Infratil Aktie

Welcome, everyone. I'd like to begin today by acknowledging the Gadigal people of the Eora Nation, the traditional custodians of Tallawoladah, after we meet today and pay my respects to elders past, present and emerging. I also extend my respects to all Aboriginal and Torres Strait Islanders 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 welcome 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 Kiwi 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 is 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 impart 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 -- or 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 six of the Infratil directors with us today in the room. So please do feel free to introduce yourself to us 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 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 Infratil's inception, and our performance compares favorably to listed infrastructure companies that we're benchmarked 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 this week for sure. But we also know that we can do more to help markets understand the value in the longer-dated Infratil valuations. This is a large reason for us being here today, so you can hear directly from us and hear from our portfolio companies as to what we see ahead of us. We're also continuing to enhance our disclosures. CDC's 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 asset and sector concentration risk, particularly with CDC's strong growth. And the Board monitors this risk, and we've spent quite a bit of time stress testing CDC's valuation. Last December, Infratil received its inaugural BBB+ credit rating from S&P Global Ratings, which we're really pleased with and a little bit surprised with, 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 within.

ESG reporting is another focus area because decisions grounded in responsible stewardship are part of creating long-term value and managing risk. And we're very pleased that being recognized as leaders this year in various external assessments, particularly, I think it was Morningstar Sustainalytics. Finally, on this slide, portfolio company relationships and resourcing are an area we're paying closer attention 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 this day 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 lunch, followed by One NZ's 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 data centers, and we all know we can 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. Nice 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 were dreaming seeing the President calling Jensen Huang on stage at the All-In Conference yesterday morning, you'll be as excited as I am to find out what happens 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 are particularly relevant for long-term contracted infrastructure like the stuff we build. So let's get going. I wanted to start with a couple of introductions or three actually, and then I'll get on to the portfolio strategy update and 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 distributed portfolio, finance, which has become bigger as well and also investment. And so we have Andy Carroll, who is 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 job now.

And then we have Matt Ross, who is Deputy CFO, and we're delighted he could step up into the CFO role, which means we don't miss a beat in that seat because he has a long history with them longer than both of 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 that 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 our ultimately finite 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 stuff done with these guys alongside me and a few other people, other kind of fulcrum points of all that. So if you see them around, they're important people. If you've got investment ideas, [indiscernible] 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 three pillars, you have cash flow and then mature and future growth.

And the three, 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, CDC and Longroad, data centers and renewables in which would be supported by divestments of less 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 minds. 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 Infratil 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, balanced cash flow kind of three. And then what do we see during the year? We obviously saw progress on divestments with $600 million done, the last of that first batch still ongoing and then announcing that further divestments were on the horizon as well, 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 progress from One NZ, 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 Longroad. And CDC, 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 said and maybe we can flip through this, but we're seeing surging token demand all around the world, driven by the capabilities in the models 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 tokens that are more cheaper, which again drives more adoption, more token demand and so it goes.

There's no doubt model 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 through adopting it in the areas that I talked about and more that will continue to drive the system over time. And perhaps now is a good time to just 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 who can make use of it.

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 Conference 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 exist all across the scene 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 them financed and built. And sometimes they run late. So, our central thesis is that at that layer and at the data center layer, that is a 2-year, 3-year lead time piece of infrastructure.

And Microsoft CEO was talking about this last night. You don't stop that now, right? Because the frontier might be flying 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 inflection 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 for 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 up what we've got to everybody who could benefit from it. It's 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 records in developing responsibly in this space, which is an increasingly important requirement for having a long-term business with advantaged access to supply chain and suppliers with deep 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 put in interconnection queues 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 getting 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 this space as delivery costs continue to change as this long-term interest rate theme plays out in 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 left on yours at the neocloud 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 AI value chain as we are today, but also to continue to build an adjacent options around each of their verticals as we see some of them converging.

So there's kind of three areas here I wanted to focus on. One is at that power and data center level, the two 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 and 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 EonFibre, right? In the fiber and connectivity space. On the data center side, we think about geographic diversification a 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. My point before, we don't have the infrastructure to serve up 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.

The 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. How can we cite 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 this.

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 have 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 there, and this will change over time. So I think of that 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 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 within existing businesses that have strong defensive characteristics as ways of creating returns that you wouldn't necessarily ordinarily expect out of these businesses. And One NZ is a very live example of that, and you've been hearing about their AI transformation story, and they've revealed a couple of other ideas this year with the EonFibre and RANCo as ways to kind of optimize your return out of that asset and optimize the way people think about them.

Health care is very much live in this space. AI is 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 addressing at a scale that's a bit small for Infratil now, but certainly we'll get the benefit of learning from those as more scaled 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 and momentum in power and data centers.

And so you can see this expressed in the portfolio proportion. This is an updated version of it 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 is a thought on our mind in the data center space as well. So double-clicking on data centers. Greg will talk a lot about this with 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're in the process of building -- the CDC is in the process of building. And you see over half of that valuation is really in existing operating businesses. So if you stopped doing any more business today, you're still on a path to over $2 billion of EBITDA and incredibly strong operating free cash flow if you were not investing at all, which I think is a great downside protected position to be in.

And Greg will talk about how they continue to have 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, providing 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 contracted.

And this -- the contracts are comprehensive, right? So you've got a long-term contract over 17 years on average. It's covering 96% of your revenue and the counter-parties are A+ 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 their own and a little bit of an upgrade from them today in 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 it's a good spot to talk about the whole real rate thing. So probably in the portfolio, the Longroad valuation is the most sensitive to long-term rising real rates, particularly if that is persistent and there are reasons to believe that could be right. 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 if rates 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, that's probably also about 1/3 to 1/2 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 you have 50 bps on the rate and your valuation is flat. So that is a little bit what it is. I mean there are two counter-balances to that, 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 put on the system is going to be higher. Unfortunately, that takes a long time to come through merchant curves and a long time 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 if they end up being perniciously higher, which is something I know on the team's mind and on our mind as well. And the other counter-balance is that on the development side of the business, we've seen for a long time that you're able to capture cost increases on 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 tends to end up in PPA prices. So while it hits your back book, your OpCo, certainly before merchant curves 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, as you saw on my AI 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 that scenario, the kind of AI end 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 there, you've got our updated guidance for FY '27.

If you take into account CDC's contracted earnings that the team are working hard to deliver the data centers in order to make that real and you take account of what Longroad is projecting will be their kind of in-year returns in 2029, you can see that CDC and Longroad on its own, our share of their EBITDAF 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 EBITDAF of the group as big as it is today just from those two businesses based on what they've 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 the benefits of our credit rating to enable us to deepen the funding that's available as well for what's ahead. 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 was the cash flow generated. I think we're thinking more about that as having sufficient cash generation across the business. And this represents that a 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 were blurring between 1 and 2, so we might as well address that to keep this current. Biggest change really is in Pillar 2, where we see scaled growth engines and there are 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 up in my advantage position slide 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 3 is still there. It's our future options in 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 Clearvision, which we haven't talked about before, which is a venture capital investment Infratil made 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 still are 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. So 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 them talk to that. We have good funding capacity now and a pathway to continue to improve that as the reinvestment 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 since I stood up here. Or it will 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 Tararua 1 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 Amargosa today that the Longroad team are working on. That's 90x 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 them 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.

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 Morrison's 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 Jonty, 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 do want to touch that on that because obviously, that is the first time we have stepped away from this model of Lloyd Morrison Trust, the founders and the family being the only shareholder and the team being the only shareholders in Morrison. So first of all, who is Sumitomo Mitsui Trust Bank. There's a lot of different Sumitomo 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, it's the same story for both of us. Japan has gone through three 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. And by the way, it's 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 giant 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 target. 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 Lloyd 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 Scollans has joined us as Head of North America, the role previously held by Perry Offutt. 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 Wynn 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 Deion Campbell, like getting the Deion Campbell of the U.S. to support us there. I won't talk about all of the non-exec 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 Kurt because those in Sydney, Kurt will be down here next week. And if you'd like to spend time with them, let us know. Kurt is the foundation member of our Morrison Advisory Board. He was back in the Obama era, if anyone remembers those days, he was Obama's Asia czar. And then in the last White House, he was Deputy Secretary of State, responsible for the Indo-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 need to say hello to Phillippa Harford. You probably remember her well, former CFO of Infratil. The reason I want to talk about Phillippa 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 surfeit of capability and senior executive talent. So great to have Phillippa 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 her. 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 Tararua 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 Deion 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 Contact. 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.

Good morning, everyone, or [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 was too long. So I went for second best. So, I'm the 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 quickly 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, 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 to 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 have 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 in Austin at 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, the QTS of this world in front of the Texas Senate trying to explain their obligations on social responsibility, social license. At the same time that day, I'd ridden in a robotaxi to the hotel, looking out the door at Cybercab starting to roll out on the streets of Austin ahead of their launch in a couple of days' time.

So, that world sort of explains 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 hype 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 hype, 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 all -- 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 deploying capital against a new data center, the expertise, the information, the years 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 pillar 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 ones then corralling 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 Morrison's. 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're 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 the 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 agreeing strategy and setting the risk profile for these entities. Primarily, that's what asset management is. But we all know that the businesses that Infratil and 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're wanting to undertake a piece of strategic M&A.

Often, those capabilities aren't embedded in a portfolio company and quite rightly so because 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 settings are in one 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 Infratil asset. And here are some -- a couple of really, really good examples, and you'll hear from the One 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 two 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 underwrote 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 One New Zealand. And you can see it there. So first, the towers are separated and sold. You'll hear from the EonFibre folks identifying the fiber assets within One New Zealand.

And then we recently announced the RANCo idea, the idea that you can pool your radio access network resources, drastically reduce your future CapEx expenditure and still deliver a better outcome for New Zealanders. 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 Anytime. So this is the idea that you could take capability out of Qscan and RHCNZ 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 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 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.

Fillex, similar point. So this is a greenfield platform in the United States. In the United States, as there 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 they're 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 be talking about things in more detail. So maybe at a sort of capital allocation level.

First question from 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 for Infratil, 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 2 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 two ones in the box, we're securing 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 1 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 forever. 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.

[indiscernible] 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?

It's a good question. You can ask the CDC team their 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 is what's...

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 carefully about who brings...

Yes, carefully weigh that you're getting a fair share of the benefits of that particular site. Thank you.

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 our 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.

Thanks for the presentation, guys. I'm Steve Hudson from Macquarie. Just two 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 physical constraint. But unless you come with a good power story, which I think was probably the advantage of the [ Contact 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 electron thing then becomes what is the cost of your electricity and how much are you being asked to contribute to that cost of supply. 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 comes first, and it's probably more important. Having said that, we still need to secure green electrons as well.

So your forefathers 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, Jason, 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...

Not indexation anymore. You have CPI linkage and a bunch of escalators in data center contracts. It's all in the build already, right? So change the assumption, you'll get a different outcome still. The airport is the best inflation-protected asset, it's not very hard to figure that out the way the regulated asset base works. So 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, One, and then data centers with limits. The other thing to think about is half of the value 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 1 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.

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

We might break there, but thank you, guys. We're going to have a half an hour break and then start back just after quarter to 2. So thank you.

[Break]

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 quiet 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, [ Flesh ]. 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 NextGen, the NextGen 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 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's 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 NextGen thing. If you look at that logo there, how creative is that, right? It's see the 10, Longroad 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 NextGen 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 gigawatts to 11.5 gigawatts. 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 gigawatts. 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 Amargosa 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 last year, at the end of '25, we'd be at $380 million. We're actually at $410 million. 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 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 NextGen. 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 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 gigawatts to 14 gigawatts, 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 Amargosa 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, Thousnd Mile. This is in Texas, but it's not in ERCOT. It's in SPP. And then Sun Pond is the fourth, some of you have heard of Sun Streams. Some of you have been to Sun Streams. And this is the fourth installment of our Sun Streams 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 WECC. 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 with Fervo. Again, leveraging excess capacity that we have in the transmission line so that they can evacuate power to Points West. And then finally, Amargosa. So Amargosa 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 and 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 Amargosa 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 were successful.

So there's still a lot of work to do with Amargosa. I think just a couple of points to make. #1, what's driving the Nevada growth is data centers. Nevada, NV Energy received 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 gigawatts 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 as 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 1 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. Thank you.

Thank you. 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 the digital build-out, onshoring, manufacturing, electrification of vehicles, and everybody wants to ensure that we are ahead in the AI race 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 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 sign that PPA. And it's been, it's only moved 1 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 1 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 years 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 years 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 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 years 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 NZD 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 are 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 neoclouds 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, JB and Matt and Flesher. 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 flat whites 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 throes 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 billion. 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, let's see what we have for questions.

Ben Crozier, Forsyth Barr. 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? 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 reach the construction hurdle?

Yes. What was the slide that you wanted to me to? 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 wants to get online. Problems you have that is an ongoing battle is several projects in one part of SPP, just pick 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.

Grant Swanepoel. Can you hear me? With this capital raise of NZD 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 sited. 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 NZD 3 million to NZD 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 as your capital stack and potential amount of equity required.

Yes. I mean that's sort of the point, right? So easy to say, let me take more merchant risk, capture more upside. Challenge with that, volatility in your annual numbers, which nobody likes. And the second part is it requires a lot more equity capital to undertake that strategy.

So we haven't seen the need to do it. We've been able to find PPAs that we think are really attractive. And therefore, you can get -- where we're not sort of taking a discount to market, right? We're seeing PPAs that are good market rates. And then that allows us to get a much cheaper cost of capital on the project. That's kind of the math that we do. And that sort of always leads you to -- let me take the PPA.

I think the merchant exposure is really on the back end. That's where we've got a fair amount. And these PPAs come off over time. This Milford project, the wind project that got us -- that sort of got us started out there in Utah that we've been able to expand so much around over the years. That was a 20-year PPA. We actually developed that project back at First Wind and 15 years ago. And so we're getting to the end of that deal.

So I think that's probably practically speaking, the bigger opportunity is the recontracting. And when you get to that point in the life cycle of the project, it's delevered. So you don't have to make this choice of, I give me more merchant exposure, but I'm going to have less debt, therefore, more equity. You've got a delevered project, and you've got kind of a lot more degrees of freedom in terms of how to recontract it.

Just on the equity raise, would you contemplate sort of equity coming in at a project level, if that's possible rather than the holdco level?

No, we're trying to raise capital at the same level that Infratil and our other shareholders are investing.

That's clear. And just you mentioned just helping us in terms of what the independent valuation might look like post 2030 if you switch on and off the tax credit. Just interested in that.

Yes. So well, -- the tax credits that are in the plan through 2029, we're going to get those tax credits, right? So we'll receive those. There's not -- there's execution that we need to do to get those, but those won't go away.

So the question is really around the tax credits is, is this business viable once those tax credits are gone? That's the sort of the threshold issue. And so we believe it is. We're investing in 2030-plus pipeline. And the reason why is there's a few different things.

First is if you look at what's actually going on in the tax credit environment, the battery portion has a tax credit through 2033 start of construction, 2037 in service. So you've got a ton of runway on the battery. And that was very intentional if you look at how the legislation was drafted. And when you look at our pipeline and our forward CapEx program, about half of the CapEx program is the battery. So we still have a tax credit for about half of what we're doing. And then so it takes you to the other half, right? And can you provide a product that is cost competitive on an unsubsidized basis. And the projections from all the experts say, well, you can't.

We're really competing with natural gas. You get a lot of questions, nuclear and coal and nuclear plant -- coal plants are just -- they're just not competitive on an economic basis, it's really that simple. And then nuclear is so far out, and it's much more expensive. So it's really kind of solar and battery versus gas. And that's where we see the sort of the industry going. And we compete well with gas. And it's really complementary technology in terms of enabling new renewables to penetrate the grid.

But I think the point to make, though, is in this market where the supply-demand dynamic is so strong, we're not competing with gas because customers need it all, right? If you talk to a data center developer, hyperscaler, they want gas, they want renewables, they want storage. So it's not -- we're not even competing. They just want to get access to the actual -- they want to know that you can actually deliver the project within a certain -- not in 2035, like can you give me something in 2029. That's valuable, whether it's gas, solar or anything, that's what's important.

Okay. I think that's a good place to end it on. Thank you very much, guys.

Thank you and good afternoon, everybody. For those of you that haven't met me before, I'm Nick Judd, recently appointed CEO of all of 2 weeks. And joining me on stage, I have Kieran Byrne, recently appointed CFO of all of 2 weeks, but have been with the company for longer; and Richard Mooney, who's CEO of our EonFibre business.

We actually thought we did quite a good job of the presentation last year, but it seems like we've been downgraded to the after lunch slot. So maybe that was a bit of misguided on our behalf. The other term that I heard was we're the warm-up act for Greg Boorer and the CDC team. So either way, we're looking to outperform this year and see if we can get a better ranking slot next year. So we'll see how we go.

So today, we're going to talk about a few things over the 40 minutes and then obviously leave some time for questions. But -- there's a couple of messages that we want to reinforce. One, why we believe we're winning in market and the external data that points to that. We want to talk through, obviously, the strategy and where we're at with this change of CEO. As you can expect, there will be some tweaks that we will make, but we want to be clear that, that is an evolution of strategy, not a revolution of strategy. And that's because of the great work, obviously, that has been led by JP and the Board over the last 7 years and how we've transitioned from Vodafone through to One NZ and having that brand so well established in market.

We'll obviously talk a bit about RANCo, which I know has got a lot of interest and a lot of questions so far, and Kieran will touch on that. But also, he'll touch on where we're going with our network aspirations and why we are starting to invest in what we see as a driver of growth for us through Horizon 2 and Horizon 3 and to give you a sense about how we see that playing out.

And last but not certainly not least, it's a good timing for Rich to join us on stage and talk about EonFibre, which has now been running as a separate business and how that business is shaping up. He'll talk through, I guess, how we're seeing that market play out and some of the opportunities that we have, which are now coming into focus quickly and the opportunity with that being a separate business.

Just touch briefly on the executive team because I am fortunate that the exec team has already sorted. And that's a real credit to JP and Jodie King, our previous Chief People Officer, because we were able to take talent within the organization and fill the roles. And so Kieran, you'll remember, for those of you that were here last year, was our Chief Technology Officer. He stepped into the CFO role. That's enabled Sharina Nisha to step up. And Sharina is a 30-year veteran of our company. She has previously almost latterly been leading our T1 transformation project and doing a fantastic job of that, and she has absolutely earned her seat at the table, and we're incredibly proud that she's joining us.

And then we've had Sonia Fernandes join us from a Chief People Officer perspective, who joins us out of Washington, but has spent time in New Zealand, Australia and across the Asia Pacific and brings a really good experience about organizational transformation and how we face into the impacts of AI and automation, which we continue to lead on certainly in a New Zealand sense and how we go about it. Rich Mooney is sitting out there by himself on the side, and that is because he actually reports into obviously, his own Board, which is made up of both owner shareholders and independent directors.

I'm not going to spend any time on that apart from two numbers. One we're incredibly proud of is we were awarded earlier this year for the fifth year in a row, the best network in New Zealand by umlaut. And while there's different measures and maybe some competitors have a different view, we unashamedly and very proudly believe we've got the best network, and that's proved by the performance stats that we look at and see.

And our job -- our team have done an incredibly great job of building that from where it was pre-Infratil ownership to where it is today. It still takes the majority of our CapEx investment. And as a result, we continue to invest in that and obviously build out 5G capability.

And the other number I want to talk on is one that's actually going to change tomorrow, which is our retail store number, which is we've got 58 today. And as of tomorrow, we'll have 59 when we launch Tauranga City again. And why that's important to us is because it's a really integral part of our sales story and our sales momentum at the moment.

As we launch stores, we are outperforming every business case that we put in place. As we refresh stores, we're getting better service metrics, better sales metrics. And it's probably a story that we don't talk about often, but it's actually quite unique to a lot of other industries where people are shrinking back to digital only. As handsets get more and more expensive, people want to touch and feel them and people still want human context. And so that you will continue to see expansion and investment in retail stores as we go forward.

The next slide, actually, I won't talk to because it sets up a bit of an agenda for the day and probably a checklist as we go through each of the areas. But what I would say is a headline sort of statement is we are very pleased with our performance today in what has been quite a challenging market. And we're pleased with the investments that we're putting into areas like AI and automation, some of the value we're starting to see through that. We're pleased with how our transformation project has gone, and we're in the third year of the 3-year program of that. And those investments will drive increased earnings and cash generation in the future, which we obviously know is incredibly important for our owners, as Jason talked to this morning.

This will be somewhat familiar to you because it looks very similar to our strategy on a page. And so as most new CEOs do, we have this chance just to stand back and reflect about how we think through our strategic priorities in. For us, the purpose and the ambition haven't changed. We still want to be the best at what customers value the most. But what we have tweaked is we've changed the pillars. The pillars that we had last year were best network, best solutions, best people, which were actually capabilities that we have in the organization. But where we're at now, we want to be really clear about how we win and how we drive future value growth and future cash generation.

And so the first pillar on this is actually embedded in that AI and automation investment that we're putting in. We want to be a much simpler and a much smarter One NZ. We know we can drive significant efficiencies at a scale and pace that we haven't been able to before because of the complexity of our business. We've got confidence that the skills we've built through the PoCs and some of the value that we've created through AI initiatives are actually now going to enable us to be able to scale efficient growth and efficiencies and cost over the next couple of years.

And so one of the aims for me in the next 3 years is that we drive really aggressively around radically simplifying the business. I don't think that this is an option for us, and it's not an option because I think business models are going to start changing so much faster with the way AI is now playing out on our landscape. And so we have to try and throw off some of the anchors of the past of being a 35-year-old telco company and have the flexibility and agility to roll with that.

We've got confidence we can do that. We will be leading with an AI-first human where it matters methodology and some of the skills and capabilities that we've built over the last 2 years will really help us in that radical transformation that you'll see.

The second one, best place to buy a phone, you might think is a bit narrow. But what we have learned and what we'll talk more about through the strategy is actually we know that if we get the phone and that phone purchase that we have customers that are stickier, they move up the product stream in terms of the value stream from a mobile phone product perspective. They churn less. But more importantly, it actually becomes our doorway into how we win their home. And off the back of it, we can win the broadband proposition. We can win their companion plans. And so while it seems focused on the phone, it's actually not. It's about our unlock through the front door about how we win that home and get much higher customer value out of the home rather than the individual. And we'll talk a little bit more about that today.

And then lastly, Kieran will touch on this in some depth. We want to be a network of choice in both Richard's EonFibre and Kieran's space. Previously in technology, we have an ability as we go forward, we think, to build -- move from the best network to a network platform that will actually drive the next wave of revenue growth for us. And so the investment that we put into that is quite important and central to how we continue to grow.

Now while we're obviously unashamedly targeting to win in market, we know that we have a core responsibility as well as one of New Zealand's largest employers to make sure that we're focused from an environmental, social and governance perspective. And we're very proud of the progress that we're making in this space. We've got a small team that drives some really good outcomes. And there's a couple of highlights that I just want to call out.

So probably the single most important number on this is the GRESB assessment, where we moved from 79 out of 100 to 95.5 out of 100 over the last year. And what that signifies is it signifies that the time that we've spent on purchasing certified renewable energy to reduce our Scope 1 emissions, the e-waste programs that we're running, the focus we have on inclusive workplace and diversity and the focus on partnerships with e-waste and others is actually showing through in how we're measured and tracked from an external benchmark. And so it's a number that we're very proud of in terms of particularly the movement we've made.

And in addition, and aligned with that, we also have Te Rourou, our foundation, which we probably don't do a good enough job of talking about that has been around for decades and focuses on youth and how we can advance better outcomes for youth through digital enablement and other activities. And so that program has had some really great success stories that we need to do a better job of amplifying. But yes, we are very proud of that.

Before, I guess, move into talking about how we're winning in market, it's probably just worthwhile touching on market dynamics at the moment. And so when we spoke probably 12 months ago, we've just come through the 6 months before we've seen the trade tariffs come on. New Zealand has started to look a little bit better, then it got the wobbles again. Same story happened earlier this year where things were starting to look better post summer. And then obviously, with the advent of the war, New Zealand got the wobbles again.

Anecdotally, certainly, the feedback we're seeing through our customer base is that there's actually more positive momentum starting to shape up. Probably won't be helped a little bit by the election going on at the moment. But actually, when you look across the board and even through probably the worst of the sectors such as construction, what we're starting to hear is actually that there's some green shoots everywhere.

We're seeing this in some of our footfall numbers. And so our Apple iPhone presales just went live on Sunday, and we're up double digits on last year, which is good, particularly given the handsets have gone up in price again. That's partly, I think, related to our proposition in market, but also is a good indication of market overall.

And we are seeing more positive signs such as, I think, Monday's announcement that net migration is starting to turn around. So while there's been really subdued growth in the overall market for the last 2 or 3 years, we actually have expectations that there is going to be a better level of industry growth over the coming years.

From our perspective, we don't need that to be exponential. We don't need migration to go back to sort of '21 to '22 and the start of '23 as it was. And so that's not built into our assumptions around how we think we can get to a mid-tier -- mid-30s EBITDA margin over time.

So I guess why do we keep saying we're winning in market? And for us, we obviously look at our internal financials, and we can see we're doing pretty well in comparison to our competitors. But the data that you see on the screen here is one of the better industry benchmarks, which is IDC data that we all contribute to. And I think it's important to pull out a couple of points in here because I think they reinforce our story really well.

And that is for the last 2 years, we've led in overall mobile growth, and we've captured on the One NZ brand alone, almost 60% of the overall market growth through that 2 years. That doesn't take into account the fact that in the MVNO bar, we're capturing a good chunk of that as well. And so when you put that on, we are far and away capturing the most significant portion of growth in the market versus any of our competitors. And that shows in the market share graphs that you see up top on consumer mobile revenue share, where obviously, every year, we've had a 1% increase.

It's hard to move the market by percent. So it doesn't look a lot. But what it does mean is in that pay monthly segment, we are now neck and neck with Spark when we previously had quite a sizable gap. And so we have the momentum in the most valuable sector of the mobile category.

And I'll talk about what underpins that shortly. But obviously, one of the elements that we have quite unashamedly led on has been price increases. And so for 10 of the last 12 quarters, we have seen ARPU growth. In fact, this was up to March. And I can tell you for June, we've also had another quarter of ARPU growth that now means that we're sitting at around NZD 51. That's market-leading, and yet it's not impacting our acquisition, as you can see from the other numbers. So our customer proposition now is strong enough that we can hold an ARPU premium and we can acquire better than what our customers can.

And that strategy for mobile growth is built on two things. It's a differentiated customer proposition and it's better customer service than what we had. And so on that first point, you would have heard us talk certainly last year and I think the year before around one wallet or phone dollars. And effectively, this is a loyalty scheme like Airpoints. And what it does is that it means that as people purchase more products with us or engage with us, we effectively give them phone dollars, which they can then use on their next handset. And that is becoming more and more important.

For those of you that followed the iPhone launch last week in terms of the foldable phone is now coming out. The starting price for that is now NZD 4,500. The top end product price is NZD 6,500. And so handsets are getting more and more expensive. The chip shortage is adding to that in terms of -- so that's not going to change anytime soon. But again, we know that if we win that moment when somebody needs a handset, we get the value creation off the back of it.

And so for us, that proposition is built on three things. One, it's built on that best network, so people can trust us when they join us. Two, we believe that our sales and our service is getting better and better, and I'll talk a little bit more about that in the second service section. And three, this one wallet proposition is, at the moment, we're the only one with that in market. And it becomes incredibly hard for others to mirror because the way we actually enable that was through removing a whole bunch of discounts on our plans a couple of years ago. So if somebody else wants to try and take us on that, it would be a direct hit to their ARPUs and very, very challenging for them to do. It provides us with a competitive advantage in that consumer space that's very, very hard for others to mirror and as you can tell, is gaining momentum. It shows up in things like reduced churn.

So we get 1/3 less churn for people that are engaged in the Wallet program. It shows up in us winning more broadband and companion plans, as I said. So it's margin accretive in two ways, both in revenue growth, but also in less revenue dilution. And so it's a really important part of our consumer proposition as we go forward. And then the other side of it, which we again haven't talked so much about, but it's actually the service side. So if you went back a couple of years ago, on average, people had to call us once a year.

Now obviously, some people call a lot more than that, but across the customer base, it was once a year. Within a couple of years, we've moved that to 2 years. And actually, with the AI and automation side, we believe that we can move that significantly again. And the ultimate aim for us is that no one needs to call us. That would be ideal because if we can get ahead of some of that stuff through the use of AI and insights, actually, we might be calling people the other way around to say, "Hey, you've got a problem, you need to look at this." Now that's Utopia. We're not quite there yet, but it's a real focus for us because we know that if people don't have to engage with us, there's less chance of problems, the Net Promoter Scores go up.

And again, they stick with us and stick with us for longer. So it's a big focus for us. In our retail environment, we've just launched Retail 3.0 in our Albany store. And if you're in that neck of the woods, it's worthwhile going to see. And effectively, what we've done is we've created a whole lot of self-service portals, which are getting better take-up than we expected from the business case.

And what that means is 2 things. One, people don't have to wait in line to get serviced. But even more importantly, it means our salespeople can sell. And so our sales numbers are up in those stores. It allows them to -- particularly with the iPhone launch and other stuff, it means that we can engage with people a whole lot more quicker, which obviously drives bottom line benefit. So it's a good example where a focus on service drives good outcomes from a sales perspective also. The last piece that I want to talk to is just enterprise.

And this is one area of the business where it's challenging and remains challenging. So we're continuing to see quite aggressive propositions in the mobile space in terms of -- and while the rate of decline in mobile ARPUs has slowed, it definitely hasn't stopped. And I don't think it will for some time based on some of the behavior in market. And so for us, that's meant that we have taken a different focus to how we try and win in that space. We've launched a product called Unlock, which effectively gives the employer the choice to slim down their corporate phone proposition.

And in return, we've come in with an employee plan proposition based around phone dollars that offsets the fact that they're now going to have to pay for their mobile phone. So a double win all going to plan. The employer gets a reduced cost. Obviously, we get the customer, but the customer gets an ongoing loyalty program that then funds their next handset. So there's not that employee disquiet over it. We've got a pretty good pipeline for this, and we believe that it will be both a retention and an acquisition tool. And so the whole organization has swung behind it. There's been a few challenges working through the product proposition and how it lays out and every organization is different. But all of the One NZ employees are now on it. And so we've worked through that and they are now advocates for pushing it out. So that will be a key tenet for us from a product perspective.

And then we've made some changes to our structure in terms of the segmentation of how we think through that base. And we've split our strategic customers from our mid-market base and then we have business and SME. And that's quite important because that top end of town requires a lot more bespoke solutions. Mid-market just has to be plug and play. We've got to get away from doing bespoke things in that space so that we spend less time on admin and drive more efficient margins through that.

And then lastly, in that space, we've taken all of the sales channels, and we put them under Chris Fletcher, who drives really strong sales disciplines right through that function and is doing a great job of leading that team. And so we're in a good shape with that. On the ICT side, we've got a couple of really good re-signs that are in the bank, a couple we've managed to build out propositions along with our cybersecurity business DEFEND. And so it's a continued focus for us, a continued challenging market, but one that we're not backing away from as we go forward. So I'll leave it there and pass over to Kieran to talk through the next pillar.

Thanks, Nick. So we talked about a simpler, smarter One NZ being a new pillar of the refreshed strategy that Nick just talked about. And the -- why that's really important is One NZ is like any typical telco, where over time, we've grown through acquisition. We've taken on different organizations, and we haven't necessarily cleaned up the IT stacks that sit behind that.

So we find ourselves in a situation where we have a lot of complex legacy products and a lot of complex legacy processes and platforms that sit around that, too. So what we decided 2 years ago that we were finally going to solve this problem, and that's when we started to think about this T1 program, which is Transforming One. And we kicked that off. And really, that is a program around modernizing our IT estate, our customer-facing platforms and moving all our customers from their current legacy platforms onto this new modern architecture.

A year ago, I stood here and I talked about we're about a year into the program, and we were starting to -- just about to migrate our prepaid base. The good news is the program has remained on track and on budget with successful cutovers. We migrated over 2 million active and preactive connections from our prepaid base onto the new stack shortly after the discussion last year. And then since then, we put our entire pay monthly base now in the new stack as well.

In about a week's time, we've got our final major release of the program, which really sort of breaks the back of this program. We will move our pay monthly products into the new stack and start migrating all those products over. So it's been a really, really great project. It's been a challenge, but we've built up some really sort of strong project disciplines around transformation in the organization as part of that. Other highlights is the simplification that's happened as a result of that.

So 98% of our mobile connections are now on in-market plans. We've gone from 130 prepaid plans down to 6. And we've gone from over 700 pay monthly plans down to a few dozen now with a little tail to clean up to get that from 98% to 100%. And we're making really good moves in broadband as well. And that's across -- that's not just consumer, that's 98% across consumer, business and enterprise as well. In terms of benefits that are coming through, we're starting to see the benefits being realized off the back of this project.

So we're seeing reduced failed orders, so less manual intervention around orders. We're seeing average handling time in the call center reduce as they get used to using these new platforms and systems. We're also seeing massively increased IT reliability. We've seen incidents in IT almost reduced by half since we started this program. And also the speed at which we're able to get to market now has really radically transformed from taking months to create new products to literally now creating them in hours.

The next thing I wanted to talk about was AI -- so [indiscernible] stood up here a year ago and talked about One and said we were going to make a big push on AI over the next 12 months, and we have. So we've launched around 50 different AI solutions in the business across the different domains. And I'll call it, there's a lot of smoke and mirrors around AI adoption in enterprise at the moment, and it is difficult.

And we've experimented a lot. We've learned a lot along the way, and we've had some really good successes. So I wanted to talk about a couple of things today in areas where we're really finding a benefit from AI in our business. We are a telco, but increasingly, we are a software business. Telco platforms are becoming very software defined, and we spend tens and tens of millions of dollars a year on software development. One thing generative AI is very good at is software development.

And so what we found is that is probably the #1 opportunity in our business for reducing material cash from our spend. We found it as other businesses have complex to deploy these tools and get people to develop them and use them. And what we've found is the best approach is standardizing a tool set that everyone can use and then driving productivity with top-down targets.

So we've created what we call a software workbench, which uses the best-of-breed tools we can find, which supports architecture, it supports software development. It supports business requirements, it supports testing, gives these standardized tools to teams, and then we've literally gone through and reduced their budgets by 25% and force the productivity through in that way. And we found that's the best way to get adoption in the software space. And we've still got a lot of work to do, and there's a lot of opportunity, and we'll keep working on that software development life cycle as it's the #1 way that we can reduce cash spend as part of AI at the moment. So that's the generative AI side. I wanted to talk a little bit about Agentic as well because I think 12 months ago, there was a lot of talk about Agentic AI, but it just didn't work.

And it certainly didn't work in the context of a business like ours and mission-critical infrastructure. Since about, I'd say, April, May this year, the capability has been out there to really take advantage of Agentic. And I'm going to talk about one solution here, but I really want to talk about in the context of what we're going to do next. So I want to talk about this network concierge AI agent. So what that does is that takes a whole of telemetry off our network.

You can basically give it the mobile phone of someone and a problem they're having, and it will go and diagnose that problem. And so that's something that an engineer would do typically, and it would take a certain amount of time. We've now got an AI agent that we can put that information in and it will come back and it's saving the people who are doing those diagnoses about 75% of the time. So on its own, that's not going to transform the economics of our business. But as we go forward, we're thinking about how do we start to really redesign processes around human and agent interaction and all the data and automation associated with that.

And so we are a process business as a telco. And so we're now going through a methodology where we go process by process through the business. We start to design out what that work looks like in an Agentic world. We build the agents, we build the data products, and we redesign that to get the value out of that. We've just started that process now, and that's going to be a big focus of the next year, it's a complete process [indiscernible] of our business around Agentic technology.

The other thing that's not on this page, which I'll mention as well is we're starting to experiment with our own in-house AI as well. So we bought a couple of GPUs. We've got our own open source models on them, and we're starting to actually deploy that on real use cases inside our business and that has sort of 2 advantages at the moment. It not only saves us token costs from frontier labs, but it also -- we can start to think through if we can do this to ourselves and start to put these workloads on our own environment. We've got a set of enterprise customers who are equally trying to solve the same problems that we are. So by trying this on ourselves and understanding what we can do, we're going to see if there's an opportunity for us to support our own enterprise customers with their own sort of sovereign AI solutions.

So the next topic I wanted to talk about was around our network and how we see value being extracted from our network in the future because we see a lot of change happening in the world at the moment, and we want to be the ability to make the most of that change that's occurring. There's a number of trends happening around us, which give us a strong conviction that there's a growth opportunity coming that if we can pivot what we do in the right way, we'll be able to capture.

And really, that centers around this AI revolution. We talked about generative AI and Agentic AI in that previous section. But when we start to make the move into physical AI and devices and sensors and robots and drones around this world, they all need to be connected back to a physical data center. And the telco is obviously in a prime position to be the bridge between that physical AI endpoint and the cloud intelligence that it needs to talk to. It requires us to think about things differently. We need to think about different types of connectivity for different applications, which is something we haven't done before. And we also need to think about how that connectivity can be consumed in different ways through third-party innovators and ecosystems rather than through the direct sales that we do now. So we're starting to work towards this, and we're starting to prepare ourselves for this future by thinking ourselves more than just a network, but more like a digital connectivity platform that can sort of empower an ecosystem of developers to use connectivity to deliver some of these productivity solutions.

And one of the foundations of that is our 5G stand-alone core, which we're currently in the process of deploying. And with that capability, we're going to be able to do this new technology, we're able to slice the network up into different lanes for different applications for some of these new and emerging use cases. And so what that actually practically looks like is you've got a traditional telco model where from device through the infrastructure, we hardwire products through there.

Everyone goes through the same lane in the network. All the innovation is done in-house. And we think about different sort of technology, satellite as sort of resilient complements to our network. What we want to ultimately pivot to is a connectivity platform where the capabilities of our network are exposed through APIs to an ecosystem of developers who can take them and do really good things with that connectivity and do the selling and the productization and the innovation for us.

So we're moving the innovation out of the inside of us through the outside. And we also want it to be infrastructure agnostic. So we want to expose connectivity products where the customer does not care whether it's satellite, whether it's wireless, whether it's a fiber, they just want a connection from A to B, and we choose the most appropriate input for that.

I want to give a practical example of where we're actually making some progress in this domain. And Halter is a New Zealand business, which a lot of you from over New Zealand will be familiar with. But for those that aren't, it's -- it's an agricultural sector business that creates collars for farm animals. Those collars do a few different things. They can obviously monitor the health of the animal.

But the real interesting use case is geofencing. So they, both the cow in each direction and what they can do, the farmer can control where the herd of cows goes to and effectively, without fencing a property, can move them around the property and get more -- much more sort of yield out of the property. It's a really interesting concept and a huge productivity driver for farmers, obviously.

And what we've done is we've actually partnered with Halter because in a lot of these instances where it doesn't make sense to build fences in these remote farms, there's actually not mobile connectivity. So we've created them a solution where when there's a mobile network, the cow collar talks to the mobile network. When it's not there, it talks to the satellite network. So from the collars point of view, it's just got 2 different networks depending on where it is, and it delivers the same solution back to the data center.

So what's great about this is exactly what I alluded to in the previous page is we haven't gone away and talked to farmers and created a product for a farmer. We've gone and done some work with an innovator who's bundled connectivity into a product that's delivering a productivity outcome for the customer. And so they're effectively doing the selling for us. They're taking our connectivity, consuming that and then taking out. And now we've got tens of thousands of cows on our network, which is growing every month at the moment. And I see this just as a thin edge of the wedge. There's going to be dozens of these opportunities if we can find the right partners who can take connectivity and innovate off it, there's a massive growth opportunity for us.

Now this [indiscernible]. This isn't an opportunity that's going to require hundreds of millions of investment in some sort of wild idea. We've already done this. We've built this platform already, and it's already powering our retail and wholesale business through APIs. It's a cloud-native platform built on GCP with our own development team, gets us away from expensive global SaaS platforms.

And it really is world-leading, so much that another telco has actually licensed it off us, and we've got more interest as well for this platform. It's powering our wholesale business, which is doing really well. You can see from the chart there, we've taken 60% of the net ports in the wholesale market over the past 12 months at strong ARPUs and margins. And as Nick said, we've got a strategy to really premiumize our main brand and really focus on that premium pay monthly consumer segment.

Wholesale is a great way for us to address some of our competition with the Skinnies and the 2degrees of this world who are focusing more at that low end of the market. And we're also launching new products on this platform. So we've got UFB, we just launched, which is fiber consumer broadband. 5G FWA is a new product that we're launching. And with our 5G stand-alone deployment, we'll be able to create 5G FWA products, which look much more like fiber products. We'll be able to have much more assurance around speed and throughput on these plans.

And that will allow us a new wave of growth through our retail and wholesale business, we're able to go after broadband connections with a new fixed wireless and highly capable product. So the final thing I wanted to talk about, which I'm sure everyone is very interested in, is announcement we made a few weeks ago about a RAN, radio access network sharing agreement with 2degrees, purpose of which is to basically improve the efficiency around deployment of mobile infrastructure in New Zealand.

So a bit of information about that, and there are certain things we won't be able to share today just to preempt some of the questions, but I'll try and answer everything I can. So it's a separate entity, 50-50 JV between us and 2degrees, providing managed services back to each of the parties. Really important here, but our core networks remain within the ServCos, within the 2degrees [indiscernible] ServCos. Spectrum remains within the ServCos as well as does the satellite assets and all the backhaul as well. What that practically means is we are running different networks. We're going to share certain infrastructure, but it's nondifferentiating infrastructure that sits on poles. You'll be able to take One NZ and the 2degrees handset, you'll be able to stand the same distance away from a pole and you'll receive a different experience because the smarts behind our network, the spectrum, the core network remain in our businesses.

We share the things that are nondifferentiating. It's going to enable us to deploy much more efficiently, deploy faster, get access to new technologies in the radio network at a faster space and it doesn't affect at all the independence and the competition that we drive between 1 and 2degrees at the retail layer. I'm sure we've done the research, but this is very consistent with international precedents. There's a lot of movement towards these infrastructure sharing agreements. It just makes sense. The days of seeing 3 poles standing beside each other out doing exactly the same thing doesn't feel like a sensible way to deploy infrastructure.

And so this is a move to do that. It's obviously it needs to go through Commerce Commission approval in New Zealand. And so it's been submitted the application at this point. We're expecting that process to take sort of 6 to 8 months. So we're aiming for completion of this pending obviously approval of that process sometime in the first half of next year. So that's all I'll cover. I'm sure there'll be some questions on that at the Q&A, but I'll hand over to Rich at the moment to talk about EonFibre.

Thanks, Kieran. So what I propose to do is just to give a quick update in terms of who EonFibre is, just to remind everyone in the room and then talk through some of the market trends that we're seeing and then how we're performing in line with those market trends.

So EonFibre is one of the largest infrastructure owners in New Zealand. We have over 11,000 kilometers of terrestrial fiber and a range of subsea assets in and out of New Zealand. So we've got subsea assets connecting the North and South Islands -- sorry, I just realized I've gone too far [indiscernible] through. Yes. Just so you got the map. We've got a range of subsea assets that connect the North and South Islands. We've got an ownership stake in a subsea system that connects Auckland through to Sydney.

And then we've got capacity in IRUs on all of the subsea systems in and out of New Zealand. We specialize in providing high-capacity bandwidth infrastructure type services to a diverse and growing customer base, everyone from One New Zealand to all of the local New Zealand telco operators through to all of the hyperscalers, neoscalers, CDN players and international carriers. FY '26 was our first full year of operations.

We separated from One New Zealand at the back end of 2024. Since then, we've migrated all of the customers, all of our direct customers away from One New Zealand to EonFibre. We've invested in stand-alone customer-facing systems, kind of further cementing independence from One New Zealand and ring-fencing all customer data. We've entered into a long-term agreement back into One New Zealand for the provision of fiber services into One New Zealand.

And we've completed an investment to upgrade our national optical network. So effectively, we've got a brand-new optical network up and down the country. So what that's given us is a high-capacity network up and down the country, connecting all the major cities in New Zealand, all of the data centers across New Zealand and all of the cable landing stations in New Zealand.

And what the chart on the right shows as well as connects up all the existing data centers, actually, our fiber network is very close or pretty much adjacent to future data center zones. So these are locations across New Zealand that have been identified by Invest New Zealand as suitable locations for future data centers and AI factories based on their proximity to renewable power, grid connections and substations allowing them to get stood up relatively quickly, relatively low seismic risk and then also fiber connectivity.

But increasingly, as I'm sure you know and have seen in other markets, the data centers are going to, the power source is not necessarily where the fiber is. But we just happen to be adjacent to all of those data center zones. So yes, EonFibre is really well positioned to support New Zealand in that next phase of digital infrastructure growth over the coming years because of that -- because of our national network.

In terms of trends, so a lot of those trends were discussed earlier on today. But what we're seeing in New Zealand is AI -- or certainly nascent AI demand is coming through. Cloud migrations is driving significant increases in bandwidth requirements from our customers. What's interesting is where that bandwidth increase is happening. It's happening between data centers, across the national networks and across subsea networks. What's different is the prior kind of growth in demand, a lot of that was access driven at the access layer.

A lot of this demand is now growing in between data centers, across the national backbone network and across the subsea. These are trends that New Zealand is not at the forefront here. The U.S. and Australia seeing the same trends or certainly accelerated trends. Locally, both Telstra and Vocus have invested or are investing significantly on their terrestrial fiber network to cater for that demand.

And New Zealand is increasingly viewed as an attractive destination for future data centers due to a number of key advantages. So firstly, the abundance of renewable power. So by the end of 2027, over 95% of all power generated in New Zealand will be renewable. Secondly, its location. So it's relatively close proximity to Australia and the fact that actually increasingly the subsea -- the global subsea traffic is moving to this region.

So New Zealand is effectively on the trunk of subsea traffic that goes from Asia Pacific through to Australia and New Zealand and onwards to the U.S. The third reason is around climate. If you've ever been there, you'll know it's colder and typically wetter, both of which are conducive to data centers. And then the final point, I think, just around why New Zealand hasn't been at the forefront in terms of data centers up until now is because historically, when the hyperscalers have looked at New Zealand, latency was an issue in the past.

What AI has done is change that location equation because there's a wide range of AI applications that don't require low latency. And so those customers are now looking at New Zealand as a viable destination for those types of workloads. So all in all, just in terms of that -- the context of the market, so how is EonFibre performing. So FY '26 EBITDA of $64 million and growing at over 10% per annum, both historically and on a forward-looking basis. We're currently in the midst of delivering a large hyperscaler subsea contract in Q4 of FY '27 and the full year benefit will flow through to FY '28.

In terms of the drivers of the demand, I think it's -- there's a distinction between what's driven our demand over the last 2 years or so versus the forward-looking. So over the last 2 years, that growth that we've seen has been a mixture of One New Zealand and external demand. The One New Zealand growth has come from increased mobile backhaul as One New Zealand deployed more sites and upgraded more sites to 5G, which required higher capacity, whereas the forward-looking growth that we've got in our plan is pretty much all external growth driven by the trends I've just been talking about.

So in terms of -- if I was to summarize, EonFibre is a leading bandwidth infrastructure provider with unique terrestrial and subsea assets and is ideally positioned to capture the next wave of growth in New Zealand as AI and data center connectivity demands continue to [ trend ].

And I'd just like to clarify, those 10,000 cows aren't captured in our market growth number, just you wondering. No. So I guess why are we so confident at the moment? One, just to summarize, we know we're winning in market.

We know we've got a differentiated customer proposition that's landing with customers. So we're confident in what we've got and how that's playing out. Two, we've got the strong support of our owners to invest in the platform that we believe will drive the next wave of growth, which Kieran talked through. Three, we've actually built muscle and capability through the work that we've done on AI and automation that now we believe we can drive a much simpler organization at a pace and scale that wasn't achievable before AI.

Four, Rich talked to EonFibre and the opportunity and the tailwinds that we have behind that business, and we are situated really well to capture on that. And so we're very confident in that business plan, in fact, and exceeding that business plan. And then five, Will actually talked about this in his presentation.

The disciplines that we're helping to build in the organization around capital management are getting better and better and it's a constant focus for us. We know we can still get better at that. Every year, as we go into planning, we try new methodologies, new approaches so that we're getting clearer on every dollar investing, driving a return back into the business and being crystal clear and holding people to account to that.

And so when you weigh all that up, that gives us confidence in these medium-term targets. It gives us confidence that we can continue to grow our cash generation, and it should give our owners confidence that hopefully, that dividend check continues to grow. Apologies, Mark.

I was going to say, I think the first time in a number of years, we haven't had a mention of the Warriors or some of the Kiwis that have required a jersey.

We haven't lost our passion for them, by the way. We still believe they're going to win, just a small hiccup last weekend.

So we'll happily go to questions if there are. Ben?

Just first one on broadband. Obviously, we've had in New Zealand, or 3 main telcos have been declining in terms of total broadband subs. And you don't split out fixed wireless, but can you sort of give a breakdown of what fixed wireless has been doing? And then with 5G fixed wireless, what's your sort of targets on the back of that? Can you -- how much can you grow fixed wireless by either connections or some monetary value?

[indiscernible] start or you want me to go, okay. So we haven't publicly talked about FWA. We -- it's one thing Spark has done very well actually when we look at it. They did a good job of getting that and holding on to that base.

We had a go at it a number of years ago, and we didn't do a good job of holding on to that base, and we saw enormous churn and the customer proposition was poor. With the build of the network now and the AI smarts we've got, we're confident we can put a really good customer proposition in front of it.

And we've got a base there that, obviously, this is not new acquisitions. It's actually migrating customers that we've got today across. The margins that are available, I won't go into in depth, but needless to say, it's pretty obvious from some of the pass-through charges that we get through the LFCs, which are pretty transparent. So there's an undoubted margin benefit for us if we do that. The counter to that and being completely honest is New Zealand probably has one of the best fiber networks in New Zealand, and it was incredibly good rollout.

So it's not going to be easy. We need to be quite targeted and quite focused, and we're actually spending a bit of time now just starting to build our customer proposition and what that looks like and how we change some of the perception that we probably had. So we've got a bit of work to do. And obviously, it needs to align with as we roll out the 5G core network and actually have the right customer experience coming off the back of it.

Yes. I think the flattening of the fixed wireless opportunity is down to 4G really being saturated. And so as we're moving to a 5G world, now we've got 70% plus of the population covered with 5G. We've got this 5G stand-alone core technology coming and a lot of 5G spectrum. It's a real opportunity to drive the next wave of growth in there.

And I mentioned in the presentation, that we can now create a much more fiber-like product. So actually a real competitor to the low end of Chorus' product and perfectly sufficient for 80% of the population's needs.

So now it's about creating that proposition and targeting those customers because obviously, there's a huge margin advantage for us as well. I think the other thing just to note is the reason we haven't been able to go really hard at this already is the prices of the modems have been very high. That's come down a lot now with global rollouts of 5G stand-alone. So we've actually got all the sort of conditions are coming back together to have another go at this.

Nick, it's Phil here from UBS. Just a couple of questions from me. One, how do you measure the economics of the One Wallet? And then the second question I have was just you might be able to answer this. But over the medium term, what do you think the CapEx to sales ratio would fall to as a result of RANCo?

So the second one, we won't answer in detail in terms of -- but obviously, it helps underpin us going to 11% or below from a general guide. The first one, we actually spent quite a bit of time on that because we look through the customer lifetime value of the product. And the way that the accounting side of that works is we take the actual cost of that in an A&R hit upfront and then obviously get the margin accretion over the lifetime value of it.

So it's something that we're continuing to monitor and tweak because this is, again, down to the benefits of AI. We can now do a lot more targeted offers. So one of the things we didn't talk to was the fact that we don't necessarily have to go above the line with as aggressive offers because we can actually make more targeted offers in behind the scenes.

So the discounts of handsets, hopefully, over time, that enables us to play less in that space, which obviously we have to fund because the margins on those handsets are so low. So we look at it through the lifetime value of the customer. And effectively, we correlate the offer up the front with what the expected term of that IFP plan is and correspondingly, the monthly earn that we get off it.

Thank you [indiscernible].

Thank you very much, guys. Appreciate it.

We're going to invite the CDC team to come on stage on a short video that is going to be played first, and then David and Greg will join us.

[Presentation]

Thank you very much for coming along today. So today, you're going to hear from myself and David. David has been with us now for just past his probation period.

And so he's relatively safe. And I think notwithstanding his poor choice in grape varieties in his wine preferences, he's not a bad [ luck ] and he's doing a fantastic job in that role.

I want to talk about lots of things today and really keen to get to the end and answer as many questions as people have. And -- but one of the main things I want to talk about is the differentiation of CDC relative to the rest of the industry. And that's on multiple levels, which we'll talk to. I feel very privileged to be right at the heart of a lot of the conversations around digital infrastructure, AI, energy, all of those things.

And I do feel for a lot of people in this room because even if you're only one step removed, 5% or 10% out of the center of the universe type of thing, it's actually really, really difficult with so much noise out there to believe what's real, what's not, where it's going, how the geopolitical overlays, regulation, government regulation, what's real, what's not, where the risks are, all of those things.

But rest assured, we live and breathe this all day, every day. And I can certainly see after being in the business for 20 years, I can see through the noise to see what's real and make sense of it, and we continue to do a pretty good job of that along the way. And so when I talk about the points of differentiation, there's a few sort of key pillars.

And a lot of the folks in our industry, they might not necessarily even understand a lot of the things that I'm about to say. And the reason for that is people have a real sort of short-term focus in many ways at the moment. There's a huge amount of speculation. We're not speculating. We're not working necessarily on a real estate project-by-project basis. We're thinking about a digital platform and the value in that platform is longevity, is the retention of customers and the velocity of creating new customer contracts with our existing customer base and how quickly we can grow that over time, and that velocity is really important.

And so at the center of the velocity, we start with security. Now the world is not getting any safer. It's getting more dangerous all of the time, geopolitical, cybersecurity, all of those types of things. And all of the customers are craving the same sort of security protections that government has enjoyed for 20 years.

Now I didn't know at the time, but actually did something that in hindsight was really smart, but it was really hard, is that we started at the sort of really hardest end of government. Government is the hardest customer because they really have high standards from a security regulations, the audits, reporting, all of those elements.

And the security was always the biggest hurdle. And we were lucky that we started or unlucky, but lucky in hindsight that we started with -- at the intelligence agency end of the spectrum because if you can satisfy their requirements, you can satisfy everyone else's requirements.

And that now has gone through all of civilian government and then into now the critical industries of Australia under the various critical infrastructure legislation in Australia. A lot of the organizations, if they were disrupted, they would have a similar impact to the disruption of Australia. Those organizations are now flocking to CDC, and they're all the biggest and best kind of organizations in banks, utilities, transport, logistics, even all the research organizations, education and the likes.

And so that's just another pillar of our customer base, and it's all been based around security. Now what people fail to recognize is that often is that the government is the biggest consumer of IT products and services in Australia. And a lot of the other organizations that are in our data centers continue to serve government through our ecosystem.

And so our government, I guess, penetration in the market is even much bigger than people first realize. And a lot of that is down to the security that we have. And in the future, cloud computing is so key to the delivery of a lot of the services on behalf of government and also enterprises, and it's completely integrated, and they need to have the same or similar security settings as well. But in the future, that proximity to the most important data in Australia is going to be super important for the AI deployments that we're having.

And AI over time, that will also require the same or similar security settings that we have for all of our other customers. And so security, it's been sort of the first starting point for us, and it continues to be super important. And the good thing about security, if you do it -- if you try to retrofit security on a footprint-by-footprint basis or a building-by-building basis, it's quite difficult, quite expensive. It's impossible really because of disruption.

But if you build it as part of your DNA from day 1 and you do it at scale, you're actually not incurring a significant or material cost overhead to build to the highest security standards, which gives you the ultimate optionality with customer choice in the future. So security is great. The availability element, people still talk about five 9s and whatnot.

We guarantee and deliver 100% uptime for our customers. And as I stand here today in 20 years, we've never had to pay out SLA sort of penalties or anything of that nature. So the availability is super important. Now number three, optionality, I believe, would argue has been the biggest contributor to CDC's success and is a massive point of differentiation.

So when I started the business, I may or may not have said this to you people before. But when I started the business, I hated data center people because data center people give you a list of constraints that you have to work towards. And I'm an IT person at heart, and I'm just learning this data center paper. And the data center sort of world, they -- it's completely sort of out of step with the way technology evolves.

So people think they build real estate and they think in real estate terms, so they build a piece of real estate. And then over time, that piece of real estate becomes progressively and increasingly at an accelerated rate, disconnected with the technology that needs to support because it's built for a point in time, and we all know that technology is rapidly changing. And so when we started the business, we did something crazy, which is we reticulated liquid in data halls 20 years ago so that we could closely couple cooling to IT equipment. We could also adapt and change footprints almost infinitely to changing technology over time. What we also could do is, over time, we could also do much higher densities in the same or similar footprints. And that really attracted the attention of the most important research organizations in Australia. And then the research organizations started deploying high-performance computing infrastructure in our facilities nearly 2 decades ago.

And then 15 years ago, we did our first direct liquid cooling to the chip supercomputer deployment inside a CDC facility. And that was really like cutting edge. And the thing about supercomputing, supercomputing is like Formula 1. And what happens in Formula 1 is a lot of the innovations of Formula 1 find themselves in passenger vehicles 10 years later or maybe less.

So today, if I think about it, supercomputing is still Formula 1, but passenger vehicles is all of the AI deployments. And we've been doing that type of deployments for 15 years. The whole world shifted and not a lot of people have this experience. And so our facilities, even the oldest one today, 18 years old, is still capable of supporting the most sophisticated computing infrastructure in the world today. And all of our facilities, all those 20-odd that are operational and the ones that we're building will be. They're certified by NVIDIA to the highest, most -- the next-generation computing infrastructure that will be deployed. And in that 20-year period, almost 20 years of operation, we've had 0% churn because our underlying facilities have always been able to adapt to changing technology over time.

We have all of this liquid cooling experience where that's a really rare element in the world. And as a result of that, we've worked closely with all of the leading hyperscalers to, in many ways, co-develop all of their liquid cooling architectures and deployment methodologies and commissioning activities. And CDC today is the home of one of the largest direct liquid cooling AI footprints of most of the hyperscalers, and that's all in Australia today and live and sets us really apart and puts us in a great position for the future.

So that optionality, the ability to adapt to changing technology over time, don't underestimate that because it's really, really valuable and our customers love it. And the biggest mistake people make in the data center industry is to think that the -- it's sort of set and forget this whole notion that you can -- you build a building, you sign a lease and then that's a mature asset, fully leased, then there's nothing to do anymore. Well, that's called an office building. It's not a data center. A data center, every rack, every row, cabling, like it's an ecosystem that changes every single day. And if you don't have a closely coupled relationship in terms of the success of your customer inside your facility, and if you don't have the ability to adapt on a rack-by-rack basis to different technologies, different cooling architectures, air cooling to liquid cooling and different ratios within each data hall, then yes, of course, you'll get business if people are desperate and there's no other electrons available, but you won't be first choice.

And CDC is the first choice. And we have -- and we could sell every electron that we have as a result of all of this. And the real challenge now is just getting electrons into the pipe at an accelerated rate. The ecosystem, the ecosystem is important and again, differentiates us significantly. 96% of our revenue comes from high investment-grade counterparties. There's not too many data center operators in the world that can say that. And the ecosystem, we don't want to be all things to all people. We don't want to have 500 or 600 customers. We only have about 100, 110 customers today, but they are the most important customers across government, across the critical industries of enterprise and also the hyperscalers. There's a handful of -- a handful of -- neoclouds as well that we work with closely with NVIDIA and others to support.

But again, 96% of our revenue comes from that ecosystem. And it's really a funny thing. Once you get an ecosystem up and running and you get all of these sites connected with fiber and you have the same standard operating procedures, the same security domains, all of those things across all of those facilities, then the more government and enterprise you have inside your facilities, then it's a big flywheel then the more attractive you are to more and more cloud and AI sort of computing deployments.

And then the more AI and cloud computing deployments you have, then the more valuable you are to the government and enterprise customers. And even all of those, and there's a slide later on, but all of those different market -- target market segments of the market, they're all growing. Some are faster than others.

But there's always this notion that at some point in time, cloud was going to cannibalize this other business, and it's just not the case. You heard it here tonight with One NZ. One NZ or today, it's One NZ, the fact that they've deployed their own GPUs. There's going to be a renaissance in hybrid computing because there's going to be a trade-off between sort of the creation of your own tokens locally with your own models, combined with leveraging on a case-by-case basis, the larger models that people need for different types of workloads, and there'll be lots and lots of different permutations of that.

And the nice thing with CDC, we're not just one data center with one customer or a data center platform with 5 or 6 customers or a data center with 500 customers, we're actually perfectly positioned to win on whichever way technology goes into the future because the most important consumers and the most valuable companies and government agencies are already inside the ecosystem.

So the ecosystem is super important. We'll talk about this later, but the social license to operate, that is as well as a grid connection and all of those things, that's becoming the most important thing, the most difficult hurdle and community engagement, governments and councils and things, they're hands off. It's all care and no responsibility. They've left it up to us to lead the charge.

And on that, CDC has impeccable sort of history, track record of doing the right thing for a long period of time. It's well sort of documented that I started the business in 2007. And at that time, we're at the end of the Millennium drought, and I didn't think that it was the right thing to do to build -- there's no regulations.

Nobody was asking for it, but I just didn't think it was the right thing to do to create a new industrial consumer of drinking water at scale when we're all sharing with buckets so that we could water the garden. And so nobody asked for it back then, but it's become really important now. And we're the only data center of the scale that we operate at in the world today that doesn't use any water, and that's a key differentiator.

And when you start to talk about with local communities, and I stood in front of communities and stood in front of councils and they've got the pitch forks ready to do in, you actually start talking about some of these elements and then the sort of the fear goes away.

And by the end of that, they're asking, we've actually got more land if you want to build more data centers. So the sustainability is really important. And since 2007 because government was our customer and government, that particular year, 2007, [indiscernible] was when we had the election was fought and won on the greatest moral challenge of our time, which is climate change.

And so we immediately decided that we would offer renewable energy and because government has got to eat its own dog food. And so government was consuming renewable energy. So we've been offering renewable energy, zero water solutions with really, really low energy efficiency ratios for 20 years.

And so the new rules and regulations that government is trying to bring in, some proponents in our industry and new entrants that are coming in and may or may not be here in 5 years' time. Their businesses might be here, but they may or may not be here. A lot of these people, they don't really have this long-term view of how the world works. And as a result of that, a lot of people are trying in the data center industry are trying to talk the standards and government off a cliff to the lowest sort of common denominator, where I'm really supportive of making the bar high because, one, we've already operated at that level.

But two, we can't lose the trust of the communities, and they've got really valid questions to ask, and we should be able to answer those questions and not dismiss them as a hurdle to doing business because they have valid concerns. And we need to think about what our system -- our facilities are going to look like and operate in 20 years' time. And that's where we're really, really careful with site selection.

And in a perverse self-punishing type of way, it's actually a nice thing in some instances because it's another barrier to entry and actually helps us remove a lot of the speculators from the market, which is the sustainability element. So -- and as of today, the only data center business that I know of that's 100% net carbon zero in 2026 across all Scope 1, 2 and 3 emissions, which is pretty cool.

And that gets you a long way when you're talking to the regulators around what good looks like now and into the future. The scale is important. Our scale today, when you think about some of the facts and figures that we'll talk about soon, the scale gives us the ability to circumvent in many ways, a lot of the challenges of organizations that are thinking about the business, their businesses on a project-by-project basis, and that's access to long lead time equipment, making commitments earlier, all of those things because we've got a production line of long lead time equipment that we've ordered [indiscernible], so that's here on time. And then we're just pushing out, but thanks to standardization, that infrastructure to the appropriate project at the appropriate time.

So scale has given us a big advantage. And I'd hate to be starting my business. I started in 2007, and then we had the GFC in 2008, which was a lot of fun. And then -- and so today, I don't think you could necessarily do what I did in 2007 and 2027 just because the game has changed, the scale is different. The barriers to entry are incredibly high and relevance is important, and you're not relevant unless you're talking about big scale and you tick all the other boxes, which we've managed to do.

And finally, densification. This is -- I love this because I'm actually a data center operator. I'm not a financial engineer. And I love what I do, and I get excited about every data center tour that I do because I get to see one of my children again.

And these data centers, they're just like the most massive big boy train set because they're just all these combination of cool elements that are stuck together. It's the melting pot of all these different engineering disciplines that I love. And if you get all of that right, then you've got a significant advantage because we're not just building a piece of real estate for a point in time. We're building something that can adapt to changing technology, customers, security, densities and whatnot.

So this densification, the current average rack density that we're deploying for AI deployments, for example, is 132 kilowatts. When I started CDC, it was 0.5 of a kilowatt was the average in Australia. Think about that, 0.5 of a kilowatt of power in every rack. And then so I did something crazy. I said, well, the minimum we'll offer is 5 kilowatts a rack because no one else could do it because no one else could do it because of floor density, power and cooling constraints.

And then suddenly, people realized that it was cheaper to rent one rack under one piece of roof supporting 5 kilowatts than renting 10 racks at 0.5 a kilowatt each. And so we sort of got going. And others didn't have the technical levers, therefore, the commercial levers to compete with us. And that densification story continues. The average cloud density now is about 13 to 15 kilowatts a rack.

The AI footprint, as I said, 132 kilowatts a rack, and we're deploying hundreds of these things at the moment. But next year, from April next year, it will be 220 to 250 kilowatts a rack. And so the magic here is if you've built a portfolio of data centers, and it's in here, there's some numbers there. I just say round numbers because I'm not very smart, 1 gigawatt of capacity, I estimate that we could squeeze 100 to 150 additional megawatts of capacity out of that existing set of shells with a very, very small growth CapEx component because of the flexibility and fungibility of the architecture and the engineering inside our facilities.

And that will be a combination of simply densifying the footprints and then upscaling over the course of the contract, people's capacity requirements.

But it's also -- Jensen has talked about moving the operating temperature of silicon from 28 -- 26, 28 degrees that it is at the moment, to 45 degrees. Now the moment that we sort of get closer to that, and we're moving closer to that all the time, then suddenly, all of this energy, these precious, precious electrons in the world, we can redirect that because of the flexibility of the architecture that we've already got in our existing facilities from the mechanical cooling electrons into leasable revenue-generating electrons in the same physical shelves.

Now that's incredible. But I don't think people are talking about that because they probably don't really get it because they haven't lived and breathed the customer requirements based with technology at the coal face. And certainly, there wouldn't be too many CEOs floating around that have cleaned the floors of their data centers at some point in time, and that's me. So the densification is a real sort of upside and there's nothing in what David says includes any yield optimization for densification. So it's just tick, tick, tick and just think about how undervalued we are.

So if you wrap all of that up, then you have like an incredible, sort of, picture in front of you, which we're really proud of. This is like 20 years of my life's work in front of you today because we've been really disciplined with the way that we've used money over time. And I say to people, like a lot of people in data center world, I think this is a get-rich-quick scheme. It's not. It's a get-rich-slow scheme. And I'm just lucky that I've been doing it for 20 years. And so because we've been reinvesting constantly with the support of our wonderful shareholders, and we continue to reinvest a lot of free cash flow. There's only 3 data center operators in the world that have an investment-grade credit rating, and we're one of them and probably the closest to the center of the universe when it comes to the AI, kind of, revolution. And what does that mean?

It says those available debt facilities, AUD 11.4 billion, which we've also worked really, really hard to establish. We've got access to bigger, larger pools of capital than other people. And our cost of capital is like -- is ridiculous relative to the market, something in the order of 6%. And that's great because it just makes it, as every year goes by and as every AUD 1 billion is invested, we just get further and further ahead in terms of our ability to execute, our ability to grow the pipeline, et cetera, et cetera, without tapping our long-suffering shareholders for additional equity. So it's going really, really well from the capital side of things.

And really, when you think about it, the constraints are really simple, capital, chips and electrons. And capital you can eventually solve for if you pay enough risk premium, but we don't have to pay much of that. Chipsets are relatively well sorted, but electrons is where the field of play, the battle is at the moment, and we do a pretty good job of that. Average weighted lease expiry is still 28.7 years. And people think about what's the re-leasing risk, the re-leasing risk, the re-leasing risk? There is no re-leasing risk because our existing customers, we can adapt to changing technology. It's so much more difficult to move than to stay. And if you love the operator and they've loved you in return, then it's unlikely that people want to move and a 0% churn rate over 20 years indicates that. But that's the old world, not the new world.

The old world was storage and processing of data. That's cloud, that's enterprise, that's government. That's not the AI world. The AI world is the generation of intelligence. And there is not enough supply for all of the demand for the intelligence that needs to be generated now and into the foreseeable future. And so -- and those electrons, that will be the most valuable thing. So those electrons will continue to be in demand regardless of who plugs the computers or who's financed the computers or owns the computers, that they will continue to be in demand. And so don't worry about re-leasing risk, but that should give you a lot of comfort in those types of numbers there. We talked about energy. We talked about water. We don't use any.

And then our pipeline. So we've got about 355 megawatts of revenue-generating capacity today. And there was a slide there about in, I think, Jason's presentation around signing a 555-megawatt contract. So we took -- it took me -- I was a bit lazy. It took me about 18 years to sign 200 megawatts of capacity, and then it's taken me 12 months to sign another 800 megawatts. And so I'm sort of starting to find my feet, training wheels are off, and we're away. But no, we signed now like it's more than 1 gigawatt of capacity. But again, if I had 5 gigawatts of capacity today, I would sell 5 gigawatts of capacity today, and that's what we're working on. We're very conservative here because we've got very, very conservative institutional investors behind us. And so we only put into this slide here, what's absolutely -- we own the land, we've got commitments on power, and we're working through the consenting process in the appropriate locations.

But rest assured, there's a conga line of additional capacity beyond what's here. So we're building 1.35 gigawatts or that sort of building and operating. We've got about 2.6 gigawatts up our sleeve that we're trying to accelerate the delivery of, which -- and that 2.6 gigawatts I probably have genuine demand, and it changes every night because I get text messages every night about more capacity, probably 8 to 10 gigawatts of capacity that I could deploy, I could contract if we had it. And so that's what we need to be able to sort of work through into the future. And that's in Australia and New Zealand.

And it is true New Zealand, although it's more expensive to develop there because of the geological risks and what you have, you've got to build a building and it bloody rains all the time and the earth is soft that -- but it is actually again becoming a more and more attractive location. And that's one of the reasons I'll talk to Contact in a moment, but that's one of the reasons why we're a bit more up and about and a bit more positive on New Zealand than we've ever been before because this business has pivoted completely from me competing for business to me allocating capacity to the appropriate customers as that capacity matures and becomes available, which is remarkable when you think about it.

So that's where we're operating today. It's been a wonderful journey, and it's very, very exciting, and there's tons more to talk about in the near term. So that -- there's lots of green there. Some people might argue that the capital expenditure should be red, not green. But I think about that as an investment, and we are getting terrific returns on every dollar that goes into the ground. But everything is on the up. People talk about it. I don't really think about it because I'm thinking 5 years ahead. But apparently, it's interesting that we've had an upgrade in our EBITDA. So it used to be AUD 680 million to AUD 720 million. Now it's probably more likely somewhere closer to AUD 750 million. So that's exciting, but it doesn't deter from what I do every day, which is just trying to keep the machine moving faster, which is great.

Now when we think about just some examples of the locations and these buildings, these are beautiful. And a lot of people think that you can have a data center that's just quite functional. I believe in form and function. So I think you have quite a functional thing, but it can also look great. And buildings, again, we continue to -- we're building 9 data centers at the moment, and that will continue to increase. The size and scale of the data centers will continue to increase. Melbourne, in Brooklyn, we've got Brooklyn 2 next to Melbourne. The Brooklyn 1 is the small one on the left and the bigger one on the right is Brooklyn. That's about 120 megawatts of data center capacity. That's all now operational in recent times. Eastern Creek 5 & 6, this is a good story about densification. If you think about the buildings on the left, closest to the old Coles depot there, that's 100 megawatts of data center initially designed, but 150 megawatts of data center deployed in the same shell as an example of densification. And the IRRs on that building are off the charts as a result.

Marsden Park. Marsden Park, that's Marsden Park 1. So that's our very first sort of data center so that we've got a little footprint there for people to connect all the comms to and all of that. But behind that, there is 550-odd megawatt data centers getting built behind it right now. And so there'll be 720 megawatts of data centers. I'm a few days away from selling the last building, and then it will all be sold, and that will all be delivered in the next couple of years, which is great. Hume 6, we're still building in Canberra because there's lots of demand. But that's only probably a 30-megawatt building in Hume 6, that's a new one that's just gone live.

Beard 1, that's a new campus, and that's brand new. And Auckland Campus 2, this is the biggest data center in New Zealand, about 35 megawatts just up the road from our original location in Hobsonville. And that's just about, if not completely sold today. And that's why we've got to move and build the next data center at Silverdale, which is already consented and approved as well. So New Zealand continues to go well for us, but we are looking at doing bigger and bigger developments over there as well.

Full on into construction, Laverton, we've got -- that's Laverton 1 and 2, and it was only, seems like the other day that we turned soil on Laverton 1 and 2. They are 75-megawatt data centers each. We just got planning approval for the third one, which is lucky because I've already sold it. So that's 3 and then we bought the land across the road where you can put another 3 of those. So we have full noise on that. And this is exciting like Perth. Perth is going to be great. Like Perth is going to be a big data center market at some point in the future. It's just got oodles of renewable energy. It -- the sun shines a lot, and then it gets hot there. But when the -- in the evening, you get the Fremantle Doctor comes in and wind power is really, really good. So you can get a high percentage across the year of genuine renewable energy 24 hours a day with less requirements for batteries and storage and other things.

So we're excited about that. There's -- it's been an interesting community engagement activity, but we've won over the community, and they love us. We've had all the councils and things over to the East Coast to actually look at our facilities. And then when you can talk about acoustics, you can talk about renewable energy, you can talk about not using water. You can talk about the community impacts of what we've done in our community over the last 20 years in terms of benefit sharing, community work, charity work, sporting organizations, then people get pretty excited about us being in their jurisdictions, which is great.

And that's -- well, there you go, there's Marsden Park. So they are the data centers on the previous slide that have come online this year, and these are the big locations that we're building at the moment. And that's a 150-megawatt data center on the left next to Marsden Park 1, Marsden Park 2, and there'll be more MPs there. And all of the stuff that we're talking about, the 1.3 gigawatts of development that we're doing at the moment, all of that's on land that's already consented. Everything is -- all the power is there. The only risk is execution on what we're doing.

Much of the same way that Longroad talked about the pipeline. We're the same. You can't sort of -- these days, speed is about everything. So we've probably got close to AUD 1 billion of land, and we're working on our pipeline constantly. And when there's an allocation each and every month -- each and every year, sorry, for additional pipeline. And as you get bigger, obviously, your pipeline wants to be bigger to maintain the same velocity and trajectory of growth, and that's what we're pushing hard for.

This is the new Kemps Creek site that we've got initially, I think, about 500 megawatts planned there, and that's going through the consenting process at the moment. Now the only real risk here, and we'll talk about the contracted capacity that we have done. But the real risk here is around just the execution. And on the execution, all of the locations that we've talked about, we've got the power locked in. And all of the sites that were not even in the presentation today, we're working on power 2, 3, 4 years in advance, grid-connected power because behind the meter gas and whatnot, it might be a thing in the United States, but it's not a thing here. It just ideologically, I think it will be difficult to get off the ground. So the grid is key, and we're ahead of the curve. And because of the size and scale of CDC, we can do that. And the rules and regulations around what you have to have in place to apply for and get a power consent today, there's quite a high bar, which is another barrier to entry, of course.

Long lead time equipment. Because of the standardization of our model, as I mentioned, we have long lead time equipment locked in because we've been partners with these organizations for 20 years, we give standing commitments. We're not ordering on a project-by-project basis or ad hoc. It's more of a strategic relationship with the Vertivs and the Schneider Electrics of the world. We have queue prioritization, pricing benefits, all of those things because we're underwriting their, in many ways, their factories ahead of time. And so we're not seeing the challenges that other people in the industry are having.

And this strategic engagement where we always make the hardest, longest decision is the best decision. And those hard decisions are going into communities before you lodge your development application. The last thing you want them to do is to see that there's a data center getting built, and you're always behind the 8-ball. So we're engaging with the community early, state governments, councils, doing tours of our data centers consistently. I reckon I'm doing 2 days a week of education sessions with people, but it's absolutely the highest and best use of my time at the moment because it's a massive differentiator. And we try to find local subcontractors, where we've built incredible businesses have grown up around CDC with incredible loyalty across all the different subcontracting disciplines to CDC because we've changed people's lives, and they've shown loyalty to us, and we continue to show loyalty to them. And as a result of that, we go much faster than most people.

With regards to the joint venture, I think you'll see more joint ventures in the future because just the velocity, like it's just the velocity if you just wanted to do, it's like a hyperscaler doesn't build all their own data centers because that they can't do it fast enough. And so if you can bring, like, the Contact, a great group of people, leading kind of renewable and infrastructure folks in New Zealand, and they've got a great site down at Stratford, which is a disused power plant with all the electrical infrastructure in place. So it's not like it's a greenfield location. It's -- there's existing infrastructure that we can tap into. They've got existing relationships. They've been there forever in those locations, very, very similar to the Longroad story, leveraging existing infrastructure.

So you don't have those costs involved. And if we -- if that means that we can move faster and we can share the upside and share the downside risk, and if it makes sense for us, noting that we're only going to do a joint venture if our -- what we bring to the table is adequately valued in terms of the customers' experiences, the technical capability, the construction expertise, all of those things and obviously, the capital. If all of that is valued satisfactorily and it makes sense, then we'll look at JVs because, again, it's just about the velocity of moving as fast as we can in a world today where, again, you can sell every electron attached to a data center that you can get. If you're the right company and you've got the right track record and you've got the right set of counterparties, you can definitely do it. So with that, I might hand over to David to talk money.

Good afternoon all. It's great to be able to come and talk to you. One of the hardest things in my job, and there's many hard things, but one of the hardest things is I have to speak after this guy. So really what chance have I got? But I'll do my absolute best for you today. It's great to see some familiar faces here also from my previous slide. So thank you for coming. Starting with our contracted capacity at CDC. Our capacity is now at 1.1 gigawatt. That's contracted capacity. You'll recall last time we spoke, it was 1 gigawatt. So we have actually contracted another 70 megawatts in new contracts over the last couple of months, which is very exciting. And indeed, since May, just over 625 megawatts of new deals for CDC.

As you'll recall, on the 5th of May, 555-megawatt contract we announced a beautiful symmetry of numbers. I love numbers, and it's easy to remember. It was with a high-end investment-grade rated hyperscaler, 10-year deal with 2 10-year options, which we think really underscored the value that we bring to the market and the esteem that we're held in by our customers that we will be able to contract on that basis with such an impressive customer. On the right-hand side of the slide, you can see how our megawatts turn into revenue earning over the next 3 years through until full year '29. Starting on the left, the 350 megawatts is what we are physically billing today, that is revenue earning today. You'll recall last time that we spoke a few months ago, that number was 220 megawatts -- so we've converted another 130 megawatts into revenue earning over that period of time.

And looking through to full year '27, we have another 100 megawatts or so that will become revenue earning by full year '27. If you roll the clock forward to full year '29, by March of 2029, we will have completed and rolled out the 555-megawatt contract. And indeed, all of the 1.1 gigawatt contracted work book will be revenue earning by March of '29. So a really busy and exciting couple of years that we have in front of us.

What does that mean for earnings, for our business? Firstly, we are talking today about an upgrade in our full year '27 EBITDAF from previously AUD 680 million to AUD 720 million up to a new range of AUD 710 million to AUD 750 million. There's a couple of things that are driving that. Firstly, the 70 megawatts of new contracts that we've announced, which will roll out over full year '27 and full year '28. Secondly, some OpEx savings in our business. And thirdly, we provide managed services to some of our customers, which in simple terms is installing equipment on their behalf and managing that process. We have been able to earn some additional margins through procurement savings, which have flowed through to the bottom line for full year '27. So AUD 710 million to AUD 750 million is our updated guidance range.

Looking through to full year '28, we still expect EBITDAF to exceed AUD 1 billion. And very importantly, by the time that the 1.1 gigawatt is fully revenue earning and fully handed over to our customers, which is March of 2029. On an annualized basis, we will have EBITDAF of AUD 2.2 billion. So specifically, what that means is for full year '30, that will be the first full year at AUD 2.2 billion. But on an annualized basis, it will be in place from March of 2029. In terms of capital expenditure, our guidance is unchanged at AUD 3.8 billion to AUD 4.2 billion, excluding land. We did make a comment earlier on about land and the investment that we're making to help build out our future pipeline. We've given some guidance or assistance on CapEx and what it costs for us to construct. That is unchanged from when we last spoke, at mid-teen level million dollars per ICT or per billable megawatt in our businesses.

As you would expect, and we'll come to CapEx in a little bit more detail in a moment, we are very careful with how we spend capital and where we spend it, and we point it at the earliest revenue earning opportunity for our business because critically for us, there is -- the more that you can condense the time from when you start spending CapEx to when you hit your first RFS or ready for service date, the more you can compress that, the less funding you need and the higher your level of returns. So that is absolutely our focus as a business.

Looking at some of the history of CDC over the last few years, back to full year '23. I think what's really impressive as you look at this and you think about this business over the years and the incredible growth that has happened, particularly over the last 12 months, as Greg mentioned, 800-odd megawatts. But through all of that growth and through the growth in the contracted work book and the EBITDAF for our business and looking forward, the fundamental competitive advantages we have around our weighted average lease expiry and also the quality of customers that we have, investment-grade customers has been maintained.

So all the way back in full year '23, we had 90% investment-grade customers in terms of our revenue base. As we sit here today, it is still 90% investment grade. And our weighted average lease expiry is still at a very impressive level of 28.7 years. Our customer base, we started with government, expanded into national critical infrastructure, expanded into hyperscale. So we have a variety of customers. We have high credit strength, and we have quality long-term customers that underpin our business. I'll talk a little bit more about credit rating a little bit later on. But one of the key things that Moody's look at when they rate us is the quality of our customers, the length of our expiry or weighted average lease expiry and the quality of our shareholders, which we've talked about today, all critical to underpin our credit rating.

Funding. Well, this has been a busy space. There's no doubt about it. And for some reason, I seem to be really popular with the banking community. And I just can't quite work out why that is. I assume it's my sense of humor and my overall personality. But I think what it is, is we're actually really busy on funding at present. We have a really strong and well-capitalized balance sheet. As I sit here today, we have over AUD 5 billion of available liquidity for our Group, mostly in the form of undrawn debt plus some cash on our balance sheet. You saw on the earlier slide, we've got total facilities of just over AUD 11 billion, AUD 11.4 billion to be precise.

And over the last 6 months, we've been very active in the markets, firstly, in the bank debt market earlier in the year. And then from April 21, which is when we made our credit rating public at Baa2. And I should add, we had held that rating on a private basis for the previous 4 years. So the business is very well climatized and accustomed to operating within the requirements of the rating. And indeed, our shareholders have been very supportive of the rating over all of those years, including providing equity support as recently as February of this year at AUD 500 million and then back in late December of '24. So very important to underpin the rating of our business.

The public credit rating allowed us to access public debt capital markets. We issued our first public hybrid in June of '26 at AUD 1 billion, our first senior bond in July at AUD 700 million. And we've been active again for the third time into the USPP market just last month, which is due to close in another month or so. So as we go forward and we think about funding our business, we've got guidance in the market for CapEx at AUD 4.8 billion to AUD 5.2 billion. You can assume over the next couple of years, whilst we don't have public guidance, we've got significant delivery in front of us to deliver the 1.1 gigawatt of contracted capacity. So it's important that we continue to diversify our funding base, lengthen the tenor of our debt and, of course, optimize the cost of that debt. So you'll see us continue to be active in the funding markets in the coming months and years.

Capital deployment, I've touched on this already. CapEx, it's really important, certainly from my perspective, certainly from our shareholders' perspective and indeed, the debt investors into our business also that we are careful and we are considered in how we spend our CapEx. What I can say to you and what you can see on the slide is that for the current financial year, we are over 90% of our spend is on delivering contracted capacity with our customers. What we're not doing is borrowing funds from the market to invest in speculative build. The majority of it is in contracted capacity. And then to a lesser extent, of course, we are investing in future capacity for our business. And as Greg touched on, the pipeline is very significant for us. That's it from me. So thank you. Look forward to some challenging questions. I'll hand over to Greg.

It seems like we're running out of time, but I'm not sure what that means. But -- so just really, really quickly because a lot of people have asked questions around basically, right now, there's obviously a lot of interest in the data center industry. There's been tons of speculation in the data center industry. And as a result of that, there's been a lot of nervousness across the community. Government understands completely the imperative from a future economic prosperity perspective and also from a sovereignty perspective and the national interest overall and the fact that if it wasn't for data centers right now that there would be -- we would be in recession. Government is completely aware of that, and they want to win back the narrative. And the way they're winning back the narrative is to bring down some pretty high standards and expectations on the data center industry, which we're very, very supportive.

One of the challenges you have is that a lot of the actual rules -- planning rules and everything is a state thing and then there's a federal -- and it's difficult for federal to -- and the conflicts of federal managing state, et cetera, et cetera. But everyone is having a kick and a punch at the moment. And we're -- rest assured, we're across all of those different conversations and have regular, regular audiences with those. And none of this scares or worries or concerns CDC because we are operating and have operated to the standards that they are contemplating, noting that a lot of this has still got a way to go. But we're ahead of the curve and in a very, very good position and very supportive, very supportive of having high standards that we all have to strive up to and not having a ceiling, not a floor.

That, again, talks to great uncertainty, and this does reinforce the strategic advantage that we have across lots and lots of technical, environmental, commercial, borrowing. There's a lot of differentiation here. Even our shareholders are even another point of differentiation in terms of being large open-ended investors. That's another advantage. So there's lots of differentiation. So we're not nervous about that at all or in any way. We've talked about a lot of these elements. I probably haven't mentioned the skills element, but we're actually -- we're leaning into with our own academy, creating our own skills to ensure that we don't have a skill shortage. We're looking ahead to what's the size and scales and skills requirements of our team in the future, and we're meeting that internally rather than trying to chase other people's employees. And so that's working really well. And that also develops like an incredible amount of loyalty.

And this goes back again, if you take a long-term view, it's an infrastructure company. Contracts are long, sales cycles are long, all of those things. So if you take a long view on most things, you'll do well. Again, just sort of amplifying the sustainability highlights, that's -- there's no other data center operator that has all of these key metrics. Even the PUE, that's a power utilization effectiveness ratio. That's on par with most data centers that spewing millions of liters of clean drinking water into the air each year. But that's an annualized number across all of our data centers. And some of our data centers are very early on, and so they're very poor efficiency at the moment until you actually build up the volume of implemented computing infrastructure inside them. And so that number will fall over time as well. And so the takeaway there is we can actually achieve the same energy effectiveness or energy utilization as organizations using water but not use water, which is pretty remarkable.

Customer demand. It's probably where people have lots and lots of questions, but there's -- don't worry about the notion of how full data centers are. There's no real capacity anywhere. Most new data centers are actually completely contracted before they even get out of the ground. And so that's our experience as well. And there's definitely -- you can see from the chart here, you can see the volume of capital that's going into data centers. But what you can see here is why. And non-AI compute, and so that's classical compute, government, enterprise, cloud computing, that continues to grow. AI training continues to grow. And inferencing is where the big movement is. And it was about 3 months ago, people always ask me about the AI bubble.

About 3 months ago, for the first time in human history, the amount of compute on the face of the earth that was dedicated to training was actually -- inferencing was larger, and that was the first time. And you'll actually see inferencing getting bigger and bigger and bigger. And that just goes to the consumption of AI in economies around the world. And even though we're in early days of that, you're going to see a huge amount of growth in inferencing over time, which just speaks to more demand. So there's basically more demand across every client of CDC's, and we're in a wonderful position as long as we keep building capacity. This talks about the size and scale of what people believe, Mandala and McKinsey, the size of the market is. It's currently, the operating capacity and revenue generation in Australia is about 1.5 gigawatts, but they think it's going to be about 5 gigawatts.

As I mentioned, I think you could just about whatever capacity you could bring into Australia, you could just about sell at the moment. And a few people have asked me, the AFR has reported about Anthropic signing a 2-gigawatt lease with Zerra, a Singapore-based developer of data centers in Central Queensland, today apparently. That's -- and saying what does that mean for us? It doesn't mean anything for us. It means what we need to do is bring on more capacity because those types of customers have almost an infinite demand, whether it's OpenAI, whether it's one of Elon's companies, whether it's Anthropic or indeed all of the big organizations that we work with that service that market and others, of course.

It's just the demand is off the charts. Just today, one of the most important customers in the world is just desperate to chase another gigawatt of capacity and wants to put it in Australia. Like it's just -- again, it's not a demand issue. It's just supply at the moment, is the challenge. I've talked about all the different market segments. All of our market segments are growing. This is about the growth in the last couple of years, and you can see huge volume of growth across all of our different addressable markets. But as we sit here today, government is still probably about 25% of our business and growing, but everything else is growing as well, which is a really wonderful, wonderful place to be. And with that, we would like to invite people to ask questions. Make sure they're all directed towards David.

Now the fun part. Grant.

Greg, you talked about all this demand, and it looks like you're moving towards 400 megawatts of annualized capacity growth sometime in the near future. What's stopping you from pushing that number even harder? Is it capital constraint? Is it building constraints?

It's just -- it's basically constraints. And the constraints -- the #1 constraint is grid connectivity. And so the components that you need to connect to the grid can take -- transformers and the like can take 2 years to arrive. And so that's 2 years. And you can't do much about that. And then that -- those components need to be compatible with the utilities kind of standards and all those things. So it's not like you can get something that's cheap and cheerful and drop it in there. And then to get to that point to order those transformers, you've got to do grid studies and work with the organized -- the AEMOs of the world and the utility and get permission to actually apply that volume of capacity to the grid because we have a national energy market here. And so that's the biggest choke point.

And absolutely, we are opening up more and more of those conversations. And the wonderful thing is you'll see is that there is actually -- and contrary to what you read often, there is actually lots and lots of spare capacity in the grid in Australia. The problem is the capacity is not in contested, congested markets. The capacity is in locations further away from capital cities. And you'll see more and more of that semi-regional and genuinely regional footprints. And we have multiple gigawatt sites under due diligence right now and working through that process. They might not be in here, but that's what I'm really focused on, and that's what I think about when I go to sleep every night is how can we get more capacity faster, but the grid is the natural constraint.

I do agree with the Longroad guys that the fastest way to bring in new capacity is a combination of renewables and storage solutions. And even the storage solutions have come a long way. And we're even contemplating in some of these big scale locations to maybe even have 2-hour grid sort of scale battery backup, BESS systems to complement our backup on-site generation because that will give us run time without using diesel generation and also be able for us to flex a little bit at different times to help the grid in times of peak demand. So that's kind of the constraint.

And then in parallel to that, naturally, we're involved early now in all of the community engagement activities. So they're the sort of activities. It's certainly not capital. We're actually blessed. You saw the numbers there. We're blessed with that, plus the support of our shareholders, which is terrific. But I want to go much, much faster. And in a perfect world, I would love to bring 1 gigawatt of capacity per annum online. That's what I would like to do. But you need a certain number of electricians, you need a certain number of even tower cranes. Tower cranes are a constraint. So within all of those constraints, I think that number, 400 megawatts, I would love that to be like a base, not a ceiling.

I just want a quick second question. Just on the relative economics between New Zealand and Australia from a build cost and a power cost perspective.

Yes. It's 30% more to build in New Zealand. And obviously, the depth and skill base is a little bit lower than Australia in terms of these types of construction activities and large-scale construction activities. The closest thing to building a data center is building a hospital, and you can see not many hospitals get built well. And so that's the sort of the cost side of things. So that's where we work towards. And it takes a little bit longer as well just because of the additional construction activities and ground conditions and all those things.

And the power contracts?

Power contracts are, I would say, comparable, like in terms of a per kilowatt basis, but the penetration of renewables is higher. And with hydro and thermal, you have a larger percentage of noncarbon-intensive energy sources in New Zealand than Australia. And certainly, since the troubles in the Middle East, New Zealand inquiries are up.

So the only reason why you would go into New Zealand is because you can get capacity there, even though it's more expensive.

No, the thing is -- what people need to understand and I laugh, like, at some of the experts writing in newspapers because they're so off the market, it's not funny. The value proposition from an AI -- the commercial sort of realities of generating tokens versus providing electrons for people to rent data centers is completely different. And so you -- for every AUD 1 billion I build a data center for, like, it used to be AUD 1 billion was the most. So if I had AUD 1 billion data center, you could have AUD 1 billion worth of IT equipment in that data center. And so -- and that's like air-cooled computing infrastructure. But these days with GPU technology, TPU technology, those things, it's more like AUD 9 billion to my AUD 1 billion.

And so -- but that $9 billion generates a much faster and bigger economic return. And so the actual -- the most important thing is the time. And so if I can guarantee a time, then actually the input cost, like I could put my data center lease costs up by 20%, and it would have a negligible impact into the cost of delivering a service to the end customer. And so like we're in a great position and people will pay more for certainty because even if you miss the date by a month or 2 months, then that's a material impact when you've got billions and billions of dollars of GPUs depreciating and not generating returns. And the returns are immense if you can get the GPUs and if you've got the technical capability to deliver that as-a-service outcome. No, you can't have another one. You are just going to say thank you.

Yes.

Sorry.

It's Elise from Pendal. I've got a 2-part question. But the first one, talking about densification, can you explain to us how that then flows through into increased returns for the data center? And then going to the second part, which is basically what you just discussed, as the return profile for your customers is increasingly getting higher and once the GPUs are depreciated potentially significantly higher, is there a way for you as a data center operator to participate in the upside?

So if you think about -- we've talked about just in round numbers, if a gigawatt of data center cost you AUD 15 million to build. And so then if you can turn that -- if you can add another 100 kilowatts -- 100 megawatts of capacity -- 100 kilowatts of capacity per megawatt, then that additional upside, which is revenue generating, is going to cost you maybe like a fraction of that AUD 15 million because a vast majority of 60% or so is into the shell and in-ground services and the fit-out costs are probably another 15%, 20%. So it's really a little bit of additional generation -- generators, chillers, a few more pumps and then you're away because we already upsized pipe work and electrical reticulation to be able to take advantage of that densification in the initial $15 million per megawatt. So what you're getting is really almost additional revenue for free, like that's the densification portion.

Can you do that both through the life of the contract?

Yes, absolutely. Like -- and that's a thing they talk to us all the time, and we're monitoring and when they get close to thresholds in terms of hitting the ceiling of the capacity that they've leased, they're really open because that's the cheapest, best way to grow as opposed to having to get another data center. They much prefer that, and it really helps them over the course of that initial contract. And that's why there's no sort of generally no quibbling or challenges when it comes to the end of their initial term and taking options and all of those things.

And absolutely, on the other side, we're looking at a range of models from no risk to more risk where if we want to take on perhaps a lower credit-rated counterparty that's got a higher sort of profitability potential, then we might not want to risk our investment-grade credit rating to have them in our data center unless we actually participate in the profit upside because getting access to the electrons is almost impossible. So if we are good enough to provide that to them, then perhaps in return, we should earn more than just the lease rate. And we're looking at all that stuff.

Can I just dig into just the returns versus cost of capital more with David? Just on the returns, some of your DC peers are, sort of, saying they're targeting a 10% yield on cost on hyperscalers. Just wondering if you guys have a comparable target or number that you've achieved? And then just on the cost of capital side, 6% WACC is really, really good. What sort of, kind of, incremental cost of debt have you been getting in your recent deals? I'm sorry, I'm going to annoy you, Greg. Can I follow up on the contracts? Because you said...

Why don't you let him answer?

Yes. Certainly, great question. So 2 questions. In terms of levels of returns, I can say some things without, sort of, directly answering your question. Maybe if I referred to an earlier slide that the Morrison team put out where they put a range of levered IRRs of 12% to 20%. So in terms of levered IRRs, we're probably targeting at the upper end of that range when we look at deals. Obviously, every deal is customer-specific. Probably would prefer not to put a yield on cost number out there, but I know that competitor you're referring to and the number they put. But maybe if I quote levered IRRs, that's kind of where we like to get to.

In terms of our cost of debt, and we showed on the slide before, what we've been up to over the last 6 months or so. If you were to look at this financial year, full year '27 through till March, so these 12 months, our forecast weighted average cost of debt net of hedging is about 6%. So that's where we sit for the business. And some of the earlier questions, valid concerns about rising bond yields and what impact will that have as we grow our funding portfolio in line with earnings. We have a very active hedging program. So we hedge forward our floating interest rate cost quite a significant period of time. For this year, we're about 95% hedged. Next year is about 80%. And if you went through to '29, which is when we will have delivered the 1.1 gigawatt, we're over 60%. So we've insulated ourselves, I think, pretty well from risk around rising bond yields. And yes, so that's what I would say.

Sorry, I might have misheard you, but did you say you're about to sell the last building in Marsden Park? And is that like roughly there's 6 buildings, so would that be about 100 megawatts? And then I guess the follow-on question is, on top of that 100 megawatts, physically, what could you sell on top of that 100 megawatts in the next 12 months?

Well, it depends on what we can bring on. But I would be forward selling sites as we get consenting. And so we might be able to sell another 500, 600 megawatts of capacity, just depends on timing of consenting. But again, if I can consent and have line of sight and all of the construction planning in place, if we could do a gigawatt of capacity, we'll sell a gigawatt of capacity. But like right now, that last building is anywhere between -- depending on the configuration of the end customer, it could be 135 to 150 megawatts. No worries.

Greg, can you just talk to your medium-term...

Where is it? Over there.

Over here, mate. Can you talk to your medium-term ambitions outside Australia and New Zealand?

Yes. I think we continue -- like obviously, there's tons to do in Australia and New Zealand and building and developing your own home market is much easier, safer, more predictable, profitable, all those things potentially. But I do think at some point, we are -- if we're going to realize our potential, we're going to have to have a larger degree of geographic diversity. And we're going to have to do that because my crystal ball is not as good as yours. And like I don't know if, like, it depends, you get a change in government and then there's momentum for some sort of data center moratorium or whatnot, like that's not going to happen anytime soon in Australia today. But imagine if it did, like that would be a disaster.

And there's lots and lots of opportunities outside of Australia, where we've been looking at them for the last year or so. And we're getting closer and closer to perhaps doing something. But again, we're not going to, sort of, risk the mothership in order to do something on a very much an ad hoc or opportunistic basis. It has to really make sense and it has to be absolutely demanded by one of our great customers. And then if that was the case, and we had the right local partnerships and relationships, then yes, we would do it, we would absolutely do it. As long as the shareholders agree, of course.

Thanks for the presentation guys. Just a quick one on the AFR article. Is the 1,400 megawatts sort of it or based on what you're saying, it's basically Stage 1 of a number of stages of demand from them?

No, no. It's -- so the particular customer you're talking about, they've given letters of intent to lots and lots of players with gigawatts of data centers because they know that not all of those data centers are going to come to fruition. Even the AFR article, the one there, it still doesn't have regulatory planning approval, so there's still a bit of water to go under that bridge. And Queensland and federal governments are locked in a bit of a battle around how data centers are powered. And so there's potential legislation impacting on the government-owned coal-fired energy generation assets in Queensland.

And so like there's -- again, there's so much noise out there. That sounds like a great article, but I've read other articles where other people have already signed leases and actually haven't signed leases. And like -- so I know what's real. What we've talked about is real. And that probably could be real, but there's still tons and tons of conversations and gigawatts of demand beyond that from not only that particular customer, but from the broader ecosystem of opportunity.

Appreciate it. Thanks, Greg. And just one quick one. Just with regards to the conflict in the Middle East, obviously, a sensitive subject. But can you give us some idea of where Australia's global market share could move to as a result of them?

Well, it's already -- it's -- like even before that happened, it was already black and white that since 2024, there is like without question, the second largest destination for global data center investment was Australia after the United States. And so the United States will continue to be massive. And Australia is already the second largest destination for data center opportunities. But India has become more significant as a result because of proximity to the Middle East, but not being the Middle East, but also the incentives and tax regime settings that the Indian government have put into place. And that's -- they've -- like CDC is about the same size as the Indian data center market today. And so you can think about like the growth opportunities that there could be in places like that.

And so -- and New Zealand will get their unfair share of global workloads as well, I believe, because they're considered super favorable by all of the largest technology companies in the world. And again, that cost to build over there, that flows through. That's a rounding error when it comes to the actual cost of the stack. And so -- but I do think Australia, like, as long as we do the right thing and we maintain the trust of the community and the populations by doing the right thing, we will be -- we should be the second largest data center market in the world. And geopolitically, it would mean that we are in such a strong, strong position geopolitically if that was the case. And from a sovereignty perspective, economic security, national security, cyber resilience, all of those things, we actually need this compute in this country because having compute in your country now is equally or more important, it's impossible, but equally important as having your own energy generation in your country that you control.

So Infratil earlier in the day put up the slide around the next step along was GPU ownership. Like, have you given any thought to owning some of that on behalf of your customers or customers ask you to do that?

We look at that regularly, and that's -- I wouldn't say no to that, but that would be some -- a bit of a departure from our core business. But I think there's ways of participating in that layer of opportunity without actually being the full-blown, kind of, owner of that sort of activity.

Okay. I know we are just over time. So any one last burning question before...[ Meryl ].

Just a quick question on the leasing side, perhaps. You talk about passing through increasing costs of potentially 20% is kind of a rounding error. What are some of the changes you're seeing in key terms of leasing with this supply-demand challenge? Just curious to see if you're seeing any new dynamics on that side.

It's actually really, really interesting. On one of the most educational things you can do is go through all of the different debt investors' offices and answer all their questions as well because they're always worried about not the blue sky opportunity, but what's the -- how -- whether -- what's going to stop them from getting their money back. And I absolutely understand that a lot of -- because of the demand and a lot of new entrants, a lot of the new entrants are getting very, very much more onerous penalties in their contracts and also really tight sunset clauses if they miss dates and things like that in terms of being able to terminate contracts and whatnot.

The good news here is that because of all these customers have been our customers for such a long time, because we've operated on sort of agreed templates, order forms for such a long period of time, the terms and conditions are not really changing, and it's just really about price and inclusions and all of those things, which are really easy to work through. We're being really sensible where our lease rates are probably on the incline, but we're not gouging because I'm not trying to optimize every single project because I know the opportunity in the next project and the next project and the next project strung together is -- and that velocity is far more valuable than a onetime deal like a lot of people are chasing. So there's not really any impact on us, but we're also not getting the pressure to drop our prices or anything like that, which is awesome, given the volume is bigger.

Okay. I'm going to hand it to Jay to thank the guys and to wrap up.

[Foreign Language] Good afternoon, and welcome to Infratil's 32nd Annual Shareholder Meeting. I'm Alison Gerry, your Board Chair. I can confirm that a quorum of shareholders is present and declare the meeting open. The minutes from our last annual meeting have been approved, and I'll take the Notice of Meeting for today's meeting as read.

I'll start today's agenda with a brief overview of Infratil's progress in delivering value to shareholders in the areas the Board has been focused on. Infratil's CEO, Jason Boyes, will then provide his view on how Infratil and its portfolio companies are performing and the outlook from here. We'll then have an opportunity to put shareholder questions before moving to the formal resolutions and voting. Following the meeting, directors will be able to meet with all the shareholders that are here today over afternoon tea.

Today's meeting is a hybrid format and we welcome those shareholders who have joined us here in the room in Wellington as well as those who have joined us online.

This slide shows the virtual meeting platform. The boxes indicate where to take to get a voting card and how to ask a question. But if you need any help, you can also call the number displayed in the blue bar at the top of the platform.

So I'd like to introduce the rest of the Board to you. Joining me today in the room, we have Jason Boyes, Jason is Infratil's Chief Executive, and he is seeking reelection today. Andrew Clark, Andrew has joined us from Melbourne and Andrew is a member of the Audit and Risk Committee. Paul Gough, Paul has traveled from London and is our longest-serving director, and he's a member of the Manager Engagement Committee. Kirsty Mactaggart, Kirsty is the Chair of the Manager Engagement Committee and is a member of the Audit and Risk Committee. Peter Springford, Peter is a member of the Manager Engagement Committee and is retiring from the Board today after almost a decade, and we'd like to acknowledge his contribution in materially enhancing Infratil's growth. Peter has been a strong steward of shareholder capital, and we're very grateful he's agreed to remain as an adviser to the Board for a few more months as we welcome our new directors.

Then we have Anne Urlwin, Anne is the Chair of the Audit and Risk Committee. She is seeking reelection at today's meeting. We've announced 2 director appointments as part of our succession planning. Brad Banducci is here from Sydney and is joining the Board today, and he's -- you're going to hear from him shortly when he gives us his election talk. Unfortunately, our other new director, Tiffany Fuller, could not join us from Melbourne due to another long-standing Board commitment. Tiffany will officially join the Infratil Board after today's meeting and will seek election next year but Tiffany brings extensive experience in corporate finance and investment banking.

We have other members of the Infratil team with us today, including Andrew Carroll, who recently has moved from Chief Financial Officer to the new role of Chief Operating Officer. This role was created because of Infratil's growth, and Andy is also a Director of One New Zealand.

Matthew Ross, who recently was appointed Chief Financial Officer from Deputy Financial Officer; and Matt is also a Director of Wellington Airport. Lee Coker, who has been appointed Head of Infratil Investment and Corporate Development. We have Brendan Kevany, our Company Secretary, and we have representatives from our auditors, KPMG, and our legal provider and Chapman Tripp.

The financial results were released back in May, so I'm going to provide a brief recap. Infratil delivered a strong performance in the financial year to the end of March, and this was underpinned by an 11% uplift in earnings to almost $1 billion. The valuation of our asset portfolio grew by 13% from $18 billion to more than $20 billion, and we lifted the dividend to $0.209 per share, up 2% on the prior year. These results underpin one of Infratil strengths, our geographic and sector diversity. Although our New Zealand businesses were largely constrained by ongoing softness in the domestic economy, but Longroad Energy and CDC are enjoying exceptional demand in their markets and sectors. The substantial investment we've been channeling into those 2 businesses is beginning to deliver a strong trajectory of future growth.

Infratil's strength lies in our commitment to active management, strategic clarity and long-term value creation. And during the year, we set 4 medium-term objectives, which are shown on your screen. These objectives were a response to Infratil's growing scale and maturity and the new challenges and opportunities this growth brings as we continue to drive shareholder value. And Jason will talk about our progress against these objectives in more detail.

I do want to underline that we're very focused on the type and scale of assets needed in Infratil's portfolio to drive ongoing outperformance and growth. This year, you've seen significant progress in refining the portfolio, and this has been a substantial program of work with more to follow. This slide is a summary of the dashboard of the more specific activity the Board is monitoring closely.

First and foremost, our cornerstone goal is to deliver shareholders 11% to 15% returns per annum after fees and taxes over a 10-year period. And this is based on share price growth and assuming that the dividends are reinvested. Our performance against this measure is 17% per annum in the decade to the end of FY '26. On a 1-year basis, your return was just under 14%. And this was a very pleasing outcome when you consider the impact market concerns about AI investment and the Middle East conflict had on global markets throughout the financial year. These themes are continuing in the current financial year and underpin the importance of back-end quality assets while remaining disciplined in the allocation of shareholder capital. And we're very cognizant of asset and sector concentration risk, particularly with CDC's strong growth.

We have, therefore, spent time stress testing CDC's valuation to ensure we have a great understanding of this and how to mitigate it. CDC also secured a public investment credit rating from Moody's ratings in April, and this provides further support as well as a competitive advantage. In December, Infratil's inaugural BBB+ credit rating from S&P Global Ratings also recognized the strength, quality and resilience of our businesses. This has provided a welcome benefit in the form of greater funding flexibility and savings on our borrowing program. It also means we have very clear credit metrics to operate to.

Another measure that we follow closely is our calculated net asset value or NAV per share after fees. Market views on value can differ from the independent or market-based valuations we use for portfolio companies. And this means, for example, the Infratil share price can lag our NAV per share where Infratil's valuations incorporate growth that is longer dated than equity markets are willing to value. And we saw this effect amplified across FY '25 and FY '26 with approximately a 25% discount to our assessed NAV. And market volatility was a significant driver of this discount. That discount has closed to about 15% at more recent share price levels, and we'll keep working to reduce this by helping our portfolio companies realize their growth opportunities and by communicating our insights on future value to the market. This communication is carried out through an extensive investor relations program, ranging from newsletters, which we send out to you through our growing schedule of global engagement with institutional investors.

At the same time, we're implementing initiatives to help investors better understand our business. And these have included publishing valuation and fee models and continuing to enhance our disclosures. New reporting on CDC's future contractor capacity is a great example of the latter.

ESG reporting is another focus because decisions grounded in responsible stewardship, a part of creating long-term value and managing risk. We ranked first globally in our sector and one ESG reporting providers' infrastructure asset assessment, and we were recognized as the top regional leader for our Asia Pacific by another ratings provider.

I've already touched on portfolio strategy, and we'll leave Jason to go into more detail. However, I would note that portfolio company relationships and resourcing and an area that we are paying close attention to. For example, greater collaboration between portfolio companies is an area where we see the potential to unlock more synergies and value. And you've seen an example of this announced in the last week with Contact Energy and CDC exploring a New Zealand data center opportunity.

One of the Board's key roles is to monitor the performance of our day-to-day manager, Morrison. While the people working for Infratil and Morrison employees, the Board retains oversight and makes key decisions on the strategic direction of the business. And this includes driving strong performance from Morrison with the evolving mix of qualitative and quantitative measures I've talked about. Infratil draws on the global expertise that Morrison is growing across multiple infrastructure sectors. And this growth supports Infratil as well as Morrison's other clients and investment funds. And this global exposure is becoming increasingly important for Infratil as we seek larger and new sector investment opportunities.

During July, Morrison announced a new strategic partnership with Sumitomo Mitsui Trust Bank. And we've had a few investors ask what does this mean for Infratil? The simple answer is it does not change Morrison's management of Infratil or Morrison's investment in asset management responsibilities. As Morrison's largest client by assets under management, we feel we're very well positioned. Infratil management sees all ideas being germinated at Morrison and the Infratil Board sees relevant opportunities. This means we aren't excluded or limited for choice.

Infratil may choose to invest on our own or alongside other Morrison clients as we did with the original investment in CDC and Longroad Energy. Morrison may also undertake transactions for other funds and clients that Infratil has elected not to participate in. The challenge for Infratil is more about balancing opportunities with our current priorities and the returns that we are seeking. There's a healthy attention in our relationship with Morrison and the management model encourages outperformance with incentive fees.

In the recent financial year, Morrison did not achieve the required incentive fee hurdle of 12% asset valuation growth on non-New Zealand assets and instead, a negative $18 million amount will be carried forward into the FY '27 fee calculation and netted off against positive fees. The Board has recently commissioned an independent benchmarking report from PwC to review the fee model as well. And a summary of that report will be available on our website. The report found that shareholders get great value under our agreements with Morrison. The 12% hurdle for outperformance is a high bar compared to other similar investment managers. And as this chart shows from the benchmarking report, Infratil has performed extremely well for a very long time.

More importantly, we believe the portfolio today is as well positioned as it's ever been to continue delivering strong returns to shareholders. These may be uncertain times, but they're also exciting times for ideas that matter.

So I'll hand over to Jason now to tell you how we intend to continue to deliver that outperformance. Thank you.

Great. [Foreign Language]. Pleasure to see you here this afternoon. Thank you for braving the cold weather, and I hope you're staying warm at home online. Let me pick up where Alison left off at this -- at 31 March, really this year, I mean market volatility meant FY '26 was not quite the steadier year we had hoped for, Liberation Day, et cetera. However, since then, CDC's announcement of Australasia's largest ever data center contract in early May, more than made up for that. And that's the end of that graph here where you can see it spiking up. It was a transformational outcome and the share price reflected that with a significant increase. Alison talked about 17% 10-year return.

But if you calculated our 1-year returns at mid-August, so taking that into account, the returns are almost 30% and our 10-year returns within 20%. So that's 20% shareholder return compound for 10 years, which is a fantastic track record, obviously. The strong increase in value reflects the rapid increase in earnings that CDC is now forecasting with that contract in place.

CDC's EBITDAF, that's our preferred measure of earnings for the current financial year is expected to be between $680 million and $720 million. That's up from about $390 million last year. The following year, it is expected to rise to more than AUD 1 billion, so a massive acceleration. And then once CDC has built and is invoicing its 1 gigawatt and 1,000 megawatts of contracted capacity that will grow to about $2 billion on an annualized basis. So it's an incredibly fast-growing business now. And those are substantial numbers.

And as this slide shows, CDC's data centers are substantial infrastructure. This is at Eastern crank. This year, CDC in Sydney. CDC expects to spend AUD 3.8 billion to AUD 4.2 billion in capital expenditure to build more data center capacity, excluding land, massive numbers. And in the recent June quarter, it added another 90 megawatts of operating capacity and doubled the capacity under construction to 810 megawatts, and that's really building to fulfill those large contracts that we've now reviewed.

It's very important, though, and CDC is very focused on maintaining its social license to operate. It locates its campuses, as you can see in this photo, in industrial areas and invest in electricity network infrastructure, such as substations for its large-scale campuses and always has. Infratil also has extensive sector expertise in renewable energy, as you all know in the room here, development that CDC can draw upon to power its data centers. CDC is also a leader in minimizing water use. It's closed liquid cooling system has been installed across CDC-built facilities for more than 18 years. We first invested in CDC 10 years ago, actually, in 2016, and we're now well ahead of the investment case written early last year to lift our CDC shareholding to 49.7%, if you remember. So that contract brings us right to the end of that investment case. So we're in good shape. June's independent valuation put our share of CDC at more than AUD 9 billion valuation, up from $7 billion a year ago, underscoring that.

It's not all CDC, though. Our investment in Longroad Energy in the United States also began in 2016. So they're both 10 years old this year. This is some streams in Arizona. Like CDC, Longroad is starting to come of age. Electricity demand is surging in the U.S. Growth of between 30% to 40% is predicted by 2040, driven by data centers, but also electrification and reshoring of manufacturing. Longroad is responding by increasing its development cadence that's how much it builds every year to more than 2 gigawatts per annum. Near term, this is underpinned by their acquisition of a massive 2.8 gigawatts early-stage project that is making its way through its approvals.

To give you a sense, it's probably twice as big as everything you can see on this picture here. And to give you another sense for comparison, New Zealand's installed generation capacity is about 11 gigawatts. So they're building 20-odd-percent of that every year at Longroad.

Regulatory support mechanisms for solar investment are in place until 2030, so we will still and even longer for batteries. And at the same time, strong power demand and prices have offset higher delivery costs, maintaining attractive development returns in that market. Solar and battery storage remain the lowest cost sources of new generation in many markets in the U.S., and we've agreed to provide a number -- a further USD 300 million of equity to Longroad to help accelerate its growth from here.

Longroad is also seeing the positive effects of data center demand, as I mentioned. It is close to completing a 400-megawatt project to supply a meta data center but almost more interesting, it's established a team to develop further data center opportunities on its solar farms. So their initial work has identified up to 10 gigawatts. That's a stupidly big number in a lot of ways when you think CDC is at 1 gigawatt now. So 10 gigawatts of their existing and future development sites may also be suitable for data center development.

So you can imagine and out in the desert here, there's lots of spaces for data centers that could be powered by those solar panels, for example. It's early days, but this could drive additional returns above Longroad's existing renewable generation plans and Longroad is considering what form this might take, including whether to partner with an established data center operator, I know one, they could partner with. While the U.S. market remains attractive, some Asian and European markets have seen development returns compress. So project delivery and platform costs have increased along with complexity in time periods.

So in Europe for Galileo, our European renewable energy business. This has been a reduction in valuation this year, as I mentioned in the annual report and a shift in its focus to fewer nearer-term projects in a smaller number of markets, so a focused strategy.

In Asia, Gearing Energy is managing its prioritization of markets and opportunities carefully as well. Government approval for its large Indonesian solar project is also taking longer than we'd hoped for. So a lot of work going on in those businesses while the U.S. is really taking off.

Alison mentioned this before, but for a long time, we wondered if CDC should expand offshore to capture some of the oversales growth we see there. I just talked about in the U.S. But instead, we're seeing oversized overseas demand coming to Australasia, I mentioned those contracts before and much of that demand has been focused in Australia. But last week, we announced that 2 of our portfolio companies, Contact Energy, and CDC are exploring how they might satisfy that demand in Taranaki. Contact Energy brings existing network infrastructure in Stratford and existing renewable energy generation, and a substantial pipeline of new renewable energy projects as well, which could be relevant for that project. And then CDC obviously brings globally recognized data center expertise and sustainability credentials that sort of partnership, we think, makes great sense. And if the team can make the pieces fall into place, I think it really will meet our goal of delivering infrastructure ideas that matter, both for that region and I think, the country.

So turning to the strategic objectives that we set last year and that Alison mentioned, I think we've made solid progress delivering against those objectives throughout the year. On the first one, while we always make an investment decision with a view to holding an asset for the long term and our track record speaks to that, I think.

Our growth has driven us to refine our current portfolio more over the last couple of years. This means we are divesting those businesses unlikely to scale or deliver meaningful returns under our ownership. So today, we are more than $600 million towards our initial target of $1 billion of investments seem to come in billions in this speech on. This has come from the sale of our stakes in Fortysouth, if you remember, RetireAustralia and our property business and the sale process is underway for our radiology business in Australia, Qscan as well.

Importantly, I think looking ahead, we expect to continue refining the portfolio in the medium term. Another goal onto the next objective is to balance our operating cash flows and dividends in the medium term are pretty important, sign of the sustainability of the business. Income from our portfolio companies began to increase in the last financial year, and that narrowed our operating cash flow deficit after cash dividends to $90 million from -- I think it was $120 million in FY '25. So we are getting there, and we feel like we're on track to close the gap completely. One New Zealand and Wellington Airport play an important role as cash flow generators, always have. And with optimization of those businesses expected to continue to drive distributions both businesses have been pretty resilient despite weak macroeconomic conditions and sector challenges.

And then importantly, to really finish the job on closing that gap, we expect CDC and Longroad to generate sufficient returns to fund their own investment, but also distributions to Infratil. So watch this over the next 18 to 24 months, I think.

Next objective, the growth of CDC and Longroad is also helping meet our objective of diversifying our shareholder base. Wider ownership beyond New Zealand we believe will benefit all investors over time by deepening the pool of potential investors and liquidity in the stock. And over the last year, were included in the S&P ASX200, which has boosted offshore trading in several more Australia-based analysts have initiated coverage as well. So now about a dozen analysts published research on Infratil, which is a really important way to get investors interested. We do have more work to do on helping investors understand our model and having fewer portfolio companies. What I mentioned before, will help with that, we think.

And then lastly, we're always scanning for new infrastructure businesses is really the blue one that's on the screen there. But for now, we believe our strongest opportunities are adjacent to our existing data center and renewable businesses. Longroad's exploration of data center opportunity is a prime example of where we're spending most of our time looking for new investment ideas at the moment.

Let's have a look at portfolio composition. The blue is digital infrastructure, and this chart shows that the growth and composition of our portfolio over the decade. And our core investment themes haven't really changed that much in that time. We continue to see the strongest opportunities in data centers and renewable energy, as I said before, we think they can help meet our target returns in a way that is reflected in the share price is important for us as shareholders, that is at scale, and that growth can be supported by internally generated cash flows, which is important as well. CDC size in our portfolio, it's a big chunk of that blue. It means that some investors do ask and they should when we might sell it to reduce any potential concentration risk.

Our view at the moment is that we remain comfortable with this position and scale in the portfolio today. Approximately half of CDC's valuation as relatively low risk comprising lengthy leases of mostly new cutting edge data centers to some of the world's most creditworthy customers. So that's not going to let you down that part of the valuation.

The rest is growth. And we constantly monitor the growth prospects of data centers around the world. They are at that kind of picks and shovels layer of today's digital world, housing the compute capacity that enables the cloud and AI services we hear a lot about. Infratil had portfolio concentration and our high conviction investments in the past. It's actually how we drive value.

Our focus is on sifting through the noise around AI, and there's a lot of it to understand what really matters for our existing businesses. We do that every day. And we're in a good position to do that. We see demand and customer behavior firsthand at CDC, right? We're at the edge of that. And then we see the implications for energy demand through Longroad Energy and our other energy businesses. And then we're seeing the practical applications as well as that of AI at scale and like One NZ or our teleradiology businesses. So cross-referencing all that, we think gives us a good picture of where CDC's trajectory will go.

Just a bit of a sidebar. These guys here. This image is a timely reminder of our philosophy to invest wisely in ideas that matter and taking a long-term approach to creating value. It was posted online just the other week to Mark Morrison's founding back in 1988 that features the Infratil Board at the time, including Lloyd Morrison, second from the left there. Looking happy at 1 of Trustpower's original wind farms around 20 years ago. Wind farms were, by no means, mainstream infrastructure back at that time, look at those turbines, my goodness. Now they are, though, and we see data centers becoming mainstream infrastructure in the same way.

From those early days, the push from Lloyd was for Infratil to be brave and ambitious. And we're still aspiring to do that and to do things that haven't been done before, and we're constantly looking for new ways to add shareholder value, but this involves taking calculated risk and backing our view of the future, as I just described.

While there is a lot of AI hype that needs to be screened out, it is clear we are still in the midst arguably near the beginning of one of the largest technological developments and infrastructure build-outs we're likely to see in our lifetimes. I think it's pretty clear AI is going to be transformational just like railroads, electricity and the Internet have before. And it will be hugely important to a country's ability to innovate in the future as well, which I think would have got Lloyd smiling as well. You get a chocolate fish, if you can name the guy on the furthest left, I didn't know him. So you can come and see me afterwards and claim that, if you like.

Let's just look ahead to finish up. As Alison said, prior years of investment are beginning to produce a significant step up in returns. This year, we've guided to a 21% increase in proportionate operational EBITDAF from FY '26. That's on a like-for-like basis at the midpoint, excluding corporate costs because that brings in the share price, which we don't really control.

Looking further ahead, as I said, CDC and Longroad are, we think, 2 hugely exciting businesses with lots of opportunity. We need to focus on helping them maximize and execute the opportunities in front of them to the best of our ability, and that's what's going to drive value for all of us. Infratil is well positioned to support that growth. and our divestments are adding extra capacity to strengthen the balance sheet as well. But at the same time, we need to keep an eye on the future and identify the next large-scale growth businesses. We're continuing to drive operational performance across the portfolio, and there's always plenty to be done doing all of that at the same time. Things may not happen as quickly or as predictably as we'd like, but maintaining our capital discipline throughout that as important as ever.

I think we all feel as a Board and certainly as a management team, we are in a great position and have a great fortune to have fantastic investment opportunities in front of us. For an active investor like Infratil, there is a choice, though, having those choices are what really matters when it comes to creating shareholder value for the long term.

So thank you for your attention. I'll hand you back to you, Alison.

Thank you, Jason. We'll now move to shareholder questions on our updates and the financial results. There'll be an opportunity later in the meeting to ask questions about today's resolutions. So in this part of the meeting, if we could keep our questions about the company update and our financial results.

So let's start with written questions received ahead of the meeting and then move to questions in the room, and then we will follow with online questions. So our first question submitted comes from shareholders, Brian and Theresa and they ask, when are we going to get an increased dividend in relation to the share price?

So dividends is something that we discuss at length at the Board and we have seen the dividend incrementally growing broadly in line with inflation, but we don't have a formal dividend policy. And that's because our focus is very much on delivering value for shareholders through share price growth. So my advice to shareholders who do want to have a higher dividend is potentially to sell small portions of your shares and create the dividend that you would like to see.

Okay. So that was the only 1 that we have submitted online? Are they -- sorry, before yes, we're going to move to questions in the room. So if you would like to wait for a microphone to come to you, clearly state your name, and then please ask your questions.

Yes, Michael Shroff, shareholder. I guess this is a question Jason might like to answer as the face of the company. So these data centers now maybe today or certainly in the future, data centers are going to become a lightning rod for protest, not just from Waco Greenies, but from ordinary citizens who happen to be living in the vicinity of data centers. So maybe you could say a bit about how Infratil is looking to -- I know you said something already, but maybe you could flesh it out. And I'm also interested in what Brad would have to say, if anything, from what the state of players like over in Australia.

And it might be we get Jason to comment on Australia, too, because today was Brad's first day sitting around the Board table. So I don't expect him to be an expert on social license in Australia just yet, but feel free to ask him next year. But Jason, can you cover these.

Yes. Thank you for the question, mate. I'm just going to call us but -- it's a really important one. I think both as people who work here and the shareholders to make sure we're doing a good job, continuing to do a good job with all our development activity. Actually, we've had protesters at a lot of renewable energy development sites over many years for the business as well.

So I think we're well used to the types of things you need to do in order to make sure that things -- I put it as being a good neighbor, to be honest, but the things that you're doing around your developments in line with certainly best practices and beyond it. The key for CDC, I think, to think about is where we're building the data centers to something you raised about the neighbors. I think being outside residential areas being in industrial areas as much as you can, having buffer zones around them are really important ways to develop and it's very similar actually for the solar and battery projects you could see on the screen, right, you're building a long way away from people so that you don't have neighbor issues.

But the team, I think, are at the edge of what a very good data center looks like as well with their closed loop water calling system is a real calling card of that business even globally. But they will continue to need to improve their design as well and be receptive to feedback, and we should expect that to happen. I think we're seeing it happen all around the world though.

So from a customer perspective, they are all trying to build good data centers and be good corporate citizens as well. So I'm not so worried from a demand or investment perspective that that's going to mean New Zealand or Australia are disadvantage relative to the rest of the world for this investment. I think the trick for CDC is to make sure it's as current as we can be and what the best way to build these data centers is and our experience in some areas, that water, we're ahead of the game and with a very strong development set of expertise within CDC, plenty of expertise to adjust designs and incorporate the kind of latest and greatest sort of what's needed for these facilities in the future.

When I zoom back from that, it still is critical infrastructure for a country. Countries in the future will really struggle without this infrastructure available. It's very economically important for jurisdiction to have this. So I think our approach is more trying to make sure we're solving all the problems that people are raising in a reasonable way. And the last of those pieces is really the energy pieces and that is to make sure that you're able to bring energy on. So it's not taking energy away from other critical uses. And one of our advantages, that's what we do for a day job as well at Infratil making sure we're getting the time and all those things lined up, will be important, but you can be assured that we're very focused on it.

Environment in Australia, others might be -- it's the same as here and the same as in the U.S., right? These things rightly get a lot of focus the big infrastructure investments, and they take up a lot of space and a lot of money. The good thing for us, I think, in New Zealand is the New Zealand were to benefit from everything CDC is learning in that jurisdiction and bring it here.

Hi. My name is Jim Coyle. I'm a shareholder. And my question sort of fits into the renewable bucket. My wife and I watched a fascinating interview on -- I think it was YouTube last night with -- on the spin-off, Tim Grosser was being interviewed, and he was extolling the potential for generating energy in the Taupo Volcanic Zone area. And so my question is about is there some interest from Infratil in that. We're talking about what was described as a super critical geothermal potential that could change everything.

So yes, the question is -- are you guys aware of that? Is that something that you could be potentially investing in and exploring in the future because it sounds really exciting. So we're talking about New Zealand being 1 of the 3 places on the planet where there's a plume of hot magma sufficiently close to the surface to mine basically.

Geothermal is a really interesting technology [indiscernible] talks about. We're currently exposed to that in a couple of ways. One, through our investment in Contact Energy, which was the largest geothermal generators in the world actually, and they're definitely focused on the potential for that and maybe some geothermal could power a data center in Stratford, for example. So we're definitely focused on it. We also have through our Clearvision venture capital investments in the U.S. focused on next-generation geothermal scanning technology that uses RADAR to find geothermal resource in a much more reliable way than it used to be in the past. So I would say, yes, we are very interested.

The scalability of geothermal, I think, is the question on most people's minds on what time frame. How quickly will it get to a scale that would displace something like solar and battery. I think our current view is it's very good in particular locations, but that in a lot of places, solar will continue to be the fastest and cheapest way to develop.

Any more questions in the room?

Brian Busby, I'm a shareholder. Have the fires in Europe had any effect on Galileo. I know they haven't been specifically in Italy, but they are certainly very fierce. So I've just come back from the U.K., and it's one of the hottest summers I can ever remember.

Yes. It's crazy hot, isn't it? I haven't heard of anything actually specifically for Galileo, no. Thank you.

38 degrees in London last week. So yes, very hot. It looks as if we don't have any more questions in the room. So Mark, can you read out questions which have been submitted online?

We have a question from David Langford. Is Infratil's long-term goal to be a predominantly data center and solar cell owner?

Okay. Look, I think we often get asked about the concentration risk in that portfolio because CDC is performing so well and differently, meaning that they have an increased portion of our portfolio. And I think you might have also heard from Jason, that this is a once-in-a-lifetime potential investment opportunity. So we're very comfortable with our investment in CDC so it's the data center piece and also very comfortable with our renewables investments, particularly Longroad, but Galileo, Gurin and our smaller Mint Renewables business in Australia.

That doesn't mean to say that we're not looking at lots of other ideas. And it's a shame we can't publish those ideas and show you how many things we have considered. And today, we had our Board meeting this morning, and even there were many ideas that we talked about as well. So when we have more insight into other investments will bring them to you. But at this stage, I think it's fair to say that the real drivers of shareholder value are going to come from Longroad and CDC. Anything further, Jason?

No, I think it's possible to extrapolate in a straight line to that, but the world really doesn't work that way. And we continue to look at millions of options here.

Question from Stephen Maine. Having announced the appointment of Tiffany Fuller and Brad Banducci to the Board on 18th of June. Why have we waited until the day after the meeting for Tiffany to take up our appointment effectively removing the opportunity for shareholders to give here a mandate and leaving here serving for a year without voting support from shareholders. A Board commitment is now excuse. You don't have to physically attend the AGM to run for election.

Right. Thank you for your question. It is really disappointing to Tiffany and to the Infratil Board that she can't be with us today. She had a long-standing Board commitment in Australia. And so we did consult with the New Zealand Shareholders Association to ask advice on how best should we do this? Should we have her stand for election today, but not have shareholders have the ability to ask her questions and we were advised that it probably makes more sense to have Tiffany join the Board from tomorrow and have her stand for election and be able to answer questions next year.

Next question, Mark.

We have a question from Phil Cuneo. What contingency plans does Infratil have in place for when the AI bubble boosts?

Yes. Well, if you could let me know the date that would be really helpful. But because of the concentration risk, we do talk about, well, what there is, for example, a significant pullback in the valuation of CDC. And what would that mean for CDC's credit metrics, its ability to fund itself in the future? And what would that mean for Infratil and our own credit metrics? And so we have done stress testing exercises on theoretical scenarios so that we know that we have sufficient liquidity to be able to support volatility that comes through from sentiment in the AI space.

A similar question from Peter Calero. Sometime over the next several years, is there a danger of overbuild in data centers. I heard one U.S. commentator recently saying the U.S., many datas will ultimately be turned into pickleball courts. How will we know it is time to sell data centers just as we got out of Tilt Renewables?

Yes, very interesting. I don't know if pickleball was going to be the best fit. But Jason, any thoughts on that.

The answer is potentially yes. I think on overbuild, but the question is where and will that affect our business. I think I can only really point back to the remarks we made in our opening, right? We're building data centers that are leased out for long periods of time to the most creditworthy counterparties in the world, and that's more than half the valuation of CDC, which if you step back from it, is not a particularly bubbly or challenging valuation, I didn't think, overall.

So I'm not worried so much about CDC's data centers and the enormous amount of cash flow that comes out of that business if it just stopped with the contracts we have announced today, it's $2 billion and the cash flow, along with the work Alison mentioned around the balance sheet work that we've done about to write out any volatility, I think, will leave us in very good position with very high-quality, long-term assets.

I think a lot of the overbuild if there's an overbuild happening would be happening somewhere in the U.S. for a shorter type of data center that probably isn't going to be that relevant to the kind of long-term leased infrastructure we've got in Australia. I think we still keep a lot of an eye on what is the demand outlook for the output of these facilities. And if somebody is saying they're going to build them in space, and I think everything on the ground is probably going to be used up before we put one in space. So all of these things that we're looking at for the long-term demand, I think, are what gives us confidence that the type of infrastructure we are building will have a place in most scenarios.

Great. Is there any other question, Mark?

A question from Kaushik Patel. I'd like to know if there's any valuation hit expected from our One New Zealand value carried in the box as we've seen a large sector lost value in New Zealand. So if we write off, if any, and the timing being affected by the CDC valuations that might grow and hence, fees kick in to our advisers, Morrison. Can you also elaborate on One NZ's business and carrying market value?

Andy, do you want to have a go that we have Andy as a Director of One NZ and recently was our CFO. Do you want to put them -- I don't know if you can put the questions on the screen here too, Mark, so that -- you'll see the...

So the One NZ carrying value is something that is [indiscernible] year. And you look at forward earnings, and we remain very comfortable in the outlook for One NZ. Independent valuation is something slightly different and the market forms its own view on One NZ's value relative to the independent valuation. The performance of MNOs in New Zealand is not all the same, but we remain very comfortable in the outlook for One NZ.

Thanks, Andy. Any other question, Mark?

Lindsay Breeze. Are airlines willing to use Wellington Airport for wide-body jets?

I might answer that question because I'm on the board of Air New Zealand. I think they're talking about long haul, though, aren't they? Look, Matt Clark, our CEO of Wellington Airport with the work that they have done on the runway, where they have extended it through RESA, the safety mechanism that if you're taking off, you might see at the end of the runway, I think, does give them the theoretical ability to have wide-body jets come to Wellington, but an airline does need to see demand before they are willing to commit to that schedule. But I think it's a very positive development that Wellington Airport has executed. Next question?

Question from Anne here. Thank you for outlining our ESG considerations. Does Infratil ensure it avoids exposure to illegally occupied Palestine territories or has Infratil considered utilizing United Nations backed principles for responsible investment?

Look, we take our sustainability and ESG program very seriously. And we have an exclusion list of investment areas where we have no interest investing in. But I might actually, we've got our Chief Sustainability exec here, Louise Tong in the front row. So we might ask Louise to comment on the...

Thank you for the question. I always love getting a sustainability question. You'll see the exclusion policy on the website on Infratil's website. And it does say that we invest in geopolitically stable regions. So I think that would probably preclude Palestine and Israel and the several areas around that region. And the question on PRI, so Morrison, who manages Infratil's investments has been a signatory to PRI, which means Morrison commits to integrating ESG factors into its investment process. So Morrison has been a signatory to that framework since 2010.

Great. Thanks, Louise. Is there another question, Mark?

I got a question, it might be one for Matt. On Page 34 of the annual report, it would appear that in the total equity and liabilities figure of $18.1 billion, the figure of $8.5 billion in equity is $1.1 billion less than the $9.6 billion reported as liabilities. Can you explain how this is good management of Infratil?

I will hand over to Matt, our CFO.

Thanks for the question. I've understood that correctly. It's that our equity is a positive number. And even if it is outweighed by liabilities, that means that we have assets that are by far in excess of our liabilities. Yes.

Great.

That's great answer the question. So I think we're comfortable in that position.

You can always contact us at the e-mail address on the Infratil website, if you'd like further information. Any further question, Mark?

We have a question from Peter Claro. In his presentation, Jason, our CEO, compared data centers to railroads. Most of the railroad investors went broke because they overbuilt. Is that what Jason sees happening to the data center world in the end? And is railroad comparison the right one?

Maybe no. I don't tend to get broke on this one. Good point though.

Next question.

A question from Dominic Lane. There is a significant outage -- sorry, there was a significant advantage at One New Zealand service early in the year that highlighted the lack of redundancy in the network. Has this been addressed?

Andy, yes, it has been addressed. Next question.

Question from Derek Gale. Does CDC actually own the service or just the premises? If the former, how is the depreciation handled, especially in light of cheaper Chinese production?

Just the buildings, not the service. Yes.

Next question.

There are no more questions.

Great. Thank you. So given there are no more questions, we will now move to the formal part of the meeting. My fellow directors and I intend to vote all discretionary proxies that we have received and for which we are permitted to cast a vote in favor of the resolutions as set out in your notice of meeting. For those of you in the room, you should have received your voting card when you registered. But if you haven't, put your hand up and someone will come and assist you. Each resolution set out in the notice of meeting is to be considered as an ordinary resolution and must be approved by a simple majority of the eligible votes cast by shareholders.

The first set of resolutions for shareholders is to consider the election and reelection of directors. The listing rules require that directors stand for election at the first Annual Meeting after their appointment. And accordingly, Brad Banducci is standing for election. As I mentioned earlier, Tiffany Fuller can't be here today. So she is going to stand for election at our next annual meeting. The listing rules also require that directors must not hold office past the third annual meeting following the director's appointment or 3 years, whichever is longer. And accordingly, Anne Urlwin and Jason Boyes retire, and being eligible, offer themselves for reelection. Jason is standing for reelection a year earlier than necessary.

And as we explained in the notice of meeting, this is because we wanted to balance out the number of directors standing for reelection in any one meeting. So the first resolution is the election of Brad Banducci as a director. The Board unanimously supports his election. Brad's credentials are outlined in your notice of meeting. I'd now like to invite Brad to address the meeting.

Thank you, Alison, and terrific to be here with you. My name is Brad Banducci, and I joined the Infratil Board as an Independent Director a month ago. For reasons that Alison has outlined, I'm now standing for formal election to the Board. A little bit about me and why I believe I can help you make a positive contribution to the ongoing growth and performance of Infratil. If one thing stands out in my career, it is the breadth of experiences I've been lucky enough to have. I spent the first 14 years of my work in Korea with the Boston Consulting Group, working for them in Sydney, Chicago and Auckland.

And I actually did the performance and efficiency order for the New Zealand Dairy Board in '93 and '98 and got to travel the world and engage with all of their customers. And I have to say it's very nice to be back in Wellington actually because I had some very happy times working here. After being with the Boston Consulting Group, I then spent 5 years working in venture capital and private equity. The first few years, we're doing a technology start-up of fintech in the early 2000s that we ultimately IPO-ed in 2019 in Australia. And I got to see the challenges of scaling up a very small business.

I then moved on to be the CEO of Cellarmasters, which was a roll-up of wine assets in Australia and New Zealand bought by a company called Archer Capital, and I joined them, became the CEO and got to experience the difference between how you scale a business versus found a business. That brought me to Woolworths, where Woolworths actually bought the business Cellarmasters. And I spent 11 very happy years, I must say, working at Woolworths and being part of the team of Woolworths and Countdown as we try to make a difference to the communities that we served.

Learns a lot about issues of rights to operate reputation and things that, hopefully, those experiences stand me in good stead as I joined the Infratil Board.

In terms of other skills I bring to the Board, I'm a very curious person. I am used to dealing with complexity -- and I do love operations. I don't think I can never quite fit Peter Springford's operational shoes, but I will certainly do my best. Finally, on a personal note, I am pleased to be able to report I'm married to a Kiwi, although I live in Australia. I have 2 very strong world New Zealand Kiwi daughters. And until a year ago, I was a wine grower in Bendigo in Central Otago. So in conclusion, if elected to the Board, you can rest assured of my commitment in some modest way to help Infratil achieve its very exciting potential. Thank you very much.

Thank you, Brad. So we did receive a question from the New Zealand Shareholders Association asking why Brad's most recent role at Ticketek wasn't included in your notice of meeting?

And the simple answer is that it was a private company, and he held that role for a very short period of time. But the Infratil Board's focus is on the skills gained across the span of Brad's career, particularly at Woolworths. And as he said, we were very keen to add the operational expertise around the board table given that Peter is leaving us. We can also assure shareholders that we undertook diligent processes with our recent director appointments. So I now propose that Brad Banducci be elected as a Director of the company.

Are there any other matters or questions concerning the motion relating to Brad's election? Any questions in the room? No. Thank you. Mark, are there any questions online?

We have a question from Stephen Mayne. Why didn't the notice a meeting disclose Brad Banducci, as CEO of Ticketek for 13 months until May this year? And could you comment on whether that experience will make him a better Infratil Director. Also could Brad, please detail is full relationship history with Key Morrison personnel. And after a few weeks on the Infratil Board, what is his view about whether independent shareholders would benefit from internalizing the management arrangements. Finally, when is he going to be buying some Infratil shares?

Okay. Lots of questions in that question. I might just -- the first part, I think we've already covered off why we didn't include the Ticketek experience because of private company, and we didn't really think it was relevant to the reasons as to why we want to be sitting around the Infratil Board table. I might also take the question around whether Brad has a view on internalizing the management agreement. I think, again, on your first meeting, it's probably best answered by me and my fellow directors, it's -- we are asked this many times because we have seen some companies internalize their management agreement. But in my chair speech, I think I also referenced the benchmarking report, which we have undertaken, which has clearly shown that shareholders are getting a fantastic result from our management agreement that we have with our external manager, Morrison.

We really like the fact that while there are perhaps about 20 dedicated Morrison executives who work full time on Infratil with many of them in the room today. There is 200 other Morrison executives that we can tap into as we need to. But the nice thing is that when we don't -- when we're really happy with our portfolio, and we're not necessarily looking to do in thing particularly new, those Morrison executives can work for other clients, which keeps them very focused on the opportunities in the marketplace. So we talk about the internalization as an option but it's certainly not something that is jumping out as a great solution for Infratil or its shareholders. But Brad, I might ask you to comment on some of the other aspects.

Thank you, Alison. And good to hear from you, Stephen. I learned a lot, as you always do in my 15 months at Ticketek Entertainment Group, it was with Silver Lake as the key private equity firm. The primary thing I really got the opportunity to do was go very deep on technology and a very large business like Woolworths, there are many layers between you and where the work is done. I got to really get hands on the tool, which I think is key right now. We all need to be engaging with the power of Gen AI, whether we like it philosophically or ethically or not and can see what it can unlock within the context of a business, and that was something I got to do over the last 15 months. The other reason I took the role is after 35 years, it was nice to do something completely different and just refresh myself. So it was a very good opportunity. In terms of Infratil shares, if we weren't in a blackout period, I'd be buying shares. So will let my actions in the future speak for themselves. I think the performance this year has been very strong as I know that both Jason and Alison have spoken to.

Great. Thank you. Are there any other questions online, Mark?

There are no more questions.

Thank you. So if we could please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 1 on the voting card.

So Resolution 2 is for the reelection of Anne Urlwin as a Director. The Board unanimously supports her reelection and its credentials are outlined in the Notice of Meeting. And I'd now like to invite Anne to address the meeting.

Thank you, Alison, and good afternoon, shareholders. Thank you for the opportunity to address you today to seek your support from my election as an Independent Director on the Board of your company. It was certainly a privilege to join the Infratil Board in January 2023, and I have chaired the Audit and Risk Committee since my appointment. I've certainly appreciated being part and contributing to a company that invests in ideas that matter. Those fitting the brief infrastructure characteristics and attractive global thematics, transformative assets that do matter to society, both now, but importantly, into the future. Renewable energy and digital infrastructure, including the AI-driven convergence between those 2, as Jason has spoken to health care and mobility in the form of airports.

But a bit about me. Firstly, similar to Brad, I'm curious about people, about businesses and what might be those ideas that matter in the future. that represent investment opportunities for Infratil that enable it to continue to deliver returns to you as shareholders, meeting that target of portfolio returns of 11% to 15% per annum over a 15-year rolling period.

My chartered accountancy background enables me to get down into the detail when necessary and my corporate sector executive roles in earlier years enhanced my ability to unpick complexity.

I have been incredibly unfortunate having been a professional director for a number of years, incredibly fortunate in terms of the governance roles that I've had, many of which have been with high-performing New Zealand companies in earlier years, including Tilt Renewables, Chorus, Somerset and Meridian Energy. My previous non-listed company experience includes as a former Director of Queenstown Airport and as Chair of National Commercial Construction Group, Naila Love.

In terms of my current roles, I'm currently the Chair of Precinct Properties here in New Zealand, the Audit Committee Chair of Vector in the energy sector, and I chair the Safety and Sustainability Committee of infrastructure services company, Ventia. These governance roles give me a Trans-Tasman perspective that is relevant to Infratil's diverse portfolio. I have a passion for sustainability and its focus on long-term value creation while also meeting society's expectations.

And as we've touched on here already today, sustainability is a key component of Infratil's social license to operate as well as its access to capital to deliver the long-term value to investors.

Being a director of your company is both a responsibility as well as a privilege. I hope the brief details are provided here today demonstrate my experience and focus on effective governance, financial performance and delivering returns to you. I confirm that I have the time, energy and commitment needed to support Infratil and to represent shareholders' interest into the future. I therefore seek your support for my election as a Director of Infratil. So thank you for the opportunity to address the meeting. I'm certainly happy to answer any questions you may have of me and look forward to meeting many of you after the formal part of the meeting. Thank you.

Thank you Anne. I now propose that Anne Urlwin be reelected as a Director of Infratil. Are there any matters for discussion or questions concerning the motion relating to Anne's reelection.

Mark, are there any questions online?

There are no questions.

Great. Okay. So if we could mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 2 on the voting card.

So Resolution 3 is for the reelection of Jason Boyes as a Director. The Board unanimously supports his reelection. Jason's credentials are outlined in your Notice of Meeting. And I'd now like to invite Jason to address the meeting.

Thank you, Alison. It's my pleasure to be -- put myself forward for reelection this year as a member of the Board. So slightly unusual structure, not all chief executives are also members of the Board of Directors of their companies. I think as I've said in the past, I think that's a real strength of the Infratil model. It's certainly been the way here since it was established from Lloyd to Marco to me.

I think the real strength of it is being able to work as a team, this team here to -- and be in the same whacker, I think I put it last time, but certainly in the same boat as our fellow directors as we wrestle with some really tricky issues that like the ones we've talked about today, is it important to be in CDC for the long term as renewable energy, an important part to be in? Are we looking after shareholders' money as best we can? And that for me personally is there is an I come and do this job every day as I take taking care of your money prudently but with an eye on the types of growth that I think we're expected to generate, I think we have the opportunity to generate incredibly seriously.

So I would be grateful and very happy to be reelected as a director to continue the work here with the rest of the team, but I'm happy to answer any other questions you might have on my background as well that you don't know already. Thank you.

-- thank you, Jason. I now propose that Jason Boyes be reelected as a Director of Infratil. Are there any matters for discussion or questions concerning this motion? None in the room. Mark, are there any questions online?

There are no questions.

Great. So please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 3 on the voting card.

So Resolution 4 is to provide the Board with the option to pay all or part of the third installment of the FY '25 annual incentive fee, which could be payable in May 2027 by issuing shares to Morrison instead of paying cash.

Resolution 4 is not seeking shareholder approval to pay the fee. The fee, if payable, as an existing obligation under the management agreement. But what the resolution deals with -- resolution deals is how Infratil pays the fee. And at present, if the fees become payable, they can only be paid in cash. If Resolution 4 has passed, the Board then has the option to pay all or some of the fee using Infratil shares if the Board chooses to do so. And if the Board chooses to do that, the price at which shares would be issued as 98% of the average market price at that time. Now we don't know today if the Board would exercise the option to pay the fee by issuing Infratil shares. That is a decision that the Board will need to make at that time based on what the Board believes is in the best interest of Infratil and its shareholders have in regard to market conditions and Infratil circumstances at that time.

Are there any matters for discussion or questions concerning this motion? We have a question.

Frank Pearson. And I'll sit down if you consider $75 million jump change. So it's about $75 million. But first of all, can I take Jason up on his picture, 2004, not '80, '90, whatever it was. Yes, 2004, David Kegel, Dave Newman, Chairman. Yes. But going to leave -- I missed the chocolate fish. I can't back in -- last year, you were telling us the asset value was much higher than the share price as you do year in and year out. In the end, you ended up issuing shares in the $10-ish at about 2/3 of the price now. So essentially, instead of getting $80 million, Morrison & Co got $120 million of value for the management fee. At the same time, you're paying dividends to people, and I'm sure I'll get somebody yelling at me now.

You're paying dividends to people which are unimputed, so taxable. If we assume that's 20% average, if you cut the dividend and pay cash you'd be saving about -- shareholders about $75 million, $80 million a year. I just don't understand the policies that are in place. Sorry.

So when we decide to either pay Morrison in shares or cash, it does really come back to our own opportunities for that cash. So I think when we decided to issue shares, we felt that the cash could be better used elsewhere in the portfolio.

I think with what share price it was in FY '25 versus now, is not really relevant because I think what is relevant is the 2% discount that we give to Morrison, which is set in the management agreement, which also equates to the 2% discount in the DRP that is available to shareholders. But always happy to have alternative views put forward. Any comments?

Just on the dividend point. I take your point, and we've talked to a lot as a Board, I think about the dividend policy and what the right thing to do there is. I think we're confident that the right balance is to maintain but not strongly grow it because of the large proportion, I think, of the shareholder base that still expects that dividend. And I think we felt that if you say cut the dividend to pay management fees, you would see -- I'm not sure the share price would have gone to $15. I think that would be the worry we're thinking about for all shareholders is that you would get a reaction in the share price that outweighs the $20 million, $30 million kind of gap between your $75 million and your $120 million that you talked about there. But it is a balancing act. And I think it perfectly finds you to continue to raise it at these forums. Thank you.

Yes. I need to point out Madam Chairman that you to a question earlier about the risks of being concentrated and you said you had sufficient liquidity I think that was the expression? Yes, sufficient liquidity. Well, if you have sufficient liquidity, why are you...

So I think you'll notice that at the end of FY '26, we paid Morrison in that cash. So when no shares issued. So it was -- when you say last year, that was at the end of -- that was in May 2025. At the moment, we have said we do have about more than $1 billion of available liquidity and that isn't necessarily cash sitting on the balance sheet, but that is an undrawn facility is available to us. We also have our 9% fitting in Contact Energy, which is sort of -- could be used for liquidity if we chose to.

Here we have another question?

I'm just wondering if there are any other pros or cons? And I'd also like to say that as shareholders, we're quite happy to get non-imputed dividends, yes.

I mean that is a balancing act. We actually think it isn't the best. So what happens is there is a subvention payment from Wellington Airport and also from One NZ and that is more tax effective for the company and, therefore, beneficial for shareholders. And that is one of the key reasons why we don't have imputation credits to attach to our dividends.

Mark, any more or any questions? And any more questions in the room? Any more?

Yes. Look, I think we've covered them really. I think we have covered them. I mean, dividends are very -- I think some people, as I mentioned earlier, hold their shares on an online platform where you can easily sell and the transaction costs are very small. And so you can make your own dividends, but that isn't available for all shareholders. We think it is important to pay a small dividend. I think we've increased it by 2% this year because that is important for a number of retail shareholders in particular. We have recently done about 20 meetings with institutional shareholders. And actually, none of them raised the issue around dividends. So they seem very comfortable that we are paying a small but growing dividend to shareholders.

Mark, any questions online?

We've had 2 or 3 similar questions, which I'll paraphrase. It's again around the review of the management contract and comparing it with other managers and also whether you've had discussions with any of the large shareholders around internalization?

Right. Thank you. I think what has been really helpful is that the Board has undertaken this benchmarking exercise by PwC, and we have now an executive summary of that benchmarking exercise on our website. And it's a good comparison of the management agreement that we have with Morrison versus other listed infrastructure companies. And you'll actually see that the hurdle rate is the highest, I think, in the comparative group. And shareholders get a lot of value from that very high hurdle range. Morrison earns no performance fees if on the non-New Zealand assets the performance is below 12%. Above 12%, 20% of the outperformance is paid to Morrison as an incentive fee. But that structure -- although it is more than 30 years old is we think, at the moment, delivering great value to shareholders.

So we do consider that question. And you will have noticed, I'm sure many of you are long-time shareholders that we had undertaken different benchmarking exercises over the last sort of 10 years. I think this is probably our third or fourth our benchmarking exercise.

We also recognize, however, that the management agreement is complicated. So we are sort of balancing the complexity of the management agreement with that real advantage of having that high hurdle rate on non-New Zealand assets. And also noting that there is no performance fees paid to Morrison on New Zealand assets.

And we also think that as an interesting point to note, we used to be concerned that, that might bias Morrison to not recommend investments in New Zealand. However, as you know, we have invested, first of all, buying the first half of Vodafone and then buying the second half and now fully own One New Zealand, which is a fantastic portfolio company.

There was another part of that question, I think, around internalizing the management agreement. I think I addressed that when Stephen Maine was asking his question of Brad.

Any other questions online?

There are no more questions.

Great. Thank you. So if you could please mark your voting card in the way you wish to vote by ticking for against or abstain next to Resolution 4 on the voting card.

The final resolution for shareholders to consider today is the remuneration of Infratil's auditor, KPMG. KPMG are automatically reappointed as auditors under the Companies Act. However, the meeting is required to authorize directors to set the audit fee. So I now propose that the directors are authorized to set the remuneration of the auditor, and I'd like to ask are there any questions for the Board concerning this motion.

Mark, can I check if there are any questions online?

We have a question from Stephen Maine. What is the history of KPMG's relationship with Infratil and Morrison? When was the external audit last tendered? And when is it next plan to be tendered? And could the Audit Chair please comment on how Infratil has responded to the recent regulations around confidentiality breaches in KPMG, Sydney's audit division to assist with tenders to win new clients.

Great. So I'll just hand over to Anne Urlwin, our Chair of our Audit and Risk Committee to answer those questions.

And thank you for the question, Mr. Mayne. So as a committee, the Audit and Risk Committee reviews auditor independence and audit quality annually. And while KPMG has been Infratil's group auditor for an extended period of time, I actually think it's back to about between 2001. Infratil is primarily a holding company and rather than an operating business in and of itself. And most of the audit work as well as, of course, most of the financial results are actually undertaken within the portfolio companies. And a number of those portfolio companies have moved to have KPMG as their auditor in recent years. So there isn't that long tenure there. Not all of them have KPMG as their auditor.

So one of the key requirements we have, of course, is that the lead audit partner is rotated at least every 5 years. So that provides fresh perspective and independent challenge. But we also have a range of other independent assurance providers because KPMG, of course, is prohibited from providing a range of services that could create an actual or perceived conflict so they can't undertake any internal audit work, any management consulting services, any evaluation services. So we get those services provided by other independent assurance providers.

For example, PwC as Infratil's global tax adviser and EY provide assurance over climate disclosures, but importantly, and I think this is a key component of Infratil as a holding company rather than an operating business. Infratil appoints independent valuers to assess the values of most of our portfolio companies with those valuers selected from a panel and those valuers are required to rotate every 3 years.

So for the moment, the committee certainly remain satisfied with both the quality of the audit services provided by KPMG and their independence, but we do, of course, continue to keep the audit relationship under regular review. I think we have all noted with concern what the issues have been arise, they've been reported in the Australian media in relation to KPMG and we have had very proactive engagement, including proactive reaching out by KPMG at the most senior level here in New Zealand to provide that assurance to Infratil and also to its portfolio companies, particularly those in Australia that do utilize KPMG as the auditor that, firstly, none of that personnel at KPMG that have been referred to publicly in Australia are involved in the delivery of any audit services to the Infratil Group. And there is no indication that similar behaviors that are being reported in the Australian media have occurred as part of the Infratil group audit.

We will, of course, keep everything under review, and we will continue to monitor the independence and the performance of KPMG as Infratil's auditor.

Thanks, Anne. And Mark, can I check if there are any other questions online?

There are no further questions.

Great. Thank you. So please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to Resolution 5 on your voting card.

So ladies and gentlemen, our registry MUFG, will now move through the room with ballot boxes to collect your voting cards. And this concludes the business of the meeting.

For those in the room, I'd like to invite you to join directors to have some refreshments. Thank you very much. [Foreign Language]. And I'd also like to say that the results of the polls will be announced through the market later today or tomorrow. Thank you.

[Foreign Language] I'm Jason Boyes, the Chief Executive of Infratil and welcome to Infratil's annual results presentation for the year ended 31 March 2026. I'm here with our CFO, Andy Carroll. Good morning, Andy.

Good morning.

And together, we're going to run through the annual results presentation that was released to the ASX and the NZX this morning. You can also find our annual report and a whole bunch of other supporting information in that release. So without further ado, let's get going.

This is an overview of the company that all of you will hopefully be familiar with. We're very proud of the strong track record that we're showing on the right-hand side there, very strong growth over many periods and remarkable over such a long period since inception.

If we then switch to having a quick look at the portfolio. This is a snapshot of the portfolio as at 31 March. We had some farewells and a welcome during the year. During the year, we sold RetireAustralia, Infratil Property and FortySouth, our towers business. We also sold Manawa Energy into Contact Energy as we progressed our medium-term target that we described last year of divesting up to $1 billion of assets over the medium term. One welcome to Anytime Radiology, which was established during the year, our teleradiology business that we spun out of our ANZ radiology businesses. I'll talk about that a little bit more later on.

So quickly to the highlights. We delivered growth in what were very volatile markets. I'll let Andy talk to the numbers in a second, but quickly focus on the 2 main drivers of growth, CDC and Longroad, both have their growth being accelerated by the massive build-out of AI infrastructure globally. CDC is now a global scale data center operator with more than 1 gigawatt of contracted capacity and a strong growth outlook. That's underpinned by its new Moody's Baa2 public credit rating, which shows what a differentiated platform CDC continues to be for us. Longroad Energy is also accelerating, delivering strong earnings growth during the year and with a strong growth outlook as well that I'll talk about in a second.

Our largest New Zealand businesses were resilient with Wellington Airport and One NZ delivering their guidance and positive EBITDAF growth despite challenging market conditions. It wasn't all rosy though with Gurin Energy and Galileo and renewable energy development, having a difficult year, and our New Zealand radiology business dealing with a weak local economy. I'll talk about both of those in a second.

We're on track to achieve that $1 billion divestment target I talked about with 600 sold and a sales process underway for Qscan. And we also announced our A credit rating, Standard & Poor's BBB+, which transforms our access to debt markets, which is perfect timing given the strong growth we're seeing from CDC and Longroad, in particular.

Lastly, strong ESG performance across the portfolio is translating into higher ratings as we put out here, which exposes us to more ESG-oriented investors around the world.

Over to you, Andy, on the financial highlights.

Thanks, Jason. And just a couple of quick call-outs, which I'll touch on in a little more detail later on. So $989 million proportionate operational EBITDAF, so almost $1 billion in the top half of guidance, $2.7 billion of proportionate CapEx. We've talked about that in the past. That investment driving future earnings growth. And then in terms of total asset value, that's up 13%. There's a few other steps there, but I'll touch on those a little later. Thanks, Jason.

Thanks, Andy, back to you later. And let's go through some of the portfolio companies and of course, starting with the big one, CDC. A strong operating performance from CDC achieving their guidance, a nearly 20% uplift in EBITDAF during the year. Large uplifts in built operating capacity with 350 of the 450 megawatts that were under construction at the start of the year, completing construction. CapEx was up $400 million to $2.1 billion, completing those builds, but also getting started on further builds with 572 megawatts under construction at year-end. The big news, of course, was the 555-megawatt customer contract announced on 5 May just after the 31 March cutoff, but important to mention, lifting our contracted capacity to over 1 gigawatt as we've got here.

Together with existing contracts that are expected to come billing as construction completes, as shown in this graph on the right-hand side, which is the same as the one we showed on the fifth.

CDC has good funding flexibility to deliver that growth and more as CDC's CFO outlined on the call we had then. This is supported by the credit rating, I mentioned before, which gives it access to multiple debt capital markets at a much lower cost than if it weren't rated. The first step in that program is the hybrid AMTN wholesale bond program or a bond issuance announced by CDC yesterday.

Looking ahead, that FY '27 EBITDAF guidance is that big jump we showed in March and again on the fifth to $680 million to $720 million. This exceeds our guidance last year that we were doubling the $330 million delivered in FY '25. We're maintaining that $1 billion EBITDAF for FY '28, that we talked about in May, more than doubling again last year's earnings over the next 2 years, and we're on track to double again to $2 billion in FY '30 once the contracted capacity is fully deployed over FY '29. So remarkable growth really doubling earnings every 2 years, and that all contracted already. Lots of work to do, but the contracted side is in good shape.

CapEx guidance is understandably increasing also double last year's $2.1 billion at the top end, excluding land because that is lumpy.

And lastly, but importantly, we see further growth potential from here with unprecedented demand continuing for further small, medium and large-scale deployments that have the potential to accelerate the business even further towards the back end of this decade and beyond. The team are currently -- our contract discussions are progressing well for more signings, I should say, in the first half of this financial year and beyond as well.

And finally, the team are actively progressing a gigawatt or more of extensions to their growth pipeline which, as at 31 March was say a bit over 1 gigawatt, which you can see on the next slide here as well, just on the right-hand side, that's unchanged from what we showed in May.

CDC is well positioned to continue to capture outsized growth as what we see and what we've been saying for some time is quite a differentiated platform with strong access to funding, driving off strong contracted earnings and premium customer mix with capability and pipeline enabling it to scale efficiently and continue to deliver strong returns for Infratil as the shareholder.

Moving then to Longroad. Probably the most new news in this section of the growth businesses anyway. It also delivered its guidance lifting EBITDA for giant 170% over the year to this $121 million we are showing here. But importantly, future growth is strong, too, with another 2 gigawatts under construction and coming online over FY '27 and '28. And a further 1.7 gigawatts expected to commence construction this year. So those 2 together, 3.7 gigawatts will more than double the capacity in operation at the beginning of this year, 3.5 gigawatts, all put into construction over the next -- last year and this year. So another business looking to double every 2 years, if you like.

Because its growth is so strong, we also report in track the step we're talking about on the right-hand side, OpCo run rate EBITDAF, which is a little like CDC's contracted earnings or EBITDAF that I just talked about that $2 billion I just talked about for them. So how we do that is shown on the right-hand side, it's worth just stepping through it. At the end of FY '26, those earnings were USD 367 million, in line with the guidance we set at the start of the year as well.

So what that does is we take reported EBITDAF and then we add back the contracted annualized earnings of the projects that are under construction in that year, which is seeing that 144 on the right. And we also add back the development expenses, which are really investment in new projects and the corporate overheads to give a view of value of the -- just the operating projects or what we call the OpCo, the operating company.

If you wanted to convert that into a valuation, we see listed comps trading in the kind of 13 to 15x that number or that number looking a year ahead because the business is growing so quickly. And if you used about 60% gearing or 8x EBITDAF for leverage, remembering the revenue is contracted for 30 years or more with minimal maintenance CapEx, that should give you a good sense of the equity value pretty close to the independent valuation that we're putting out there.

Lastly, you might recall that law changes in the U.S. last year mean that tax credits for solar projects would expire by 2030. But your projects had to be qualified in -- by later this year actually. We're confirming on the bottom of this slide that we've qualified more than 6 gigawatts of projects now to support our development targets out to 2030. And remember that battery storage credits, which applied to half the CapEx effectively of the projects these days remain accessible through to 2037. So a much longer runway on that support from the federal government under the current settings.

These tax credits, what they do is they effectively reduce U.S. renewable energy power prices. But renewable energy is still competitive without them. So we believe you can look through them for a lot of purposes. The expiry though, of the solar tax credits should mean a big build program out to 2030 as developers and power buyers look to take advantage of them before they expire.

So now looking ahead. The biggest news here is that Longroad has materially increased its target development cadence for the next 4 years from 1.5 gigawatts per annum to 2 gigawatts per annum on average, a 33% increase. That's supported by what we've talked about for a long time now, the robust demand for electricity, supported by AI and broader electrification and decarbonization still going on in the U.S. It's also supported by the good work the team has done, tax qualifying that more than 6 gigawatts of projects I talked about.

And also new news today, a super large project Longroad acquired in April. It's a 2.8 gigawatt solar and storage projects. So nearly as big as our entire operating fleet today and 1 project and importantly, has a PPA in place. That project on its own would develop -- would deliver, I should say, the uptick in development cadence we have guided to. So there's potential to grow even faster, I think.

And the other key things to know about this project are it's expected to come online calendar year '28, '29, so towards the back end of the decade. And also that is contingent on 2 regulatory approvals that Longroad is confident can be obtained based on similar projects that have recently been approved and the clear need for the power. We expect to be able to update on progress on those approvals over the year.

What does that all mean? If you took the average earnings from our projects, that uptick sees on the right-hand side of that graph, Longroad targeting $1 billion of OpCo run rate EBITDAF, run rate earnings measure I mentioned earlier, by the end of the decade. Double what those earnings will be at the end of this year, so that doubling in 2 years that I've mentioned.

I've also talked to multiples. You could use those to back solve the equity value of what I just talked about. Or another way, we've guided in the past to about USD 300 million of net present value creation for every 1.5 gigawatts of projects because that's what we were trying to do every year. So $300 million a year. So -- and I'd say that's conservative. If you lift that by 33%, the number of gigawatts you're delivering, then the NPV is bigger as well. So another $100 million of NPV creation per annum is kind of what we're talking about. Or by the same metric, if you looked at our new project, that's kind of 2 years of development or USD 600 million of NPV, just to give you a rough sense of it, a significant acceleration, I would say, compared to where we were before.

But that's not all. At the bottom here, we're revealing that Longroad has also been actively progressing its own data center strategy to develop at the moment, 4-plus gigawatts of grid connected data centers co-located with Longroad solar and storage projects. We can develop the power shell to have more value creation, either alone or with partners or simply sell that land as powered land to data center developers. Either way, you're able to accelerate Longroad's own core energy development pipeline developing through renewable energy for those facilities. We're not ready to value this pipeline. It's not on the independent valuation, but it's a very logical and interesting opportunity that we intend to pursue.

So lastly to guidance. We're guiding a modest uplift this year, $120 million to $135 million. That's because a lot of the construction that's underway will complete towards the back end of this financial year and actually into FY '28, but also because of increased development expenses really in line with that acceleration of the development business. I just talked about that increased development cadence. That's taken another $20 million of that.

But you can see the impact of that strong development addition, the extra 1.7 gigawatts we see coming under construction this year coming into the OpCo run rate EBITDA at the bottom, lifting that to nearly $500 million over the year, so $120 million increase. Infratil has agreed to provide an additional $300 million of equity funding to support this acceleration, which would be deployed over the next 2 years, and we see very strong returns from that, obviously.

I think that's it on Longroad. Maybe over to you Andy, is it?

No, no, two more.

Two more. It's actually -- this is a good spot to put this because the U.S. has been incredibly strong, but as I mentioned in the opening, elsewhere, it's been a little tricky. Gurin has done well in Southeast Asia progressing its projects. But really, the big focus is on this key approval that we're waiting for, for Project Vanda, its own very large project. The government-to-government discussion appear to be producing positively, which are needed to facilitate that approval. But it's fair to say that's taking longer than we hoped, and we hope to be able to update on that over the half.

Turning to Europe. That has been a difficult market as well. Really the prolonged effect of the Ukraine war depressing demand for new electricity there means that the markets have reached a kind of mature stage and values for earlier-stage projects have reduced markedly, making our target returns more difficult to achieve. That's led to a strategy reset over the last half to focus on projects that are nearer term, so taking off the longer-term projects and the ones that can take the business to more material scale, which would be more resilient business over the near term as well, and we're showing the targeted state for that business by 2030. That resulted in some write-downs and write-offs, which I mentioned here, which are not particularly big or material from an Infratil perspective, but we're clearly not what we hoped for or what the team hoped for from the business. They've got a good plan in place, I think, to get the business back to growth, and we'll be reporting on that over the half as well.

Maybe now you, Andy. Yes.

Thanks, Jason. One, the team is continuing to deliver well in challenging market conditions. EBITDAF up $4 million on the prior periods. We promised a stronger second half, and that's what the team has delivered.

A few call-outs on this slide. So mobile revenues continuing to perform well. And you'll also see an uplift in handset in other sales, which it does talk to the effectiveness of One Wallet as a retention tool so that program is going well. EonFiber had its first full year of operation with EBITDAF of $65 million. And of particular note, secured a material undersea contract with a hyperscaler. Now there's work to be done there, so you don't expect revenues to turn out for 12 months or so and there is some CapEx and other spend associated with delivery of that contract over the next 12 months.

In terms of metrics that people regularly ask us about free cash flow and dividends, you'll see that they have both doubled over the last 12 months and that graph is on the next slide.

In terms of outlook, my commentary has been largely unchanged for the last 18 months. So soft economic conditions, challenging competitive environment and limited immigration, which all contributes to a pretty challenging operating environment. The team is conscious of careful financial management in those circumstances. So a focused revenue growth in particular areas, and you'll see that there are price increases that have been applied to both mobile and fixed in April. We're also keeping a close eye on costs, while pushing on a number of key strategic programs of work. You'll see to that end of cost control. We have over 50 AI solutions working across the business now delivering cost savings, productivity benefits and customer experience benefits. The IT program continues to track to plan.

Moving to guidance. There is an uplift in EBITDAF guidance relative to the previous year. CapEx is unchanged. I've noted some of the EonFiber-related spend. And our medium-term EBITDAF and EBITDA margin and CapEx intensity targets remain unchanged.

Thanks, Jason, back to you.

Nice one, Andy. Back to you in a minute, actually, but let me talk through the rest of the portfolio, starting with Wellington Airport. Their results are already public. But from our perspective, resilient performance given the ongoing aircraft capacity issues last year and the weak economic environment, domestically, good growth in international, though that you can see here.

The outlook for the next year is relatively flat with aircraft back, but fuel crisis affecting capacity, of course. We'll have to revisit that guidance number if the crisis continues to be protected. But the team is doing a great job managing them with the guidance so far, sensible CapEx to continuing and route development with the runway now able to accommodate long-haul flight to Asia. Matt tells me, and I'm looking forward to that.

Next is Kao data. Quickly on the London data center business, a strong year actually doubling its contracted capacity. So that, I think, actually is nearly sold out at the moment. So you can see why Kao acquired a prime London data center site that we've talked about here, which would be attractive to multiple hyperscalers in that location and is progressing that as well as its existing Manchester site. So it's growth ahead looks good, just at a much smaller scale than CDC, of course, from a shareholder perspective.

Lastly, I think, is our health care businesses, but not least at all. So diagnostic imaging, of course, it's been a difficult year, as I said, at the top for our New Zealand business with EBITDAF slightly down over the period, reflecting cost and competition pressures. The excellent team there, though, is implementing our performance improvement plan, as we've said there, to return the business to growth, and it's early days, and we'll report back at the half on that. And Australia, on the other hand, Qscan has had an excellent year, delivering double-digit growth from a range of initiatives executed pretty well. The sales process for that business is ongoing, and we expect to update on that in the half as well.

And then finally, Anytime Radiology, the newest addition to the portfolio. is now up and running after being spun out of our ANZ businesses. It's a pure-play teleradiology business, which is a subsector of radiology that's growing faster than traditional ones. It's small now, but we think more are likely to be successful and attractive in this stand-alone format.

Back to you, Andy.

Thank you. I think I've touched on a number of these metrics already. So operational EBITDAF in the top half of guidance. Key drivers, CDC and Longroad as we had foreshadowed. I didn't touch much on Infratil investment, but that alongside that proportionate capital expenditure are the ingredients for future earnings growth in shareholder value accretion. So I think those are the key numbers to touch on there. Independent valuations, just touching on a few of the movements there. So CDC is the largest one, unsurprisingly, and part of that increase does reflect the additional investment that we made into CDC through the period. If I touch on some of the pinks. So One NZ is down $320-odd million, and that broadly reflects that reduced growth outlook that we've seen in the New Zealand economy. So moderated growth outlook. And I think now the midpoint of that independent valuation does align with market consensus.

Galileo is weaker for the reasons that Jason has outlined. So some write-downs. And also some of those early-stage projects, less value attributed to that pipeline. And RHC also reduced. So underperformance relative to guidance. So moderated growth outlook from a different base. So those are a few things, that's just to call out on the independent valuation slide. Thank you.

Dividend. This is exactly as we foreshadowed at the half year, so $0.1365. There are no imputation credits attached, and we will continue to run the DRP with a 2% discount.

Funding and liquidity, I will spend a bit more time on this slide because there are some changes here. So inaugural S&P BBB+ credit rating. We announced that in late December, and that is proving material in terms of reduced funding costs. Broader access to capital sources and improved funding terms.

So we have some brand-new banking arrangements in May. That's 1 example of that with cost savings and improved borrowing terms realized. Today, we're launching our first capital bonds PDS, which should also enhance funding flexibility and you can expect to see further work from us to diversify funding sources over the balance of the this financial year.

Just to give you a sense of some of the cost saving benefits. So we see savings in the order of $10 million per annum in interest costs in the medium term.

And last but not least, on the slide, liquidity, $1.1 billion of available liquidity at 31 March. And clearly, we've enhanced that with the partial sale of our Contact stake recently.

Guidance. We've talked a lot about growth this year. So proportionate operational EBITDA up materially 20% odd in this year, midpoint 30 and 50. And that largely reflects the CDC uplift, which we've talked to you about previously, proportionate development expenditure debts up per touch.

Corporate cost guidance. Now we have broken that out separately. We did have that sitting within proportionate operational EBITDA. So all of the component parts here are unchanged, but there is a different dynamic that drives corporate costs. That's largely related to the Infratil share price as opposed to proportional operating which talks to the earnings performance of the investments. We think it is helpful to break out those component parts, so you can better understand the individual drivers. If you want to reassemble the guidance fruit salad, you're very welcome to. So yes, corporate costs called out separately.

And then proportionate CapEx guidance range, that's up 50% again, largely reflecting that CDC effect, which we have previously guided on.

And I think I'm back to you now. Thanks, Jason.

Great. Thanks, Andy. Is there a slide you switched around. Great to see the $1 billion of proportional operating EBITDA, even if you reassemble the fruit salad as you say, I think we're touching over that, which is correct to see that finally happening.

I wanted to touch on 2 things before wrapping up and going to questions. First, sustainability highlights. As I mentioned at the top, strong progress has been made across our portfolio and portfolio companies, some of which I mentioned here, resulting in the improved ratings, which we'll continue to work-on to improve I think the key metric to watch is our SBTi target, which really hinges on the scoping work CDC is doing to set its own SBTi target now that its first report under the new Australian reporting regime nears completion. So that's the 1 I would focus on from now.

And then the second thing is our medium-term strategic objectives that we set at the -- it was last year, wasn't it? On the first, we set a target of $1 billion of divestments and completed $600 million, as I said, with Qscan underway. We see the potential for another $1 billion plus of divestments over the medium term as well of investments we think are unlikely to scale under our ownership. And as we said last year, we expect to be reinvesting those into growth or new businesses.

On the second objective, this is on track with improved distributions from One NZ and a stronger outlook for CDC and over the longer term, Longroad. I think this year, we needed a little under $90 million to cover all of the dividend being balanced, Andy. So this is in sight.

On the third, frankly, we're reassessing this a little bit. CDC and Longroad have accelerated materially and see a very high bar for new ideas, which we have continued to look at. But now our focus is on interest in adjacent opportunities like Longroad's own data center ideas, for example.

In the near term, assisting these adjacent ideas is a high priority, and we'll update on this and the strategic objectives, I think, at our Investor Day, which I think is in September this year. That's probably the right place for that discussion.

Lastly, this year register while progress has been made, this still an important work on for the reasons we outlined last year.

So let me wrap up. Growth this year has been excellent, but we continue to position the portfolio for further step changes in growth ahead. CDC is facing this once in a lifetime opportunity to develop AI infrastructure globally. I mean a globally relevant scale with strong demand and its deep capability pipeline and funding flexibility to continue to accelerate. Longroad also, right, setting materially higher development targets, its own path to the billion club, $1 billion of run rate EBITDA by the end of the decade, backed by the new very large-scale project that's been acquired, subject to regulatory approvals, of course. But we continue to develop other materially -- potentially material growth opportunities, right, including Longroad's data center options, which we've revealed today and don't forget Gurin's Vanda project. As Andy outlined, Infratil has significant flexibility to support that growth, especially with the new credit rating. And we continue to focus on lifting operational performance across the portfolio, as shown by One NZ and Qscan's strong performance this year and actually Wellington Airport, I would say, and improvement plans in place for the New Zealand Diagnostic Imaging business and Galileo.

I feel like we have navigated the noise of 2025. And while there's plenty of noise still about in the world, were as positive as ever about the opportunities and options for the portfolio ahead. So thank you to all the teams and the portfolio companies, all the teams at Morrison and all our customers and stakeholders for the progress we've made this year. We might go to questions.

[Operator Instructions] The first question today comes from Eric Choi from Barrenjoey.

Could I please ask 1 question on Longroad and 1 on CDC. Just on Longroad and on the data center strategy, I was wondering if I could confirm, A, what the book or market value of that land is? B, that the IE hasn't included that land value and the valuation. You said included the projects but haven't included the land value as well. And C, that land value we should be thinking of that as maybe the floor. I'm just referencing your annual report, I think you made a comment you want to bring power and DC expertise together. And I was just wondering, does that mean you can leverage CDC? And Longroad DC maybe even generate CDC type level returns, which would build cases more compelling than the land one. Sorry, I'll pause there.

Yes. I think you've put all the pieces together there, well, Eric. I don't think the landers will be in the valuation or if it is, it won't be particularly material. The land that we're generally acquiring, it's not metro or anything, and it's very competitively available. I think the overall expenditure on this initiative would be in the low single-digit millions, and that's really just because you're converting stuff we already have or buying the land next door and what they do is put in an application to take load out of the grid rather than put it in to give you a sense of the activity.

But there's so much alignment, I think, between this stage of development that longer it does and what CDC already does in Australia, that have made sense, I think, to recycle a lot of that capability and see what progress could be made. And breakdown surprised how much they've managed to progress over 6 months. So none of that -- none of the potential PV of those being turned into powered land or being sold as powered land is in the independent valuation yet. I think there is an interesting potential for CDC and Longroad to work together and certainly those teams have and are building a relationship. But even without that, there can be other partners in the U.S. if that doesn't really work for CDC to develop it or that they could partner with. There are small development teams around. I think Longroad and the shareholder group is still figuring out what the best way to take advantage of this opportunity is.

Clearly, there's a lot more present value to be got through developing the data center as well and leasing it out and sort of stacking that on top of the value you're generating from the energy. If you look at what CDC earns and turn that into U.S. dollars and maybe they could bit off, it's pretty interesting, right? We make $70,000 of EBITDA per megawatt roughly from a Longroad energy project. That's pretty much what our average is saying. You would be making more like $1 million of EBITDA on a data center if you added that to it. So pretty interesting kind of step-up in the NPV that's potentially available to Longroad or its partners. That's how we're thinking about it.

It's very useful. And then just a quick 1 on CDC. I'm just trying to do our own analysis on where that IE valuation could go once 500 megawatts in first half or any first half '27 is affected. So my question is, does the IE reference contracted EBITDA multiples at all? And if so, is the benchmarking peer set in the mid- to high teens. And the piece of information we're missing is the CapEx that would be required to fulfill the existing 1 gigawatt plus of contracted capacity. So maybe if you could help us out with that, so we could do this back of the envelope.

Yes, I understand the question. The independent valuer does reference a wide range of comps -- listed comps, but also the contracted earnings statistic you referred to, which I think is probably the most common way of eyeballing the valuation of these businesses. It would be in the mid- to high teens. And of course, you've seen businesses trade at a 20% in the past as well on a contracted earnings basis. You have to adjust that for the CapEx, of course, which is why you've got your next question. So hopefully, that answers the first one.

On the CapEx, we gave the guidance in May, which we were holding here, which is this kind of mid-teens per megawatt x land that you can use that. What you're probably missing is how much of that has already been spent or built, I am guessing. And if you think of the 572 megawatt we're building now, I think we've spent about 1/4 of the CapEx for that amount of the megawatts. So hopefully, that will give you pretty close to, I guess, admit the number at the back end in a CapEx number. I don't know if you had a quick follow-up to that and make sure I got your question.

The next question comes from Wade Gardiner from Craigs Investment Partners.

I'm glad that Eric asked that around the percentage completion. I was sort of working off $3.2 million to $4.2 million divided by, say, $15 a megawatt would imply that it's about 50% complete, but you're saying it's more like a quarter complete.

That's of the 572 megawatt underway.

At the end of March. Yes.

Yes.

Extension to that, if you've sold -- once that's completed, you'll have roughly about 1.2 gigs of which you've sold about one. If you did another big contract, and therefore, we're starting to talk about developing the pipeline. What's the time frame to sort of -- if we push more today, how long to build a 100-megawatt data center?

Yes. So we have 100-megawatt of sort of blocks of available still in our pipeline, you can sort of see that right. And they would be -- I talked in the voiceover about sort of towards the back end of the decade. I think is what you're asking is when could that turn up in earnings when where is the real potential upside. I think this year is largely done, right, '28 is capacity for upside, but then more '29, '30 onwards is the way to think about it, Wade, I think that's what you're asking.

Yes. I'm just sort of -- I guess, if I look at the 1.6 gig of pipeline, if we were to include the development gains of that and our valuation, a big part of that is understanding when those development gains arrived. Are we talking 5 years? Are we talking 10 years?

Yes. So I would say nothing much in the next 2 years and then from '29 onwards is kind of what I'm saying and bigger chunks from 2030 onwards.

Okay. One, previous guidance has included, I think, last year, $25 million rise to space exclusivity and AI acceleration. Is there anything in the guidance for this year?

Some of those elements are implicit in guidance. So SpaceX exclusivity has expired, but the service ongoing isn't free. And there continues to be -- so we talked about SpaceX AI and there was a property move, so the property move is complete. There is ongoing AI spend still at the point where it's investment ahead of the return, albeit that some of the returns are absolutely in year, but that's growing momentum. So there are still elements of that in their weight, yes.

Okay. And just finally, also on one, can you provide any update on where the new IT stack program, how that's looking?

Yes. So we talked at the half year about post -- prepaid being complete, we are now well through the postpaid migration and that is material, but it is tracking to plan. And there is Phase 2 of broadly a 3-phase program. We've talked about 3 years. So we're approaching the crunch time for Phase 2.

The next question comes from Suraj Nebhani from Citi.

Just a couple of quick ones from me. Firstly, on -- just a follow-up on Eric's question on the valuation assumptions for CDC. Is it fair to say the contracted capacity that was announced earlier this month, it's yet to flow through into the independent valuation?

That's correct. Came after 31 March, yes.

Yes. Okay. All right. And then I guess just to answer to Eric's question, Jason, on CapEx and on the 572 megawatt. So that mid-teens number, is that on a 572-megawatt basis? Or should we think of it on an ICT sort of contract?

Sorry, great clarification. That's the ICT number.

Yes, yes. Okay. Understood. Yes. Understood Yes. And then the second question was, again, not surprisingly on long road. Just interested to understand this data center strategy a bit more. Firstly, how much capacity -- exactly how close it is? And is there further capacity to increase that over time. U.S. obviously is -- in terms of data centers, yes, demand is growing strongly, but there's a lot of supply as well. So how do you think about what that bit?

Yes. That's a great question. And I think the key is to understand these are grid connected, they're co-located with often projects we were already planning to build. They just happen to be in good places for data centers as well. So we have certainly a long-term view on the value of those sites as energy sites.

On the data center side in terms of timing, Longroad is talking to like a lot of people in the market, pretty much all the hyperscalers. They're all focused on like a 29 onwards type delivery date. And so some early studies have come and saying some of the projects could hit that time line, some of them are saying later. So it's still reasonably early on to when we could say definitively that a project could hit a '29, '30 delivery date, which is kind of the zone where customers are interested just now. So maybe bear with us over the half, and we'll have the team down here in September at the Investor Day to get a good sense of that.

But it's still reasonably long dated. I think to hit that in the U.S. at the moment, there's almost always a bridge to grid solution. So the bundled energy and data center side of things is getting, I think, quite a lot of traction. And then if you zoom out from a shareholder perspective of Longroad, it just creates a different potential buyer set for this business if you roll out 2 or 3 years, if actually you're being able to generate your own -- in some ways, your own demand for your power projects through the data center side of your business, rather than necessarily relying on kind of utility RFPs and things like that.

So zoom forward, potentially a much more stable sort of development business than we have enjoyed over the last few years.

Understood. I'll just ask 1 last question on the corporate cost, please. That's obviously significantly higher and the development spend as well compared to last year. How are you thinking about on a go-forward basis? And firstly, what's driving that? Is it just increased activity across the various businesses?

I think that corporate cost is about the same as last year. I think it was mostly in the development expenses where we had another $20 million. That's really just increased team size, increased cadence on more megawatts than we were doing last year. And if there's an increase on the corporate side, it would be the element of that, that we can't automatically charge the project. So I think it goes hand in hand with that. If you're asking should that happen every year? I don't think so unless we're also increasing delivery cadence as well.

The next question comes from Grant Swanepoel from Jarden.

Just on Longroad; so I might have missed this. But your stakes has gone up to 42.5%. And I assume that's from the extra equity you've put in, is there a read-through on the applied valuation of the extra equity?

Not yet, Grant. Not yet, no.

So that is led to the -- your overtipping in the extra equity share?

That's right. Yes.

But we haven't contributed the cash yet, Grant.

Yes, I saw that. The cadence stepped up a 1.5 to 2 gigawatts per annum on Longroad. Is that factored in independent valuations yet? Because it seemed to have gone up very little. Now the WACC did go up and offset some of it. It just seems that the long run valuation is just stalled for a while.

Yes. No, it isn't. But a lot of the headwind in the long run valuation itself in U.S. dollar terms was raising interest rates, frankly, so you had a reasonable amount of discount rate expansion. So the business did what it said it was going to do. It just was worth less than that interest rate environment effectively. But no, this is really -- because we didn't buy the new project until April, all the stuff is not in that 31 March valuation yet.

Okay. This extra $1 billion of divestments you're talking about now, does that include the $495 million you've just realized for the contact sale? And then what you're left in context is over $900 million, is that just the extra billion you're talking about here?

No, it doesn't include the $495 million, and we don't talk about exactly which business that we're choosing to divest for all sorts of reasons, including disruption to the businesses. We had in mind a target like this already to give you a sense of it. So I think if you go through the portfolio, you can pretty easily see which investments aren't able to scale. It's definitely more than the context at which could actually scale. So no, it's not just that.

And just my final question, just on CDC. You did answer the questions from Wade and Barrenjoey. But these contracts you're talking about in first half of '27 just trying to get a feel of what the quantum could be. Just in terms of the buyers, when do they need you to start delivering megawatts that allows you to really scale again with another big contract.

I mean as Greg described this -- I think I know what you mean. As Greg described, there is great demand now sort of outstrips the available supply tomorrow. But for a while, we've been talking about this delivery is '29, '30. You can look at peers and see where they're signing contracts for deliveries, clearly, that zone for lighting things out to an entity is the zone that people are most interested in now exactly the same as Longroad is hearing in the U.S. So if you're thinking about the kind of next set of contracts, I think there good contracts. There's a kind of a broad range of the small, medium, large. It's -- but they're very lumpy.

So why we're sort of a little bit vague as well, 1 moves, I mean people think we're disappointed. So they're lumpy, but they're all ranges of size, the demand is good. And we hope to have an update in the half on exactly what that kind of near-term contracting that Greg alluded to in May is. And then longer term, I think it's sort of back end of the decade and beyond is probably more realistic at the stage in terms of further growth.

The next question comes from Ben Crozier from Forsyth Barr.

Just first 1 on Longroad. You just called out this project you acquired. It still needs federal approval on the land lease extension. I think some of the other projects, renewable projects across the U.S. have gone on to a bit of problems on federal land. Is that what Longroad's experience is? And what gives you the confidence that you'll get the approval for that?

Yes, exactly. That's a big part of due diligence in the Board and shareholder discussions. The thing that gives us confidence here is that it's in a region with a counterparty that's had good success recently on getting these approvals through for all sorts of various reasons but also because the demand is very strong. So without that track record, we'd be very skeptical, but that recent track record was what gave us confidence.

Yes. And then just on the projects that are completing later this year. Is that sort of a delay in development that you sort of time to time table that you would have expected maybe 12, 18 months ago, noting that sort of completions are below your 1.5 gigawatt target over the last sort of 12, 18 months?

Yes. We guide the 1.5% on getting into operations rather than completions, but I know what you're saying. I don't think any of those came in super late, but they are a longer build time. I was sort of surprised as it was coming through as well that there was so much in really in the next financial year. But there's nothing material going on in terms of build times or delays and starts if that's what you're asking.

Yes. No, that's some good clarity. And maybe 1 last 1 on One NZ. I know you talked through some of the AI improvements haven't shown up in cost savings overall. But are you able to give it out or pull out a couple of examples of projects where you have seen deployed AI and sort of what cost savings you've seen in those specific projects to date because I know you sort of OpEx subsume the revenue sort of increased this year. And if we look at going to that 35% margin target will have to come down quite a bit over the next few years.

Yes. I'm not going to get into too many specifics. But I mean, we have got a good sense of what's cost avoided, what's cost saved? And some of the projects that are more visible from a public perspective, you will see One NZ as referenced publicly, for example, when it comes to faults, call center AI agents collecting relevant data, response times reducing by 80% as a consequence. And those are sort of early-stage projects that then you can think differently about how you resource them and there might be medium-term and longer-term cost savings. But I think the good news is the breadth of deployment and the nature of the benefits that are being realized does give us confidence that there is a medium term and longer-term material cost saving in the mix.

The next question comes from [ Ben Cura ] from [ Shakespeare ]. Ben, your line is open if you'd like to ask your question. I might move on to the next question here.

We've got some new investors lined up.

Maybe. It's from Stephen Hudson from Macquarie Securities.

Just a couple from me. Just firstly, on Longroad. You mentioned in your annual report the Zambales project is being developed for Meta. I just wondered if you could flesh that out, particularly in light of the 4-gig new DC development strategy, whether or not there's opportunities there at all.

Yes. I think the relationships are definitely proving helpful as we -- from selling electrons to showing land as well. So having an existing relationship with Meta, that's not the only project we've built for them. And there have been tax equity on another project as well is helpful. But that project, I believe, we bought with the PPA. So yes, it was well before this data strategy was let up. But I think that's helpful. We have other projects that we sold to Microsoft and then there are others where Google has been in and around them. So it's really those -- extending those relationships from the power side to the kind of infrastructure side as part of the strategy for sure.

Okay. And just on the $1 billion of further asset sales, can we get some sort of color on what you're thinking is around rationalizing the 13 company portfolio there. As you said, we can do the math. But what's your latest thinking in terms of complexity and the price NAV gap?

Yes. We still believe, I think, Andy, that asking people at our current scale to analyze both data centers, energy offshore as well and say health care is probably too hard. And so hence, the Qscan sales. So we would see it tightening down. But it's not just there. I think there are some earlier-stage investments in energy and data centers, for example, where the path to material scale is not super clear. And so there are things we're considering here. If you roll forward, as I was saying, we'll talk about this a bit more at Investor Day because we're still learning and developing our thinking.

Maybe 2 to 3 markets focused in and around AI infrastructure, so energy, building it up, could be kind of more coherent from a capital markets perspective. I think also take advantages of the capability we've got and the great start we've got across the platform. And also lead to still an interesting growth profile just at our current scale. I think we haven't changed our spots. Infratil has made its track record of moving in and out of sectors as they became more or less attractive. And we would still reserve the right to continue to do that over time. But for a variety of reasons, a kind of more focused strategy over the next period feels good to us and something we have more focused on than spreading out again just now.

That's useful. Just a couple of quick ones. Just back to Longroad. I think somebody else asked the question around your shareholding. Are there any advantages to you going higher in terms of your existing shareholding and EMEA and then better going to be participating in the current equity raise?

There aren't any yet, so it's just more share of the good growth we see ahead. I think for those other 2 investors, they have their own kind of portfolio-related reasons for whether they're participating or not, which has given us the opportunity this time to get biggest share of kind of the future growth we see.

Going forward, who knows, that will be a question we'll be asking them as well.

Okay. And 1 last quick one, sorry. The 1 gigawatt pipeline extension that you referred to on CDC. Did you say that the current contract discussions that are taking place that you're likely to update us on over the first half of this financial year will support that sort of 3.9 gigawatts ultimate pipeline? Or were you saying that it's actually beyond that time frame?

No. I think they're quite separate things. I think these contracts we've been -- we talked about we've been working on for a long period of time, and we already have the land and everything for those kind of near-term ones. We're talking about longer-dated contracting discussions that telling people realistically back into the decade and into the 2030s is when they would light up. So topping up the land pipeline for those sorts of target dates, which you kind of obviously have to do having accelerated so quickly in terms of contracted over the last month.

But you'd want reasonable certainty on your contract discussions before you go on the land support an extra cash essentially is what you're saying?

No, no, no. No, I think we are seeing enough raw demand to justify actively progressing that now is what I'm saying. You put down a deposit and pay later in a lot of instances and the amount you spend on the land is pretty immaterial relative to the overall build cost of it. So we're signaling -- you should see that I think 1.6 gigawatts of future pipeline we showed at 31 March, you should expect that to continue to extend over the year.

The next question is from Paul Mason from E&P.

Just 2 for me. First one, just on your credit ratings. I was just wondering if you could give us some comments on like what your plans around managing those are? Are you aiming to keep them stable through time for the head stock and for CDC? Or is there scope for you to maybe look at a lower rating and more gearing now that you're in the rating system or a higher rating on what, sort of general plan?

Good question. Andy?

Well, I think both public ratings are brand-spanking-new. So I think you can expect us to continue to support those. And we both have a number of tools available to us to support the current ratings and grow liquidity. In our case -- in both cases, we're looking at capital notes with equity credit, divestments, broadening our funding profile. So I think you can expect steady as she goes from both of us for the foreseeable future. Yes.

Okay. Great. And the second 1 was just on the Kao data and the AirCloud deal that you guys mentioned. Can you just give us a bit of color like how it came together and also just the structuring like is it similar to what you did with [indiscernible] where you've got some additional credit comfort? Yes.

Yes. I think that particular customer has been growing strongly in the U.K., particularly as the government pushed the kind of sovereign AI efforts. So Kao participated in a lot of the kind of white papers and worked with the government on that. And so I believe the relationship was built out of working either on those things. The credit profile is obviously different from hyperscale. And so yes, there's slightly different technology than was used in [indiscernible] but trying to get to the same point where you're able to start using money from the customer to start building things and effectively raising the equity content in the build and then sort of ongoing credit support as well to give you comfort ahead that the rate is going to be paid and interest and all those things will be met.

So interesting to see how that technology is evolving all around the world. This is another iteration of it that we've seen and there's others we've heard of as well. But yes, that's exactly what's going on.

Okay. I think we have 1 more question, do we?

Yes. Nick Harris from Morgans Financial.

So questions, so two. One was just on the Longroad's potentially long-term data center builds. From what you said on the delivery date, it sort of feels to me like it's more traditional CDC Kao-style co-lo rather than potentially Neo cloud builds, obviously, unless those CPs are scrambling to secure energy. So I'm just trying to understand what the theoretical counterparty might look like, so I can get a feel for theoretical funding envelope?

Yes. Yes. It's actually both in the kind of neo cloud at the kind of more institutional in because of the debt requirements, even the project finance require our energy right does narrow the aperture a bit. But -- and the traditional hyperscale. Actually, it's been quite interesting to see how the U.S. market has developed its view on how to finance kind of lower investment credit rated or sub-investment credit rated neo-cloud-or model builds. So kind of wrap technology from maybe the chip provider, their own credit support like we were just talking about with Paul there, plenty of innovation that's resulting in investment-grade credit structures for counterparties that I think a year ago would have been almost unimaginable for the market. So hopefully, that gives you a sense that there's actually a broader set than just the big hyperscalers that I think could back 1 of these projects.

Yes. And a lot of those NPCs are obviously backed by the hyperscalers as well.

Yes.

Cool. And just my second question was on Gurin's Project Vanda. I just wanted to make sure I understood correctly. There's sort of slippage you're seeing at the moment, as I understand it is more governments taking their time as governments tend to do as opposed to any specific roadblocks you may need to overcome?

Yes. That's a good question. Andy?

Yes, that's right. So the key milestone we are waiting on is Indonesian export license and that does involve conversations between Singapore and Indonesia. That is the key milestone. We've got -- we've ticked off a number of the stepping stones that are precursors to that. But that export approval is taking longer, so it is moving to the right.

Yes. And I think the context is for a new Indonesia government that's come in since these projects were started, is there enough benefit, right, for Indonesia that they're seeing. So that's the kind of conversations that are going on. So not so much to do with our project, but that kind of broader context particularly in light of the energy crisis at the moment, I think, as well.

Okay. Well, let's wrap it up there. Thank you very much for your attention today. Hopefully, see you out on the road tour we're about to do. If not, we'll talk to you again around Investor Day. Have a good day.

Thanks.

Thank you for standing by, and welcome to the Infratil Limited Conference Call. [Operator Instructions] I would now like to hand the conference over to Mr. Jason Boyes, Chief Executive. Please go ahead.

Good morning, everyone. It's Jason Boyes here, the Chief Executive of Infratil. We're very pleased to be talking to you this morning about some contracts that CDC have signed and announced overnight. There's a release that's gone out to the exchange and a presentation that we're going to run through with you here this morning. [indiscernible] opportunity questions and answers here at the end. I'm joined by Greg Boorer, CDC Founder and CEO; and David Collins, the CDC CFO as well. We're going to do the bulk of the lifting on the presentation. I won't steal any of their thunder, and I'll hand over to Greg now who will be on Page 3 of the presentation.

Over to you, Greg.

Thanks, Jason, and good morning, everybody. I love a great day to be talking to everyone after a long buildup, which has taken quite a few months to get this significant contract across the line, but the largest contract in CDC's history, but also probably one of the bigger contracts in the history of APAC. So it's a wonderful day, and that takes us up to more than 1 gigawatt of contracted capacity. And the slide in front of you demonstrates the rollout timetable for that capacity over the coming years.

Now the size of this contract and the length of the contract are quite significant. And that really goes to the heart of the confidence that the customer has in CDC's ability to deliver certainly from a capacity and capability perspective, but also from the wherewithal in terms of the capital to meet the size and scale of the opportunity.

It also speaks volumes to the technological flexibility and something that I've been talking about for a long time, the adaptation that's inherent in the model that we created nearly 20 years ago, which enables customers to adapt to changing technologies and densities and methods of cooling architectures, et cetera, over time. And that plays a big role in our ability to win these outside contracts.

It also speaks volumes to the sustainability story. The sustainability story of CDC is really, really significant. And this is an absolute differentiator, just like the other elements or pillars of our offering around security, technological future-proof fairness, the sustainability is increasingly important and one of the most important considerations. And the fact that we are going to be in calendar year 2026, the first 100% certified net zero data center operator is proof of those credentials.

But I think more importantly, which one of the bigger challenges when it comes to consenting or application approvals in Australia is the use of water. And this contract alone through CDC's unique cooling architecture that uses closed-loop cooling architecture, which uses no water will actually save 14 billion liters of clean drinking water per annum that won't be used for evaporative cooling, which is part of the industry standard today, unfortunately. So that's a really important takeaway, and that is very important to our end customer, of course.

The end customer, it's a single customer. It's a U.S.-based hyperscaler, probably no surprises there and investment-grade counterparty, which then increases the investment-grade counterparty percentage in CDC's business from a capacity basis to pretty close to 100%, which is amazing. And one of the reasons why the wonderful rating agencies continue to support an investment-grade credit rating for CDC, which then goes to speaks to our ability to raise capital very, very efficiently in market-leading rates, which then transforms into even more momentum for the business in the future.

If we change slides and go to the development program. What's important to take away here is that there's no real risk here because the capacity that we've contracted yesterday is going to be delivered through existing sites that are well down the development path much faster consenting and permitting in all of those things, and we're actually delivering these buildings as we speak. And that then leads into the conversation of the size and scale of the pipeline. So from 1 gigawatt of contracted capacity, we still have more than that, 1.6 gigawatts of land that we own, power that is secured that we're progressively going to work through.

And that's important because the size and scale of the business today is such that we need to have a large pipeline to continue to grow at the velocity that we have been growing in recent times. And we do feel that, that growth is really in sort of -- in the large-scale growth is only just beginning. And we're very, very confident of doing more business of this size and scale in the future, hence, the importance of that 1.6 gigawatts of capacity that we're slowly bringing into -- bringing online over the coming years.

What's also important to recognize here is the size and scale of the opportunity for Australia is significant, but the number of counterparties that actually have all of the characteristics that make them suitable to be a delivery partner in the new AI world are becoming smaller and smaller. And that's because not everybody can actually have to find the capital to deliver at this scale. And not many people have the expertise or experience or the referenceability to actually deliver these very, very sophisticated liquid cooling AI builds in the way that CDC has. And again, that differentiation whilst in a rising tide in terms of AI and capacity, people might argue that most all boats will float higher. It's just not necessarily the case because the cost of the IT equipment, the GPUs is so high now and the risk of getting liquid cooling wrong and destroying that equipment is such that the biggest customers in the world, the most important customers in the world are really relying on a smaller and smaller number of trusted counterparties that have that capability to deliver.

So given our credentials, given the fact that we've been doing this for 20 years and the liquid cooling story is part of our history from day 1, then I'm very, very confident that we will continue to grow in a faster rate in an outsized way relative to the industry, which is growing fast, notwithstanding. So with that, we might -- I might hand you over to our Chief Financial Officer, David, to step through the financial impacts of this contract on the business, but also, most importantly, how we plan to fund this and to give everyone confidence that we've got all of those details in hand.

Over to you, David.

Thanks, Greg, and good morning, everyone. It's great to be with you today. I'm on Slide 5. I wanted to make a couple of comments on EBITDAF and CapEx forecast following this contract announcement. So starting with EBITDAF, we are seeing a significant step-up in EBITDAF looking forward as contracted capacity comes online. Existing guidance for FY '27 is unchanged at $680 million to $720 million. We are advising today that expected EBITDAF in full year '28 will exceed $1 billion. As always with our earnings subject to us the timing of build delivery and customer activation. And looking past full year '28 to when this contract is fully deployed and we will be over 1 gigawatt of contracted capacity, that will deliver annualized contracted EBITDAF of around AUD 2 billion. So a very significant step-up as we look forward in EBITDAF as a result of this contract.

Moving to CapEx. CapEx does lift and will lift in full year '27 to support the ongoing strong capacity demand that we're seeing in the market. We are guiding today to full year '27 CapEx guidance of AUD 3.8 billion to AUD 4.2 billion, excluding land, which is up from the full year '26 guidance of $1.9 billion to AUD $2.2 billion.

In terms of the cost of CapEx per ICT megawatt, that does vary by site, location and customer. But on average, on a per million measure, that is in the mid-teens for CapEx, excluding land. And as you would expect and as our history shows, we have a continued focus on efficiently deploying our capital and aligning that with revenue generation and indeed with customer demand.

Moving on to Slide 6 and some comments on the funding capacity of our business. If I start with debt and make a few comments around the debt platform we have within our business. Starting with what we have in our hand at the moment, we have AUD 3.9 billion of cash and undrawn bank borrowings as at the 31st of March. So we're in a very solid position from a liquidity perspective. Our weighted average cost of debt is around 6% at full year '26. Very importantly, on the 21st of April, Moody's announced a public credit rating for CDC Australia at Baa2 and stable. What that rating gives us is a path to a deeper and broader range of capital markets, broadening from our existing funding sources of bank debt and USPP and allowing us to extend into broader debt, both senior and hybrid capital markets.

As you will have seen recently, we did complete a structural separation of the New Zealand business from the Australian business, which was done for reasons of both capital and operating and balance sheet efficiency, and that did deliver $827 million of capital back to the Australian business, which helped to reduce debt on the Australian side of our business. Importantly, for the New Zealand business and that part of the structure, whilst it's not publicly rated, it does maintain an investment-grade profile and will support the New Zealand business going forward.

A couple of specific comments on Moody's and on the announcement on the 21st of April. This was a critical milestone for our business. We have long held a private rating at investment-grade Baa2, but this is a public acknowledgment and announcement for Moody's. They do point to in their report, the strength of our business around demand, proportion of investment-grade weighted customers, long weighted average lease life and indeed our approach to CapEx.

So very important for us as we look forward to funding the growth of our business. We have a detailed plan to fund this contract. We are active on that plan at present. We are looking at both senior and hybrid capital markets. And I would note specifically with hybrids, it's important to note the equity content that comes with hybrid issuances in the marketplace.

Lastly, in terms of equity, we are privileged to have very supportive and strong shareholders who have supported our business over time and indeed, most recently provided $500 million of equity in February of this year, of which Infratil contributed their share at $250 million. Today's contract announcement does not require any equity going forward to fund, but indeed or instead, we will fund this through the debt capacity we have in our business, as I've just outlined.

With that, I'll hand over to Greg for Slide #7. Thank you.

Thank you, David. This slide builds on the update that I provided investors in Sydney at the end of March, so not so long ago and shows the global requirement in terms of data center capacity over the coming years. Now this has been also echoed in recent announcements or earnings calls by every single major hyperscaler, where every single hyperscaler mentioned that they are also very, very capacity constrained in their data center portfolios. And so I think the future looks very, very bright. And indeed, we are working with a number of large clients as we speak on large-scale future deployments, which I'm really excited about and hope to be able to provide even more clarity on those conversations at the end of May during Infratil's earnings and end of year update. But this reinforces this announcement last night today that sort of reinforces the fact that we've been -- CDC has been working really, really hard for 20 years across lots of different sections of the addressable market and has been very successful at adapting to the changing demands, requirements of customers.

And it also speaks volumes of the differentiation of the CDC offering relative to the industry and why we continue to grow faster than the industry as a whole. So looking very forward to getting our teeth into execution and delivery. We'll continue to execute to continue to meet all of the time frames, which are really important. That's one of the important elements here is the largest customers in the world will only back the companies that they have trust and confidence that can hit the dates that they have been promised in their contractual agreements because the implications financially to the largest customers in the world if those dates are missed are quite material.

So with that, I might hand back to Jason to round out this morning's conversation and then to invite a question-and-answer session.

Congratulations. The smiles in the room are pretty big here, everyone. I think what we wanted to capture on this last slide is really should have been evident from what Greg and David are saying the relentless focus on all the little bits and pieces that have gone together to maintain what we see as a very attractive mid-teens plus infrastructure like investment. So you have infrastructure style financing producing infrastructure style cost of capital rolling up to what we continue to see as a very attractive investment for Infratil sitting in that growth very much in that growth driver part of the portfolio going forward. reiterating what David said, this does not require further shareholder equity from shareholders for CDC.

And I guess the other key message I was listening to Greg and David talk there is that this isn't the end for CDC. This is the beginning and the business remains incredibly well positioned with pipeline and everything Greg and we have been talking about for a long time to continue to capture an outsized growth like this, which will be amazing not only for CDC, Infratil shareholders, but for the Australian industry as well, which I know is a big motor Greg.

We've got here a reference to our own investment-grade credit rating, which was achieved late last year, which reflects our strong liquidity position, backed by the divestment program we've talked about for the last year, which continues to be on track. And so if you look back over the last year, you'll see all these little bits and pieces being put in place, our credit rating, David's credit rating, some of the raises that have been done, some of the raises that have been coming to make sure that when we reach this moment, which is happily here, we're well placed to confirm to the market that the attractive equity investment story certainly remains strong and alive.

So with that, I'll finish up here and hand back to you, Ashley, for some questions.

[Operator Instructions] Eric Choi with Barrenjoey.

Can I please ask 2 numerical questions, just one on funding and one on returns. Just on funding, firstly, I just wanted to check the logic on why further equity isn't required. And that is, if we look at Moody's, they've got a 10x gearing target, you're spending $4 billion of CapEx in FY '27. So $4 billion divided by $10 billion is $400 million of EBITDA growth required.

Coincidentally enough, your $700 million of EBITDA in '27 probably goes to $1.5 billion by FY '29. So you're actually growing $400 million a year. So my question is, does all of that math actually suggest the credit agencies will allow you to debt fund $4 billion of CapEx every year based on your current profile? And actually, you could fund more CapEx than that if your EBITDA growth ever stepped above that kind of $400 million a year. Sorry, that's a long-winded first question.

I think we got it in the half, but I think we got...

Thanks, Eric, for the question. Moody's are clear with the metrics that -- or the thresholds for us, which, as you know, is 10x net debt to -- it's very important that -- and I'm sure you know this from looking from your experience that Moody's will look through periods of time where entities like us are temporarily above that level when you have rapid deleveraging coming as earnings grow looking forward.

So the math broadly that you described is right. It's a 10x net debt-to-EBITDA ratio. What I would point out though is there is variation from year-to-year. There are some years where spend will be higher for commercial reasons, but you can look through that as the deleveraging follows with earnings. So reiterating, we have a detailed funding plan that we are actively pursuing at present for this contract and for our broader business, we can fully debt fund this contract.

We do have hybrid markets available to us as well as senior debt markets, all of which we are looking at as we speak. So the rating is important to us. We work closely with Moody's, as you would expect, and we're very confident that we will be able to continue to maintain that rating without the need for shareholder equity support to deliver this contract.

Do you have a second one?

Yes, please, sorry. Just secondly, on returns, obviously, investors are very focused on returns versus your cost of capital spread. But if I oversimplify the return cap to 4 drivers, there's cost of build ramp time, EBITDA per megawatt, cost of debt. It looks like 2 of those are improving, which is cost to build and ramp time. One looks flat based on your guidance, which is EBITDA per megawatt and then one could be worse, which is interest cost. But if you got 2 better, worse and you run that through a DCF it suggests returns are actually improving. So my question is, can we actually conclude the equity IRR on this 555-megawatt contract is actually better than your historic mid-teens IRR?

I can talk a little bit to that because we've guided that in the past, you might have a contribution. I think the -- yes, so the mid-teens is actually our overall investment in CDC, right? And so individual developments will generally be higher than that. But of course, we're holding a bunch of operating assets that are probably like a 9% to 10% cost of equity. So when I talk about it from an Infratil perspective, what I want to see a big part of the portfolio is a mid-teens plus profile, and we're well and truly in terms of the blending on profit. I don't know if you have anything to add on.

I would just add 2 things to that. As you understand, we don't quote IRRs on individual contracts at a CDC level or even in total. But what I would say is that you get variations across customers and sites according to the particular contract. We do have, over time, as we look forward, very strong and improving operational leverage. So you will see that as we scale, we get more efficiency in the use of our cost base, and you will see our EBITDAF margins grow over time.

On interest cost, as you mentioned, sure, in the market at present, interest rates have increased, particularly with what's happened in the Middle East. However, what I would say is we have a forward-looking hedging profile, which looks to smooth out the impact of market volatility on interest rates. So that's something that we think is an important part of the overall mix for us. So -- and probably one last comment. A number of our contracts as we look at them now and negotiations with customers are at campus level. So a campus has multiple data centers on it. And again, that drives efficiency, scale and operating leverage for our business, all of which ultimately feeds margins and IRRs. So that's probably what I would say.

Your next question comes from Roger Samuel with Jefferies.

I've got 2 questions as well. First is just on the delivery time frame. It looks like you have to fulfill this new contract by the end of FY '29. My question is what gives you confidence that you can meet the delivery time frame given the sheer scale of development required?

Thanks for the question, Roger. We have lots and lots of confidence. We have a significant in-house capability in terms of construction code management alongside our trusted general contractors. trusted general contractors have been with us for many, many years and built many, many data centers. And so -- and plus, the campus model that David alluded to a moment ago actually improves the speed significantly because you can have a rolling workforce that kind of stays on your land for a number of years, never never leaves. And that makes it much more efficient to deliver these buildings.

And the fact that I think we've built about 28 data centers so far in CDC's history, and we have a wonderful track record of delivering data centers efficiently to a really high standard. And that gives us, again, confidence to do it. We have a detailed construction and implementation plan. We are one of the largest partners of the largest infrastructure providers in the world, which gives us incredible leverage in the long lead time equipment and supply chain areas. And we've been prepositioning long lead time equipment for this particular opportunity and indeed, our forward-looking pipeline for many years already. And so I'm very confident every which way that I consider this and look at it that we will not only meet those time frames, but hopefully exceed those and generate the revenue even earlier.

Yes. Okay. And my second question is on that EBITDA for this new contract, yes, it looks like it's not going to be much lower than $2 million per megawatt despite such a large size. I'm just wondering how competitive was the tendering process for this contract? Perhaps it's not very competitive given that you're probably the only one in Australia who can actually deliver the 100-plus megawatt contract.

Yes. It's -- the global nature of some of these workloads is such that we're not necessarily competing for these contracts with other organizations in Australia or APAC. In many instances, you're actually competing for these workloads with other organizations around the world. But I think the strong the strong economic returns and the value that we've been able to negotiate here is a direct reflection of the differentiated model, the trust that is required in terms of counterparty risk to deliver and the knowledge, experience of the particular technologies that need to be deployed, which we've built up over 20-odd years in the liquid cooling and high-performance computing space.

And customers will pay more for confidence, for certainty, predictability and Australia is an increasingly attractive location when you think about all of the other major characteristics, which are important, which is penetration of renewable energy, which is the sort of safe and secure nature of our location, particularly post recent events in the Middle East, our Five Eyes alignment, rule of law, stable government, et cetera, et cetera. So there's lots of things that feed into what customers will be prepared to pay, but we definitely have to be very competitive globally. We are very competitive globally.

But the token economics, the economics of an accelerating AI world where demand far outstrips supply for intelligence generation today means that the profits that can be made by these organizations are so attractive that the relativity of the cost of the data center to the overall technology stack to deliver is quite a modest portion when you look at the entire economic model around token economics, et cetera. So we're very, very comfortable. This is a great contract in terms of returns.

And notwithstanding the scale, just even if it was a smaller scale, it will be still very, very healthy. And so the scale only makes us more excited. But again, reaffirms CDC's credentials as a trusted partner in every way that you think about it and Australia being a very, very trusted, trusted geography in a world that is getting increasingly geopolitically unbalanced. So I believe that those -- this momentum will continue for a long period of time as will the healthy economic returns because everyone is making healthy economic returns in this space given the demand and supply ratio.

Your next question comes from Phil Campbell with UBS.

Just a couple of questions from me as well. David, I just wanted to check the independent valuation for CDC and the Moody's rating, do both of those take into account this contract?

Sure, Phil. So in terms of the independent valuation, the last published valuation was 31 March, which Infratil released to market in early April. The sites that are part of this contract were included in that valuation, but they were included as uncontracted because they were uncontracted at that point, which would mean that there would be -- you can expect for the next valuation, there would be a compression of discount rate attached to these sites. So it was included, yes, but in an earlier uncontracted phase.

In terms of Moody's, they have our existing forecast with them. They are aware of the contract. We've briefed them on it. They -- the last published opinion they had had these sites being developed in it, but not a specific contract because at that point, it had not been signed. That was in April and that Moody's have all of the details and indeed have our detailed funding plan as well. So we don't anticipate any concerns on that front.

Okay. Great. Second question was just on what's going on with the New Zealand business. I'm assuming that's just some sort of tax issue that's going on there. We shouldn't view that as kind of some separation of the New Zealand business from CDC.

No, Phil, that separation was done, and it's a structural separation just for reasons of efficiency. So from a balance sheet efficiency perspective and a gearing perspective, the ability to separately fund the Australian and New Zealand business, it makes more sense to have the 2 structurally separated. So you should not read into that, that there is any change in our strategy or ambition and growth in New Zealand. It's simply an operational and capital efficiency move that we've made.

Your next question comes from Owen Birrell with RBC.

Just I wanted to get a bit of a sense on this contract. I mean one of the things that we've constantly heard is that CDC provides a varying level of redundancy to its customers based on their requirements. I'm just wanting to get a sense as to, I guess, how high end this contract is. Are you able to give us a sense as to what the redundancy requirements are around such a large volume of your capacity?

I think we do have the ability to provide due to the granular modular design architecture, we do have the ability to offer varying levels of redundancy, resilience and customers are increasingly looking at those advantages for different types of workloads. However, this particular contract, this is the same as just about every other contract that we have. We're guaranteeing 100% uptime. We're doing all the maintenance concurrently. So it's right at the high end of resilience, redundancy availability.

Okay. So fairly consistent with the broader base is what you're saying?

Absolutely, absolutely.

Excellent. And just another question regarding the CapEx guidance. You provided that CapEx guidance ex land. But obviously, the growth profile of your business is going to obviously require a lot more land as we move forward. Just wondering if you could give us a sense as to how you think about land, whether you buy or lease and give us a sense of, I guess, the OpEx or CapEx requirements around this degree of expansion.

You're spot on. We're going to require more land, more power commitments, et cetera, to continue the velocity of growth that we're enjoying today and to ensure that we see -- we capture our share of the market going forward. In terms of numbers, we sort of play it by year, but we've already -- we've still got 1.6 gigawatts of land and power that we already own to work through. So we've got a significant amount of capacity and the cost of land, et cetera, is very geographically dependent. So in terms of guidance, David, we budget for how much...

Yes, sure. Owen, thanks for the question. The reason just adding to everything that Greg has said there that from a guidance perspective, we exclude land is the transactions are binary, of course. They're high in value but low in volume. So from a guidance perspective, we can manage that on a case-by-case basis as acquisitions happen, but felt that it was more useful for the market to see what our pure growth CapEx is from a guidance perspective, excluding land, and then we will manage land from a guidance perspective on a case-by-case basis.

Yes. No, I understand that. And that's actually a very useful way to provide that information. But just in terms of just, I guess, what the cost of the land underneath that as we try to model CDC as a whole, if there's any sense of guidance you can provide?

What I would say without giving a specific number is it very significantly based on where the land is. It sounds like an obvious thing, but which city you're in and indeed, whether you're in the region or the city. So it's probably best not to give a view of land cost because it is extremely variable. But what I would say is, of course, if there's anything significant that happens, we would talk to that and the location and the cost of that acquisition.

Your next question comes from Suraj Nebhani with Citi.

And just a couple of quick questions. Firstly, just following on from Owen's question on the land piece. Maybe, David, can you give a sense of -- if you think about the overall project cost, you highlighted mid-teens per megawatt. What proportion does land make typically in terms of the project costs overall?

Sure. The answer is it's a small proportion relative to the total project cost because of the technology and the capital investment that goes into constructing a data center. So it is a small component. I can't put a percentage around it because it will depend where the site is, what state, what city and whether it's regional or city-based. But you should assume it's a smaller part of the equation when it comes to the total CapEx for either a campus or a particular footprint.

Are we talking less than 5% just sort of very big round numbers or less than 10% -- probably not...

The variability is too high, but it is small.

Yes, not material to...

Yes. Yes. And the second one was -- thanks for the new disclosure on the ICT megawatts as well. That's helpful. Can you just talk to -- so I think the numbers in the presentation, I'm just trying to reconcile them with prior disclosures. So I think Greg mentioned 1.6 gigawatts of additional capacity. So does that mean that this contract total takes you to 1.3 out of the 2.9 contracted. So that implies obviously a lower PUE than what was applicable previously. So just trying to understand that.

We think about the capacity, we're moving the language to be IT capacity, which is what we're working towards delivering because that's what our customers think in rather than the PE element or component and that should make your life easier. But also, please keep in mind, as per my update recently, there is a significant technological evolution happening with GPU infrastructure, which is great because more and more electrons can be dedicated to revenue-generating IT equipment and less and less over time to mechanical cooling support. So that means the numbers that we're saying to you today could actually even become better over time. But that's -- we're thinking in that normally around that 1.2, 1.3 general PUE sort of range when we talk about the difference between IT load that we are working towards delivering for our customers and the total energy capacity to the pipeline.

Got it. And yes, just to follow up on that point. So the 1.6 number in the presentation, that's on a previous disclosure basis, right? So the IT load would be whatever the PU is 1.3 or lower, adjusting that 1.6 down. Is that the right way to think of it?

You're right. That's totally built.

Your next question comes from Conor O'Prey with Canaccord Genuity.

Maybe a question on the pipeline, the 1.6, 1.7 gigawatts you've got and maybe how you're positioned to respond to RFPs and tenders over the next sort of 12 to 18 months given that this contract seems to pick up a lot of your sort of projects that are under construction, where are you sort of sat? Do you need to sort of reload there a little bit for a period? Or do you feel like you can be active in market winning new contracts from here on?

Conor, we're definitely active in market because -- we still have pockets of capacity, obviously, much smaller volumes than what we're talking about with this contract. And we're bringing on new capacity all of the time. And so we are definitely in the market and talking to customers at scale customers around end of '26, '27, '28 and '29. Obviously, the conversations and the capacity gets bigger as you move through those financial years. But we're definitely up and about when it comes to chasing customers, having great conversations, and we're building in every geography that we operate in over and above the requirements for this particular contract.

Your final question comes from Howard Slynn with Citi.

It's actually Suraj Amas from Citi. Howard just raised for me. Just 2 quick questions. First one, just in terms of pricing, that looks extremely strong, right? What are you seeing in terms of escalators looking ahead? Because just conscious, I think Digital Realty was calling out pretty strong escalators of 3% plus as well. Is that what you're seeing as well in this contract?

We have healthy escalation built in over the full life of the contract, which in relative terms is consistent with what you're hearing, but we don't go into specifics on a contract-by-contract basis.

Got it. And second one, Greg, you sort of mentioned this in the last response that you're building across multiple sites, right? I think you've been pretty positive on Perth opening up as well. I'm just wondering whether this contract is talking to Perth as well? Or is it just still Sydney and Melbourne?

Currently, this particular contract is on existing sites. But unfortunately, we can't go into specifics of the locations.

All right. And last one, just in terms of the future, it sounds like we're talking about May, there's still at scale large contracts, right? Given those are yet to be built, how quickly do you think you can deliver the large-scale contract?

Sorry, the question how quickly can we deliver additional capacity or how quickly?

Let's say, it sounds like you're still -- you're in discussions for the large contracts, right? I'm just wondering how quickly you can actually turn on additional capacity, right? I know you have the land and the power given the other kitten stuff, how quickly can we think about other stuff?

We've definitely got the capacity to deliver large scale in the hundreds of megawatts additionally between now and financial year '29. In fact, we're probably going to be a little bit more bullish than that in our thinking, but people should be comfortable that we certainly are not tapped out in terms of delivery or execution capability, and we will be like we always have, trying to develop and execute, contract and deliver our entire pipeline as quickly as possible because that's what we've always done.

There are no further questions at this time. I'll now hand back to Mr. Boyes for closing remarks.

Thank you, Ashley, and thank you, Greg and David, for all that this morning. Congratulations again on a massive achievement. Thank you, everyone, for listening. We'll talk to you again at our results in May.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

[Foreign Language] Hey, everybody. Welcome to Infratil's Half Year Results Presentation for Financial Year 2026. I'm Jason Boyes, the Chief Executive of Infratil. And I'm here with my partner in crime, Andy Carroll, the CFO. Welcome, Andy.

Good morning.

We're going to talk through the presentation that's been released to the NZX and ASX this morning, along with other materials for our half. And then there'll be questions as usual -- time for questions as usual at the end. So let's get into it.

Excellent to be speaking to you today on the half just gone and how we feel about the half and further ahead. In short, we feel good with recent contract wins and progress on our strategic initiatives, and strong demand for more data centers and power to run them. The portfolio is extremely well positioned for growth, including the big guns CDC and Longroad and also Gurin and potentially Kao poised to join that acceleration. Those big guns have driven the half also with their strong contracted growth starting to come through in earnings with more to come.

And when New Zealand has done a good job too in a challenging domestic environment. So with that introduction, let's go to the highlights, which should be on your screen now.

Actually, not too much new news in the announcements today, but one at top here announcing signing to sell our stake in FortySouth, our towers business, and our old New Zealand bus property in Halsey Street there in Auckland.

That's in line with our strategic objective to sell a billion of assets that we feel can't scale to be meaningful in the portfolio, alongside the sale of RetireAustralia that we announced earlier in the year. We're over halfway towards our target with a strategic review of our investment in Qscan already announced that would finish the job, and that we expect to progress in the next half.

Secondly, on this slide I want to call out, Andy will talk to the numbers more shortly. Some puts and takes as usual between different assets in the portfolio, but pleasing growth overall, that 7% increase and proportionate operational EBITDAF compared to the same half last year, in line with expectations.

I think when we look at the other key things that happened in the half, digital and renewable energy thematics are stronger than ever as data and electricity demand continues to accelerate across multiple markets. You've got that 140 megawatts of contracting that CDC is announced in the half actually since our Investor Day in September event and Longroad has continued to push ahead with an exceptional volatility in its market, commencing construction of a further nearly 1 gigawatt of capacity, talk about our move on Contact Energy that we've already announced and the strong sustainability results.

Later, I might hand to Andy for some highlights on the financial side.

Yes. Good morning, again. So this is a new slide just summarizing 3 key financial metrics and a quick snapshot. In terms of highlights, operational proportionate EBITDAF continues to grow with one around 60% that you can see CDC and Longroad are growing strongly.

Proportionate CapEx of over $1 billion reflects continued material investment, particularly within our growth engines of CDC and Longroad. And our asset valuation has now reached $19 billion, materially up on the first half last year with a significant transaction-based uplift in CDC's valuation. Value increases in the last 6 months have been more modest with nearer-term growth effectively captured in last year's uplift.

Thank you, Andy. Let's go through that portfolio. Let's start with the big one, CDC, a good result up on the previous comparable half as another 50 megawatts or so of -- in construction reached operations and starting to be billing.

The big news in the period, as I said before, since our Investor Day in September has been 140 megawatts of new contracts announced. The large AI contract still the limelight, but CDC isn't a one trick pony and is seeing strong growth across all its customer segments with wins in government, critical infrastructure and cloud as well. So don't forget those.

Looking at the half and its ability to win and be relevant in these new contract discussions, CDC's flexible infrastructure deserves a callout. It's proving beneficial, being able to scale efficiently as computing weight and density increases and also permitting and social license issues that are faced by data centers that use significant water. Remember, CDC is calling with a closed loop liquid cooling system. So that is, as we've talked about in the past, still very relevant.

Looking ahead, those contract wins I mentioned, underpin our targeted doubling of EBITDAF by 2027. And expect to see a further step-up in EBITDAF from the following year as the full impact -- full year impact of those contracts come through, so that momentum carries through. We mentioned at our Investor Day that the timing of those new contracts mean CDC was tracking towards the lower end of the guidance range this year, which is confirmed here as well.

Looking further ahead, with the strong demand I mentioned, CDC is engaged in multiple opportunities with existing and new customers for significant additional capacity. So we see further growth from here. This is going to be supported by the existing significant build program we talked about on this slide, still 450 megawatts coming to completion.

Expansion opportunities for intensification of current and planned developments essentially squeezing more megawatts into the same building envelope. That's part of that flexible infrastructure I talked about before. And of course, CDC is already deep and diverse pipeline of potential data center sites.

CDC is accelerating its own investment to prepare for and meet that demand with CapEx guidance increased $300 million to $400 million to the AUD 1.9 billion and AUD 2.2 billion we have on this slide for this year. And we expect the CDC equity raise, we've talked about for a while now to take place in the next half. AUD 250 is Infratil's share and that will reinforce CDC's significant debt capacity to complete its planned growth.

All those data centers need power, and that's where Longroad is seeing strong demand. A strong half of delivery, though from Longroad through the exceptional volatility of the tax reforms we talked about at the full year, with EBITDAF more than doubling versus the same period last year as over 1 gigawatt of new projects came online. They are on track to reach their target of 5.5 gigawatts of operating and under construction projects by the end of this financial year. And also in the half, they signed revenue arrangements for a further 200 megawatts of future projects to that demand that we talk about starting to come through.

The U.S. tax credit reforms that dominated the discussions at our full year results, as I said, are nearly complete or 1.3 gigawatts of the 2025 projects are qualified for tax credits, with a further 6 gigawatts qualified that could meet the in-service date of 2029 required to get access to those credits, which is essentially equivalent to our 1.5 gigawatt per annum target out to that date. We're looking to qualify more than another 2 gigawatts of projects between now and when the qualification window closes next year.

Looking further ahead then, we are shifting Longroad's guidance up $10 million to that $120 million to $130 million we mentioned here, that's U.S. dollars, largely from the Serrano project coming on earlier than forecast this year.

In the next half, we see another solar project Sun Pond coming online and a further 400 megawatts of construction set to commence.

Looking further ahead, as I've alluded to, demand signals remain really strong, what Longroad described as a generational growth opportunity at our Investor Day. That's driven by data centers, of course, but also reshored manufacturing in the U.S. and their pipeline is well placed to address that demand and the business is well positioned to execute on its 1.5 gigawatts per annum target over the next 3 years.

And even though achieving that will be a lot of work in itself, we do see the potential for upside beyond this, as momentum in the market and the business continues to build ahead of the solar and wind tax credits running off in 2030.

I'll hand back to you, Andy.

Thank you. 1, so the team is doing a really good job of delivering in challenging market conditions with the market-leading offering. So you'll see revenue is up $14 million from the prior period, but strong growth in mobile in procurement and other offsetting declines in fixed. The standout on the slide is the continued growth in mobile revenues with notable growth in consumer postpaid connections in postpaid ARPUs overall. All -- and SpaceX have been valuable differentiators.

Handset sales showed good growth, reflecting improved trading momentum in strong mobile activation. Key elements within wholesale and Eon are progressing well, with One NZ taking strong share of MVNO growth from onboarding and growing connections with a couple of new partnerships announced recently.

The challenging areas remain challenging, enterprise and fixed. It is the One NZ in team covered at our Investor Day. While the enterprise pipeline is stronger with good wins on the back of this basic offering, like the Department of Conservation, we continue to see aggressive competitor discounting.

EBITDAF performance for the first half is down relative to the prior period and that reflects the circa $25 million of discretionary OpEx spend on strategic initiatives that I talked about at the full year, but cash flow has improved and is an area of continued focus.

Moving to outlook. There is no change in either of our EBITDAF or CapEx guidance, so that's confirmed today. We are expecting a stronger financial performance in the second half as talked to at our Investor Day, reflecting seasonal trading and the benefit of first half price increases flowing through to the second half.

In terms of strategic programs of work, T-One is progressing very well with Phase 1 prepaid complete. SpaceX is also performing very well, more than 6 million texts have been sent, and it's delivering great coverage, productivity and health and safety benefits. And now we're looking at base voice calling.

Our confidence in the AI opportunity is growing with benefits being realized across many areas. This has included AI for network reliability, cybersecurity, detecting schemes and fraud and improving customer service.

For those of you still running around with old handsets, hopefully no, not too many on this call. Another reminder of 3G shutdown from the end of 2025. That closure will provide through the simplification and cost benefits and free up network capacity.

Medium term, we continue to note our intention to continue to grow EBITDA margins to the mid-30s, with reduced capital intensity and improved cash generation. And you'll see on the bottom right there, the very smart new premises that the team moved into 10 days ago. So that should be great for customers and staff in Auckland, on time and under fit our budget. So a nice job team. Back to you, Jason.

Thanks, Andy. Yes, nothing worse than getting the 3G come up on your phone. I won't miss that in future. Let's stick with New Zealand for a bit and turn to Wellington Airport. These results have been out for a while. So only a quick comment on track performance with the team working hard to offset economic and domestic capacity headwinds upon one intended in Wellington.

Good lift in international shows demand is there for capacity, though, and the headwinds will abate eventually and they're getting ready for that with the car park and terminal upgrades and the EMIS being installed.

Always working on expanding international further ever since I've known Matlack, that's been top of his mind. I've announced this MoU with Guangzhou, which the base force China Southern, and I hope to see a China Southern tail and Wellington at some stage once the EMIS is in place.

Diagnostic Imaging, a bit of a mixed bag here in New Zealand, a difficult half with a lower-than-expected margin mix of scans coming through, which means their guidance is coming back a little bit to be flat year-on-year. Improvement initiatives are underway, including a new clinic coming in Dunedin across the Tasmania Qscan, double-digit growth in guidance unchanged, so a good performance there.

Also happy to announce today that both our New Zealand and Australian businesses are collaborating to separate and consolidate their teleradiology businesses into a new stand-alone business. So this is literally radiologists in front of computers reading scans that are taken elsewhere, maybe urgent scans from hospitals or overflow work from bricks-and-mortar businesses. So that's been consolidated into a new single business.

We expect more efficiency and growth with a dedicated focused team and immediate scale in the space through this consolidation. Being less capital intense, these businesses tend to trade on higher multiples as well. Quite a lot of work I know between the teams to get to the stage and looking to complete the establishment of that by the end of the year.

On to renewables, back to them for a second. On Contact Energy, we were pleased to acquire TECT's 4.9% stake recently with a mixture of cash and fiduciaries shares, increasing our overall stake to 14.3%. This fits our strategy of seeking scaled cash flow-generating businesses, while also giving us more financial flexibility as a relatively liquid-listed holding.

We like context outlook too with synergies from integrating Manawa to be realized in interesting development options ahead. What about Gurin, you're going to do this, Andy?

Yes. Thank you. As given the nature of the business, there's not a lot of news relative to the update that aside provided in September. You can see that the first solar plant in the Philippines is beginning to make a revenue contribution and Gurin has recently bought a wind and solar project in South Korea from a European developer.

For Vanda, the key milestone remains approval of the export license by the Indonesian government. The team is right into detailed planning work with RFPs for the construction of the project assets currently in market. And we're targeting a final investment decision for this project around the middle of the next calendar year.

Thanks, Jason.

Nice one. Turning to Europe. Galileo is never getting a tricky market. There's an update here. But demand across the market is still affected by the war and a large data center build-out is not arriving as quickly there as it has in other markets. I would say that the medium-term outlook is as strong as anywhere. That will arrive. But in the meantime, the team is allocating its capital carefully to the most meaningful projects it has like this offshore wind one mentioned here, and they've got other interesting wind projects in battery and also some modest build like this, the first project in SLE.

And lastly, or at least next to Europe, Kao Data. Although data center build out is more modest in Europe than, say, the U.S., demand has increased really markedly, since last financial year, which we talked about in May and in a much more tightly constrained market than the U.S. So an increase in demand with not a lot of supply is creating quite an interesting environment.

Kao Data is well placed with over 20 megawatts of near-term capacity and interest from a number of parties that would see all that capacity contracted. This would be an exciting step change for the business and unlock debt capacity for further growth.

On that positive note, go to the numbers.

Thank you. Right, a few numbers. So proportion of EBITDAF, $514 million for the half, that's up 7% on the prior period. You'll see most of the uplift comes from CDC and Longroad, reflecting the growth of the operating assets. Proportionate development EBITDAF was up 15% on the prior period, which reflects the growth of our development platforms. Proportionate CapEx was down slightly, but there's still very material CapEx spend occurring.

A quick bridge on independent valuations. I touched on this earlier. It's been relatively modest growth in the last 6 months following a material uplift in CDC's transaction-based independent valuation in the previous period. The biggest movements relate to CDC, but part of that reflecting our additional investment. Manawa and Contact swap positions with some uplift in the Contact valuation plus $180 million of cash proceeds, which isn't reflected here.

Longroad is up $160 million across the period with some of the drivers noted in our disclosures today. And on the downside, we've noted -- we've reflected our RetireAustralia sale price in this bridge and the decrease in RHCNZ's latest valuation performed by a new valuer and reflecting a range of factors, again, as covered in the disclosures today.

Funding capacity. This is an update of the graph that we showed at Investor Day with the announced divestments bar growing. We have material funding capacity available to us.

Dividends. We are declaring a partially imputed interim dividend of NZD 0.725. We are signaling an intention for an uplift in the final dividend to deliver annualized dividend growth of circa 2% per annum, subject to the usual provisos. We continue to operate the DRP with a 2% discount.

And I will also stop to ref guidance. We've summarized a few changes in EBITDAF guidance here, which we have touched on as we've run through the peak today. To recap, as we signaled at Investor Day, we expect CDC to land at the lower end of FY '26 guidance. So we've tightened the range to reflect that.

Longroad guidance is up, largely reflecting the early delivery of Serrano. RHCNZ guidance is revised downward, which Jason touched on and corporate guidance. Corporate cost guidance has increased reflecting a mathematical impact of an uplift in Infratil share price on management fees.

In net terms, we remain within our previous guidance range before we adjust for the divestments of RetireAustralia and FortySouth. So taking all of that into account, we've got an updated range of $960 million to $1 billion.

We're tightening up our expected proportionate development expenditure range by $5 million. So the revised range is now $85 million to $100 million. And on CapEx guidance, the net effects of an uplift in CDC's guidance and removing our divestments leaves our proportionate CapEx guidance range unchanged at $2.2 billion to $2.6 billion.

Funding and liquidity usual update on the facilities and quality position. The one thing that's new is that we've made slight change in the leverage metric that we're reporting. So we've moved to a loan-to-value metric, which we think is more relevant than our previous measure. And as I've noted a few times we're in a strong financial position with considerable flexibility to support further growth.

Back to you. Thanks, Jason.

Thanks, Andy. Let's finish up. First, here's an updated view of the 3 pillars of the portfolio. We introduced at our full year results in May with RetireAustralia and FortySouth removed know that those sales are still conditional and to complete. And if you remember that sort of pillar approach led us to these 4 medium-term strategic objectives, which are set out here.

Most progress in the half on divestments, as we've said, but directionally, at least also on our operating cash flow, and these 4 KPIs continue to be our focus.

Next, sustainability. Where our work is turning up in tangible results with strong GRESB as we call them, outcomes. These are the people who rate private real asset businesses for their sustainability work. Infratil's management score was the first out of 135 peers and One NZ performed well winning medium-sized Company of the Year at Global Sustainability Awards.

This flows through importantly to global listed indices some of which are here with our Sustainalytics rating among the best in the world, and we're also committed to progressing our SBTi target, and we'll continue to report on that as we have here.

So let me wrap-up and we can go to some questions. With increased investment in Contact, strong progress on divestments, growing operating cash flow, as I've said, that is all underpinning Infratil having significant financial flexibility to invest for future growth.

Longroad and CDC both have strong contracted growth profiles, with material earnings expected. You can see that in this half starting to come through as development sites convert to operations that will support distributions from them in the future, hence my first point.

AI represents significant upside potential from that already attractive growth. And Longroad and CDC are well positioned to capture that through strong track records, deep pipelines and financial flexibility. As I've said, CDC has multiple opportunities with existing and new customers for significant additional capacity, while Longroad could push beyond, it's 1.5 gigawatt per annum target in the future.

Gurin is poised to join its scale as we have reported and maybe Kao is well positioned as well. We're a high conviction on these opportunities. And I said at the outset, we feel good about them. But we'll continue ways to position the portfolio for long-term growth, scanning as we always do for attractive new growth pillars as well.

So I'll finish there and go to questions, please. Harmony?

Your first question comes from Eric Choi from Barrenjoey.

Maybe I have 2, if that's all right. Just a long-winded first 1 on CDC. You've got a qualitative comment in there at the run rate for FY '28, it's pretty good. I was just wondering, if there's kind of multiple ways to triangulate maybe even a potential $900 million-plus [ EBITDAF ] outcome. If we think about the Investor Day, Greg was saying the growth trajectory will continue beyond FY '27 and then in FY '27, you're going to grow EBITDA kind of $270 million. If you just annualize your 140 megawatts of recent contracts that's left with a $100 million benefit by itself. And if you look at your kind of CapEx bill, you'll have sort of 825 megawatts growth and maybe that 600 megawatts IT low, but even kind of assuming a sub [ $2 billion ] per megawatt number could suggest $900 million as well. So all kind of points at [ $9 million ], plus. Sorry, Jason. Is that ballpark?

I think I'm following you. Yes, yes, I think I following you. I'm just running that through. The -- I think -- how do I put it? I think $900 million is possible. And I think the way you're constructing the maths is sensible. But it's not by no means in the bag, right? We -- that would require additional contracts, which we're working on. And we'll be updating on where we've got to on all of that, certainly by the full year. But I think the way you're constructing the math is sensible. A couple of maybe comments just listening to you now.

In terms of the EBITDA per megawatt, I think it is sensible to be conservative overall, but around that because what you see, I think, going forward, and it's maybe a little bit missed to date is the densification that we're seeing with new contracts coming through means that your ROIC on some of those contracts is exceptionally good, even with a lower per megawatt kind of assumption around it. So if you're tracking for an EBITDA number, then I think some conservatism is sensible.

We are very IRR and ROIC driven, so you can be assured that we're driving to exactly the same underwriting standards we've talked about in the past that kind of mid-teens plus. That's possible -- one way that's possible in this environment is that very strong densification we're seeing squeezing more megawatts into the same space. Does that help?

Got you. It's very, very helpful. Actually, can I do one more then, maybe just a segue from your comment on maintaining returns. But obviously, the new information is a bunch of the Neocloud deals being signed in the sector. So just listening to what Firmus has to say, they're sort of saying they've got a gigawatt plus commitment to CDC. So I just wonder if -- if you can tell us or give some color on how their rights of first refusals work at Firmus and Neocloud terms, at least as good as hyperscaler terms and maybe hyperscale is a view very favorably by wind. I just wonder how lenders view Neocloud versus hyperscalers as well?

I can give maybe some general comments. I don't like talking about individual customers, although on that particular one, Firmus. So the committed, committed is $40 million, but I think we're very clear on that on the CDC side. But having said that, Greg is personally very keen to lean in for the Australian company, he's founded to support other Australian companies like Firmus develop what he thinks could be an important export industry in the future, and I think Firmus agree. So they'll be leaning in to try and support their growth in the way. I think Firmus is describing to you having just listened to what you've said there.

But having said that, as I said before, we and CDC haven't changed our spots on how we underwrite the type of contractual profile we need to see underlying customer mix, et cetera, is all still very important that we've got very comfortable with the contract we signed. That sort of stuff doesn't been overnight. The usual due diligence is done. Firmus has a good track record, in particular, of providing these services globally and the underlying customer mix. They already announced themselves and NVIDIA is there, all goes to support the credit profile that we look at.

And I expect going on to the second part of your question, we are the debt providers are, we don't have insight into their particular debt arrangements. But as part of our kind of scanning for AI bubble type stuff, one of the big things we are focused on is underwriting standards for credit in the space.

And what we have seen so far suggest actually very sensible underwriting, where you're seeing underwriting of debt shorter than useful life, shorter than contracts from creditworthy counterparties and payback periods, all still looking reasonably robust. Now we don't see the whole market, but that is I guess, a comment on exactly what we're looking for to assure ourselves that underwriting standards aren't slipping and people are getting ahead of themselves, which we haven't seen yet.

Your next question comes from Ben Crozier from Forsyth Barr.

Just a couple of questions for me. First, just on the densification you're talking about on the data center side of things. So what exactly does that look like? Can you guys sort of give a little more example, is it going through to some of the older data centers built 10 years ago and up in the megawatts. So what's sort of required from that point of view?

Or is it just sort of the ones in the pipeline saying you're looking at them now and saying maybe they could be more megawatts than what you have sort of indicated previously?

At the moment, the latter, yes. So it's stuff in the pipeline that's been built, yes. Yes. Yes. Greg would say all of the infrastructure can scale, et cetera, et cetera, but we're not banking any of that in yet.

And then just on sort of free cash flow. If we look at both Wellington Airport and One NZ, sort of free cash flow was below what you've had as distributions back to inventory over the last sort of 12 months particularly in this first half for One NZ. What do you think a sustainable level of cash flow coming out of these entities? Is that what you've distributed now and that these companies have to grow to that level? Or is it, you're just looking at these as the moment you've got a bit of a mismatch as you've alluded to at the current level, and this is just a reallocation of capital, sort of levering up those entities? Or do you think that, say, One NZ and Wellington over time can grow to this current level?

Yes, I understand the question. Do you want to cover it, Andy?

Yes. Thanks, Ben. I mean we are looking for growth from both in terms of the recipe to get there, that medium-term guidance or outlook that we've talked about for one is material to that. Wellington Airport volumes, pricing, yes, we're -- again, we're expecting more from Wellington Airport through time.

And then if you look at the other assets, we can you reasonably expect a material uplift in operating earnings at the CDCs and the Longroads, probably more the CDCs, but we've seen the operating earnings grow in this period. So that's the sort of medium-term picture if that helps.

Yes. That's pretty clear. And maybe just last one on One NZ. Obviously, mobile growth is still pretty solid, but it is becoming a bit more reliant on price growth in the connections were slightly down year-on-year. Do you think over the next few years, you can stabilize that market share, you obviously been a little bit under pressure from just 2 degrees discounting. Is there things you're actually doing in market to sort of improve market share, increasing marketing or anything?

Yes. I mean that's always the aspiration that there is a balancing act. Isn't there between price increases in market share. I think the team is doing a really good job of managing that balance. Would we like to see more prepaid growth? Yes, we would. Now with those customers and the new stack, we think we've got greater flexibility in terms of how pricing constructs are created. So watch out for that, but it's a continuing area of focus. But I think the team is doing a really good job in a challenging market.

Is it all price? Or is there a mix? Sorry to ask a question?

Yes, that's right. So thank you. So there is mix in some of the growth in consumer postpaid has come from prepaid. So I think we would say the quality of the mobile revenues are improving through time.

Your next question comes from Phil Campbell from UBS.

Just a few questions for me. Just on CDC, just talking to a number of the Australian data center operators recently. They're kind of indicating there's been like an inflection in demand, quite a substantial increase in the demand in the last 3 or 4 months, which is kind of what you're alluding to as well. So I was just wanting to get your view, Jason, on kind of what's driving that? You did say it was across the board, but I was just interested in getting your views on what's changed in the last 3 or 4 months has actually driven that?

Then the second question was just on the Neoclouds. You kind of alluded to a little bit, but I'd just be interested in kind of what you include in your contracts to try and mitigate any kind of credit risk around some of these smaller or newer players? And also to what extent kind of NVIDIA plays a role on that.

And then just the last question on Longroad. I just noticed that there was a bankruptcy of a reasonably large solar developer in the U.S. I know at the Investor Day, we were kind of talking with the guys and that we're expecting a number of the smaller guys to probably find difficulties there. But was it going to be an opportunity for Longroad? But I was just interested in your views, if you had any intelligence as to what's gone on there. And again, I'm assuming there's kind of an opportunity for Longroad?

Thanks, Phil. Take those in turn. So inflection in demand, it feels consistent with what we were communicating at the full year actually, which if you recall, was that the demand we were seeing in June hadn't really gone away, but it had shifted to where it was coming from.

So while go back all the way last year, hyperscale was doing all the work. In May, we were seeing more or less the same demand, very strong, but coming from multiple pockets and you can sort of see that happening globally as well through different people, building the infrastructure that is largely going back to all the same uses, whether it's your Open AIs or Meta or other uses like that.

So I think it has been very strong since that period we're talking about in May and quite an inflection after that kind of period earlier in the year, while the market was transitioning to where it had been 12 months before to the state we're in now.

So very positive. And I think the good thing from a data center operator perspective is you're able to have, as I put in this presentation, multiple concurrent conversations with multiple people, so that if one falls away, there's -- there are multiple people who you can still talk to about.

None of it's in the bag, I would say, the demand is good. But a lot of the workload is globally oriented. So this is a key moment for CDC's business, Australia and New Zealand as countries, I think, to get on the front foot to get its fair share of it. And you can see CDC trying to do its best there with accelerating CapEx giving us pipeline in order, cranking its infrastructure to provide as much capacity near term as it can possibly be provisioned to do because that is still the key definer of whether contracts can be won your time to market. So that's a little bit of color on demand, I think still strong as we felt in May.

On credit risk, it's difficult to go into detail on specific contracts or even generally given that we've only announced one. So -- but I would say that we haven't changed our underwriting standards. And key things for us are underlying customer mix.

Obviously, an NVIDIA being there as a customer, in particular, is obviously material to an underwriting case. And more broadly from a CDC perspective, there's definitely a desire to help Australia get on the map here, but that -- building that relationship with NVIDIA is a key strategic plan for us as the key player in the space for a long period of time. So all of that goes into the mix.

I think the densification is probably a little bit overlooked as well, as I said to Eric, Neocloud tend to deploy a much higher density. So your capital employed or capital risk is quite a different equation as well. All of that then goes into the next to come up with an underwriting case that we can support.

Last one, smaller platforms in the U.S., M&A has got really busy in the U.S. renewable market for sure. People are selling interesting projects, smaller developers coming to the market under stress and knowing there's an opportunity and not a 1 million buyers either. So the team is very active.

We're quite active on quite a big portfolio, which we lost to someone else. So the team will pivot to something else, but I definitely think those opportunities are coming up in this next period, partly what we're saying there's the kind of potential for upside here even if it's still early days in the business -- and the market is building momentum towards that 2030 date. I think that's covered at all hopefully.

Your next question comes from Grant Swanepoel from Jarden.

A couple of quick ones. Your proportional EBITDA, you're saying that it's broadly unchanged at related adjustments. Over the last 3 months, translational currencies have moved against New Zealand by about 5%. What is your outlook for New Zealand dollars in terms of what you've got in your forecast?

Andy?

Well, I think we've noted the exchange rates, Grant.

What do we have?

Okay. So actually, it's a softer outlook to EBITDA in New Zealand dollar terms or in high currency terms, if the translation covers softer outlook.

It's a very modest sum.

Second question, just on your now at half pregnant stake more half pregnant if there is such a thing on Contact at 14-odd-percen. Can you give -- where will you be able to give some sort of color when this thing isn't just cash?

I think the options are all there in terms of whether it becomes a core part of the portfolio, as you say, a proxy for cash. We don't have a strong view or need to form that view now. I don't think the tick stake was a little bit their timing, their ability to -- and willingness to transact on terms that were particularly attractive to us in terms of their mix of shares and cash. So I wouldn't read too much more into that other than it being slightly opportunistic. And we haven't really formed firm views either way in terms of proximity cash or a strategic long-term holding and don't really need to yet.

But I do think it's not sustainable or a whole 15% of a listed company for ages. We do have the synergies that are going to come through over the next year or so. I think once those are all fully priced in, then you're probably in a situation where you had to make it a stronger call. But then that feels, I don't know, 6 to 12 months away, in my mind depending on what happens to the market price.

So while we're in that period, we'll keep forming our views and seeing how the rest of the portfolio evolves, what happens to other cash flow-generating assets. But in that sort of time period, I suspect we do need to make a call, as you see.

Your next question comes from Paul Mason from Evans & Partners.

Just 1 on CDC. I was just wondering if you could make some comments on the power position of the business because you got like about 2.5 gigawatts, including future build in the presentation.

Like how much line of sight do you have over that 1.6 future build in terms of the power being secured already? And do you have like short or medium-term time frame, so like any that's not fully firmed to get secured as well?

Yes. The question, I have the complete breakdown. I mean, it doesn't really go on the pipeline until we have line of sight on the power. So we'd have line of sight on it. The key point is when it's deliverable, as you're alluding to. And near-term delivery is pretty constrained in both those key markets, and the team are working pretty hard to get as much on as soon as you can in that kind of next 12- to 24-month period because that's where a lot of the demand sits.

I don't have the exact numbers. But yes, you couldn't turn on 1.6 gigawatts of power and all those sites today, tomorrow or next year, for sure, it is for delivery in a staged way over those periods, Paul.

Your next question comes from Stephen Hudson from Macquarie Securities.

Just a couple from me. I just wondered if you could give any sort of feel for what you're seeing in the stabilized data center pricing space. So cap rates around stabilized data center transactions? And then just a further one on CDC. Just on the independent valuation, whether or not the current independent valuation includes Marsden Park densification benefits and fully incorporates the West Australia campus as well?

On the first one, we are quite interested in the space funnily enough. So I don't know, 6.5% cap rate for good quality, stellar outcome, people would be pushing for a tad under 6%, which you can see in the old portfolio around the world, but difficult to get as a bit of guidance. The densification now is not in the independent -- the 30 September independent valuation. I'm pretty sure. Andy is nodding here next to me. So yes, that's still to come.

And West Australia campus as well that doesn't look as if it's in there.

A little bit, just a little bit.

And maybe, Andy, straight to you, the March recut, is that the most likely timing for the independent valuation term corporate at least those 2 factors, last impact densification in West Australia.

Potentially, I mean, management will need to take a view of it before the independent valuer takes it into account size, I'll put it in that potentially [indiscernible]. I think you're alluding CDC, March valuation or maybe December.

Okay. I'll sneak in one more. I think you've indicated that it may be useful for Infratil to secure a credit rating over time. You've obviously had a significant improvement in your parent operating cash flow position. I think you're sort of traveling at about $160 million. Is that sort of job done or do you think you need to see more improvement there to secure an investment-grade credit rating? And I guess, part B to that, what do you also need to see on the liquidity front?

Andy?

Yes. It's something we have turned our mind to Stephen. Part of the answer depends what methodology you pursue, and there are various options. But it's fair to say the metrics that we think are most relevant are beginning to tune up or have already turned up.

Yes, I think that's right. And you can see one of them and the change Andy has made and how we're presenting gearing in this pack now run. So that's -- that is one of the measures we think is the more relevant one for what you're talking about.

Your next question comes from Suraj Nebhani from Citi.

Just a follow-up to 1 of the earlier questions initially. On the secured power of the 1.6 gigawatt pipeline, is it possible to make some comments, Jason, on that? How much is secured already?

As I said, we have a line of sight to all of it. Really, the key is timing, though, in this environment. Yes, when can you get it on. And that's a combination of work with -- what I was trying to say is work with the utilities, but also work on our side of the line in terms of densification and other things we can do on our side. So the team's been great, I think, at getting big watches of power on in good time frames and continuing to be successful of that as a key differentiator for them.

And then maybe just a related question on the partnership that you've announced recently with Firmus. Obviously, Firmus have been in the press talking about much bigger numbers. Like is it fair to say that Infratil has capacity in the current book to fulfill all of that? Or do you need to grow the business a bit more?

I think you'd be looking to grow the business a bit more for all of that capacity. Not all of it will need to be where this first workload is and even may have talked about there he's talking about Firmus. Tasmania site, for example, would be a growth.

So CDC is leaning into that relationship because we think it's an important one, particularly with NVIDIA there. But we need to run through our normal underwriting standard as well, and we're looking to at a CDC level, achieve a -- continue to achieve a very attractive mix of customers. So not all of our pipeline is going to go to Firmus or any Neocloud, there will be an attractive mix. So again expansion would be implied in that I agree with that.

And then in the back, there were some comments around CDC where you talked about the run rate impact of development completions into FY '28. Is that similar to the numbers that were being discussed, I guess, early on, the $900 million in response to one of the first questions?

I think -- no, just continuing the full year impact of contracts that come online to hit our 660 or whatever it's going to be in FY '27, isn't going to get you all the way to $900 million. The -- I think the -- but it will get you beyond the $660 million say where we land. So I'm just saying there's momentum through there. To be clear on the $900 million, what I was agreeing with Eric, it's -- it's possible, but not in the bag, we will be needed to sign further contracts, which obviously we're working on. And then so you want have a chance to hit that. And then it would depend on exactly when those contracts convert to billing as well.

So a few things need to fall our way for $900 million to turn up as actual. And to be double clear, we're not changing guidance at that point. We're just sort of talking theoretically about how the maths could work, yes.

Of course. And just one final one on CDC. I'll jump off then is on the CapEx side. The CapEx has gone up this period. Is that a function of just putting more capacity to work and not an increase in cost per megawatt?

No, definitely not an increase in cost per megawatt. It's additional capacity and fitting out for new contracts that we've announced in the period.

Your next question comes from Grant Swanepoel from Jarden.

I'm sorry, that's a glitch.

No, fair enough. Back to you, Harmony. Anyone left.

[Operator Instructions] Your next question comes from Wade Gardiner from Craigs Investment Partners.

Just giving away from data centers for a second, separation of the teleradiology business within Qscan and RHCNZ, does it have the potential to be material? And how does that affect the strategic review and sale of Qscan?

We think it's -- it doesn't detract from the strategic reviews, the strategic reviews going ahead. Telerad is an faster-growing, higher multiple vertical for sure than bricks and mortars. And there's been an opportunity for both the doctor owners, remember we own it with them and for us to grab a position to scale in an interesting market through doing this ahead of the strategic review essentially is how you should think about it.

Could it grow to be material? It would be a long road to doing it, but it could given the dynamics much more scalable and not a lot of capital intensity required. To give you a sense of the size, sort of roughly $10 million of EBITDA going across and maybe a couple of million or more of extra OpEx in terms of setting it up and running it as a stand-alone business, from which it should grow from. So yes, that could give you a feel for it.

Right. So that would essentially lower the value of what you're selling?

Yes. Yes, although arguably, hopefully, on a total basis, you'll have a higher multiple on the EBITDA. So you should be up.

There are no further questions at this time. I'll now hand back to Mr. Boyes for closing remarks.

Thank you, Harmony. Thanks, everyone, for the questions and the attention. Really, just on a final note, as I said at the outset, we feel really good with where the portfolio is at. With those contract wins at CDC, I don't think our valuation for their business is now particularly challenging.

And nor as Longroad, obviously under pressure through that period with a strong demand ahead and the business is well positioned to win new contracts and accelerate for further growth from here on top of already attractive contracted profiles. That stuff isn't in the bag. It needs to land and we need to win it, but we feel good about our prospects of doing that. So I'll finish there. Thank you for Andy and I and see your around.

Thanks, everyone.