Use these links to rapidly review the documentTABLE OF CONTENTS BROOKFIELD INFRASTRUCTURE PARTNERS L.P. INDEX TO FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on April 30, 2013



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington D.C. 20549

FORM 20-F

o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934ORý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934for the fiscal year ended December 31, 2012ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934ORo

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission file number 001-33632

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.(Exact name of Registrant as specified in its charter)

Bermuda(Jurisdiction of incorporation or organization)

73 Front Street
Hamilton, HM 12, Bermuda

(Address of principal executive offices)

73 Front Street
Hamilton, HM 12, Bermuda
+1-441-294-3309(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered pursuant to Section 12(b) of the Act:

Title of class

Name of each exchange on which registeredLimited Partnership Units

New York Stock Exchange; Toronto Stock Exchange


Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None

Indicate
the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

143,567,955 Limited Partnership Units as of December 31, 2012

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.Yes ý No o

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.Yes o
No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).Yes o
No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer
and large accelerated filer" in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o


Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

o U.S. GAAP

ý International Financial Reporting Standards as issued by the International Accounting Standards Board

o Other


If "Other" has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to
follow.Item 17 o Item 18 o

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).Yes o No ý





---





Table of Contents



TABLE OF CONTENTS



PAGEINTRODUCTION AND USE OF CERTAIN TERMS


1FORWARD-LOOKING STATEMENTS


3PART I


7Item 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS


7Item 2.

OFFER STATISTICS AND EXPECTED TIMETABLE


7Item 3.

KEY INFORMATION


73.A

SELECTED FINANCIAL DATA


73.B

CAPITALIZATION AND INDEBTEDNESS


83.C

REASONS FOR THE OFFER AND USE OF PROCEEDS


83.D

RISK FACTORS


8Item 4.

INFORMATION ON THE COMPANY


434.A

HISTORY AND DEVELOPMENT OF OUR PARTNERSHIP


434.B

BUSINESS OVERVIEW


494.C

ORGANIZATIONAL STRUCTURE


644.D

PROPERTY, PLANTS AND EQUIPMENT


66Item 4E.

UNRESOLVED STAFF COMMENTS


66Item 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS


67Item 6.

DIRECTORS AND SENIOR MANAGEMENT


1056.A

DIRECTORS AND SENIOR MANAGEMENT


1056.B

COMPENSATION


1126.C

BOARD PRACTICES


1136.D

EMPLOYEES


1176.E

SHARE OWNERSHIP


117Item 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS


1187.A

MAJOR SHAREHOLDERS


1187.B

RELATED PARTY TRANSACTIONS


1197.C

INTEREST OF EXPERTS AND COUNSEL


129Item 8.

FINANCIAL INFORMATION


1298.A

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION


1298.B

SIGNIFICANT CHANGES


129Item 9.

THE OFFER AND LISTING


1309.A

PRICING HISTORY


1309.B

PLAN OF DISTRIBUTION


1319.C

MARKET


1319.D

SELLING SHAREHOLDERS


1319.E

DILUTION


1319.F

EXPENSES OF THE ISSUE


131Item 10.

ADDITIONAL INFORMATION


13110.A

SHARE CAPITAL


13110.B

MEMORANDUM AND ARTICLES OF ASSOCIATION


13210.C

MATERIAL CONTRACTS


15310.D

EXCHANGE CONTROLS


15310.E

TAXATION


15310.F

DIVIDENDS AND PAYING AGENTS


18610.G

STATEMENT BY EXPERTS


18610.H

DOCUMENTS ON DISPLAY


18610.I

SUBSIDIARY INFORMATION


187


i

---



Table of Contents

PAGEItem 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT NON-PRODUCT RELATED MARKET RISK


187Item 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES


187PART II


188Item 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES


188Item 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS


188Item 15.

CONTROLS AND PROCEDURES


188Item 16A.

AUDIT COMMITTEE FINANCIAL EXPERT


189Item 16B.

CODE OF ETHICS


189Item 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES


189Item 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE


190Item 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASER


190Item 16F.

CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT


190Item 16G.

CORPORATE GOVERNANCE


190Item 16H.

MINE SAFETY DISCLOSURES


190PART III


191Item 17.

FINANCIAL STATEMENTS


191Item 18.

FINANCIAL STATEMENTS


191Item 19.

EXHIBITS


191


ii

---





Table of Contents

INTRODUCTION AND USE OF CERTAIN TERMS

Unless otherwise specified, information provided in this annual report on Form 20-F is as of
December 31, 2012.

Unless
the context requires otherwise, when used in this annual report on Form 20-F, the terms "Brookfield Infrastructure", "we", "us" and "our" refer to Brookfield
Infrastructure Partners L.P., collectively with its subsidiary entities and the operating entities (as defined below). All dollar amounts contained in this annual report on
Form 20-F are expressed in U.S. dollars and references to "dollars", "$", "US$" or "USD" are to U.S. dollars, all references to "C$" or "CAD" are to Canadian dollars,
and all references to "A$" are to Australian dollars. In addition, all references to "£" or "GBP" are to pound sterling, all references to "NZD" are to New Zealand dollars, all
references to "€" or "EUR" are to Euros, and unless the context suggests otherwise, references to:



Brookfield Infrastructure     1

---



Table of Contents



2     Brookfield Infrastructure

---



Table of Contents

FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F contains certain forward-looking statements and information concerning our business
and operations. The forward-looking statements and information also relate to, among other things, our objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates and
anticipated events or trends. In some cases, you can identify forward-looking statements by terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential,"
"should," "will" and "would" or the negative of those terms or other comparable terminology.

Although
we believe that our anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based on reasonable
assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve assumptions, known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by the
forward-looking statements and information.

The
following factors could cause our actual results to differ materially from our forward looking statements and information:



Brookfield Infrastructure     3

---



Table of Contents



4     Brookfield Infrastructure

---



Table of Contents



In
light of these risks, uncertainties and assumptions, the events described by our forward-looking statements and information might not occur. We qualify any and all of our
forward-looking statements and information by these cautionary factors. Please keep this cautionary note in mind as you read this annual report on Form 20-F. We disclaim any
obligation to update or revise publicly any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by
applicable law.

CAUTIONARY STATEMENT REGARDING THE USE OF NON-IFRS ACCOUNTING MEASURES



To measure performance, among other measures, we focus on net income as well as funds from operations ("FFO").

We
define FFO as net income excluding the impact of depreciation and amortization, deferred taxes and other items. FFO is a measure of operating performance, which is not calculated in
accordance with, and does not have any standardized meaning prescribed by, International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), FFO
is therefore unlikely to be comparable to similar measures presented by other issuers. FFO has limitations as an analytical tool. See Item 5 "Operating and Financial Review and
ProspectsReconciliation of Non-IFRS Financial Measures" for more information on this measure, including a reconciliation to the most directly comparable IFRS measure.



In addition, we use adjusted funds from operations ("AFFO") as a measure of long-term sustainable cash flow.

We
define AFFO as FFO less maintenance capital expenditures. AFFO is a measure of operating performance, which is not calculated in accordance with, and does not have any standardized
meaning prescribed by IFRS. AFFO is therefore unlikely to be comparable to similar measures presented by

Brookfield Infrastructure     5

---



Table of Contents

other
issuers. AFFO has limitations as an analytical tool. See Item 5 "Operating and Financial Review and ProspectsReconciliation of Non-IFRS Financial Measures" for
more information on this measure, including a reconciliation to the most directly comparable IFRS measure.



In addition to FFO, we focus on "adjusted EBITDA", which we define as FFO excluding the impact of interest expense, cash taxes and
other income (expenses). Like FFO, adjusted EBITDA is a measure of operating performance, which is not calculated in accordance with, and does not have any standardized meaning prescribed by IFRS.
Adjusted EBITDA is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted EBITDA has limitations as an analytical tool. See Item 5 "Operating and Financial
Review and ProspectsReconciliation of Non-IFRS Financial Measures" for more information on this measure, including a reconciliation to the most directly comparable
IFRS measure.



In addition, in calculating certain performance yields we use "Invested Capital".

We
define Invested Capital as partnership capital adding back the following items: maintenance capital expenditures, non-cash statement of operating results items and other
comprehensive income. Invested Capital is a measure that is not calculated in accordance with, and does not have any standardized meaning prescribed by IFRS. Invested Capital is therefore unlikely to
be comparable to similar measures presented by other issuers. Invested Capital has limitations as an analytical tool. See Item 5 "Operating and Financial Review and
ProspectsReconciliation of Non-IFRS Financial Measures" for more information on this measure, including a reconciliation to the most directly comparable IFRS measure.

6     Brookfield Infrastructure

---





Table of Contents

PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.    KEY INFORMATION

3.A    SELECTED FINANCIAL DATA

The following table presents financial data for Brookfield Infrastructure as of and for the periods indicated:

For the Year Ended
December 31,MILLIONS

2012

2011

2010

2009Statements of Operating Results Key Metrics(1)Revenue

$
2,004

$
1,636

$
634

$
290Direct operating costs


(1,094
)

(899
)

(413
)

(198
)General and administrative expenses


(95
)

(61
)

(35
)

(18
)Depreciation


(232
)

(127
)

(29
)

(12
)Interest expense


(407
)

(335
)

(144
)

(103
)Earnings from investments in associates


1


76


52


14Gain on sale of investment (after-tax)











68Fair value gains and other items


8





396


28Net income attributable to partnership(2)


106


187


430


53Net income per limited partnership unit


0.47


1.13


3.91


1.11Funds from operations (FFO)(3)(4)


462


392


197


117Per unit FFO(4)(5)


2.41


2.41


1.79


2.45Per unit distributions


1.50


1.32


1.10


1.06


(1)Brookfield Infrastructure prepared its annual consolidated financial statements in accordance
with IFRS as issued by the IASB for the years ended December 31, 2012, 2011, 2010 and 2009. Brookfield Infrastructure's consolidated financial statements were prepared in 2010 in accordance
with IFRS 1 First-time Adoption of International Financial Reporting Standards. Prior to the adoption of IFRS Brookfield Infrastructure prepared its financial statements in
accordance with U.S. generally accepted accounting principles. Brookfield Infrastructure's transition date was January 1, 2009 ("transition date") and Brookfield Infrastructure has
prepared its opening IFRS Statements of Financial Position as of that date. Brookfield Infrastructure has not included financial information for the year ended December 31, 2008, as such
information is not available on a basis consistent with the consolidated financial information for the years ended December 31, 2012, 2011, 2010 and 2009 and cannot be provided on an IFRS basis
without unreasonable effort or expense.(2)Net income attributable to partnership includes net income attributable to non-controlling interestsRedeemable Partnership Units held by
Brookfield, general partner and limited partners.(3)FFO is defined as net income excluding the impact of depreciation, amortization, deferred taxes and other items. FFO is a measure of operating performance
that is not calculated in accordance with, and does not have any standardized meaning prescribed by IFRS. Please see Item 5 "Operating and Financial Review and
ProspectsManagement's Discussion and Analysis of Financial Condition and Results of OperationsReconciliation of Non-IFRS Financial Measures" for a discussion of
FFO and its limitations as a measure of our operating performance.(4)Includes $68 million gain on sale of Transmissoras Brasileiras de Energia ("TBE") in 2009.(5)During 2012, on average there were 191.5 million units outstanding (2011: 162.5 million, 2010: 109.9 million,
2009: 47.7 million).


Brookfield Infrastructure     7

---



Table of Contents



As of December 31,MILLIONS

2012

2011

2010

2009Statements of Financial Position Key MetricsCash and cash equivalents

$
263

$
153

$
154

$
107Total assets


19,718


13,269


13,352


6,052Corporate borrowings


946





18


Non-recourse borrowings


6,993


4,885


4,575


1,926Partnership capitalattributable to limited partners


3,632


3,049


2,461


1,126Partnership capitalattributable to general partner


27


24


23


18Non-controlling interestRedeemable Partnership Units held by Brookfield


1,365


1,133


887


761Non-controlling interestin operating subsidiaries


2,784


1,683


1,552


1,305


The
following table reconciles FFO, a non-IFRS financial metric, to the most directly comparable IFRS measure, which is net income:

For the Year Ended
December 31MILLIONS, EXCEPT PER UNIT AMOUNTS(1)

2012

2011

2010

2009Net income attributable to partnership(2)

$
106

$
187

$
430

$
53Add back or deduct the following:Depreciation and amortization


300


203


132


26Deferred taxes


(37
)

73


11


(8
)Fair value adjustments


(63
)

(144
)

(10
)

66Revaluation gain


(8
)




(396
)

(28
)Other expenses


164


73


30


8FFO(3)

$
462

$
392

$
197

$
117


(1)Please see Item 5 "Operating and Financial Review and
ProspectsManagement's Discussion and Analysis of Financial Condition and Results of OperationsReconciliation of Non-IFRS Financial Measures" for a detailed
reconciliation of Brookfield Infrastructure's proportionate results to our partnership's consolidated statements of operating results.(2)Net income attributable to partnership includes net income attributable to non-controlling interestRedeemable
Partnership Units held by Brookfield, general partner and limited partners.(3)Includes $68 million gain on sale of TBE in 2009.


Brookfield Infrastructure has not included financial information for the year ended December 31, 2008 as such
information is not available on a basis consistent with the consolidated financial information for the years ended December 31, 2012, 2011, 2010 and 2009 and cannot be provided on an IFRS basis
without unreasonable effort or expense.

3.B    CAPITALIZATION AND INDEBTEDNESS

Not applicable.

3.C    REASONS FOR THE OFFER AND USE OF PROCEEDS

Not applicable.

3.D    RISK FACTORS

You should carefully consider the following factors in addition to the other information set forth in this annual report on
Form 20-F. If any of the following risks actually occur, our business, financial condition and results of operations and the value of our unitholders' units would
likely suffer.

8     Brookfield Infrastructure

---



Table of Contents

Risks Relating to Us and Our Partnership

Brookfield Infrastructure and our operating entities are or may become highly leveraged and such indebtedness may result in Brookfield Infrastructure or our operating
entities being subject to certain covenants which restrict our ability to engage in certain types of activities or to make distributions to equity.

The Holding LP and many of our operating entities have entered into credit facilities or have incurred other forms of debt,
including for the purposes of acquisitions and investments as well as for general corporate purposes. The total quantum of exposure to debt within Brookfield Infrastructure is significant, and we may
become more highly leveraged in the future. Some facilities are fully drawn, while some have amounts of principal which are undrawn.

Highly
leveraged assets are inherently more sensitive to declines in revenues, increases in expenses and interest rates, and adverse economic, market and industry developments. A
leveraged company's income and net assets also tend to increase or decrease at a greater rate than would otherwise be the case if money had not been borrowed. As a result, the risk of loss associated
with a leveraged company, all other things being equal, is generally greater than for companies with comparatively less debt. In addition, the use of indebtedness in connection with an acquisition may
give rise to negative tax consequences to certain investors. Leverage may also result in a requirement for short-term liquidity, which may force the sale of assets at times of low demand
and/or prices for such assets. This may mean that we are unable to realize fair value for the assets in a sale.

Our
credit facilities also contain covenants applicable to the relevant borrower and events of default. Covenants can relate to matters including limitations on financial indebtedness,
dividends, investments, or minimum amounts for interest coverage, adjusted EBITDA, cash flow or net worth. If an event of default occurs, or minimum covenant requirements are not satisfied, this can
result in a requirement to immediately repay any drawn amounts or the imposition of other restrictions including a prohibition on the payment of distributions to equity.

Our
credit facilities or other debt or debt-like instruments may or may not be rated. Should such debt or debt-like instruments be rated, a credit downgrade may
have an adverse impact on the cost of such debt.

Our partnership is a holding entity and currently we rely on the Holding LP and, indirectly, the Holding Entities and our operating entities to provide us with the
funds necessary to pay distributions and meet our financial obligations.

Our partnership is a holding entity and its sole material asset is its limited partnership interest in the Holding LP, which
owns all of the common shares of the Holding Entities, through which we hold all of our interests in the operating entities. Our partnership has no independent means of generating revenue. As a
result, we depend on distributions and other payments
from the Holding LP and, indirectly, the Holding Entities and our operating entities to provide us with the funds necessary to pay distributions on our units and to meet our financial
obligations. The Holding LP, the Holding Entities and our operating entities are legally distinct from us and some of them are or may become restricted in their ability to pay dividends and
distributions or otherwise make funds available to us pursuant to local law, regulatory requirements and their contractual agreements, including agreements governing their financing arrangements, such
as the Holding LP's credit facilities and other indebtedness incurred by the operating entities. Any other entities through which we may conduct operations in the future will also be legally
distinct from us and may be similarly restricted in their ability to pay dividends and distributions or otherwise make funds available to us under certain conditions. The Holding LP, the
Holding Entities and our operating entities will generally be required to service their debt obligations before making distributions to us or their parent entities, as applicable, thereby reducing the
amount of our cash flow available to pay distributions, fund working capital and satisfy other needs.

Brookfield Infrastructure     9

---



Table of Contents

Our
partnership anticipates that the only distributions that it will receive in respect of our partnership's limited partnership interests in the Holding LP will consist of
amounts that are intended to assist our partnership in making distributions to our unitholders in accordance with our partnership's distribution policy and to allow our partnership to pay expenses as
they become due.

While
we plan to review our partnership's distributions to our unitholders periodically, there is no guarantee that we will be able to increase, or even maintain the level of
distributions that are paid. Historically, as a result of this review, we decided to increase distributions in February 2011, February 2012 and February 2013, respectively.
However, such historical increases in distribution payments may not be reflective of any future increases in distribution payments which will be subject to review by the board of directors of our
Managing General Partner taking into account prevailing circumstances at the relevant time. Although we intend to make distributions in accordance with our distribution policy, our partnership is not
required to pay distributions and neither our partnership nor our Managing General Partner can assure you that our partnership will be able to increase or even maintain the level of distributions that
are made in the future.

Future sales or issuances of our units in the public markets, or the perception of such sales or issuances, could depress the trading price of our units.

The sale or issuance of a substantial number of our units or other equity related securities of our partnership in the public markets,
or the perception that such sales or issuances could occur, could depress the market price of our units and impair our ability to raise capital through the sale of additional units. We cannot predict
the effect that future sales or issuances of our units or other equity-related securities would have on the market price of our units.

The completion of new acquisitions can have the effect of significantly increasing the scale and scope of our operations, including operations in new geographic areas and
industry segments, and the Manager may have difficulty managing these additional operations.

A key part of Brookfield Infrastructure's strategy involves seeking further acquisition opportunities. Acquisitions may increase the
scale, scope and diversity of our operations. We depend on the diligence and skill of Brookfield's professionals to manage us, including integrating all of the acquired business's operations with our
existing operations. These individuals may have difficulty managing the additional operations and may have other responsibilities within Brookfield's asset management business. If Brookfield does not
effectively manage the additional operations, our existing business, financial condition and results of operations may be adversely affected.

Future
acquisitions will likely involve some or all of the following risks, which could materially and adversely affect our business, financial condition or results of operations: the
difficulty of integrating the acquired operations and personnel into our current operations; potential disruption of our current operations; diversion of resources, including Brookfield's time and
attention; the difficulty of managing the growth of a larger organization; the risk of entering markets in which we have little experience; the risk of becoming involved in labour, commercial or
regulatory disputes or litigation related to the new enterprise; and risk of environmental or other liabilities associated with the acquired business; and the risk of a change of control resulting
from an acquisition triggering rights of third parties or government agencies under contracts with, or authorizations held by the operating business being acquired. While it is our practice to conduct
extensive due diligence investigations into businesses being acquired, it is possible that due diligence may fail to identify a change of control trigger in a material contract or authorization, or
that a contractual counterparty or government agency may take a different view on the interpretation of such a provision to that taken by us, thereby resulting in a dispute.

10     Brookfield Infrastructure

---



Table of Contents

We are subject to foreign currency risk and our risk management activities may adversely affect the performance of our operations.

A significant portion of our current operations are in countries where the U.S. dollar is not the functional currency. These
operations pay distributions in currencies other than the U.S. dollar, which we must convert to U.S. dollars prior to making distributions, and certain of our operations have revenues
denominated in currencies different from our expense structure, thus exposing us to currency risk. Fluctuations in currency exchange rates could reduce the value of cash flows generated by our
operating entities or could make it more expensive for our customers to
purchase our services and consequently reduce the demand for our services. In addition, a significant depreciation in the value of such foreign currencies may have a material adverse effect on our
business, financial condition and results of operations.

When
managing our exposure to such market risks, we may use forward contracts, options, swaps, caps, collars and floors or pursue other strategies or use other forms of derivative
instruments. The success of any hedging or other derivative transactions that we enter into generally will depend on our ability to structure contracts that appropriately offset our risk position. As
a result, while we may enter into such transactions in order to reduce our exposure to market risks, unanticipated market changes may result in poorer overall investment performance than if the
derivative transaction had not been executed. Such transactions may also limit the opportunity for gain if the value of a hedged position increases.

Our partnership is not, and does not intend to become, regulated as an investment company under the Investment Company Act (and similar legislation in other
jurisdictions) and if our partnership was deemed an "investment company" under the Investment Company Act, applicable restrictions could make it impractical for us to operate as contemplated.

The Investment Company Act (and similar legislation in other jurisdictions) provide certain protections to investors and impose
certain restrictions on companies that are required to be regulated as investment companies. Among other things, such rules limit or prohibit transactions with affiliates, impose limitations on the
issuance of debt and equity securities and impose certain governance requirements. Our partnership has not been and does not intend to become regulated as an investment company and our partnership
intends to conduct its activities so it will not be deemed to be an investment company under the Investment Company Act (and similar legislation in other jurisdictions). In order to ensure that
we are not deemed to be an investment company, we may be required to materially restrict or limit the scope of our operations or plans. We will be limited in the types of acquisitions that we may
make, and we may need to modify our organizational structure or dispose of assets of which we would not otherwise dispose. Moreover, if anything were to happen which causes our partnership to be
deemed an investment company under the Investment Company Act, it would be impractical for us to operate as contemplated. Agreements and arrangements between and among us and Brookfield would be
impaired, the type and amount of acquisitions that we would be able to make as a principal would be limited and our business, financial condition and results of operations would be materially
adversely affected. Accordingly, we would be required to take extraordinary steps to address the situation, such as the amendment or termination of the Master Services Agreement, the restructuring of
our partnership and the Holding Entities, the amendment of our limited partnership agreement or the termination of our partnership, any of which could materially adversely affect the value of our
units. In addition, if our partnership were deemed to be an investment company under the Investment Company Act, it would be taxable as a corporation for U.S. federal income tax purposes, and
such treatment could materially adversely affect the value of our units.

Brookfield Infrastructure     11

---



Table of Contents

Our partnership is an "SEC foreign issuer" under Canadian securities regulations and is exempt from certain requirements of Canadian securities laws and a "foreign private
issuer" under U.S. securities laws and as a result is subject to disclosure obligations different from requirements applicable to U.S. domestic registrants listed on the New York
Stock Exchange ("NYSE").

Although our partnership is a reporting issuer in Canada, it is an "SEC foreign issuer" and is exempt from certain Canadian securities
laws relating to disclosure obligations and proxy solicitation, subject to certain conditions. Therefore, there may be less publicly available information in Canada about our partnership than would be
available if we were a typical Canadian reporting issuer.

Although
our partnership is subject to the periodic reporting requirement of theU.S. Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder ("Exchange Act"), the periodic disclosure required of foreign private issuers under the Exchange Act is different from periodic disclosure required
of U.S. domestic registrants. Therefore, there may be less publicly available information about our partnership than is regularly published by or about other public limited partnerships in the
United States. Our partnership is exempt from certain other sections of the Exchange Act to which U.S. domestic issuers are subject, including the requirement to provide our unitholders
with information statements or proxy statements that comply with the Exchange Act. In addition, insiders and large unitholders of our partnership are not obligated to file reports under
Section 16 of the Exchange Act, and certain corporate governance rules imposed by the NYSE are inapplicable to our partnership.

We may be subject to the risks commonly associated with a separation of economic interest from control or the incurrence of debt at multiple levels within an organizational
structure.

Our ownership and organizational structure is similar to structures whereby one company controls another company which in turn holds
controlling interests in other companies; thereby, the company at the top of the chain may control the company at the bottom of the chain even if its effective equity position in the bottom company is
less than a controlling interest. Brookfield is the sole shareholder of our Managing General Partner and, as a result of such ownership of our Managing General Partner, Brookfield is able to control
the appointment and removal of our Managing General Partner's directors and, accordingly, exercises substantial influence over us. In turn, we often have a majority controlling interest or a
significant influence in our investments. Even though Brookfield currently has an effective economic interest in our business of approximately 29.6% as a result of ownership of our units and the
Redeemable Partnership Units, over time Brookfield may
reduce this economic interest while still maintaining its controlling interest, and, therefore, Brookfield may use its control rights in a manner that conflicts with the economic interests of our
other unitholders. For example, despite the fact that we have a conflicts policy in place, which addresses the requirement for independent approval and other requirements for transactions in which
there is greater potential for a conflict of interest to arise, including transactions with affiliates of Brookfield, because Brookfield will be able to exert substantial influence over us, and, in
turn, over our investments, there is a greater risk of transfer of assets of our investments at non-arm's length values to Brookfield and its affiliates. In addition, debt incurred at
multiple levels within the chain of control could exacerbate the separation of economic interest from controlling interest at such levels, thereby creating an incentive to leverage us and our
investments. Any such increase in debt would also make us more sensitive to declines in revenues, increases in expenses and interest rates, and adverse market conditions. The servicing of any such
debt would also reduce the amount of funds available to pay distributions to us and ultimately to our unitholders.

Our failure to maintain effective internal controls could have a material adverse effect on our business in the future and the price of our units.

Any failure to maintain adequate internal controls over financial reporting or to implement required, new or improved controls, or
difficulties encountered in their implementation, could cause us to report material weaknesses or other deficiencies in our internal controls over financial reporting and

12     Brookfield Infrastructure

---



Table of Contents

could
result in errors or misstatements in our consolidated financial statements that could be material. If we or our independent registered public accounting firm were to conclude that our internal
controls over financial reporting were not effective, investors could lose confidence in our reported financial information and the price of our units could decline. Our failure to achieve and
maintain effective internal controls could have a material adverse effect on our business in the future, our access to the capital markets and investors' perception of us. In addition, material
weaknesses in our internal controls could require significant expense and management time to remediate.

Risks Relating to Our Operations and the Infrastructure Industry

All of our operating entities are subject to general economic conditions and risks relating to the economy.

Many industries, including the industries in which we operate, are impacted by adverse events in financial markets, which may have a
profound effect on global or local economies. Some key impacts of general financial market turmoil include contraction in credit markets resulting in a widening of credit spreads, devaluations and
enhanced volatility in global equity, commodity and foreign exchange markets and a general lack of market liquidity. A slowdown in the financial markets or other key measures of the global economy or
the local economies of the regions in which we operate, including, but not limited to, new home construction, employment rates, business conditions, inflation, fuel and energy costs, commodity prices,
lack of available credit, the state of the financial markets, interest rates and tax rates may adversely affect our growth and profitability.

The
demand for services provided by our operating entities are, in part, dependent upon and correlated to general economic conditions and economic growth of the regions applicable to the
relevant asset. Poor economic conditions or lower economic growth in a region or regions may, either directly or indirectly, reduce demand for the services provided by an asset.

For
example, a credit/liquidity crisis, such as the global crisis experienced in 2008/2009, could materially impact the cost and availability of financing and overall liquidity; the
volatility of commodity output prices and currency exchange markets could materially impact revenues, profits and cash flow; volatile energy, commodity input and consumables prices and currency
exchange rates could materially impact production costs; poor local or regional economic conditions could materially impact the level of traffic on our toll roads or volume of commodities shipped on
our rail network; our timber operations are sensitive to macro-economic conditions in North America and Asia and are thus susceptible to economic recessions or downturns and the level of residential
construction, repair and remodeling activity in these markets; our UK regulated distribution business earns connection revenues that would be negatively impacted by an economic recession and a
reduction of housing starts in the UK; and the devaluation and volatility of global stock markets could materially impact the valuation of our units. Any one of these factors could have a material
adverse effect on our business, financial condition and results of operations. If such increased levels of volatility and market turmoil were to continue, our operations and the trading price of our
units may be further adversely impacted.

Some of our operations depend on continued strong demand for commodities, such as natural gas, minerals or timber, for their financial performance. Material reduction in
demand for these key commodities can potentially result in reduced value for assets, or in extreme cases, a stranded asset.

Some of our operations are critically linked to the transport or production of key commodities. For example, in the long term, our
Australian regulated terminal operation relies on demand for coal exports, our Australian railroad operation relies on demand for iron ore for steel production and our North American gas transmission
operation relies on demand for natural gas and benefits from higher gas prices. Similarly, our timber operations rely on strong demand for timber
products. Accordingly, a downturn in the demand for or price of a key commodity linked to one of our operations may have a material adverse impact on the financial performance or growth prospects of
that particular operation.

Brookfield Infrastructure     13

---



Table of Contents

If
a critical upstream or downstream business ceased to operate, this could materially impact our financial performance or the value of one or more of our operating businesses. In
extreme cases, our infrastructure could become redundant, resulting in an inability to recover a return on or of capital and potentially triggering covenants and other terms and conditions under
associated debt facilities.

General economic and business conditions that impact the debt or equity markets could impact Brookfield Infrastructure's ability to access credit markets.

General economic and business conditions that impact the debt or equity markets could impact the availability of credit to, and cost of
credit for, Brookfield Infrastructure. Brookfield Infrastructure has revolving credit facilities and other short-term borrowings. The amount of interest charged on these will fluctuate
based on changes in short-term interest rates. Any economic event that affects interest rates or the ability to refinance borrowings could materially adversely impact Brookfield
Infrastructure's financial condition. Movements in interest rates could also affect the discount rates used to value Brookfield Infrastructure's assets, which in turn could cause their valuations
calculated under IFRS to be reduced resulting in a material reduction in Brookfield Infrastructure's equity value.

In
addition, some of our operations either currently have a credit rating or may have a credit rating in the future. A credit rating downgrade may result in an increase in the cost of
debt for the relevant businesses and reduced access to debt markets.

Some
assets in our portfolio have a requirement for significant capital expenditure. For other assets, cash, cash equivalents and short-term investments combined with cash
flow generated from operations are believed to be sufficient for it to make the foreseeable required level of capital investment. However, no assurance can be given that additional capital investments
will not be required in these businesses. If Brookfield Infrastructure is unable to generate enough cash to finance necessary capital expenditures through operating cash flow, then Brookfield
Infrastructure may be required to issue additional equity or incur additional indebtedness. The issue of additional equity would be dilutive to existing unitholders at the time. Any additional
indebtedness would increase the leverage and debt payment obligations of Brookfield Infrastructure, and may negatively impact its business, financial condition and results of operations.

Our
business relies on continued access to capital to fund new investments and capital projects. While we aim to prudently manage our capital requirements and ensure access to capital is
always available, it is possible we may overcommit ourselves or misjudge the requirement for capital or the availability of liquidity. Such a misjudgment may require capital to be raised quickly and
the inability to do so could result in negative financial consequences or in extreme cases bankruptcy.

All of our operating entities are subject to changes in government policy and legislation.

Our financial condition and results of operations could also be affected by changes in economic or other government policies or other
political or economic developments in each country or region, as well as regulatory changes or administrative practices over which we have no control such as: the regulatory environment related to our
business operations and concession agreements; interest rates; currency fluctuations; exchange controls and restrictions; inflation; liquidity of domestic financial and capital markets; policies
relating to climate change or policies relating to tax; and other political, social, economic, and environmental and occupational health and safety developments that may occur in or affect the
countries in which our operating entities are located or conduct business or the countries in which the customers of our operating entities are located or conduct business or both.

In
addition, operating costs can be influenced by a wide range of factors, many of which may not be under the control of the owner/operator, including the need to comply with the
directives of central and local government authorities. For example, in the case of our utility, transport and energy operations, we cannot predict the impact of future economic conditions, energy
conservation measures, alternative fuel requirements, or governmental regulation all of which could reduce the demand for or

14     Brookfield Infrastructure

---



Table of Contents

availability
of commodities our transport and energy operations rely upon, most notably coal and natural gas. It is difficult to predict government policies and what form of laws and regulations will
be adopted or how they will be construed by the relevant courts, or to the extent which any changes may adversely affect us.

We may be exposed to natural disasters, weather events, uninsurable losses and force majeure events.

Force majeure is the term generally used to refer to an event beyond the control of the party claiming that the event has occurred,
including but not limited to acts of God, fires, floods, earthquakes, wars and labour strikes. The assets of our infrastructure businesses are exposed to unplanned interruptions caused by significant
catastrophic events such as cyclones, landslides, explosions, terrorist attacks, war, floods, earthquakes, fires, major plant breakdowns, pipeline or electricity line ruptures, accidents, extreme
weather events or other disasters. Operational disruption, as well as supply disruption, could adversely affect the cash flow available from these assets. In addition, the cost of repairing or
replacing damaged assets could be considerable and could give rise to third-party claims. In some cases, project agreements can be terminated if the force majeure event is so catastrophic as to render
it incapable of remedy within a reasonable time period. Repeated or prolonged interruption may result in a permanent loss of customers, substantial litigation, damage, or penalties for regulatory or
contractual non-compliance. Moreover, any loss from such events may not be recoverable in whole or in part under relevant insurance policies. Business interruption insurance is not always
available, or available on reasonable economic terms to protect the business from these risks.

Given
the nature of the assets operated by our operating entities, we may be more exposed to risks in the insurance market that lead to limitations on coverage and/or increases in
premium. For example, our timber operations are not insured against losses from fires, many components of our South American electricity transmission operations and toll roads are not insured or not
fully insured against losses from earthquakes and our North American gas transmission operation, our Australasian regulated distribution operations and our European regulated distribution operations
self-insure the majority of their line and pipe assets. Therefore, the occurrence of a major or uninsurable event could have a material adverse effect on financial performance. Even if
such insurance were available, the cost may be prohibitive. The ability of the operating entities to obtain the required insurance coverage at a competitive price may have an impact on the returns
generated by them and accordingly the returns we receive.

For
example, the timberlands owned by our timber operations may suffer damage by fire, insect infestation, wind, disease, prolonged drought and other natural and man-made
disasters for which there may be no responsive insurance policy. In addition, our regulated energy distribution businesses generate revenue based on the volume transmitted through their systems.
Weather that deviates materially from normal conditions could impact these businesses. A number of our businesses may be adversely impacted by extreme weather. Our Australian railroad transports grain
on its system, for which it is contracted on a volume basis. A drought could have a material negative impact on revenue from grain transportation.

All of our infrastructure operations may require substantial capital expenditures in the future.

Our utilities, transport and energy operations are capital intensive and require substantial ongoing expenditures for, among other
things, additions and improvements, and maintenance and repair of plant and equipment related to our operations. Any failure to make necessary capital expenditures to maintain our operations in the
future could impair the ability of our operations to serve existing customers or accommodate increased volumes. In addition, we may not be able to recover such investments based upon the rates our
operations are able to charge.

Brookfield Infrastructure     15

---



Table of Contents

In
some of the jurisdictions in which we have utilities, transport or energy operations, certain maintenance capital expenditures may not be covered by the regulatory framework. If our
operations in these jurisdictions require significant capital expenditures to maintain our asset base, we may not be able to recover such costs through the regulatory framework. In addition, we may be
exposed to disallowance risk in other jurisdictions to the extent that capital expenditures and other costs are not fully recovered through the regulatory framework.

Performance of our operating entities may be harmed by future labour disruptions and economically unfavorable collective bargaining agreements.

Several of our current operations or other business operations have workforces that are unionized or that in the future may become
unionized and, as a result, are required to negotiate the wages, benefits and other terms with many of their employees collectively. If an operating entity were unable to negotiate acceptable
contracts with any of its unions as existing agreements expire, it could experience a significant disruption of its operations, higher ongoing labour costs and restrictions on its ability to maximize
the efficiency of its operations, which could have a material adverse effect on its business, financial condition and results of operations.

In
addition, in some jurisdictions where we have operations, labour forces have a legal right to strike which may have an impact on our operations, either directly or indirectly, for
example if a critical upstream or downstream counterparty was itself subject to a labour disruption which impacted our ability to operate.

Our operations are exposed to occupational health and safety and accident risks.

Infrastructure projects and operational assets are highly exposed to the risk of accidents that may give rise to personal injury, loss
of life, disruption to service and economic loss. Some of the tasks undertaken by employees and contractors are inherently dangerous and have the ability to result in serious injury or death.

Our
operating entities are subject to laws and regulations governing health and safety matters, protecting both members of the public and their employees and contractors. Occupational
health and safety legislation and regulations differ in each jurisdiction. Any breach of these obligations, or serious accidents involving our employees, contractors or members of the public could
expose them to adverse regulatory consequences, including the forfeit or suspension of operating licenses, potential litigation, claims for material financial compensation, reputational damage, fines
or other legislative sanction, all of which have the potential to impact the results of our operating entities and our ability to make distributions. Furthermore, where we do not control a business,
we have a limited ability to influence health and safety practices and outcomes.

Many of our utilities, transport and energy operations are subject to economic regulation and may be exposed to adverse regulatory decisions.

Due to the essential nature of some of the services provided by our assets and the fact that some of these services are provided on a
monopoly or near monopoly basis, many of our operations are subject to forms of economic regulation. This regulation can involve different forms of price control and can involve ongoing commitments to
economic regulators and other governmental agencies. The terms upon which access to our facilities is provided, including price, can be determined or amended by a regulator periodically. Future terms
to apply, including access charges that our operations are entitled to charge, cannot be determined with any certainty, as we do not have discretion as to the amount that can be charged. New
legislation, regulatory determinations or changes in regulatory approaches may result in regulation of previously unregulated businesses or material changes to the revenue or profitability of our
operations. In addition, a decision by a government or regulator to regulate non-regulated assets may significantly and negatively change the economics of these businesses and the value or
financial performance of Brookfield Infrastructure. For example, in 2010 regulatory action

16     Brookfield Infrastructure

---



Table of Contents

taken
by the Federal Energy Regulatory Commission ("FERC") saw a significant reduction in annual cashflow expectations of our North American gas transmission operations.

Our operating entities are exposed to the risk of environmental damage.

Many of Brookfield Infrastructure's assets are involved in using, handling or transporting substances that are toxic, combustible or
otherwise hazardous to the environment. Furthermore some of our assets have operations in or in close proximity to environmentally sensitive areas or densely populated communities. There is a risk of
a leak, spillage or other environmental emission at one of these assets, which could cause regulatory infractions, damage to the environment, injury or loss of life. Such an incident if it occurred
could result in fines or penalties imposed by regulatory authorities, revocation of licenses or permits required to operate the business or the imposition of more stringent conditions in those
licenses or permits, or legal claims for compensation (including punitive damages) by affected stakeholders. All of these have the potential to significantly impact the value or financial performance
of Brookfield Infrastructure.

Our operating entities are exposed to the risk of increasing environmental legislation and the broader impacts of climate change.

With an increasing global focus and public sensitivity to environmental sustainability and environmental regulation becoming more
stringent, Brookfield Infrastructure's assets could be subject to increasing environmental responsibility and liability. For example, many jurisdictions in which Brookfield Infrastructure operates are
considering implementing, or have implemented, schemes relating to the regulation of carbon emissions. As a result, there is a risk that the consumer demand for some of the energy sources supplied by
Brookfield Infrastructure will be reduced. For example, the United Kingdom's phasing out of analog meters and use of gas as a source of heating for residential customers could lead to a
reduction in revenue and growth at our UK utility business. The nature and extent of future regulation in the various jurisdictions in which Brookfield Infrastructure's operations are situated is
uncertain, but is expected to become more complex and stringent.

It
is difficult to assess the impact of any such changes on Brookfield Infrastructure. These schemes may result in increased costs to our operations and may have an adverse impact on
prospects for growth of some businesses. To the extent such regimes (such as carbon emissions schemes or other carbon emissions regulations) become applicable to the operations of Brookfield
Infrastructure (and the costs of such regulations are not able to be fully passed on to consumers), its financial performance may be impacted due to costs applied to carbon emissions and
increased compliance costs.

Our
operating entities are also subject to laws and regulations relating to the protection of the environment and pollution. Standards are set by these laws and regulations regarding
certain aspects of environmental quality and reporting, provide for penalties and other liabilities for the violation of such standards, and establish, in certain circumstances, obligations to
remediate and rehabilitate current and former facilities and locations where our operations are, or were, conducted. These laws and regulations may have a detrimental impact on the financial
performance of our infrastructure operations and projects through increased compliance costs or otherwise. Any breach of these obligations, or even incidents relating to the environment that do not
amount to a breach, could adversely affect the results of our operating entities and their reputations and expose them to claims for financial compensation or adverse regulatory consequences.

Our
operations may also be exposed directly or indirectly to the broader impacts of climate change, including extreme weather events, export constraints on commodities, increased
resource prices and restrictions on energy and water usage.

Brookfield Infrastructure     17

---



Table of Contents

Our operating entities may be exposed to higher levels of regulation than in other sectors and breaches of such regulations could expose our operating entities to claims for
financial compensation and adverse regulatory consequences.

In many instances, our ownership and operation of infrastructure assets involves an ongoing commitment to a governmental agency. The
nature of these commitments exposes the owners of infrastructure assets to a higher level of regulatory control than typically imposed on other businesses. For example, our timber operations are
subject to provincial, state and federal government regulations relating to forestry practices and the export of logs. Moreover, several of our utilities, transport and energy operations are subject
to government safety and reliability regulations that are specific to their industries. The risk that a governmental agency will repeal, amend, enact or promulgate a new law or regulation or that a
governmental authority will issue a new interpretation of the law or regulations, could affect our operating entities substantially.

Sometimes
commitments to governmental agencies, for example, under toll road concession arrangements, involve the posting of financial security for performance of obligations. If
obligations are breached these financial securities may be called upon by the relevant agency.

There
is also the risk that our operating entities do not have, might not obtain, or may lose permits necessary for their operations. Permits or special rulings may be required on
taxation, financial and
regulatory related issues. Even though most permits and licenses are obtained before the commencement of operations, many of these licenses and permits have to be renewed or maintained over the life
of the business. The conditions and costs of these permits, licenses and consents may be changed on any renewal, or, in some cases, may not be renewed due to unforeseen circumstances or a subsequent
change in regulations. In any event, the renewal or non-renewal could have a material adverse effect on our business, financial condition and results of operations.

The
risk that a government will repeal, amend, enact or promulgate a new law or regulation or that a regulator or other government agency will issue a new interpretation of the law or
regulations, may affect our operations or a project substantially. This may also be due to court decisions and actions of government agencies that affect these operations or a project's performance or
the demand for its services. For example, a government policy decision may result in adverse financial outcomes for us through directions to spend money to improve security, safety, reliability or
quality of service.

The lands used for our infrastructure assets may be subject to adverse claims or governmental or First Nations rights.

Our operations require large areas of land on which to be constructed and operated. The rights to use the land can be obtained through
freehold title, leases and other rights of use. Although we believe that we have valid rights to all material easements, licenses and rights of way for our infrastructure operations, not all of our
easements, licenses and rights of way are registered against the lands to which they relate and may not bind subsequent owners. Additionally, different jurisdictions have adopted different systems of
land title and in some jurisdictions it may not be possible to ascertain definitively who has the legal right to enter into land tenure arrangements with the asset owner. In some jurisdictions where
we have operations, it is possible to claim indigenous rights to land and the existence or declaration of native title may affect the existing or future activities of our utilities, transport, energy
or timber operations and impact on their business, financial condition and results of operations.

In
addition, a government, court, regulator, or aboriginal group may make a decision or take action that affects an asset or project's performance or the demand for its services. In
particular, a regulator may restrict our access to an asset, or may require us to provide third parties with access, or may affect the pricing structure so as to lower our revenues and earnings. In
Australia, native title legislation provides for a series of procedures that may need to be complied with if native title is declared on relevant land. In Canada, courts have recognized that First
Nations peoples may possess

18     Brookfield Infrastructure

---



Table of Contents

rights
at law in respect of land used or occupied by their ancestors where treaties have not been concluded to deal with these rights. In either case, the claims of a First Nations group may affect
the existing or future activities of our operations, impact on our business, financial condition and results of operations, or require that compensation be paid.

We operate in a highly competitive market for acquisition opportunities.

Our acquisition strategy is dependent to a significant extent on the ability of Brookfield to identify acquisition opportunities that
are suitable for us. We face competition for acquisitions primarily from investment funds, operating companies acting as strategic buyers, construction companies, commercial and investment banks, and
commercial finance companies. Many of these competitors are substantially larger and have considerably greater financial, technical and marketing resources than are available to us. Some of these
competitors may also have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of acquisitions and to offer terms that we are unable or unwilling to
match. Due to the capital intensive nature of infrastructure acquisitions, in order to finance acquisitions we will need to compete for equity capital from institutional investors and other equity
providers, including Brookfield, and our ability to consummate acquisitions will be dependent on such capital continuing to be available. Increases in interest rates could also make it more difficult
to consummate acquisitions because our competitors may have a lower cost of capital which may enable them to bid higher prices for assets. In addition, because of our affiliation with Brookfield,
there is a higher risk that when we participate with Brookfield and others in joint ventures, partnerships and consortiums on acquisitions we may become subject to antitrust or competition laws that
we would not be subject to if we were acting alone. These factors may create competitive disadvantages for us with respect to acquisition opportunities.

We
cannot provide any assurance that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations or that
Brookfield will be able to identify and make acquisitions on our behalf that are consistent with our objectives or that generate attractive returns for our unitholders. We may lose acquisition
opportunities in the future if we do not match prices, structures and terms offered by competitors, if we are unable to access sources of equity or obtain indebtedness at attractive rates or if we
become subject to antitrust or competition laws. Alternatively, we may experience decreased rates of return and increased risks of loss if we match prices, structures and terms offered
by competitors.

Infrastructure assets may be subject to competition risk.

Some assets may be affected by the existence of other competing assets owned and operated by other parties. There can be no assurance
that our businesses can renew all their existing contracts or win additional contracts with their existing or potential customers. The ability of our businesses to maintain or improve their revenue is
dependent on price, availability and customer service as well as on the availability of access to alternative infrastructure. In the case where the relevant business is unable to retain customers
and/or unable to win additional customers to replace those customers it is unable to retain, the revenue from such assets will be reduced.

In
addition, wood and paper products are subject to increasing competition from a variety of substitute products, including non-wood and engineered wood products and
electronic media. The competitive position of our timber operations and the price realized for our products is also influenced by a number of other factors including: the ability to attract and
maintain long-term customer relationships; the quality of our products; the health of the regional converting industry; the costs of timber production; the availability, quality and cost
of labour; the cost of fuel; shipping and fee for service costs; changes in global timber supply; technological advances that increase yield in other regions; and the price and availability of
substitute wood and non-wood products.

Brookfield Infrastructure     19

---



Table of Contents

Investments in infrastructure projects prior to or during a construction or expansion phase are likely to be subject to increased risk.

A key part of Brookfield Infrastructure's growth strategy involves identifying and taking advantage of organic growth opportunities
within our existing businesses. These opportunities typically involve development and construction of new infrastructure or expansion or upgrades to existing infrastructure. Investments in new
infrastructure projects during a development or construction phase are likely to be subject to additional risk that the project will not receive all required approvals, will not be completed within
budget, within the agreed timeframe and to the agreed specifications and, where applicable, will not be successfully integrated into the existing assets. During the construction phase, major risks
include: (i) a delay in the projected completion of the project, which can result in an increase in total project construction costs through higher capitalized interest charges and additional
labour, material expenses, and a resultant delay in the commencement of cash flow; (ii) the insolvency of the head contractor, a major subcontractor and/or a key equipment supplier, and
(iii) construction costs exceeding estimates for various reasons, including inaccurate engineering and planning, labour and building material costs in excess of expectations and unanticipated
problems with project start-up. Such unexpected increases may result in increased debt service costs, operations phase debt service costs, operations and maintenance expenses
and damage payments for late delivery. This may result in the inability of project owners to meet the higher interest and principal repayments arising from the additional debt required.

Finally,
construction projects may be exposed to significant liquidated damages to the extent that commercial operations are delayed beyond prescribed dates or that performance levels do
not meet guaranteed levels. For example, a liquated damages regime applies in respect of some of the major expansion works being undertaken at our Brazilian toll road business.

Brookfield has structured some of our current operations as joint ventures, partnerships and consortium arrangements, and we intend to continue to operate in this manner in
the future, which will reduce Brookfield's and our control over our operations and may subject us to additional obligations.

Brookfield has structured some of our current operations as joint ventures, partnerships and consortium arrangements. An integral part
of our strategy is to participate with institutional investors in Brookfield sponsored or co-sponsored consortiums for single asset acquisitions and as a partner in or alongside Brookfield
sponsored or co-sponsored partnerships that target acquisitions that suit our profile. These arrangements are driven by the magnitude of capital required to complete acquisitions of
infrastructure assets and other industry-wide trends that we believe will continue. Such arrangements involve risks not present where a third party is not involved, including the
possibility that partners or co-venturers might become bankrupt or otherwise fail to fund their share of required capital contributions. Additionally, partners or co-venturers
might at any time have economic or other business interests or goals different from us and Brookfield.

Joint
ventures, partnerships and consortium investments generally provide for a reduced level of control over an acquired company because governance rights are shared with others.
Accordingly, decisions relating to the underlying operations, including decisions relating to the management and operation and the timing and nature of any exit, are often made by a majority vote of
the investors or by separate agreements that are reached with respect to individual decisions. In addition, such operations may be subject to the risk that the company may make business, financial or
management decisions with which we do not agree or the management of the company may take risks or otherwise act in a manner that does not serve our interests. Because we may not have the ability to
exercise control over such operations, we may not be able to realize some or all of the benefits that we believe will be created from our and Brookfield's involvement. If any of the foregoing were to
occur, our business, financial condition and results of operations could suffer as a result.

20     Brookfield Infrastructure

---



Table of Contents

In
addition, because some of our current operations are structured as joint ventures, partnerships or consortium arrangements, the sale or transfer of interests in some of our operations
are subject to rights of first refusal or first offer, tag along rights or drag along rights and some agreements provide for buy-sell or similar arrangements. For example, some of our
investments are subject to a shareholder agreement which allows for the sale of the assets without our consent. Such rights may be triggered at a time when we may not want them to be exercised and
such rights may inhibit our ability to sell our interest in an entity within our desired time frame or on any other desired basis.

Our infrastructure business is at risk of becoming involved in disputes and possible litigation.

Our infrastructure business is at risk of becoming involved in disputes and possible litigation, the extent of which cannot be
ascertained. Any material or costly dispute or litigation could adversely affect the value of the assets or future financial performance of Brookfield Infrastructure. In addition, as a result of the
actions of the Holding Entities or the operating entities, Brookfield Infrastructure could be subject to various legal proceedings concerning disputes of a commercial nature, or to claims in the event
of bodily injury or material damage. The final outcome of any proceeding could have a negative impact on the business, financial condition or results of operations of Brookfield Infrastructure during
a given quarter or financial year.

Some of our businesses operate in jurisdictions with less developed legal systems and could experience potential difficulties in obtaining effective legal redress and create
uncertainties.

Some of our businesses operate in jurisdictions with less developed legal systems than those in more established economies. In these
jurisdictions, Brookfield Infrastructure could be faced with potential difficulties in obtaining effective legal redress; a higher degree of discretion on the part of governmental authorities; a lack
of judicial or administrative guidance on interpreting applicable rules and regulations; inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; and
relative inexperience of the judiciary and courts in such matters.

In
addition, in certain jurisdictions, Brookfield Infrastructure may find that the commitment of local business people, government officials and agencies and the judicial system to abide
by legal requirements and negotiated agreements could be uncertain, creating particular concerns with respect to permits, approvals and licenses required or desirable for, or agreements entered into
in connection with, the Brookfield Infrastructure business in any such jurisdiction. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no
assurance that joint ventures, licenses, permits or approvals (or applications for licenses, permits or approvals) or other legal arrangements will not be adversely affected by the actions of
government authorities or others and the effectiveness of and enforcement of such arrangements in these jurisdictions cannot be assured.

Action taken by national, state or provincial governments, including nationalization or the imposition of new taxes, could materially impact the financial performance or
value of our assets.

Our assets are located in many different jurisdictions, each with its own government and legal system. Different levels of political
risk exist in each jurisdiction and it is possible that action taken by a national, state or provincial government, including the nationalization of a business or the imposition of new taxes, could
materially impact our financial performance or in extreme cases deprive Brookfield Infrastructure of one or more of its businesses without adequate compensation.

We rely on computerized business systems.

Our business places significant reliance on information technology. Our computer systems include custom developed and purchased
business applications, both for information and processing, as well as embedded systems, which support ongoing administrative and commercial operations. In addition, our business also relies upon
telecommunication services to interface with its widely distributed business

Brookfield Infrastructure     21

---



Table of Contents

network
and customers. The information and embedded systems of key business partners and regulatory agencies are also important to our operations. In light of this increased dependence on digital
technologies and the increasing frequency and severity of cyber incidents, we may be subject to cybersecurity risks or other breaches of information technology security. A breach of our cyber/data
security measures or the failure of any such systems or associated backup or data storage systems for a significant time period could have a material adverse effect on our business prospects,
financial condition and results of operations.

Many of our operations depend on relevant contractual arrangements.

Some of our operations rely on revenue from customers under contracts. There is a risk that customers will default under their
contracts. We cannot provide assurance that one or more customers will not default on their obligations to us or that such a default or defaults will not
have a material adverse effect on our utilities, transport or energy operations, financial position, future results of operations, or future cash flows. Furthermore, the bankruptcy of one or more of
our customers, or some other similar proceeding or liquidity constraint, might make it unlikely that we would be able to collect all or a significant portion of amounts owed by the distressed entity
or entities. In addition, such events might force such customers to reduce or curtail their future use of our products and services, which could have a material adverse effect on our business,
financial condition and results of operations. For example, we have a single customer which represented a majority of contractual and regulated revenues of our South American electricity transmission
operations in 2012. As this accounts for a majority of its cash flow, our South American electricity transmission operations could be materially adversely affected by any material change in the
financial condition of that customer. Similarly, our rail business is party to several long-term commercial track access agreements to provide access to our rail network for the haulage of
iron ore. The largest of these contracts currently accounts for over 40% of forecast adjusted EBITDA within the rail business and an event of default under this contract could have a materially
adverse effect on that business.

Certain
of our assets with revenues contracted under a small number of long term contracts will be subject to re-contracting risk in the future. We cannot provide assurance
that we will be able to re-negotiate these contracts once their terms expire, or that even if we are able to do so, that we will be able to obtain the same prices or terms we currently
receive. If we are unable to renegotiate these contracts, or unable to receive prices at least equal to the current prices we receive, our business, financial condition, results of operation and
prospects could be adversely affected.

A variety of factors may limit or prevent harvesting by our timber operations, including weather conditions.

Weather conditions, industry practices and federal, state and provincial laws and regulations associated with forestry practices, sale
of logs and environmental matters, including wildlife and water resources, may limit or prevent harvesting, road building and other activities on the timberlands owned by our timber operations. In the
case of restrictions arising from regulatory requirements, the size of the area subject to restriction can vary depending on species or resource at issue, the time of year and other factors. In
addition, if regulations become more restrictive, the amount of the timberlands subject to harvest restrictions could increase. The timberlands owned by our timber operations may also suffer damage by
fire, insect infestation, wind, disease, prolonged drought and other natural and man-made disasters. There can be no assurance that our timber operations will achieve harvest levels in the
future necessary to maintain or increase revenues, earnings and cash flows. There can be no assurance that the forest management planning by our timber operations, including silviculture, will have
the intended result of ensuring that their asset base appreciates over time. Further, we may reduce near term harvest levels to preserve our inventory for periods of higher pricing, which would
negatively impact the near term results and cash flow of our timber operations.

22     Brookfield Infrastructure

---



Table of Contents

We rely on tolling and revenue collection systems.

Revenues at some of our assets depend on reliable and efficient tolling, metering or other revenue collection systems. There is a risk
that, if one or more of our businesses are not able to operate and maintain the tolling, metering or other revenue collection systems in the manner expected, or if the cost of operation and
maintenance is greater than expected, our assets, business, financial condition, and risks of operations could be materially adversely affected. Users of our facilities who do not pay tolls or other
charges may be subject to either direct legal action from the relevant business, or in some cases may be referred to the state for enforcement action. Our unitholders bear the ultimate risk if
enforcement actions against defaulting customers are not successful or if enforcement actions are more costly or take more time than expected.

Our ability to finance our operations is subject to various risks relating to the state of the capital markets.

We have corporate debt and limited recourse project level debt, the majority of which is non-recourse that will need to be
replaced from time to time. Our financings may contain conditions that limit our ability to repay indebtedness prior to maturity without incurring penalties, which may limit our capital markets
flexibility. Refinancing risk includes, among other factors, dependence on continued operating performance of our assets, future electricity market prices, future capital markets conditions, the level
of future interest rates and investors' assessment of our credit risk at such time. In addition, certain of our financings are, and future financings may be exposed to floating interest rate risks,
and if interest rates increase, an increased proportion of our cash flow may be required to service indebtedness. Future acquisitions, development and construction of new facilities and other capital
expenditures will be financed out of cash generated from our operations, borrowings and possible future sales of equity. Our ability to obtain financing to finance our growth is dependent on, among
other factors, the overall state of the capital markets, continued operating performance of our assets, future electricity market prices, the level of future interest rates and investors' assessment
of our credit risk at such time, and investor appetite for investments in renewable energy and infrastructure assets in general and in our securities in particular. To the extent that external sources
of capital become limited or unavailable or available on onerous terms, our ability to make necessary capital investments to construct new or maintain existing facilities will be impaired, and as a
result, our business, financial condition, results of operations and prospects may be materially and adversely affected.

Changes in our credit ratings may have an adverse effect on our financial position and ability to raise capital.

We cannot assure you that any credit rating assigned to us or any of our subsidiaries' debt securities will remain in effect for any
given period of time or that any rating will not be lowered or withdrawn entirely by the relevant rating agency. A lowering or withdrawal of such ratings may have an adverse effect on our financial
position and ability to raise capital.

Risks Relating to Our Relationship with Brookfield

Brookfield exercises substantial influence over our partnership and we are highly dependent on the Manager.

Brookfield is the sole shareholder of our Managing General Partner. As a result of its ownership of our Managing General Partner,
Brookfield is able to control the appointment and removal of our Managing General Partner's directors and, accordingly, exercise substantial influence over our partnership. In addition, our
partnership holds its interest in the operating entities indirectly and will hold any future acquisitions indirectly through the Holding LP, the general partner of which is indirectly owned by
Brookfield. As our partnership's only substantial asset is the limited partnership interests that it holds in the Holding LP, our partnership does not have a right to participate directly in

Brookfield Infrastructure     23

---



Table of Contents

the
management or activities of the Holding LP or the Holding Entities, including with respect to the making of decisions.

Our
partnership and Holding LP do not have any employees and depend on the management and administration services provided by the Manager. Brookfield personnel and support staff
that provide services to us are not required to have as their primary responsibility the management and administration of our partnership or the Holding LP or to act exclusively for either of
us. Any failure to
effectively manage our current operations or to implement our strategy could have a material adverse effect on our business, financial condition and results of operations.

Brookfield has no obligation to source acquisition opportunities for us and we may not have access to all infrastructure acquisitions that Brookfield identifies.

Our ability to grow depends on Brookfield's ability to identify and present us with acquisition opportunities. Brookfield established
our partnership to own and operate certain infrastructure assets on a global basis. However, Brookfield has no obligation to source acquisition opportunities for us. In addition, Brookfield has not
agreed to commit to us any minimum level of dedicated resources for the pursuit of infrastructure-related acquisitions. There are a number of factors which could materially and adversely impact the
extent to which suitable acquisition opportunities are made available from Brookfield, for example:



24     Brookfield Infrastructure

---



Table of Contents

In
making these determinations, Brookfield may be influenced by factors that result in a misalignment or conflict of interest. See Item 7.B "Related Party
TransactionsConflicts of Interest and Fiduciary Duties."

The departure of some or all of Brookfield's professionals could prevent us from achieving our objectives.

We depend on the diligence, skill and business contacts of Brookfield's professionals and the information and opportunities they
generate during the normal course of their activities. Our future success will depend on the continued service of these individuals, who are not obligated to remain employed with Brookfield.
Brookfield has experienced departures of key professionals in the past and may do so in the future, and we cannot predict the impact that any such departures will have on our ability to achieve our
objectives. The departure of a significant number of Brookfield's professionals for any reason, or the failure to appoint qualified or effective successors in the event of such departures, could have
a material adverse effect on our ability to achieve our objectives. Our limited partnership agreement and our Master Services Agreement do not require Brookfield to maintain the employment of any of
its professionals or to cause any particular professionals to provide services to us or on our behalf.

The control of our Managing General Partner may be transferred to a third party without unitholder consent.

Our Managing General Partner may transfer its general partnership interest to a third party in a merger or consolidation or in a
transfer of all or substantially all of its assets without the consent of our unitholders. Furthermore, at any time, the shareholder of our Managing General Partner may sell or transfer all or part of
its shares in our Managing General Partner without the approval of our unitholders. If a new owner were to acquire ownership of our Managing General Partner and to appoint new directors or officers of
its own choosing, it would be able to exercise substantial influence over our partnership's policies and procedures and exercise substantial influence over our management and the types of acquisitions
that we make. Such changes could result in our partnership's capital being used to make acquisitions in which Brookfield has no involvement or in making acquisitions that are substantially different
from our targeted acquisitions. Additionally, our partnership cannot predict with any certainty the effect that any transfer in the ownership of our Managing General Partner would have on the trading
price of our units or our partnership's ability to raise capital or make investments in the future, because such matters would depend to a large extent on the identity of the new owner and the new
owner's intentions with regard to our partnership. As a result, the future of our partnership would be uncertain and our partnership's business, financial condition and results of operations
may suffer.

Brookfield may increase its ownership of our partnership and the Holding LP relative to other unitholders.

Brookfield holds approximately 28.5% of the issued and outstanding interests in the Holding LP through a 0.5% general
partnership interest and a 28% limited partnership interest. The limited partnership interests held by Brookfield are redeemable for cash or exchangeable for our units in accordance with the
Redemption-Exchange Mechanism, which could result in Brookfield eventually owning approximately 29.1% of our issued and outstanding units (including other issued and outstanding units that Brookfield
currently also owns). See Item 10.B "Memorandum and Articles of AssociationDescription of the Holding LP's Limited Partnership AgreementRedemption-Exchange
Mechanism." Brookfield currently owns approximately 1.6% of our issued and outstanding units.

The
Infrastructure GP LP may also reinvest incentive distributions in exchange for units of the Holding LP. See Item 7.B "Related Party
TransactionsIncentive Distributions." In addition, Brookfield has advised our partnership that it may from time-to-time reinvest distributions it receives from the
Holding LP in the Holding LP's distribution reinvestment plan, with the result that Brookfield will receive additional units of the Holding LP. Additional units of the
Holding LP acquired, directly or

Brookfield Infrastructure     25

---



Table of Contents

indirectly,
by Brookfield are redeemable for cash or exchangeable for our units in accordance with the Redemption-Exchange Mechanism. See Item 10.B "Memorandum and Articles of
AssociationDescription of the Holding LP's Limited Partnership AgreementRedemption-Exchange Mechanism." Brookfield may also purchase additional units of our
partnership in the market. Any of these events may result in Brookfield increasing its ownership of our partnership and the Holding LP above 50%.

Our Master Services Agreement and our other arrangements with Brookfield do not impose on Brookfield any fiduciary duties to act in the best interests of our unitholders.

Our Master Services Agreement and our other arrangements with Brookfield do not impose on Brookfield any duty (statutory or otherwise)
to act in the best interests of the Service Recipients, nor do they impose other duties that are fiduciary in nature. As a result, our Managing General Partner, a wholly-owned subsidiary of Brookfield
Asset Management, in its capacity as our general partner, has sole authority to enforce the terms of such agreements and to consent to any waiver, modification or amendment of their provisions,
subject to approval by a majority of our independent directors in accordance with our conflicts policy.

In
addition, theBermuda Limited Partnership Act of 1883, under which our partnership and the Holding LP were established, does not
impose statutory fiduciary duties on a general partner of a limited partnership in the same manner that certain corporate statutes, such as theCanada Business Corporations
Act, impose fiduciary duties on directors of a corporation. In general, under applicable Bermudian legislation, a general partner has certain limited duties to its limited
partners, such as the duty to render accounts, account for private profits and not compete with the partnership in business. In addition, Bermudian common law recognizes that a general partner owes a
duty of utmost good faith to its limited partners. These duties are, in most respects, similar to duties imposed on a general partner of a limited partnership under U.S. and Canadian law. However, to
the extent that our Managing General Partner and the Infrastructure General Partner owe any such fiduciary duties to our partnership and our unitholders, these duties have been modified pursuant to
our limited partnership agreement and the Holding LP's limited partnership agreement as a matter of contract law. We have been advised by Bermudian counsel that such modifications are not
prohibited under Bermudian law, subject to typical qualifications as to enforceability of contractual provisions, such as the application of general equitable principles. This is similar to Delaware
law which expressly permits modifications to the fiduciary duties owed to partners, other than an implied contractual covenant of good faith and fair dealing.

Our
limited partnership agreement and the Holding LP's limited partnership agreement contain various provisions that modify the fiduciary duties that might otherwise be owed to
our partnership and our unitholders, including when conflicts of interest arise. Specifically, the limited partnership agreements of our partnership and the Holding LP state that no breach of
such limited partnership agreements or a
breach of any duty, including fiduciary duties, may be found for any matter that has been approved by a majority of the independent directors of our Managing General Partner and/or the Infrastructure
General Partner, as applicable. In addition, when resolving conflicts of interest, the limited partnership agreements do not impose any limitations on the discretion of the independent directors or
the factors which they may consider in resolving any such conflicts. The independent directors of our Managing General Partner and the Infrastructure General Partner can therefore take into account
the interests of third parties, including Brookfield, when resolving conflicts of interest. Additionally, any fiduciary duty that is imposed under any applicable law or agreement is modified, waived
or limited to the extent required to permit our Managing General Partner and/or the Infrastructure GP LP, as applicable, to undertake any affirmative conduct or to make any decisions, so long
as such action is reasonably believed to be in, or not inconsistent with, the best interests of our partnership and/or the Holding LP, as applicable.

26     Brookfield Infrastructure

---



Table of Contents

In
addition, the limited partnership agreements provide that our Managing General Partner, the Infrastructure GP LP and their affiliates do not have any obligation under
the limited partnership agreements of our partnership or the Holding LP, or as a result of any duties stated or implied by law or equity, including fiduciary duties, to present business or
investment opportunities to our partnership, the Holding LP, any Holding Entity or any other holding entity established by us. They also allow affiliates of our Managing General Partner and the
Infrastructure GP LP to engage in activities that may compete with us or our activities. Additionally, any failure by our Managing General Partner or the
Infrastructure GP LP to consent to any merger, consolidation or combination will not result in a breach of the limited partnership agreements or any other provision of law. The limited
partnership agreements each prohibit the limited partners from advancing claims that otherwise might raise issues as to compliance with fiduciary duties or applicable law. These modifications to the
fiduciary duties are detrimental to our unitholders because they restrict the remedies available for actions that might otherwise constitute a breach of fiduciary duty and permit conflicts of interest
to be resolved in a manner that is not in the best interests of our partnership or the best interests of our unitholders. See Item 7.B. "Major Shareholders and Related Party
TransactionsRelated Party TransactionsConflicts of Interest and Fiduciary Duties".

Our organizational and ownership structure may create significant conflicts of interest that may be resolved in a manner that is not in the best interests of our partnership
or the best interests of our unitholders.

Our organizational and ownership structure involves a number of relationships that may give rise to conflicts of interest between our
partnership and our unitholders, on the one hand, and Brookfield, on the other hand. In certain instances, the interests of Brookfield may differ from the interests of our partnership and our
unitholders, including with respect to the types of acquisitions made, the timing and amount of distributions by our partnership, the reinvestment of returns generated by our operations, the use of
leverage when making acquisitions and the appointment
of outside advisors and service providers, including as a result of the reasons described under Item 7.B "Related Party Transactions."

In
addition, the Manager, an affiliate of Brookfield, provides management services to us pursuant to our Master Services Agreement. Pursuant to our Master Services Agreement, on a
quarterly basis, we pay a base management fee to the Manager equal to 0.3125% (1.25% annually) of the market value of our partnership. For purposes of calculating the base management fee, the market
value of our partnership is equal to the volume weighted average of the closing prices of our partnership's units on the NYSE (or other exchange or market where our partnership's units are
principally traded) for each of the last five trading days of the applicable quarter multiplied by the number of issued and outstanding units of our partnership on the last of those days (assuming
full conversion of Brookfield's interest in Brookfield Infrastructure into units of our partnership), plus the amount of third-party debt, net of cash, with recourse to our partnership, the
Holding LP and any Holding Entity. Infrastructure GP LP will also receive incentive distributions based on the amount by which quarterly distributions on the limited partnership
units of the Holding LP exceed specified target levels as set forth in the Holding LP's limited partnership agreement. For a further explanation of the base management fee and incentive
distributions, see Item 6.A "Directors and Senior ManagementManagement Fee" and Item 7.B "Related Party TransactionsIncentive Distributions". This relationship
may give rise to conflicts of interest between us and our unitholders, on the one hand, and Brookfield, on the other, as Brookfield's interests may differ from the interests of Brookfield
Infrastructure and our unitholders.

Our
Managing General Partner, the sole shareholder of which is Brookfield, has sole authority to determine whether we will make distributions and the amount and timing of these
distributions. The arrangements we have with Brookfield may create an incentive for Brookfield to take actions which would have the effect of increasing distributions and fees payable to it, which may
be to the detriment

Brookfield Infrastructure     27

---



Table of Contents

of
us and our unitholders. For example, because the base management fee is calculated based on the market value of our partnership, it may create an incentive for Brookfield to increase or maintain
the market value of our partnership over the near-term when other actions may be more favorable to us or our unitholders. Similarly, Brookfield may take actions to increase our
distributions in order to ensure Brookfield is paid incentive distributions in the near-term when other investments or actions may be more favorable to us or our unitholders. Also, through
Brookfield's ownership of our units and the Redeemable Partnership Units, it has an effective economic interest in our business of approximately 29.6% and therefore may be incentivized to increase
distributions payable to our unitholders and thereby to Brookfield.

Our arrangements with Brookfield were negotiated in the context of an affiliated relationship and may contain terms that are less favorable than those which otherwise might
have been obtained from unrelated parties.

The terms of our arrangements with Brookfield were effectively determined by Brookfield in the context of the spin-off.
While our Managing General Partner's independent directors are aware of the terms of these arrangements and have approved the arrangements on our behalf, they did not negotiate the terms. These terms,
including terms relating to compensation, contractual or fiduciary duties, conflicts of interest and Brookfield's ability to engage in outside activities, including activities that compete with us,
our activities and limitations on liability and indemnification, may be less favorable than otherwise might have resulted if the negotiations had involved unrelated parties. Under our limited
partnership agreement, persons who acquire our units and their transferees will be deemed to have agreed that none of those arrangements constitutes a breach of any duty that may be owed to them under
our limited partnership agreement or any duty stated or implied by law or equity.

Our Managing General Partner may be unable or unwilling to terminate the Master Services Agreement.

The Master Services Agreement provides that the Service Recipients may terminate the agreement only if: the Manager defaults in the
performance or observance of any material term, condition or covenant contained in the agreement in a manner that results in material harm to us and the default continues unremedied for a period of
30 days after written notice of the breach is given to the Manager; the Manager engages in any act of fraud, misappropriation of funds or embezzlement against any Service Recipient that results
in material harm to us; the Manager is grossly negligent in the performance of its duties under the agreement and such negligence results in material harm to the Service Recipients; or upon the
happening of certain events relating to the bankruptcy or insolvency of the Manager. Our Managing General Partner cannot terminate the agreement for any other reason, including if the Manager or
Brookfield experiences a change of control, and there is no fixed term to the agreement. In addition, because our Managing General Partner is an affiliate of Brookfield, it may be unwilling to
terminate the Master Services Agreement, even in the case of a default. If the Manager's performance does not meet the expectations of investors, and our Managing General Partner is unable or
unwilling to terminate the Master Services Agreement, the market price of our units could suffer. Furthermore, the termination of the Master Services Agreement would terminate our partnership's rights
under the Relationship Agreement and the Licensing Agreement. See Item 7.B "Related Party TransactionsRelationship Agreement" and Item 7.B "Related Party
TransactionsLicensing Agreement."

The liability of the Manager is limited under our arrangements with it and we have agreed to indemnify the Manager against claims that it may face in connection with such
arrangements, which may lead it to assume greater risks when making decisions relating to us than it otherwise would if acting solely for its own account.

Under the Master Services Agreement, the Manager has not assumed any responsibility other than to provide or arrange for the provision
of the services described in the Master Services Agreement in good faith and will not be responsible for any action that our Managing General Partner takes in

28     Brookfield Infrastructure

---



Table of Contents

following
or declining to follow its advice or recommendations. In addition, under our limited partnership agreement, the liability of our Managing General Partner and its affiliates, including the
Manager, is limited to the fullest extent permitted by law to conduct involving bad faith, fraud or willful misconduct or, in the case of a criminal matter, action that was known to have been
unlawful. The liability of the Manager under the Master Services Agreement is similarly limited, except that the Manager is also liable for liabilities arising from gross negligence. In addition, our
partnership has agreed to indemnify the Manager to the fullest extent permitted by law from and against any claims, liabilities, losses, damages, costs or expenses incurred by an indemnified person or
threatened in connection with our operations, investments and activities or in respect of or arising from the Master Services Agreement or the services provided by the Manager, except to the extent
that the claims, liabilities, losses, damages, costs or expenses are determined to have resulted from the conduct in respect of which such persons have liability as described above. These protections
may result in the Manager tolerating greater risks when making decisions than otherwise would be the case, including when determining whether to use leverage in connection with acquisitions. The
indemnification arrangements to which the Manager is a party may also give rise to legal claims for indemnification that are adverse to our partnership and our unitholders.

Risks Relating to Our Units

Our unitholders do not have a right to vote on partnership matters or to take part in the management of our partnership.

Under our limited partnership agreement, our unitholders are not entitled to vote on matters relating to our partnership, such as
acquisitions, dispositions or financing, or to participate in the management or control of our partnership. In particular, our unitholders do not have the right to remove our Managing General Partner,
to cause our Managing General Partner to withdraw from our partnership, to cause a new general partner to be admitted to our partnership, to appoint new directors to our Managing General Partner's
board of directors, to remove existing directors from our Managing General Partner's board of directors or to prevent a change of control of our Managing General Partner. In addition, except as
prescribed by applicable laws, our unitholders' consent rights apply only with respect to certain amendments to our limited partnership agreement. As a result, unlike holders of common stock of a
corporation, our unitholders are not able to influence the direction of our partnership, including its policies and procedures, or to cause a change in its management, even if they are unsatisfied
with the performance of our partnership. Consequently, our unitholders may be deprived of an opportunity to receive a premium for their units in the future through a sale of our partnership and the
trading price of our units may be adversely affected by the absence or a reduction of a takeover premium in the trading price.

The market price of our units may be volatile.

The market price of our units may be highly volatile and could be subject to wide fluctuations. Some of the factors that could
negatively affect the price of our units include: general market and economic conditions, including disruptions, downgrades, credit events and perceived problems in the credit markets; actual or
anticipated variations in our quarterly operating results or distributions; changes in our investments or asset composition; write-downs or perceived credit or liquidity issues affecting our assets;
market perception of our partnership, our business and our assets; our level of indebtedness and/or adverse market reaction to any indebtedness we incur in the future; our ability to raise capital on
favorable terms or at all; loss of any major funding source; the termination of our Master Services Agreement or additions or departures of our or Brookfield's key personnel; changes in market
valuations of similar infrastructure companies; speculation in the press or investment community regarding us or Brookfield; and changes in U.S. tax laws that make it impractical or impossible
for our partnership to continue to be taxable as a partnership for U.S. federal income tax purposes. Securities markets in general have experienced extreme volatility that has often been

Brookfield Infrastructure     29

---



Table of Contents

unrelated
to the operating performance of particular companies or partnerships. Any broad market fluctuations may adversely affect the trading price of our units.

We may need additional funds in the future and we may issue additional units in lieu of incurring indebtedness which may dilute existing holders of our units or we may issue
securities that have rights and privileges that are more favorable than the rights and privileges accorded to our unitholders.

Under our limited partnership agreement, we may issue additional partnership securities, including units and options, rights, warrants
and appreciation rights relating to partnership securities for any purpose and for such consideration and on such terms and conditions as our Managing General Partner may determine. Our Managing
General Partner's board of directors will be able to determine the class, designations, preferences, rights, powers and duties of any additional partnership securities, including any rights to share
in our profits, losses and distributions, any rights to receive partnership assets upon our dissolution or liquidation and any redemption, conversion and exchange rights. Our Managing General Partner
may use such authority to issue additional units, which could dilute holders of our units, or to issue securities with rights and privileges that are more favorable than those of our units. Holders of
units will not have any pre-emptive right or any right to consent to or otherwise approve the issuance of any such securities or the terms on which any such securities may
be issued.

Non-U.S. unitholders will be subject to foreign currency risk associated with Brookfield Infrastructure's distributions.

A significant number of our unitholders will reside in countries where the U.S. dollar is not the functional currency. Our
distributions are denominated in U.S. dollars but are settled in the local currency of the unitholder receiving the distribution. For each non-U.S. unitholder, the value
received in the local currency from the distribution will be determined based on the exchange rate between the U.S. dollar and the applicable local currency at the time of payment. As such, if
the U.S. dollar depreciates significantly against the local currency of the non-U.S. unitholder, the value received by such unitholder in its local currency will be adversely
affected.

U.S. investors in our units may find it difficult or impossible to enforce service of process and enforcement of judgments against us and directors and officers of
our Managing General Partner and the Manager.

We were established under the laws of Bermuda, and most of our subsidiaries are organized in jurisdictions outside of the
United States. In addition, our executive officers and the experts identified in this annual report on Form 20-F are located outside of the United States. Certain of
the directors and officers of our Managing General Partner and the Manager reside outside of the United States. A substantial portion of our assets are, and the assets of the directors and
officers of our Managing General Partner and the Manager and the experts identified in this annual report on Form 20-F may be, located outside of the United States. It may
not be possible for investors to effect service of process within the United States upon the directors and officers of our Managing General Partner and the Manager. It may also not be possible
to enforce against us, the experts identified in this annual report on Form 20-F, or the directors and officers of our Managing General Partner and the Manager judgments
obtained in U.S. courts predicated upon the civil liability provisions of applicable securities law in the United States.

30     Brookfield Infrastructure

---





Table of Contents

Canadian investors in our units may find it difficult or impossible to enforce service of process and enforcement of judgments against us and the directors and officers of
our Managing General Partner and the Manager.

We were established under the laws of Bermuda, and most of our subsidiaries are organized in jurisdictions outside of Canada. Certain
of the directors and officers of our Managing General Partner and the Manager reside outside of Canada. A substantial portion of our assets are, and the assets of the directors and officers of our
Managing General Partner and the Manager and the experts identified in this annual report on Form 20-F may be, located outside of Canada. It may not be possible for investors to
effect service of process within Canada upon the directors and officers of our Managing General Partner and the Manager. It may also not be possible to enforce against us, the experts identified in
this annual report on Form 20-F, or the directors and officers of our Managing General Partner and the Manager judgments obtained in Canadian courts predicated upon the civil
liability provisions of applicable securities laws in Canada.

We may not be able to continue paying comparable or growing cash distributions to our unitholders in the future.

The amount of cash we can distribute to our unitholders depends upon the amount of cash we receive from the Holding LP and,
indirectly, the Holding Entities and the operating entities. The amount of cash the Holding LP, the Holding Entities and the operating entities generate will fluctuate from quarter to quarter
and will depend upon, among other things: the weather in the jurisdictions in which they operate; the level of their operating costs; and prevailing economic conditions. In addition, the actual amount
of cash we will have available for distribution will also depend on other factors, such as: the level of costs related to litigation and regulatory compliance matters; the cost of acquisitions, if
any; our debt service requirements; fluctuations in our working capital needs; our ability to borrow under our credit facilities; our ability to access capital markets; restrictions on distributions
contained in our debt agreements; and the amount, if any, of cash reserves established by our Managing General Partner in its discretion for the proper conduct of our business. As a result of all
these factors, we cannot guarantee that we will have sufficient available cash to pay a specific level of cash distributions to our unitholders. Furthermore, unitholders should be aware that the
amount of cash we have available for distribution depends primarily upon the cash flow of the Holding LP, the Holding Entities and the operating entities, and is not solely a function of
profitability, which is affected by non-cash items. As a result, we may declare and/or pay cash distributions during periods when we record net losses.

Risks Related to Taxation

General

Changes in tax law and practice may have a material adverse effect on the operations of our partnership, the Holding Entities, and the operating entities and, as a
consequence, the value of our assets and the net amount of distributions payable to our unitholders.

Our structure, including the structure of the Holding Entities and the operating entities, is based on prevailing taxation law and
practice in the local jurisdictions in which we operate. Any change in tax legislation (including in relation to taxation rates) and practice in these
jurisdictions could adversely affect these entities, as well as the net amount of distributions payable to our unitholders. Taxes and other constraints that would apply to our operating entities in
such jurisdictions may not apply to local institutions or other parties, and such parties may therefore have a significantly lower effective cost of capital and a corresponding competitive advantage
in pursuing such acquisitions.

Brookfield Infrastructure     31

---



Table of Contents

Our partnership's ability to make distributions depends on it receiving sufficient cash distributions from its underlying operations, and we cannot assure our unitholders
that our partnership will be able to make cash distributions to them in amounts that are sufficient to fund their tax liabilities.

Our Holding Entities and operating entities may be subject to local taxes in each of the relevant territories and jurisdictions in
which they operate, including taxes on income, profits or gains and withholding taxes. As a result, our partnership's cash available for distribution is indirectly reduced by such taxes, and the
post-tax return to our unitholders is similarly reduced by such taxes. We intend for future acquisitions to be assessed on a case-by-case basis and, where possible
and commercially viable, structured so as to minimize any adverse tax consequences to our unitholders as a result of making such acquisitions.

In
general, a unitholder that is subject to income tax in Canada or the United States must include in income its allocable share of our partnership's items of income, gain, loss,
and deduction (including, so long as it is treated as a partnership for tax purposes, our partnership's allocable share of those items of the Holding LP) for each of our partnership's fiscal
years ending with or within such unitholder's tax year. See Item 10.E "TaxationCertain Material Canadian Federal Income Tax Considerations" and "TaxationCertain
Material U.S. Federal Income Tax Considerations". However, the cash distributed to a unitholder may not be sufficient to pay the full amount of such unitholder's tax liability in respect of its
investment in our partnership, because each unitholder's tax liability depends on such unitholder's particular tax situation and the tax treatment of the underlying activities or assets of our
partnership. If our partnership is unable to distribute cash in amounts that are sufficient to fund our unitholders' tax liabilities, each of our unitholders will still be required to pay income taxes
on its share of our partnership's taxable income.

As a result of holding our units, our unitholders may be subject to U.S. state, local or non-U.S. taxes and return filing obligations in
jurisdictions in which they are not resident for tax purposes or otherwise not subject to tax.

Our unitholders may be subject to U.S. state, local, and non-U.S. taxes, including unincorporated business
taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which our partnership entities do business or own property now or in the future, even if our
unitholders do not reside in any of those jurisdictions. Our unitholders may be required to file income tax returns and pay income taxes in some or all of these jurisdictions. Further, our unitholders
may be subject to penalties for failure to comply with these requirements. Although our partnership will attempt, to the extent reasonably practicable, to structure our partnership operations and
investments so as to minimize income tax filing obligations by our unitholders in such jurisdictions, there may be circumstances in which our partnership is unable to do so. It is the responsibility
of each unitholder to file all U.S. federal, state, local, and non-U.S. tax returns that may be required of such unitholder.

Our unitholders may be exposed to transfer pricing risks.

To the extent that our partnership, the Holding LP, the Holding Entities or the operating entities enter into transactions or
arrangements with parties with whom they do not deal at arm's length, including Brookfield, the relevant tax authorities may seek to adjust the quantum or nature of the amounts received or paid by
such entities if they consider that the terms and conditions of such transactions or arrangements differ from those that would have been made between persons dealing at arm's length. This could result
in more tax being paid by such entities, and therefore the return to investors could be reduced. For Canadian tax purposes, a transfer pricing adjustment may in certain circumstances result in
additional income being allocated to a unitholder with no corresponding cash distribution or in a dividend being deemed to be paid by a Canadian-resident to a non-arm's length
non-resident, which deemed dividend is subject to Canadian withholding tax.

32     Brookfield Infrastructure

---



Table of Contents

Our
Managing General Partner and the Infrastructure General Partner believe that the base management fee and any other amount that is paid to the Manager will be commensurate with the
value of the services being provided by the Manager and comparable to the fees or other amounts that would be agreed to in an arm's-length arrangement. However, no assurance can be given in
this regard.

If
the relevant tax authority were to assert that an adjustment should be made under the transfer pricing rules to an amount that is relevant to the computation of the income of the
Holding LP or our partnership, such assertion could result in adjustments to amounts of income (or loss) allocated to our unitholders by our partnership for tax purposes. In addition, we
might also be liable for transfer pricing penalties in respect of transfer pricing adjustments unless reasonable efforts were made to determine, and use, arm's-length transfer prices. Generally,
reasonable efforts in this regard are only considered to be made if contemporaneous documentation has been prepared in respect of such transactions or arrangements that support the transfer pricing
methodology.

United States

If our partnership or the Holding LP were to be treated as a corporation for U.S. federal income tax purposes, the value of our units might be adversely
affected.

The value of our units to unitholders will depend in part on the treatment of our partnership and the Holding LP as partnerships
for U.S. federal income tax purposes. However, in order for our partnership to be treated as a partnership for U.S. federal income tax purposes, under present law, 90% or more of our
partnership's gross income for every taxable year must consist of qualifying income, as defined in Section 7704 of the U.S. Internal Revenue Code, and our partnership must not be
required to register, if it were a U.S. corporation, as an investment company under the Investment Company Act and related rules. Although our Managing General Partner intends to manage our
partnership's affairs so that our partnership will not need to be registered as an investment company if it were a U.S. corporation and so that it will meet the 90% test described above in each
taxable year, our partnership may not meet these requirements, or current law may change so as to cause, in either event, our partnership to be treated as a corporation for U.S. federal income
tax purposes. If our partnership (or the Holding LP) were treated as a corporation for U.S. federal income tax purposes, adverse U.S. federal income tax consequences could
result for our unitholders and our partnership (or the Holding LP, as applicable), as described in greater detail in Item 10.E "TaxationCertain Material
U.S. Federal Income Tax ConsiderationsPartnership Status of Our Partnership and the Holding LP."

We may be subject to U.S. backup withholding tax or other U.S. withholding taxes if any unitholder fails to comply with U.S. tax reporting rules or if
the U.S. Internal Revenue Service ("IRS") or other applicable state or local taxing authority does not accept our withholding methodology, and such excess withholding tax cost will be an
expense borne by our partnership and, therefore, by all of our unitholders on a pro rata basis.

We may become subject to U.S. "backup" withholding tax or other U.S. withholding taxes with respect to any unitholder who
fails to timely provide our partnership (or the applicable clearing agent or other intermediary) with an IRS Form W-9 or IRS Form W-8, as the case
may be, or if the withholding methodology we use is not accepted by the IRS or other applicable state or local taxing authority. See Item 10.E "TaxationCertain Material
U.S. Federal Income Tax ConsiderationsAdministrative MattersWithholding and Backup Withholding". To the extent that any unitholder fails to timely provide the
applicable form (or such form is not properly completed), or should the IRS or other applicable state or local taxing authority not accept our withholding methodology, our partnership might
treat such U.S. backup withholding taxes or other U.S. withholding taxes as an expense, which would be borne indirectly by all of our unitholders on a pro rata basis. As a result,
our unitholders that fully comply with their U.S. tax reporting obligations may bear a share of such burden created by other unitholders that do not comply with the U.S. tax reporting
rules.

Brookfield Infrastructure     33

---



Table of Contents

Tax-exempt organizations may face certain adverse U.S. tax consequences from owning our units.

Our Managing General Partner and the Infrastructure General Partner intend to use commercially reasonable efforts to structure the
activities of our partnership and the Holding LP, respectively, to avoid generating income connected with the conduct of a trade or business (which income generally would constitute "unrelated
business taxable income" ("UBTI") to the extent allocated to a tax-exempt organization). However, neither our partnership nor the Holding LP is prohibited from incurring
indebtedness, and no assurance can be provided that neither our partnership nor the Holding LP will generate UBTI attributable to debt-financed property in the future. In
particular, UBTI includes income attributable to debt-financed property, and neither our partnership nor the Holding LP is prohibited from financing the acquisition of property with
debt. The potential for income to be characterized as UBTI could make our units an unsuitable investment for a tax-exempt organization. Each tax-exempt organization should
consult an independent tax adviser to determine the U.S. federal income tax consequences of an investment in our units.

There may be limitations on the deductibility of our partnership's interest expense.

So long as our partnership is treated as a partnership for U.S. federal income tax purposes, each of our unitholders that is a
U.S. Holder (as defined in Item 10.E "TaxationCertain Material U.S. Federal Income Tax Considerations") generally will be taxed on its share of our
partnership's net taxable income. However, U.S. federal, state, or local income tax law may limit the deductibility of such U.S. Holder's share of our partnership's interest expense.
Therefore, any such U.S. Holder may be taxed on amounts in excess of such holder's share of the net income of our partnership. This could adversely impact the value of our units if our
partnership were to incur a significant amount of indebtedness. See Item 10.E "TaxationCertain Material U.S. Federal Income Tax ConsiderationsConsequences to
U.S. HoldersHolding of Our UnitsLimitations on Interest Deductions".

If our partnership were engaged in a U.S. trade or business, non-U.S. persons would face certain adverse U.S. tax consequences from owning
our units.

Our Managing General Partner and the Infrastructure General Partner intend to use commercially reasonable efforts to structure the
activities of our partnership and the Holding LP, respectively, to avoid generating income treated as effectively connected with a U.S. trade or business, including effectively connected
income attributable to the sale of a "United States real property interest", as defined in the U.S. Internal Revenue Code. If our partnership were deemed to be engaged in a
U.S. trade or business, or to realize gain from the sale or other disposition of a U.S. real property interest, Non-U.S. Holders (as defined in Item 10.E
"TaxationCertain Material U.S. Federal Income Tax Considerations") generally would be required to file U.S. federal income tax returns and could be subject to
U.S. federal withholding tax at the highest marginal U.S. federal income tax rates applicable to ordinary income. See Item 10.E "TaxationCertain Material
U.S. Federal Income Tax ConsiderationsConsequences to Non-U.S. Holders".

To meet U.S. federal income tax and other objectives, our partnership and the Holding LP may invest through U.S. and non-U.S. Holding
Entities that are treated as corporations for U.S. federal income tax purposes, and such Holding Entities may be subject to corporate income tax.

To meet U.S. federal income tax and other objectives, our partnership and the Holding LP may invest through U.S. and
non-U.S. Holding Entities that are treated as corporations for U.S. federal income tax purposes, and such Holding Entities may be subject to corporate income tax.
Consequently, items of income, gain, loss, deduction, or credit realized in the first instance by the operating entities will not flow, for U.S. federal income tax purposes, directly to the
Holding LP, our partnership, or our unitholders, and any such income or gain may be subject to a corporate income tax, in the United States or other jurisdictions, at the level of the
Holding Entity. Any such additional taxes may adversely affect our partnership's ability to maximize its cash flow.

34     Brookfield Infrastructure

---



Table of Contents

Our unitholders taxable in the United States may be viewed as holding an indirect interest in an entity classified as a "passive foreign investment company" for
U.S. federal income tax purposes.

U.S. Holders may face adverse U.S. tax consequences arising from the ownership of a direct or indirect interest in a
"passive foreign investment company" ("PFIC"). In general, gain realized by U.S. Holders from the sale of stock of a PFIC is subject to tax at ordinary income rates, and an interest charge
generally applies. Alternatively, U.S. Holders making certain elections with respect to their direct or indirect interest in a PFIC may be required to recognize taxable income prior to the
receipt of cash relating to such income. See Item 10.E "TaxationCertain Material U.S. Federal Income Tax ConsiderationsConsequences to
U.S. HoldersPassive Foreign Investment Companies". Based on our organizational structure, as well as our expected income and assets, our Managing General Partner and the
Infrastructure General Partner currently believe that a U.S. Holder is unlikely to be regarded as owning an interest in a PFIC solely by reason of owning our units for the taxable year ending
December 31, 2013. However, our Managing General Partner and the Infrastructure General Partner believe that some of our operating entities may have been PFICs in prior taxable years.
Furthermore, there can be no assurance that a future entity in which our partnership acquires an interest will not be classified as a PFIC with respect to a U.S. Holder, because PFIC status is
a factual determination that depends on the assets and income of a given entity and must be made on an annual basis. Each U.S. Holder should consult an independent tax adviser regarding the
implication of the PFIC rules for an investment in our units.

Tax gain or loss from the disposition of our units could be more or less than expected.

If a sale of our units by a unitholder is taxable in the United States, the unitholder will recognize gain or loss for
U.S. federal income tax purposes equal to the difference between the amount realized and the unitholder's adjusted tax basis in such units. Prior distributions to a unitholder in excess of the
total net taxable income allocated to such unitholder will have decreased such unitholder's tax basis in our units. Therefore, such excess distributions will increase a unitholder's taxable gain or
decrease such unitholder's taxable loss when our units are sold, and may result in a
taxable gain even if the sale price is less than the original cost. A portion of the amount realized, whether or not representing gain, could be ordinary income to such unitholder.

Our partnership structure involves complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. The tax
characterization of our partnership structure is also subject to potential legislative, judicial, or administrative change and differing interpretations, possibly on a retroactive basis.

The U.S. federal income tax treatment of our unitholders depends in some instances on determinations of fact and interpretations
of complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. Unitholders should be aware that the U.S. federal income tax rules,
particularly those applicable to partnerships, are constantly under review by the Congressional tax-writing committees and other persons involved in the legislative process, the IRS, the
Treasury Department and the courts, frequently resulting in changes which could adversely affect the value of our units or cause our partnership to change the way it conducts its activities. In
addition, our partnership's organizational documents and agreements permit our Managing General Partner to modify our limited partnership agreement, without the consent of our unitholders, to address
such changes. These modifications could have a material adverse impact on our unitholders. See Item 10.E "TaxationCertain Material U.S. Federal Income Tax
ConsiderationsNew Legislation or Administrative or Judicial Action".

Brookfield Infrastructure     35

---



Table of Contents

The IRS may not agree with certain assumptions and conventions that we use in order to comply with applicable U.S. federal income tax laws or that we use to report
income, gain, loss, deduction, and credit to our unitholders.

Our partnership will apply certain assumptions and conventions in order to comply with applicable tax laws and to report income, gain,
deduction, loss, and credit to a unitholder in a manner that reflects such unitholder's beneficial ownership of partnership items, taking into account variation in ownership interests during each
taxable year because of trading activity. A successful IRS challenge to such assumptions or conventions could adversely affect the amount of tax benefits available to our unitholders and could require
that items of income, gain, deduction, loss, or credit, including interest deductions, be adjusted, reallocated or disallowed in a manner that adversely affects our unitholders.

Our partnership's delivery of required tax information for a taxable year may be subject to delay, which could require a unitholder who is a U.S. taxpayer to request
an extension of the due date for such unitholder's income tax return.

Our partnership has agreed to use commercially reasonable efforts to provide U.S. tax information (including IRS
Schedule K-1 information needed to determine a unitholder's allocable share of our partnership's income, gain, losses, and deductions) no later than 90 days after the close
of each calendar year. However, providing this U.S. tax information to our unitholders will be subject to delay in the event of, among other reasons, the late receipt of any necessary tax
information from lower-tier entities. It is therefore possible that, in any taxable year, a unitholder will need to apply for an extension of time to file such unitholder's tax returns.
See Item 10.E "Certain Material U.S. Federal Income Tax ConsiderationsAdministrative MattersInformation Returns".

The sale or exchange of 50% or more of our units will result in the constructive termination of our partnership for U.S. federal income tax purposes.

Our partnership will be considered to have been terminated for U.S. federal income tax purposes if there is a sale or exchange
of 50% or more of our units within a 12-month period. A constructive termination of our partnership would, among other things, result in the closing of its taxable year for
U.S. federal income tax purposes for all of our unitholders and could result in the possible acceleration of income to certain of our unitholders and certain other consequences that could
adversely affect the value of our units. However, our Managing General Partner does not expect a constructive termination, should it occur, to have a material impact on the computation of the future
taxable income generated by our partnership for U.S. federal income tax purposes. See Item 10.E "TaxationCertain Material U.S. Federal Income Tax
ConsiderationsAdministrative MattersConstructive Termination".

The U.S. Congress has considered legislation that could, if enacted, adversely affect our partnership's qualification as a partnership for U.S. federal tax
purposes under the publicly traded partnership rules and subject certain income and gains to tax at increased rates. If this or similar legislation were to be enacted and to apply to our partnership,
then the after-tax income of our partnership, as well as the market price of our units, could be reduced.

Over the past several years, a number of legislative proposals have been introduced in the U.S. Congress which could have had
adverse tax consequences for our partnership or the Holding LP, including the recharacterization of certain items of capital gain income as ordinary income for U.S. federal income tax
purposes. However, such legislation was not enacted into law. The Obama administration has indicated it supports such legislation and has proposed that the current law regarding the treatment of such
items of capital gain income be changed to subject such income to ordinary income tax. For further detail on such proposed legislation, see Item 10.E
"TaxationCertain Material U.S. Federal Income Tax ConsiderationsProposed Legislation".

36     Brookfield Infrastructure

---



Table of Contents

Under the Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act of 2010 ("FATCA"), certain payments made or received by our
partnership on or after January 1, 2014 could be subject to a 30% federal withholding tax, unless certain requirements are met.

Under FATCA, certain payments of U.S.-source income made on or after January 1, 2014 to our partnership, the Holding LP,
the Holding Entities, or the operating entities, or by our partnership to a unitholder (as well as certain payments made on or after January 1, 2017 that are attributable to such income
or that constitute gross proceeds from the disposition of property that could produce U.S.-source dividends or interest) could be subject to a 30% withholding tax, unless certain requirements are met,
as described in greater detail in Item 10.E "TaxationCertain Material U.S. Federal Income Tax ConsiderationsAdministrative MattersForeign Account
Tax Compliance". In addition, to ensure compliance with FATCA, information regarding certain unitholders' ownership of our units may be reported to the IRS or to a
non-U.S. governmental authority. Each of our unitholders should consult an independent tax advisor regarding the consequences under FATCA of an investment in our units.

Canada

Proposed amendments to the Income Tax Act (Canada), together with the regulations thereunder ("Tax Act"), may deny the deductibility of losses arising from our
unitholders' units in our partnership in computing their income for Canadian federal income tax purposes.

On October 31, 2003, the Department of Finance (Canada) released for public comment proposed amendments to the Tax Act
regarding the deductibility of interest and other expenses for purposes of the Tax Act ("REOP Proposals"). Under the REOP Proposals, a taxpayer would be considered to have a loss from a
source that is a business or property for a taxation year only
if, in that year, it is reasonable to assume that the taxpayer will realize a cumulative profit (excluding capital gains or losses) from the business or property during the period that the business is
carried on or that the property is held. In general, these proposals may deny the deduction of losses by our unitholders arising from their investment in our partnership in computing their income for
Canadian federal income tax purposes in a particular taxation year, if, in the year the loss is claimed, it is not reasonable to expect that an overall cumulative profit would be earned from the
investment in our partnership for the period in which our unitholders held and can reasonably be expected to hold the investment. Our Managing General Partner and the Infrastructure General Partner do
not anticipate that the activities of our partnership and the Holding LP will, in and of themselves, generate losses. However, investors may incur expenses in connection with an acquisition of
our units that could result in a loss that could be affected by the REOP Proposals. As part of the 2005 Canadian federal budget, the Minister of Finance (Canada) ("Minister"), announced that an
alternative proposal to reflect the REOP Proposals would be released for comment at an early opportunity. No such alternative proposal has been released to date. There can be no assurance that such
alternative proposal will not adversely affect our unitholders, or that any revised proposal may not differ significantly from the REOP Proposals described above and in Item 10.E
"TaxationCertain Material Canadian Federal Income Tax Considerations."

If the subsidiaries that are corporations and that are not resident or deemed to be resident in Canada for purposes of the Tax Act ("Non-Resident Subsidiaries")
and that are "controlled foreign affiliates" (as defined in the Tax Act and referred to herein as "CFA") in which the Holding LP directly invests earn income that is "foreign accrual property
income" ("FAPI"), our unitholders may be required to include amounts allocated from our partnership in computing their income for Canadian federal income tax purposes even though there may be no
corresponding cash distribution.

Certain of the Non-Resident Subsidiaries in which the Holding LP directly invests are expected to be CFAs, of the
Holding LP. If any CFA of the Holding LP or any direct or indirect subsidiary thereof

Brookfield Infrastructure     37

---



Table of Contents

that
is itself a CFA of the Holding LP ("Indirect CFA"), earns income that is characterized as FAPI in a particular taxation year of the CFA or Indirect CFA, the FAPI allocable to the
Holding LP must be included in computing the income of the Holding LP for Canadian federal income tax purposes for the fiscal period of the Holding LP in which the taxation year
of that CFA or Indirect CFA ends, whether or not the Holding LP actually receives a distribution of that FAPI. Our partnership will include its share of such FAPI of the Holding LP in
computing its income for Canadian federal income tax purposes and our unitholders will be required to include their proportionate share of such FAPI allocated from our partnership in computing their
income for Canadian federal income tax purposes. As a result, our unitholders may be required to include amounts in their income for Canadian federal income tax purposes even though they have not and
may not receive an actual cash distribution of such amounts. Bill C-48, which is currently proceeding through the legislative process, contains anti-avoidance
rules to address certain foreign tax credit generator transactions
("Foreign Tax Credit Generator Proposals"). Under the Foreign Tax Credit Generator Proposals, the "foreign accrual tax" (as defined in the Tax Act) applicable to a particular amount of
FAPI included in the Holding LP's income in respect of a particular CFA of the Holding LP may be limited in certain specified circumstances. See Item 10.E
"TaxationCertain Material Canadian Federal Income Tax Considerations".

Unitholders may be required to include imputed amounts in their income for Canadian federal income tax purposes in accordance with section 94.1 of the Tax Act
as proposed to be amended under proposed amendments to the Tax Act announced on March 4, 2010 and contained in Bill C-48 which is currently proceeding through the
legislative process.

On March 4, 2010, the Minister announced as part of the 2010 Canadian federal budget that the outstanding tax proposals
regarding investments in "foreign investment entities" would be replaced with revised tax proposals under which the existing rules in section 94.1 of the Tax Act relating to investments
in "offshore investment fund property" would remain in place subject to certain limited enhancements. Legislation to implement the revised tax proposals is contained in Bill
C-48 which is currently proceeding through the legislative process. Section 94.1 of the Tax Act contains rules relating to investments in entities that are not
resident or deemed to be resident for purposes of the Tax Act or not situated in Canada, other than a CFA of the taxpayer ("Non-Resident Entities"), that could in certain
circumstances cause income to be imputed to unitholders for Canadian federal income tax purposes, either directly or by way of allocation of such income imputed to our partnership or to the
Holding LP. See Item 10.E "TaxationCertain Material Canadian Federal Income Tax Considerations".

Unitholders' foreign tax credits for Canadian federal income tax purposes will be limited if the Foreign Tax Credit Generator Proposals apply in respect of the foreign
"business-income tax" or "non-business-income tax" (each as defined in the Tax Act) paid by our partnership or the Holding LP to a foreign country.

Under the Foreign Tax Credit Generator Proposals contained in Bill C-48 which is currently proceeding through the
legislative process, the foreign "business-income tax" or "non-business-income tax" for Canadian federal income tax purposes for any taxation year may be limited in certain circumstances.
If the Foreign Tax Credit Generator Proposals apply, the allocation to a unitholder of foreign "business-income tax" or "non-business-income tax" paid by our partnership or the
Holding LP, and therefore, such unitholder's foreign tax credits for Canadian federal income tax purposes, will be limited. See Item 10.E "TaxationCertain Material Canadian
Federal Income Tax Considerations".

38     Brookfield Infrastructure

---



Table of Contents

Unitholders who are not and are not deemed to be resident in Canada for purposes of the Tax Act and who do not use or hold, and are not deemed to use or hold, their
units of our partnership in connection with a business carried on in Canada ("non-Canadian limited partners"), may be subject to Canadian federal income tax with respect to any Canadian
source business income earned by our partnership or the Holding LP if our partnership or the Holding LP were considered to carry on business in Canada.

If our partnership or the Holding LP were considered to carry on a business in Canada for purposes of the Tax Act,
non-Canadian limited partners would be subject to Canadian federal income tax on their proportionate share of any Canadian source business income earned or considered to be earned by our
partnership, subject to the potential application of the safe harbor rule in section 115.2 of the Tax Act, as proposed to be amended under proposed amendments to the Tax Act
contained in Bill C-48 which is currently proceeding through the legislative process, and any relief that may be provided by any relevant income tax treaty or convention.

Our
Managing General Partner and the Infrastructure General Partner intend to manage the affairs of our partnership and the Holding LP, to the extent possible, so that they do not
carry on business in Canada and are not considered or deemed to carry on business in Canada for purposes of the Tax Act. Nevertheless, because the determination of whether our partnership or
the Holding LP is carrying on business and, if so, whether that business is carried on in Canada, is a question of fact that is dependent upon the surrounding circumstances, the Canada Revenue
Agency ("CRA"), might contend successfully that either or both of our partnership and the Holding LP carries on business in Canada for purposes of the Tax Act.

If
our partnership or the Holding LP is considered to carry on business in Canada or is deemed to carry on business in Canada for the purposes of the Tax Act,
non-Canadian limited partners that are corporations would be required to file a Canadian federal income tax return for each taxation year in which they are a
non-Canadian limited partner regardless of whether relief from Canadian taxation is available under an applicable income tax treaty or convention. Non-Canadian limited partners
who are individuals would be required to file a Canadian federal income tax return for any taxation year in which they are allocated income from our partnership from carrying on business in
Canada that is not exempt from Canadian taxation under the terms of an applicable income tax treaty or convention.

Non-Canadian limited partners may be subject to Canadian federal income tax on capital gains realized by our partnership or the Holding LP on dispositions
of "taxable Canadian property" (as defined in the Tax Act).

A non-Canadian limited partner will be subject to Canadian federal income tax on its proportionate share of capital gains
realized by our partnership or the Holding LP on the disposition of "taxable Canadian property" other than "treaty-protected property" (as defined in the Tax Act). "Taxable
Canadian property" includes, but is not limited to, property that is used or held in a business carried on in Canada and shares of corporations that are not listed on a "designated stock exchange"
(as defined in the Tax Act) if more than 50% of the fair market value of the shares is derived from certain Canadian properties during the 60-month period immediately
preceding the particular time. Property of our partnership and the Holding LP generally will be "treaty-protected property" to a non-Canadian limited partner if the gain from the
disposition of the property would, because of an applicable income tax treaty or convention, be exempt from tax under the Tax Act. Our Managing General Partner and the Infrastructure General
Partner do not expect our partnership or the Holding LP to realize capital gains or losses from dispositions of "taxable Canadian property". However, no assurance can be given in this regard.
Non-Canadian limited partners will be required to file a Canadian federal income tax return in respect of a disposition of "taxable Canadian property" by our partnership or the
Holding LP unless the disposition is an "excluded disposition" for the purposes of section 150 of the Tax Act. However, non-Canadian limited partners that are
corporations will still be required to file a Canadian federal income tax return in respect of a disposition of "taxable

Brookfield Infrastructure     39

---



Table of Contents

Canadian
property" that is an "excluded disposition" for purposes of section 150 of the Tax Act if tax would otherwise be payable under Part I of the Tax Act by the
non-Canadian limited partners in respect of the disposition but is not because of an applicable income tax treaty or convention (otherwise than in respect of a disposition of "taxable
Canadian property" that is "treaty-protected property" of the corporation). In general, an "excluded disposition" is a disposition of property by a taxpayer in a taxation year where (a) the
taxpayer is a non-resident of Canada at the time of the disposition; (b) no tax is payable by the taxpayer under Part I of the Tax Act for the taxation year;
(c) the taxpayer is not liable to pay any amounts under the Tax Act in respect of any previous taxation year (other than certain amounts for which the CRA holds adequate security); and
(d) each "taxable Canadian property" disposed of by the taxpayer in the taxation year is either (i) "excluded property" (as defined in subsection 116(6) of the Tax Act) or
(ii) property in respect of the disposition of which a certificate under subsection 116(2), (4) or (5.2) has been issued by the CRA. Non-Canadian limited
partners should consult their own tax advisors with respect to the requirements to file a Canadian federal income tax return in respect of a disposition of "taxable Canadian property" by our
partnership or the Holding LP.

Non-Canadian limited partners may be subject to Canadian federal income tax on capital gains realized on the disposition of our units if our units are "taxable
Canadian property".

Any capital gain arising from the disposition or deemed disposition of our units by a non-Canadian limited partner will be
subject to taxation in Canada, if, at the time of the disposition or deemed disposition, our units are "taxable Canadian property" of the non-Canadian limited partner, unless our units are
"treaty-protected property" to such non-Canadian limited partner. In general, our units will not constitute "taxable Canadian property" of any non-Canadian limited partner at
the time of disposition or deemed disposition, unless (a) at any time in the 60-month period immediately preceding the disposition or deemed disposition, more than 50% of the fair
market value of our units was derived, directly or indirectly (under proposed amendments to the Tax Act contained in Bill C-48 which is currently proceeding through the
legislative process, excluding through a corporation, partnership or trust, the shares or interests in which were not themselves "taxable Canadian property"), from one or any combination of
(i) real or immovable property situated in Canada, (ii) "Canadian resource property" (as defined in the Tax Act), (iii) "timber resource property" (as defined
in the Tax Act), and (iv) options in respect of, or interests in, or for civil law rights in, such property, whether or not such property exists, or (b) our units are otherwise
deemed to be "taxable Canadian property". Since our partnership's assets will consist principally of units of the Holding LP, our units would generally be "taxable Canadian property" at a
particular time if the units of the Holding LP held by our partnership derived, directly or indirectly (under proposed amendments to the Tax Act contained in Bill
C-48 which is currently proceeding through the legislative process, excluding through a corporation, partnership or trust, the shares or interests in which were not themselves
"taxable Canadian property") more than 50% of their fair market value from properties described in (i) to (iv) above, at any time in the 60-month period preceding the
particular time. Units of our partnership will be "treaty-protected property" if the gain on the disposition of our units is exempt from tax under the Tax Act under the terms of an applicable
income tax treaty or convention. Our Managing General Partner does not expect our units to be "taxable Canadian property" of any non-Canadian limited partner at any time but no assurance can be given
in this regard. See Item 10.E "TaxationCertain Material Canadian Federal Income Tax Considerations." Even if our units constitute "taxable Canadian property", our units will be
"treaty-protected property" if the gain on the disposition of our units is exempt from tax under the Tax Act under the terms of an applicable income tax treaty or convention. If our units
constitute "taxable Canadian property", non-Canadian limited partners will be required to file a Canadian federal income tax return in respect of a disposition of our units unless
the disposition is an "excluded disposition" (as discussed above). If our units constitute "taxable Canadian property", non-Canadian limited partners should consult their own tax
advisors with respect to the requirement to file a Canadian federal income tax return in respect of a disposition of our units.

40     Brookfield Infrastructure

---



Table of Contents

Non-Canadian limited partners may be subject to Canadian federal income tax reporting and withholding tax requirements on the disposition of "taxable Canadian
property".

Non-Canadian limited partners who dispose of "taxable Canadian property", other than "excluded property" (as defined
in subsection 116(6) of the Tax Act) and certain other property described in subsection 116(5.2) of the Tax Act, (or who are considered to have disposed of such
property on the disposition of such property by our partnership or the Holding LP), are obligated to comply with the procedures set out in section 116 of the Tax Act and obtain a
certificate pursuant to the Tax Act. In order to obtain such certificate, the non-Canadian limited partner is required to report certain particulars relating to the transaction to the CRA
not later than 10 days after the disposition occurs. Our Managing General Partner and the Infrastructure General Partner do not expect our units to be "taxable Canadian property" of any
non-Canadian limited partner and they do not expect our partnership or the Holding LP to dispose of property that is "taxable Canadian property" but no assurance can be given in
these regards.

Payments of dividends or interest (other than interest exempt from Canadian federal withholding tax) by residents of Canada to the Holding LP will be subject to
Canadian federal withholding tax and we may be unable to apply a reduced rate taking into account the residency or entitlement to relief under an applicable income tax treaty or convention of our
unitholders.

Our partnership and the Holding LP will be deemed to be a non-resident person in respect of certain amounts paid or
credited or deemed to be paid or credited to them by a person resident or deemed to be resident in Canada, including dividends or interest. Dividends or interest (other than interest exempt from
Canadian federal withholding tax) paid or deemed to be paid by a person resident or deemed to be resident in Canada to the Holding LP will be subject to withholding tax under Part XIII
of the Tax Act at the rate of 25%. However, the CRA's administrative practice in similar circumstances is to permit the rate of Canadian federal withholding tax applicable to such payments to
be computed by looking through the partnership and taking into account the residency of the partners (including partners who are resident in Canada) and any reduced rates of Canadian federal
withholding tax that any non-Canadian limited partners may be entitled to under an applicable income tax treaty or convention, provided that the residency status and entitlement to treaty
benefits can be established. In determining the rate of Canadian federal withholding tax applicable to amounts paid by the Holding Entities to the Holding LP, our Managing General Partner and
the Infrastructure General Partner expect the Holding Entities to look-through the Holding LP and our partnership to the residency of the partners of our partnership (including
partners who are residents of Canada) and to take into account any reduced rates of Canadian federal withholding tax that non-Canadian limited partners may be entitled to under an
applicable income tax treaty or convention in order to determine the appropriate amount of Canadian federal withholding tax to withhold from dividends or interest paid to the Holding LP.
However, there can be no assurance that the CRA would apply its administrative practice in this context. If the CRA's administrative practice is not applied and the Holding Entities withhold Canadian
federal withholding tax from applicable payments on a look-through basis, the Holding Entities may be liable for additional amounts of Canadian federal withholding tax plus any associated
interest and penalties. Under the Canada-United States Tax Convention (1980) ("Treaty"), a Canadian-resident payer is required in certain circumstances to look-through fiscally
transparent partnerships, such as our partnership, and the Holding LP to the residency and Treaty entitlements of their partners and take into account the reduced rates of Canadian federal
withholding tax that such partners may be entitled to under the Treaty.

While
we expect the Holding Entities to look-through our partnership and the Holding LP in determining the rate of Canadian federal withholding tax applicable to
amounts paid or deemed to be paid by the Holding Entities to the Holding LP, we may be unable to accurately or timely determine the residency of our unitholders for purposes of establishing the
extent to which Canadian federal withholding taxes apply or whether reduced rates of withholding tax apply to some or all of our

Brookfield Infrastructure     41

---



Table of Contents

unitholders.
In such a case, the Holding Entities will withhold Canadian federal withholding tax from all payments made to the Holding LP that are subject to Canadian federal withholding tax at
the rate of 25%. Canadian-resident unitholders will be entitled to claim a credit for such taxes against their Canadian federal income tax liability but non-Canadian limited partners will
need to take certain steps to receive a refund or credit in respect of any such Canadian federal withholding taxes withheld equal to the difference between the withholding tax at a rate of 25% and the
withholding tax at the reduced rate they are entitled to under an applicable income tax treaty or convention. Investors should consult their own tax advisors concerning all aspects of Canadian federal
withholding taxes.

Our units may not continue to be "qualified investments" under the Tax Act for registered plans.

Provided that our units are listed on a "designated stock exchange" (which currently includes the Toronto Stock Exchange ("TSX") and
the NYSE), our units will be "qualified investments" under the Tax Act for a trust governed by a registered retirement savings plan ("RRSP"), deferred profit sharing plan, registered retirement
income fund ("RRIF"), registered education savings plan, registered disability savings plan, and a tax-free savings account ("TFSA"). However, there can be no assurance that tax laws
relating to qualified investments will not be changed. Taxes may be imposed in respect of the acquisition or holding of non-qualified investments by such registered plans and certain other
taxpayers and with respect to the acquisition or holding of "prohibited investments" (as defined in the Tax Act) by a TFSA or an RRSP or RRIF.

Our
units will not be a "prohibited investment" for a trust governed by a TFSA or an RRSP or RRIF, provided that the holder of the TFSA or the annuitant of the RRSP or RRIF, as the case
may be, (i) deals at arm's length with our partnership for purposes of the Tax Act and (ii) does not have a
"significant interest" (as defined in the Tax Act) in (A) our partnership or in (B) a corporation, partnership or trust with which our partnership does not deal at arm's
length for purposes of the Tax Act. The Department of Finance (Canada) released proposed amendments to the Tax Act on December 21, 2012 that will delete the condition
in (ii)(B) above and will exclude certain "excluded property" (as defined in the proposed amendments) from being a "prohibited investment". Generally, our units will be "excluded
property" (i.e., not a "prohibited investment") to the holder of a TFSA or the annuitant of an RRSP or RRIF, as the case may be, if, at the relevant time, at least 90% of the fair market value
of all equity of our partnership is owned by persons dealing at arm's length with such holder or annuitant, as the case may be, and their investment in our partnership meets the other criteria set
forth in such proposed amendments. Such proposed amendments will be deemed to have come into force on March 23, 2011. Unitholders who intend to hold our units in a TFSA, RRSP or RRIF should
consult with their own tax advisors regarding the application of the foregoing prohibited investment rules having regard to their particular circumstances.

The Canadian federal income tax consequences to our unitholders could be materially different in certain respects from those described in this annual report on
Form 20-F if our partnership or the Holding LP is a "SIFT partnership" (as defined in the Tax Act).

Under the rules in the Tax Act applicable to a "SIFT partnership" ("SIFT Rules"), certain income and gains earned by a "SIFT
partnership" are subject to income tax at the partnership level at a rate similar to a corporation and allocations of such income and gains to its partners are taxed as a dividend from a taxable
Canadian corporation. In particular, a "SIFT partnership" will be required to pay a tax on the total of its income from businesses carried on in Canada, income from "non-portfolio
properties" (as defined in the Tax Act) other than taxable dividends, and taxable capital gains from dispositions of "non-portfolio properties". "Non-portfolio
properties" include, among other things, equity interests or debt of corporations, trusts or partnerships that are resident in Canada, and of non-resident persons or partnerships the
principal source of income of which is one or any combination of sources in Canada, that are held by the "SIFT partnership" and have a fair market value that is greater than 10% of the equity value of
such entity, or that have, together with debt or equity that the

42     Brookfield Infrastructure

---



Table of Contents

"SIFT
partnership" holds of entities affiliated (within the meaning of the Tax Act) with such entity, an aggregate fair market value that is greater than 50% of the equity value of the "SIFT
partnership". The tax rate applied to the above mentioned sources of income and gains is set at a rate equal to the "net corporate income tax rate", plus the "provincial SIFT tax rate" (each as
defined in the Tax Act).

A
partnership will be a "SIFT partnership" throughout a taxation year if at any time in the taxation year (i) it is a "Canadian resident partnership" (as defined in the
Tax Act), (ii) "investments" (as defined in the Tax Act) in the partnership are listed or traded on a stock exchange or other public market, and (iii) it holds one
or more "non-portfolio properties". For these purposes, a partnership will be a "Canadian resident partnership" at a particular time if (a) it is a "Canadian partnership"
(as defined in the Tax Act) at that time, (b) it would, if it were a corporation be resident in Canada (including, for greater certainty, a partnership that has its central
management and control located in Canada), or (c) it was formed under the laws of a province. A "Canadian partnership" for these purposes is a partnership all of whose members are resident in
Canada or are partnerships that are "Canadian partnerships".

Under
the SIFT Rules, our partnership and the Holding LP could each be a "SIFT partnership" if it is a "Canadian resident partnership". However, the Holding LP would not be
a "SIFT partnership" if our partnership is a "SIFT partnership" regardless of whether the Holding LP is a "Canadian resident partnership" on the basis that the Holding LP would be an
"excluded subsidiary entity" (as defined in the Tax Act as proposed to be amended under proposed amendments to the Tax Act announced by the Minister on July 25, 2012). Our
partnership and the Holding LP will be a "Canadian resident partnership" if the central management and control of these partnerships is located in Canada. This determination is a question of
fact and is expected to depend on where our Managing General Partner and the Infrastructure General Partner are located and exercise central management and control of the respective partnerships. Our
Managing General Partner and the Infrastructure General Partner will each take appropriate steps so that the central management and control of these entities is not located in Canada such that the
SIFT Rules should not apply to our partnership or the Holding LP at any relevant time. However, no assurance can be given in this regard. If our partnership or the Holding LP is a "SIFT
partnership", the Canadian federal income tax consequences to our unitholders could be materially different in certain respects from those described in Item 10.E "TaxationCertain
Material Canadian Federal Income Tax Considerations." In addition, there can be no assurance that the SIFT Rules will not be revised or amended in the future such that the SIFT Rules
will apply.

ITEM 4.    INFORMATION ON THE COMPANY

4.A    HISTORY AND DEVELOPMENT OF BROOKFIELD INFRASTRUCTURE



Brookfield Infrastructure owns and operates high quality, long-life assets that generate stable cash flows, require
relatively minimal maintenance capital expenditures and, by virtue of barriers to entry or other characteristics, tend to appreciate in value over time. Our current operations consist of utility,
transport and energy businesses, and freehold timberlands in North and South America, Australasia and Europe. Brookfield Infrastructure has appointed Brookfield as its Manager to provide certain
management, administrative and advisory services for a fee under the Master Services Agreement. Brookfield owns an approximate 30% interest in Brookfield Infrastructure.

Our
mission is to own and operate a globally diversified portfolio of high quality infrastructure assets that will generate sustainable and growing distributions over the long term for
our unitholders. To accomplish this objective, we will seek to leverage our operating platforms to acquire infrastructure assets and actively manage them to extract additional value following our
initial investment. An integral part of our strategy is to participate with institutional investors in Brookfield-sponsored partnerships that target acquisitions that suit our profile. We focus on
partnerships in which Brookfield has sufficient influence or control to deploy an operations-oriented approach.

Brookfield Infrastructure     43

---





Table of Contents

We target a total return of 12% to 15% per annum on the infrastructure assets that we own, measured over the long-term. We intend to generate this
return from the in-place cash flow of our operations plus growth through investments in upgrades and expansions of our asset base, as well as acquisitions. If we are successful in growing
our FFO per unit, we will be able to increase distributions to unitholders. Additionally, the increase in our FFO per unit should result in capital appreciation. For our business as a whole, a key
performance measure is AFFO yield, defined as FFO less maintenance capital expenditures divided by invested capital, which measures the sustainable return on capital that we have deployed. We also
measure the growth of FFO per unit, which we believe is a proxy for our ability to increase distributions. See Item 5 "Operating and Financial Review and Prospects" for more detail.

Our
objective is to pay a distribution that is sustainable on a long-term basis while retaining within our operations sufficient liquidity to fund recurring growth capital
expenditures, debt repayments and general corporate requirements. We currently believe that a payout of 60% to 70% of our FFO is appropriate.

In
light of the current prospects for our business, the Board of Directors of our Managing General Partner recently approved a 15% increase in our quarterly distribution to
43 cents per unit. This
increase reflects the forecasted contribution from our recently commissioned capital projects as well as the expected cash yield on acquisitions that we closed in the fourth quarter of 2012. Since our
spin-off five years ago, we have increased our quarterly distribution from 26.5 cents per unit to 43 cents, a compound annual growth rate in excess of 10%. We continue to
target a 3% to 7% annual distribution growth in light of the per unit FFO growth that we foresee in our operations. We intend to review our distribution in the first quarter of each year in the normal
course. Please refer to Item 3.D Risk FactorsRisks Relating to Us and Our Partnership"Our partnership is a holding entity and currently we rely on the
Holding LP and, indirectly, the Holding Entities and our operating entities to provide us with the funds necessary to pay distributions and meet our financial obligations".

History and Development of our Business

Our partnership, Brookfield Infrastructure Partners L.P., is a Bermuda exempted limited partnership that was established on
May 21, 2007 under the provisions of theExempted Partnership Act, 1992of Bermuda and theLimited Partnership Act,
1883of Bermuda. Our registered office is 73 Front Street, Hamilton HM 12, Bermuda and our telephone number at this address
+1-441-294-3309. Our partnership was spun-off from Brookfield on January 31, 2008. The following table outlines the formative events in the
history and development of our business:

Date

Notes

EventMay 2007

1

Corporate: Utilities:

Established Brookfield Infrastructure Partners L.P.
Contributed interests in utilities investments into Brookfield Infrastructure, including:
  South American electricity transmission operations
  North American electricity transmission operations
  Brazilian transmission investments (TBE)Timber:

Contributed interests in timberlands into Brookfield InfrastructureJanuary 2008

2

Corporate:

Began trading as public entity on NYSE (under the symbol "BIP")November 2008

3

Timber:

Invested $103 million in U.S. timber operation following the acquisition of a tree farm in Washington StateJanuary 2009

4

Utilities:

Brookfield and partner Isolux Corsan Concesiones, SA (Isolux) were awarded right to build $500 million of transmission
lines in Texas


44     Brookfield Infrastructure

---



Table of Contents

Date

Notes

EventJune 2009

5

Utilities:

Completed the sale of our interest in TBE for after-tax proceeds of $275 millionSeptember 2009

6

Corporate:

Units commenced trading on TSX (under the symbol "BIP.UN")November 2009

7

Corporate:

Invested $941 million to acquire a 40% interest in Prime and direct interests in two assets from PrimeUtilities:

Acquired interests in the following:
  Australian regulated terminal operations
  Australasian regulated distribution operations
  UK regulated distribution operationsTransport:

Acquired interests in the following:
  Australian railroad operations
  UK port operations
  European port operationsEnergy:

Acquired interests in the following:
  North American gas transmission operations
  European energy distribution operations
  Australian energy distribution operationsNovember 2009

8

Corporate:

Raised approximately $940 million of net proceeds through issuance of equity. Proceeds were used to fund the Prime
investmentsDecember 2009  September 2010

9

Corporate:

Sold interests in certain utilities, transport and energy assets for proceeds of $74 million and acquired Brookfield's
interest in our UK port operations for $27 millionDecember 2010

10

Corporate:

Completed merger with PrimeUtilities:

Increased interests in the following:
  Australian regulated terminal operations
  Australasian regulated distribution operations
  UK regulated distribution operationsTransport:

Increased interests in the following:
  Australian railroad operations
  European port operationsEnergy:

Increased interests in the following:
  North American gas transmission operations
  European energy distribution operations
  Australian energy distribution operationsOctober 2011

11

Corporate:

Raised approximately $660 million of net proceeds through issuance of equity. Proceeds were used primarily to fund
Australian railroad expansion and pending Chilean toll road acquisitionDecember 2011

12

Transport:

Invested $160 million to acquire Chilean toll road assetsJanuary 2012

13

Utilities:

Invested $55 million in a Colombian regulated distribution businessApril 2012

14

Energy:

Invested $16 million in a natural gas storage facility in AlbertaAugust 2012

15

Corporate:

Raised approximately $500 million of net proceeds through issuance of equity. Proceeds were used to partially fund several
strategic initiativesSeptember 2012

16

Utilities:

Announced plans to acquire Brookfield's interest in our Chilean transmission system for approximately
$235 million


Brookfield Infrastructure     45

---



Table of Contents

Date

Notes

EventOctober 2012

17

Transport:

Closed acquisition of additional interest in Chilean toll road for $170 million increasing ownership to 51%October 2012

18

Corporate:

Completed C$400 million corporate bond issuanceOctober 2012

19

Energy:

Invested approximately $75 million in a district energy system in TorontoNovember 2012

20

Utilities:

Completed merger and recapitalization of a UK regulated distribution utility investing approximately $525 million and closed
sale of 20% interest in combined UK regulated distribution business for proceeds of approximately $235 millionDecember 2012

21

Transport:

Completed $310 million investment in Brazilian toll road platformDecember 2012

22

Corporate:

Closed upsizing of credit facilities to $855 millionDecember 2012

23

Timber:

Completed sale of 12.5% interest in Canadian Timber operations for approximately $85 million


Details of History and Development of our Business (Notes)



46     Brookfield Infrastructure

---



Table of Contents



Brookfield Infrastructure     47

---



Table of Contents



48     Brookfield Infrastructure

---



Table of Contents



4.B    BUSINESS OVERVIEW

Our Operations

Brookfield Infrastructure owns a balanced portfolio of infrastructure assets that are diversified by sector and by geography. We have a
stable cash flow profile with approximately 85% of our adjusted EBITDA supported by regulated or contractual revenues. In order to assist our unitholders in evaluating our performance and assessing
our value, we group our businesses into operating platforms based on similarities in their underlying economic drivers.

Our
operating platforms are summarized below:

Operating Platform

Asset Type

Primary LocationUtilitiesRegulated or contractual businesses that earn a return on their rate base

Regulated Terminal
Electricity Transmission
Regulated Distribution

Australasia
North & South America
Australasia & EuropeTransportKey assets involved in the movement of freight, bulk commodities and passengers

Railroad
Toll Roads
Ports

Australasia
South America
EuropeEnergySystems for the transportation, storage and handling of energy

Energy Transmission Storage
Distribution and Storage
District Energy

North America
Australasia & Europe
North AmericaTimberProvide essential products for the global economy on a sustainable basis

Freehold Timberlands

North America


Brookfield Infrastructure     49

---



Table of Contents

Location of Operations

GRAPHIC

Utilities

Overview

Our utilities platform is comprised of regulated businesses, which earn a return on their asset base, as well as businesses with
long-term contracts designed to generate a stable return on capital over the life of the contract. In all cases, we own and operate assets that earn a return on a regulated or notionally
stipulated asset base, which we refer to as rate base. Our rate base increases in accordance with capital that we invest to upgrade and expand our systems. Depending on the jurisdiction, our rate base
may also increase by inflation and maintenance capital
expenditures and decrease by regulatory depreciation. The return that we earn is typically determined by a regulator or contract for prescribed periods of time. Thereafter, it may be subject to
customary reviews based upon established criteria. Due to the regulatory diversity we have within our utilities platform, we mitigate exposure to any single regulatory regime. In addition, due to the
regulatory frameworks and economies of scale in our established franchises of our utilities businesses, we often have significant competitive advantages in competing for projects to expand our rate
base. Accordingly, we expect this segment to produce stable revenue and margins that should increase with investment of additional capital and inflation. Virtually all of our utility platform's
adjusted EBITDA is supported by regulated or contractual revenues.

Our
objectives for our utilities platform are to invest capital in the expansion of our rate base and to provide safe and reliable service for our customers on a cost efficient basis. If
we do so, we will be in a position to earn an appropriate return on our rate base. Our performance can be measured by the growth in our rate base, the return on our rate base, as well as our
AFFO yield.

Our
utilities platform is comprised of the following:

Regulated Terminal Operations

One of the world's largest coal export terminals, with 85 mtpa of coal handling capacity

50     Brookfield Infrastructure

---



Table of Contents

Electricity Transmission Operations

Approximately 9,900 kilometres of transmission lines in North and South America

Regulated Distribution Operations

Approximately 2.5 million electricity and natural gas connections

Regulated Terminal Operations

Our regulated terminal operation is comprised of a port facility that exports metallurgical and thermal coal mined in the central Bowen
Basin region of Queensland, Australia, which is one of the lowest cost sources of metallurgical coal in the world. Our operations are expected to include land located four kilometres from our existing
terminal that we anticipate will be allocated to us for the potential development of a new export coal terminal. Our Australian regulated terminal is one of the world's largest export terminals,
accounting for approximately 17% of global seaborne metallurgical coal exports and 5% of total global seaborne coal exports.

Our
regulated terminal operation generates revenues under long-term take-or-pay contracts that are made up of two components: a capacity charge that
is allocated to users based on the percentage of total capacity for which they contract and a fixed and variable handling charge associated with operating and maintaining the terminal. The capacity
charge is paid by users irrespective of their use of our facility and is not subject to any force majeure provisions. The handling charge (both fixed and variable) is structured to be a complete pass
through of the costs charged for terminal operations and maintenance.

Strategic Position

The Bowen Basin is one of the lowest cost and most prolific series of coal deposits in the world, and there are few cost efficient
options to access export markets for this coal other than through our terminal operations. We have long-term take-or-pay contracts with some of the world's largest
mining companies that operate in the Bowen Basin. Our coal terminal has a capacity of 85 mtpa. Capacity is currently 100% contracted through 2018 with customers having an evergreen option to
extend their capacity by a further five years. In the terminal's 29-year history, no customers have allowed their right to capacity to lapse.

Regulatory Environment

Our Australian terminal operation is regulated by the Queensland Competition Authority (QCA). The current regulatory period was set for
five and a half years ending June 30, 2016. The QCA utilizes a return on regulated asset base methodology to calculate our revenue requirement. Our coal terminal's rate base increases with
inflation and capital expenditures and decreases by depreciation. Our current weighted average cost of capital allowed by the regulator is 9.9%.

Growth Opportunities

Over the past 29 years, our terminal's capacity has been expanded from 15 mtpa to 85 mtpa to meet ongoing customer
demand. Potential exists to further expand our operations to facilitate future expansions by mining companies in the Bowen Basin. In December 2011, the Queensland government announced that we
would be allocated 50% of the site earmarked for development of the new coal export terminal at Dudgeon Point, which is located approximately four kilometres to the north of our existing facilities.
The ultimate land allocation at Dudgeon Point will be subject to finalization of the Master Plan by the North Queensland Bulk Ports Corporation. We are currently working with potential counterparties
and expect to proceed with the project subject to negotiating sufficient long-term contracts to support our capital investment.

Brookfield Infrastructure     51

---



Table of Contents

Electricity Transmission Operations

Our electricity transmission operations are comprised of approximately 9,900 km of transmission lines in North and South
America. Our North American electricity transmission system consists of approximately 560 km of 44 kilovolt ("kV") to 230 kV transmission lines in Ontario and a 39 km,
330 megawatt ("MW") high-voltage direct current ("HVDC") submarine cable in New York. We also have 600 km of 345 kV transmission lines under development in
Texas. Our South American electricity transmission system includes 100% of Chile's 500 kV transmission lines, the highest voltage lines in the country, approximately 51% of the 220 kV
lines, 86% of the 154 kV lines and 11% of the 66 kV and 110 kV lines in Chile.

Strategic Position

Our electricity transmission operations occupy key positions in the markets in which we operate. In North America, our operations
include an important component of Ontario's transmission system that connects generators in Northern Ontario to electricity demand in Southern Ontario. Our HVDC submarine cable connects the
electricity grids of New England and Long Island, New York. In Texas, we are building transmission lines to facilitate the delivery of wind power to population centers as part of the
state's competitive renewable energy zone program. In South America, our operations constitute the backbone high-voltage transmission system in Chile. Our system extends from the city of Arica in the
north of Chile to the island of Chiloé in the south, serving 98% of the population of the country.

All
of our electricity transmission operations benefit from stable long-term cash flows. Our Ontario operation has a broad customer base with revenues assessed and collected on a
province-wide basis, mitigating volume and credit risk. Our HVDC submarine cable is fully contracted to an investment grade utility on Long Island, and the contract is based on
availability, not usage. Approximately 57% of our South American electricity transmission operations' revenues are derived from a number of long-term transmission contracts, primarily
serving hydro-electric power generators. These contracts have a pricing framework that is similar to the regulatory framework, and following their expiration, a majority of this contracted revenue
will convert to the regulatory framework.

Regulatory Environment

All of our electricity transmission operations are located in regions with stable regulatory environments. In Ontario, revenues from
our operations are 100% regulated under a historical cost of service regime and are subject to periodic review by the Ontario Energy Board. Based on a recent rate review, our Ontario transmission
operations are allowed to earn an 8.9% return on equity, which is deemed to be 40% of our rate base. Our rate base is equal to the historic cost of the system's assets plus any capital expenditures
less depreciation and other deductibles. Our operating revenues do not fluctuate with usage of our system but do fluctuate based on provincial electric loads, which are measured by the Independent
Electricity System Operator, a not-for-profit corporate entity that is responsible for the day-to-day operation of Ontario's electrical system.

In
the U.S., capacity payments on our HVDC submarine cable escalate by 1% per annum and are based on a 98% availability factor. To the extent that performance diverges from the target
availability factor, the capacity payments are adjusted in a linear fashion either upwards or downwards.
Historically, the capacity factor of the cable has been in excess of the target level. Our Texas transmission business will operate under a historical cost of services regulatory regime, similar to
Ontario, overseen by the Public Utility Commission of Texas. Based on a recent rate case settlement, our Texas transmission business is allowed to earn a 9.6% return on equity which is deemed to be
40% of our rate base. This project is currently under construction and is expected to achieve commercial operation during 2013.

52     Brookfield Infrastructure

---





Table of Contents

In Chile, regulated revenues are determined every four years based on a 10% annuity real rate return on replacement cost of the existing transmission system plus
annual payments that provide for recovery of operational, maintenance and administrative costs. Since the 10% annuity return is prescribed by law, it is not subject to review in the regulatory
process. Between rate reviews, both revenue components are adjusted by a multi-component inflation factor. This effectively results in a 10% pre-tax, real return on our regulated asset
base. Since the Chilean regulatory and contractual frameworks are based on replacement cost, we are not required to invest capital in our regulated asset base at a level equal to depreciation to
prevent a decline in revenue. Furthermore, our South American electricity transmission system has no material volume risk.

Growth Opportunities

We believe that attractive growth opportunities exist for our electricity transmission operations, including the following.

In
2012, we made significant progress advancing our Texas transmission project. As at December 31, 2012, we had acquired 100% of the right-of-way required
for the three transmission line segments. As at December 31, 2012 we had erected 782 of 1,865 towers (42%), poured 1,182 of 1,865 foundations (63%) and expect to complete
construction and commission the three transmission line segments in 2013.

Ontario
has adopted a very aggressive Renewable Portfolio Standard through the passage of Ontario Bill 150 ("Green Energy Act"). A cornerstone of the Green Energy Act requires the
decommissioning of existing coal plants and replacement with renewable and clean sources of power. The majority of the new generation that will be developed is in remote locations far from the
existing transmission grid. Expansions of the electricity transmission system will be required to connect this generation to the existing grid. As an incumbent utility, our Ontario electricity
transmission system has an advantage in competing for these projects, and we have identified projects where, due to their geographic location and size, we believe that we have a unique competitive
advantage to build and own these new lines.

Chile
also has electricity generation that is many miles away from population centres. Upgrades and expansions of the electricity transmission system will be required to connect new
electricity generation to load centers to satisfy increased electricity demand resulting from economic growth. As of December 31, 2012, the capital expenditure backlog of our South American
transmission system was approximately $351 million and is comprised of projects that have been awarded to us for which expenditures have not yet been made.

Regulated Distribution Operations

Our regulated distribution operations have almost 2.5 million electricity and natural gas connections in the UK,
New Zealand and Colombia. In the UK, our regulated distribution operations is the largest independent "last mile" natural gas and electricity connections provider, comprised of approximately
1.6 million connections, principally natural gas and electricity. In New Zealand, we have more than 426,000 connections across a service area of 39,000 km2 on
the North Island of the country. In South America, our electricity distribution franchise area is in the Boyacá and Santander provinces in Colombia, a region that is
approximately 150 km north of Bogotá.

Strategic Position

Like our electricity transmission systems, our regulated distribution operations are critical to the markets in which they are located.
In the UK, our regulated distribution system is currently a market leader in terms of new gas and electricity connection sales and in terms of
total installed connections among independent utilities. Our Australasian regulated distribution business is New Zealand's second

Brookfield Infrastructure     53

---



Table of Contents

largest
electricity and gas distribution company (by customer) and accounts for approximately 38% of the gas and 16% of the electricity connections throughout the country. Our South American
regulated distribution operations provide reliable power to 401,000 customers in the Boyacá region of Colombia.

Our
regulated distribution operations generate stable cash flow in the geographies in which we operate. Our UK regulated distribution operations have a diverse customer base throughout
England, Scotland and Wales, which underpins its cash flow. Our UK customers consist primarily of large energy retailers who serve residential and business users. In Australasia, electricity and gas
demand is largely comprised of residential users. Our customers are the retail energy companies that serve these residential users. Our South American regulated distribution operations provide power
to a customer base that is primarily residential with nearly 100% urban electrification and 92% rural electrification.

Regulatory Environment

Our UK regulated distribution operations compete with other connection providers in the UK to secure contracts to construct, own and
operate new natural gas and electricity connections. Once connections are established, we charge energy retailers rates that are established based on the tariff of the distribution utility with which
we are interconnected, which are set on the basis of a regulated asset base. The connection rate is typically adjusted annually and provides inflation protection as it escalates at inflation minus a
factor determined by the UK regulator. During the first 20 years after the commissioning of a connection, the gas connection rate is subject to a cap and floor that escalates by an inflation
factor. Electricity and gas connections revenue does not vary materially with volume transported over our system. In Australasia, regulated tariffs are recalculated every five years by the
New Zealand Commerce Commission. Under the current regulatory regime, electricity and gas tariffs are reset at the beginning of each period and escalate thereafter by an inflation factor. As
our revenue fluctuates with volume, we capture growth associated with both tariff increases and load growth on our network. Our South American distribution business earns an annuity return on the
replacement cost of its systems plus a charge to cover operating expenses. Our rates are determined every five years. Our current regulated return is in excess of 13%. Between rate reviews, revenues
are adjusted by an inflation factor. A majority of our South American regulated distribution business' revenues do not fluctuate with volumes.

Growth Opportunities

We believe that our regulated distribution operations will be able to grow organically in each of the regions in which we operate.
Opportunities for growth in the UK are driven by new gas and electricity connections. Growth is also aided as the electricity market continues to open up to independent connections providers and as
the housing market recovers. In Australasia, opportunities for growth are driven by increased energy demand and new connections primarily as a result of housing starts. In South America, our regulated
distribution operations will benefit from economic growth in the Boyacá region, which is home to emerging cement, coal and steel industries.

Transport

Overview

Our transport platform is comprised of open access systems that provide transportation for freight, bulk commodities and passengers,
for which we are paid an access fee. Profitability is based on the volume and price achieved for the provision of these services. This operating platform is comprised of businesses with regulated
tariff structures, such as our railroad and toll road operations, as well as unregulated businesses, such as our ports. Our transport platform is expected to benefit from increases in demand for
commodities as well as increases in the global movement of goods. Furthermore, the diversification within our transport platform mitigates the impact of fluctuations in demand from any

54     Brookfield Infrastructure

---



Table of Contents

particular
sector, commodity or customer. Approximately 70% of our transport platform's adjusted EBITDA is supported by long-term contracts or regulation.

Our
primary objective for our transport platform is the safe and efficient movement of people and goods over our networks. Additionally, we will seek to expand our networks in a capital
efficient manner to support additional capacity. If we do so, we should be able to charge an appropriate price for our services, and earn an attractive return on the incremental capital that we have
deployed. Our performance can be measured by our revenue growth, our adjusted EBITDA margin, as well as our AFFO yield.

Our
transport platform is comprised of the following:

Railroad



Toll Roads



Ports



Railroad Operations

Our railroad operations are comprised of a below rail access provider, which operates approximately 5,100 km of track and
related infrastructure in the southwest region of Western Australia ("WA") under a long-term lease with the government. Our railroad has approximately 37 years remaining on the
lease and is a crucial transport link in the region.

Our
Australian railroad's revenue is derived from access charges paid by rail operators or underlying customers. Stability of revenue is underpinned by rail transport being a small yet
essential component of the overall value of the commodities and freight transported and the long-term contractual framework that exists with a significant proportion of
our customers.

Strategic Position

Our railroad is the only freight rail network in the southwest region of WA providing access to the region's five ports for minerals,
grain and interstate intermodal traffic. The majority of our customers are leading commodity customers and our top 10 customers contribute approximately 95% of our track access revenue with
contract expiration dates ranging from 2013 to 2027. With the completion of our current expansion program, over 50% of revenue will be derived from long-term,
take-or-pay contracts.

Regulatory Environment

The Economic Regulatory Authority ("ERA") is the independent economic regulator for WA, responsible for the gas, electricity and rail
industries. For the rail industries, the ERA has an access regime with revenue ceilings and floors for each track segment, established using a methodology based on return on regulated
asset base.

However,
our revenue is outside this regulatory regime as our customers have requested greater service than the level required in the standard tariff. As a result, none of our contracted
revenue is exposed to reduction under this access regime. Our Australian railroad operates its track as open access infrastructure consistent with the rail access regime and its lease obligations to
the WA government.

Brookfield Infrastructure     55

---



Table of Contents

Growth Opportunities

Our Australian railroad is a critical component of the logistics chain in WA as, in many cases, it is the only mode of transportation
for freight that is economically viable. As a result, our railroad is well positioned to benefit from a number of expansions of existing mines and the development of new mines in WA, which will
require access to our rail network in order for commodities from these projects to access the export markets. In order to accommodate this increased tonnage, we embarked on an approximate
A$600 million expansion of our railroad. At December 31, 2012, we had completed the majority of this program with A$575 million invested. We expect that we will generate
approximately A$150 million of annual incremental adjusted EBITDA from this expansion program. In order to mitigate our capital at risk, we structured our rail access agreements to include
take-or-pay provisions and security for early termination to the extent possible.

Toll Road Operations

Our toll road operations are comprised of two urban toll roads and nine interurban toll roads in Chile and Brazil, respectively. Our
Chilean assets are 33 km of free flowing toll roads that form a key part of the ring road in the transportation network of Santiago, Chile. Our Brazilian assets total in excess of
3,200 km of inter-urban toll roads, primarily located in the state of Sao Paulo. Our concessions began operations between 1998 and 2008 and operate under long-term concessions with
staggered maturities. The average remaining term is 18 years.

Our
toll roads should generate stable, growing cash flows as a result of their strategic locations and the favourable economic trends in Chile and Brazil. Both markets have experienced
significant growth over the last 20 years, which has led to increased motorization rates and economic trade. These key factors have driven increases in traffic volumes. We expect these trends
to continue, resulting in significant future traffic growth on our toll roads.

Strategic Position

Our Chilean toll road constitutes a key artery in Santiago's urban road network as it connects the affluent business center of east
Santiago with the international airport, the Port of Valparaiso and the North of Chile. The primary users of the road are commuters, who utilize the road to get to and from work. Conversely, our
Brazilian roads are part of the inter-urban Brazilian toll road network, whose traffic is primarily heavy industrial users. Our roads are used in the transportation of goods in states of Brazil, which
represent approximately 65% of Brazilian GDP.

Our
toll roads are critical infrastructure for their economies, with few alternative routes. The ability to build new competing routes is limited by environmental restrictions,
difficulty to expropriate urban land and physical restrictions.

Regulatory Environment

Our Chilean assets are governed by the Ministerio de Obras Publicas ("MOP"). Chile has an established concession program which has been
in place for more than 20 years. To date, 66 concession agreements have been awarded, representing a total investment of approximately $14 billion within the country.
Specifically, the regime for urban toll roads allows operators to raise annual tariffs at a level equal to the consumer price index ("CPI") + 3.5% with additional increases in the form
of congestion premiums, which can be up to three times the base tariff during congested periods.

Our
Brazilian assets are governed by Agência Reguladora de Serviços Públicos Delegados de Transporte do Estado de São Paulo
("ARTESP") and Agência Nacional de Transportes Terrestres ("ANTT"), the Sao Paulo State and Federal regulators, respectively. The country has a widely developed toll road program, both
at the Federal and State level, which has been in place for

56     Brookfield Infrastructure

---



Table of Contents

approximately
15 years. As of 2012, there were 55 motorway concessions in Brazil totaling 15,500 km. The concession agreements provide operators with annual tariff increases
indexed to Índice Nacional de
Preços ao Consumidor Amplo ("IPCA"), the Brazilian inflation rate. Additional investments not considered in the initial concession agreements are compensated with real tariff increase
or an extension of the concession period.

Growth Opportunities

We believe that continued growth in these South American economies will trigger increases in traffic volumes. Coupled with tariff
increases in excess of inflation and congestion tariffs, this should drive significant future cash flow growth for our toll road businesses. In addition, both Brazil and Chile are seeking to increase
their respective paved road network by expanding existing roads and developing new roads. This should present opportunities for us to invest additional capital in these attractive markets, given the
scale of our existing network.

Port Operations

Our port operations are located primarily in the UK and Europe. Our UK port is one of the largest operators in the country by volume
and is a statutory harbor authority ("SHA") for the Port of Tees and Hartlepool in the north of the UK. Our UK port's status as the SHA gives it the right to charge vessel and cargo owners conservancy
tariffs for use of the River Tees. Our European port operation is comprised of a portfolio of concessions in key strategic locations throughout Europe that handle heavy dry bulk, specialty dry bulk,
liquid bulk, general cargo and containers. Our European port operation handles over 50 mtpa of cargo.

At
our UK port, our revenue is primarily generated from port handling services for bulk and container volumes. However, approximately 25% of our revenue is earned from conservancy
tariffs. Furthermore, we have a freehold land base of approximately 2,065 acres that is strategically located in close proximity to our port, which generates income from long-term
property leases that account for 6% of our revenue. At our European operations, we benefit from diversified operations with over 50 different types of products handled at 23 terminals
located throughout seven countries in Europe.

Strategic Position

Our port operations benefit from their strategic locations. In the UK, Teesport is a large, deep-water port located in a
well-developed industrial
area in Northern England. The SHA status as well as the established infrastructure, including rail and road access enjoyed by Teesport create barriers to entry for potential competitors. Our European
port operations are located in 21 port terminals across continental Europe plus two in China and consist of 485 hectares of long-term port concessions and over
31 kilometres of quay length. With substantial infrastructure that is often integrated with our customers' facilities, including cranes, berths, warehouses, inloading and outloading equipment,
our European port operations is protected by significant barriers to entry. Additionally, our operations provide significant logistical services for our customers that would be difficult for potential
competitors to replicate.

Our
UK port operations have a number of long-term contracts with established parties, including large multinational corporations. The majority of our revenues are derived
from customers with significant investment in industrial infrastructure at or within close proximity to Teesport. Our European port operations mainly serve industrial customers in the immediate
vicinity of our terminals under varied contract terms. Many key customers have been long-term customers continuously for between 10 and 30 years.

Brookfield Infrastructure     57

---



Table of Contents

Regulatory Environment

Our UK port is unregulated, but its status as the SHA for the River Tees provides the statutory right to collect conservancy tariffs
(toll-like dues) payable by ships using the river and the requirement to maintain navigability of the waterway. Our European port operations conduct business in an unregulated environment.

Growth Opportunities

Our UK port's flexible, multi-purpose capacity positions it to benefit from numerous growth initiatives including
the following:



In
Europe, our port operations are well positioned to capitalize on increasing demand for bulk and general commodities as well as cross-selling opportunities with existing customers.

Energy

Overview

Our energy platform is comprised of systems that provide energy transportation, distribution and storage services. Profitability is
based on the volume and price achieved for the provision of these services. This operating platform is comprised of businesses that are subject to light regulation, such as our natural gas
transmission business whose services are subject to price ceilings, and businesses that are essentially unregulated like our district energy business. Energy businesses typically have high barriers to
entry as a result of significant fixed costs combined with economies of scale or unique positions in their local markets. Our energy platform is expected to benefit from increases in demand for
energy. Although these businesses have greater sensitivity to market prices and volumes than our utilities platform, revenues are typically generated under contracts with varying durations and are
generally stable. Approximately 80% of our energy platform's adjusted EBITDA is supported by long-term contractual revenues.

Our
objectives for our energy platform are to provide safe and reliable service to our customers and to satisfy their growth requirements by increasing the utilization of our assets and
expanding our capacity in a capital efficient manner. If we do so, we will be able to charge an appropriate price for our services, and we will be able to earn an attractive return on the capital that
we have deployed, as well as the capital that we will invest to increase the capacity of our operations. Our performance can be measured by our revenue growth, our adjusted EBITDA margin and our
AFFO yield.

58     Brookfield Infrastructure

---



Table of Contents

Our
energy platform is comprised of the following:

Energy Transmission, Distribution and Storage



District Energy



Energy Transmission, Distribution and Storage Operations

Our energy transmission, distribution and storage operations are comprised of one of the largest natural gas transmission and pipeline
systems in the U.S., unregulated natural gas and liquid propane gas ("LPG") distribution operations in Australia and the UK, and significant natural gas storage capacity in Alberta and the continental
U.S. Our profitability in this segment is primarily determined by market competition rather than a regulated return on rate base.

The
majority of our revenues in these operations are generated under contracts with a demand charge and variable charge structure. The demand charge does not fluctuate with usage and is
designed to cover fixed costs and a return of and return on our capital, while the variable charge is designed to cover variable costs. Our energy distribution systems in Tasmania and the UK are the
only providers of natural gas and LPG distribution services on the islands on which they are located. Revenues from our distribution operations fluctuate with the volume of sales, which is
primarily driven by weather.

Strategic Position

Our North American natural gas transmission system is the largest provider of natural gas transmission and storage services to the
Chicago and Northern Indiana market and has significant interconnectivity with local distribution companies, industrial users and gas fired power plants. The system is also well connected to other
pipelines accessing additional downstream markets, which increases demand for our services. Our natural gas transmission operation provides transportation and storage to approximately 65% of the
Chicago and Northern Indiana natural gas market, and its storage facilities represent approximately 6% of total U.S. natural gas storage capacity. With its broad geographical footprint, our
natural gas pipeline system traverses many of the prolific
natural gas supply basins in the U.S. and also provides access to high growth shale basins including Eagleford, Granite Wash, Barnett and Haynesville, as well as liquefied natural gas supply from the
Gulf Coast.

Our
North American natural gas transmission operation has a diverse group of customers comprised primarily of investment grade local distribution companies, producers, marketers and
industrial users. Its top 10 customers account for approximately 65% of transportation and storage revenues.

In
the UK, our energy distribution business is the sole provider of gas distribution and retail services on the Channel Islands and the Isle of Man. The natural gas and LPG
distribution customer base on the Channel Islands and Isle of Man is comprised of a number of residential and commercial end users. Our main competition comes from alternate energy sources, such as
electricity, as we believe it is uneconomic for potential new entrants to establish competing businesses.

In
Australasia, we are the sole provider of gas distribution services in Tasmania. Capital expenditures of approximately A$200 million have been incurred to establish this
network, which

Brookfield Infrastructure     59

---



Table of Contents

creates
a significant barrier to new entrants due to the limited market opportunity for customers to support a competing business. Our Australasian operation receives revenue from natural gas
retailers who supply gas to approximately 10,800 residential, commercial and industrial customers connected to the network. As one of two natural gas retailers in Tasmania, we also earn a
margin on the difference between the sales price and the cost of procuring and transporting natural gas.

Our
Canadian natural gas storage asset represents approximately 5% of total storage capacity in the province of Alberta and is connected to the mainline natural gas transportation system
in central Alberta. The facility contracts with customers to provide natural gas storage services where the customers pay a fee to store their natural gas. The facility's customers are primarily large
international financial institutions.

Regulatory Environment

Our energy transmission and storage operations are subject to varied regulation that differs across our regions of operation. Our
U.S. operations are regulated by FERC under theNatural Gas Act of 1938("Gas Act"). FERC provides a regulated framework for shippers and
natural gas pipeline owners to reach commercial agreement with customers without regulatory intervention under a maximum rate regime, and there is no periodic rate case obligation. On
November 19, 2009, FERC notified our natural gas transmission operation that it had commenced a proceeding pursuant to section 5 of the Gas Act to review rates and determine whether they
were just and reasonable. As a result, our natural gas transmission operations negotiated a settlement with all interveners and FERC that resulted in a phased reduction of retained fuel amounts,
transportation and storage rates that was fully implemented in July of 2011.

Our
European energy distribution operations are not regulated, but are ultimately subject to government oversight, while our Australian energy distribution operation is not subject to
any economic regulation.

Our
Canadian natural gas storage asset is regulated by the Alberta Energy and Resources Conservation Board, which provides operational and environmental oversight. The facility is not
subject to any economic regulation.

Growth Opportunities

We believe that various growth opportunities exist within our energy transmission and distribution operations. In North America, our
profitability has been negatively impacted by a significant build-out of natural gas pipeline capacity as well as low natural gas prices. Due to our connectivity with emerging natural gas
shale basins and our strong market position in the Chicago area, we believe our cash flow will recover as demand for natural gas increases, particularly from growth in power generation.

In
Tasmania, the natural gas market is relatively new. Our network is currently accessible by approximately 43,000 households with only approximately 10,800 installed
connections. Commercial and industrial growth is linked to the Tasmanian economy and alternate energy options, including cogeneration opportunities.

District Energy

Our district energy operations consist of 522 megawatts thermal equivalent of heating capacity, produced from three
gas-fired steam plants and 72,000 tons of cooling capacity, sourced primarily from a deep lake water system. The district heating system services over 150 buildings in
downtown Toronto and the cooling network serves over 60 buildings. Heating and cooling services are delivered through a 42 km network of underground pipes spanning the downtown core
of Toronto.

60     Brookfield Infrastructure

---



Table of Contents

Strategic Position

Our district energy business provides essential heating and cooling services to approximately 150 customers in Toronto,
including commercial real estate operators, governments and hospitals. Over 90% of the system's revenue is generated from long-term capacity contracts, indexed to inflation. In many
instances, our system is the only source of heating and cooling services as customers removed their in-house equipment once connected to our system. Additionally, our network would be
extremely difficult to replicate with a greenfield development due to difficulty in obtaining permits to build the pipeline network in downtown Toronto and substantial capital cost.

Regulatory Environment

Our district energy business is regulated under theOntario Public Utilities Actand
theToronto District Heating Corporation Act. However, the business is not subject to rate regulation but receives the rights of a utility, allowing it
unrestricted access to its network of underground pipes in downtown Toronto.

Growth Opportunities

We have organic growth opportunities in our Canadian district energy business through system expansions. Our deep lake cooling system
provides chilled water by pumping cold water from the depths of Lake Ontario. As a result of significant historical investment this system has low variable costs. Our deep lake cooling system
currently has significant excess capacity during non-peak periods of demand, upon which we will seek to capitalize by connecting incremental interruptible load to the system at limited
capital cost. Furthermore, the district energy industry in North America is highly fragmented. We believe there are significant opportunities to grow our business through acquisitions.

Timber

Our timber platform consists of 343,000 net acres of high-quality freehold timberlands located in the coastal region
of British Columbia, Canada and the Pacific Northwest region of the U.S. Our timberlands are predominantly comprised of premium Douglas-fir, hemlock and cedar species suitable for
high-value structural and appearance applications in domestic and export markets. In addition, our land holdings include approximately 8,000 net acres of higher and better use
("HBU") lands, which may have greater value for real estate development or conservation.

The
following table presents our proportionate share of selected statistics of our timberlands as of December 31, 2012:

Timberlands (000's acres)


343HBU lands (000's acres)


8Long-run sustainable yield ("LRSY") (millions m3 per annum)


1.4Deferred harvest volume (millions m3)


2.1


Our
timberlands have an estimated deferred harvest volume of 2.1 million m3. This deferred harvest volume is in addition to harvest volumes that reflect annual
timber growth as determined through our LRSY. As markets continue to improve, we plan to ramp-up our harvest levels to monetize this deferred harvest volume.

One
of the key attributes of our timber platform is its operating flexibility, which allows us to optimize our harvest mix and harvest levels, as well as the markets into which we sell,
in order to maximize value. We plan our annual harvest to produce the products that offer the most attractive margins in the context of current market conditions and freight costs to access those
markets. When log prices are attractive, we increase harvest levels to monetize the value of our inventory. When log

Brookfield Infrastructure     61

---



Table of Contents

prices
are weak, we grow inventory on the stump to enhance value through capital appreciation. The objective for our timber platform is to maximize the total return on the capital that we invest in
this business. Our performance can be measured by our harvest levels, our adjusted EBITDA margin, as well as our AFFO yield.

Strategic Position

Due to their species mix and coastal access, our freehold timberlands have significant flexibility. In order to maximize profitability,
we tailor our harvest to match market opportunities, as well as to optimize between the domestic and export market, particularly Asia, to achieve the highest price for our product, net of
transportation costs. Our freehold timberlands have a broad base of domestic and international customers.

Regulatory Environment

Our freehold timberlands operate in a regulated economic environment. Our Canadian timberlands are subject to certain federal
government imposed log export restrictions that require that logs be declared surplus to domestic market needs in order to be eligible for export. These restrictions can constrain marketing and
selling activities aimed at maximizing selling prices and margins. We continue to work with both provincial and federal levels of government to mitigate the impact of these restrictions. Our
timberlands are operated in a manner consistent with theSustainable Forestry Initiative.

Growth Opportunities

We believe operating results will meaningfully improve following recovery in new home construction in the U.S. As a result of a
substantial surplus of merchantable inventory, we plan on increasing harvest level to 120% of LRSY and maintaining this level for approximately 10 years once we are able to sell such volumes at
attractive prices on a sustainable basis. Although it is difficult to predict the timing and magnitude, we believe that we will achieve significantly increased earnings due to improved pricing and
increased harvest levels.

Acquisition Strategy

Over the past few years, we have established operating platforms with scale in many aspects of the utility, transport, energy and
timber industries. As we look to grow our business, we will primarily target acquisitions that add on to existing operating platforms and extend our operating platforms into new geographies in which
we have a presence. As we grow our asset base, we will primarily target acquisitions in the following infrastructure sectors:



An
integral part of our acquisition strategy is to participate with institutional investors in Brookfield sponsored consortiums for single asset acquisitions and as a partner in or
alongside Brookfield sponsored partnerships that target acquisitions that suit our profile. We will focus on consortiums and partnerships where Brookfield has sufficient influence or control to deploy
our operations oriented approach. Brookfield has a strong track record of leading such transactions.

Brookfield
has agreed that it will not sponsor transactions that are suitable for us in the infrastructure sector unless we are given an opportunity to participate. See Item 7.B
"Related Party TransactionsRelationship Agreement". Since Brookfield has large, well-established operations in real

62     Brookfield Infrastructure

---



Table of Contents

estate
and renewable power that are separate from us, Brookfield will not be obligated to provide us with any opportunities in these sectors. In addition, since Brookfield has granted an affiliate the
right to act as the exclusive vehicle for Brookfield's timberland acquisitions in Eastern Canada and the Northeastern U.S., we will not be entitled to participate in timberland acquisitions in those
geographic regions.

About Brookfield

Brookfield is a global asset management company focused on property, power and infrastructure assets with over $175 billion of
assets under management, 24,000 operating employees and over 600 investment professionals worldwide. Brookfield's strategy is to combine best-in-class operating
platforms and transaction execution capabilities to acquire and invest in targeted assets and actively manage them in order to achieve superior returns on a long-term basis.

To
execute our vision of being a leading owner and operator of high quality infrastructure assets that produce an attractive risk-adjusted total return for our unitholders,
we will seek to leverage our relationship with Brookfield and in particular, its operations-oriented approach, which is comprised of the following
attributes:



Brookfield
has an approximate 30% interest in Brookfield Infrastructure. Our partnership, the Holding LP and the Holding Entities have each appointed Brookfield as their manager
to provide certain management, administrative and advisory services, for a fee, under the Master Services Agreement.

Employees

Our partnership does not employ any of the individuals who carry out the current management of our partnership. The personnel that
carry out these activities are employees of Brookfield, and their services are provided to our partnership or for our benefit under the Master Services Agreement. For a discussion of the individuals
from Brookfield's management team that are expected to be involved in our infrastructure business, see Item 6.A "Directors and Senior ManagementOur Management."

Intellectual Property

Our partnership, as licensee, has entered into a Licensing Agreement with Brookfield pursuant to which Brookfield has granted us a
non-exclusive, royalty-free license to use the name "Brookfield" and the Brookfield logo in connection with marketing activities. Other than under this limited license, we do
not have a legal right to the "Brookfield" name or the Brookfield logo. Brookfield may terminate the Licensing Agreement immediately upon termination of our Master Services Agreement and it may

Brookfield Infrastructure     63

---



Table of Contents

be
terminated in the circumstances described under Item 7.B "Related Party TransactionsLicensing Agreement."

4.C    ORGANIZATIONAL STRUCTURE

Organizational Charts

The chart below presents a summary of our ownership and organizational structure. Please note that on this chart all interests are 100%
unless otherwise indicated and "GP Interest" denotes a general partnership interest and "LP Interest" denotes a limited partnership interest. These charts should be read in conjunction with the
explanation of our ownership and organizational structure below and the information included under Item 4.B "Business Overview," Item 6.C "Board Practices" and Item 7.B "Related
Party Transactions."

LOGO

64     Brookfield Infrastructure

---



Table of Contents

Our Partnership

We own and operate high quality, long-life assets that generate stable cash flows, require relatively minimal maintenance
capital expenditures and, by virtue of barriers to entry and other characteristics, tend to appreciate in value over time.

Our
partnership is a Bermuda exempted limited partnership that was established on May 21, 2007. See Item 4.D "Property, Plant and Equipment" for information regarding our
partnership's head office.

Our
partnership's sole material asset is its limited partnership interest in the Holding LP. Our partnership anticipates that the only distributions that it will receive in
respect of our partnership's limited partnership interests in the Holding LP will consist of amounts that are intended to assist our partnership in making distributions to our unitholders in
accordance with our partnership's distribution policy and to allow our partnership to pay expenses as they become due. The declaration and payment of cash distributions by our partnership is at the
discretion of our Managing General Partner. Our partnership is not required to make such distributions and neither our partnership nor our Managing General Partner can assure you that our partnership
will make such distributions as intended.

The Manager and Brookfield

The Service Recipients have engaged the Manager, an affiliate of Brookfield, to provide them with management and administration
services pursuant to the Master Services Agreement.

Our Managing General Partner

Our Managing General Partner serves as our partnership's general partner and has sole authority for the management and control of our
partnership, which is exercised exclusively by its board of directors in Bermuda. Our partnership's only interest in the Holding LP consists of limited partnership interests in the
Holding LP, which by law do not entitle the holders thereof to participate in partnership decisions. Pursuant to a Voting Agreement, however, our partnership, through our Managing General
Partner, has a number of voting rights, including the right to direct all eligible votes in the election of the directors of the Infrastructure General Partner. See Item 7.B "Related Party
TransactionsVoting Agreements."

The Holding LP and Holding Entities

Our partnership indirectly holds its interests in operating entities through the Holding LP and the Holding Entities. The
Holding LP owns all of the common shares of the Holding Entities. Brookfield has provided an aggregate of $20 million of working capital to certain Holding Entities through a
subscription for preferred shares of such Holding Entities. These preferred shares are entitled to receive a cumulative preferential dividend equal to 6% of their redemption value as and when declared
by the board of directors of the applicable Holding Entity and are redeemable at the option of the Holding Entity, subject to certain limitations, at any time after the tenth anniversary of their
issuance. The preferred shares are not entitled to vote, except as required by law.

Infrastructure GP LP and Infrastructure General Partner

The Infrastructure GP LP serves as the general partner of Holding LP and has sole authority for the management and
control of the Holding LP. The general partner of Infrastructure GP LP is the Infrastructure General Partner, a corporation wholly owned by Brookfield Asset Management but
controlled by our partnership, through our Managing General Partner, pursuant to a Voting Agreement. See Item 7.B "Related Party TransactionsVoting Agreements." The
Infrastructure GP LP is entitled to receive incentive distributions from the Holding LP as a result of its ownership of the

Brookfield Infrastructure     65

---



Table of Contents

general
partnership interests of the Holding LP. See Item 7.B "Related Party TransactionsIncentive Distributions."

See
also the information contained in this annual report on Form 20-F under Item 3.D "Risk FactorsRisk Relating to Us and Our Partnership,"
Item 3.D "Risk FactorsRisk Relating to our Relationship with Brookfield," Item 6.A "Directors and Senior Management," Item 7.B "Related Party Transactions,"
Item 10.B "Memorandum and Articles of AssociationDescription of Our Units and Our Limited Partnership," Item 10.B "Memorandum and Articles of
AssociationDescription of the Holding LP's Limited Partnership Agreement" and Item 7.A "Major Shareholders."

Significant Subsidiaries

The
following table sets forth for each of Brookfield Infrastructure's significant subsidiaries, the jurisdiction of incorporation and the percentage ownership held by Brookfield
Infrastructure.

Ownership
Interest

Voting
InterestDefined Name

Name of entity

Jurisdiction of
Organization

2012
%

2012
%Holding LP

Brookfield Infrastructure L.P.

Bermuda


72
(1)

100Australian railroad operation

Brookfield Rail Holdings No. 1 Pty Ltd

Australia


100
(2)

100Regulated terminal operations

DBCT Management Pty Ltd

Australia


71
(2)

100UK regulated distribution operations

Brookfield Utilities UK Holdings Limited

United Kingdom


80
(2)(3)

80U.S. freehold timberlands

Longview Timber Holdings Corp

Delaware, U.S.


30
(2)

89North American gas transmission operation

Natural Gas Pipeline Company of
America LLC

Delaware, U.S.


26
(2)

26


(1)Ownership interest held directly by our partnership.(2)Ownership interest held indirectly by the Holding LP.(3)In November 2012, a wholly-owned subsidiary of Brookfield Infrastructure agreed with an institutional investor on the sale of a 20% interest in its
UK regulated distribution operation for £145 million, subject to attaining long-term financing consistent with an investment grade utility. Our partnership completed the
refinancing subsequent to year end and as a result closed the sale of the 20% interest in the UK regulated distribution operation.


4.D   PROPERTY, PLANT AND EQUIPMENT

Our partnership's principal office and its registered office is at 73 Front Street, Hamilton HM 12, Bermuda. Our partnership
does not directly own any real property.

See
also the information contained in this annual report on Form 20-F under Item 3.D "Risk FactorsRisks Relating to Our Operations and the
Infrastructure Industry", "Risks Relating to Us and Our PartnershipAll of our infrastructure operations may require substantial capital expenditures in the future,"
"Investment in infrastructure projects during the construction phase are likely to retain some residual risk," "All of our operating entities are subject to government policy
changes," "Risks Relating to Our Timber OperationsA variety of factors may limit or prevent harvesting by our timber operations," and Item 5 "Operating and Financial
Review and Prospects."

ITEM 4.E    UNRESOLVED STAFF COMMENTS

Not applicable.

66     Brookfield Infrastructure

---





Table of Contents

ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Performance Targets and Key Measures

We target a total annual return of 12% to 15% on the infrastructure assets that we own, measured over the long term. We intend to
generate this return from the in-place cash flow of our operations plus growth though investments in upgrades and expansions of our asset base and acquisitions. If we are successful in
growing our FFO per unit, we will be able to increase distributions to our unitholders. Additionally, the increase in our FFO per unit should result in capital appreciation. For our business as a
whole, a key performance measure is AFFO yield, defined as FFO less maintenance capital expenditures divided by Invested capital, which measures the sustainable return on capital that we have
deployed. We also measure the growth of FFO per unit, which we believe is a proxy for our ability to increase distributions. In addition, we have performance measures that track the key value drivers
for each of our operating platforms. See "Segmented Disclosures" for more detail.

Distribution Policy

Our objective is to pay a distribution that is sustainable on a long-term basis while retaining within our operations
sufficient liquidity to fund recurring growth capital expenditures, debt repayments and general corporate requirements. We currently believe that a payout of 60% to 70% of our FFO
is appropriate.

In
light of the current prospects for our business, the Board of Directors of our Managing General Partner has approved a 15% increase in our quarterly distribution to 43 cents
per unit. This increase reflects the forecasted contribution from our recently commissioned capital projects as well as the expected cash yield on acquisitions that we closed in the fourth quarter.
Since our spin-off five years ago, we have increased our quarterly distribution from 26.5 cents per unit to 43 cents, a compound annual growth rate in excess of 10%. We
continue to target a 3% to 7% annual distribution growth in light of the per unit FFO growth that we foresee in our operations.

Basis of Presentation

Our consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued
by the International Accounting Standards Board ("IASB"). Our consolidated financial statements include the accounts of Brookfield Infrastructure and the entities over which it has control. Brookfield
Infrastructure accounts for
investments over which it exercises significant influence, however does not control, using the equity method.

Our
partnership's equity interests include units held by our public unitholders and Redeemable Partnership Units held by Brookfield Asset Management. The units and the Redeemable
Partnership Units have the same economic attributes in all respects, except that the Redeemable Partnership Units provide Brookfield the right to request that its units be redeemed for cash
consideration. In the event that Brookfield exercises this right, our partnership has the right, at its sole discretion, to satisfy the redemption request with its units, rather than cash, on a
one-for-one basis. As a result, Brookfield, as holder of Redeemable Partnership Units, participates in earnings and distributions on a per unit basis equivalent to the per unit
participation of the units of our partnership. However, given the redeemable feature referenced above, we present the Redeemable Partnership Units as a component of non-controlling
interests.

When
we discuss the results of our operating platforms, we present Brookfield Infrastructure's proportionate share of results for operations accounted for using consolidation and the
equity method, in order to demonstrate the impact of key value drivers of each of these operating platforms on our

Brookfield Infrastructure     67

---



Table of Contents

partnership's
overall performance. As a result, segment revenues, costs attributable to revenues, other income, interest expense, depreciation and amortization, deferred taxes, fair value adjustments
and other items will differ from results presented in accordance with IFRS as they (1) include Brookfield Infrastructure's proportionate share of earnings from investments in associates
attributable to each of the above-noted items, and (2) exclude the share of earnings (loss) of consolidated investments not held by Brookfield Infrastructure apportioned to each of the
above-noted items. However, net income for each segment is consistent with results presented in accordance with IFRS. See "Reconciliation of Non-IFRS Financial Measures" on
page 95 for a reconciliation of segment results to our partnership's statement of operating results in accordance with IFRS.

REVIEW OF CONSOLIDATED FINANCIAL RESULTS

In this section we review our consolidated performance and financial position for the twelve-month periods ended December 31,
2012, 2011 and 2010. Further details on the key drivers of our operations and financial position are contained within the review of operating segments.

The
following table summarizes the financial results of Brookfield Infrastructure.

Year Ended
December 31MILLIONS

2012

2011

2010Summary Statements of Operating Results Key MetricsRevenues

$
2,004

$
1,636

$
634Direct operating expenses


(1,094
)

(899
)

(413
)General and administrative expenses


(95
)

(61
)

(35
)Interest expense


(407
)

(335
)

(144
)Earnings from investments in associates


1


76


52Fair value adjustments


200


356


12Net income attributable to partnership


106


187


430Net income per limited partnership unit


0.47


1.13


3.91


Revenues
totaled $2,004 million for 2012, representing a year over year increase of $368 million. Approximately $260 million of the increase is attributable to
investments completed during the year in our UK regulated distribution operations, Chilean toll roads, Colombian regulated distribution utility
and North American district energy business. A further $80 million of the increase was due to increased throughput at our railroad operations as a result of the expansion projects that were
commissioned during the year. The remaining increase is primarily attributable to investments in our asset base that began to generate revenues and inflation indexation of our existing revenues.
Compared to 2010, revenues for 2012 rose by $1,370 million. This increase is primarily attributable to the merger with Prime Infrastructure in December 2010, which increased revenues by
approximately $960 million, as well as the acquisitions and other factors discussed above which contributed to the increase from 2011.

Direct
operating expenses totaled $1,094 million for the year ended December 31, 2012, which was an increase of $195 million over to the same period in 2011,
primarily due to the operating costs associated with businesses acquired during the year. Compared to 2010, direct operating costs for 2012 increased by almost $700 million due to the operating
expenses associated with the businesses acquired in the Prime merger as well as the acquisition discussed above.

General
and administrative expenses totaled $95 million for the year ended December 31, 2012, which was a $34 million increase to 2011 levels. This line item
primarily consists of a management service fee that is paid to Brookfield, which is calculated on the basis of market capitalization and certain public company expenditures relating to the
on-going operations of our partnership. The year over year increase in general and administrative expenses primarily results from an increase in our

68     Brookfield Infrastructure

---



Table of Contents

market
capitalization as a result of equity issuances totaling approximately $1.2 billion completed in August 2012 and October 2011 and the increase in the trading price of our
units. Compared to 2010, our general and administrative expenses increased by $60 million in 2012, which was also primarily driven by an increase in the management service fee paid to
Brookfield as a result of growth in our partnership's market capitalization.

Interest
expense for 2012 totaled $407 million compared to $335 million for 2011 and $144 million for 2010. The $72 million increase compared to 2011 was due
primarily to the increased debt levels in our business in conjunction with acquisitions and capital expenditures in the year. Interest expense was $263 million higher compared to 2010,
attributable primarily to the increase in debt balances associated with the Prime merger, acquisitions completed during 2011 and 2012 and capital expenditures.

Earnings
from investments in associates were $1 million in 2012 compared to $76 million for 2011 and $52 million for 2010. Earnings from investments in associates
declined by $75 million compared to the prior year primarily as a result of a $50 million non-recurring charge recorded in the current year attributable to a refinancing
completed at our North American natural gas transmission business in addition to an impairment recorded at one of our European ports. Compared to 2010, earnings from investments in associates fell by
$51 million primarily due to the aforementioned
non-recurring, non-cash charges relating to our North American transmission and European port operations.

Fair
value adjustments relate to revaluation gains that were recorded at our timberland operations as a result of increases in annual appraisals due to a stronger outlook for log prices.
Fair value adjustments were $200 million in 2012 compared to $356 million in 2011 and $12 million in 2010.

The
following table summarizes the financial position of Brookfield Infrastructure.

As ofDecember 31, 2012

December 31, 2011MILLIONSSummary Statements of Financial Position Key MetricsCash and cash equivalents

$
263

$
153Other current assets


483


325Total assets


19,718


13,269Current liabilities


628


381Corporate borrowings


946


Non-recourse borrowings


6,993


4,885Other long-term liabilities


3,343


2,114Non-controlling interestin operating subsidiaries


2,784


1,683Non-controlling interestRedeemable Partnership Units held by Brookfield


1,365


1,133Limited Partners' capital


3,632


3,049General Partner capital


27


24


As
of December 31, 2012, we had $19,718 million in assets and $5,024 million in partnership capital compared to $13,269 million in assets and
$4,206 million in partnership capital as of December 31, 2011. The increase in assets, compared to December 31, 2011, was primarily due to investments completed during the
year including investments in our UK regulated distribution operations, Chilean toll roads, Colombian regulated distribution utility and North American district energy business, all of which we
consolidate. The increase in partnership capital, compared to December 31, 2011, is primarily attributable to our approximate $500 million equity issuance in August 2012 and
$200 million of valuation gains resulting from our annual revaluation process, primarily relating to our Australian railroad operation and our electricity transmission operations.

Brookfield Infrastructure     69

---



Table of Contents

Corporate
borrowings were $946 million at December 31, 2012, compared to $nil as of December 31, 2011. Approximately $546 million was drawn on our corporate
credit facility, which was used to finance a portion of the investments that we closed in the fourth quarter. Additionally, we issued approximately $400 million of corporate bonds in
October 2012, in order to retire debt at various intermediate holding corporations. Our Consolidated Statement of Financial Position as of December 31, 2012 reflected
$6,993 million of non-recourse borrowings compared to $4,885 million as of December 31, 2011. The increase in non-recourse borrowings was primarily
attributable to the investments completed during the year at our UK regulated distribution operations, Chilean toll roads, Colombian regulated distribution utility and North American district energy
business, which are consolidated. As of December 31, 2012, our consolidated net debt-to-capitalization ratio increased to 50%, compared with 45% as of
December 31, 2011, primarily as a result of the increase in the drawn amount on our corporate credit facility.

SEGMENTED DISCLOSURES

In this section, we review the results of our principal operating segments: utilities, transport, energy and timber. Each segment is
presented on a proportionate basis, taking into account Brookfield Infrastructure's ownership in operations accounted for using the consolidation and equity method, whereby our partnership either
controls or exercises significant influence over its investments. See "Discussion of Segment Reconciling Items" on page 101 for a reconciliation of segment results to our
partnership's statement of operating results in accordance with IFRS.

Utilities Operations

Results of Operations

The following table presents the roll-forward of our rate base and selected key metrics of our utilities operations:

Year Ended
December 31,MILLIONS

2012

2011Rate base, start of period

$
3,316

$
3,182Impact of mergers and acquisitions


1,126


42Capital expenditures commissioned


129


164Inflation and other indexation


218


120Regulatory depreciation


(107
)

(116
)Foreign exchange


108


(76
)Rate base, end of period

$
4,790

$
3,316


70     Brookfield Infrastructure

---



Table of Contents

Year ended December 31MILLIONS

2012

2011

2010Funds from operations (FFO)

$
308

$
275

$
144Maintenance capital


(25
)

(24
)

(13
)Adjusted funds from operations (AFFO)

$
283

$
251

$
131Return on rate base(1)(3)


12%


12%


11%AFFO yield(2)()3)


15%


16%


14%


(1)Return on rate base is adjusted EBITDA divided by time weighted average rate base.(2)AFFO yield is AFFO divided by time weighted average invested capital.(3)Return on rate base and AFFO yield excludes impact of connections revenues at our European regulated distribution operation.


For the year ended December 31, 2012, our utilities platform generated adjusted EBITDA and FFO of $469 million and
$308 million, respectively, compared to $418 million and $275 million, respectively, in the prior year and $227 million and $144 million, respectively, in 2010. The
increase in FFO versus 2011 was primarily due to the recently completed merger in our UK regulated distribution business, the increase in ownership of our Chilean electricity transmission system, and
the acquisition of an interest in a Colombian regulated distribution company. Excluding new investments, the cash flows of our business steadily increased with inflation indexation and contributions
from organic growth investments. The increase in FFO versus 2010 was primarily attributable to the Prime merger and strong results from our UK regulated distribution business. For the year, our
maintenance capital expenditures were $25 million, which is consistent with our average annual sustaining level. After deducting maintenance capital expenditures, our AFFO yield was 15% on an
average invested capital base of $1,626 million, excluding the impact of connection revenues at our UK regulated distribution business, which is largely consistent with the comparative periods.

The
following table presents our utilities platform's proportionate share of financial results:

Year ended December 31MILLIONS

2012

2011

2010Revenue

$
774

$
644

$
331Costs attributed to revenues


(305
)

(226
)

(104
)Adjusted EBITDA


469


418


227Interest expense


(167
)

(149
)

(81
)Other income (expenses)


6


6


(2
)Funds from operations (FFO)


308


275


144Depreciation and amortization


(123
)

(91
)

(60
)Deferred taxes and other items


(74
)

(21
)

(39
)Net income

$
111

$
163

$
45


Brookfield Infrastructure     71

---



Table of Contents

The
following table presents proportionate adjusted EBITDA and FFO for each operation in this platform:

Year Ended
December 31Adjusted EBITDA

FFOMILLIONS

2012

2011

2010

2012

2011

2010Regulated Terminal

$
180

$
182

$
97

$
98

$
102

$
59Electricity Transmission


101


85


78


77


65


56Regulated Distribution


188


151


52


133


108


29Total

$
469

$
418

$
227

$
308

$
275

$
144


For
the year ended December 31, 2012, our regulated terminal reported adjusted EBITDA and FFO of $180 million and $98 million, respectively, versus
$182 million and $102 million, respectively, in the prior period and $97 million and $59 million, respectively, in 2010. Adjusted EBITDA and FFO were lower compared to the
year ended December 31, 2011 as the contribution from our increased rate base was more than offset by non-recurring revenues in 2011 associated with additions to our rate base which
were approved in that year. The increase in results in 2012 relative to 2010 was primarily attributable to a full year contribution from the increased ownership in the business, following the Prime
merger in December 2010. Adjusting for the change in ownership due to the Prime merger, our regulated terminal's results increased by over 10% versus 2010 primarily as a result of its
regulatory rate increase, effective January 2011, as well as investments in our rate base.

For
the year ended December 31, 2012, our electricity transmission operations' adjusted EBITDA and FFO were $101 million and $77 million, respectively, versus
$85 million and $65 million, respectively, in the prior period and $78 million and $56 million, respectively, in 2010. Adjusted EBITDA and FFO increased over the prior
periods primarily due to positive revenue indexation and benefits from investments in our rate base, as well as the acquisition of an additional interest in our Chilean electricity transmission
system, which was effective as of the fourth quarter of 2012.

For
the year ended December 31, 2012, our regulated distribution business earned adjusted EBITDA and FFO of $188 million and $133 million, respectively, versus
$151 million and $108 million, respectively, in the prior period and $52 million and $29 million, respectively, in 2010. The increase from the prior year arises primarily
from investments in our rate base and contributions from the acquisitions of our Colombian regulated distribution company in January 2012 and a UK regulated distribution company in
November 2012. Results increased compared to the year ended December 31, 2010 as a result of increased ownership in a number of our businesses due to the Prime merger in
December 2010, as well as the aforementioned acquisitions and additions to our rate base. Excluding the impact of the acquisitions and the Prime merger, results improved versus the year ended
December 31, 2010 due to investments in our rate base and inflation indexation of our revenues, as well as an increase in connections revenue from our UK operations.

Non-cash
expenses are primarily comprised of depreciation and amortization, non-cash inflation indexation on our Chilean peso denominated debt and unrealized
mark-to-market losses on derivative contracts which are a part of our interest rate hedging program. Depreciation and amortization increased to $123 million for the year
ended December 31, 2012 versus $91 million and $60 million in the years ended December 31, 2011 and December 31, 2010, respectively, primarily due to additions to
our regulated asset base from investments in our business and the aforementioned acquisitions. Deferred taxes and other items increased to $74 million for the year ended December 31,
2012 compared to $21 million in the prior year, as the prior
year results included a $45 million revaluation gain relating to our Chilean transmission operations. Deferred taxes and other items increased by

72     Brookfield Infrastructure

---



Table of Contents

$35 million
over the year ended December 31, 2010, due primarily to the impact of the Prime merger in December 2010.

Business Development and Outlook

Within our utilities platform, we have numerous opportunities to upgrade and expand our rate base. While we are required to make
certain capital expenditures to maintain safety and reliability, we will direct discretionary capital to those businesses that provide the highest risk-adjusted returns. In our utilities
platform, we expect to earn a return on rate base on incremental investments, which is consistent with our current return on rate base.

Our
capital backlog is comprised of investments that will increase our rate base, for which we have not yet invested the capital. It is defined as projects that have been awarded to us,
as well as projects that have been filed with the regulator with anticipated expenditures within the next two years.

The
following table presents our proportionate share of our capital backlog.

Year Ended December 31MILLIONS

2012

2011Capital project backlog, start of period

$
284

$
310Impact of mergers and acquisitions


56


Additional capital projects mandates


164


159Less capital expenditures


(187
)

(188
)Foreign exchange and other


9


3Capital backlog, end of period

$
326

$
284Construction work in progress


126


68Total capital to be commissioned into rate base

$
452

$
352


We
finished the period with a capital backlog of $326 million, an increase of $42 million compared to December 31, 2011. The increase is mainly attributable to the
acquisitions of an additional interest in our Chilean transmission system and a UK regulated distributions business, as well as capital project mandates won, primarily at our UK and Australasian
regulated distribution companies and our Chilean transmission system. As at December 31, 2012, the largest contributors to our capital backlog were our UK regulated distribution company, our
Texas transmission system, our regulated terminal operation and our Chilean transmission system at $186 million, $42 million, $41 million and $30 million, respectively. In
addition, our construction work in progress was $126 million at quarter end, a $58 million increase from December 31, 2011, primarily due to capital expenditures at our Texas
transmission system. Construction work in progress represents capital that we have invested that will begin generating cash flow upon commencement of service when these investments will be added to
our rate base. In total, we finished the quarter with $452 million of capital to be commissioned into our rate base.

In
January, alongside institutional investors, we invested approximately $54 million to purchase a 17% interest in a Colombian distribution utility. In early November, we
completed the acquisition and recapitalization of a UK distribution business, investing $525 million. This business was merged with our existing UK distribution company which increased our
installed connections to over one million. Our initial investment in the UK distribution sector was made in connection with the acquisition of Prime Infrastructure in 2009. On closing, the invested
capital in the combined business totaled approximately $650 million, however we believe that the value of this franchise is significantly greater due to its prospects for growth and its market
position. We successfully recognized some of this value in November with the sale of a 20% interest in the combined entity to an institutional investor for

Brookfield Infrastructure     73

---



Table of Contents

proceeds
of approximately $235 million. During the fourth quarter we also signed an agreement to acquire an additional 10% interest in our Chilean transmission system from Brookfield Asset
Management for $235 million, effective October 2012.

Transport Operations

Results of Operations

The following table presents the key metrics of our transport platform:

Year ended December 31MILLIONS

2012

2011

2010Growth capital expenditures

$
361

$
335

$
56Adjusted EBITDA margin(1)


37%


28%


25%Funds from operations (FFO)

$
168

$
98

$
52Maintenance capital


(45
)

(36
)

(21
)Adjusted funds from operations (AFFO)

$
123

$
62

$
31AFFO yield(2)


10%


7%


8%


(1)Adjusted EBITDA margin is adjusted EBITDA divided by revenues.(2)AFFO yield is AFFO divided by time weighted average invested capital.


Our transport platform earned adjusted EBITDA and FFO of $275 million and $168 million, respectively, for the year ended
December 31, 2012 compared with $180 million and $98 million, respectively, in the prior year and $100 million and $52 million, respectively, in 2010. The year over
year increase in FFO was primarily driven by a 110% increase in our Australian railroad's FFO as a result of the commissioning of our expansion program, as well as a favorable grain harvest. Our
results also benefited from the South American toll roads that we acquired in the fourth quarter. The increase in FFO compared to the year ended December 31, 2010 year is primarily
attributable to the Prime merger and the contribution from the aforementioned railroad expansion program and the toll road acquisitions. Overall, the AFFO yield for our transport platform was 10% for
the year, on an average invested capital base of $1,252 million. This yield, while higher than the prior years, is below the level that we expect from this segment over the long term. In 2013,
the AFFO yield should increase with a further ramp-up in cash flows from the expansion program at our railroad and a full year of results in our toll road business.

The
following table presents our transport platform's proportionate share of financial results:

Year ended
December 31MILLIONS

2012

2011

2010Revenues

$
738

$
640

$
402Cost attributed to revenues


(463
)

(460
)

(302
)Adjusted EBITDA


275


180


100Interest expense


(106
)

(82
)

(46
)Other (expenses) income


(1
)




(2
)Funds from operations (FFO)


168


98


52Depreciation and amortization


(118
)

(58
)

(50
)Deferred taxes and other items


(17
)

(16
)

34Net income

$
33

$
24

$
36


74     Brookfield Infrastructure

---



Table of Contents

The
following table presents proportionate adjusted EBITDA and FFO for each business in this operating platform:

Year Ended
December 31Adjusted EBITDA

FFOMILLIONS

2012

2011

2010

2012

2011

2010Railroad

$
169

$
98

$
42

$
118

$
56

$
26Ports


76


82


58


38


42


26Toll Roads


30








12





Total

$
275

$
180

$
100

$
168

$
98

$
52


For
the year ended December 31, 2012, our railroad reported adjusted EBITDA and FFO of $169 million and $118 million, respectively, versus $98 million and
$56 million, respectively, in the prior year and $42 million and $26 million, respectively, in 2010. The increase from the year ended December 31, 2011 was driven by
revenue from our expansion program, which was commissioned during the year, as well as an above average grain harvest. The increase from the year ended December 31, 2010 was attributable to the
aforementioned expansion program as well as the Prime merger. Adjusting for the change in ownership due to the Prime merger, current year results increased by approximately 90% versus the year ended
December 31, 2010 as a result of the expansion program.

For
the year ended December 31, 2012, our port operations reported adjusted EBITDA and FFO of $76 million and $38 million, respectively, versus $82 million
and $42 million, respectively, in the prior year and $58 million and $26 million, respectively, in 2010. Current period results were lower than the prior year due to reduced
throughput as a result of the economic slowdown in Europe, partially offset by a decrease in financing costs as we invested capital to delever our continental European business. The increase in
adjusted EBITDA and FFO relative to 2010 was primarily attributable to stronger results from our UK port due to the restart of the Teeside Cast Products plant.

Our
toll roads contributed adjusted EBITDA and FFO of $30 million and $12 million, respectively, for the year ended December 31, 2012 compared to adjusted EBITDA and
FFO of $nil and $nil, respectively for the years ended December 31, 2011 and 2010 as we made our first investment in the sector in late December 2011. The toll roads are performing
consistent with expectations to date.

Non-cash
expenses are primarily comprised of depreciation, amortization and deferred taxes. Depreciation and amortization increased to $118 million for the year
compared to $58 million in 2011 and $50 million in 2010, primarily due to additional depreciation on our recently commissioned Australian railroad expansion, as well as incremental
depreciation and amortization on acquisitions completed over the past two years.

Business Development and Outlook

In our transport platform, we strive to increase the amount of goods that we can transport or handle in a capital efficient manner. Due
to the economies of scale or strategic locations of our networks, we are often able to earn very attractive returns when we invested capital to expand our facilities to serve our customers' growth
requirements.

Within
our transport platform, we completed the acquisition of an additional interest in our Chilean toll road for $170 million in October, increasing our ownership to 51%. In
December, we acquired an interest in an entity that owns a 60% controlling stake in the largest toll road operator in Brazil for $310 million, in partnership with Abertis Infraestructuras and
institutional investors. These roads benefit from long-term concession agreements in proven regulatory regimes, with tariffs that are

Brookfield Infrastructure     75

---



Table of Contents

indexed
to inflation. In addition, we believe that there will be significant opportunities to deploy additional capital to expand our networks to accommodate increased traffic due to
GDP growth.

Energy Operations

Results of Operations

The following table presents the key metrics of our energy platform:

Year Ended
December 31MILLIONS

2012

2011

2010Growth capital expenditures

$
17

$
21

$
5Adjusted EBITDA margin(1)


46%


46%


47%Funds from operations (FFO)

$
76

$
69

$
39Maintenance capital


(37
)

(29
)

(12
)Adjusted funds from operations (AFFO)

$
39

$
40

$
27AFFO yield(2)


6%


8%


11%


(1)Adjusted EBITDA margin is adjusted EBITDA divided by revenues.(2)AFFO yield is AFFO divided by time weighted average invested capital.


Our energy platform earned adjusted EBITDA and FFO of $144 million and $76 million, respectively, for the year ended
December 31, 2012 compared with $143 million and $69 million, respectively, in the prior year and $69 million and $39 million, respectively, in 2010. The year over
year increase in FFO was largely due to investments made in our natural gas transmission and distribution operations, in order to pay down holding company debt as well as acquisitions of interests in
natural gas storage and district energy operations during 2012. The increase in FFO compared to the year ended December 31, 2010 is primarily attributable to the aforementioned investments as
well as the Prime merger. Overall, the AFFO yield for our energy platform was 6% for the year, on an average invested capital base of $669 million, a decline from the prior year primarily due
to above average maintenance capital expenditures. AFFO yield was reduced from the year ended December 31, 2010 primarily due to above average maintenance capital expenditures for the segment,
in addition to a lower contribution from our North American gas transmission business as a result of weaker market conditions and the phase in of tariff reductions pursuant to our FERC rate
settlement.

The
following table presents our energy platform's proportionate share of financial results:

Year Ended
December 31MILLIONS

2012

2011

2010Revenues

$
316

$
311

$
146Cost attributed to revenues


(172
)

(168
)

(77
)Adjusted EBITDA


144


143


69Interest expense


(70
)

(74
)

(33
)Other (expenses) income


2





3Funds from operations (FFO)


76


69


39Depreciation and amortization


(59
)

(54
)

(22
)Deferred taxes and other items


(17
)

8


(6
)Net income

$


$
23

$
11


76     Brookfield Infrastructure

---



Table of Contents

The
following table presents proportionate adjusted EBITDA and FFO for each business in this operating platform:

Year Ended
December 31Adjusted EBITDA

FFOMILLIONS

2012

2011

2010

2012

2011

2010Energy Transmission, Distribution & Storage

$
142

$
143

$
69

$
75

$
69

$
39District Energy


2








1





Total

$
144

$
143

$
69

$
76

$
69

$
39


For
the year ended December 31, 2012, our energy transmission, distribution and storage operations reported adjusted EBITDA and FFO of $142 million and $75 million,
respectively, versus $143 million and $69 million, respectively, in the prior year and $69 million and $39 million, respectively, in 2010. The year over year increase in
FFO was largely due to an investment of equity to retire holding company debt and an acquisition of an interest in a natural gas storage operation during the year. In our North American natural gas
transmission business, lower financing costs as a result of the $200 million debt retirement offset softer operating results due to excess capacity and depressed natural gas prices. Results
exceeded those for the year ended December 31, 2010 largely due to a full year contribution following our merger with Prime in December 2010. However, adjusting for the change in
ownership due to the Prime merger, results trailed the year ended December 31, 2010 primarily due to the implementation of the FERC rate settlement and softening market conditions that
negatively impacted sales of retained natural gas, market sensitive transportation capacity and line pack services.

Our
district energy business contributed adjusted EBITDA and FFO of $2 million and $1 million, respectively, for the year ended December 31, 2012 compared to
adjusted EBITDA and FFO of $nil and $nil, respectively for the years ended December 31, 2011 and 2010 as we made our first investment in the sector in the fourth quarter of 2012. Overall, our
district energy operation is performing consistent with our expectations to date.

Non-cash
expenses are primarily comprised of depreciation, amortization and deferred taxes. Depreciation and amortization increased to $59 million for the year
compared to $54 million in 2011 and $22 million in 2010, due primarily to incremental depreciation on acquisitions over the past two years.

Business Development and Outlook

In our energy platform, we strive to provide safe and reliable service to our customers and to satisfy their growth requirements by
increasing the utilization of our assets and expanding our capacity in a capital efficient manner.

A
particular focus is the North American midstream sector as the collapse in natural gas prices has dramatically clouded the outlook for a number of gathering and processing,
transportation and storage businesses. In such an environment, our strategy is to take advantage of any dislocation that results and opportunistically acquire high quality assets at a discount to
replacement cost. In April, alongside institutional investors, we acquired a 22% interest in a natural gas storage system in northeastern Alberta.

At
the end of October, we invested approximately $75 million for a 25% interest in a district energy system that serves commercial customers in downtown Toronto, which we acquired
in partnership with institutional investors. The growth opportunities of this business are particularly

Brookfield Infrastructure     77

---



Table of Contents

exciting
in light of the large pipeline of prospective new customers that can be connected to its deep lake cooling system, as well as opportunities to expand our footprint into other geographies.

Timber

The following table presents our proportionate share of selected statistics of our timberlands:

As ofDecember 31, 2012

December 31, 2011Timberlands (000's acres)


343


419HBU lands (000's acres)


8


12Long-run sustainable yield (LRSY) (millions m3 per annum)


1.3


1.6Deferred harvest volume (millions m3)


2.1


2.9


Our
timberlands have an estimated deferred harvest volume of 2.1 million m3. This deferred harvest volume is in addition to harvest volumes that reflect annual
timber growth as determined through our long-run sustainable yield ("LRSY").

One
of the key attributes of our timber platform is its operating flexibility which allows us to optimize our harvest mix and harvest levels as well as the markets to which we sell in
order to maximize value. We plan our annual harvest to produce the products that offer the most attractive margins in the context of current market conditions and freight costs to access those
markets. When log prices are attractive, we increase harvest levels to monetize the value of our inventory. When log prices are weak, we grow inventory on the stump to enhance value through capital
appreciation. Our objective for our timber platform is to maximize the total return on the capital that we invest in this business. Our performance can be measured by our harvest levels, adjusted
EBITDA margin and AFFO yield.

Results of Operations

The following table summarizes our proportionate share of harvest, sales and sale price realizations by species for our timber
operations:

Year Ended December 31, 2012Harvest
(000's m3)

Sales
(000's m3)

Revenue/m3

Revenue
($ millions)Douglas-fir


863


929

$
90

$
84Whitewood


355


420


81


34Other species


322


340


71


241,540


1,689

$
84

$
142HBU and other sales











1Total










$
143




Year ended December 31, 2011Harvest
(000's m3)

Sales
(000's m3)

Revenue/m3

Revenue
($ millions)Douglas-fir


855


933

$
98

$
91Whitewood


394


438


89


39Other species


318


333


72


241,567


1,704

$
90

$
154HBU and other sales











1Total










$
155


78     Brookfield Infrastructure

---



Table of Contents

Year ended December 31, 2010Harvest
(000's m3)

Sales
(000's m3)

Revenue/m3

Revenue
($ millions)Douglas-fir


604


632

$
85

$
54Whitewood


341


373


72


27Other species


280


292


72


211,225


1,297

$
79

$
102HBU and other sales











4Total










$
106


For
the twelve months ended December 31, 2012, average indicative prices for Douglas-fir and whitewood in the U.S. market were approximately 4% and 6% lower,
respectively, than the prior year due to weaker demand from China and South Korea and reduced tension in the domestic market. However, average indicative prices for Douglas-fir and
whitewood in the U.S. market were approximately 17% and 16% higher, respectively, than the year ended December 31, 2010 due to stronger log demand as a result of a partial recovery in
the U.S. housing market and increased demand from China and South Korea as compared with 2010. In 2012, the Japanese Douglas-fir market weakened somewhat with average indicative
prices falling 2% from the previous year, although prices were 6% higher than the year ended December 31, 2010. For the period, whitewood sold to China and Korea offered a 20% premium over the
U.S. market, compared to premiums of 29% in 2011 and 27% in 2010, respectively. Although average indicative prices for Douglas-fir sold to China fell 10% during 2012, this market
still offered a 5% premium over the U.S. market during the period, compared to premiums of 11% and 21% in the years ended December 31, 2011 and 2010, respectively.

In
2012, our harvest level was 2% below 2011 as our operations, particularly in the coastal region of British Columbia, were restricted by an unusually long period of warm dry weather,
which caused us to reduce our harvest to decrease the risk of forest fires. However, harvest volumes were 26% above 2010 levels, when we reduced harvest levels in response to soft pricing conditions.
With relative fundamentals improving in the domestic market, the proportion of our timber sold to off-shore markets declined to 41% from 47% and 46% for the years ended December 31,
2011 and 2010, respectively.

The
following table presents select key metrics of our timber platform:

Year Ended December 31MILLIONS UNLESS OTHERWISE NOTED

2012

2011

2010Harvest (000's m3)


1,540


1,567


1,225Harvest as % of LRSY


97%


99%


77%Adjusted EBITDA margin(1)


34%


39%


34%Funds from operation (FFO)

$
22

$
33

$
11Maintenance capital


(2
)

(3
)

(3
)Adjusted funds from operations (AFFO)

$
20

$
30

$
8AFFO yield(2)


4%


6%


2%


(1)Adjusted EBITDA divided by revenue, excluding HBU and other revenue.(2)AFFO divided by time weighted average invested capital.


Brookfield Infrastructure     79

---



Table of Contents

The following table presents our timber platform's proportionate share of financial results.

Year Ended December 31MILLIONS

2012

2011

2010Revenue

$
143

$
155

$
106Cost attributed to revenues


(95
)

(95
)

(70
)Adjusted EBITDA


48


60


36Other income


2


1


3Interest expense


(28
)

(28
)

(28
)Funds from operations (FFO)


22


33


11Fair value adjustments


63


93


10Deferred taxes and other items


(39
)

(35
)

3Net income

$
46

$
91

$
24


For
the year ended December 31, 2012, our timber operations' adjusted EBITDA and FFO totaled $48 million and $22 million, respectively, compared with
$60 million and $33 million, respectively, in 2011 and $36 million and $11 million, respectively, in 2010. Compared with the prior year, revenues declined by 8% as our
average realized price and sales volume decreased by 7% and 1%, respectively. Revenues increased by 35% compared to the year ended December 31, 2010 as our average realized price and sales
volume rose by 6% and 30%, respectively. Per unit harvest and delivery costs increased by 1% and 18% versus the years ended December 31, 2011 and 2010 respectively, due primarily to higher fuel
costs and increased road-building activity, as we prepare to increase harvest levels in response to the housing market recovery. As a result of those cost increases, our adjusted EBITDA
margin declined to 34% versus 39% in the prior year and 34% in the year ended December 31, 2010.

For
the year ended December 31, 2012, our share of revenue from HBU land and other sales was $1 million, compared to $1 million and $4 million in 2011 and
2010, respectively.

For
the year ended December 31, 2012, net income was $46 million versus $91 million in 2011 and $24 million in 2010. In addition to the factors discussed
above, in 2012, we recorded a positive fair value adjustment of $63 million compared to adjustments of $93 million and $10 million in 2011 and 2010, respectively. These increases
resulted from an improving short-to-medium term outlook for log prices, as well as a reduction in equity discount rates for timberlands.

Business Development

In December, we completed the sale of a 12.5% interest in our Canadian timberlands to an institutional investor for $85 million,
which is equivalent to its IFRS book value.

The
U.S. housing market recovery gained momentum throughout the year with seasonally adjusted annualized U.S. housing starts reaching 954,000 in
December 2012, 37% above year-ago levels, while permits increased 29% year-over-year. For the year, housing starts climbed 28% to 780,000 from
609,000 in 2011, and inventories of new homes available for sale remained near 50-year record lows. While the consensus forecast is somewhat of a moving target and risks to the
forecasts are expected to be on the upside, it appears that a reasonable collection of estimates is now projecting 925,000 housing starts for 2013, 1.15 million in 2014 and
1.42 million in 2015, all levels that are expected to result in very strong markets for timber aimed at
solid wood products markets. Once pricing demonstrates sustained strength, we will elevate our harvest levels to approximately 20% over our LRSY.

In
export markets, Japanese log prices are expected to strengthen from 2012 levels as housing starts increase modestly and sawmill production remains stable. Demand in China and Korea is
expected to be somewhat stronger as inventory levels in China have normalized and demand is

80     Brookfield Infrastructure

---



Table of Contents

improving.
We expect market prices in the coming year to be comparable to 2011 as off-shore demand remains strong and demand in the domestic market makes modest gains.

Over
the medium-to-long term, we expect that our timber operations will be positively impacted by a number of fundamental factors affecting the supply and demand
of timber in the markets that we serve:



CORPORATE AND OTHER

The following table presents the components of Corporate and Other, on a proportionate basis, for the twelve months ended
December 31, 2012, 2011 and 2010:

Year Ended December 31MILLIONS

2012

2011

2010General and administrative costs

$
(9
)
$
(9
)
$
(18
)Base management fee


(86
)

(53
)

(28
)Other income


5


4


8Financing costs


(22
)

(25
)

(11
)Funds from operations (FFO)


(112
)

(83
)

(49
)Revaluation gain








396Deferred taxes and other


28


(31
)

(33
)Net Income

$
(84
)
$
(114
)
$
314


For
the year ended December 31, 2012, general and administrative costs were consistent with the prior year but were lower than 2010, which included our proportionate share of
Prime's general and administrative expenses. Following the Prime merger, many of these services are provided under the
Master Services Agreement, and as a result, a substantial portion of these costs have been absorbed by Brookfield. We currently anticipate that our corporate and administrative costs, excluding the
base management fee, will be in the range of $9 million to $11 million per year.

Pursuant
to our Master Services Agreement, we pay an annual base management fee to Brookfield equal to 1.25% of our market value, plus recourse debt, net of cash. For the twelve months
ending December 31, 2012, this fee increased versus the years ended December 31, 2011 and 2010 due to an increase in our market capitalization as a result of equity issuances in
October 2011 and August 2012, totaling approximately $1.2 billion, and the higher trading price of our units.

Financing
costs include interest expense and standby fees on our committed credit facility less interest earned on cash balances. Financing costs for the current year were lower than the
prior year, primarily due to lower average corporate borrowings as well as reduced rates on our corporate credit facility following receipt of our BBB+ credit rating from Standard & Poor's,
partially offset by interest on our recently issued C$400 million corporate bonds. Financing costs increased over the year ended December 31, 2010 primarily due to the merger with Prime
and increased average corporate debt

Brookfield Infrastructure     81

---



Table of Contents

balance
as we drew on our corporate credit facility to finance a portion of investments made during the year.

SELECTED STATEMENT OF OPERATING RESULTS AND FINANCIAL POSITION INFORMATION

The following table summarizes the financial results of Brookfield Infrastructure.

Year Ended
December 31MILLIONS, EXCEPT PER UNIT INFORMATION

2012

2011

2010Key MetricsFunds from operations (FFO)

$
462

$
392

$
197Per unit FFO(1)

$
2.41

$
2.41

$
1.79Per unit net income

$
0.55

$
1.15

$
3.91Per unit distribution

$
1.50

$
1.32

$
1.10Payout ratio(2)


62%


55%


60%Growth of per unit FFO(2)





35%


(26)%
(3)Adjusted funds from operations (AFFO)(4)

$
353

$
300

$
148AFFO yield(5)


10%


10%


8%


(1)Average units outstanding during the year of 191.5 million (2011: 162.5 million, 2010: 109.9 million).(2)Payout ratio is defined as distributions to unitholders divided by FFO.(3)Growth of per unit FFO is 74% adjusting for the gain on sale of TBE in 2009.(4)AFFO is defined as FFO less maintenance capital expenditures.(5)AFFO yield is defined as AFFO divided by time weighted average invested capital.


For the year ended December 31, 2012, we recorded FFO of $462 million, or $2.41 per unit, versus $392 million, or $2.41 per
unit, in the prior year and $197 million, or $1.79 per unit, in 2010. This 18% and 135% increase in our FFO versus 2011 and 2010, respectively, was driven by expansion projects that we
successfully commissioned and new investments. Our FFO per unit in 2012 was consistent with 2011 as we did not realize the full benefit of investments made with proceeds from $1.2 billion of
equity issuances in our 2012 results. On an average invested capital base of $3,847 million, we generated an AFFO yield of 10% versus 10% and 8% in 2011 and 2010, respectively. Our distribution
of $1.50 per unit implied a payout of 62% of our FFO for the year, which is within our targeted range of 60% to 70%.

82     Brookfield Infrastructure

---



Table of Contents

The
following tables present selected statement of operating results and financial position information by operating platform on a proportionate basis:

Statement of Operating Results

Year Ended
December 31MILLIONS

2012

2011

2010Net income by segmentUtilities

$
111

$
163

$
45Transport


33


24


36Energy





23


11Timber


46


91


24Corporate and other


(84
)

(114
)

314Net income

$
106

$
187

$
430Adjusted EBITDA by segmentUtilities

$
469

$
418

$
227Transport


275


180


100Energy


144


143


69Timber


48


60


36Corporate and other


(95
)

(61
)

(42
)Adjusted EBITDA

$
841

$
740

$
390FFO by segmentUtilities

$
308

$
275

$
144Transport


168


98


52Energy


76


69


39Timber


22


33


11Corporate and other


(112
)

(83
)

(49
)Funds from operations (FFO)

$
462

$
392

$
197


Brookfield Infrastructure     83

---



Table of Contents

Statement of Financial Position

As ofMILLIONS

December 31,
2012

December 31,
2011Total assets by segmentUtilities

$
5,525

$
3,787Transport


4,412


2,736Energy


1,849


1,613Timber


1,017


1,112Corporate and other


(122
)

55Total assets

$
12,681

$
9,303Net debt by segmentUtilities

$
3,307

$
2,463Transport


2,077


1,117Energy


911


1,018Timber


415


464Corporate and other


947


35Total net debt

$
7,657

$
5,097Partnership capital by segmentUtilities

$
2,218

$
1,324Transport


2,335


1,619Energy


938


595Timber


602


648Corporate and other


(1,069
)

20Total partnership capital

$
5,024

$
4,206




The nature of our asset base and the quality of our associated cash flows enable us to maintain a stable and low cost capitalization.
We attempt to maintain sufficient financial liquidity at all times so that we are able to participate in attractive opportunities as they arise, better withstand sudden adverse changes in economic
circumstances and maintain a relatively high distribution of our FFO to our unitholders. Our principal sources of liquidity are cash flows from our operations,
undrawn credit facilities and access to public and private capital markets. We also structure the ownership of our assets to enhance our ability to monetize them to provide additional liquidity, if
necessary. Certain subsidiaries may be subject to limitations on their ability to declare and pay dividends. Any limitations existing at December 31, 2012 and 2011 were insignificant and would
not adversely impact our ability to meet cash obligations.

84     Brookfield Infrastructure

---



Table of Contents

Our
group-wide liquidity was approximately $760 million at December 31, 2012, down from $1.5 billion at December 31, 2011, and was comprised of
the following:

MILLIONS

As of
December 31,
2012

As of
December 31,
2011Corporate cash and cash equivalents

$
7

$
79Committed corporate credit facility


855


700Draws on corporate credit facility


(546
)

Commitments under corporate credit facility


(92
)

(51
)Proportionate cash retained in businesses


203


127Proportionate availability under subsidiary credit facilities


336


691Group wide liquidity

$
763

$
1,546


At
December 31, 2012, we believe that the sources of group-wide liquidity are sufficient for Brookfield Infrastructure's present requirements.

On
November 30, 2012, we increased the size of our corporate credit facility to $855 million from $700 million, which was subsequently further increased to
$900 million in January 2013. The facility is available for investments and acquisitions, as well as general corporate purposes. At December 31, 2012, the outstanding balance
under this facility was $546 million, as we drew on the facility to bridge finance a portion of our acquisitions that closed in the fourth quarter.

We
finance our assets principally at the operating company level with debt which generally has long-term maturities, few restrictive covenants and no recourse to either
Brookfield Infrastructure or our other operations. At the operating company level, we endeavor to maintain prudent levels of debt. We also strive to ladder our principal repayments over a number of
years. Further, we believe that the value of the majority of our assets will vary in part with changes in long-term interest rates due to the nature of their revenue streams. Accordingly,
we endeavor to finance these assets with long-term fixed rate borrowings. Where financing cannot be obtained to match the interest rate exposure of an asset, derivative contracts may be
entered into with credit worthy counterparties. The use of derivatives is governed by prescribed policies. We evaluate and monitor the credit risk of derivative financial instruments, and we seek to
minimize credit risk through collateral and other mitigation techniques. On

Brookfield Infrastructure     85

---



Table of Contents

a
proportionate basis as of December 31, 2012, scheduled principal repayments for our borrowings over the next five years are as follows:

MILLIONS

Average Term
(years)

2013

2014

2015

2016

2017

Beyond

TotalRecourse borrowingsCorporate borrowings


5

$


$


$


$
546

$
408

$


$
954Total recourse borrowings


5











546


408





954Non-recourse borrowings(1),(2)Utilities


8


49


936


146


417


52


1,773


3,373Transport


5


158


934


247


77


40


722


2,178Energy


8


24


16


2


87


512


297


938Timber


5


136





117








171


424Total non-recourse borrowings(1),(2)


6


367


1,886


512


581


604


2,963


6,913Total borrowings(3)


6

$
367

$
1,886

$
512

$
1,127

$
1,012

$
2,963

$
7,867Cash retained in businessesUtilities






















$
66Transport























101Energy























27Timber























9Corporate























7Total cash retained






















$
210Net debtUtilities






















$
3,307Transport























2,077Energy























911Timber























415Corporate























947Total net debt






















$
7,657


(1)Represents non-recourse debt to Brookfield Infrastructure as the holders have recourse only to the underlying operations.(2)Non-recourse project debt from our social infrastructure operations has been excluded from the above tables as this is long-term
debt which is fully amortized during the term of our concession contracts.(3)As of December 31, 2012, approximately 47% has been issued as floating rate debt. Brookfield Infrastructure and its subsidiaries have entered into
interest rate swaps whereby the floating rate debt has been converted to fixed rate debt, effectively reducing floating rate debt maturities to approximately 15% of our total borrowings.


The proportionate average cash interest rate for our utilities, transport, energy and timber platforms was 6%, 7%, 7% and 6%, respectively (2011:
6%, 8%, 7% and 6%; 2010: 6%, 7%, 7% and 6%)

86     Brookfield Infrastructure

---



Table of Contents

Our
debt has an average term of six years. On a proportionate consolidated basis, our net debt-to-capitalization ratio as of December 31, 2012 was 60%.
Proportionate debt can be reconciled to consolidated debt as follows:

As of December 31MILLIONS

2012

2011Consolidated debt

$
7,939

$
4,885Less: borrowings attributable to non-controlling interest


(2,705
)

(1,812
)Premium on debt and cross currency swaps


144


148Add proportionate share of borrowings of investments in associates:Utilities


1,038


703Transport


666


431Energy


785


948Proportionate debt

$
7,867

$
5,303


FOREIGN CURRENCY HEDGING STRATEGY

To the extent that we believe it is economic to do so, our strategy is to hedge a portion of our equity investment and/or cash flows
exposed to foreign currencies. The following key principles form the basis of our foreign currency hedging strategy:



The
following table presents the hedged position of our equity investment in foreign currencies as of December 31, 2012:

Net Investment HedgesMILLIONS

USD

AUD

GBP

NZD

CLP

BRL

CAD

EUR

COPEquity InvestmentUS$

$
838

$
2,010

$
669

$
384

$
340

$
335

$
231

$
147

$
70FX contractsUS$


710


(359
)

(244
)

(29
)










(78
)

Net unhedgedUS$


1,548


1,651


425


355


340


335


231


69


70Net equity investmentnatural currency


838


1,933


412


464


162,832


687


229


112


123,160FX contractsnatural currency


710


(344
)

(150
)

(35
)










(59
)

% of equity investment hedged


n/a


18%


36%


8%











53%


Unhedged position in natural currency


n/a


1,589


262


429


162,832


687


229


53


123,160


At December 31, 2012, we had hedges in place equal to approximately 17% of our net equity investment in foreign currencies. In the twelve
months ended December 31, 2012, we recorded losses of $9 million in comprehensive income related to these contracts, which were more than offset by foreign currency translation gains of
$86 million recorded during the year.

We
have also implemented a FFO hedging program by entering into foreign exchange contracts to lock in approximately 70% of our forecasted FFO denominated in AUD, GBP, EUR and NZD for the
next four quarters. As these forward contracts settle, we intend to roll over the contracts so that we will continue to have approximately 70% of the next twelve months of forecasted FFO hedged. We
will periodically re-evaluate this strategy.



Brookfield Infrastructure     87

---



Table of Contents

For
the year ended December 31, 2012, 8%, 47% and 23% of our FFO was generated in USD, AUD and GBP, respectively, with the remaining 22% generated in other currencies. As a result
of our FFO hedging program, 60%, 9% and 17% of our FFO was effectively generated in USD, AUD and GBP, respectively, with the remaining 14% generated in other currencies. For the period, a 10% change
in the average exchange rate of our foreign currencies would have resulted in approximately an $18 million, or 4%, change in FFO. Without the implementation of our FFO hedging program, the
sensitivity to the same movement in the average exchange rate would have resulted in an approximate $43 million, or 9%, variance in FFO.

OTHER MARKET RISKS

Certain of our subsidiaries and associates are subject to inflation risk. Most significantly, our South American electricity
transmission operations and a portion of our toll road operations in Chile are subject to inflation risk as these debt portfolios are denominated in Unidad de Fomento, ("UF") which is an inflation
indexed Chilean peso monetary unit that is set daily, on the basis of the prior month's inflation rate. However, we believe this is offset by the nature of our revenues which are in large part indexed
to Chilean inflation.

Commodity Risk

Our principal commodity risks are to the price of timber and natural gas, and to a lesser extent metals, primarily aluminum. All of our
Canadian and U.S. timber operations' log sales are at short-term market prices. As there is no liquid forward contract to hedge our position, we are exposed to fluctuations in
log prices.

Certain
of our subsidiaries have indirect exposure to natural gas as increased demand for natural gas generally impacts the utilization of our energy transmission, distribution and
storage infrastructure. Furthermore, our North American gas transmission operations have direct natural gas exposure as it collects more natural gas from customers than it consumes and resells the
balance; however, this exposure has been significantly reduced as a result of the FERC settlement agreed to in July 2010. See Item 4.B "Business OverviewCurrent
OperationsEnergyEnergy Transmission, Distribution and Storage Operations" for more information.

Revenues
from our Chilean electricity transmission operation are adjusted by a multi-factor inflation index that is designed to approximate changes in prices of the underlying components
of the replacement cost of our transmission system. See Item 4.B "Business Overview". Due to the construction of the system, metals, such as aluminum, are a material percentage of replacement
cost. Thus, changes in the price of these metals will impact our revenues.

We
do not currently use any strategies or instruments to manage the commodity risks in our operations.

CAPITAL REINVESTMENT

Our financing plan is to fund our recurring growth capital expenditures with cash flow generated by our operations, as well as debt
financing that is sized to maintain our credit profile. To fund large scale development projects and acquisitions, we will evaluate a variety of capital sources including proceeds from selling
non-core assets, equity and debt financing. We will seek to raise additional equity if we believe that we can earn returns on these investments in excess of the cost of the incremental
equity.

88     Brookfield Infrastructure

---



Table of Contents

The
following table highlights the sources and uses of cash for the years ended December 31:

Year Ended December 31MILLIONS

2012

2011

2010Funds from operations (FFO)

$
462

$
392

$
197Less maintenance capital


(109
)

(92
)

(49
)Funds available for distribution (AFFO)


353


300


148Distributions paid


(304
)

(217
)

(117
)Funds available for reinvestment

$
49

$
83

$
31Growth capital expenditures


(565
)

(544
)

(130
)Asset level debt funding of growth capital expenditures


437


149


New investments, net of disposals


(1,012
)

(140
)

Debt paydowns


(374
)

(93
)

Equity issuance, net


497


657


Corporate debt issuance, net


408





Draws (repayments) on corporate credit facility


546


(18
)

18Changes in working capital and other


18


(86
)

40Change in proportionate cash retained in business


4


8


(41
)Opening, proportionate cash retained in business


206


198


239Closing, proportionate cash retained in business

$
210

$
206

$
198


The
following table presents the components of growth and maintenance capital expenditures by operating platform:

Year Ended December 31MILLIONS

2012

2011

2010Growth capital expenditures by segmentUtilities

$
187

$
188

$
69Transport


361


335


56Energy


17


21


5Timber








$
565

$
544

$
130




Current Estimated
Sustaining Capex

Actual CapexMaintenance capital expenditures by segment

Low

High

2012

2011

2010Utilities

$
30

$
35

$
25

$
24

$
13Transport


65


70


45


36


21Energy


25


30


37


29


12Timber


2


5


2


3


3$
122

$
140

$
109

$
92

$
49


Brookfield Infrastructure     89

---





Table of Contents

PARTNERSHIP CAPITAL

As of December 31, 2012, our partnership owned limited partnership units that represented approximately 71.5% of the
Holding LP's total outstanding units, and Brookfield owned Redeemable Partnership Units that represented approximately 28% of the Holding LP's total outstanding units. The Redeemable
Partnership Units, at the request of the holder, require the Holding LP to redeem all or a portion of the holder's units for cash in an amount equal to the market value of our units multiplied
by the number of units to be redeemed. This right is subject to our partnership's right of first refusal which entitles it, at its sole discretion, to elect to acquire any unit so presented to the
Holding LP in exchange for one of the partnership's units (subject to certain customary adjustments). Both the units issued by Brookfield Infrastructure and the Redeemable Partnership Units
issued by the Holding LP have the same economic attributes in all respects, except for the redemption right described above. The Redeemable Partnership Units participate in earnings and
distributions on a per unit basis equivalent to the per unit participation of the units of Brookfield Infrastructure. The partnership reflects the Redeemable Partnership Units issued to Brookfield by
the Holding LP as a separate component of non-controlling interest, within consolidated equity, as Brookfield Infrastructure can, at its sole discretion elect to satisfy a
redemption request by Brookfield of the Redeemable Partnership Units by issuing an equal number of units. Based on the number of units
outstanding as of December 31, 2012, Brookfield's aggregate limited partnership interest in our partnership would be approximately 29.1%, if Brookfield fully exercised its redemption right and
our partnership fully exercised its right of first refusal.

Brookfield
also owns general partnership units that represent approximately 0.5% of the Holding LP's total outstanding units. The general partner is entitled to incentive
distribution rights which are based on the amount by which quarterly distributions on the limited partnership units exceed specified target levels. To the extent distributions on limited partnership
units exceed $0.305 per quarter, the incentive distribution rights are entitled to 15% of incremental distributions above this threshold. To the extent that distributions on limited partnership units
exceed $0.33 per quarter, the incentive distribution rights are entitled to 25% of incremental distributions above this threshold. During the year ended December 31, 2012, the partnership paid
incentive distributions of $16 million (2011: $4 million, 2010: $nil).

As
of December 31, 2012 the total number of our general partnership, redeemable partnership and limited partnership units outstanding was comprised as follows:

2012

2011Redeemable Partnership Units, held by Brookfield


56,137,081


51,698,081General partnership units


1,066,929


1,066,929Limited partnership units


143,567,955


132,352,111Total


200,771,965


185,117,121


During
2012 and 2011, our outstanding issued Redeemable Partnership Units changed as follows:

2012

2011MILLIONS, EXCEPT UNIT INFORMATION

Book Value

Units

Book Value

UnitsOutstanding at beginning of year

$
942


51,698,081

$
745


43,396,642Units issued


142


4,439,000


197


8,301,439Outstanding at end of year

$
1,084


56,137,081

$
942


51,698,081


90     Brookfield Infrastructure

---



Table of Contents

During
2012 and 2011, our outstanding issued limited partnership units changed as follows:

2012

2011MILLIONS, EXCEPT UNIT INFORMATION

Book Value

Units

Book Value

UnitsOutstanding at beginning of year

$
2,597


132,352,111

$
2,136


112,964,451Units issued


358


11,215,844


461


19,387,660Outstanding at end of year

$
2,955


143,567,955

$
2,597


132,352,111


During
2012 and 2011, our outstanding issued general partnership units changed as follows:

2012

2011MILLIONS, EXCEPT UNIT INFORMATION

Book Value

Units

Book Value

UnitsOutstanding at beginning of year

$
19


1,066,929

$
19


1,066,929Outstanding at end of year

$
19


1,066,929

$
19


1,066,929


In
August 2012, our partnership issued 11,132,000 units at $33.25 per unit in the U.S. and Canada. In addition, the Holding LP issued 4,439,000 Redeemable
Partnership Units at $31.92. In total, $497 million of proceeds was raised through this issuance.

In
October 2011, our partnership issued 19,370,025 units at $24.75 per unit in the U.S. and Canada. In addition, the Holding LP issued 8,301,439 Redeemable
Partnership Units at $23.76. In total, $657 million of proceeds was raised through this issuance.

Our
partnership had 143,567,955 units outstanding at December 31, 2012, which are publicly traded on the NYSE and TSX. Our partnership owns 143,567,955 of the
Holding LP's limited partnership units representing an economic interest of 71.5%. The Holding LP had 56,137,081 Redeemable Partnership Units outstanding at December 31,
2012, which are owned by Brookfield.

In
June 2010, we implemented a distribution reinvestment plan ("Plan"), that allows eligible holders of our partnership to purchase additional units by reinvesting their cash
distributions. Under the Plan, units are acquired at a price per unit calculated by reference to the volume weighted average of the trading price for our units on the NYSE for the five trading days
immediately preceding the relevant distribution date. During the period, our partnership issued 83,844 units (2011: 17,635 units and 2010: 44 units) under the Plan.

In
February 2012, we authorized a unit repurchase program ("2012 Program"). Repurchases were authorized for the period beginning on February 13, 2012 and ending on
February 12, 2013 or earlier if repurchases were completed prior to such date. In the year ended December 31, 2012, no units were repurchased and cancelled under this program. We expect
to authorize a unit repurchase program in 2013. See Item 16E. "Purchases of Equity Securities by the Issuer and Affiliated Purchaser" for more information.

Brookfield Infrastructure     91

---



Table of Contents

CONTRACTUAL OBLIGATIONS

The table below outlines Brookfield Infrastructure's contractual obligations as at December 31, 2012:

Payments due by periodMILLIONS

Total

Less than
1 year

1-2 years

2-5 years

5+ yearsAccounts payable and other liabilities

$
734

$
558

$
101

$


$
75Interest-bearing liabilities


8,082


635


2,892


1,424


3,131Finance lease liabilities


48


7


9


6


26Other Long-Term Liabilities


235





235





$
9,099

$
1,200

$
3,237

$
1,430

$
3,232


In
addition, pursuant to the Master Services Agreement, on a quarterly basis the Holding LP pays a base management fee to the Manager equal to 0.3125% (1.25% annually) of the
market value, plus non-recourse debt of our partnership. Based on the market value of our partnership as of December 31, 2012, this fee is estimated to be approximately $100 million
per year.

OFF-BALANCE SHEET ARRANGEMENTS

Brookfield Infrastructure does not have any off-balance sheet arrangements.

RELATED PARTY TRANSACTIONS

We have entered into a number of related party transactions with Brookfield. See Item 7.B"Related Party
Transactions."

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with IFRS requires management to select appropriate accounting policies and to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. In particular, critical accounting policies and estimates utilized in the normal course of preparing our partnership's financial
statements require the determination of the fair value of property, plant and equipment; the fair value of standing timber; the fair value of investment property; the impairment of goodwill and
intangibles with indefinite lives; the fair values in business combinations; and the estimation of useful lives of assets of property, plant and equipment.

In
making estimates, management relies on external information and observable conditions where possible, supplemented by internal analysis as required. These estimates have been applied
in a manner consistent with that in the prior year, and there are no known trends, commitments, events or uncertainties that we believe will materially affect the methodology or assumptions utilized
in this report. The estimates are impacted by, among other things, movements in interest rates, foreign exchange and other factors, some of which are highly uncertain. The interrelated nature of these
factors prevents us from quantifying the overall impact of these movements on our partnership's financial statements in a meaningful way. These sources of estimation uncertainty relate in varying
degrees to virtually all asset and liability account balances.

92     Brookfield Infrastructure

---



Table of Contents

The
following is a discussion of our critical accounting policies:

Common control transactions

IFRS 3R does not include specific measurement guidance for transfers of businesses or subsidiaries between entities under common
control. Accordingly, Brookfield Infrastructure has developed a policy to account for such transactions taking into consideration other guidance in the IFRS framework and pronouncements of other
standard-setting bodies. Brookfield Infrastructure's policy is to record assets and liabilities recognized as a result of transactions between entities under common control at the carrying value on
the transferor's financial statements, and to have the Statements of Financial Position, Statements of Operating Results, Statements of Comprehensive Income and Statements of Cash Flows reflect the
results of combining entities for all periods presented for which the entities were under the transferor's common control, irrespective of when the combination takes place.

Property, plant and equipment

Brookfield Infrastructure uses the revaluation method of accounting for all classes of property, plant and equipment. Certain assets
which are under development for future use as property, plant and equipment are also accounted for using the revaluation method. Property, plant and equipment is initially measured at cost and
subsequently carried at its revalued amount, being the fair value at the date of the revaluation less any subsequent accumulated depreciation and any
accumulated impairment losses. Revaluations are made on an annual basis to ensure that the carrying amount does not differ significantly from fair value. Where the carrying amount of an asset is
increased as a result of a revaluation, the increase is recognized in other comprehensive income and accumulated in equity within the revaluation surplus reserve, unless the increase reverses a
previously recognized impairment recorded through net income, in which case that portion of the increase is recognized in net income. Where the carrying amount of an asset is decreased, the decrease
is recognized in other comprehensive income to the extent of any balance existing in revaluation surplus in respect of the asset, with the remainder of the decrease recognized in net income.

Standing timber

Standing timber is measured at fair value after deducting estimated selling costs and recorded as timber on the Statements of Financial
Position. Estimated selling costs include commissions, levies, delivery costs, transfer taxes and duties. The fair value of standing timber is calculated as the present value of anticipated future
cash flows for standing timber before tax. The calculation is based on existing, sustainable felling plans and assessments regarding growth, timber prices and felling and silviculture costs. The
discount rate is based upon a normal timberland owner's weighted average cost of capital before tax for the geographic location of the standing timber. Changes in fair value are recorded in net income
during the period of change. Brookfield Infrastructure determines fair value using external valuations on an annual basis.

Intangible Assets

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair
value at the acquisition date. Brookfield Infrastructure's intangible assets are comprised primarily of conservancy rights, service concession arrangements and customer order backlogs.

Concession
arrangements were acquired as part of the acquisition of the Australian regulated terminal operation and Chilean toll roads and were recognized at their fair value. The
intangible asset at the Australian regulated terminal operation relates to the right to control and use a specific coal port terminal for a contractual length of time and is amortized over the life of
the contractual arrangement (91 years remaining). The intangible assets at the Chilean toll roads relate to the right to

Brookfield Infrastructure     93

---



Table of Contents

control
and operate a road and charge users a specified tariff for a contractual length of time and is amortized over the life of the contractual arrangement (20 years remaining).

The
conservancy right was acquired as part of the acquisition of the U.K. Port operation and was recorded at its fair value. As a right in perpetuity issued by the Statutory
Harbour Authority in the U.K., the conservancy right is classified as having an indefinite life, and is subject to an annual impairment review.

The
customer order backlog was acquired as part of the acquisition of the U.K. regulated distribution operation and was recorded at its fair value. The customer order backlog
represents the present value of future earnings derived from the build out of contracted connections as at the acquisition date at the U.K. regulated distribution operation. The customer order
backlog is amortized over its estimated useful life of 50 years.

Derivative Financial Instruments

Brookfield Infrastructure selectively utilizes derivative financial instruments primarily to manage financial risks, including interest
rate and foreign exchange risks. Derivative financial instruments are recorded at fair value. Hedge accounting is applied when the derivative is designated as a hedge of a specific exposure and there
is assurance that it will continue to be effective as a hedge based on an expectation of offsetting cash flows or fair value. Hedge accounting is discontinued prospectively when the derivative no
longer qualifies as a hedge or the hedging relationship is terminated. Once discontinued, the cumulative change in fair value of a derivative that was previously recorded in other comprehensive income
by the application of hedge accounting is recognized in net income over the remaining term of the original hedging relationship as amounts related to the hedged item are recognized in net income. The
assets or liabilities relating to unrealized mark-to-market gains and losses on derivative financial instruments are recorded in Financial Assets and Financial Liabilities,
respectively.

Items Classified as Hedges

Realized and unrealized gains and losses on foreign exchange contracts, designated as hedges of currency risks relating to a net
investment in a subsidiary with a functional
currency other than the U.S. dollar are included in equity and are included in net income in the period in which the subsidiary is disposed of or to the extent partially disposed and control is
not retained. Derivative financial instruments that are designated as hedges to offset corresponding changes in the fair value of assets and liabilities and cash flows are measured at estimated fair
value with changes in fair value recorded in net income or as a component of equity as applicable.

Unrealized
gains and losses on interest rate contracts designated as hedges of future variable interest payments are included in equity as a cash flow hedge when the interest rate risk
relates to an anticipated variable interest payment. The periodic exchanges of payments on interest rate swap contracts designated as hedges of debt are recorded on an accrual basis as an adjustment
to interest expense. The periodic exchanges of payments on interest rate contracts designated as hedges of future interest payments are amortized into net income over the term of the corresponding
interest payments.

Items Not Classified as Hedges

Derivative financial instruments that are not designated as hedges are carried at estimated fair value, and gains and losses arising
from changes in fair value are recognized in net income in the period the changes occur. Realized and unrealized gains on other derivatives not designated as hedges are recorded in
other expenses.

94     Brookfield Infrastructure

---



Table of Contents

RECONCILIATION OF NON-IFRS FINANCIAL MEASURES

FFO

To measure performance, among other measures, we focus on FFO. We define FFO as net income excluding the impact of depreciation and
amortization, deferred taxes and other items as shown in the reconciliation below. FFO is a measure of operating performance that is not calculated in accordance with, and does not have any
standardized meaning prescribed by IFRS. FFO is therefore unlikely to be comparable to similar measures presented by other issuers. FFO has limitations as an
analytical tool:



Because
of these limitations, FFO should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, analysis of our
results as reported under IFRS. However, FFO is a key measure that we use to evaluate the performance of our operations and forms the basis for our partnership's distribution policy.

When
viewed with our IFRS results, we believe that FFO provides a more complete understanding of factors and trends affecting our underlying operations. FFO allows us to evaluate our
businesses on the basis of cash return on net capital deployed by removing the effect of non-cash and
other items. We add back depreciation and amortization to remove the implication that our assets decline in value over time since we believe that the value of most of our assets will typically
increase over time provided we make all necessary maintenance expenditures.

We
add back deferred income taxes because we do not believe this item reflects the present value of the actual cash tax obligations we will be required to pay, particularly if our
operations are held for a long period of time. We add back fair value adjustments and mark-to-market adjustments recorded in net income as these are non-cash in
nature and indicate a point in time approximation of value on long-term items.

Brookfield Infrastructure     95

---



Table of Contents

The
following table reconciles FFO to the most directly comparable IFRS measure, which is net income. We urge you to review the IFRS financial measures within the MD&A and to not rely on
any single financial measure to evaluate our partnership.

Year Ended
December 31,MILLIONS

2012

2011

2010Net income attributable to partnership

$
106

$
187

$
430Add back or deduct the following:Depreciation and amortization


300


203


132Deferred taxes


(37
)

73


11Fair value adjustments


(63
)

(144
)

(10
)Revaluation gain


(8
)




(396
)Other expenses


164


73


30FFO

$
462

$
392

$
197Maintenance capital


(109
)

(92
)

(49
)AFFO

$
353

$
300

$
148


The
difference between net income and FFO is primarily attributable to depreciation and amortization expenses, fair value adjustments and revaluation gains.

AFFO

In addition, we focus on adjusted funds from operations or AFFO, which is defined as FFO less maintenance capital expenditures.
Management uses AFFO as a measure of long-term sustainable cash flow.

Adjusted EBITDA

We also use adjusted EBITDA as a measure of performance. We define adjusted EBITDA as FFO excluding the impact of interest expense,
cash taxes and other income (expenses).

AFFO Yield

In order to assess our performance as stewards of capital, we track our AFFO yield, which is a proxy for our returns on invested
capital.

Invested
capital is meant to track the initial investment that we make in a business plus all cash flow that we re-invest in the business. We define invested capital as
partnership capital adding back the following items; non-cash statement of operating results items net of maintenance capital expenditures as well as other comprehensive income, as shown
in the reconciliation below. Invested capital is a measure that is not calculated in accordance with, and does not have any
standardized meaning prescribed by IFRS. Invested capital is therefore unlikely to be comparable to similar measures presented by other issuers. Invested capital has limitations as a tool to measure
returns on capital invested as follows:



Because
of these limitations of invested capital and limitations of FFO previously discussed, AFFO yield should not be considered as the sole measure of our performance and should not be
considered

96     Brookfield Infrastructure

---



Table of Contents

in
isolation from, or as a substitute for, analysis of our results as reported under IFRS. However, invested capital is a key measure that we use to evaluate the performance of our operations.

When
viewed in conjunction with our IFRS results, we believe that AFFO yield provides a more complete understanding of our investment in each of our businesses. AFFO yield allows us to
evaluate our businesses on the basis of cash return on net capital deployed by removing the effect of non-cash impacts on our capital base. We add back maintenance capital expenditures in
order to capture the difference between depreciation and our sustaining capital investment which can be reinvested in our business. Non-controlling interest is excluded as this represents
capital invested by other shareholders. Non-cash statement of operating results items are not included as these balances do not represent cash returned or reinvested in our assets. The
impact of other comprehensive income is not included as these are unrealized adjustments to partnership capital, such as fair value adjustments or non-cash gains or losses on foreign
exchange.

Invested
capital is defined as partnership capital adding back the following items: non-cash statement of operating results items net of maintenance capital expenditures as
well as accumulated other comprehensive income as reconciled above. Reconciling items are presented based on Brookfield Infrastructure's proportionate share of results in operations accounted for
using consolidation and the equity method whereby our partnership either controls or exercises significant influence over the investment respectively. As a result, non-cash statement of
operating results will differ from results presented in accordance with IFRS as they (1) include Brookfield Infrastructure's earnings from investments in associates attributable to each of the
above-noted items, and (2) exclude the share of earnings (loss) of consolidated investments not held by Brookfield Infrastructure.

The
following table reconciles invested capital to the most directly comparable IFRS measure, which is partnership capital, as of December 31, 2012:

MILLIONS

Utilities

Transport

Energy

Timber

Other

TotalPartnership capital

$
2,218

$
2,335

$
938

$
602

$
(1,069
)
$
5,024Cumulative differences and other adjustments(1)


231


(91
)

(177
)

(180
)

26


(191
)Maintenance capital expenditures


(25
)

(45
)

(37
)

(2
)




(109
)Non-cash statement of operating results items


197


135


76


(24
)

(28
)

356Accumulated other comprehensive income


(517
)

(628
)

56


21


163


(905
)Invested capital

$
2,104

$
1,706

$
856

$
417

$
(908
)
$
4,175Weighted average invested capital

$
1,626

$
1,252

$
669

$
469

$
(169
)
$
3,847


---

Brookfield Infrastructure     97

---



Table of Contents

The following table reconciles invested capital to the most directly comparable IFRS measure, which is partnership capital, as of
December 31, 2011:

MILLIONS

Utilities

Transport

Energy

Timber

Other

TotalPartnership capital

$
1,324

$
1,619

$
595

$
648

$
20

$
4,206Cumulative differences and other adjustments(1)


143


(112
)

(211
)

(119
)

(5
)

(304
)Maintenance capital expenditures


(24
)

(36
)

(29
)

(3
)




(92
)Non-cash statement of operating results items


112


57


63


(58
)

31


205Accumulated other comprehensive income


(155
)

(365
)

112





21


(387
)Invested capital

$
1,400

$
1,163

$
530

$
468

$
67

$
3,628Weighted average invested capital

$
1,337

$
869

$
515

$
475

$
(152
)
$
3,044


---

The following table reconciles invested capital to the most directly comparable IFRS measure, which is partnership capital, as of
December 31, 2010:

MILLIONS

Utilities

Transport

Energy

Timber

Other

TotalPartnership capital

$
1,227

$
884

$
720

$
602

$
(62
)
$
3,371Cumulative differences and other adjustments(1)


56


(107
)

(227
)

(103
)

358


(23
)Maintenance capital expenditures


(13
)

(21
)

(12
)

(3
)




(49
)Non-cash statement of operating results items


99


16


28


(13
)

(363
)

(233
)Accumulated other comprehensive income


(71
)

(26
)

(20
)

(5
)

(51
)

(173
)Invested capital

$
1,298

$
746

$
489

$
478

$
(118
)
$
2,893Weighted average invested capital

$
845

$
295

$
263

$
473

$
(60
)
$
1,816


---

Operating Segments

Adjusted EBITDA, FFO and AFFO are presented based on Brookfield Infrastructure's proportionate share of results in operations accounted
for using consolidation and the equity method whereby our partnership either controls or exercises significant influence over the
investment respectively, in order to demonstrate the impact of key value drivers of each of these operating platforms on our partnership's overall performance. As a result, segment depreciation and
amortization, deferred taxes, fair value adjustments, revaluation gains and other items are reconciling items that will differ from results presented in accordance with IFRS as these reconciling
items (1) include Brookfield Infrastructure's proportionate share of earnings from investments in associates attributable to each of the above-noted items, and (2) exclude the
proportionate share of earnings (loss) of consolidated investments not held by Brookfield Infrastructure apportioned to each of the above-noted items.

The
following tables present each segment's results in the format that management organizes its segments to make operating decisions and assess performance. Each segment is presented on
a proportionate basis, taking into account Brookfield Infrastructure's ownership in operations accounted for using the consolidation and equity method whereby our partnership either controls or
exercises significant influence over the investment respectively. These tables reconcile Brookfield Infrastructure's proportionate results to our partnership's consolidated statements of operating
results on a line by line

98     Brookfield Infrastructure

---



Table of Contents

basis
by aggregating the components comprising the earnings from our partnership's investments in associates and reflecting the portion of each line item attributable to non-controlling
interests. See "Discussion of Segment Reconciling Items" for a reconciliation of segment results to our partnership's statement of operating results in accordance with IFRS.

Total attributable to Brookfield Infrastructure

Contribution
from
investments
in associates

Attributable
to non-
controlling
interest

As per
IFRS
financials
on F-6For the year ended
December 31, 2012
in US$ millionsUtilities

Transport

Energy

Timber

Other

TotalRevenues

$
774

$
738

$
316

$
143

$


$
1,971

$
(726
)
$
759

$
2,004Costs attributed to revenues


(305
)

(463
)

(172
)

(95
)




(1,035
)

403


(462
)

(1,094
)General and administrative costs














(95
)

(95
)







(95
)Adjusted EBITDA


469


275


144


48


(95
)

841


(323
)

297Other income


8


6


2


3


11


30


(4
)




26Interest expense


(167
)

(106
)

(70
)

(28
)

(22
)

(393
)

138


(152
)

(407
)Cash taxes


(2
)

(7
)




(1
)

(6
)

(16
)

7


(7
)

(16
)FFO


308


168


76


22


(112
)

462


(182
)

138Depreciation and amortization


(123
)

(118
)

(59
)







(300
)

122


(54
)

(232
)Deferred taxes


11


(2
)

31


(34
)

31


37


(31
)

(36
)

(30
)Fair value gains and other items














8


8








8Fair value adjustments











63





63





137


200Other expenses


(85
)

(15
)

(48
)

(5
)

(11
)

(164
)

90





(74
)Share of earnings from associates




















1





1Net income attributable to non-controlling interest























(185
)

(185
)Net income attributable to partnership

$
111

$
33

$


$
46

$
(84
)
$
106

$


$


$
106




Total attributable to Brookfield Infrastructure

Contribution
from
investments
in associates

Attributable
to non-
controlling
interest

As per
IFRS
financials
on F-6For the year ended
December 31, 2011
in US$ millionsUtilities

Transport

Energy

Timber

Other

TotalRevenues

$
644

$
640

$
311

$
155

$


$
1,750

$
(694
)
$
580

$
1,636Costs attributed to revenues


(226
)

(460
)

(168
)

(95
)




(949
)

403


(353
)

(899
)General and administrative costs














(61
)

(61
)







(61
)Adjusted EBITDA


418


180


143


60


(61
)

740


(291
)

227Other income


6


4





2


7


19


(3
)

7


23Interest expense


(149
)

(83
)

(73
)

(28
)

(25
)

(358
)

128


(105
)

(335
)Cash taxes





(4
)




(1
)

(4
)

(9
)

5





(4
)FFO


275


97


70


33


(83
)

392


(161
)

129Depreciation and amortization


(91
)

(58
)

(54
)







(203
)

96


(20
)

(127
)Deferred taxes


(11
)

(15
)

16


(42
)

(21
)

(73
)

(2
)

(79
)

(154
)Fair value adjustments


45


6





93





144


(45
)

257


356Other expenses


(55
)

(6
)

(9
)

7


(10
)

(73
)

36


(34
)

(71
)Share of earnings from associates




















76





76Net income attributable to non-controlling interest























(253
)

(253
)Net income attributable to partnership

$
163

$
24

$
23

$
91

$
(114
)
$
187

$


$


$
187


Brookfield Infrastructure     99

---



Table of Contents



Total attributable to Brookfield Infrastructure

Contribution
from
investments
in associates

Attributable
to non-
controlling
interest

As per
IFRS
financials
on F-6For the year ended
December 31, 2010
in US$ millionsUtilities

Transport

Energy

Timber

Other

TotalRevenues

$
331

$
402

$
146

$
106

$


$
985

$
(685
)
$
334

$
634Costs attributed to revenues


(104
)

(303
)

(76
)

(70
)




(553
)

372


(232
)

(413
)General and administrative costs














(42
)

(42
)




7


(35
)Adjusted EBITDA


227


99


70


36


(42
)

390


(313
)

109Other income





2





3


5


10


(2
)

(8
)

Interest expense


(81
)

(46
)

(33
)

(28
)

(11
)

(199
)

125


(70
)

(144
)Cash taxes


(2
)

(4
)

3





(1
)

(4
)

5


(7
)

(6
)FFO


144


51


40


11


(49
)

197


(185
)

24Depreciation and amortization


(60
)

(51
)

(21
)







(132
)

110


(7
)

(29
)Deferred taxes


(15
)

30


(9
)

5


(22
)

(11
)

6


26


21Fair value adjustments











10





10





2


12Fair value gains and other














396


396








396Other expenses


(24
)

6


1


(2
)

(11
)

(30
)

17


(2
)

(15
)Share of earnings from associates




















52





52Net income attributable to non-controlling interest























(43
)

(43
)Net income attributable to partnership

$
45

$
36

$
11

$
24

$
314

$
430

$


$


$
430


The following tables provide each segment's assets in the format that management organizes its segments to make operating decisions and assess
performance. Each segment is presented on a proportionate basis, taking into account Brookfield Infrastructure's ownership in operations using consolidation and the equity method whereby our
partnership either controls or exercises significant influence over the investment respectively. These tables reconcile Brookfield Infrastructure's proportionate assets to total assets presented on
our partnership's consolidated statements of financial position by removing net liabilities contained within investments in associates and reflecting the assets attributable to
non-controlling interests, and adjusting for working capital assets which are netted against working capital liabilities.

Total attributable to Brookfield Infrastructure

Contribution
from
investments
in associates

Attributable
to non-
controlling
interest



As per
IFRS
financials
on F-5Working
capital
adjustmentAs at December 31, 2012
in US$ millions

Utilities

Transport

Energy

Timber

Other

TotalTotal assets

$
5,525

$
4,412

$
1,849

$
1,017

$
(122
)
$
12,681

$
(2,072
)
$
6,530

$
2,579

$
19,718




Total attributable to Brookfield Infrastructure

Contribution
from
investments
in associates

Attributable
to non-
controlling
interest



As per
IFRS
financials
on F-5Working
capital
adjustmentAs at December 31, 2011
in US$ millions

Utilities

Transport

Energy

Timber

Other

TotalTotal assets

$
3,787

$
2,736

$
1,613

$
1,112

$
55

$
9,303

$
(2,000
)
$
4,228

$
1,738

$
13,269


100     Brookfield Infrastructure

---



Table of Contents

Discussion of Segment Reconciling Items

For Adjusted EBITDA, FFO and net income attributable to our partnership, the following tables detail by segment the reconciliation of
Brookfield Infrastructure's proportionate results to its consolidated IFRS financial statements and provide a discussion of its material changes, where applicable.

Twelve months ended
December 31MILLIONS

2012

2011

2010UtilitiesAdjustments to items comprising Adjusted EBITDA(1)Contributions from investment in associates

$
146

$
130

$
183Attribution to non-controlling interest


(150
)

(75
)

(5
)Adjusted EBITDA


(4
)

55


178Adjustments to items comprising Adjusted FFO(2)Contributions from investment in associates

$
(42
)
$
(38
)
$
(64
)Attribution to non-controlling interest


54


33


3FFO


8


50


117Adjustments to items comprising net income attributable to Partnership(3)Contributions from investment in associates

$
(104
)
$
(92
)
$
(119
)Attribution to non-controlling interest


96


42


2Net income attributable to Partnership

$


$


$



(1)Revenues, costs attributed to revenues, general and administrative costs.(2)Other income, Interest expense, cash taxes.(3)Depreciation and amortization, deferred taxes, fair value adjustments, other expenses, share of earnings from associates, net income
attributable to non-controlling interest.


Contributions from investment in associates increased compared to 2011, primarily as a result of an increase in our ownership interest in our
Chilean electricity transmission system in the fourth quarter of 2012. Contributions from investment in associates decreased compared to 2010, primarily as a result of the acquisition of control of
our regulated terminal and European regulated distribution business in December 2010, as part of the Prime merger partially offset by an increase in our ownership interest in our Chilean
electricity system in the fourth quarter of 2012.

Attribution
to non-controlling interest increased significantly in 2012 compared to 2011, primarily as a result of the acquisition of our Colombian distribution operations in
January 2012, in which non-controlling shareholders hold an 83% economic interest. Attribution to
non-controlling interests increased significantly versus 2010, due to aforementioned acquisition of our Colombian distribution operations, as well as the acquisition of a control of our
regulated terminal and European regulated distribution operations in December 2010, as part of the Prime merger.

Brookfield Infrastructure     101

---



Table of Contents

Twelve months ended
December 31MILLIONS

2012

2011

2010TransportAdjustments to items comprising Adjusted EBITDA(1)Contributions from investment in associates

$
61

$
41

$
62Attribution to non-controlling interest


(34
)

(29
)

(27
)Adjusted EBITDA


27


12


35Adjustments to items comprising Adjusted FFO(2)Contributions from investment in associates

$
(37
)
$
(24
)
$
(30
)Attribution to non-controlling interest


15


12


12FFO


5





17Adjustments to items comprising net income attributable to Partnership(3)Contributions from investment in associates

$
(23
)
$
(17
)
$
(32
)Attribution to non-controlling interest


18


17


15Net income attributable to Partnership

$


$


$



---

Contributions from investment in associates increased in 2012, versus 2011, primarily as a result of the contribution from our Toll road
investments. Contributions from investment in associates were largely consistent with 2010, as the aforementioned toll road investments were offset by the acquisition of control of our Australian
railroad businesses in December 2010, as part of the Prime merger.

Attribution
to non-controlling interest was largely consistent with 2011 and 2010 as we have maintained relatively consistent ownership interests in the transport businesses
that we consolidate.

Twelve months ended
December 31MILLIONS

2012

2011

2010EnergyAdjustments to items comprising Adjusted EBITDA(1)Contributions from investment in associates

$
116

$
120

$
70Attribution to non-controlling interest


(9
)




Adjusted EBITDA


107


120


70Adjustments to items comprising Adjusted FFO(2)Contributions from investment in associates

$
(64
)
$
(67
)
$
(29
)Attribution to non-controlling interest


1





FFO


44


53


41Adjustments to items comprising net income attributable to Partnership(3)Contributions from investment in associates

$
(52
)
$
(53
)
$
(41
)Attribution to non-controlling interest


8





Net income attributable to Partnership

$


$


$



---

102     Brookfield Infrastructure

---



Table of Contents

Contributions from investment in associates for 2012 were largely consistent with prior year as we maintained consistent ownership in the energy
businesses that we account for using the equity method. Contributions from investment in associates increased by $46 million compared to 2010, due primarily to an increase in the ownership
interest of our North American natural gas transmission business, following the Prime merger in December 2010.

Attribution
to non-controlling interest increased in 2012 compared to 2011 and 2010 due to the acquisition of interests in our natural gas storage and district energy
business during the current year.

Twelve months ended
December 31MILLIONS

2012

2011

2010TimberAdjustments to items comprising Adjusted EBITDA(1)Contributions from investment in associates

$


$


$
Attribution to non-controlling interest


(105
)

(123
)

(77
)Adjusted EBITDA


(105
)

(123
)

(77
)Adjustments to items comprising Adjusted FFO(2)Contributions from investment in associates

$


$


$
Attribution to non-controlling interest


57


53


58FFO


(48
)

(70
)

(19
)Adjustments to items comprising net income attributable to Partnership(3)Contributions from investment in associates

$


$


$
Attribution to non-controlling interest


48


70


19Net income attributable to Partnership

$


$


$



---

Attribution to non-controlling interest in 2012 decreased compared to 2011 due to softer results as our average realized price and
sales volume decreased over the period. Attribution to non-controlling interest increased versus 2010 due primarily to improved performance due to higher average timber prices and sales
volumes that rose by 30%.

Brookfield Infrastructure     103

---



Table of Contents

Twelve months ended
December 31MILLIONS

2012

2011

2010OtherAdjustments to items comprising Adjusted EBITDA(1)Contributions from investment in associates

$


$


$
Attribution to non-controlling interest








Adjusted EBITDA








Adjustments to items comprising Adjusted FFO(2)Contributions from investment in associates

$
1

$
(1
)
$
Attribution to non-controlling interest








FFO


1


(1
)

Adjustments to items comprising net income attributable to Partnership(3)Contributions from investment in associates

$
(1
)
$
1

$
Attribution to non-controlling interest








Net income attributable to Partnership

$


$


$



---

Twelve months ended
December 31MILLIONS

2012

2011

2010TotalAdjustments to items comprising Adjusted EBITDA(1)Contributions from investment in associates

$
323

$
291

$
313Attribution to non-controlling interest


(297
)

(227
)

(109
)Adjusted EBITDA


26


64


204Adjustments to items comprising Adjusted FFO(2)Contributions from investment in associates

$
(141
)
$
(130
)
$
(128
)Attribution to non-controlling interest


159


98


85FFO


44


32


161Adjustments to items comprising net income attributable to Partnership(3)Contributions from investment in associates

$
(182
)
$
(161
)
$
(185
)Attribution to non-controlling interest


138


129


24Net income attributable to Partnership

$


$


$



---

104     Brookfield Infrastructure

---





Table of Contents

ITEM 6.    DIRECTORS AND SENIOR MANAGEMENT

6.A    DIRECTORS AND SENIOR MANAGEMENT

Board of Directors of our Managing General Partner

As required by law, our limited partnership agreement provides for the management and control of our partnership by a general partner
rather than a board of directors and officers. Our Managing General Partner serves as our partnership's general partner and has a board of directors. Our Managing General Partner has no executive
officers. Our Managing General Partner has sole responsibility and authority for the central management and control of our partnership, which is exercised through its board of directors
in Bermuda.

The
following table presents certain information concerning the current board of directors of our Managing General Partner as of the date of this annual report on
Form 20-F:

Name and Municipality of Residence(1)

Age

Position

Principal OccupationDerek Pannell
Bathurst, Canada


66

Chair

DirectorJeffrey Blidner
Toronto, Canada


65

Director

Senior Managing Partner of Brookfield Asset ManagementJohn Fees(3)
Lynchburg, Virginia


55

Director

Chairman of The Babcock & Wilcox CompanyDavid Hamill(2,4)
Ipswich, Qld, Australia


55

Director

DirectorArthur Jacobson, Jr.(2)
Mamaroneck, New York


50

Director

Managing Member, Martinart Partners, L.L.C., a restaurantDon Mackenzie(3)
Pembroke, Bermuda


52

Director

Chairman and Owner of New Venture HoldingsRafael Miranda Robredo(2)
Madrid, Spain


63

Director

DirectorAnne Schaumburg(4)
Short Hills, New Jersey


63

Director

DirectorDanesh Varma(3,4)
Kingston-Upon-Thames, England


63

Director

Chief Financial Officer, Labrador Iron Mines Limited, a mining company


(1)The business address for each of the directors is 73 Front Street, Hamilton, HM 12, Bermuda.(2)Member of the nominating and governance committee. Arthur Jacobson is the Chair of the nominating and governance committee.(3)Member of the compensation committee. Danesh Varma is the Chair of the compensation committee.(4)Member of the audit committee. Anne Schaumburg is the chair of the audit committee as of February 3, 2011. Danesh Varma is an audit committee
financial expert.


Set forth below is biographical information for our Managing General Partner's current directors.

Derek Pannell.Derek has served as a director of our Managing General Partner since June 15, 2007. Until April 2010, he was a
Managing
Partner of Brookfield Asset Management and prior to this he was the Chief Executive Officer of Noranda Inc. and Falconbridge Limited from June 2002 to October 2006. He also served
as the President and Chief Operating Officer for Noranda Inc. between September 2001 and June 2002. Derek is a metallurgical engineer with over 42 years of experience in
the mining and metals industry. He is former Chair of the Mining Association of Canada and board

Brookfield Infrastructure     105

---



Table of Contents

member
of the International Council on Mining and Metals. Derek was a board member of Teck Resources Inc. until April 1, 2010 and currently serves on the boards of Agrium Inc. and
African Barrick Gold. Derek is a professional engineer registered in Quebec and Peru and is an Associate of the Royal School of Mines and a Fellow of the Canadian Academy of Engineers. Derek holds a
Bachelor of Science degree from Imperial College in London, England.

Jeffrey Blidner.Jeffrey is a Senior Managing Partner of Brookfield Asset Management and is responsible for strategic planning and
transaction
execution. Mr. Blidner is also a director of a number of Brookfield companies in Europe and Canada. Prior to joining Brookfield in 2000, Mr. Blidner was a senior partner at
Goodman & Carr LLP, a Toronto-based law firm. Jeff's practice focused on merchant banking transactions, public offerings, mergers and acquisitions, management buy-outs and
private equity transactions. Jeff received his LLB from Osgoode Hall Law School and was called to the Bar in Ontario as a Gold Medalist.

John Fees.John joined as a director of our Managing General Partner on April 22, 2013. He is the Chairman of The
Babcock & Wilcox
Company, having assumed this role after completing the spin-off of The Babcock & Wilcox Company to McDermott International shareholders. John is a 30 year veteran of
McDermott International, having started his career in 1979 in The Babcock & Wilcox Company. While CEO of McDermott International, John led the company and board through the process of the
spin-off and established McDermott International and The Babcock & Wilcox Company as two independent, public companies. John holds a Masters of Engineering Administration from
George Washington University and a Bachelor of Science, Industrial Engineering, from the University of Pittsburgh.

David Hamill.David is a professional director and brings significant management and strategic expertise to Brookfield Infrastructure.
He was
Treasurer of the State of Queensland in Australia from 1998 to 2001, Minister for Education from 1995 to 1996, and Minister for Transport and Minister Assisting the Premier on Economic and Trade
Development from 1989 to 1995. Dr. Hamill retired from the Queensland Parliament in February 2001. Dr. Hamill holds a Bachelor of Arts (Honours) from the University of Queensland,
a Master of Arts from Oxford University and a Doctorate of Philosophy from University of Queensland and is a fellow of the Chartered Institute of Transport and the Australian Institute of Company
Directors.

Arthur Jacobson, Jr.Arthur has served as a director of our Managing General Partner since November 27, 2007. He is a former
Managing Director
of Spear, Leeds Kellogg Specialists LLC (a division of Goldman Sachs Group Inc.) from 2001 to 2004. He was a partner of Benjamin Jacobson and Sons, LLC from 1987 to 2001.
He was also a specialist on the NYSE for 16 years, from 1988 to 2004. Prior to that he was an account executive at Drexel Burnham Lambert Inc. from 1985 to 1987. Arthur holds a degree in
business administration from the University of Southern California.

Don Mackenzie.Don joined as a director of our Managing General Partner on April 22, 2013. He is the Chairman and Owner of
New Venture
Holdings, a well established privately owned holding company with operating company and real estate investments in Bermuda and Canada. Prior to moving to Bermuda in 1990, Don worked in the software
and sales sector. He acquired his first business in 1995, and New Venture Holdings was formed in 2000 to consolidate a number of operating investments under a holding company umbrella. Don has
a Bachelor of Commerce from Queens University and an MBA from Schulich School of Business of York University.

Rafael Miranda Robredo.Rafael joined as a director of our Managing General Partner on April 22, 2013. He is the Chairman of the
Endesa
Foundation, Honorary Chairman of Eurelectric, the European Electricity Association, Chairman of the Social Council of Burgos and, until April 2013, a board member of Enersis, the company which manages
all of Endesa's investments in Latin America. He joined Endesa, Spain's largest electric company in 1987 as managing director, and served as the

106     Brookfield Infrastructure

---



Table of Contents

company's
CEO from 1997 to 2009, leading the business through a period of government deregulation of the electricity sector. Rafael has a Bachelor of Industrial Engineering from Comillas University,
and a Masters degree in Management Science from the Industrial Organization E.O.I.

Anne Schaumburg.Anne has served as a director of our Managing General Partner since November 3, 2008. She has been a member of
the board of
directors of NRG Energy, Inc., a power generation company listed on NYSE, since 2005. From 1984 until her retirement in 2002, Anne was with the Global Energy Group of Credit Suisse First
Boston, where she last served as Managing Director. From 1979 to 1984, she was with the Utilities Group at Dean Witter Financial Services Group, where she last served as Managing Director. From 1971
to 1978, Anne was at First Boston Corporation in the Public Utilities Group. Anne is a graduate of the City University of New York.

Danesh Varma.Danesh has served as a director of our Managing General Partner since June 15, 2007. He is the Chief Financial
Officer,
Feronia Inc., Minco plc., Xterra Inc. and Conquest Resources Limited. He joined Minco plc and Conquest Resources Limited in 2006, Xterra Inc. in 2008 and
Feronia Inc. in 2011. From 1999 to 2005, Danesh was a director at Dundee B Corp. Ltd. Prior to that, Danesh held a number of senior positions in the banking, corporate finance and
accounting fields. Danesh holds a degree from Delhi University and is a Chartered Accountant.

Additional Information About Directors and Officers

Until February 2011, CEO of the Manager, Mr. Sam Pollock was a director of Fraser Papers Inc. ("Fraser Papers") an
integrated specialty paper company that produces a broad range of specialty packaging and printing papers. On June 28, 2009, Fraser Papers and its subsidiaries filed for creditor protection
under theCompanies Creditors Arrangement Act("CCAA") in Canada and Chapter 15 of the U.S. Bankruptcy Code. In February 2011, the
Ontario and Delaware courts overseeing these proceedings issued orders enabling the implementation of an amended plan of arrangement and compromise previously approved by Fraser Papers' creditors,
which was completed in May 2011.

Director
of our Managing General Partner, Mr. Danesh Varma has acted as a director of various corporations in several jurisdictions around the world. He was a director and officer
of American Resource Corporation Limited when it became subject to a cease trade order by the Ontario Securities Commission in June 2004 for failure to file its audited annual financial
statements for the year ended
December 31, 2003 and the first quarter interim unaudited financial statements for the period ended March 31, 2004. The cease trade order was lifted in June 2008.

Our Management

Our Managing General Partner does not have any employees. Instead, members of Brookfield's senior management and other individuals from
Brookfield's global affiliates are drawn upon to fulfill the Manager's obligations to provide us with management services under our Master Services Agreement. Brookfield currently has approximately
24,000 operating employees and over 600 investment professionals, worldwide. The following table presents certain information concerning the core senior management team that is
principally responsible for our operations and their positions with the Manager as of the date of this annual report on Form 20-F:

Name

Age

Years of Experience in
relevant industry or role

Years at Brookfield

Current Position with the ManagerJeffrey Blidner


65


37


12

ChairSamuel Pollock


46


24


19

Chief Executive OfficerJohn Stinebaugh


46


24


8

Chief Financial Officer


Brookfield Infrastructure     107

---



Table of Contents

Each
of the members of this team has substantial deal origination and execution expertise, having put together numerous consortiums, partnerships and joint ventures for large complex
transactions. Members of this team have also been integral in building and developing Brookfield's utilities, transport, energy and timber operations. Set forth below is biographical information for
Messrs. Pollock,
and Stinebaugh, however, for biographical information regarding Mr. Blidner see Item 6.A "Directors and Senior ManagementBoard of Directors of our Managing General Partner":

Samuel Pollock.Sam is a Senior Managing Partner of Brookfield Asset Management and Chief Executive Officer of the Manager. Since 2006,
Sam has led
Brookfield's expansion into the infrastructure sector and is responsible for the formulation and execution of the operating and investment strategy for Brookfield's infrastructure business. Sam joined
Brookfield Asset Management in 1994 and, prior to his current role, was broadly responsible for Brookfield's investment initiatives acting as Brookfield Asset Management's Chief Investment Officer.
Sam is a Chartered Accountant and holds a business degree from Queen's University.

John Stinebaugh.John is a Managing Partner of Brookfield Asset Management and Chief Financial Officer of the Manager. In his capacity
of Chief
Financial Officer of the Manager, John is responsible for the Infrastructure Group's financial reporting, risk management, corporate finance and overall funding activities of the organization. John is
also very involved in the group's utility infrastructure business and runs the group's operations in the Americas. Prior to joining Brookfield, John was with Credit Suisse Securities
(U.S.A.) LLC where he was responsible for mergers and acquisitions and leveraged financings in the energy group. John graduated with a degree in economics from Harvard University and received
his Chartered Financial Analyst designation in 1995.

See
also information contained in this annual report on Form 20-F under Item 6.C "Board Practices," Item 3.D "Risk FactorsRisks Relating to
our Relationship with Brookfield," Item 6.A "Directors and Senior Management" and Item 7.B "Related Party Transactions."

Our Master Services Agreement

The Service Recipients have entered into a Master Services Agreement pursuant to which the Manager and certain other affiliates of
Brookfield Asset Management who are party thereto have agreed to provide or arrange for other service providers to provide management and administration services to our partnership and the other
Service Recipients. The operating entities are not a party to the Master Services Agreement.

The
following is a summary of certain provisions of our Master Services Agreement and is qualified in its entirety by reference to all of the provisions of the agreement. Because this
description is only a summary of the Master Services Agreement, it does not necessarily contain all of the information that you may find useful. We therefore urge you to review the Master Services
Agreement in its entirety.
Copies of the Master Services Agreement are available electronically on the website of the SEC at www.sec.gov and are made available to our unitholders as described under Item 10.C "Material
Contracts" and Item 10.H "Documents on display."

Appointment of the Manager and Services Rendered

Under our Master Services Agreement, the Service Recipients have appointed the Manager, as the service provider, to provide the
following services, or arrange for their provision by an appropriate service provider:



108     Brookfield Infrastructure

---



Table of Contents



Brookfield Infrastructure     109

---



Table of Contents

The
Manager's activities are subject to the supervision of the board of directors of our Managing General Partner and of each of the other Service Recipients or their equivalent,
as applicable.

Management Fee

Pursuant to the Master Services Agreement, on a quarterly basis, we pay a base management fee, referred to as the Base Management Fee,
to the Manager equal to 0.3125%
(1.25% annually) of the market value of our partnership. For purposes of calculating the Base Management Fee, the market value of our partnership is equal to the volume weighted average of the closing
prices of our partnership's units on the NYSE (or other exchange or market where our partnership's units are principally traded) for each of the last five trading days of the applicable quarter
multiplied by the number of issued and outstanding units of our partnership on the last of those days (assuming full conversion of Brookfield's interest in Brookfield Infrastructure into units of our
partnership), plus the amount of third-party debt, net of cash, with recourse to our partnership, the Holding LP and any Holding Entity.

The
table below sets forth the management fees for the years ended December 31, 2012, 2011 and 2010, respectively.

Year ended December 31MILLIONS

2012

2011

2010Base Management Fee

$
86

$
53

$
28


To
the extent that under any other arrangement we are obligated to pay a base management fee (directly or indirectly through an equivalent arrangement) to the Manager (or any
affiliate) on a portion of our capital that is comparable to the Base Management Fee, the Base Management Fee payable for each quarter in respect thereof will be reduced on a dollar for dollar basis
by our proportionate share of the comparable base management fee (or equivalent amount) under such other arrangement for that quarter. The Base Management Fee will not be reduced by the amount
of any incentive distribution payable by any Service Recipient or operating entity to the Manager (or any other affiliate) (for which there is a separate credit mechanism under the
Holding LP's limited partnership agreement), or any other fees that are payable by any operating entity to Brookfield for financial advisory, operations and
maintenance, development, operations management and other services. See Item 7.B "Related Party TransactionsOther Services" and Item 7.B "Related Party
TransactionsIncentive Distributions."

Reimbursement of Expenses and Certain Taxes

We also reimburse the Manager for any out-of-pocket fees, costs and expenses incurred in the provision of the
management and administration services. However, the Service Recipients are not required to reimburse the Manager for the salaries and other remuneration of its management, personnel or support staff
who carry out any services or functions for such Service Recipients or overhead for such persons.

The
relevant Service Recipient is required to pay the Manager all other out-of-pocket fees, costs and expenses incurred in connection with the provision of the
services including those of any third party and to reimburse the Manager for any such fees, costs and expenses. Such out-of-pocket fees, costs and expenses include, among other
things, (i) fees, costs and expenses relating to any debt or equity financing; (ii) out-of-pocket fees, costs and expenses incurred in connection with the general
administration of any Service Recipient; (iii) taxes, licenses and other statutory fees or penalties levied against or in respect of a Service Recipient; (iv) amounts owed under
indemnification, contribution or similar arrangements; (v) fees, costs and expenses relating to our financial reporting, regulatory filings

110     Brookfield Infrastructure

---



Table of Contents

and
investor relations and the fees, costs and expenses of agents, advisors and other persons who provide services to or on behalf of a Service Recipient; and (vi) any other fees, costs and
expenses incurred by the Manager that are reasonably necessary for the performance by the Manager of its duties and functions under the Master Services Agreement.

In
addition, the Service Recipients are required to pay all fees, expenses and costs incurred in connection with the investigation, acquisition, holding or disposal of any acquisition
that is made or that is proposed to be made by us. Where the acquisition or proposed acquisition involves a joint acquisition that is made alongside one or more other persons, the Manager will be
required to allocate such fees, costs and expenses in proportion to the notional amount of the acquisition made (or that would have been made in the case of an unconsummated acquisition) among
all joint investors. Such
additional fees, expenses and costs represent out-of-pocket costs associated with investment activities that are undertaken pursuant to the Master Services Agreement.

The
Service Recipients are also required to pay or reimburse the Manager for all sales, use, value added, withholding or other taxes or customs duties or other governmental charges
levied or imposed by reason of the Master Services Agreement or any agreement it contemplates, other than income taxes, corporation taxes, capital taxes or other similar taxes payable by the Manager,
which are personal to the Manager.

Termination

The Master Services Agreement has no fixed term. However, the Service Recipients may terminate the Master Services Agreement upon
30 days' prior written notice of termination from our Managing General Partner to the Manager if any of the following occurs:



The
Service Recipients have no right to terminate for any other reason, including if the Manager or Brookfield experiences a change of control. Our Managing General Partner may only
terminate the Master Services Agreement on behalf of our partnership with the prior unanimous approval of our Managing General Partner's independent directors.

Our
Master Services Agreement expressly provides that the agreement may not be terminated by our Managing General Partner due solely to the poor performance or the underperformance of
any of our operations.

The
Manager may terminate the Master Services Agreement upon 30 days' prior written notice of termination to our Managing General Partner if any Service Recipient defaults in the
performance or observance of any material term, condition or covenant contained in the agreement in a manner that results in material harm and the default continues unremedied for a period of
30 days after written notice of the breach is given to the Service Recipient. The Manager may also terminate the Master Services Agreement upon the occurrence of certain events relating to the
bankruptcy or insolvency of our partnership.

Brookfield Infrastructure     111

---



Table of Contents

If
the Master Services Agreement is terminated, the Licensing Agreement, the Relationship Agreement and any of Brookfield's obligations under the Relationship Agreement would also
terminate. See Item 7.B "Related Party TransactionsRelationship Agreement" and Item 3.D "Risk FactorsRisks Relating to Our Relationship with Brookfield."

Indemnification and Limitations on Liability

Under the Master Services Agreement, the Manager has not assumed and will not assume any responsibility other than to provide or
arrange for the provision of the services called for thereunder in good faith and will not be responsible for any action that the Service Recipients take in following or declining to follow the advice
or recommendations of the Manager. The maximum amount of the aggregate liability of the Manager or any of its affiliates, or of any director, officer, employee, contractor, agent, advisor or other
representative of the Manager or any of its affiliates, will be equal to the Base Management Fee previously paid by the Service Recipients in the two most recent calendar years pursuant to the Master
Services Agreement. The Service Recipients have also agreed to indemnify each of the Manager, Brookfield and their directors, officers, agents, members, partners, shareholders and employees to the
fullest extent permitted by law from and against
any claims, liabilities, losses, damages, costs or expenses (including legal fees) incurred by an indemnified person or threatened in connection with our respective businesses, investments and
activities or in respect of or arising from the Master Services Agreement or the services provided by the Manager, except to the extent that the claims, liabilities, losses, damages, costs or expenses
are determined to have resulted from the indemnified person's bad faith, fraud or willful misconduct, or in the case of a criminal matter, action that the indemnified person knew to have been
unlawful. In addition, under the Master Services Agreement, to the fullest extent permitted by law, the indemnified persons will not be liable to the Service Recipients except for conduct that
involved bad faith, fraud, willful misconduct, gross negligence or in the case of a criminal matter, action that the indemnified person knew to have been unlawful.

Outside Activities

Our Master Services Agreement does not prohibit the Manager or its affiliates from pursuing other business activities or providing
services to third parties that compete directly or indirectly with us. For a description of related aspects of the relationship between Brookfield and the Service Recipients, see Item 7.B
"Related Party TransactionsRelationship Agreement."

6.B    COMPENSATION

During the year ended December 31, 2012, our Managing General Partner paid each of its directors $60,000 per year for serving on
its board of directors and various board committees. Our Managing General Partner during the year ended December 31, 2012 paid the chairperson of the board of directors $110,000 per year for
serving as chairperson of its board of directors. Also during the year ended December 31, 2012 an additional amount of $20,000 was paid to the chairperson of the audit committee, making the
audit committee chairperson's total remuneration for the 2012 fiscal year $80,000.

Our
Managing General Partner does not have any employees. Our partnership has entered into a Master Services Agreement with the Manager pursuant to which the Manager and certain other
affiliates of Brookfield provide or arrange for other service providers to provide day-to-day management and administrative services for our partnership, the Holding LP
and the Holding Entities. The fees payable under the Master Service Agreement are set forth under Item 6.A "Directors and Senior ManagementOur Master Services
AgreementManagement Fee." In addition, Brookfield is entitled to receive incentive distributions from the Holding LP described under Item 7.B "Related Party
TransactionsIncentive Distributions."

112     Brookfield Infrastructure

---



Table of Contents

Pursuant
to the Master Service Agreement, members of Brookfield's senior management and other individuals from Brookfield's global affiliates are drawn upon to fulfill obligations under
the Master Service Agreement. However, these individuals, including the Brookfield employees identified in the table under Item 6.A "Directors and Senior ManagementOur Management,"
are not compensated by our partnership or our Managing General Partner. Instead, they will continue to be compensated by Brookfield.

6.C    BOARD PRACTICES

Board Structure, Practices and Committees

The structure, practices and committees of our Managing General Partner's board of directors, including matters relating to the size,
independence and composition of the board of directors, the election and removal of directors, requirements relating to board action and the powers delegated to board committees, are governed by our
Managing General Partner's By-laws. Our Managing General Partner's board of directors is responsible for exercising the management, control, power and authority of the Managing General
Partner except as required by applicable law or the By-laws of the Managing General Partner. The following is a summary of certain provisions of those By-laws that affect our
partnership's governance.

Size, Independence and Composition of the Board of Directors

Our Managing General Partner's board of directors is currently set at nine directors. The board may consist of between three and
11 directors or such other number of directors as may be determined from time-to-time by a resolution of our Managing General Partner's shareholders and subject to its
By-laws. At least three directors and at
least a majority of the directors holding office must be independent of our Managing General Partner and Brookfield, as determined by the full board of directors using the standards for independence
established by the NYSE.

If
the death, resignation or removal of an independent director results in the board of directors consisting of less than a majority of independent directors, the vacancy must be filled
promptly. Pending the filling of such vacancy, the board of directors may temporarily consist of less than a majority of independent directors and those directors who do not meet the standards for
independence may continue to hold office. In addition, our Managing General Partner's By-laws provide that not more than 50% of the directors (as a group) or the independent
directors (as a group) may be residents of any one jurisdiction (other than Bermuda and any other jurisdiction designated by the board of directors from time to time).

Election and Removal of Directors

Our Managing General Partner's board of directors was appointed by its shareholders and each of its current directors will serve until
the close of the next annual meeting of shareholders of our Managing General Partner or his or her death, resignation or removal from office, whichever occurs first. Vacancies on the board of
directors may be filled and additional directors may be added by a resolution of our Managing General Partner's shareholders or a vote of the directors then in office. A director may be removed from
office by a resolution duly passed by our Managing General Partner's shareholders or, if the director has been absent without leave from three consecutive meetings of the board of directors, by a
written resolution requesting resignation signed by all other directors then holding office. A director will be automatically removed from the board of directors if he or she becomes bankrupt,
insolvent or suspends payments to his or her creditors or becomes prohibited by law from acting as a director.

Brookfield Infrastructure     113

---



Table of Contents

Action by the Board of Directors

Our Managing General Partner's board of directors may take action in a duly convened meeting at which a quorum is present or by a
written resolution signed by all directors then holding office. Our Managing General Partners' board of directors holds a minimum of four
meetings per year. When action is to be taken at a meeting of the board of directors, the affirmative vote of a majority of the votes cast is required for any action to be taken.

Transactions Requiring Approval by Independent Directors

Our Managing General Partner's independent directors have approved a conflicts policy which addresses the approval and other
requirements for transactions in which there is greater potential for a conflict of interest to arise. These transactions include:



Our
conflicts policy requires the transactions described above to be approved by a majority of our Managing General Partner's independent directors. Pursuant to our conflicts policy,
independent directors may grant approvals for any of the transactions described above in the form of general guidelines, policies or procedures in which case no further special approval will be
required in connection with a particular transaction or matter permitted thereby. See Item 7.B "Related Party TransactionsConflicts of Interest and Fiduciary Duties."

Transactions in which a Director has an Interest

A director who directly or indirectly has an interest in a contract, transaction or arrangement with our Managing General Partner, our
partnership or certain of our affiliates is required to disclose the nature of his or her interest to the full board of directors. Such disclosure may take the form of a general notice given to the
board of directors to the effect that the director has an interest in a specified company or firm and is to be regarded as interested in any contract, transaction or arrangement which may after the
date of the notice be made with that company or firm or its affiliates. A director may participate in any meeting called to discuss or any vote called to approve the transaction in which the director
has an interest and any transaction approved by the board of directors will not be void or voidable solely because the director was present at or participates in the meeting in which the approval was
given provided that the board of directors or a board committee authorizes the transaction in good faith after the director's interest has been disclosed or the transaction is fair to our Managing
General Partner and our partnership at the time it is approved.

Service Contracts

There are no service contracts with directors that provide benefit upon termination of employment.

114     Brookfield Infrastructure

---



Table of Contents

Audit Committee

Our Managing General Partner's board of directors is required to establish and maintain at all times an audit committee that operates
pursuant to a written charter. The audit committee is required to consist solely of independent directors and each member must be financially literate and there will be at least one member designated
as an audit committee financial expert. Not more than 50% of the audit committee members may be directors who are residents of any one jurisdiction (other than Bermuda and any other jurisdiction
designated by the board of directors from time to time).

The
audit committee is responsible for assisting and advising our Managing General Partner's board of directors with matters
relating to:



The
audit committee is also responsible for engaging our independent accountants, reviewing the plans and results of each audit engagement with our independent accountants, approving
professional services provided by our independent accountants, considering the range of audit and non-audit fees charged by our independent accountants and reviewing the adequacy of our
internal accounting controls. The audit committee charter is available on our website at www.brookfieldinfrastructure.com/aboutus/governance and is available upon written request from our Corporate
Secretary, at 73 Front Street, Hamilton HM 12, Bermuda.

Nominating and Governance Committee

Our Managing General Partner's board of directors is required to establish and maintain at all times a nominating and governance
committee that operates pursuant to a written charter. The nominating and governance committee is required to consist of a majority of independent directors and not more than 50% of the nominating and
corporate governance committee members may be directors who are residents of any one jurisdiction (other than Bermuda and any other jurisdiction designated by the board of directors from time
to time).

The
nominating and governance committee is responsible for approving the appointment by the sitting directors of a person to the office of director and for recommending a slate of
nominees for election as directors by our Managing General Partner's shareholders. The nominating and governance committee is also responsible for assisting and advising our Managing General Partner's
board of directors with respect to matters relating to the general operation of the board of directors, our partnership's governance, the governance of our Managing General Partner and the performance
of its board of directors and individual directors. The nominating and governance committee charter is available on our website at www.brookfieldinfrastructure.com/aboutus/governance and is available
upon written request from our Corporate Secretary, at 73 Front Street, Hamilton HM 12, Bermuda.

Compensation Committee

Our Managing General Partner's board of directors is required to establish and maintain at all times a compensation committee that
operates pursuant to a written charter. The compensation committee is required to consist of a majority of independent directors. Not more than 50% of the compensation committee members may be
directors who are residents of any one jurisdiction (other than Bermuda and any other jurisdiction designated by the board of directors from time to time).

Brookfield Infrastructure     115

---



Table of Contents

The
compensation committee is responsible for reviewing and making recommendations to the board of directors of our Managing General Partner concerning the remuneration of directors and
committee members and supervising any changes in the fees to be paid pursuant to the Master Services Agreement. The compensation committee charter is available on our website at
www.brookfieldinfrastructure.com/aboutus/governance and is available upon written request from our Corporate Secretary, at 73 Front Street, Hamilton HM 12, Bermuda.

Indemnification and Limitations on Liability

Our Limited Partnership Agreement

Bermuda law permits the partnership agreement of a limited partnership, such as our partnership, to provide for the indemnification of
a partner, the officers and directors of a partner and any other person against any and all claims and demands whatsoever, except to the extent that the indemnification may be held by the courts of
Bermuda to be contrary to public policy or to the extent that Bermuda law prohibits indemnification against personal liability that may be imposed under specific provisions of Bermuda law. Bermuda law
also permits a partnership to pay or reimburse an indemnified person's expenses in advance of a final disposition of a proceeding for which indemnification is sought. See Item 10.B "Memorandum
and Articles of AssociationDescription of Our Units and Our Limited Partnership AgreementIndemnification; Limitations on Liability" for a description of the indemnification
arrangements in place under our limited partnership agreement.

Our Managing General Partner's By-laws

Bermuda law permits the By-laws of an exempted company, such as our Managing General Partner, to provide for the
indemnification of its officers, directors and shareholders and any other person designated by the company against any and all claims and demands whatsoever, except to the extent that the
indemnification may be held by the courts of Bermuda to be contrary to public policy or to the extent that Bermuda law prohibits indemnification against personal liability that may be imposed under
specific provisions of Bermuda law. Bermuda company law also permits an exempted company to pay or reimburse an indemnified person's expenses in advance of a final disposition of a proceeding for
which indemnification is sought.

Under
our Managing General Partner's By-laws, our Managing General Partner is required to indemnify, to the fullest extent permitted by law, its affiliates, directors,
officers, resident representative, shareholders and employees, any person who serves on a governing body of the
Holding LP or any of its subsidiaries and certain others against any and all losses, claims, damages, liabilities, costs or expenses (including legal fees and expenses), judgments, fines,
penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, incurred by an indemnified person in connection with our partnership's
investments and activities or in respect of or arising from their holding such positions, except to the extent that the claims, liabilities, losses, damages, costs or expenses are determined to have
resulted from the indemnified person's bad faith, fraud or willful misconduct, or in the case of a criminal matter, action that the indemnified person knew to have been unlawful. In addition, under
our Managing General Partner's By-laws, (i) the liability of such persons has been limited to the fullest extent permitted by law and except to the extent that their conduct
involves bad faith, fraud or willful misconduct, or in the case of a criminal matter, action that the indemnified person knew to have been unlawful; and (ii) any matter that is approved by the
independent directors will not constitute a breach of any duties stated or implied by law or equity, including fiduciary duties. Our Managing General Partner's By-laws require it to
advance funds to pay the expenses of an indemnified person in connection with a matter in which indemnification may be sought until it is determined that the indemnified person is not entitled to
indemnification.

116     Brookfield Infrastructure

---



Table of Contents

Insurance

Our partnership has obtained insurance coverage under which the directors of our Managing General Partner are insured, subject to the
limits of the policy, against certain losses arising from claims made against such directors by reason of any acts or omissions covered under the policy in their respective capacities as directors of
our Managing General Partner, including certain liabilities under securities laws.

Canadian Insider Reporting

Our partnership is not subject to Canadian insider reporting requirements due to its status as a "SEC Foreign Issuer" under Canadian
securities laws. However, our partnership does not rely on the exemption that is available to it from the insider reporting requirements of Canadian securities laws.

Governance of Brookfield Infrastructure

The board of directors of the Infrastructure General Partner is identical to the board of directors of our Managing General Partner and
has substantially similar governance arrangements as our partnership. However, the Infrastructure General Partner's By-laws allow for alternate directors and do not require that the board
of directors establish and maintain committees. A director of the Infrastructure General Partner may by written notice to the secretary of the Infrastructure General Partner appoint any person,
including another director, who meets any minimum standards that are required by applicable law to serve as an alternate director to attend and vote in the director's place at any meeting of the
Infrastructure General Partner's board of directors at which the director is not personally present and to perform any duties and functions and exercise any rights that the director could perform or
exercise personally. Any alternate director appointed may not be a resident of a jurisdiction if such residency would cause more than 50% of the directors (as a group) or the independent
directors (as a group) to consist of directors who are residents of any one jurisdiction (other than Bermuda and any other jurisdiction designated by the board of directors from time
to time).

6.D    EMPLOYEES

Our partnership does not employ any of the individuals who carry out the management and activities of our partnership. The personnel
that carry out these activities are employees of Brookfield, and their services are provided to our partnership or for our benefit under our Master Services Agreement. For a discussion of the
individuals from Brookfield's management team that are expected to be involved in our infrastructure business, see Item 6.A "Directors and Senior ManagementOur Management."

6.E    SHARE OWNERSHIP

Each of our directors and officers of our Managing General Partner own less than one percent of our units

Brookfield Infrastructure     117

---





Table of Contents

ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A    MAJOR SHAREHOLDERS

The following table presents information regarding the beneficial ownership of our units by each entity that we know beneficially owns
more than 5% of our units as at December 31, 2012.

Units OutstandingName and Address

Units Owned(1)

Percentage(2)Brookfield Asset Management Inc.


56.2 million
(3)

28.0%
(3)Partners Limited


58.5 million
(4)

29.1%
(4)Morgan Stanley Investment Management Inc.


13.7 million
(5)

9.6%GCIC Ltd


8.2 million
(6)

5.7%


(1)Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with
respect to securities. Units relating to securities currently exercisable or exercisable within 60 days of the date of this table are deemed outstanding for computing the percentage of the
person holding such securities but are not deemed outstanding for computing the percentage of any other person.(2)Except as set forth in footnotes (3) and (4) below, the percentages shown are based on 143,567,955 units outstanding as of
December 31, 2012.(3)Brookfield Asset Management may be deemed to be the beneficial owner of 56,186,011 of our units that it holds through wholly-owned subsidiaries,
constituting approximately 28% of the issued and outstanding units, assuming that all of the Redeemable Partnership Units are exchanged for our units pursuant to the Redemption-Exchange Mechanism
described in Item 10.B "Memorandum and Articles of AssociationDescription of the Holding LP's Limited Partnership AgreementRedemption-Exchange Mechanism." This
amount includes 48,930 of our units beneficially held by Brookfield Asset Management.(4)Partners Limited owns all of Brookfield Asset Management's Class B Limited Voting Shares and approximately 50% of BAM Investments Corp.'s common
shares. Partners Limited may be deemed to be the beneficial owner of 58,404,660 of our units, constituting approximately 29.1% of the issued and outstanding units, assuming that all of the Redeemable
Partnership Units are exchanged for our units pursuant to the Redemption-Exchange Mechanism described in Item 10.B "Memorandum and Articles of AssociationDescription of the
Holding LP's Limited Partnership AgreementRedemption-Exchange Mechanism." This amount includes 2,218,649 of our units beneficially held by BAM Investments Corp. and 48,930 of our
units beneficially held by Brookfield Asset Management. Partners Limited may be deemed to have the power (together with each of Brookfield Asset Management and BAM Investments Corp.) to vote or direct
the vote of the units beneficially owned by it or to dispose of such units other than 20,295 of our units with respect to which it has sole voting and investment power.(5)Based on a Schedule 13F filed by Morgan Stanley with the SEC showing that it held 13,744,881 units as of December 31, 2012 and other
information available to our partnership.(6)Based on a Schedule 13F filed by GCIC Ltd with the SEC showing that it held 8,163,969 units on
December 31, 2012.


On February 20, 2009, Brookfield Asset Management, Brookfield Financial Corp., BAM Investments Corp. and Partners Limited jointly filed an
amendment to their Schedule 13D with the SEC reflecting shared beneficial ownership of 17,400,517, or 45.5%, of our units. On May 20, 2011, Brookfield Asset Management, Inc., BAM
Investments Corp. and Partners Limited jointly filed an amendment to their Schedule 13D with the SEC reflecting shared beneficial ownership of 45,684,516, or 29.2%, of our units.

On
January 19, 2010, TD Asset Management Inc. filed a Schedule 13G with the SEC reflecting beneficial ownership of 5,057,100, or 8.01%, of our units. On
January 12, 2011, TD Asset Management Inc. filed a
Schedule 13G with the SEC reflecting beneficial ownership of 4,790,825, or 4.24%, of our units. On November 8, 2011, TD Asset Management Inc. filed a Schedule 13G with the
SEC reflecting beneficial ownership of 7,266,993, or 5.49%, of our units. On March 23, 2012, TD Asset Management Inc. filed an amendment to its Schedule 13G with the SEC
reflecting beneficial ownership of 7,918,919, or 5.98%, of our units. On August 10, 2012, TD Asset Management Inc. filed an amendment to its Schedule 13G with the SEC
reflecting beneficial ownership of 6,690,142, or 4.71%, of our units.

118     Brookfield Infrastructure

---



Table of Contents

On
February 16, 2010, FMR LLC and Mr. Edward C. Johnson 3d jointly filed a Schedule 13G with the SEC reflecting beneficial ownership of 2,064,000, or 9.179%,
of our units. On April 12, 2010, the foregoing reporting persons filed an amendment to their Schedule 13G with the SEC reflecting beneficial ownership of 2,475,136, or 3.919%, of our
units. On February 14, 2012, the foregoing reporting persons filed a Schedule 13G with the SEC reflecting beneficial ownership of 7,292,206, or 5.51%, of our units. On
February 14, 2012, the foregoing reporting persons filed an amendment to their Schedule 13G with the SEC reflecting beneficial ownership of 5,823,108, or 4.05% of our units.

Our
major unitholders have the same voting rights as all other holders of our units.

As
of April 26, 2013, 197,386 of our outstanding units were held by 1,102 holders of record in the United States, not including The Depository Trust Company ("DTC").
As of April 26, 2013, DTC was the holder of record of 140,580,722 units.

See
also the information contained in this annual report on Form 20-F under Item 3.D "Risk FactorsRisks Relating to our Relationship with
Brookfield," Item 6.C "Board Practices," Item 6.A "Directors and Senior Management" and Item 7.B "Related Party Transactions."

7.B    RELATED PARTY TRANSACTIONS

We are an affiliate of Brookfield. We have entered into a number of agreements and arrangements with Brookfield in order to enable us
to be established as a separate entity and pursue our vision of being a leading owner and operator of high quality infrastructure assets. While we believe that this ongoing relationship with
Brookfield provides us with a strong competitive
advantage as well as access to opportunities that would otherwise not be available to us, we operate very differently from an independent, stand-alone entity. We describe below these relationships as
well as potential conflicts of interest (and the methods for resolving them) and other material considerations arising from our relationship with Brookfield.

See
also the information contained in this annual report on Form 20-F under Item 3.D "Risk FactorsRisks Relating to our Relationship with
Brookfield," Item 6.C "Board Practices," Item 6.A "Directors and Senior Management" and Item 7.A "Major Shareholders."

Relationship Agreement

Our partnership, the Holding LP, the Holding Entities, the Manager and Brookfield have entered into an agreement, referred to as
the Relationship Agreement, that governs aspects of the relationship among them. Pursuant to the Relationship Agreement, Brookfield has agreed that we serve as the primary (though not exclusive)
vehicle through which Brookfield makes future infrastructure related acquisitions that are suitable for our strategy and objectives. Our acquisition strategy focuses on large scale transactions, for
which we believe there is less competition and where Brookfield has sufficient influence or control so that our operations-oriented approach can be deployed to create value. Due to similar asset
characteristics and capital requirements we believe that the infrastructure industry will evolve like the real estate industry in which assets are commonly owned through consortiums and partnerships
of institutional equity investors and owner/operators such as ourselves. Accordingly, an integral part of our strategy is to participate with institutional investors in Brookfield sponsored or
co-sponsored consortiums for single asset acquisitions and as a partner in or alongside Brookfield sponsored or co-sponsored partnerships that target acquisitions that suit our
profile. Brookfield has a strong track record of leading such consortiums and partnerships and actively managing underlying assets to improve performance. Brookfield agreed that it will not sponsor
such arrangements that are suitable for us in the infrastructure sector unless we are given an opportunity to participate.

Brookfield's
commitment to us and our ability to take advantage of opportunities is subject to a number of inherent limitations such as our financial capacity, the suitability of the
acquisition in terms

Brookfield Infrastructure     119

---



Table of Contents

of
the underlying asset characteristics and its fit with our strategy, limitations arising from the tax and regulatory regimes that govern our affairs and certain other restrictions. See
Item 3.D "Risk FactorsRisks Relating to Our Relationship with Brookfield." Under the terms of the Relationship Agreement, our partnership, the Holding LP and the Holding
Entities acknowledge and
agree that, subject to providing us the opportunity to participate on the basis described above, Brookfield (including its directors, officers, agents, members, partners, shareholders and employees)
is able to pursue other business activities and provide services to third parties that compete directly or indirectly with us. In addition, Brookfield has established or advised, and may continue to
establish or advise, other entities that rely on the diligence, skill and business contacts of Brookfield's professionals and the information and acquisition opportunities they generate during the
normal course of their activities. Our partnership, the Holding LP and the Holding Entities acknowledge and agree that some of these entities may have objectives that overlap with our
objectives or may acquire infrastructure assets or businesses that could be considered appropriate acquisitions for us, and that Brookfield may have greater financial incentives to assist those other
entities over us. Due to the foregoing, we expect to compete from time-to-time with Brookfield or other third parties for access to the benefits that we expect to realize from
Brookfield's involvement in our business.

Since
Brookfield has large, well established operations in real estate, timberlands and renewable power that are separate from us, Brookfield will not be obligated to provide us with any
opportunities in these sectors. In addition, since Brookfield has granted an affiliate the right to act as the exclusive vehicle for Brookfield's timberland acquisitions in Eastern Canada and the
Northeastern U.S., we will not be entitled to participate in timberland acquisitions in those geographic regions. Brookfield has also appointed an affiliate as its primary vehicle through which
Brookfield will acquire renewable power assets on a global basis. In the event of the termination of the Master Services Agreement, the Relationship Agreement would also terminate, including
Brookfield's commitments to provide us with acquisition opportunities, as described above.

Pursuant
to the Relationship Agreement, Brookfield has also agreed that any voting rights with respect to any operating entity that are held by entities over which it has control will
be voted:



For
these purposes, the relevant entity may maintain, from time-to-time, an approved slate of nominees or provide direction with respect to the approval or
rejection of any matter in the form of general guidelines, policies or procedures in which case no further approval or direction will be required. Any such general guidelines, policies or procedures
may be modified by the relevant entity in its discretion.

Under
the Relationship Agreement, our partnership, the Holding LP and the Holding Entities have agreed that none of Brookfield or the Manager, nor any director, officer, agent,
member, partner, shareholder or employee of Brookfield or the Manager, will be liable to us for any claims, liabilities, losses, damages, costs or expenses (including legal fees) arising in connection
with the business, investments and activities in respect of or arising from the Relationship Agreement. The maximum

120     Brookfield Infrastructure

---



Table of Contents

amount
of the aggregate liability of Brookfield, or of any director, officer, employee, contractor, agent, advisor or other representative of Brookfield, will be equal to the amounts previously paid
in the two most recent calendar years by the Service Recipients pursuant to the Master Services Agreement.

Voting Agreements

Our partnership and Brookfield have entered into voting agreements ("Voting Agreements") that permit (i) our partnership,
through our Managing General Partner, to direct all eligible votes in the election of the directors of the Infrastructure General Partner, through which our partnership participates in the management
and activities of the Holding LP and the Holding Entities, and (ii) our partnership or our partnership's designated affiliates to direct all eligible votes in the election of directors
of the following entities, which control entities in which we have an interest:



Pursuant
to the Voting Agreements, Brookfield has agreed that any voting rights with respect to the above noted entities will be voted in favor of the election of directors, or managers,
as applicable, approved by our partnership or our partnership's designated affiliates, as applicable. For these purposes, our partnership or our partnership's designated affiliates, as applicable, may
maintain, from time-to-time, an approved slate of nominees or provide direction with respect to the approval or rejection of any matter in the form of general guidelines,
policies or procedures in which case no further approval or direction will be required. Any such general guidelines, policies or procedures may be modified by our partnership or our partnership's
designated affiliates, as applicable, in their discretion.

In
addition, pursuant to the Voting Agreement relating to the Infrastructure General Partner, Brookfield has also agreed that any voting rights with respect to the Infrastructure General
Partner, the Infrastructure GP LP and the Holding LP will be voted in accordance with the direction of our partnership with respect to the approval or rejection of the following
matters relating to any such entity, as applicable: (i) any sale of all or substantially all of its assets, (ii) any merger, amalgamation, consolidation, business combination or other
material corporate transaction, except in connection with any internal reorganization that does not result in a change of control, (iii) any plan or proposal for a complete or partial
liquidation or dissolution, or any reorganization or any case, proceeding or action seeking relief under any existing laws or future laws relating to bankruptcy or insolvency, (iv) any
amendment to the limited partnership agreement of Infrastructure GP LP or the Holding LP or (v) any commitment or agreement to do any of the foregoing.

Pursuant
to the Voting Agreement relating to CSC and EBSA, the counterparty has also agreed that any voting rights with respect to the relevant controlling entity will be voted in
accordance with the

Brookfield Infrastructure     121

---



Table of Contents

direction
of our partnership with respect to the approval or rejection of the following matters relating to the controlling entity: (i) any sale of all or substantially all of its assets,
(ii) any merger, amalgamation, consolidation, business combination or other material corporate transaction, except in connection with any internal reorganization that does not result in a
change of control, (iii) any plan or proposal for a complete or partial liquidation or dissolution, or any reorganization or any case, proceeding or action seeking relief under any existing
laws or future laws relating to bankruptcy or insolvency, (iv) in the case of EBSA, any amendment to the EBSA by-laws or (v) any commitment or agreement to do any of
the foregoing.

In
addition, pursuant to the Voting Agreement in respect of the Infrastructure General Partner, Brookfield has agreed that it will not exercise its right under the limited partnership
agreements for certain entities (including the Infrastructure GP LP) to remove the general partner of such entities except with the prior consent of our partnership.

Each
Voting Agreement terminates (i) at such time that we cease to own any interest in the relevant entity, (ii) at such time that our Managing General Partner
(or its successors or permitted assigns) involuntarily ceases to be the general partner of our partnership, (iii) at such time that that the Infrastructure GP LP
(or its successors or permitted assigns) involuntarily ceases to be the general partner of the Holding LP, or (iv) at such time that that the Infrastructure General Partner
(or its successors or permitted assigns) involuntarily ceases to be the general partner of the Infrastructure GP LP. In addition, we are permitted to terminate the Voting
Agreements upon 30 days notice. The termination of a Voting Agreement with respect to one or more entity will not affect the validity or enforceability of the Voting Agreements with respect to
any other entity.

The
Voting Agreements also contain restrictions on transfers of the shares that Brookfield has agreed to vote in favor of the election of directors approved by our partnership or our
partnership's designated affiliates, as applicable.

Services Provided under Our Master Services Agreement

The Service Recipients have entered into the Master Services Agreement pursuant to which the Manager and certain other affiliates of
Brookfield Asset Management have agreed to provide or arrange for other service providers to provide management and administration services to our partnership and the other Service Recipients. For
example, Samuel Pollock, in his capacity as the Chief Executive Officer of the Manager, and John Stinebaugh, in his capacity as the Chief Financial Officer of the Manager, are the persons who perform
the functions of our partnership's principal executive officer and principal financial officer, respectively. In exchange, the Manager is entitled to a Base Management Fee. For a description of our
Master Services Agreement, see Item 6.A "Directors and Senior ManagementOur Master Services Agreement."

Other Services

Brookfield may provide to the operating entities services which are outside the scope of the Master Services Agreement under
arrangements that are on market terms and conditions and pursuant to which Brookfield will receive fees. The services provided under these arrangements include financial advisory, operations and
maintenance, development, operations management and other services. Pursuant to our conflict of interest guidelines, those arrangements may require prior approval by a majority of the independent
directors, which may be granted in the form of general guidelines, policies or procedures. See "Conflicts of Interest and Fiduciary Duties."

Preferred Shares

Brookfield has provided an aggregate of $20 million of working capital to certain of our Holding Entities through a subscription
for preferred shares of such Holding Entities. The preferred shares are

122     Brookfield Infrastructure

---



Table of Contents

entitled
to receive a cumulative preferential dividend equal to 6% of their redemption value as and when declared by the board of directors of the applicable Holding Entity and are redeemable at the
option of the Holding Entity, subject to certain limitations, at any time after the tenth anniversary of their issuance. The preferred shares are not entitled to vote, except as required
by law.

Redemption-Exchange Mechanism

One or more wholly-owned subsidiaries of Brookfield Asset Management that hold Redeemable Partnership Units (as hereinafter
defined) have the right to require the Holding LP to redeem all or a portion of the Redeemable Partnership Units, subject to our partnership's right of first refusal, for cash in an amount
equal to the market value of one of our units multiplied by the number of units to be redeemed (subject to certain adjustments). See Item 10.B "Memorandum and Articles of
AssociationDescription of the Holding LP's Limited Partnership AgreementRedemption-Exchange Mechanism." Taken together, the effect of the redemption right and the
right of first refusal is that one or more wholly-owned subsidiaries of Brookfield Asset Management will receive our units, or the value of such units, at the election of our partnership. Should our
partnership determine not to exercise its right of first refusal, cash required to fund a redemption of limited partnership interests of the Holding LP held by wholly-owned subsidiaries of
Brookfield Asset Management will likely be financed by a public offering of our units.

Registration Rights Agreement

Our partnership has entered into a registration rights agreement with Brookfield pursuant to which our partnership has agreed that,
upon the request of Brookfield, our partnership will file one or more registration statements to register for sale under theUnited States Securities Act of
1933, as amended, any of our units held by Brookfield (including our units acquired pursuant to the Redemption-Exchange Mechanism). In the registration rights agreement we have
agreed to pay expenses in connection with such registration and sales and have indemnified Brookfield for material misstatements or omissions in the registration statement.

Incentive Distributions

Infrastructure GP LP is entitled to receive incentive distributions from the Holding LP as a result of its
ownership of the general partnership interest in the Holding LP. The incentive distributions are to be calculated in increments based on the amount by which quarterly distributions on the
limited partnership units of the Holding LP exceed specified target levels as set forth in the Holding LP's limited partnership agreement. See Item 10.B "Memorandum and Articles
of AssociationDescription of the Holding LP's Limited Partnership AgreementDistributions."

The
Infrastructure GP LP may, at its sole discretion, elect to reinvest incentive distributions in exchange for Redeemable Partnership Units.

To
the extent that any Holding Entity or any operating entity pays to Brookfield any comparable performance or incentive distribution, the amount of any future incentive distributions
will be reduced in an equitable manner to avoid duplication of distributions.

For
example, in conjunction with the consortium arrangements in respect of our Canadian timber operations and our South American electricity transmission operations, we pay to Brookfield
our pro-rata share of base management fees paid by each of the respective consortiums and, in the case of our Canadian timber operations, our pro-rata share of performance
fees. Pursuant to the Master Services Agreement, the base management fees paid pursuant to the consortium arrangements are creditable against the management fee payable under the Master Services
Agreement and, in the case of the performance fees paid pursuant to the consortium arrangements in respect of the Canadian timber operations, such performance fees reduce incentive distributions to
which Brookfield would

Brookfield Infrastructure     123

---



Table of Contents

otherwise
be entitled from the Holding LP pursuant to the Holding LP's limited partnership agreement. See Item 6.A "Directors and Senior ManagementOur Master Services
Agreement."

General Partner Distributions

Pursuant to our limited partnership agreement, our Managing General Partner is entitled to receive a general partner distribution equal
to 0.01% of the total distributions of our partnership. See Item 10.B "Memorandum and Articles of AssociationDescription of Our Units and Our Limited Partnership Agreement."

Pursuant
to the limited partnership agreement of the Holding LP, the Infrastructure GP LP is entitled to receive a general partner distribution from the
Holding LP equal to a share of the total distributions of the Holding LP in proportion to the Infrastructure GP LP's percentage interest in the Holding LP which,
immediately following the spin-off, was equal to 1% of the total distributions of the Holding LP. See Item 10.B "Memorandum and Articles of
AssociationDescription of the Holding LP's Limited Partnership AgreementDistributions." In addition, it is entitled to receive the incentive distributions described
above under "Incentive Distribution."

Distribution Reinvestment Plan

The Holding LP has a distribution reinvestment plan. Brookfield has advised our partnership that it may from
time-to-time reinvest distributions it receives from the Holding LP in the Holding LP's distribution reinvestment plan. In addition, our partnership adopted a
distribution reinvestment plan which became effective on June 29, 2010. The following is a summary description of the principal terms of our partnership's distribution reinvestment plan.

Pursuant
to the distribution reinvestment plan, holders of our units may elect to have distributions paid on our units held by them automatically reinvested in additional units to be
held for the account of the unitholder in accordance with the terms of the distribution reinvestment plan, provided that there are not any laws or governmental regulations in the unitholder's
jurisdiction that may limit or prohibit participation. Distributions to be reinvested in our units under the distribution reinvestment plan will be reduced by the amount of any applicable
withholding tax.

Distributions
due to plan participants will be paid to the plan agent, for the benefit of the plan participants and, if a plan participant has elected to have his or her distributions
automatically reinvested, applied, on behalf of such plan participant, to the purchase of additional units. Such purchases will be made from our partnership on the distribution date at a price per
unit calculated by reference to the volume weighted average of the trading price for our units on the NYSE for the five trading days immediately preceding the date the relevant distribution is paid by
our partnership ("Market Price").

As
soon as reasonably practicable after each distribution payment date, a statement of account will be mailed to each participant setting out the amount of the relevant cash distribution
reinvested, the applicable Market Price, the number of units purchased under the distribution reinvestment plan on the distribution payment date and the total number of units, computed to four decimal
places, held for the account of the participant under the distribution reinvestment plan (or, in the case of DTC participants, DTC will receive such statement on behalf of beneficial owners
participating in the distribution reinvestment plan). While our partnership will not issue fractional units, a plan participant's entitlement to units purchased under the distribution reinvestment
plan may include a fraction of a unit and such fractional units shall accumulate. A cash adjustment for any fractional units will be paid by the plan agent upon the withdrawal from or termination by a
plan participant of his or her participation in the distribution reinvestment plan or upon termination of the distribution reinvestment plan at price per unit calculated based upon the closing price
of our units on the NYSE on the trading day immediately preceding such withdrawal or termination. A registered holder may, at any time,

124     Brookfield Infrastructure

---



Table of Contents

obtain
unit certificates for any number of whole units held for the participant's account under the distribution reinvestment plan by notifying the plan agent. Certificates for units acquired under
the distribution reinvestment plan will not be issued to participants unless specifically requested. Prior to pledging, selling or otherwise transferring units held for a participant's account (except
for sale of units through the plan agent), a registered holder must request that his or her units be electronically transferred to his or her brokerage account or a unit certificate be issued. The
automatic reinvestment of distributions under the distribution reinvestment plan will not relieve participants of any income tax obligations applicable to such distributions. No brokerage commissions
will be payable in connection with the purchase of our units under the distribution reinvestment plan and all administrative costs will be borne by our partnership.

Unitholders
will be able to terminate their participation in the distribution reinvestment plan by providing, or by causing to be provided, notice to the plan agent. Such notice, if
actually received by the plan agent no later than 5 business days prior to a record date, will have effect in respect of the distribution to be made as of such date. Thereafter, distributions
to such unitholders will be in cash. In addition, unitholders may request that all or part of their units be sold. When units are sold through the plan agent, a holder will receive the proceeds less a
handling charge and any brokerage trading fees. Our partnership will be able to amend, modify, suspend or terminate our distribution reinvestment plan, at any time, but such actions will have no
retroactive effect that would prejudice a participant's interest. The plan agent will notify participants in writing of any amendments or modifications to our distribution reinvestment plan that in
our partnership's opinion may materially prejudice participants.

Our
partnership does not intend to reinvest distributions it receives from the Holding LP in the Holding LP's distribution reinvestment plan except to the extent that
holders of our units elect to reinvest distributions pursuant to our distribution reinvestment plan. Brookfield has advised our partnership that it may from time-to-time
reinvest distributions it receives
from the Holding LP pursuant to the Holding LP's distribution reinvestment plan. The units of the Holding LP to be issued to Brookfield under the distribution reinvestment plan
will become subject to the Redemption-Exchange Mechanism and may therefore result in Brookfield acquiring additional units of our partnership. See Item 10.B "Memorandum and Articles of
AssociationDescription of the Holding LP's Limited Partnership AgreementRedemption-Exchange Mechanism."

Indemnification Arrangements

Subject to certain limitations, Brookfield and its directors, officers, agents, members, partners, shareholders and employees generally
benefit from indemnification provisions and limitations on liability that are included in our limited partnership agreement, our Managing General Partner's By-laws, the Holding LP's
limited partnership agreement, our Master Services Agreement and other arrangements with Brookfield. See Item 6.A "Directors and Senior ManagementOur Master Services Agreement,"
Item 10.B "Memorandum and Articles of AssociationDescription of Our Units and Our Limited Partnership AgreementIndemnification; Limitations of Liability" and
Item 10.B "Memorandum and Articles of AssociationDescription of the Holding LP's Limited Partnership AgreementIndemnification; Limitations of Liability."

Licensing Agreement

Our partnership and the Holding LP have each entered into a Licensing Agreement with Brookfield pursuant to which Brookfield has
granted a non-exclusive, royalty-free license to use the name "Brookfield" and the Brookfield logo. Other than under this limited license, we do not have a legal right to the
"Brookfield" name and the Brookfield logo in the United States and Canada.

We
will be permitted to terminate the Licensing Agreement upon 30 days' prior written notice if Brookfield defaults in the performance of any material term, condition or agreement
contained in the

Brookfield Infrastructure     125

---



Table of Contents

agreement
and the default continues for a period of 30 days after written notice of termination of the breach is given to Brookfield. Brookfield may terminate the Licensing Agreement effective
immediately
upon termination of our Master Services Agreement or with respect to any licensee upon 30 days' prior written notice of termination if any of the following
occurs:



A
termination of the Licensing Agreement with respect to one or more licensee will not affect the validity or enforceability of the agreement with respect to any other licensees.

Conflicts of Interest and Fiduciary Duties

Our organizational and ownership structure and strategy involve a number of relationships that may give rise to conflicts of interest
between our partnership and our unitholders, on the one hand, and Brookfield, on the other hand. In particular, conflicts of interest could arise, among other reasons,
because:



126     Brookfield Infrastructure

---



Table of Contents



With
respect to transactions in which there is greater potential for a conflict of interest to arise, our Managing General Partner may be required to seek the prior approval of a
majority of the independent directors pursuant to conflict of interest guidelines that have been approved by a majority of the independent directors. These transactions include (i) the
dissolution of our partnership; (ii) any material amendment to the Master Services Agreement, our limited partnership agreement or the Holding LP's limited partnership agreement;
(iii) any material service agreement or other arrangement pursuant to which Brookfield will be paid a fee, or other consideration other than any agreement or arrangement contemplated by the
Master Services Agreement; (iv) acquisitions by us from, and dispositions by us to, Brookfield; (v) any other transaction involving Brookfield; and (vi) termination of, or any
determinations regarding indemnification under, the Master Services Agreement. Pursuant to our conflicts policy, independent directors may grant prior approvals for any of these transactions in the
form of general guidelines, policies or procedures in which case no further special approval will be required in connection with a particular transaction or matter permitted thereby. In certain
circumstances, these transactions may be related party transactions for the purposes of, and subject to certain requirements ofMultilateral
Instrument 61-101Protection of Minority Security Holders in Special Transactions("MI 61-101") which in some situations
requires minority shareholder approval and/or valuation for transactions with related parties. An exemption from such requirements is available when the fair market value of the transaction is not
more than 25% of the market capitalization of the issuer. Our partnership has been granted exemptive relief from the
requirements of MI 61-101 that, subject to certain conditions, would permit it to be exempt from the minority approval and valuation requirements for transactions that would have a
value of less than 25% of our partnership's market capitalization if Brookfield's indirect equity interest in our partnership was included in the calculation of our partnership's market
capitalization. As a result, the 25% threshold above which the minority approval and valuation requirements would apply would be increased to include the approximately 29.6% indirect interest in our
partnership held by Brookfield.

We
maintain a conflicts policy to assist in the resolution of these potential or actual conflicts which states that conflicts be resolved based on the principles of transparency,
independent validation and approvals. The policy recognizes the benefit to us of our relationship with Brookfield and our intent to pursue a strategy that seeks to maximize the benefits from this
relationship. The policy also recognizes that the principal areas of potential application of the policy on an ongoing basis will be in connection with our acquisitions and our participation in
Brookfield led consortia and partnership arrangements,

Brookfield Infrastructure     127

---



Table of Contents

together
with any management or service arrangements entered into in connection therewith or the ongoing operations of the underlying operating entities.

In
general, the policy provides that acquisitions that are carried out jointly by us and Brookfield, or in the context of a Brookfield led or co-led consortium or partnership
be carried out on the basis that the consideration paid by us be no more, on a per share or proportionate basis, than the consideration paid by Brookfield or other participants, as applicable. The
policy also provides that any fees or carried interest payable in respect of our proportionate investment, or in respect of an acquisition made solely by us, must be credited in the manner
contemplated by our Master Services Agreement and the Holding LP's limited partnership agreement, where applicable, or that such fees or carried interest must either have been negotiated with
another arm's length participant or otherwise demonstrated to be on market terms. The policy further provides that if the acquisition involves the purchase by us of an asset from Brookfield, or the
participation in a transaction involving the purchase by us and Brookfield of different assets, that a fairness opinion or, in some circumstances, a valuation or appraisal by a qualified expert be
obtained. These requirements provided for in the conflicts policy are in addition to any disclosure, approval and valuation requirements that may arise under applicable law.

Our
limited partnership agreement and the Holding LP's limited partnership agreement contain various provisions that modify the fiduciary duties that might otherwise be owed to
our partnership and our unitholders, including when conflicts of interest arise. Specifically, the limited partnership agreements of our partnership and the Holding LP state that no breach of
such limited partnership agreements or a breach of any duty, including fiduciary duties, may be found for any matter that has been approved by a majority of the independent directors of our Managing
General Partner and/or the Infrastructure General Partner, as applicable. In addition, when resolving conflicts of interest, the limited partnership agreements do not impose any limitations on the
discretion of the independent directors or the factors
which they may consider in resolving any such conflicts. The independent directors of our Managing General Partner and the Infrastructure General Partner can therefore take into account the interests
of third parties, including Brookfield, when resolving conflicts of interest. Additionally, any fiduciary duty that is imposed under any applicable law or agreement is modified, waived or limited to
the extent required to permit our Managing General Partner and/or the Infrastructure GP LP, as applicable, to undertake any affirmative conduct or to make any decisions, so long as such action
is reasonably believed to be in, or not inconsistent with, the best interests of our partnership and/or the Holding LP, as applicable.

Our
Master Services Agreement and our other arrangements with Brookfield do not impose on Brookfield any duty (statutory or otherwise) to act in the best interests of the Service
Recipients, nor do they impose other duties that are fiduciary in nature. As a result, our Managing General Partner, a wholly-owned subsidiary of Brookfield Asset Management, in its capacity as our
general partner, has sole authority to enforce the terms of such agreements and to consent to any waiver, modification or amendment of their provisions, subject to approval by a majority of our
independent directors in accordance with our conflicts policy.

In
addition, theBermuda Limited Partnership Act of 1883, under which our partnership and the Holding LP were established, does not
impose statutory fiduciary duties on a general partner of a limited partnership in the same manner that certain corporate statutes, such as the Canada Business Corporations Act, impose fiduciary
duties on directors of a corporation. In general, under applicable Bermudian legislation, a general partner has certain limited duties to its limited partners, such as the duty to render accounts,
account for private profits and not compete with the partnership in business. In addition, Bermuda common law recognizes that a general partner owes a duty of utmost good faith to its limited
partners. These duties are, in most respects, similar to duties imposed on a general partner of a limited partnership under U.S. and Canadian law. However, to the extent that our Managing General
Partner and the Infrastructure GP LP owe any such fiduciary duties to our

128     Brookfield Infrastructure

---



Table of Contents

partnership
and our unitholders, these duties have been modified pursuant to our limited partnership agreement and the Holding LP's limited partnership agreement as a matter of contract law. We
have been advised by counsel that such modifications are not prohibited under Bermuda law, subject to typical qualifications as to enforceability of contractual provisions, such as the application of
general equitable principles. This is similar to Delaware law which expressly permits modifications to the fiduciary duties owed to partners, other than an implied contractual covenant of good faith
and fair dealing.

In
addition, the limited partnership agreements provide that our Managing General Partner, the Infrastructure GP LP and their affiliates do not have any obligation under
the limited partnership agreements of our partnership or the Holding LP, or as a result of any duties stated or implied by law or equity, including fiduciary duties, to present business or
investment opportunities to our partnership,
the Holding LP, any Holding Entity or any other holding entity established by us. They also allow affiliates of our Managing General Partner and the Infrastructure GP LP to engage
in activities that may compete with us or our activities. Additionally, any failure by our Managing General Partner or the Infrastructure GP LP to consent to any merger, consolidation or
combination will not result in a breach of the limited partnership agreements or any other provision of law. The limited partnership agreements each prohibit the limited partners from advancing claims
that otherwise might raise issues as to compliance with fiduciary duties or applicable law.

These
modifications to the fiduciary duties are detrimental to our unitholders because they restrict the remedies available for actions that might otherwise constitute a breach of
fiduciary duty and permit conflicts of interest to be resolved in a manner that is not always in the best interests of our partnership or the best interests of our unitholders. We believe it is
necessary to modify the fiduciary duties that might otherwise be owed to us and our unitholders, as described above, due to our organizational and ownership structure and the potential conflicts of
interest created thereby. Without modifying those duties, the ability of our Managing General Partner and the Infrastructure General Partner to attract and retain experienced and capable directors and
to take actions that we believe will be necessary for the carrying out of our business would be unduly limited due to their concern about potential liability. See Item 3.D "Risk
FactorsRisks Relating to Our Relationship with BrookfieldOur Master Services Agreement and our other arrangements with Brookfield do not impose on Brookfield any fiduciary
duties to act in the best interests of our unitholders".

7.C    INTEREST OF EXPERTS AND COUNSEL

Not applicable.

ITEM 8.    FINANCIAL INFORMATION

8.A    CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Please see Item 18 below for additional information required to be disclosed under this Item.

8.B    SIGNIFICANT CHANGES

Please see Item 3 "Key Information," Item 4 "Information on the Company," Item 5 "Operating and Financial Review
and Prospects" for additional information.

Brookfield Infrastructure     129

---



Table of Contents

ITEM 9.    THE OFFER AND LISTING

9.A    PRICING HISTORY

The following table sets forth the annual high and low prices for our units on the NYSE for the periods indicated since the date of
listing on January 31, 2008:

High

LowYear Ended December 31, 2008

$
21.60

$
9.47Year Ended December 31, 2009

$
18.64

$
7.15Year Ended December 31, 2010

$
23.34

$
14.95Year Ended December 31, 2011

$
27.86

$
21.08Year Ended December 31, 2012

$
36.70

$
27.98


The
following table sets forth the quarterly high and low prices for our units on the NYSE for the two most recent full financial years:

High

LowJanuary 1, 2011 to March 31, 2011

$
23.79

$
20.80April 1, 2011 to June 30, 2011

$
25.17

$
22.55July 1, 2011 to September 30, 2011

$
27.58

$
23.68October 1, 2011 to December 31, 2011

$
27.86

$
23.00January 1, 2012 to March 31, 2012

$
31.63

$
27.98April 1, 2012 to June 30, 2012

$
33.57

$
29.66July 1, 2012 to September 30, 2012

$
36.70

$
32.49October 1, 2012 to December 31, 2012

$
35.45

$
32.95January 1, 2013 to March 31, 2013

$
40.40

$
35.85


The
following table sets forth the monthly high and low prices for our units on the NYSE for the most recent six months:

High

LowOctober 1, 2012 to October 31, 2012

$
35.45

$
33.88November 1, 2012 to November 30, 2012

$
34.40

$
32.95December 1, 2012 to December 31, 2012

$
35.25

$
33.23January 1, 2013 to January 31, 2013

$
37.73

$
35.85February 1, 2013 to February 29, 2013

$
39.70

$
37.32March 1, 2013 to March 31, 2013

$
40.40

$
37.37


The
following table sets forth the annual high and low prices for our units on the TSX for the periods indicated since the date of listing on September 10, 2009, in Canadian
dollars:

High

LowSeptember 10, 2009 to December 31, 2009

$
19.50

$
15.50January 1, 2010 to December 31, 2010

$
23.31

$
15.94January 1, 2011 to December 31, 2011

$
28.35

$
19.68January 1, 2012 to December 31, 2012

$
36.27

$
28.13


130     Brookfield Infrastructure

---



Table of Contents

The
following table sets forth the quarterly high and low prices for our units on the TSX for the two most recent full financial years, in Canadian dollars:

High

LowJanuary 1, 2011 to March 31, 2011

$
27.28

$
23.45April 1, 2011 to June 30, 2011

$
28.35

$
24.00July 1, 2011 to September 30, 2011

$
18.80

$
17.00October 1, 2011to December 31, 2011

$
18.60

$
15.94January 1, 2012 to March 31, 2012

$
31.51

$
28.13April 1, 2012 to June 30, 2010

$
34.33

$
29.78July 1, 2010 to September 30, 2012

$
36.27

$
33.23October 1, 2012 to December 31, 2012

$
34.90

$
32.86January 1, 2013 to March 31, 2013

$
41.25

$
35.33


The
following table sets forth the monthly high and low prices for our units on the TSX for the most recent six months, in Canadian dollars:

High

LowOctober 1, 2012 to October 31, 2012

$
34.90

$
33.47November 1, 2012 to November 30, 2012

$
34.29

$
32.86December 1, 2012 to December 31, 2012

$
34.87

$
32.86January 1, 2013 to January 31, 2013

$
37.85

$
35.33February 1, 2013 to February 29, 2013

$
40.82

$
37.28March 1, 2013 to March 31, 2013

$
41.25

$
38.29


Our
units do not have a par value.

9.B    PLAN OF DISTRIBUTION

Not applicable.

9.C    MARKET

Our units are listed on the NYSE under the symbol "BIP" and on the TSX under the symbol "BIP.UN".

9.D    SELLING SHAREHOLDERS

Not applicable.

9.E    DILUTION

Not applicable.

9.F    EXPENSES OF THE ISSUE

Not applicable.

ITEM 10.    ADDITIONAL INFORMATION

10.A    SHARE CAPITAL

Not applicable.

Brookfield Infrastructure     131

---





Table of Contents

10.B    MEMORANDUM AND ARTICLES OF ASSOCIATION

DESCRIPTION OF OUR UNITS AND OUR LIMITED PARTNERSHIP AGREEMENT

The following is a description of the material terms of our units and our limited partnership agreement, as amended, and is qualified
in its entirety by reference to all of the provisions of our limited partnership agreement. Because this description is only a summary of the terms of our units and our limited partnership agreement,
it does not contain all of the information
that you may find useful. For more complete information, you should read the limited partnership agreement which is available electronically on the website of the Securities and Exchange Commission at
www.sec.gov and our Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") profile at www.sedar.com and will be made available to our holders as described under Item 10.C
"Material Contracts" and Item 10.H "Documents on display."

See
also the information contained in this annual report on Form 20-F under Item 3.D "Risk FactorsRisk Relating to Our Relationship with
Brookfield," Item 6.C "Board Practices," Item 6.A "Directors and Senior Management" and Item 7.B "Related Party Transactions."

Formation and Duration

Our partnership is a Bermuda exempted limited partnership registered under theLimited Partnership Act
1883and theExempted Partnerships Act 1992. Our partnership has a perpetual existence and will continue as a limited liability
partnership unless our partnership is terminated or dissolved in accordance with our limited partnership agreement. Our partnership interests consist of our units, which represent limited partnership
interests in our partnership, and any additional partnership interests representing limited partnership interests that we may issue in the future as described below under "Issuance of
Additional Partnership Interests." In this description, references to "holders of our partnership interests" and our "unitholders" are to our limited partners and references to our limited partners
include holders of our units.

Nature and Purpose

Under section 2.2 of our limited partnership agreement, the purpose of our partnership is to: acquire and hold interests in the
Holding LP and, subject to the approval of our Managing General Partner, any other subsidiary of our partnership; engage in any activity related to the capitalization and financing of our
partnership's interests in such entities; and engage in any other activity that is incidental to or in furtherance of the foregoing and that is approved by our Managing General Partner and that
lawfully may be conducted by a limited partnership organized under theLimited Partnership Act 1883and our limited partnership agreement.

Our Units

Our units are limited partnership interests in our partnership. Holders of our units are not entitled to the withdrawal or return of
capital contributions in respect of our units, except to the extent, if any, that distributions are made to such holders pursuant to our limited partnership agreement or upon the liquidation of our
partnership as described below under "Liquidation and Distribution of Proceeds" or as otherwise required by applicable law. Except to the extent expressly provided in our limited
partnership agreement, a holder of our units does not have priority over any other holder of our units, either as to the return of capital contributions or as to profits, losses or distributions.
Holders of our units will not be granted any preemptive or other similar right to acquire additional interests in our partnership. In addition, holders of our units do not have any right to have their
units redeemed by our partnership.

132     Brookfield Infrastructure

---



Table of Contents

Issuance of Additional Partnership Interests

Our Managing General Partner has broad rights to cause our partnership to issue additional partnership interests and may cause our
partnership to issue additional partnership interests (including new classes of partnership interests and options, rights, warrants and appreciation rights relating to such interests) for any
partnership purpose, at any time and on such terms and conditions as it may determine without the approval of any limited partners. Any additional partnership interests may be issued in one or more
classes, or one or more series of classes, with such designations, preferences, rights, powers and duties (which may be senior to existing classes and series of partnership interests) as may be
determined by our Managing General Partner in its sole discretion, all without approval of our limited partners.

Investments in the Holding LP

If and to the extent that our partnership raises funds by way of the issuance of equity or debt securities, or otherwise, pursuant to a
public offering, private placement or otherwise, an amount equal to the proceeds will be invested in the Holding LP.

Capital Contributions

Brookfield and our Managing General Partner each contributed $1 to the capital of our partnership in order to form our partnership.
Thereafter, Brookfield contributed to our partnership limited partnership interests of the Holding LP in exchange for Redeemable Partnership Units and our units, the latter of which was
distributed by Brookfield Asset Management in the spin-off.

Distributions

Distributions to partners of our partnership will be made only as determined by our Managing General Partner in its sole discretion.
However, our Managing General Partner will not be permitted to cause our partnership to make a distribution if it does not have sufficient cash on hand to make the distribution, the distribution would
render it insolvent or if, in the opinion of our Managing General Partner, the distribution would leave it with insufficient funds to meet any future contingent obligations.

Any
distributions from our partnership will be made to the limited partners as to 99.99% and to our Managing General Partner as to 0.01%. Each limited partner will receive a
pro rata share of distributions made to all limited partners in accordance with the proportion of all outstanding units held by that limited partner. See Item 8.A "Consolidated
Statements and Other Financial Information."

Allocations of Income and Losses

Net income and net loss for U.S. federal income tax purposes will be allocated for each taxable year among our partners using a
monthly, quarterly or other permissible convention pro rata on a per unit basis, except to the extent otherwise required by law or pursuant to tax elections made by our partnership. The source
and character of items of income and loss so allocated to a partner of our partnership will be the same source and character as the income earned or loss incurred by our partnership.

The
income for Canadian federal income tax purposes of our partnership for a given fiscal year of our partnership will be allocated to each partner in an amount calculated by multiplying
such income by a
fraction, the numerator of which is the sum of the distributions received by such partner with respect to such fiscal year and the denominator of which is the aggregate amount of the distributions
made by our partnership to partners with respect to such fiscal year. Generally, the source and character of items of income so allocated to a partner with respect to a fiscal year of our partnership
will be the same source and character as the distributions received by such partner with respect to such fiscal year.

Brookfield Infrastructure     133

---



Table of Contents

If,
with respect to a given fiscal year, no distribution is made by our partnership or our partnership has a loss for Canadian federal income tax purposes, one quarter of the income, or
loss, as the case may be, for Canadian federal income tax purposes of our partnership for such fiscal year, will be allocated to the partners of record at the end of each calendar quarter ending in
such fiscal year pro rata to their respective percentage interests in our partnership, which in the case of our Managing General Partner shall mean 0.01%, and in the case of all limited
partners of our partnership shall mean in the aggregate 99.99%, which aggregate percentage interest shall be allocated among the limited partners in the proportion that the number of limited
partnership units held at each such date by a limited partner is of the total number of limited partnership units issued and outstanding at each such date. Generally, the source and character of such
income or losses so allocated to a partner at the end of each calendar quarter will be the same source and character as the income or loss earned or incurred by our partnership in such calendar
quarter.

Limited Liability

Assuming that a limited partner does not participate in the control or management of our partnership or conduct the affairs of, sign or
execute documents for or otherwise bind our partnership within the meaning of theLimited Partnership Act 1883and otherwise acts in conformity with the
provisions of our limited partnership agreement, such partner's liability under theLimited Partnership Act 1883and our limited partnership agreement
will be limited to the amount of capital such partner is obligated to contribute to our partnership for its limited partner interest plus its share of any undistributed profits and assets, except as
described below.

If
it were determined, however, that a limited partner was participating in the control or management of our partnership or conducting the affairs of, signing or executing documents for
or otherwise binding our partnership (or purporting to do any of the foregoing) within the meaning of theLimited Partnership Act 1883or the Exempted Partnerships Act
1992, such limited partner would be liable as if it were a general partner of our partnership in respect of all debts of our
partnership incurred while that limited partner was so acting or purporting to act. Neither our limited partnership agreement nor theLimited Partnership Act
1883specifically provides for legal recourse against our Managing General Partner if a limited partner were to lose limited liability through any fault of our Managing General
Partner. While
this does not mean that a limited partner could not seek legal recourse, we are not aware of any precedent for such a claim in Bermuda case law.

No Management or Control

Our partnership's limited partners, in their capacities as such, may not take part in the management or control of the activities and
affairs of our partnership and do not have any right or authority to act for or to bind our partnership or to take part or interfere in the conduct or management of our partnership. Limited partners
are not entitled to vote on matters relating to our partnership, although holders of units are entitled to consent to certain matters as described under "Amendment of Our Limited
Partnership Agreement," "Opinion of Counsel and Limited Partner Approval," "Merger, Sale or Other Disposition of Assets," and "Withdrawal of Our Managing General
Partner" which may be effected only with the consent of the holders of the percentages of our outstanding units specified below. Each unit shall entitle the holder thereof to one vote for the purposes
of any approvals of holders of units.

Meetings

Our Managing General Partner may call special meetings of partners at a time and place outside of Canada determined by our Managing
General Partner on a date not less than 10 days nor more than 60 days after the mailing of notice of the meeting. The limited partners do not have the ability to call a special meeting.
Only holders of record on the date set by our Managing General Partner (which

134     Brookfield Infrastructure

---



Table of Contents

may
not be less than 10 days nor more than 60 days, before the meeting) are entitled to notice of any meeting.

Written
consents may be solicited only by or on behalf of our Managing General Partner. Any such consent solicitation may specify that any written consents must be returned to our
partnership within the time period, which may not be less than 20 days, specified by our Managing General Partner.

For
purposes of determining holders of partnership interests entitled to provide consents to any action described above, our Managing General Partner may set a record date, which may be
not less than 10 nor more than 60 days before the date by which record holders are requested in writing by our Managing General Partner to provide such consents. Only those holders of
partnership interests on the record date established by our Managing General Partner will be entitled to provide consents with respect to matters as to which a consent right applies.

Amendment of Our Limited Partnership Agreement

Amendments to our limited partnership agreement may be proposed only by or with the consent of our Managing General Partner. To adopt a
proposed amendment, other than the amendments that do not require limited partner approval discussed below, our Managing General Partner must seek approval of a majority of our outstanding units
required to approve the amendment or call a meeting of the limited partners to consider and vote upon the proposed amendment.

Prohibited Amendments

No amendment may be made that would:



The
provision of our limited partnership agreement preventing the amendments having the effects described directly above can be amended upon the approval of the holders of at least 90%
of the outstanding units.

No Limited Partner Approval

Subject to applicable law, our Managing General Partner may generally make amendments to our limited partnership agreement without the
approval of any limited partner to reflect:



Brookfield Infrastructure     135

---



Table of Contents



In
addition, our Managing General Partner may make amendments to our limited partnership agreement without the approval of any limited partner if those amendments, in the discretion of
our Managing General Partner:



Opinion of Counsel and Limited Partner Approval

Our Managing General Partner will not be required to obtain an opinion of counsel that an amendment will not result in a loss of
limited liability to the limited partners if one of the amendments described above under "No Limited Partner Approval" should occur. No other amendments to our limited partnership
agreement (other than an amendment pursuant
to a merger, sale or other disposition of assets effected in accordance with the provisions described under "Merger, Sale or

136     Brookfield Infrastructure

---



Table of Contents

Other
Disposition of Assets") will become effective without the approval of holders of at least 90% of our units, unless our partnership obtains an opinion of counsel to the effect that the amendment
will not cause our partnership to be treated as an association taxable as a corporation or otherwise taxable as an entity for tax purposes (provided that for U.S. tax purposes our Managing
General Partner has not made the election described below under "Election to be Treated as a Corporation") or affect the limited liability under theLimited
Partnership Act of 1883of any of our partnership's limited partners.

In
addition to the above restrictions, any amendment that would have a material adverse effect on the rights or preferences of any type or class of partnership interests in relation to
other classes of partnership interests will also require the approval of the holders of at least a majority of the outstanding partnership interests of the class so affected.

In
addition, any amendment that reduces the voting percentage required to take any action must be approved by the affirmative vote of limited partners whose aggregate outstanding voting
units constitute not less than the voting requirement sought to be reduced.

Merger, Sale or Other Disposition of Assets

Any merger, consolidation or other combination of our partnership requires the prior approval of our Managing General Partner who has
no duty or obligation to provide any such approval. Our limited partnership agreement generally prohibits our Managing General Partner, without the prior approval of the holders of a majority of our
units, from causing our partnership to, among other things, sell, exchange or otherwise dispose of all or substantially all of our partnership's assets in a single transaction or a series of related
transactions, including by way of merger, consolidation or other combination, or approving on our partnership's behalf the sale, exchange or other disposition of all or substantially all of the assets
of our partnership's subsidiaries. However, our Managing General Partner in its sole discretion may mortgage, pledge, hypothecate or grant a security interest in all or substantially all of our
partnership's assets (including for the benefit of persons other than our partnership or our partnership's subsidiaries) without that approval. Our Managing General Partner may also sell all or
substantially all of our partnership's assets under any forced sale of any or all of our partnership's assets pursuant to the foreclosure or other realization upon those encumbrances without
that approval.

If
conditions specified in our limited partnership agreement are satisfied, our Managing General Partner may convert or merge our partnership into, or convey some or all of our
partnership's assets to, a newly formed entity if the sole purpose of that merger or conveyance is to effect a mere change in our partnership's legal form into another limited liability entity.
Holders of partnership interests are not entitled to dissenters' rights of appraisal under our limited partnership agreement or theLimited Partnership Act
1883or theExempted Partnerships Act 1992in the event of a merger or consolidation, a sale of substantially all of our assets
or any other transaction or event.

Election to be Treated as a Corporation

If our Managing General Partner determines that it is no longer in our partnership's best interests to continue as a partnership for
U.S. federal income tax purposes, our Managing General Partner may elect to treat our partnership as an association or as a publicly traded partnership taxable as a corporation for
U.S. federal (and applicable state) income tax purposes.

Termination and Dissolution

Our partnership will terminate upon the earlier to occur of (i) the date on which all of our partnership's assets have been
disposed of or otherwise realized by our partnership and the proceeds of such disposals or realizations have been distributed to partners, (ii) the service of notice by our Managing General
Partner, with the special approval of a majority of its independent directors, that in

Brookfield Infrastructure     137

---



Table of Contents

its
opinion the coming into force of any law, regulation or binding authority has or will render illegal or impracticable the continuation of our partnership, and (iii) at the election of our
Managing General Partner, if our partnership, as determined by our Managing General Partner, is required to register as an "investment company" under the Investment Company Act or similar legislation
in other jurisdictions.

Our
partnership will be dissolved upon the withdrawal of our Managing General Partner as the general partner of our partnership (unless Brookfield becomes the general partner as
described in the following sentence or the withdrawal is effected in compliance with the provisions of our limited partnership agreement that are described below under "Withdrawal of Our
Managing General Partner") or the entry by a court of competent jurisdiction of a decree of judicial dissolution of our partnership or an order to wind up or liquidate our Managing General Partner.
Our partnership will be reconstituted and continue without dissolution if within 30 days of the date of dissolution (and so long as a notice of dissolution has not been filed with the
Bermuda Monetary Authority), Brookfield executes a transfer deed pursuant to which it becomes the general partner and assumes the rights and undertakes the obligations of the general partner and our
partnership receives an opinion of counsel that the admission of Brookfield as general partner will not result in the loss of the limited liability of any limited partner.

Liquidation and Distribution of Proceeds

Upon our dissolution, unless our partnership is continued as a new limited partnership, the liquidator authorized to wind up our
partnership's affairs will, acting with all of the powers of our Managing General Partner that the liquidator deems necessary or appropriate in its judgment, liquidate our partnership's assets and
apply the proceeds of the liquidation first, to discharge our partnership's liabilities as provided in our limited partnership agreement and by law and thereafter to the partners pro rata
according to the percentages of their respective partnership interests as of a record date selected by the liquidator. The liquidator may defer liquidation of our partnership's assets for a reasonable
period of time or distribute assets to partners in kind if it determines that an immediate sale or distribution of all or some of our partnership's assets would be impractical or would cause undue
loss to the partners.

Withdrawal of Our Managing General Partner

Our Managing General Partner may withdraw as Managing General Partner without first obtaining approval of our unitholders by giving
90 days' advance notice, and that withdrawal will not constitute a violation of our limited partnership agreement.

Upon
the withdrawal of our Managing General Partner, the holders of a majority of the voting power of our outstanding units may select a successor to that withdrawing Managing General
Partner. If a successor is not elected, or is elected but an opinion of counsel regarding limited liability, tax matters and the Investment Company Act (and similar legislation in other
jurisdictions) cannot be obtained, our partnership will be dissolved, wound up and liquidated. See "Termination and Dissolution" above.

In
the event of withdrawal of a general partner where that withdrawal violates our limited partnership agreement, a successor general partner will have the option to purchase the general
partnership interest of the departing general partner for a cash payment equal to its fair market value. Under all other circumstances where a general partner withdraws, the departing general partner
will have the option to require the successor general partner to purchase the general partnership interest of the departing general partner for a cash payment equal to its fair market value. In each
case, this fair market value will be determined by agreement between the departing general partner and the successor general partner. If no agreement is reached within 30 days of the general
partner's departure, an independent investment banking firm or other independent expert selected by the departing general

138     Brookfield Infrastructure

---



Table of Contents

partner
and the successor general partner will determine the fair market value. If the departing general partner and the successor general partner cannot agree upon an expert within 45 days of
the general partner's departure, then an expert chosen by agreement of the experts selected by each of them will determine the fair market value.

If
the option described above is not exercised by either the departing general partner or the successor general partner, the departing general partner's general partnership interests
will automatically convert into units pursuant to a valuation of those interests as determined by an investment banking firm or other independent expert selected in the manner described in the
preceding paragraph.

Transfer of the General Partnership Interest

Our Managing General Partner may transfer all or any part of its general partnership interests without first obtaining approval of any
unitholder. As a condition of this transfer, the transferee must assume the rights and duties of our Managing General Partner to whose interest that transferee has succeeded, agree to be bound by the
provisions of our limited partnership agreement and furnish an opinion of counsel regarding limited liability, tax matters, and the Investment Company Act (and similar legislation in other
jurisdictions). Any transfer of the general partnership interest is subject to prior notice to and approval of the relevant Bermuda regulatory authorities. At any time, the members of our Managing
General Partner may sell or transfer all or part of their shares in our Managing General Partner without the approval of the unitholders.

Partnership Name

If our Managing General Partner ceases to be the general partner of our partnership and our new general partner is not an affiliate of
Brookfield, our partnership will be required by our limited partnership agreement to change the name of our partnership to a name that does not include "Brookfield" and which could not be capable of
confusion in any way with such name. Our limited partnership agreement explicitly provides that this obligation shall be enforceable and waivable by our Managing General Partner notwithstanding that
it may have ceased to be the general partner of our partnership.

Transactions with Interested Parties

Our Managing General Partner, the Manager and their respective partners, members, shareholders, directors, officers, employees and
shareholders, which we refer to as "interested parties," may become limited partners or beneficially interested in limited partners and may hold, dispose of or otherwise deal with our units with the
same rights they would have if our Managing General Partner was not a party to our limited partnership agreement. An interested party will not be liable to account either to other interested parties
or to our partnership, our partnership's partners or any other persons for any profits or benefits made or derived by or in connection with any such transaction.

Our
limited partnership agreement permits an interested party to sell investments to, purchase assets from, vest assets in and enter into any contract, arrangement or transaction with
our partnership, the Holding LP, any of the Holding Entities, any operating entity or any other holding vehicle established by our partnership and may be interested in any such contract,
transaction or arrangement and shall not be liable to account either to our partnership, the Holding LP, any of the Holding Entities, any operating entity or any other holding vehicle
established by our partnership or any other person in respect of any such contract, transaction or arrangement, or any benefits or profits made or derived therefrom, by virtue only of the relationship
between the parties concerned, subject to any approval requirements that are contained in our conflicts policy. See Item 7.B "Related Party TransactionsConflicts of Interest and
Fiduciary Duties."

Brookfield Infrastructure     139

---



Table of Contents

Outside Activities of Our Managing General Partner; Conflicts of Interest

Under our limited partnership agreement, our Managing General Partner is required to maintain as its sole activity the role of general
partner of our partnership. Our Managing General Partner is not permitted to engage in any activity or incur any debts or liabilities except in connection with or incidental to its performance as
general partner or acquiring, owning or disposing of debt or equity securities of the Holding LP, a Holding Entity or any other holding vehicle established by our partnership.

Our
limited partnership agreement provides that each person who is entitled to be indemnified by our partnership (other than our Managing General Partner), as described below under
"Indemnification; Limitation on Liability," has the right to engage in businesses of every type and description and other activities for profit, and to engage in and possess interests in
business ventures of any and every type or description, irrespective of whether (i) such activities are similar to our affairs or activities or (ii) such affairs and activities directly
compete with, or disfavor or exclude, our Managing General Partner, our partnership, the Holding LP, any Holding Entity, any operating entity or any other holding vehicle established by our
partnership. Such business interests, activities and engagements will be deemed not to constitute a breach of our limited partnership agreement or any duties stated or implied by law or equity,
including fiduciary duties, owed to any of our Managing General Partner, our partnership, the Holding LP, any Holding Entity, any operating entity and any other holding vehicle established by
our partnership (or any of their respective investors), and shall be deemed not to be a breach of our Managing General Partner's fiduciary duties or any other obligation of any type whatsoever
of our Managing General Partner. None of our Managing General Partner, our partnership, the Holding LP, any Holding Entity, any operating entity, any other holding vehicle established by our
partnership or any other person shall have any rights by virtue of our limited partnership agreement or the partnership relationship established thereby or otherwise in any business ventures of any
person who is entitled to be indemnified by our partnership as described below under "Indemnification; Limitation on Liability."

Our
Managing General Partner and the other indemnified persons described in the preceding paragraph do not have any obligation under our limited partnership agreement or as a result of
any duties stated or implied by law or equity, including fiduciary duties, to present business or investment opportunities to our partnership, the Holding LP, any Holding Entity, any operating
entity or any other holding vehicle established by our partnership. These provisions will not affect any obligation of an indemnified person to present business or investment opportunities to our
partnership, the Holding LP, any Holding Entity, any operating entity or any other holding vehicle established by our partnership pursuant to a separate written agreement between
such persons.

Any
conflicts of interest and potential conflicts of interest that are approved by a majority of our Managing General Partner's independent directors from
time-to-time will be deemed approved by all partners. Pursuant to our conflicts policy, independent directors may grant approvals for any of the transactions described above in
the form of general guidelines, policies or procedures in which case no further special approval will be required in connection with a particular
transaction or matter permitted thereby. See Item 7.B "Related Party TransactionsConflicts of Interest and Fiduciary Duties."

Indemnification; Limitations on Liability

Under our limited partnership agreement, our partnership is required to indemnify to the fullest extent permitted by law our Managing
General Partner, the Manager and any of their respective affiliates (and their respective officers, directors, agents, shareholders, partners, members and employees), any person who serves on a
governing body of the Holding LP, a Holding Entity, operating entity or any other holding vehicle established by our partnership and any other person designated by our Managing General Partner
as an indemnified person, in each case, against all losses, claims, damages, liabilities, costs or expenses (including legal fees and expenses), judgments, fines, penalties,

140     Brookfield Infrastructure

---



Table of Contents

interest,
settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, incurred by an indemnified person in connection with our investments and activities or
by reason of their holding such positions, except to the extent that the claims, liabilities, losses, damages, costs or expenses are determined to have resulted from the indemnified person's bad
faith, fraud or willful misconduct, or in the case of a criminal matter, action that the indemnified person knew to have been unlawful. In addition, under our limited partnership agreement,
(i) the liability of such persons has been limited to the fullest extent permitted by law, except to the extent that their conduct involves bad faith, fraud or willful misconduct, or in the
case of a criminal matter, action that the indemnified person knew to have been unlawful and (ii) any matter that is approved by the independent directors of our Managing General Partner will
not constitute a breach of our limited partnership agreement or any duties stated or implied by law or equity, including fiduciary duties. Our limited partnership agreement requires us to advance
funds to pay the expenses of an indemnified person in connection with a matter in which indemnification may be sought until it is determined that the indemnified person is not entitled to
indemnification.

Accounts, Reports and Other Information

Pursuant to an amendment to our limited partnership agreement dated February 5, 2010, our partnership is required to prepare
financial statements in accordance with IFRS. This change was made in light of Holding LP's investments in Prime, DBCT and PD Ports which use
IFRS as their primary basis of accounting. Brookfield Infrastructure has adopted IFRS effective January 1, 2010. Prior to the adoption of IFRS, Brookfield Infrastructure prepared its financial
statements in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). As stated in note 3, Brookfield Infrastructure's first annual consolidated financial statements
prepared in accordance with IFRS were as at and for the year ended December 31, 2010. Brookfield Infrastructure's transition date was January 1, 2009 ("transition date") and Brookfield
Infrastructure has prepared its opening IFRS Statement of Financial Position as at that date.

Our
partnership's financial statements must be made publicly available together with a statement of the accounting policies used in their preparation, such information as may be required
by applicable laws and regulations and such information as our Managing General Partner deems appropriate. Our partnership's annual financial statements must be audited by an independent accountant
firm of international standing and made publicly available within such period of time as is required to comply with applicable laws and regulations, including any rules of any applicable securities
exchange. Our partnership's quarterly financial statements may be unaudited and are made available publicly as and within the time period required by applicable laws and regulations.

Our
Managing General Partner is also required to use commercially reasonable efforts to prepare and send to the limited partners of our partnership on an annual basis, additional
information regarding our partnership, including Schedule K-1 (or equivalent) and information related to the passive foreign investment company status of any
non-U.S. corporation that we control and, where reasonably possible, any other non-U.S. corporation in which we hold an interest. Our Managing General Partner
will, where reasonably possible, prepare and send information required by the non-U.S. limited partners of our partnership for U.S. federal income tax reporting purposes,
including information related to investments in "U.S. real property interests," as that term is defined in Section 897 of the U.S. Internal Revenue Code. Our Managing General
Partner will also, where reasonably possible and applicable, prepare and send information required by limited partners of our partnership for Canadian federal income tax purposes.

Governing Law; Submission to Jurisdiction

Our limited partnership agreement is governed by and will be construed in accordance with the laws of Bermuda. Under our limited
partnership agreement, each of our partnership's partners (other

Brookfield Infrastructure     141

---



Table of Contents

than
governmental entities prohibited from submitting to the jurisdiction of a particular jurisdiction) will submit to the non-exclusive jurisdiction of any court in Bermuda in any
dispute, suit, action or proceeding arising out of or relating to our limited partnership agreement. Each partner waives, to the fullest extent permitted by law, any immunity from jurisdiction of any
such court or from any legal process therein and further waives, to the fullest extent permitted by law, any claim of inconvenient forum, improper venue or that any such court does not have
jurisdiction over the partner. Any final judgment against a partner in any proceedings brought in a court in Bermuda will be conclusive and binding upon the partner and may be enforced in the courts
of any other jurisdiction of which the partner is or may be subject, by suit upon such judgment. The foregoing submission to jurisdiction and waivers will survive the dissolution, liquidation, winding
up and termination of our partnership.

Transfers of Units

We are not required to recognize any transfer of our units until certificates, if any, evidencing such units are surrendered for
registration of transfer. Each person to whom a unit is transferred (including any nominee holder or an agent or representative acquiring such unit for the account of another person) will be admitted
to our partnership as a partner with respect to the unit so transferred subject to and in accordance with the terms of our limited partnership agreement. Any transfer of a unit will not entitle the
transferee to share in the profits and losses of our partnership, to receive distributions, to receive allocations of income, gain, loss, deduction or credit or any similar item or to any other rights
to which the transferor was entitled until the transferee becomes a partner and a party to our partnership's limited partnership agreement.

By
accepting a unit for transfer in accordance with our limited partnership agreement, each transferee will be deemed to have:



The
transfer of any unit and the admission of any new partner to our partnership will not constitute any amendment to our limited partnership agreement.

142     Brookfield Infrastructure

---



Table of Contents

Transfer Agent and Registrar

Computershare Trust Company, N.A. in New York, New York, U.S.A. has been appointed to act as transfer agent and registrar
for the purpose of registering our limited partnership interests and transfers of our limited partnership interests as provided in our limited partnership agreement. Our partnership will indemnify the
transfer agent, its agents and each of their shareholders, directors, officers and employees against all claims and losses that may arise out of acts
performed or omitted for its activities in that capacity, except for any liability due to any gross negligence or intentional misconduct of the indemnified person or entity.

Description of the Holding LP's Limited Partnership Agreement

The following is a description of the material terms of the Holding LP's limited partnership agreement and is qualified in its
entirety by reference to all of the provisions of such agreement. Holders of units in our partnership are not limited partners of the Holding LP and do not have any rights under its limited
partnership agreement. Pursuant to the Voting Agreements, however, our partnership, through our Managing General Partner, has a number of voting rights, including the right to direct all eligible
votes in the election of the directors of the Infrastructure General Partner. See Item 7.B "Related Party TransactionsVoting Agreements".

Because
this description is only a summary of the terms of the agreement, it does not necessarily contain all of the information that you may find useful. For more complete information,
you should read the Holding LP's limited partnership agreement which is available electronically on the website of the Securities and Exchange Commission at www.sec.gov and on our SEDAR profile
at www.sedar.com and will be made available to our unitholders as described under Item 10.C "Material Contracts" and Item 10.H "Documents on display."

Formation and Duration

The Holding LP is a Bermuda exempted limited partnership registered under theLimited Partnership Act
1883and theExempted Partnerships Act 1992. The Holding LP has a perpetual existence and will continue as a limited
liability partnership unless the partnership is terminated or dissolved in accordance with its limited partnership agreement.

Nature and Purpose

Under its limited partnership agreement, the purpose of the Holding LP is to: acquire and hold interests in the Holding Entities
and, subject to the approval of Infrastructure GP LP, any other subsidiary of the Holding LP; engage in any activity related to the capitalization and financing of the
Holding LP's interests in such entities; and engage in any other activity that is incidental to or in furtherance of the foregoing and that is approved by the
Infrastructure GP LP and that lawfully may be conducted by a limited partnership organized under theLimited Partnership Act 1883and our
limited partnership agreement.

Units

The Holding LP's units are limited partnership interests in the Holding LP. Holders of units are not entitled to the
withdrawal or return of capital contributions in respect of their units, except to the extent, if any, that distributions are made to such holders pursuant to the Holding LP's limited
partnership agreement or upon the liquidation of the Holding LP or as otherwise required by applicable law. Except to the extent expressly provided in the Holding LP's limited
partnership agreement, a holder of units does not have priority over any other holder of units, either as to the return of capital contributions or as to profits, losses or distributions.

Brookfield Infrastructure     143

---



Table of Contents

In
connection with the spin-off, the Holding LP issued two classes of units. The first class of units was issued to Brookfield and subsequently transferred to our
partnership and the second class of units, referred to as the Redeemable Partnership Units, were issued to wholly-owned subsidiaries of Brookfield Asset Management. Redeemable Partnership Units are
identical to the limited partnership units held by our partnership, except as described below under "Distributions" and "No Management or Control" and except
that they have the right of redemption described below under the heading "Redemption-Exchange Mechanism."

Issuance of Additional Partnership Interests

The Holding LP may issue additional partnership interests (including new classes of partnership interests and options, rights,
warrants and appreciation rights relating to such interests) for any partnership purpose, at any time and on such terms and conditions as its general partner may determine. Any additional partnership
interests may be issued in one or more classes, or one or more series of classes, with such designations, preferences, rights, powers and duties (which may be senior to existing classes and series of
partnership interests) as its general partner may determine in its sole discretion.

Redemption-Exchange Mechanism

At any time, one or more wholly-owned subsidiaries of Brookfield Asset Management that hold Redeemable Partnership Units will have the
right to require the Holding LP to redeem for cash all or a portion of the Redeemable Partnership Units held by such subsidiary, subject to our partnership's right of first refusal, as
described below. Any such redeeming subsidiary may exercise its right of redemption by delivering a notice of redemption to the Holding LP and our partnership. After presentation for
redemption, such redeeming subsidiary will receive, subject to our partnership's right of first refusal, as described below, for each unit that is presented, cash in an amount equal to the market
value of one of our units multiplied by the number of units to be redeemed (as determined by reference to the five day volume weighted average of the trading price of our units and subject to
certain customary adjustments). Upon its receipt of the redemption notice, our partnership will have a right of first refusal entitling it, at its sole discretion, to elect to acquire all
(but not less than all) units described in such notice and presented to the Holding LP for redemption in exchange for units on a one for one basis (subject to certain customary
adjustments). Upon a redemption for cash, the holder's right to receive distributions with respect to the Holding LP's units so redeemed will cease.

Brookfield's
aggregate limited partnership interest in our partnership would be approximately 29.1% if it exercised its redemption right in full and our partnership exercised its right
of first refusal on the Holding LP's units redeemed (including the approximately 1.6% of the issued and outstanding units that Brookfield currently also owns). Brookfield's total percentage
interest in our partnership would be increased if it participates in the Holding LP's distribution reinvestment plan.

Distributions

Distributions by the Holding LP will be made in the sole discretion of its general partner. However, its general partner will
not be permitted to cause the Holding LP to make a distribution if the Holding LP does not have sufficient cash on hand to make the distribution, the distribution would render the
Holding LP insolvent or if, in the opinion of its general partner, the distribution would leave the Holding LP with insufficient funds to meet any future contingent obligations.

Except
as set forth below, prior to the dissolution of the Holding LP, distributions of available cash (if any) in any given quarter will be made by the Holding LP
as follows, referred to as the Regular Distribution Waterfall:



144     Brookfield Infrastructure

---



Table of Contents



Set
forth below is an example of how the incentive distributions described above are calculated on a quarterly and annualized basis. The figures used below are for illustrative purposes
only and are not indicative of Brookfield Infrastructure's expectations.

Quarterly

AnnuallyIncentive Distribution Calculation

Units (m)

Per Unit ($)

Total ($m)

Per Unit ($)

Total ($m)Illustrative distribution




$
0.375




$
1.500First distribution threshold




$
0.305





1.220Total units of Holding LP


201Total first distribution







$
61




$
245Distribution in excess of first distribution threshold




$
0.025




$
0.100Total units of Holding LP


201Second distribution to partners







$
5




$
2015% incentive distribution to general partner








1





4Total second distribution







$
6




$
24Distribution in excess of second distribution threshold




$
0.045




$
0.180Total units Holding LP


201Third distribution to partners







$
9




$
3625% incentive distribution to general partner








3





12Total third distribution







$
12




$
48Total distributions to partners (including incentive distributions)







$
79




$
317Total incentive distributions to general partner







$
4




$
16


The
table below sets forth the incentive distributions for the years ended December 31, 2012, 2011 and 2010 paid to the general partner.

Year ended December 31MILLIONS

2012

2011

2010Incentive Distributions

$
16

$
4

$



Brookfield Infrastructure     145

---



Table of Contents

If,
prior to the dissolution of the Holding LP, available cash is deemed by its general partner, in its sole discretion, to be (i) attributable to sales or other
dispositions of the Holding LP's assets and (ii) representative of unrecovered capital, then such available cash shall be distributed to the partners of the Holding LP in
proportion to the unreturned capital attributable to the Holding LP's partnership interests held by the partners until such time as the unreturned capital attributable to each such partnership
interest is equal to zero. Thereafter, distributions of available cash made by the Holding LP (to the extent made prior to dissolution) will be made in accordance with the Regular
Distribution Waterfall.

Upon
the occurrence of an event resulting in the dissolution of the Holding LP, all cash and property of the Holding LP in excess of that required to discharge the
Holding LP's liabilities will be distributed as follows: (i) to the extent such cash and/or property is attributable to a realization event occurring prior to the event of dissolution,
such cash and/or property will be distributed in accordance with the Regular Distribution Waterfall and/or the distribution waterfall applicable to unrecovered capital; and (ii) all other cash
and/or property will be distributed in the manner set forth below.



Each
partner's percentage interest is determined by the relative portion of all outstanding partnership interests held by that partner from time to time and is adjusted upon and to
reflect the issuance of additional partnership interests of the Holding LP. In addition, the unreturned capital attributable to each of the partnership interests, as well as certain of the
distribution thresholds set forth above, may be adjusted pursuant to the terms of the limited partnership agreement of the Holding LP so as to ensure the uniformity of the economic rights and
entitlements of (i) the previously outstanding
partnership interests of the Holding LP, and (ii) the subsequentlyissued partnership interests of the Holding LP.

146     Brookfield Infrastructure

---



Table of Contents

The
limited partnership agreement of the Holding LP provides that, to the extent that any Holding Entity or any operating entity pays to Brookfield any comparable performance or
incentive distribution, the amount of any incentive distributions paid to the Infrastructure GP LP in accordance with the distribution entitlements described above will be reduced in an
equitable manner to avoid duplication of distributions.

The
Infrastructure GP LP may elect, at its sole discretion, to reinvest incentive distributions in Redeemable Partnership Units.

No Management or Control

The Holding LP's limited partners, in their capacities as such, may not take part in the management or control of the activities
and affairs of the Holding LP and do not have any right or authority to act for or to bind the Holding LP or to take part or interfere in the conduct or management of the
Holding LP.

Limited
partners are not entitled to vote on matters relating to the Holding LP, although holders of units are entitled to consent to certain matters as described under
"Amendment of the Holding LP's Limited Partnership Agreement," "Opinion of Counsel and Limited Partner Approval," "Merger, Sale or Other Disposition of
Assets," and "Withdrawal of the General Partner" which may be effected only with the consent of the holders of the percentages of outstanding units specified below. For the purposes of
any approval required from holders of the Holding LP's units, if Brookfield and its subsidiaries are entitled to vote, they will be entitled to one vote per unit held subject to a maximum
number of votes equal to 49% of the total number of units of the Holding LP then issued and outstanding. Each unit shall entitle the holder thereof to one vote for the purposes of any approvals
of holders of units.

In
addition, pursuant to the Voting Agreements, our partnership, through our Managing General Partner, has a number of voting rights, including the right to direct all eligible votes in
the election of
the directors of the Infrastructure General Partner. See Item 7.B "Related Party TransactionsVoting Agreements".

Meetings

Special meetings of the limited partners of the Holding LP may be called by its general partner at a time and place outside of
Canada determined by it on a date not less than 10 days nor more than 60 days after the mailing of notice of the meeting. Special meetings of the limited partners may also be called by
limited partners owning 50% or more of the voting power of the outstanding partnership interests of the class or classes for which a meeting is proposed. For this purpose, the partnership interests
outstanding do not include partnership interests owned by its general partner or Brookfield. Only holders of partnership interests of the Holding LP of record on the date set by its general
partner (which may not be less than 10 days nor more than 60 days, before the meeting) are entitled to notice of any meeting.

Amendment of the Holding LP's Limited Partnership Agreement

Amendments to the Holding LP's limited partnership agreement may be proposed only by or with the consent of its general partner.
To adopt a proposed amendment, other than the amendments that do not require limited partner approval discussed below, the general partner must seek approval of a majority of the Holding LP's
outstanding units required to approve the amendment or call a meeting of the limited partners to consider and vote upon the proposed amendment.

Brookfield Infrastructure     147

---



Table of Contents

Prohibited Amendments

No amendment may be made that would:



The
provision of the Holding LP's limited partnership agreement preventing the amendments having the effects described directly above can be amended upon the approval of the
holders of at least 90% of the outstanding units.

No Limited Partner Approval

Subject to applicable law, the Infrastructure GP LP may generally make amendments to the Holding LP's limited
partnership agreement without the approval of any limited partner to reflect:



148     Brookfield Infrastructure

---



Table of Contents



In
addition, amendments to the Holding LP's limited partnership agreement may be made by its general partner without the approval of any limited partner if those amendments, in
the discretion of the general partner:



Opinion of Counsel and Limited Partner Approval

The Infrastructure GP LP will not be required to obtain an opinion of counsel that an amendment will not result in a loss
of limited liability to the limited partners if one of the amendments described above under "No Limited Partner Approval" should occur. No other amendments to the Holding LP's
limited partnership agreement (other than an amendment pursuant to a merger, sale or other disposition of assets effected in accordance with the Holding LP's limited partnership agreement) will
become effective without the approval of holders of at least 90% of the Holding LP's units, unless it obtains an opinion of counsel to the effect that the amendment will not cause the
Holding LP to be treated as an association taxable as a corporation or otherwise taxable as an entity for tax purposes (provided that for U.S. tax purposes its general partner has not
made the election described below under "Election to be Treated as a Corporation") or affect the limited liability under theLimited Partnership Act of
1883of any of the Holding LP's limited partners.

In
addition to the above restrictions, any amendment that would have a material adverse effect on the rights or preferences of any type or class of partnership interests in relation to
other classes of partnership interests will also require the approval of the holders of at least a majority of the outstanding partnership interests of the class so affected.

In
addition, any amendment that reduces the voting percentage required to take any action must be approved by the affirmative vote of limited partners whose aggregate outstanding voting
units constitute not less than the voting requirement sought to be reduced.

Brookfield Infrastructure     149

---



Table of Contents

Election to be Treated as a Corporation

If, in the determination of its general partner, it is no longer in the Holding LP's best interests to continue as a partnership
for U.S. federal income tax purposes, the Infrastructure GP LP may elect to treat the Holding LP as an association or as a publicly traded partnership taxable as a
corporation for U.S. federal (and applicable state) income tax purposes.

Dissolution

The Holding LP shall dissolve and its affairs shall be wound up, upon the earlier of (i) the service of notice by its
general partner, with the approval of a majority of the members of the independent directors of our Managing General Partner, that, in the opinion of the general partner, the coming into force of any
law, regulation or binding authority renders illegal or impracticable the continuation of the Holding LP; (ii) the election of its general partner if the Holding LP, as determined
by its general partner, is required to register as an "investment company" under the Investment Company Act or similar legislation in other jurisdictions; (iii) the date that its general
partner withdraws from the partnership (unless Brookfield becomes the general partner of the Holding LP as described below under "Withdrawal of the General Partner");
(iv) the date on which any court of competent jurisdiction enters a decree of judicial dissolution of the Holding LP or an order to wind up or liquidate its general partner; and
(v) the date on which its general partner decides to dispose of, or otherwise realize proceeds in respect of, all or substantially all of the Holding LP's assets in a single transaction
or series of transactions.

The
Holding LP shall not dissolve if within 30 days of the date of dissolution (and provided that a notice of dissolution with respect to the Holding LP has
not been filed with the Bermuda Monetary Authority), Brookfield executes a transfer deed pursuant to which the new general partner assumes the rights and undertakes the obligations of the original
general partner, but only if the Holding LP receives an opinion of counsel that the admission of Brookfield as general partner will not result in the loss of limited liability of any limited
partner of the Holding LP.

Withdrawal of the General Partner

The Infrastructure GP LP may withdraw as general partner without first obtaining approval of unitholders by giving
90 days advance notice, and that withdrawal will not constitute a violation of the limited partnership agreement.

Upon
the withdrawal of the Infrastructure GP LP, the holders of a majority of the voting power of outstanding units may select a successor to the
Infrastructure GP LP. If a successor is not elected, or is elected but an opinion of counsel regarding limited liability, tax matters and the Investment Company Act (and similar
legislation in other jurisdictions) cannot be obtained, the Holding LP will be dissolved, wound up and liquidated. See "Dissolution" above.

The
Infrastructure GP LP may not be removed unless that removal is approved by the vote of the holders of at least 662/3% of the outstanding class of units
that are not Redeemable Partnership Units and it receives an opinion of counsel regarding limited liability tax matters and the Investment Company Act (and similar legislation in other
jurisdictions). Any removal of the Infrastructure GP LP is also subject to the approval of a successor general partner by the vote of the holders of a majority of the voting power of its
outstanding units.

In
the event of removal of the Infrastructure GP LP under circumstances where cause exists or withdrawal of the Infrastructure GP LP where that withdrawal
violates the Holding LP's limited partnership agreement, a successor general partner will have the option to purchase the general partnership interest of the Infrastructure GP LP
for a cash payment equal to its fair market value. Under all other circumstances where the Infrastructure GP LP withdraws or is removed by the limited partners, the
Infrastructure GP LP will have the option to require the successor general partner to

150     Brookfield Infrastructure

---



Table of Contents

purchase
the general partnership interest of the Infrastructure GP LP for a cash payment equal to its fair market value. In each case, this fair market value will be determined by
agreement between the Infrastructure GP LP and the successor general partner. If no agreement is reached within 30 days of the Infrastructure GP LP's departure, an
independent investment banking firm or other independent expert selected by the Infrastructure GP LP and the successor general partner will determine the fair market value. If the
Infrastructure GP LP and the successor general partner cannot agree upon an expert within 45 days of the Infrastructure GP LP's departure, then an expert chosen by
agreement of the experts selected by each of them will determine the fair market value.

If
the option described above is not exercised by either the departing general partner or the successor general partner, the departing general partner's general partnership interests
will automatically convert into either class A units of the Holding LP or Redeemable Partnership Units pursuant to a valuation of those interests as determined by an investment banking
firm or other independent expert selected in the manner described in the preceding paragraph.

Transfer of the General Partnership Interest

The Infrastructure GP LP may transfer all or any part of its general partnership interests without first obtaining
approval of any unitholder. As a condition of this transfer, the transferee must assume the rights and duties of the general partner to whose interest that transferee has succeeded, agree to be bound
by the provisions of the Holding LP's limited partnership agreement and furnish an opinion of counsel regarding limited liability, tax matters and the Investment Company Act (and similar
legislation in other jurisdictions). Any transfer of the general partnership interest is subject to prior notice to and approval of the relevant Bermuda regulatory authority. At any time, the members
of the Infrastructure GP LP may sell or transfer all or part of their units in the Infrastructure GP LP without the approval of the unitholders.

Transactions with Interested Parties

The general partner of the Holding LP and their respective partners, members, shareholders, directors, officers, employees and
shareholders, which we refer to as "interested parties", may become limited partners or beneficially interested in limited partners and may hold, dispose of or otherwise deal with units of the
Holding LP with the same rights they would have if the general partner of the Holding LP were not a party to the limited partnership agreement of the Holding LP. An interested
party will not be liable to account either to other interested parties or to the Holding LP, its partners or any other persons for any profits or benefits made or derived by or in connection
with any such transaction.

The
limited partnership agreement of the Holding LP permits an interested party to sell investments to, purchase assets from, vest assets in and enter into any contract,
arrangement or transaction with the Holding LP, any of the Holding Entities, any operating entity or any other holding vehicle established by the Holding LP and may be interested in any
such contract, transaction or arrangement and shall not be liable to account either to the Holding LP, any of the Holding Entities, any operating entity or any other holding vehicle established
by the Holding LP or any other person in respect of any such contract, transaction or arrangement, or any benefits or profits made or derived therefrom, by virtue only of the relationship
between the parties concerned, subject to our conflicts policy.

Outside Activities of the General Partner

Under the Holding LP's limited partnership agreement, the general partner will be required to maintain as its sole activity the
role of the general partner of the Holding LP. The general partner will not be permitted to engage in any activity or incur any debts or liabilities except in connection with or incidental to
its performance as general partner or acquiring, owning or disposing of debt or equity

Brookfield Infrastructure     151

---



Table of Contents

securities
of a subsidiary of an Holding Entity or any other holding vehicle established by the Holding LP.

The
Holding LP's limited partnership agreement provides that each person who is entitled to be indemnified by the partnership, as described below under
"Indemnification; Limitations on Liability" (other than the general partner) will have the right to engage in businesses of every type and description and other activities for profit, and
to engage in and possess interests in business ventures of any and every type or description, irrespective of whether (i) such businesses and activities are similar to our activities, or
(ii) such businesses and activities directly compete with, or disfavor or exclude, the Holding LP, its general partner, any Holding Entity, operating entity, or any other holding vehicle
established by the Holding LP. Such business interests, activities and engagements will be deemed not to constitute a breach of the limited partnership agreement or any duties stated or implied
by law or equity, including fiduciary duties, owed to any of the Holding LP, its general partner, any Holding Entity, operating entity, and any other holding vehicle established by the
Holding LP (or any of their respective investors), and shall be deemed not to be a breach of its general partner's fiduciary duties or any other obligation of any type whatsoever of the
general partner. None of the Holding LP, its general partner, any Holding Entity, operating entity, any other holding vehicle established by the Holding LP or any other person shall have
any rights by virtue of the Holding LP's limited partnership agreement or the partnership relationship established thereby or otherwise in any business ventures of any person who is entitled to
be indemnified by the Holding LP as described below under "Indemnification; Limitations on Liability."

The
Infrastructure GP LP and the other indemnified persons described in the preceding paragraph will not have any obligation under the Holding LP's limited
partnership agreement or as a result of any duties stated or implied by law or equity, including fiduciary duties, to present business or investment opportunities to the Holding LP, any Holding
Entity, operating entity, or any other holding vehicle established by the Holding LP. These provisions will not affect any obligation of such indemnified person to present business or
investment opportunities to the Holding LP, any Holding Entity, operating
entity or any other holding vehicle established by the Holding LP pursuant to a separate written agreement between such persons.

Account Reports

Pursuant to an amendment to the Holding LP's limited partnership agreement, the Infrastructure GP LP was required
to prepare financial statements in accordance with IFRS. This amendment was made in conjunction with our partnership's amendment of its limited partnership agreement and subsequent adoption of IFRS as
at and for the quarter ended March 31, 2010. See also the information contained in this annual report on Form 20-F under Item 10.B "Memorandum and Articles of
AssociationDescription of Our Units and Our Limited Partnership AgreementAccounts, Reports and Other Information".

The
general partner of the Holding LP is also required to use commercially reasonable efforts to prepare and send to the Holding LP's limited partners on an annual basis,
additional information regarding the Holding LP, including Schedule K-1 (or equivalent) and information related to the passive foreign investment company status of any
non-U.S. corporation that we control and, where reasonably possible, any other non-U.S. corporation in which we hold an interest. The general partner of the
Holding LP will also, where reasonably possible, prepare and send information required by the Holding LP's non-U.S. limited partners for U.S. federal income tax
reporting purposes, including information related to investments in "U.S. real property interests," as that term is defined in Section 897 of the U.S. Internal Revenue Code. The
general partner will also, where reasonably possible and applicable, prepare and send information required by the Holding LP's limited partners for Canadian federal income tax purposes.

152     Brookfield Infrastructure

---





Table of Contents

The Infrastructure GP LP will deliver to our partnership (i) the financial statements of the Holding LP, and (ii) the accounts
and financial statements of any Holding Entity or any other holding vehicle established by the Holding LP that is not consolidated with the Holding LP or any Holding Entity or holding
vehicle whose accounts are subject to such approval.

Indemnification; Limitations on Liability

Under the Holding LP's limited partnership agreement, it is required to indemnify to the fullest extent permitted by law its
general partner, the Manager and any of their respective affiliates (and their respective officers, directors, agents, shareholders, partners, members and employees), any person who serves on a
governing body of the Holding LP, a Holding Entity, operating entity or any other holding vehicle established by our partnership and any other person designated by its general partner as an
indemnified person, in each case, against all losses, claims, damages, liabilities, costs or expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other
amounts arising from any and all claims, demands, actions, suits or proceedings, incurred by an indemnified person in connection with its business, investments and activities or by reason of their
holding such positions, except to the extent that the claims, liabilities, losses, damages, costs or expenses are determined to have resulted from the indemnified person's bad faith, fraud or willful
misconduct, or in the case of a criminal matter, action that the indemnified person knew to have been unlawful. In addition, under the Holding LP's limited partnership agreement, (i) the
liability of such persons has been limited to the fullest extent permitted by law, except to the extent that their conduct involves bad faith, fraud or willful misconduct, or in the case of a criminal
matter, action that the indemnified person knew to have been unlawful and (ii) any matter that is approved by the independent directors will not constitute a breach of any duties stated or
implied by law or equity, including fiduciary duties. The Holding LP's limited partnership agreement requires it to advance funds to pay the expenses of an indemnified person in connection with
a matter in which indemnification may be sought until it is determined that the indemnified person is not entitled to indemnification.

Governing Law

The Holding LP's limited partnership agreement is governed by and will be construed in accordance with the laws
of Bermuda.

10.C    MATERIAL CONTRACTS

There have been no material contracts, other than contracts entered into in the ordinary course of business, to which we have been a
party within the past two years.

10.D    EXCHANGE CONTROLS

There are currently no governmental laws, decrees, regulations or other legislation of Bermuda or the United States which
restrict the import or export of capital or the remittance of dividends, interest or other payments to non-residents of Bermuda or the United States holding the Company's
securities, except as otherwise described in this annual report on Form 20-F under Item 10.E "Taxation."

10.E    TAXATION

The following summary discusses certain material United States, Canadian, Australian and Bermudian tax considerations related to
the holding and disposition of our units as of the date hereof. Holders of our units are advised to consult their own tax advisors concerning the consequences under the tax laws of the country of
which they are resident or in which they are otherwise subject to tax of making an investment in our units.

Brookfield Infrastructure     153

---



Table of Contents

CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

This summary discusses certain material United States federal income tax considerations to unitholders relating to the receipt,
holding, and disposition of our units as of the date hereof. This summary is based on provisions of theU.S. Internal Revenue Code of 1986, as
amended ("U.S. Internal Revenue Code") on the regulations promulgated thereunder, and on published administrative rulings, judicial decisions, and other applicable authorities, all as in effect
on the date hereof and all of which are subject to change at any time, possibly with retroactive effect. This summary is necessarily general and may not apply to all categories of investors, some of
whom may be subject to special rules, including, without limitation, persons that own (directly or indirectly, applying certain attribution rules) 5% or more of our units, dealers in securities or
currencies, financial institutions or financial services entities, life insurance companies, persons that hold our units as part of a straddle, hedge, constructive sale or conversion transaction with
other investments, persons whose functional currency is not the U.S. dollar, persons who have elected mark-to-market accounting, persons who hold our units through a
partnership or other entity treated as a pass-through entity for U.S. federal income tax purposes, persons for whom our units are not a capital asset, persons who are liable for the
alternative minimum tax, and certain U.S. expatriates or former long-term residents of the United States. Tax-exempt organizations are addressed separately below.
The actual tax consequences of the ownership and disposition of our units will vary depending on your individual circumstances.

For
purposes of this discussion, a "U.S. Holder" is a beneficial owner of one or more of our units that is for U.S. federal tax purposes: (i) an individual citizen
or resident of the United States; (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or
under the laws of the United States, any state thereof or the District of Columbia; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of
its source; or (iv) a trust (a) that is subject to the primary supervision of a court within the United States and all substantial decisions of which one or more
U.S. persons have the authority to control or (b) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

A
"Non-U.S. Holder" is a beneficial owner of one or more of our units, other than a U.S. Holder or an entity classified as a partnership or other fiscally
transparent entity for U.S. federal tax purposes.

If
a partnership holds our units, the tax treatment of a partner of such partnership generally will depend upon the status of the partner and the activities of the partnership. Partners
of partnerships that hold our units should consult an independent tax adviser.

This discussion does not constitute tax advice and is not intended to be a substitute for tax planning. You should consult an independent tax adviser concerning
the U.S. federal, state and local income tax consequences particular to your ownership and disposition of our units, as well as any tax consequences under the laws of any other taxing
jurisdiction.

Partnership Status of Our Partnership and the Holding LP

Each of our partnership and the Holding LP has made a protective election to be classified as a partnership for
U.S. federal tax purposes. An entity that is treated as a partnership for U.S. federal tax purposes incurs no U.S. federal income tax liability. Instead, each partner is required
to take into account its allocable share of items of income, gain, loss, deduction, or credit of the partnership in computing its U.S. federal income tax liability, regardless of whether cash
distributions are made. Distributions of cash by a partnership to a partner generally are not taxable unless the amount of cash distributed to a partner is in excess of the partner's adjusted basis in
its partnership interest.

An
entity that would otherwise be classified as a partnership for U.S. federal income tax purposes may nonetheless be taxable as a corporation if it is a "publicly traded
partnership", unless an exception applies. Our partnership will be publicly traded. However, an exception, referred to as the "Qualifying

154     Brookfield Infrastructure

---



Table of Contents

Income
Exception", exists with respect to a publicly traded partnership if (i) at least 90% of such partnership's gross income for every taxable year consists of "qualifying income" and
(ii) the partnership would not be required to register under the Investment Company Act if it were a U.S. corporation. Qualifying income includes certain interest income, dividends, real
property rents, gains from the sale or other disposition of real property, and any gain from the sale or disposition of a capital asset or other property held for the production of income that
otherwise constitutes qualifying income.

Our
Managing General Partner and the Infrastructure General Partner intend to manage the affairs of our partnership and the Holding LP, respectively, so that our partnership will
meet the Qualifying Income Exception in each taxable year. Accordingly, our Managing General Partner believes that our partnership will be treated as a partnership and not as a corporation for
U.S. federal income tax purposes.

If
our partnership fails to meet the Qualifying Income Exception, other than a failure which is determined by the U.S. Internal Revenue Service ("IRS") to be inadvertent and which
is cured within a reasonable time after discovery, or if our partnership is required to register under the Investment Company Act, our partnership will be treated as if it had transferred all of its
assets, subject to liabilities, to a newly formed corporation, on the first day of the year in which our partnership fails to meet the Qualifying Income Exception, in return for stock in such
corporation, and then distributed the stock to our unitholders in liquidation. This deemed contribution and liquidation likely would result in the recognition of gain (but not loss) to
U.S. Holders, except that U.S. Holders generally would not recognize the portion of such gain attributable to stock or securities of non-U.S. corporations held by us.
If, at the time of such contribution, our partnership were to have liabilities in excess of the tax basis of its assets, U.S. Holders generally would recognize gain in respect of such excess
liabilities upon the deemed transfer. Thereafter, our partnership would be treated as a corporation for U.S. federal income tax purposes.

If
our partnership were treated as a corporation in any taxable year, either as a result of a failure to meet the Qualifying Income Exception or otherwise, our partnership's items of
income, gain, loss, deduction, or credit would be reflected only on our partnership's tax return rather than being passed through to our unitholders, and our partnership would be subject to
U.S. corporate income tax and potentially branch profits tax with respect to its income, if any, effectively connected with a U.S. trade or business. Moreover, under certain
circumstances, our partnership might be classified as a passive foreign investment company ("PFIC"), for U.S. federal income tax purposes, and a U.S. Holder would be subject to the rules
applicable to PFICs discussed below. See "Consequences to U.S. HoldersPassive Foreign Investment Companies". Subject to the PFIC rules, distributions made to
U.S. Holders would be treated as taxable dividend income to the extent of our partnership's current or accumulated earnings and profits. Any distribution in excess of current and accumulated
earnings and profits would first be treated as a tax-free return of capital to the extent of a U.S. Holder's adjusted tax basis in its units. Thereafter, to the extent such
distribution were to exceed a U.S. Holder's adjusted tax basis in its units, the distribution would be treated as gain from the sale or exchange of such units. The amount of a distribution
treated as a dividend could be eligible for reduced rates of taxation, provided certain conditions are met. In addition, dividends,
interest and certain other passive income received by our partnership with respect to U.S. investments generally would be subject to U.S. withholding tax at a rate of 30% (although
certain Non-U.S. Holders nevertheless might be entitled to certain treaty benefits in respect of their allocable share of such income) and U.S. Holders would not be allowed a
tax credit with respect to any such tax withheld. In addition, the "portfolio interest" exemption would not apply to certain interest income of our partnership (although certain
Non-U.S. Holders nevertheless might be entitled to certain treaty benefits in respect of their allocable share of such income). In addition to the foregoing consequences, if our
partnership were treated as a corporation for U.S. federal income tax purposes, and, as of the time of conversion from partnership status to

Brookfield Infrastructure     155

---



Table of Contents

corporate
status, the value of our partnership's U.S. assets were to equal or exceed 60% of the value of our partnership's total assets, some or all of the net income recognized by our
partnership subsequent to such conversion would be subject to U.S. corporate income tax. Our Managing General Partner and the Infrastructure General Partner believe that our partnership's
U.S. assets currently do not equal or exceed such thresholds, but no assurance can be provided that such thresholds will not be exceeded in the future.

Based
on the foregoing consequences, the treatment of our partnership as a corporation could materially reduce a holder's after-tax return and therefore could result in a
substantial reduction of the value of our units. If the Holding LP were to be treated as a corporation for U.S. federal income tax purposes, consequences similar to those described above
would apply.

The
remainder of this summary assumes that our partnership and the Holding LP will be treated as partnerships for U.S. federal tax purposes. Our partnership expects that a
substantial portion of the items of income, gain, deduction, loss, or credit realized by our partnership will be realized in the first instance by the Holding LP and allocated to our
partnership for reallocation to our unitholders. Unless otherwise specified, references in this section to realization of our partnership's items of income, gain, loss, deduction, or credit include a
realization of such items by the Holding LP and the allocation of such items to our partnership.

Proposed Legislation

Over the past several years, a number of legislative and administrative proposals relating to partnership taxation have been introduced
and, in certain cases, have been passed by the U.S. House of Representatives. On May 28, 2010, the U.S. House of Representatives passed legislation which, if it had been finally
enacted into law and applied to our partnership or to the
Holding LP, could have had adverse consequences, including (i) the recharacterization of capital gain income as "ordinary income", (ii) the potential reclassification of qualified
dividend income as "ordinary income" subject to a higher rate of U.S. income tax, and (iii) potential limitations on the ability of our partnership to meet the "qualifying income"
exception for taxation as a partnership for U.S. federal income tax purposes. This legislation was not passed by the U.S. Senate and therefore was not enacted into law. However,
similar legislation was introduced in both the U.S. House of Representatives and the U.S. Senate in February 2013.

The
Obama administration has indicated it supports the adoption of legislation that similarly changes the treatment of carried interest for U.S. federal income tax purposes. In
its published revenue proposals for 2014, the Obama administration proposed that the current law governing the treatment of carried interest be changed to subject such income to ordinary income tax.
The Obama administration's published revenue proposals for previous years contained similar proposals.

It
remains unclear whether any legislation related to such revenue proposals or similar to the legislation described above will be proposed or enacted by the U.S. Congress and, if
enacted, whether such legislation would affect an investment in our partnership. You should consult an independent tax adviser as to the potential effect of any proposed or future legislation on an
investment in our partnership.

The
remainder of this discussion is based on current law without regard to the proposed legislation or administrative proposals discussed above.

Consequences to U.S. Holders

Holding of Our Units

Income and Loss.If you are a U.S. Holder, you will be required to take into account, as described below, your allocable
share of our
partnership's items of income, gain, loss, deduction, and credit for

156     Brookfield Infrastructure

---



Table of Contents

each
of our partnership's taxable years ending with or within your taxable year. Each item generally will have the same character and source as though you had realized the item directly. You must
report such items without regard to whether any distribution has been or will be received from our partnership. Our partnership intends to make cash distributions to all unitholders on a quarterly
basis in amounts generally expected to be sufficient to permit U.S. Holders to fund their estimated U.S. tax obligations (including U.S. federal, state, and local income taxes)
with respect to their allocable shares of our partnership's net income or gain. However, based upon your particular tax situation and simplifying assumptions that our partnership will make in
determining the amount of such distributions, and depending upon whether you elect to reinvest such distributions pursuant to the distribution reinvestment plan, your tax liability might exceed cash
distributions made to you, in which case any tax liabilities arising from your ownership of our units would need to be satisfied from your own funds.

With
respect to U.S. Holders who are individuals, certain dividends paid by a corporation (including certain qualified foreign corporations) to our partnership and that are
allocable to such U.S. Holders may qualify for reduced rates of taxation. A qualified foreign corporation includes a foreign corporation that is eligible for the benefits of specified income
tax treaties with the United States. In addition, a foreign corporation is treated as a qualified corporation with respect to its shares that are readily tradable on an established securities
market in the United States. Among other exceptions, U.S. Holders who are individuals will not be eligible for reduced rates of taxation on any dividends if the payer is a PFIC for the
taxable year in which such dividends are paid or for the preceding taxable year. Dividends received by non-corporate U.S. Holders may be subject to an additional Medicare tax on
unearned income of 3.8% (see "Tax Rates" below). U.S. Holders that are corporations may be entitled to a "dividends received deduction" in respect of dividends paid by
U.S. corporations in which our partnership (through the Holding LP) owns stock. You should consult an independent tax adviser regarding the application of the foregoing rules in light of
your particular circumstances.

For
U.S. federal income tax purposes, your allocable share of our partnership's items of income, gain, loss, deduction, or credit will be governed by our limited partnership
agreement if such allocations have "substantial economic effect" or are determined to be in accordance with your interest in our partnership. Similarly, our partnership's allocable share of items of
income, gain, loss, deduction, or credit of the Holding LP will be governed by the limited partnership agreement of the Holding LP if such allocations have "substantial economic effect"
or are determined to be in accordance with our partnership's interest in the Holding LP. Our Managing General Partner and the Infrastructure General Partner believe that, for
U.S. federal income tax purposes, such allocations should be given effect, and our Managing General Partner and the Infrastructure General Partner intend to prepare and file tax returns based
on such allocations. If the IRS were to successfully challenge the allocations made pursuant to either our limited partnership agreement or the limited partnership agreement of the Holding LP,
then the resulting allocations for U.S. federal income tax purposes might be less favorable than the allocations set forth in such agreements.

Basis.You will have an initial tax basis in your units equal to the sum of (i) the amount of cash paid for our units (or,
if you received
your units pursuant to the spin-off, the amount of dividend income you recognized pursuant to the spin-off) and (ii) your share of our partnership's liabilities, if any.
That basis will be increased by your share of our partnership's income and by increases in your share of our partnership's liabilities, if any. That basis will be decreased, but not below zero, by
distributions you receive from our partnership, by your share of our partnership's losses, and by any decrease in your share of our partnership's liabilities. Under applicable U.S. federal
income tax rules, a partner in a partnership has a single, or "unitary", tax basis in his or her partnership interest. As a result, any amount you pay to acquire additional units (including through
the distribution reinvestment plan) will be averaged with the adjusted tax basis of units owned by you prior to the acquisition of such additional units.

Brookfield Infrastructure     157

---



Table of Contents

For
purposes of the foregoing rules, the rules discussed immediately below, and the rules applicable to a sale or exchange of our units, our partnership's liabilities generally will
include our partnership's share of any liabilities of the Holding LP.

Limits on Deductions for Losses and Expenses.Your deduction of your allocable share of our partnership's losses will be limited
to your tax basis in
our units and, if you are an individual or a corporate holder that is subject to the "at risk" rules, to the amount for which you are considered to be "at risk" with respect to our partnership's
activities, if that is less than your tax basis. In general, you will be at risk to the extent of your tax basis in our units, reduced by (i) the portion of that basis attributable to your
share of our partnership's liabilities for which you will not be personally liable (excluding certain qualified non-recourse financing) and (ii) any amount of money you borrow to
acquire or hold our units, if the lender of those borrowed funds owns an interest in our partnership, is related to you, or can look only to your units for repayment. Your at-risk amount
generally will increase by your allocable share of our partnership's income and gain and decrease by cash distributions you receive from our partnership and your allocable share of losses and
deductions. You must recapture losses deducted in previous years to the extent that distributions cause your at-risk amount to be less than zero at the end of any taxable year. Losses
disallowed or recaptured as a result of these limitations will carry forward and will be allowable to the extent that your tax basis or at-risk amount, whichever is the limiting factor,
subsequently increases. Upon the taxable disposition of our units, any gain recognized by you can be offset by losses that were previously suspended by the at-risk limitation, but may not
be offset by losses suspended by the basis limitation. Any excess loss above the gain previously suspended by the at-risk or basis limitations may no longer be used. You should consult an
independent tax adviser as to the effects of the at-risk rules.

Limitations on Deductibility of Organizational Expenses and Syndication Fees.In general, neither our partnership nor any
U.S. Holder may
deduct organizational or syndication expenses. Similar rules apply to organizational or syndication expenses incurred by the Holding LP. Syndication fees (which would include any sales or
placement fees or commissions) must be capitalized and cannot be amortized or otherwise deducted.

Limitations on Interest Deductions.Your share of our partnership's interest expense is likely to be treated as "investment
interest" expense. For a
non-corporate U.S. Holder, the deductibility of "investment interest" expense generally is limited to the amount of such holder's "net investment income". Your share of our
partnership's dividend and interest income will be treated as investment income, although "qualified dividend income" subject to reduced rates of tax in the hands of an individual will only be treated
as investment income if such individual elects to treat such dividend as ordinary income not subject to reduced rates of tax. In addition, state and local tax laws may disallow deductions for your
share of our partnership's interest expense.

Net
investment income includes gross income from property held for investment and amounts treated as portfolio income under the passive loss rules, less deductible expenses, other than
interest, directly connected with the production of investment income, but generally does not include gains attributable to the disposition of property held for investment.

Deductibility of Partnership Investment Expenditures by Individual Partners and by Trusts and Estates.Subject to certain
exceptions, all
miscellaneous itemized deductions of an individual taxpayer, and certain of such deductions of an estate or trust, are deductible only to the extent that such deductions exceed 2% of the taxpayer's
adjusted gross income. In addition, the otherwise allowable itemized deductions of individuals whose gross income exceeds an applicable threshold amount are subject to reduction by an amount equal to
the lesser of (i) 3% of the excess of the individual's adjusted gross income over the threshold amount and (ii) 80% of the amount of the individual's itemized deductions. The operating
expenses of our partnership, including our partnership's allocable share of the base management fee or any other management fees, may be treated as miscellaneous itemized deductions

158     Brookfield Infrastructure

---



Table of Contents

subject
to the foregoing rule. Accordingly, if you are a non-corporate U.S. Holder, you should consult an independent tax adviser regarding the application of these limitations.

Treatment of Distributions

Distributions of cash by our partnership generally will not be taxable to you to the extent of your adjusted tax basis (described
above) in our units. Any cash distributions in excess of your adjusted tax basis generally will be considered to be gain from the sale or exchange of our units (described below). Such gain generally
will be treated as capital gain and will be long-term capital gain if your holding period for our units exceeds one year. A reduction in your allocable share of our liabilities, and
certain distributions of marketable securities by our partnership, if any, will be treated similar to cash distributions for U.S. federal income tax purposes.

Sale or Exchange of Our Units

You will recognize gain or loss on the sale or taxable exchange of our units equal to the difference, if any, between the amount
realized and your tax basis in our units sold or exchanged. Your amount realized will be measured by the sum of the cash or the fair market value of other property received plus your share of our
partnership's liabilities, if any.

Gain
or loss recognized by you upon the sale or exchange of our units generally will be taxable as capital gain or loss and will be long-term capital gain or loss if our
units were held for more than one year as of the date of such sale or exchange. Assuming you have not elected to treat your share of our partnership's investment in any PFIC as a "qualified electing
fund", gain attributable to such investment in a PFIC would be taxable in the manner described below in "Passive Foreign Investment Companies". In addition, certain gain attributable to
"unrealized receivables" or "inventory items" could be characterized as ordinary income rather than capital gain. For example, if our partnership were to hold debt acquired at a market discount,
accrued market discount on such debt would be treated as "unrealized receivables". The deductibility of capital losses is subject to limitations.

Each
U.S. Holder who acquires our units at different times and intends to sell all or a portion of our units within a year of the most recent purchase should consult an
independent tax adviser regarding the application of certain "split holding period" rules to such sale and the treatment of any gain or loss as long-term or short-term capital
gain or loss.

Tax Rates

Under recently enacted legislation, U.S. Holders that are individuals, estates, or trusts may be required to pay a 3.8% Medicare
tax on the lesser of (i) such U.S. Holders' "modified adjusted gross income" (or "adjusted gross income" in the case of estates and trusts) over certain thresholds and
(ii) such U.S. Holders' "net investment income" (or "undistributed net investment income" in the case of estates and trusts). Net investment income generally includes your
allocable share of our partnership's income, as well as gain realized by you from a sale of our units. Under recently proposed Treasury Regulations, special rules relating to the 3.8% Medicare tax may
apply to dividends and gain, if any, derived by such U.S. Holders with respect to our partnership's interest in a PFIC. See "Passive Foreign Investment Companies" below. You should
consult an independent tax adviser regarding the implications of this recently enacted legislation and the recently proposed Treasury Regulations for your ownership and disposition of
our units.

For
the 2012 taxable year, the highest marginal U.S. federal income tax rates for individuals applicable to ordinary income and long-term capital gains (generally,
gains from the sale or exchange of certain investment assets held for more than one year) were 35% and 15%, respectively. Under the American Taxpayer Relief Act of 2012, in taxable years beginning on
or after January 1, 2013, the highest marginal federal income tax rate applicable to ordinary income of individuals is 39.6%, and the

Brookfield Infrastructure     159

---



Table of Contents

highest
marginal federal income tax rate applicable to long-term capital gains of individuals is 20% (not including the 3.8% Medicare tax).

Foreign Tax Credit Limitations

If you are a U.S. Holder, you generally will be entitled to a foreign tax credit with respect to your allocable share of
creditable foreign taxes paid on our partnership's income and gains. Complex rules may, depending on your particular circumstances, limit the availability or use of foreign tax credits. Gain from the
sale of our partnership's investments may be treated as U.S.-source gain. Consequently, you may not be able to use the foreign tax credit arising from any foreign taxes imposed on such gain unless the
credit can be applied (subject to applicable limitations) against U.S. tax due on other income treated as derived from foreign sources. Certain losses that our
partnership incurs may be treated as foreign-source losses, which could reduce the amount of foreign tax credits otherwise available.

Section 754 Election

Our partnership and the Holding LP have each made the election permitted by Section 754 of the U.S. Internal
Revenue Code ("Section 754 Election"). The Section 754 Election cannot be revoked without the consent of the IRS. The Section 754 Election generally requires our partnership to
adjust the tax basis in its assets, or inside basis, attributable to a transferee of our units under Section 743(b) of the U.S. Internal Revenue Code to reflect the purchase price paid
by the transferee for our units. This election does not apply to a person who purchases units directly from us. For purposes of this discussion, a transferee's inside basis in our partnership's assets
will be considered to have two components: (i) the transferee's share of our partnership's tax basis in our partnership's assets, or common basis, and (ii) the adjustment under
Section 743(b) of the U.S. Internal Revenue Code to that basis. The foregoing rules would also apply to the Holding LP.

Generally,
a Section 754 Election would be advantageous to a transferee U.S. Holder if such holder's tax basis in its units were higher than such units' share of the
aggregate tax basis of our partnership's assets immediately prior to the transfer. In that case, as a result of the Section 754 Election, the transferee U.S. Holder would have a higher
tax basis in its share of our partnership's assets for purposes of calculating, among other items, such holder's share of any gain or loss on a sale of our partnership's assets. Conversely, a
Section 754 Election would be disadvantageous to a transferee U.S. Holder if such holder's tax basis in its units were lower than such units' share of the aggregate tax basis of our
partnership's assets immediately prior to the transfer. Thus, the fair market value of our units may be affected either favorably or adversely by the election.

Whether
or not the Section 754 Election is made, if our units are transferred at a time when our partnership has a "substantial built-in loss" in its assets, our
partnership will be obligated to reduce the tax basis in the portion of such assets attributable to such units.

The
calculations involved in the Section 754 Election are complex, and our Managing General Partner and the Infrastructure GP LP advise that each will make such
calculations on the basis of assumptions as to the value of our partnership assets and other matters. Each U.S. Holder should consult an independent tax adviser as to the effects of the
Section 754 Election.

Uniformity of Our Units

Because we cannot match transferors and transferees of our units, we must maintain uniformity of the economic and tax characteristics
of our units to a purchaser of our units. In the absence of uniformity, we may be unable to comply fully with a number of U.S. federal income tax requirements. A lack of uniformity can result
from a literal application of certain Treasury Regulations to our partnership's Section 743(b) adjustments, a determination that our partnership's Section 704(c) allocations are
unreasonable, or other reasons. Section 704(c) allocations would be intended to reduce

160     Brookfield Infrastructure

---



Table of Contents

or
eliminate the disparity between tax basis and the value of our partnership's assets in certain circumstances, including on the issuance of additional units. In order to maintain the fungibility of
all of our units at all times, we will seek to achieve the uniformity of U.S. tax treatment for all purchasers of our units which are acquired at the same time and price (irrespective of the
identity of the particular seller of our units or the time when our units are issued by our partnership), through the application of certain tax accounting principles that our Managing General Partner
believes are reasonable for our partnership. However, the IRS may disagree with us and may successfully challenge our application of such tax accounting principles. Any non-uniformity
could have a negative impact on the value of our units.

Foreign Currency Gain or Loss

Our partnership's functional currency is the U.S. dollar, and our partnership's income or loss is calculated in
U.S. dollars. It is likely that our partnership will recognize "foreign currency" gain or loss with respect to transactions involving non-U.S. dollar currencies. In general,
foreign currency gain or loss is treated as ordinary income or loss. You should consult an independent tax adviser regarding the tax treatment of foreign currency gain or loss.

Passive Foreign Investment Companies

U.S. Holders may be subject to special rules applicable to indirect investments in foreign corporations, including an investment
through our partnership in a PFIC. A PFIC is defined as any foreign corporation with respect to which (after applying certain look-through rules) either (i) 75% or more of its gross
income for a taxable year is "passive income" or (ii) 50% or more of its assets in any taxable year (generally based on the quarterly average of the value of its assets) produce or are held for
the production of "passive income". There are no minimum stock ownership requirements for PFICs. If you hold an interest in a foreign corporation for any taxable year during which the corporation is
classified as a PFIC with respect to you, then the corporation will continue to be classified as a PFIC with respect to you for any subsequent taxable year during which you continue to hold an
interest in the corporation, even if the corporation's income or assets would not cause it to be a PFIC in such subsequent taxable year, unless an exception applies.

Subject
to certain elections described below, any gain on the disposition of stock of a PFIC owned by you indirectly through our partnership, as well as income realized on certain
"excess distributions" by such PFIC, would be treated as though realized ratably over the shorter of your holding period of our units or our partnership's holding period for the PFIC. Such gain or
income generally would be taxable as ordinary income, and dividends paid by the PFIC would not be eligible for the preferential tax rates for dividends paid to non-corporate
U.S. Holders. In addition, an interest charge would apply, based on the tax deemed deferred from prior years. To the extent reasonably practicable, we intend to make distributions of the
earnings of each entity we are able to identify as a PFIC not less frequently than annually so as to minimize the likelihood that you will have excess distributions with respect to any such entity.
However, because we cannot assure that will be the case, and because any gains on a sale of any such entity would remain subject to the PFIC tax regime, we urge you to consider making the elections
described below.

If
you were to elect to treat your share of our partnership's interest in a PFIC as a "qualified electing fund" ("QEF Election"), for the first year you were treated as holding such
interest, then in lieu of the tax consequences described in the paragraph immediately above, you would be required to include in income each year a portion of the ordinary earnings and net capital
gains of the PFIC, even if not distributed to our partnership or to you. A QEF Election must be made by you on an entity-by-entity basis. To make a QEF Election, you must,
among other things, (i) obtain a PFIC annual information statement (through an intermediary statement supplied by our partnership) and (ii) prepare and submit IRS Form 8621 with
your annual income tax return. To the extent reasonably

Brookfield Infrastructure     161

---



Table of Contents

practicable,
we intend to timely provide you with information related to the PFIC status of each entity we are able to identify as a PFIC, including information necessary to make a QEF Election with
respect to each such entity. Any such election should be made for the first year our partnership holds an interest in such entity or for the first year in which you hold our units, if later.

Once
you have made a QEF Election for an entity, such election applies to any additional shares of interest in such entity acquired directly or indirectly, including through additional
units acquired after the QEF Election is made (such as units acquired under the distribution reinvestment plan). If you were to make a QEF Election after the first year that you were treated as
holding an interest in a PFIC, the adverse tax consequences relating to PFIC stock would continue to apply with respect to the pre-QEF Election period, unless you were to make a "purging
election". The purging election would create a deemed sale of your previously held share of our partnership's interests in a PFIC. The gain recognized by the purging election would be subject to the
special tax and interest charge rules, which treat the gain as an excess distribution, as described above. As a result of the purging election, you would have a new basis and holding period in your
share of our partnership's interests in the PFIC. U.S. Holders should consult an independent tax adviser as to the manner in which such direct inclusions could affect their allocable share of
our partnership's income and their tax basis in our units and the advisability of making a QEF Election or a purging election.

Recently
proposed Treasury Regulations contain special rules for applying the 3.8% Medicare tax to non-corporate U.S. Holders making QEF Elections. Although the
regulations generally are proposed to become effective for taxable years beginning on or after January 1, 2014, you are permitted to rely on the proposed regulations for taxable years beginning
on or after January 1, 2013. If you are a non-corporate U.S. Holder that has made a QEF Election with respect to our partnership's interest in a PFIC, and you include in
income your share of the ordinary earnings and net capital gains of such PFIC, you may be required under the proposed regulations to make certain adjustments to your basis in our units for purposes of
the 3.8% Medicare tax. These basis adjustments could differ from the basis adjustments required for U.S. federal income tax purposes generally. Moreover, you may be required to make certain
adjustments to your "modified adjusted gross income" or adjusted gross income in the case of estates and trusts for purposes of the 3.8% Medicare tax. However, you generally would not be required to
treat your share of the ordinary earnings and net capital gains of such PFIC as "net investment income" for purposes of the 3.8% Medicare tax. See "Tax Rates" above. Instead, your net
investment income for such purposes generally would include your share of distributions made by the PFIC out of previously taxed earnings and profits. Additional special rules under the proposed
Treasury Regulations may apply to your disposition of our units. To mitigate the complexity of the foregoing rules, the proposed Treasury Regulations permit you to make a special election to forego
adjustments to basis or gross income solely for purposes of the 3.8% Medicare tax. If you make the special election, you must treat your share of a PFIC's ordinary earnings and net capital gains as
net investment income for purposes of the 3.8% Medicare tax. You should consult an independent tax adviser regarding the implications of this special election, as well as the other implications of the
3.8% Medicare tax and the recently proposed Treasury Regulations for your ownership and disposition of our units.

In
the case of a PFIC that is a publicly traded foreign company, and in lieu of making a QEF Election, an election may be made to "mark to market" the stock of such publicly traded
foreign company on an annual basis. Pursuant to such an election, you would include in each year as ordinary income the excess, if any, of the fair market value of such stock over its adjusted basis
at the end of the taxable year. However, none of the current Holding Entities or operating entities are expected to be publicly traded, although our partnership may in the future acquire interests in
PFICs which are publicly traded foreign companies. Thus the mark-to-market election is not expected to be available to any U.S. Holder in respect of its indirect
ownership interest in any of the current Holding Entities or operating entities.

162     Brookfield Infrastructure

---



Table of Contents

Based
on our organizational structure, as well as our expected income and assets, our Managing General Partner and the Infrastructure General Partner currently believe that a
U.S. Holder is unlikely to be regarded as owning an interest in a PFIC solely by reason of owning our units for the taxable year ending December 31, 2013. However, our Managing General
Partner and the Infrastructure General Partner believe that some of our operating entities may have been PFICs in prior taxable years. In addition, we may decide to hold an existing or future
operating entity through a Holding Entity that would be a PFIC in order to ensure that our partnership satisfies the Qualifying Income Exception. See "Investment Structure", below.
Accordingly, there can be no assurance that a current or future investment will not qualify as a PFIC.

Recently
enacted U.S. legislation requires each U.S. person who directly or indirectly owns an interest in a PFIC to file an annual report with the IRS, and failure to file
such report could result in the imposition of penalties on such U.S. person and in the extension of the statute of limitations with respect to federal income tax returns filed by such
U.S. person. You should consult an independent tax adviser regarding the PFIC rules, including the potential effect of this legislation on your filing requirements and the advisability of
making a QEF Election, a special election under the proposed Treasury Regulations relating to the 3.8% Medicare tax, or, if applicable, a mark-to-market election, with respect
to any PFIC in which you are treated as owning an interest through our partnership.

Investment Structure

To ensure that our partnership meets the Qualifying Income Exception for publicly traded partnerships (discussed above) and complies
with certain requirements in its limited partnership agreement, our partnership may structure certain investments through an entity classified as a corporation for U.S. federal income tax
purposes. Such investments will be structured as determined in the sole discretion of our Managing General Partner and the Infrastructure General Partner
generally to be efficient for our unitholders. However, because our unitholders will be located in numerous taxing jurisdictions, no assurance can be given that any such investment structure will
benefit all our unitholders to the same extent, and such an investment structure might even result in additional tax burdens on some unitholders. As discussed above, if any such entity were a
non-U.S. corporation, it might be considered a PFIC. If any such entity were a U.S. corporation, it would be subject to U.S. federal net income tax on its income,
including any gain recognized on the disposition of its investments. In addition, if the investment were to involve U.S. real property, gain recognized on the disposition of the investment by a
corporation generally would be subject to corporate-level tax, whether the corporation were a U.S. or a non-U.S. corporation.

U.S. Withholding Taxes

Although each U.S. Holder is required to provide us with an IRS Form W-9, we nevertheless may be unable to
accurately or timely determine the tax status of our investors for purposes of determining whether U.S. withholding applies to payments made by our partnership to some or all of our
unitholders. In such a case, payments made by our partnership to U.S. Holders might be subject to U.S. "backup" withholding at the applicable rate or other U.S. withholding taxes.
You would be able to treat as a credit your allocable share of any U.S. withholding taxes paid in the taxable year in which such withholding taxes were paid and, as a result, you might be
entitled to a refund of such taxes from the IRS. In the event you transfer or otherwise dispose of some or all of your units, special rules might apply for purposes of determining whether you or the
transferee of such units were subject to U.S. withholding taxes in respect of income allocable to, or distributions made on account of, such units or entitled to refunds of any such taxes
withheld. See below "Administrative MattersCertain Effects of a Transfer of Units". You should consult an independent tax adviser regarding the treatment of U.S. withholding taxes.

Brookfield Infrastructure     163

---



Table of Contents

Transferor/Transferee Allocations

Our partnership may allocate items of income, gain, loss, and deduction using a monthly or other convention, whereby any such items
recognized in a given month by our partnership are allocated to our unitholders as of a specified date of such month. As a result, if you transfer your units, you might be allocated income, gain,
loss, and deduction realized by our partnership after the date of the transfer. Similarly, if you acquire additional units, you might be
allocated income, gain, loss, and deduction realized by our partnership prior to your ownership of such units.

Although
Section 706 of the U.S. Internal Revenue Code generally governs allocations of items of partnership income and deductions between transferors and transferees of
partnership interests, it is not clear that our partnership's allocation method complies with the requirements. If our partnership's convention were not permitted, the IRS might contend that our
partnership's taxable income or losses must be reallocated among our unitholders. If such a contention were sustained, your tax liabilities might be adjusted to your detriment. Our Managing General
Partner is authorized to revise our partnership's method of allocation between transferors and transferees (as well as among investors whose interests otherwise vary during a taxable period).

U.S. Federal Estate Tax Consequences

If our units are included in the gross estate of a U.S. citizen or resident for U.S. federal estate tax purposes, then a
U.S. federal estate tax might be payable in connection with the death of such person. Individual U.S. Holders should consult an independent tax adviser concerning the potential
U.S. federal estate tax consequences with respect to our units.

Certain Reporting Requirements

A U.S. Holder who invests more than $100,000 in our partnership may be required to file IRS Form 8865 reporting the
investment with such U.S. Holder's U.S. federal income tax return for the year that includes the date of the investment. You may be subject to substantial penalties if you fail to comply
with this and other information reporting requirements with respect to an investment in our units. You should consult an independent tax adviser regarding such reporting requirements.

U.S. Taxation of Tax-Exempt U.S. Holders of Our Units

Income recognized by a U.S. tax-exempt organization is exempt from U.S. federal income tax except to the
extent of the organization's unrelated business taxable income ("UBTI"). UBTI is defined generally as any gross income derived by a tax-exempt organization from an unrelated trade or
business that it regularly carries on,
less the deductions directly connected with that trade or business. In addition, income arising from a partnership (or other entity treated as a partnership for U.S. federal income tax
purposes) that holds operating assets or is otherwise engaged in a trade or business generally will constitute UBTI. Notwithstanding the foregoing, UBTI generally does not include any dividend income,
interest income, certain other categories of passive income, or capital gains realized by a tax-exempt organization, so long as such income is not "debt-financed", as discussed
below. Our Managing General Partner believes that our partnership should not be regarded as engaged in a trade or business, and anticipates that any operating assets held by our partnership will be
held through entities that are treated as corporations for U.S. federal income tax purposes.

The
exclusion from UBTI does not apply to income from "debt-financed property", which is treated as UBTI to the extent of the percentage of such income that the average
acquisition indebtedness with respect to the property bears to the average tax basis of the property for the taxable year. If an entity treated as a partnership for U.S. federal income tax
purposes incurs acquisition indebtedness, a tax-exempt partner in such partnership will be deemed to have acquisition indebtedness equal to its allocable portion of such acquisition
indebtedness. If any such indebtedness were used by

164     Brookfield Infrastructure

---



Table of Contents

our
partnership or by the Holding LP to acquire property, such property generally would constitute debt-financed property, and any income from or gain from the disposition of such
debt-financed property allocated to a tax-exempt organization generally would constitute UBTI to such tax-exempt organization. In addition, even if such
indebtedness were not used either by our partnership or by the Holding LP to acquire property but were instead used to fund distributions to our unitholders, if a tax-exempt
organization subject to taxation in the United States were to use such proceeds to make an investment outside our partnership, the IRS might assert that such investment constitutes
debt-financed property to such unitholder with the consequences noted above. Our partnership and the Holding LP currently do not have any outstanding indebtedness used to acquire
property, and our Managing General Partner and the Infrastructure General Partner do not believe that our partnership or the Holding LP will generate UBTI attributable to
debt-financed property in the future. However, neither our partnership nor the Holding LP is prohibited from incurring indebtedness, and no assurance can be provided that neither
our partnership nor the Holding LP will generate UBTI attributable to debt-financed property in the future. Tax-exempt U.S. Holders should consult an independent
tax adviser regarding the tax consequences of an investment in our units.

Investments by U.S. Mutual Funds

A U.S. mutual fund that is treated as a regulated investment company ("RIC"), for U.S. federal income tax purposes is
required, among other things, to meet an annual 90% gross income and a quarterly 50% asset value test under Section 851(b) of the U.S. Internal Revenue Code to maintain its favorable
U.S. federal income tax status. The treatment of an investment by a RIC in our units for purposes of these tests will depend on whether our partnership is treated as a "qualified publicly
traded partnership". If our partnership is so treated, then our units themselves are the relevant assets for purposes of the 50% asset value test, and the net income from our units is the relevant
gross income for purposes of the 90% gross income test. If, however, our partnership is not so treated, then the relevant assets are the RIC's allocable share of the underlying assets held by our
partnership, and the relevant gross income is the RIC's allocable share of the underlying gross income earned by our partnership. Whether our partnership will qualify as a qualified publicly traded
partnership depends on the exact nature of its future investments, but our Managing General Partner believes it is likely that our partnership will not be treated as a qualified publicly traded
partnership. RICs should consult an independent tax adviser regarding the U.S. tax consequences of an investment in our units.

Consequences to Non-U.S. Holders

Our Managing General Partner and the Infrastructure General Partner intend to use commercially reasonable efforts to structure the
activities of our partnership and the Holding LP, respectively, to avoid the realization by our partnership and the Holding LP, respectively, of income treated as effectively connected
with a U.S. trade or business, including effectively connected income attributable to the sale of a "United States real property interest", as defined in the U.S. Internal Revenue
Code. Specifically, our partnership intends not to make an investment, whether directly or through an entity which would be treated as a partnership for U.S. federal income tax purposes, if our
Managing General Partner believes at the time of such investment that such investment would generate income treated as effectively connected with a U.S. trade or business. If, as anticipated,
our partnership is not treated as engaged in a U.S. trade or business or as deriving income which is treated as effectively connected with a U.S. trade or business, and provided that a
Non-U.S. Holder is not itself engaged in a U.S. trade or business, then such Non-U.S. Holder generally will not be subject to U.S. tax return filing
requirements solely as a result of owning our units and generally will not be subject to U.S. federal income tax on its allocable share of our partnership's interest and dividends from
non-U.S. sources or gain from the sale or other disposition of securities or real property located outside of the United States.

Brookfield Infrastructure     165

---



Table of Contents

However,
there can be no assurance that the law will not change or that the IRS will not deem our partnership to be engaged in a U.S. trade or business. If, contrary to our
Managing General Partner's expectations, our partnership is treated as engaged in a U.S. trade or business, then a Non-U.S. Holder generally would be required to
file a U.S. federal income tax return, even if no effectively connected income were allocable to it. If our partnership were to have income treated as effectively connected with a
U.S. trade or business, then a Non-U.S. Holder would be required to report that income and would be subject to U.S. federal income tax at the regular graduated rates.
In addition, our partnership might be required to withhold U.S. federal income tax on such Non-U.S. Holder's distributive share of such income. A corporate
Non-U.S. Holder might also be subject to branch profits tax at a rate of 30%, or at a lower treaty rate, if applicable. Finally, if our partnership were treated as engaged in a
U.S. trade or business, a portion of any gain realized by a Non-U.S. Holder upon the sale or exchange of its units could be treated as income effectively connected with a
U.S. trade or business and therefore subject to U.S. federal income tax at the regular graduated rates.

In
general, even if our partnership is not engaged in a U.S. trade or business, and assuming you are not otherwise engaged in a U.S. trade or business, you will nonetheless
be subject to a withholding tax of 30% on the gross amount of certain U.S.-source income which is not effectively connected with a U.S. trade or business. Income subjected to such a flat tax
rate is income of a fixed or determinable annual or periodic nature, including dividends and certain interest income. Such withholding tax may be reduced or eliminated with respect to certain types of
income under an applicable income tax treaty between the United States and your country of residence or under the "portfolio interest" rules or other provisions of the U.S. Internal
Revenue Code, provided that you provide proper certification as to your eligibility for such treatment. Notwithstanding the foregoing, and although each Non-U.S. Holder is required
to provide us with an IRS Form W-8, we nevertheless may be unable to accurately or timely determine the tax status of our investors for purposes of establishing whether reduced
rates of withholding apply to some or all of our investors. In such a case, your allocable share of distributions of U.S.-source dividend and interest income will be subject to U.S. withholding
tax at a rate of 30%. Further, if you would not be subject to U.S. tax based on your tax status or otherwise were eligible for a reduced rate of U.S. withholding, you might need to take
additional steps to receive a credit or refund of any excess withholding tax paid on your account, which could include the filing of a non-resident U.S. income tax return with the
IRS. Among other limitations applicable to claiming treaty benefits, if you reside in a treaty jurisdiction which does not treat our partnership as a pass-through entity, you might not be
eligible to receive a refund or credit of excess U.S. withholding taxes paid on your account. In the event you transfer or otherwise dispose of some or all of your units, special rules may
apply for purposes of determining whether you or the transferee of such units are subject to U.S. withholding taxes in respect of income allocable to, or distributions made on account of, such
units or entitled to refunds of any such taxes withheld. See "Administrative MattersCertain Effects of a Transfer of Units". You should consult an independent tax adviser
regarding the treatment of U.S. withholding taxes.

Special
rules may apply in the case of a Non-U.S. Holder subject to special rules, including, without limitation, any Non-U.S. Holder
(i) that has an office or fixed place of business in the United States; (ii) that is present in the United States for 183 days or more in a taxable year; or
(iii) that is (a) a former citizen or long-term resident of the United States, (b) a foreign insurance company that is treated as holding a partnership interest
in our partnership in connection with its U.S. business, (c) a PFIC, or (d) a corporation that accumulates earnings to avoid
U.S. federal income tax. You should consult an independent tax adviser regarding the application of these special rules.

166     Brookfield Infrastructure

---



Table of Contents

Taxes in Other Jurisdictions

In addition to U.S. federal income tax consequences, an investment in our partnership could subject you to U.S. state and
local taxes in the U.S. state or locality in which you are a resident for tax purposes. You could also be subject to tax return filing obligations and income, franchise, or other taxes,
including withholding taxes, in non-U.S. jurisdictions in which we invest. We will attempt, to the extent reasonably practicable, to structure our operations and investments so as
to avoid income tax filing obligations by U.S. Holders in non-U.S. jurisdictions. However, there may be circumstances in which we are unable to do so. Income or gain from
investments held by our partnership may be subject to withholding or other taxes in jurisdictions outside the United States, except to the extent an income tax treaty applies. If you wish to
claim the benefit of an applicable income tax treaty, you might be required to submit information to tax authorities in such jurisdictions. You should consult an independent tax adviser regarding the
U.S. state, local, and non-U.S. tax consequences of an investment in our partnership.

Administrative Matters

Tax Matters Partner

Our Managing General Partner will act as our partnership's "tax matters partner". As the tax matters partner, our Managing General
Partner will have the authority, subject to certain restrictions, to act on behalf of our partnership in connection with any administrative or judicial review of our partnership's items of income,
gain, loss, deduction, or credit.

Information Returns

We have agreed to use commercially reasonable efforts to furnish to you, within 90 days after the close of each calendar year,
U.S. tax information (including IRS Schedule K-1) which describes on a U.S. dollar basis your share of our partnership's income, gain, loss and deduction for our
preceding taxable year. However, providing this U.S. tax information to our unitholders will be subject to delay in the event of, among other reasons, the late receipt of any necessary tax
information from lower-tier entities. It is therefore possible that, in any taxable year, you will need to apply for an extension of time to file your tax returns. In preparing this
U.S. tax information, we will use various accounting and reporting conventions, some of which have been mentioned in the previous discussion, to determine your share of income, gain, loss and
deduction. The IRS may successfully contend that certain of these reporting conventions are impermissible, which could result in an adjustment to your income or loss.

Our
partnership may be audited by the IRS. Adjustments resulting from an IRS audit could require you to adjust a prior year's tax liability and result in an audit of your own tax return.
Any audit of your tax return could result in adjustments not related to our partnership's tax returns, as well as those related to our partnership's tax returns.

Tax Shelter Regulations and Related Reporting Requirements

If we were to engage in a "reportable transaction", we (and possibly our unitholders) would be required to make a detailed
disclosure of the transaction to the IRS in accordance with regulations governing tax shelters and other potentially tax-motivated transactions. A transaction may be a reportable
transaction based upon any of several factors, including the fact that it is a type of tax avoidance transaction publicly identified by the IRS as a "listed transaction" or "transaction of interest",
or that it produces certain kinds of losses in excess of $2 million (or, in the case of certain foreign currency transactions, losses in excess of $50,000). An investment in our partnership may
be considered a "reportable transaction" if, for example, our partnership were to recognize certain significant losses in the future. In certain circumstances, a unitholder who disposes of an interest
in a transaction resulting in the recognition by such holder of significant losses in excess of certain threshold

Brookfield Infrastructure     167

---



Table of Contents

amounts
may be obligated to disclose its participation in such transaction. Certain of these rules are unclear, and the scope of reportable transactions can change retroactively. Therefore, it is
possible that the rules may apply to transactions other than significant loss transactions.

Moreover,
if we were to participate in a reportable transaction with a significant purpose to avoid or evade tax, or in any listed transaction, you might be subject to significant
accuracy-related penalties with a broad scope, for those persons otherwise entitled to deduct interest on federal tax deficiencies, non-deductibility of interest on any resulting tax
liability, and in the case of a listed transaction, an extended statute of limitations. We do not intend to participate in any reportable transaction with a significant purpose to avoid or evade tax,
nor do we intend to participate in any listed transactions. However, no assurance can be provided that the IRS will not assert that we have participated in such a transaction.

You
should consult an independent tax adviser concerning any possible disclosure obligation under the regulations governing tax shelters with respect to the disposition of
our units.

Taxable Year

Our partnership uses the calendar year as its taxable year for U.S. federal income tax purposes. Under certain circumstances
which we currently believe are unlikely to apply, a taxable year other than the calendar year may be required for such purposes.

Constructive Termination

Subject to the electing large partnership rules described below, our partnership will be considered to have been terminated for
U.S. federal income tax purposes if there is a sale or exchange of 50% or more of our units within a 12-month period.

A
constructive termination of our partnership would result in the close of its taxable year for all unitholders. If a unitholder reports on a taxable year other than a fiscal year ending
on our partnership's year-end, and the unitholder is otherwise subject to U.S. federal income tax,
the closing of our partnership's taxable year may result in more than 12 months of our partnership's taxable income or loss being includable in such unitholder's taxable income for the year of
the termination. We would be required to make new tax elections after a termination, including a new Section 754 Election. A constructive termination could also result in penalties and other
adverse tax consequences if we were unable to determine that the termination had occurred. Moreover, a constructive termination might either accelerate the application of, or subject our partnership
to, any tax legislation enacted before the termination.

Elective Procedures for Large Partnerships

The U.S. Internal Revenue Code allows large partnerships to elect streamlined procedures for income tax reporting. This election
would reduce the number of items that must be separately stated on the IRS Schedules K-1 that are issued to our unitholders, and such IRS Schedules K-1 would have
to be provided to holders on or before the first March 15 following the close of each taxable year. In addition, this election would prevent our partnership from suffering a "technical
termination" (which would close our partnership's taxable year and require that we make a new Section 754 Election) if, within a 12-month period, there were a sale or exchange of
50% or more of our partnership's total units. Despite the foregoing benefits, there are also costs and administrative burdens associated with such an election. Consequently, as of this time, our
partnership has not elected to be subject to the reporting procedures applicable to large partnerships.

168     Brookfield Infrastructure

---



Table of Contents

Withholding and Backup Withholding

For each calendar year, we will report to you and to the IRS the amount of distributions that we pay, and the amount of tax
(if any) that we withhold on these distributions. The proper application to our partnership of the rules for withholding under Sections 1441 through 1446 of the
U.S. Internal Revenue Code (applicable to certain dividends, interest, and amounts treated as effectively connected with a U.S. trade or business, among other items) is unclear. Because
the documentation we receive may not properly reflect the identities of unitholders at any particular time (in light of possible sales of our units), we may over-withhold or
under-withhold with respect to a particular unitholder. For example, we may impose withholding, remit such amount to the IRS and thus reduce the amount of a distribution paid to a
Non-U.S. Holder. It may be the case, however, that the corresponding amount of our income was not properly allocable to such holder, and the appropriate amount of withholding should
have been less than the actual amount
withheld. Such Non-U.S. Holder would be entitled to a credit against the holder's U.S. federal income tax liability for all withholding, including any such excess
withholding. However, if the withheld amount were to exceed the holder's U.S. federal income tax liability, the holder would need to apply for a refund to obtain the benefit of such excess
withholding. Similarly, we may fail to withhold on a distribution, and it may be the case that the corresponding income was properly allocable to a Non-U.S. Holder and that
withholding should have been imposed. In such case, we intend to pay the under-withheld amount to the IRS, and we may treat such under-withholding as an expense that will be borne indirectly by all
unitholders on a pro rata basis (since we may be unable to allocate any such excess withholding tax cost to the relevant Non-U.S. Holder).

Under
the backup withholding rules, you may be subject to backup withholding tax with respect to distributions paid unless: (i) you are an exempt recipient and demonstrate this
fact when required; or (ii) provide a taxpayer identification number, certify as to no loss of exemption from backup withholding tax, and otherwise comply with the applicable requirements of
the backup withholding tax rules. A U.S. Holder that is exempt should certify such status on a properly completed IRS Form W-9. A Non-U.S. Holder may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to
you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund from the IRS, provided you supply the required information to the IRS in a
timely manner.

If
you do not timely provide our partnership, or the applicable nominee, broker, clearing agent, or other intermediary, with IRS Form W-9 or IRS
Form W-8, as applicable, or such form is not properly completed, then our partnership may become subject to U.S. backup withholding taxes in excess of what would have
been imposed had our partnership or the applicable intermediary received properly completed forms from all unitholders. For administrative reasons, and in order to maintain the fungibility of our
units, such excess U.S. backup withholding taxes, and if necessary similar items, may be treated by our partnership as an expense that will be borne indirectly by all unitholders on a
pro rata basis (e.g., since it may be impractical for us to allocate any such excess withholding tax cost to the unitholders that failed to timely provide the proper
U.S. tax forms).

Foreign Account Tax Compliance

The Foreign Account Tax Compliance provisions of theHiring Incentives to Restore Employment Act of
2010("FATCA"), impose a 30% withholding tax on "withholdable payments" made to a "foreign financial institution" or a "non-financial foreign entity", unless such
financial institution or entity satisfies certain information reporting or other requirements. Withholdable payments include certain U.S.-source income (such as interest, dividends, and other passive
income) and gross proceeds from the sale or disposition of property that can produce U.S.-source interest or dividends. The withholding tax applies to withholdable payments made on or after
January 1, 2014 (or January 1, 2017 in the case of gross proceeds). Our Managing General Partner intends to ensure that our partnership complies with

Brookfield Infrastructure     169

---



Table of Contents

FATCA,
including by entering into an agreement with the IRS if necessary, so as to ensure that the 30% withholding tax does not apply to any withholdable payments received by our partnership, the
Holding LP, the Holding Entities, or the operating entities.

If
our units are not "regularly traded on an established securities market" for FATCA purposes, then the 30% withholding tax may apply to withholdable payments made by our partnership to
any unitholder who fails to meet certain requirements under FATCA. The 30% withholding tax may also apply to "foreign passthru payments" made by our partnership on or after January 1, 2017 to
any unitholder that is (i) a foreign financial institution that fails to meet certain requirements under FATCA or (ii) a "recalcitrant account holder" for FATCA purposes. Our Managing
General Partner believes that our units should be regarded as regularly traded on an established securities market for FATCA purposes. However, this conclusion is based upon recently promulgated
Treasury Regulations whose meaning is not free from doubt. Moreover, the scope of foreign passthru payments must be determined under Treasury Regulations that have yet to be issued. Thus it is
uncertain whether the 30% withholding tax will apply to certain payments made by our partnership in the future to unitholders who fail to meet certain requirements under FATCA. The foregoing rules
remain subject to modification by an applicable intergovernmental agreement between the United States and one or more other countries or by other future Treasury Regulations or guidance.

To
ensure compliance with FATCA, information regarding certain unitholders' ownership of our units may be reported to the IRS or to a non-U.S. governmental authority.
Each of our unitholders should consult an independent tax advisor regarding the consequences under FATCA of an investment in our units.

Information Reporting with Respect to Foreign Financial Assets

Under Treasury Regulations, U.S. individuals that own "specified foreign financial assets" with an aggregate fair market value
exceeding either $50,000 on the last day of the taxable year or $75,000 at any time during the taxable year generally are required to file an information report with respect to such assets with their
tax returns. Significant penalties may apply to persons who fail to comply with these rules. Specified foreign financial assets include not only financial accounts maintained in foreign financial
institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held
for investment that has an issuer or counterparty other than a U.S. person, and any interest in a foreign entity. Upon the issuance of future Treasury Regulations, these information reporting
requirements may apply to certain U.S. entities that own specified foreign financial assets. The failure to report information required under the current regulations could result in substantial
penalties
and in the extension of the statute of limitations with respect to federal income tax returns filed by you. You should consult an independent tax adviser regarding the possible implications of these
Treasury Regulations for an investment in our units.

Certain Effects of a Transfer of Units

Our partnership may allocate items of income, gain, loss, deduction, and credit using a monthly or other convention, whereby any such
items recognized in a given month by our partnership are allocated to our unitholders as of a specified date of such month. Any U.S. withholding taxes applicable to dividends received by the
Holding LP (and, in turn, our partnership) generally will be withheld by our partnership only when such dividends are paid. Because our partnership generally intends to distribute amounts
received in respect of dividends shortly after receipt of such amounts, it is generally expected that any U.S. withholding taxes withheld by our partnership on such amounts will correspond to
our unitholders who were allocated income and who received the distributions in respect of such amounts. The Holding LP may invest in debt obligations or other securities for which the accrual
of interest or income thereon is not matched by a contemporaneous receipt of cash. Any such accrued interest or

170     Brookfield Infrastructure

---



Table of Contents

other
income would be allocated pursuant to such monthly or other convention. Consequently, our unitholders may recognize income in excess of cash distributions received from our partnership, and any
income so included by a unitholder would increase the basis such unitholder has in our units and would offset any gain (or increase the amount of loss) realized by such unitholder on a
subsequent disposition of its units. In addition, U.S. withholding taxes generally would be withheld by our partnership only on the payment of cash in respect of such accrued interest or other
income, and, therefore, it is possible that some unitholders would be allocated income which might be distributed to a subsequent unitholder, and such subsequent unitholder would be subject to
withholding at the time of distribution. As a result, the subsequent unitholder, and not the unitholder who was allocated income, would be entitled to claim any available credit with respect to such
withholding.

The
Holding LP has invested and will continue to invest in certain Holding Entities and operating entities organized in non-U.S. jurisdictions, and income and
gain from such investments may be subject to withholding and other taxes in such jurisdictions. If any such non-U.S. taxes were imposed on income allocable to a U.S. Holder,
and such holder were thereafter to dispose of its units prior to the date distributions were made in respect of such income, under applicable provisions of the U.S. Internal Revenue Code and
Treasury Regulations, the unitholder to whom such income was allocated (and not the unitholder to whom distributions were ultimately made) would, subject to other applicable limitations, be the
party permitted to claim a credit for such non-U.S. taxes for U.S. federal income tax purposes. Thus a unitholder may be affected
either favorably or adversely by the foregoing rules. Complex rules may, depending on a unitholder's particular circumstances, limit the availability or use of foreign tax credits, and you are urged
to consult an independent tax adviser regarding all aspects of foreign tax credits.

Nominee Reporting

Persons who hold an interest in our partnership as a nominee for another person may be required to furnish
to us:



Brokers
and financial institutions may be required to furnish additional information, including whether they are U.S. persons and specific information on units they acquire, hold,
or transfer for their own account. A penalty of $100 per failure, up to a maximum of $1,500,000 per calendar year, generally is imposed by the U.S. Internal Revenue Code for the failure to
report such information to us. The nominee is required to supply the beneficial owner of our units with the information furnished to us.

New Legislation or Administrative or Judicial Action

The U.S. federal income tax treatment of our unitholders depends, in some instances, on determinations of fact and
interpretations of complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. You should be aware that the U.S. federal

Brookfield Infrastructure     171

---



Table of Contents

income
tax rules, particularly those applicable to partnerships, are constantly under review (including currently) by the Congressional tax-writing committees and other persons involved in
the legislative process, the IRS, the U.S. Treasury Department and the courts, frequently resulting in revised interpretations of established concepts, statutory changes, revisions to
regulations and other modifications and interpretations, any of which could adversely affect the value of our units and be effective on a retroactive basis. For example, changes to the
U.S. federal tax laws and interpretations thereof could make it more difficult or impossible for our partnership to be treated as a partnership that is not taxable as a corporation for
U.S. federal income tax purposes, affect the tax considerations of owning our units, change the character or treatment of portions of our partnership's income, and adversely affect an
investment in our units. Such changes could also affect or cause our partnership to change the way it conducts its activities, affect the tax considerations of an investment in our partnership, and
otherwise change the character or treatment of portions of our partnership's income (including changes that recharacterize certain allocations as potentially non-deductible fees).

Our
partnership's organizational documents and agreements permit our Managing General Partner to modify our limited partnership agreement from time to time, without the consent of our
unitholders, to elect to treat our partnership as a corporation for U.S. federal tax purposes, or to address certain changes in U.S. federal income tax regulations, legislation or
interpretation. In some circumstances, such revisions could have a material adverse impact on some or all of our unitholders.

THE
FOREGOING DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX PLANNING. THE TAX MATTERS RELATING TO OUR PARTNERSHIP AND UNITHOLDERS ARE COMPLEX AND ARE SUBJECT TO VARYING
INTERPRETATIONS. MOREOVER, THE EFFECT OF EXISTING INCOME TAX LAWS, THE MEANING AND IMPACT OF WHICH IS UNCERTAIN, AND OF PROPOSED CHANGES IN INCOME TAX LAWS WILL VARY WITH THE PARTICULAR CIRCUMSTANCES
OF EACH UNITHOLDER, AND IN REVIEWING THIS ANNUAL REPORT ON FORM 20-F THESE MATTERS SHOULD BE CONSIDERED. EACH UNITHOLDER SHOULD CONSULT AN INDEPENDENT TAX ADVISER WITH RESPECT TO THE
U.S. FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES OF ANY INVESTMENT IN OUR UNITS.

CERTAIN MATERIAL CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

The following is an accurate summary of the principal Canadian federal income tax consequences under the Tax Act of the holding
and disposition of units in our partnership generally applicable to a holder who, for the purposes of the Tax Act and at all relevant times, holds our units as capital property, deals at arm's
length and is not affiliated with our partnership, the Holding LP, Brookfield Infrastructure Partners Limited, our Managing General Partner, the Infrastructure General Partner, the
Infrastructure GP LP and their respective affiliates, or a Holder. Generally, our units will be considered to be capital property to a Holder, provided that the Holder does not use or
hold our units in the course of carrying on a business of trading or dealing in securities, and has not acquired them in one or more transactions considered to be an adventure or concern in the nature
of trade.

This
summary is not applicable to (i) a Holder that is a "financial institution" (as defined in the Tax Act) for the purpose of the "mark-to-market" rules,
(ii) a Holder that is a "specified financial institution" (as defined in the Tax Act), (iii) a Holder who makes or has made a functional currency reporting election
pursuant to section 261 of the Tax Act, (iv) a Holder an interest in which would be a "tax shelter investment" (as defined in the Tax Act) or a Holder who acquires
our units as a "tax shelter investment" (and this summary assumes that no such persons hold our units), (v) a Holder that has, directly or indirectly, a "significant interest"
(as defined in subsection 34.2(1) of the Tax Act) in our partnership or (vi) a Holder to whom any affiliate of our partnership is a "foreign affiliate" (as defined in the
Tax Act). Any such Holders should consult their own tax advisors with respect to an investment in our units.

172     Brookfield Infrastructure

---



Table of Contents

This
summary is based on the current provisions of the Tax Act, all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister prior to the
date hereof, ("Tax Proposals"), and the current published administrative and assessing policies and practices of the CRA. This summary assumes that all Tax Proposals will be enacted in the form
proposed but no assurance can be given that the Tax Proposals will be enacted in the form proposed or at all. This summary does not otherwise take into account or anticipate any changes in law,
whether by judicial, administrative or legislative decision or action, or changes in the CRA's administrative and assessing policies and practices, nor does it take into account provincial,
territorial or foreign income tax legislation or considerations, which may differ significantly from those described herein. A Holder should consult their own tax advisors in respect of the
provincial, territorial, or foreign income tax consequences to them of holding and disposing of our units.

This
summary assumes that neither our partnership nor the Holding LP will be considered to carry on business in Canada. Our Managing General Partner and the Infrastructure General
Partner intend to organize and conduct the affairs of each of these entities, to the extent possible, so that neither of these entities should be considered to carry on business in Canada for purposes
of the Tax Act. However, no assurance can be given in this regard. If our partnership or the Holding LP carry on business in Canada, the tax implications to our partnership or the
Holding LP and to the unitholders may be materially and adversely different than as set out herein. This summary also assumes that neither our partnership nor the Holding LP is a "tax
shelter" (as defined in the Tax Act) or "tax shelter investment". However, no assurance can be given in this regard.

This
summary also assumes that neither our partnership nor the Holding LP will be a "SIFT partnership" at any relevant time for the purposes of the SIFT Rules on the basis that
neither our partnership nor the Holding LP will be a "Canadian resident partnership" at any relevant time. However, there can be no assurance that the SIFT Rules will not be revised or amended
such that the SIFT Rules will apply.

This
summary does not address the deductibility of interest on money borrowed to acquire our units.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder, and no
representation with respect to the Canadian federal income tax consequences to any particular Holder is made. Consequently, Holders are advised to consult their own tax advisors with respect to their
particular circumstances. See also Item 3.D "Risk FactorsRisks Related to TaxationCanada".

For
purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of our units must be expressed in Canadian dollars including any distributions,
adjusted cost base and proceeds of disposition. For purposes of the Tax Act, amounts denominated in a currency other than the Canadian dollar generally must be converted into Canadian dollars
using the rate of exchange quoted by the Bank of Canada at noon on the date such amounts arose, or such other rate of exchange as is acceptable to the CRA.

Holders Resident in Canada

The following portion of the summary is generally applicable to a Holder who, for purposes of the Tax Act and at all relevant
times, is or is deemed to be resident in Canada ("Resident Holder").

Computation of Income or Loss

Each Resident Holder is required to include (or, subject to the "at-risk rules" discussed below, entitled to deduct) in
computing his or her income for a particular taxation year, the Resident Holder's pro rata share of the income (or loss) of our partnership for its fiscal year ending in, or
coincidentally with, the Resident Holder's taxation year end, whether or not any of that income is distributed to the

Brookfield Infrastructure     173

---



Table of Contents

Resident
Holder in the taxation year and regardless of whether our units were held throughout such year.

Our
partnership will not itself be a taxable entity and is not expected to be required to file an income tax return in Canada for any taxation year. However, the income (or loss)
of our partnership for a fiscal period for purposes of the Tax Act will be computed as if it were a separate person resident in Canada and the partners will be allocated a share of that income
(or loss) in accordance with our partnership's limited partnership agreement. The income (or loss) of our partnership will include our partnership's share of the income (or loss)
of the Holding LP for a fiscal year determined in accordance with the Holding LP's limited partnership agreement. For this purpose, our partnership's fiscal year end and that of the
Holding LP will be December 31.

The
income for tax purposes of our partnership for a given fiscal year of our partnership will be allocated to each Resident Holder in an amount calculated by multiplying such income
that is allocable to unitholders by a fraction, the numerator of which is the sum of the distributions received by such Resident Holder with respect to such fiscal year and the denominator of which is
the aggregate amount of the distributions made by our partnership to all unitholders with respect to such fiscal year.

If,
with respect to a given fiscal year, no distribution is made by our partnership to unitholders or our partnership has a loss for tax purposes, one quarter of the income, or loss, as
the case may be, for tax purposes of our partnership for such fiscal year that is allocable to unitholders, will be allocated to the unitholders of record at the end of each calendar quarter ending in
such fiscal year in the proportion that the number of units of our partnership held at each such date by a unitholder is of the total number of units of our partnership that are issued and outstanding
at each such date.

The
income of our partnership as determined for purposes of the Tax Act may differ from its income as determined for accounting purposes and may not be matched by cash
distributions. In addition, for purposes of the Tax Act, all income (or losses) of our partnership and the Holding LP must be calculated in Canadian currency. Where our partnership
(or the Holding LP) holds investments denominated in U.S. dollars or other foreign currencies, gains and losses may be realized by our partnership as a consequence of fluctuations
in the relative values of the Canadian and foreign currencies.

In
computing the income (or loss) of our partnership, deductions may be claimed in respect of reasonable administrative costs, interest and other expenses incurred by our
partnership for the purpose of earning income, subject to the relevant provisions of the Tax Act. Our partnership may also deduct from its income for the year a portion of the reasonable
expenses, if any, incurred by our partnership to issue units. The portion of such issue expenses deductible by our partnership in a taxation year is 20% of such issue expenses, pro-rated
where our partnership's taxation year is less than 365 days. Our partnership and the Holding LP may be required to withhold and remit Canadian federal withholding tax on any management
or administration fees or charges paid or credited to a non-resident person, to the extent that such management or administration fees or charges are deductible in computing our
partnership's or the Holding LP's income from a source in Canada.

174     Brookfield Infrastructure

---





Table of Contents

In general, a Resident Holder's share of any income (or loss) from our partnership from a particular source will be treated as if it were income
(or loss) of the Resident Holder from that source, and any provisions of the Tax Act applicable to that type of income (or loss) will apply to the Resident Holder. Our partnership
will invest in limited partnership units of the Holding LP. In computing our partnership's income (or loss) under the Tax Act, the Holding LP will itself be deemed to be a
separate person resident in Canada which computes its income (or loss) and allocates to its partners their respective share of such income (or loss). Accordingly, the source and
character of amounts included in (or deducted from) the income of Resident Holders on account of income (or loss) earned by the Holding LP generally will be determined by
reference to the source and character of such amounts when earned by the Holding LP.

The
characterization by the CRA of gains realized by our partnership or the Holding LP on the disposition of investments as either capital gains or income gains will depend
largely on factual considerations, and no conclusions are expressed herein.

A
Resident Holder's share of taxable dividends received or considered to be received by our partnership in a fiscal year from a corporation resident in Canada will be treated as a
dividend received by the Resident Holder and will be subject to the normal rules in the Tax Act applicable to such
dividends, including the enhanced gross-up and dividend tax credit for "eligible dividends" (as defined in the Tax Act) when the dividend received by the Holding LP is
designated as an "eligible dividend".

Foreign
taxes paid by our partnership or the Holding LP and taxes withheld at source on amounts paid or credited to our partnership or the Holding LP (other than for the
account of a particular unitholder) will be allocated pursuant to the governing partnership agreement. Each Resident Holder's share of the "business-income tax" and "non-business-income
tax" paid to the government of a foreign country for a year will be creditable against such Resident Holder's Canadian federal income tax liability to the extent permitted by the detailed foreign tax
credit rules contained in the Tax Act. Although the foreign tax credit provisions are designed to avoid double taxation, the maximum credit is limited. Because of this, and because of timing
differences in recognition of expenses and income and other factors, there is a risk of double taxation. Under the Foreign Tax Credit Generator Proposals, the foreign "business-income tax" or
"non-business-income tax" allocated to a Resident Holder for the purpose of determining such Resident Holder's foreign tax credit for any taxation year may be limited in certain
circumstances, including where a Resident Holder's share of the income of our partnership or the Holding LP under the income tax laws of any country (other than Canada) under whose laws any
income of our partnership or the Holding LP is subject to income taxation ("Relevant Foreign Tax Law") is less than the Resident Holder's share of such income for purposes of the
Tax Act. For this purpose, a Resident Holder is not considered to have a lesser direct or indirect share of the income of our partnership or the Holding LP under the Relevant Foreign Tax
Law than for the purposes of the Tax Act solely because, among other reasons, of a difference between the Relevant Foreign Tax Law and the Tax Act in the manner of computing the income
of our partnership or the Holding LP or in the manner of allocating the income of our partnership or the Holding LP because of the admission or withdrawal of a partner. No assurance can
be given that the Foreign Tax Credit Generator Proposals will not apply to any Resident Holder. If the Foreign Tax Credit Generator Proposals apply, the allocation to a Resident Holder of foreign
"business-income tax" or "non-business-income tax" paid by our partnership or the Holding LP, and therefore such Resident Holder's foreign tax credits, will be limited.

Our
partnership and the Holding LP will be deemed to be a non-resident person in respect of certain amounts paid or credited or deemed to be paid or credited to them
by a person resident or deemed to be resident in Canada, including dividends or interest. Dividends or interest (other than interest exempt from Canadian federal withholding tax) paid or deemed to be
paid by a person resident or deemed to be resident in Canada to the Holding LP will be subject to withholding tax under Part XIII of the Tax Act at the rate of 25%. However, the
CRA's administrative practice in similar

Brookfield Infrastructure     175

---



Table of Contents

circumstances
is to permit the rate of Canadian federal withholding tax applicable to such payments to be computed by looking through the partnership and taking into account the residency of the
partners (including partners who are resident in Canada) and any reduced rates of Canadian federal withholding tax that any non-resident partners may be entitled to under an applicable
income tax
treaty or convention, provided that the residency status and entitlement to the treaty benefits can be established. In determining the rate of Canadian federal withholding tax applicable to amounts
paid by the Holding Entities to the Holding LP, our Managing General Partner and the Infrastructure General Partner expect the Holding Entities to look-through the Holding LP
and our partnership to the residency of the partners of our partnership (including partners who are residents of Canada) and to take into account any reduced rates of Canadian federal withholding tax
that non-resident partners may be entitled to under an applicable income tax treaty or convention in order to determine the appropriate amount of Canadian federal withholding tax to
withhold from dividends or interest paid to the Holding LP. However, there can be no assurance that the CRA would apply its administrative practice in this context. Under the Treaty, a
Canadian-resident payer is required in certain circumstances to look-through fiscally transparent partnerships, such as our partnership and the Holding LP, to the residency and
Treaty entitlements of their partners and take into account the reduced rates of Canadian federal withholding tax that such partners may be entitled to under the Treaty.

If
our partnership incurs losses for tax purposes, each Resident Holder will, subject to the REOP Proposals (discussed below), be entitled to deduct in the computation of income for tax
purposes the Resident Holder's pro rata share of any net losses for tax purposes of our partnership for its fiscal year to the extent that the Resident Holder's investment is
"at-risk" within the meaning of the Tax Act. The Tax Act contains "at-risk rules" which may, in certain circumstances, restrict the deduction of a limited
partner's share of any losses of a limited partnership. Our Managing General Partner and the Infrastructure General Partner do not anticipate that our partnership or the Holding LP will incur
losses but no assurance can be given in this regard. Accordingly, Resident Holders should consult their own tax advisors for specific advice with respect to the potential application of the
"at-risk rules".

On
October 31, 2003, the Department of Finance (Canada) released the REOP Proposals for public comment. Under the REOP Proposals a taxpayer would be considered to have a loss from
a source that is a business or property for a taxation year only if, in that year, it is reasonable to assume that the taxpayer will realize a cumulative profit (excluding capital gains or losses)
from the business or property during the period that the business is carried on or that the property is held. In general, these proposals may deny the realization of losses by Resident Holders from
their investment in our partnership in a particular taxation year, if, in the year the loss is claimed, it is not reasonable to expect that an overall cumulative profit would be earned from the
investment in our partnership for the period in which the Resident Holder has held and can reasonably be expected to hold the investment. Our Managing General Partner and the Infrastructure General
Partner do not anticipate that the activities of our partnership and the Holding LP will, in and of themselves, generate losses, but no assurance can be given in this regard. However, Resident
Holders may incur expenses in connection with an acquisition of our units that could result in a loss that could be affected by the REOP Proposals. As part of the 2005 Canadian federal budget, the
Minister announced that an alternative proposal to reflect the REOP Proposals would be released for comment at an early opportunity. No such alternative proposal has been released to date. There can
be no assurance that such alternative proposal will not adversely affect Resident Holders, or that any revised proposal may not differ significantly from the REOP Proposals described herein.

On
March 4, 2010, the Minister announced as part of the 2010 Canadian federal budget that the outstanding Tax Proposals regarding investments in "foreign investment entities"
would be replaced with revised Tax Proposals under which the existing rules in section 94.1 of the Tax Act relating to
investments in "offshore investment fund property" would remain in place subject to certain limited enhancements. Legislation to implement the revised Tax Proposals is contained in Bill
C-48, which is

176     Brookfield Infrastructure

---



Table of Contents

currently
proceeding through the legislative process. Section 94.1 of the Tax Act contains rules relating to investments by a taxpayer in Non-Resident Entities that could, in
certain circumstances, cause income to be imputed to Resident Holders, either directly or by way of allocation of such income imputed to our partnership or the Holding LP. These rules would
apply if it is reasonable to conclude, having regard to all the circumstances, that one of the main reasons for the Resident Holder, our partnership or the Holding LP acquiring, holding or
having an investment in a Non-Resident Entity is to derive a benefit from portfolio investments in certain assets from which the Non-Resident Entity may reasonably be
considered to derive its value in such a manner that taxes under the Tax Act on income, profits and gains from such assets for any year are significantly less than they would have been if such
income, profits and gains had been earned directly. In determining whether this is the case, section 94.1 of the Tax Act provides that consideration must be given to, among other
factors, the extent to which the income, profits and gains for any fiscal period are distributed in that or the immediately following fiscal period. No assurance can be given that section 94.1
of the Tax Act as proposed to be amended will not apply to a Resident Holder, our partnership or the Holding LP. If these rules apply to a Resident Holder, our partnership or the
Holding LP, income, determined by reference to a prescribed rate of interest applied to the "designated cost" (as defined in section 94.1 of the Tax Act) of the interest in
the Non-Resident Entity, will be imputed directly to the Resident Holder or to our partnership or the Holding LP and allocated to the Resident Holder in accordance with the rules in
section 94.1 of the Tax Act. The rules in section 94.1 of the Tax Act are complex and Resident Holders should consult their own tax advisors regarding the application of
these rules to them in their particular circumstances.

Certain
of the Non-Resident Subsidiaries in which the Holding LP directly invests are expected to be CFAs of the Holding LP. Dividends paid to the
Holding LP by a CFA of the Holding LP will be included in computing the income of the Holding LP. To the extent that any CFA of the Holding LP or any Indirect CFA earns
income that is characterized as FAPI in a particular taxation year of the CFA or Indirect CFA, the FAPI allocable to the Holding LP under the rules in the Tax Act must be included in
computing the income of the Holding LP for Canadian federal income tax purposes for the fiscal period of the Holding LP in which the taxation year of that CFA or Indirect CFA ends,
whether or not the Holding LP actually receives a distribution of that FAPI. Our partnership will include its share of such FAPI of the Holding LP in computing its income for Canadian
federal income tax purposes and Resident Holders will be required to include their proportionate share of such FAPI allocated from our partnership in computing their income for Canadian federal income
tax purposes. As a result, Resident Holders may be required to include amounts in their income even though they have not and may not receive an actual cash distribution of such amounts. If an amount
of FAPI is included in computing the income of the Holding LP for Canadian federal income tax purposes, an amount may be deductible in respect of the "foreign accrual tax" applicable to the
FAPI. Any amount of FAPI included in income net of the amount of any deduction in respect of "foreign accrual tax" will increase the adjusted cost base to the Holding LP of its shares of the
particular CFA in respect of which the FAPI was included. At such time as the Holding LP receives a dividend of this type of income that
was previously included in the Holding LP's income as FAPI, such dividend will, under the Tax Proposals contained in Bill C-48 (which is currently proceeding through the legislative
process), effectively not be included in computing the income of the Holding LP and there will be a corresponding reduction in the adjusted cost base to the Holding LP of the particular
CFA shares. Under the Foreign Tax Credit Generator Proposals, the "foreign accrual tax" applicable to a particular amount of FAPI included in the Holding LP's income in respect of a particular
CFA of the Holding LP may be limited in certain specified circumstances, including where the direct or indirect share of the income of any member of the Holding LP (which is deemed for
this purpose to include a Resident Holder) that is a person resident in Canada or a "foreign affiliate" of such a person is, under a Relevant Foreign Tax Law, less than such member's share of such
income for purposes of the Tax Act. No assurance can be given that the Foreign Tax Credit Generator Proposals will not apply to the Holding LP. For this purpose, a Resident Holder is

Brookfield Infrastructure     177

---



Table of Contents

not
considered to have a lesser direct or indirect share of the income of the Holding LP under the Relevant Foreign Tax Law than for purposes of the Tax Act solely because, among other
reasons, of a difference between the Relevant Foreign Tax Law and the Tax Act in the manner of computing the income of the Holding LP or in the manner of allocating the income of the
Holding LP because of the admission or withdrawal of a partner. If the Foreign Tax Credit Generator Proposals apply, the "foreign accrual tax" applicable to a particular amount of FAPI included
in the Holding LP's income in respect of a particular "foreign affiliate" of the Holding LP will be limited.

Disposition of Units

The disposition by a Resident Holder of a unit will result in the realization of a capital gain (or capital loss) by such
Resident Holder in the amount, if any, by which the proceeds of disposition of the unit, less any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base of such
unit. In general, the adjusted cost base of a Resident Holder's units will be equal to (i) the actual cost of the units (excluding any portion thereof financed with limited recourse
indebtedness) plus (ii) the pro rata share of the income of our partnership allocated to the Resident Holder for fiscal years of our partnership ending before the relevant time less
(iii) the aggregate of the pro rata share of losses of our partnership allocated to the Resident Holder (other than losses which cannot be deducted because they exceed the Resident
Holder's "at-risk" amount) for fiscal years of our partnership ending before the relevant time and less (iv) the Resident Holder's distributions received from our partnership before
the relevant time. The adjusted cost base of each of the units will be subject to the averaging provisions contained in the Tax Act.

Where
a Resident Holder disposes of all of its units, it will no longer be a partner of our partnership. If, however, a Resident Holder is entitled to receive a distribution from our
partnership after the disposition of all such units, then the Resident Holder will be deemed to dispose of the units at the later of: (i) the end of the fiscal year of our partnership during
which the disposition occurred; and (ii) the date of the last distribution made by our partnership to which the Resident Holder was entitled. Pursuant to Tax Proposals contained in Bill
C-48 which is currently proceeding through the legislative process, the pro rata share of the income (or loss) for tax purposes of our partnership for a particular
fiscal year which is allocated to a Resident Holder who has ceased to be a partner will generally be added (or deducted) in the computation of the adjusted cost base of the Resident Holder's
units immediately prior to the time of the disposition. These rules are complex and Resident Holders should consult their own tax advisors for advice with respect to the specific tax consequences to
them of disposing of units.

A
Resident Holder will realize a deemed capital gain if, and to the extent that, the adjusted cost base of the Resident Holder's units is negative at the end of any fiscal year of our
partnership. In such a case, the adjusted cost base of the Resident Holder's Units will be nil at the beginning of the next fiscal year of our partnership.

Taxation of Capital Gains and Capital Losses

In general, one-half of a capital gain realized by a Resident Holder must be included in computing such Resident Holder's
income as a taxable capital gain. One-half of a capital loss is deducted as an allowable capital loss against taxable capital gains realized in the year and any remainder may be deducted
against net taxable capital gains in any of the three years preceding the year or any year following the year to the extent and under the circumstances described in the Tax Act. Special rules
in the Tax Act may apply to disallow the one-half treatment on all or a portion of a capital gain realized on a disposition of our units to a tax-exempt person or a
non-resident person. Resident Holders contemplating such a disposition should consult their own tax advisors in this regard.

178     Brookfield Infrastructure

---



Table of Contents

A
Resident Holder that is throughout the relevant taxation year a "Canadian-controlled private corporation" (as defined in the Tax Act) may be liable to pay an additional
refundable tax of 62/3% on its "aggregate investment income" (as defined in the Tax Act) for the year, which is defined to include taxable capital gains.

Eligibility for Investment

Provided that our units are listed on a "designated stock exchange", which currently includes the TSX and the NYSE, our units will be
"qualified investments" under the Tax Act for a trust governed by an RRSP, deferred profit sharing plan, RRIF, registered education savings plan, registered disability savings plan, and a TFSA.
However, there can be no assurance that tax laws relating to qualified investments will not be changed. Taxes may be imposed in respect of the acquisition or holding of non-qualified
investments by such registered plans and certain other taxpayers and with respect to the acquisition or holding of "prohibited investments" by a TFSA or an RRSP or RRIF.

Our
units will not be a "prohibited investment" for a trust governed by a TFSA or an RRSP or RRIF, provided that the holder of the TFSA or the annuitant of the RRSP or RRIF, as the case
may be, (i) deals at arm's-length with our partnership for purposes of the Tax Act and (ii) does not have a "significant interest" in (A) our partnership or in (B) a
corporation, partnership or trust with which our partnership does not deal at arm's-length for purposes of the Tax Act. The Department of Finance (Canada) released Tax Proposals on
December 21, 2012 that will delete the condition in (ii)(B) above and will exclude certain "excluded property" (as defined in the Tax Proposals) from being a "prohibited investment".
Generally, our units will be "excluded property" (i.e., not a "prohibited investment") to the holder of a TFSA or the annuitant of an RRSP or RRIF, as the case may be, if, at the relevant time,
at least 90% of the fair market value of all equity of our partnership is owned by persons dealing at arm's length with such holder or annuitant, as the case may be, and their investment in our
partnership meets the other criteria set forth in such Tax Proposals. Such Tax Proposals will be deemed to have come into force on March 23, 2011. Unitholders who intend to hold our units in a
TFSA, RRSP or RRIF should consult with their own tax advisors regarding the application of the foregoing prohibited investment rules having regard to their particular circumstances.

Alternative Minimum Tax

Resident Holders that are individuals or trusts may be subject to the alternative minimum tax rules. Such Resident Holders should
consult their own tax advisors.

Holders Not Resident in Canada

The following portion of the summary is generally applicable to a Holder who, for purposes of the Tax Act and at all relevant
times, is not, and is not deemed to be, resident in
Canada and who does not use or hold and is not deemed to use or hold its units in connection with a business carried on in Canada ("Non-Resident Holder").

The
following portion of the summary assumes that (i) our units are not and will not at any relevant time constitute "taxable Canadian property" of any Non-Resident
Holder and (ii) our partnership and the Holding LP will not dispose of property that is "taxable Canadian property". "Taxable Canadian property" includes, but is not limited to, property
that is used or held in a business carried on in Canada and shares of corporations that are not listed on a "designated stock exchange" if more than 50% of the fair market value of the shares is
derived from certain Canadian properties during the 60-month period immediately preceding the particular time. In general, our units will not constitute "taxable Canadian property" of any
Non-Resident Holder at a particular time, unless (a) at any time during the 60-month period immediately preceding the particular time, more than 50% of the fair market
value of our units was derived, directly or indirectly (under Tax Proposals contained in Bill

Brookfield Infrastructure     179

---



Table of Contents

C-48 which
is currently proceeding through the legislative process, excluding through a corporation, partnership or trust, the shares or interests in which were not themselves
"taxable Canadian property"), from one or any combination of (i) real or immovable property situated in Canada, (ii) "Canadian resource property", (iii) "timber resource
property", and (iv) options in respect of, or interests in, or for civil law rights in, such property, whether or not such property exists, or (b) our units are otherwise deemed to be
"taxable Canadian property". Since our partnership's assets will consist principally of units of the Holding LP, our units would generally be "taxable Canadian property" at a particular time if
the units of the Holding LP held by our partnership derived, directly or indirectly (under Tax Proposals contained in Bill C-48 which is currently proceeding through the
legislative process, excluding through a corporation, partnership or trust, the shares or interests in which were not themselves "taxable Canadian property"), more than 50% of their fair market value
from properties described in (i) to (iv) above, at any time in the 60-month period preceding the particular time. Our Managing General Partner and the Infrastructure General
Partner do not expect our units to be "taxable Canadian property" of any Non-Resident Holder and they do not expect our partnership or the Holding LP to dispose of "taxable Canadian property".
However, no assurance can be given in these regards. See Item 3.D "Risk FactorsRisks Related to TaxationCanada".

Special
rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere.

Taxation of Income or Loss

A Non-Resident Holder will not be subject to Canadian federal income tax under Part I of the Tax Act on its
share of income from a business carried on by our partnership (or the Holding LP) outside Canada or the non-business income earned by our partnership (or the
Holding LP) from sources in Canada. However, a Non-Resident Holder may be subject to Canadian federal withholding tax under Part XIII of the Tax Act, as described
below. Our Managing General Partner and the Infrastructure General Partner intend to organize and conduct the affairs of our partnership and the Holding LP, to the extent possible, such that
Non-Resident Holders should not be considered to be carrying on business in Canada solely by virtue of holding our units. However, no assurance can be given in this regard.

Our
partnership and the Holding LP will be deemed to be a non-resident person in respect of certain amounts paid or credited or deemed to be paid or credited to them
by a person resident or deemed to be resident in Canada, including dividends or interest. Dividends or interest (other than interest exempt from Canadian federal withholding tax) paid or deemed to be
paid by a person resident or deemed to be resident in Canada to the Holding LP will be subject to withholding tax under Part XIII of the Tax Act at the rate of 25%. However, the
CRA's administrative practice in similar circumstances is to permit the rate of Canadian federal withholding tax applicable to such payments to be computed by looking through the partnership and
taking into account the residency of the partners (including partners who are resident in Canada) and any reduced rates of Canadian federal withholding tax that any non-resident partners
may be entitled to under an applicable income tax treaty or convention, provided that the residency status and entitlement to the treaty benefits can be established. In determining the rate of
Canadian federal withholding tax applicable to amounts paid by the Holding Entities to the Holding LP, our Managing General Partner and the Infrastructure General Partner expect the Holding
Entities to look-through the Holding LP and our partnership to the residency of the partners of our partnership (including partners who are residents of Canada) and to take into
account any reduced rates of Canadian federal withholding tax that non-resident partners may be entitled to under an applicable income tax treaty or convention in order to determine the
appropriate amount of Canadian federal withholding tax to withhold from dividends or interest paid to the Holding LP. However, there can be no assurance that the CRA would apply its
administrative practice in this context. Under the Treaty, a Canadian-resident payer is required in certain circumstances to

180     Brookfield Infrastructure

---



Table of Contents

look-through
fiscally transparent partnerships such as our partnership and the Holding LP to the residency and Treaty entitlements of their partners and take into account the
reduced rates of Canadian federal withholding tax that such partners may be entitled to under the Treaty.

AUSTRALIAN TAX CONSIDERATIONS

Set out below is general Australian income tax implications for Australian tax resident holders of units (Australian Holders).

This
is not tax advice an Australian Holder can rely on. The individual circumstances of each Australian Holder will affect the taxation implications of each Australian Holder's interest
in our partnership. Australian Holders should seek appropriate independent professional advice that considers the taxation implications in respect of their own specific circumstances.

The
discussion is primarily intended for Australian Holders who hold their interest in our partnership on capital account. Different outcomes will potentially arise for Australian
Holders who are investing on revenue account. Those Australian Holders should seek professional taxation advice in relation to their interest in our partnership.

The
summary of the Australian income tax implications set out below is based on established judicial and administrative interpretations of theIncome Tax
Assessment Act 1997(Cth) ("ITAA 1997"), theIncome Tax Assessment Act 1936(Cth) ("ITAA 1936") and the Taxation Administration Act
1953(Cth) ("Administration Act") as at the date of this Opinion.

Summary

The key Australian income tax implications for Australian Holders of units are set out below:

Our
partnership should be classified as a "corporate limited partnership" for Australian income tax purposes as:



On
the basis that our partnership is a corporate limited partnership it should be treated as a company for Australian tax purposes.

Our
partnership is a non-resident of Australia for tax purposes and therefore, should not be subject to income tax in Australia except for any income sourced in Australia, or
in respect of certain capital gains that relate to "taxable Australian property" as detailed in the ITAA 1997.

Distributions
made by our partnership to Australian Holders should be characterized as dividends for Australian income tax purposes and included in Australian Holders' assessable
unfranked income.

Australian
Holders should not be subject to income tax on an accruals basis under the Controlled Foreign Company ("CFC") or proposed Foreign Accumulation Fund ("FAF") rules. This
conclusion is dependent on the quantum and nature of the interests held in our partnership.

The
disposal of units by Australian Holders should give rise to a capital gains tax ("CGT") event for the Australian Holders. Broadly, Australian Holders that hold their units on capital
account should realize a capital gain (or loss) equal to the difference between any capital proceeds received and the cost base (or reduced cost base) of the units.

Brookfield Infrastructure     181

---



Table of Contents

Characterization of the Partnership



A limited partnership is defined in section 995-1 of the ITAA 1997 and means:



There
is no requirement as to where or under which law the liability is limited. For tax purposes, the liability is limited if it is effectively limited under the laws applying to the
partnership (as per the partnership agreement). Our partnership should be a limited partnership for Australian tax purposes.



Under subsection 94D(1)(a) of the ITAA 1936, a partnership will be a corporate limited partnership in relation to the year of
income of the partnership if the year of income is the 1995-96 year of income or a later year of income.

Our
partnership should be a corporate limited partnership under subsection 94D(1) of the above definition. Subsection 94D(2) of the ITAA 1936 specifically excludes from a
corporate limited partnership a VCLP, ESVCLP, or AFOF. A requirement for each of these definitions is that the partnership be registered either in Australia or a country prescribed by relevant
regulations or be an Australian resident. Our partnership is registered in Bermuda and is not a resident of Australia. Bermuda is not a country prescribed by relevant regulations. Therefore our
partnership will not be a VCLP, ESVCLP or AFOF. A VCLP is defined by reference to theVenture Capital Act 2002.Our partnership, as a Bermudian Exempted
Limited Partnership, will not be excluded from the definition of a corporate limited partnership as subsection 9-1(1) of the Venture Capital Act requires of a
VCLP that:





Pursuant to sub-section 94D(5) of the ITAA 1936, an exception to our partnership being a corporate limited
partnership applies if it is a "foreign hybrid limited partnership" ("FHLP"), as defined in section 830-10 of the ITAA 1997. A limited partnership will be a
FHLP if:



182     Brookfield Infrastructure

---



Table of Contents



Paragraph (a)
should be met on the basis that our partnership was formed in Bermuda. Paragraph (b) would not be met on the basis that Bermuda does not impose any tax on
income, profits, dividends or wealth. Therefore, there is no foreign tax imposed under the laws of Bermuda on the partners of our partnership and this paragraph will not be satisfied. This position is
confirmed by the Australia Taxation Office ("ATO") in ATO ID 2006/149. On the basis that paragraph (b) is not met, our partnership should not be a FHLP.



Our partnership should be classified as a corporate limited partnership for Australian income tax purposes in accordance with
section 94D of the ITAA 1997. The consequences of that include that our partnership is treated as a company for the purposes of applying Australian domestic income tax law (sections 94J
and 94K of the ITAA 1936). Accordingly, Australian Holders' units in our partnership should be treated as shares in a company.

Proposed Foreign Accumulation Fund rules

Broadly, the proposed FAF rules apply to an Australian resident who has an interest in a FAF, providing a tax deferral benefit for the
income year. A FAF is a foreign resident that is not a CFC, whose investment returns are subject to a low level of risk and which does not distribute substantially all of the profits and gains of
the fund.

The
level of risk of return of an investment held by an entity will be low if the return is 'sufficiently certain'. A return is sufficiently certain, where at the time the investment is
made it is reasonably expected that the foreign entity will receive returns from the investments it makes and at least some of the return is fixed or determinable with reasonable accuracy.

Returns
on an investment in our partnership will not be fixed or accurately determinable as the distributions are at the discretion of our Managing General Partner. Our Managing General
Partner is not required to make distributions and provides no assurance that distributions will be made as intended. The distributions paid by our partnership will be dependent on the performance of
its investments. Accordingly, the proposed FAF rules should not apply to the income accruing to Australian Holders in our partnership.

Brookfield Infrastructure     183

---



Table of Contents

Partnership distributions to Australian Holders

Australian Holders will potentially receive distributions from our partnership. Distributions will be treated as dividends on the basis
that our partnership is a corporate limited partnership for Australian tax purposes. The distributions should be treated as unfranked dividends to Australian Holders.

Our
partnership will not provide information to enable Australian Holders to determine whether a return of capital has been made for Australian tax purposes. Therefore, Australian
Holders should treat all distributions as unfranked dividends.

The
taxation treatment of a partnership dividend received by Australian Holders will vary depending on the type of Australian Holder. Australian Holders should seek further independent
advice in relation to the nature of future distributions received from our partnership.

Set
out below is a summary of how different types of Australian Holders should treat a distribution received from our partnership.



Distributions received by Australian tax resident individuals should in most cases be included in their Australian assessable income.
Australian Holders should be entitled to an Australian foreign income tax offset which reduces the Australian tax payable on assessable dividends by the amount of any foreign income tax withheld by
our partnership.

Australian
Holders should seek independent advice in relation to their entitlement to Australian foreign income tax offsets to the extent foreign tax is withheld.



The taxation treatment of a dividend received by an Australian tax resident company is the same as that described above for an
Australian tax resident individual.



The comments below relate to Australian tax resident beneficiaries who are not under a legal disability where those beneficiaries are
presently entitled to income of an Australian resident trust. If the beneficiary is under a legal disability, we recommend those beneficiaries seek independent professional taxation advice.

Distributions
in the form of dividend income should either be included in the trustee's, or the beneficiary's, assessable income, as the case may be. The tax treatment of the dividend
then depends on the legal identity of the beneficiary as an individual, a company or a trust (refer to comments above).



Dividends paid to an Australian tax resident superannuation fund should be included in the fund's Australian assessable income.
Superannuation funds should be entitled to an Australian foreign income tax offset against the Australian tax payable on assessable dividends for any foreign income tax withheld by our partnership on
future distributions.

Australian
Holders should seek further independent advice in relation to their entitlement to Australian foreign income tax offsets to the extent foreign tax is withheld on our
partnership distributions.

184     Brookfield Infrastructure

---



Table of Contents



Australian Holders with income tax years that end on 30 June will not receive any documentation from our partnership that will
correlate directly to a 30 June income tax year end. Australian Holders will need to rely on distribution payment statements to support their Australian income tax disclosures.

Australian CGT implications for Australian Holders



The cost base of the units for Australian Holders who bought their units in our partnership directly should equal the money paid for
those units plus any incidental costs of acquisition and disposal of the units (e.g. broker's fees, borrowing expenses).

Where
an Australian Holder received the units as consideration for entering into the Merger Transaction, the cost base or reduced cost base of the units acquired is made up of a number
of elements including the money paid or market value of property given to acquire the units. That amount should be the market value of the Prime Infrastructure Securities exchanged for the units under
the Merger Transaction plus the incidental costs of acquisition and disposal of the Prime Infrastructure Securities (if any).

On
the basis that our partnership and the Prime Infrastructure Securityholders were acting at arm's length, the market value of the Prime Infrastructure Securities disposed of under the
Merger Transaction should be the same as the market value of the units received in exchange.

The
acquisition date for the units for CGT purposes should be the date the units were allotted to the Prime Infrastructure Securityholders (8 December 2010 Australian
Eastern Standard Time).

The
market value of the units may be determined by reference to the NYSE/TSX VWAP of these Units on 8 December 2010 (A$20.651 per Unit).



In the event Australian Holders dispose of units, a capital gain should arise where the sale proceeds received exceed an Australian
Holders' cost base in the units. A capital loss should arise where the Australian Holders' reduced cost base exceeds the sale proceeds. The time that the CGT event occurs is when the contract is
entered into or, if there is no contract, when the change of ownership occurs.

Partnership
distributions should be treated as unfranked dividends and no CGT cost base reduction should be calculated as a result of the distributions.

Where
the proceeds received are in foreign currency (e.g. US$ or C$), these should be converted into A$ at the daily average exchange rate for the day of the sale (the date
the sale contract is entered into). The ATO publish daily average exchange rates on their website (www.ato.gov.au). This may be a different amount than the A$ cash an Australian Holder ultimately
receives.

Accordingly,
there may a foreign exchange gain or loss if there are any fluctuations in the exchange rate between the date of the sale contract and the date payment is received by the
Australian Holders. To the extent payment is received within 12 months of the date of disposal (the date the sale contract is entered into) of the units any such foreign exchange
realization gains or losses will be capital in nature and subject to the CGT provisions (i.e. included in the overall gain or loss on the disposal of the units).

If
payment is received more than 12 months after the contract date, the foreign exchange gain or loss provisions of the ITAA 1997 apply. Australian Holders should seek specific
advice in this circumstance.

Brookfield Infrastructure     185

---



Table of Contents



Provided the units that gave rise to the capital gain were held for at least 12 months prior to the occurrence of the CGT event,
any net capital gain realized by an Australian Holder on those units (e.g. if a sale were to occur) may qualify for discount capital gains tax treatment.

The
discount is taken into account after applying any available capital losses against the capital gain eligible for the discount.

This
treatment broadly only applies in respect of units held by Australian Holders that are individuals, trustees of trusts, and trustees of superannuation funds. No such discount is
available for corporate Australian Holders.

Where
the CGT discount is available, individual Australian Holders (either holding their units directly or indirectly through a trust) may reduce their net capital gain by 50%. For
trustees (responsible entities) of superannuation funds, the net capital gain may be reduced by 331/3%.

BERMUDA TAX CONSIDERATIONS

In Bermuda there are no taxes on profits, income or dividends, nor is there any capital gains tax, estate duty or death duty. Profits
can be accumulated and it is not obligatory to pay dividends. As "exempted undertakings", exempted partnerships and overseas partnerships are entitled to apply for (and will ordinarily receive)
an assurance pursuant to theExempted Undertakings Tax Protection Act 1966that, in the event that legislation introducing taxes computed on profits or
income, or computed on any capital asset, gain or appreciation, is enacted, such taxes shall not be applicable to the partnership or any of its operations until March 31, 2035. Such an
assurance may include the assurance that any tax in the nature of estate duty or inheritance tax shall not be applicable to the units, debentures or other obligations of the partnership.

Exempted
partnerships and overseas partnerships fall within the definition of "international businesses" for the purposes of theStamp Duties (International
Businesses Relief) Act 1990, which means that instruments executed by or in relation to an exempted partnership or an overseas partnership are exempt from stamp duties (such
duties were formerly applicable under the Stamp Duties Act 1976). Thus, stamp duties are not payable upon, for example, an instrument which effects the transfer or assignment of a unit in an exempted
partnership or an overseas partnership, or the sale or mortgage of partnership assets; nor are they payable upon the partnership capital.

10.F    DIVIDENDS AND PAYING AGENTS

Not applicable.

10.G    STATEMENT BY EXPERTS

Not applicable.

10.H    DOCUMENTS ON DISPLAY

Any statement in this annual report on Form 20-F about any of our contracts or other documents is not necessarily
complete. If the contract or document is filed as an exhibit to the annual report on Form 20-F the contract or document is deemed to modify the description contained in this annual
report on Form 20-F. You must review the exhibits themselves for a complete description of the contract or document.

Brookfield
Asset Management and our partnership are both subject to the information filing requirements of the Exchange Act, and accordingly are required to file periodic reports and
other information with the SEC. As a foreign private issuer under the SEC's regulations, we file annual

186     Brookfield Infrastructure

---



Table of Contents

reports
on Form 20-F and other reports on Form 6-K. The information disclosed in our reports may be less extensive than that required to be disclosed in
annual and
quarterly reports on Forms 10-K and 10-Q required to be filed with the SEC by U.S. issuers.

Moreover,
as a foreign private issuer, we are not subject to the proxy requirements under Section 14 of the Exchange Act, and our directors and principal shareholders are not
subject to the insider short swing profit reporting and recovery rules under Section 16 of the Exchange Act. Our and Brookfield Asset Management's SEC filings are available at the SEC's website
at www.sec.gov. You may also read and copy any document we or Brookfield Asset Management files with the SEC at the public reference facilities maintained by the SEC at SEC Headquarters, Public
Reference Section, 100 F Street, N.E., Washington D.C. 20549. You may obtain information on the operation of the SEC's public reference facilities by calling the SEC at
1-800-SEC-0330.

In
addition, Brookfield Asset Management and our partnership are required to file documents required by Canadian securities laws electronically with Canadian securities regulatory
authorities and these filings are available on our or Brookfield Asset Management's SEDAR profile at www.sedar.com. Written requests for such documents should be directed to our Corporate Secretary at
73 Front Street, Hamilton HM 12, Bermuda.

10.I    SUBSIDIARY INFORMATION

Not applicable.

ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT NON-PRODUCT RELATED MARKET RISK

See the information contained in this annual report on Form 20-F under Item 5 "Operating and Financial Review
and ProspectsOther Market Risks" and Item 5 "Operating and Financial Review and ProspectsForeign Currency Hedging Strategy."

ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

Brookfield Infrastructure     187

---





Table of Contents

PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of December 31, 2012, an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act) was carried out under the supervision and with the participation of persons performing the functions of
principal executive and principal financial officers for us and the Manager. Based upon that evaluation, the persons performing the functions of principal executive and principal financial officers
for us have concluded that, as of December 31, 2012, our disclosure controls and procedures were effective: (i) to ensure that information required to be disclosed by us in the reports
that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms; and
(ii) to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including the
persons performing the functions of principal executive and principal financial officers for us, to allow timely decisions regarding required disclosure.

It
should be noted that while our management, including persons performing the functions of principal executive and principal financial officers for us, believe our disclosure controls
and procedures provide a reasonable level of assurance that such controls and procedures are effective, they do not expect that our disclosure controls and procedures or internal controls will prevent
all error and all fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including persons performing the functions of principal executive and
principal financial officers for us, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2012, based on the criteria set forth in
Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on evaluation under the Framework in Internal
ControlIntegrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2012. Excluded from our evaluation were
the controls over financial reporting at our Colombian distribution utility, in which control was acquired on January 27, 2012, our North American gas storage operations, in which control was
acquired on April 25, 2012, our Chilean toll roads, in which control was acquired on October 1, 2012, our North American district energy operations, in which control was acquired on
October 31, 2012 and our UK connections operations, in which we acquired control on November 13, 2012. The financial statements of these entities in aggregate constitute 17% and 24% of
net and total assets, respectively, and 8% of net income in the consolidated financial statement amounts as of and for the year ended December 31, 2012.

188     Brookfield Infrastructure

---



Table of Contents

Internal
control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Report of Independent Registered Chartered Accountants

The effectiveness of our internal control over financial reporting as of December 31, 2012 has been audited by
Deloitte LLP, independent registered chartered accountants, who have also audited the financial statements of our partnership, as stated in their reports which are included herein.

Changes in Internal Control

There was no change in our internal control over financial reporting during the year ended December 31, 2012, that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERTS

Our Managing General Partner's board of directors has determined that Danesh Varma possesses specific accounting and financial
management expertise, that he is the audit committee financial expert as defined by the U.S. Securities and Exchange Commission, and that he is independent within the meaning of the rules of
the NYSE. Our Managing General Partner's Board has also determined that other members of the Audit Committee have sufficient experience and ability in finance and compliance matters to enable them to
adequately discharge their responsibilities.

ITEM 16B.    CODE OF ETHICS

On December 4, 2007, our Managing General Partner adopted a Code of Conduct and Ethics ("Code") that applies to the members of
the board of directors of our Managing General Partner, our partnership and any officers or employees of our Managing General Partner. The Code has been updated during 2012 and we have posted a copy
of the current Code on our website at www.brookfieldinfrastructure.com/aboutus/governance.

ITEM 16C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our Managing General Partner has retained Deloitte LLP to act as our partnership's and the Holding LP's independent
registered chartered accountants.

The
table below summarizes the fees for professional services rendered by Deloitte LLP:

For the Year Ended December 31,2012

2011FEES

USD ('000)

%

USD ('000)

%Audit fees(1)

$
4,035


94%

$
4,241


99%Tax fees


15








Audit-related fees(2)


264


6%


30


1%Total

$
4,314


100%

$
4,271


100%


(1)Audit fees relate to annual fees for our partnership and the Holding LP.(2)Audit-related fees relate primarily to the review of our base shelf prospectus.


Brookfield Infrastructure     189

---



Table of Contents

The audit committee of our Managing General Partner pre-approves all audit and non-audit services provided to our
partnership and the Holding LP by Deloitte LLP.

ITEM 16D.    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE

None.

ITEM 16E.    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASER

Our partnership may from time-to-time, subject to applicable law, purchase our units for cancellation in the
open market, provided that any necessary approval has been obtained. Brookfield has also advised our partnership that it may from time-to-time, subject to applicable law,
purchase our units in the market without making an offer to all unitholders.

In
the year ended December 31, 2012, none of our units were repurchased and cancelled under our normal course issuer bid.

ITEM 16F.    CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

Not Applicable.

ITEM 16G.    CORPORATE GOVERNANCE

Our corporate practices are not materially different from those required of domestic limited partnerships under the NYSE listing
standards.

ITEM 16H.    MINE SAFETY DISCLOSURES

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issuers that
are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information
regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Federal Mine Safety and Health
Administration ("MSHA") under theFederal Mine Safety and Health Act of 1977, as amended ("Mine Act"). During the fiscal year ended December 31,
2012, our partnership did not have any mines in the United States subject to regulation by MSHA under the Mine Act.

190     Brookfield Infrastructure

---





Table of Contents

PART III

ITEM 17.    FINANCIAL STATEMENTS

Not applicable.

ITEM 18.    FINANCIAL
STATEMENTS

See the list of financial statements on page F-1 which are filed as part of this annual report on
Form 20-F.

ITEM 19.    EXHIBITS

Number

Description1.1

Certificate of registration of Brookfield Infrastructure Partners L.P., registered as of May 29, 2007incorporated by reference to Exhibit 1.1 to our partnership's Registration Statement on
Form 20-F filed July 31, 2007. (With regard to applicable cross-references in this report, our partnership's registration statement was filed with the SEC under File No. 1-33632).1.2

Amended and Restated Limited Partnership Agreement of Brookfield Infrastructure Partners L.P., dated December 4, 2007incorporated by reference to Exhibit 1.2 to our partnership's
Registration Statement on Form 20-F/A filed December 13, 2007.4.1

Second Amended and Restated Limited Partnership Agreement of Brookfield Infrastructure L.P., dated December 4, 2007incorporated by reference to Exhibit 4.1 to our partnership's Registration
Statement on Form 20-F/A filed December 18, 2007.4.2

Master Services Agreement, dated December 4, 2007, by and among Brookfield Asset Management Inc., Brookfield Infrastructure Partners L.P., Brookfield Infrastructure L.P., Brookfield Infrastructure
Holdings (Canada) Inc. and Brookfield Asset Management Barbados Inc. and others and as indirectly assigned by Brookfield infrastructure Group Inc. to Brookfield Infrastructure Group L.P. pursuant to assignment and assumption
agreements dated January 1, 2012incorporated by reference to Exhibit 4.2 to our partnership's Registration Statement on Form 20-F/A filed December 13, 2007.4.3

Relationship Agreement, dated December 4, 2007, by and among Brookfield Infrastructure Partners L.P., Brookfield Infrastructure Group Inc., Brookfield Infrastructure L.P., Brookfield Infrastructure
Group Corporation and Brookfield Asset Management Inc. and othersincorporated by reference to Exhibit 4.3 to our partnership's Registration Statement on Form 20-F/A filed December 13, 2007.4.4

Registration Rights Agreement, dated December 4, 2007, between Brookfield Infrastructure Partners L.P. and Brookfield Asset Management Inc.incorporated by reference to Exhibit 4.4 to our
partnership's Registration Statement on Form 20-F/A filed December 13, 2007.4.5

Amendment dated June 13, 2008 to Second Amended and Restated Limited Partnership Agreement of Brookfield Infrastructure L.P., dated December 4, 2007incorporated by reference to Exhibit 4.17
to our partnership's Annual Report on Form 20-F filed June 30, 2008.4.6

Amendment dated June 13, 2008 to Amended and Restated Limited Partnership Agreement of Brookfield Infrastructure Partners L.P., dated December 4, 2007incorporated by reference to Exhibit 4.18
to our partnership's Annual Report on Form 20-F filed June 30, 2008.4.7

Second Amendment dated November 16, 2009 to Amended and Restated Limited Partnership Agreement of Brookfield Infrastructure Partners L.P., dated December 4, 2007 as amended on June 13,
2008incorporated by reference to Exhibit 99.1 to our partnership's Report of Foreign Private Issuer on Form 6-K filed March 10, 2010.


Brookfield Infrastructure     191

---



Table of Contents

Number

Description4.8

Third Amendment dated February 5, 2010 to Amended and Restated Limited Partnership Agreement of Brookfield Infrastructure Partners L.P., dated December 4, 2007, as amended on June 13, 2008 and
November 16, 2009incorporated by reference to Exhibit 99.1 to our partnership's Report of Foreign Private Issuer on Form 6-K filed February 5, 2010.4.9

Second Amendment dated February 5, 2010 to Second Amended and Restated Limited Partnership Agreement of Brookfield Infrastructure L.P., dated December 4, 2007, as amended on June 13,
2008incorporated by reference to Exhibit 99.1 to our partnership's Report of Foreign Private Issuer on Form 6-K filed February 5, 2010.4.10

Third Amendment dated September 11, 2012 to Second Amended and Restated Limited Partnership Agreement of Brookfield Infrastructure Partners L.P., dated December 4, 2007incorporated by reference to
Exhibit 99.1 to our partnership's Report of Foreign Private Issuer on Form 6-K filed September 24, 2012.8.1

Significant Subsidiaries (as defined in (210.1-02 (w) of Regulation S-X) of Brookfield Infrastructure Partners L.P. (Incorporated by reference to Item 4, "Information on the Company").12.1

Certification of Samuel Pollock, Chief Executive Officer, Brookfield Infrastructure Group Corporation, pursuant to Section 302 of theSarbanes-Oxley Act of 2002.*12.2

Certification of John Stinebaugh, Chief Financial Officer, Brookfield Infrastructure Group Corporation, pursuant to Section 302 of theSarbanes-Oxley Act of 2002.*13.1

Certification of Samuel Pollock, Chief Executive Officer, Brookfield Infrastructure Group Corporation, pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of theSarbanes-Oxley Act of 2002.*13.2

Certification of John Stinebaugh, Chief Financial Officer, Brookfield Infrastructure Group Corporation, pursuant to 18 U.S.C. Section 1350, as adopted to Section 906 of theSarbanes-Oxley Act of 2002.*15.1

Consent of Deloitte LLP, independent registered chartered accountants, relating to the incorporation of the consolidated financial statements of Brookfield Infrastructure Partners L.P. into this Annual Report on
Form 20-F.*


*Filed electronically herewith.


192     Brookfield Infrastructure

---





Table of Contents

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing an annual report on Form 20-F
and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Dated: April 30, 2013

BROOKFIELD INFRASTRUCTURE PARTNERS L.P. by its
general partner, Brookfield Infrastructure Partners LimitedBy:

/s/DON MACKENZIEName:

Don MackenzieTitle:

Director


Brookfield Infrastructure     193

---





Table of Contents



BROOKFIELD INFRASTRUCTURE PARTNERS L.P.    INDEX TO FINANCIAL STATEMENTS



PageAudited Financial Statements of Brookfield Infrastructure Partners L.P. as of December 31, 2012
December 31, 2011 and January 1, 2011 and for the years ended December 31, 2012, 2011 and 2010.

F-2


Brookfield Infrastructure     F-1

---





Table of Contents

REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To
the Board of Directors and Partners of Brookfield Infrastructure Partners L.P.

We
have audited the internal control over financial reporting of Brookfield Infrastructure Partners L.P. and subsidiaries (the "Partnership") as of December 31,
2012, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in
Management's Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over
financial reporting at the Colombian distribution utility, in which control was acquired on January 27, 2012, the North American gas storage operations, in which control was acquired on
April 25, 2012, the Chilean toll roads, in which control was acquired on October 1, 2012, the North American district energy operations, in which control was acquired on
October 31, 2012 and the UK connections operations, in which control was acquired on November 13, 2012. The financial statements of these entities in aggregate constitute 17% and 24% of
net and total assets, respectively, and 8% of net income in the consolidated financial statement amounts as of and for the year ended December 31, 2012. Accordingly, our audit did not include
the internal control over financial reporting at the Colombian distribution utility, the North American gas storage operations, the Chilean toll roads, the North American district energy operations
and the UK connections operations. The Partnership's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Partnership's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A
company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or
persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material
misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to
future periods are subject to the

F-2     Brookfield Infrastructure

---



Table of Contents

risk
that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on the criteria
established inInternal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.

We
have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the
year ended December 31, 2012 of the Partnership and our report dated April 30, 2013 expressed an unqualified opinion on those financial statements.

/s/ Deloitte LLPToronto, Canada

Independent Registered Chartered AccountantsApril 30, 2013

Licensed Public Accountants


Brookfield Infrastructure     F-3

---



Table of Contents

REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To
the Partners of Brookfield Infrastructure Partners L.P.

We
have audited the accompanying consolidated statements of financial position of Brookfield Infrastructure Partners L.P. and subsidiaries (the "Partnership") as of
December 31, 2012, December 31, 2011 and January 1, 2011 and the related consolidated statements of operating results, comprehensive income, partnership capital and cash flows for
each of the three years in the period ended December 31, 2012. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Brookfield Infrastructure Partners L.P. and subsidiaries
as of December 31, 2012, December 31, 2011 and January 1, 2011 and the results of their operations and their cash flows for each of the three years in the period ended
December 31, 2012, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We
have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Partnership's internal control over financial
reporting as of December 31, 2012, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated April 30, 2013 expressed an unqualified opinion on the Partnership's internal control over financial reporting.

/s/ Deloitte LLPToronto, Canada

Independent Registered Chartered AccountantsApril 30, 2013

Licensed Public Accountants


F-4     Brookfield Infrastructure

---





Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.    CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

US$ MILLIONS

Notes

As of
December 31,
2012

As of
December 31,
2011
Restated (See Note 3)

As of
January 1,
2011
Restated (See Note 3)AssetsCash and cash equivalents


6

$
263

$
153

$
154Accounts receivable and other


7


372


215


187Inventory


8


108


87


44Financial assets (current)


9


3


23


6Assets classified as held for sale











1,859Current assets





746


478


2,250Property, plant and equipment


11


7,970


4,073


3,131Intangible assets


12


4,497


2,924


2,903Standing timber


13


2,997


2,890


2,578Investments in associates


10


2,179


1,400


1,089Goodwill


14


636


591


591Investment properties


15


213


194


175Other assets (non-current)


7


225


200


132Financial assets (non-current)


9


113


114


118Deferred income tax asset


24


142


405


385Total assets




$
19,718

$
13,269

$
13,352Liabilities and Partnership CapitalLiabilitiesAccounts payable and other


16


582


370


265Non-recourse borrowings (current)


18


663


145


615Financial liabilities (current)


17


46


11


29Liabilities directly associated with assets classified as held for sale











1,859Current liabilities





1,291


526


2,768Corporate borrowings


18,19


946





18Non-recourse borrowings (non-current)


18


6,330


4,740


3,960Financial liabilities (non-current)


17


839


234


97Other liabilities (non-current)


16


520


300


261Deferred income tax liability


24


1,964


1,560


1,305Preferred shares


20


20


20


20Total liabilities





11,910


7,380


8,429Partnership capitalLimited partners'


25


3,632


3,049


2,461General partner


25


27


24


23Non-controlling interestRedeemable Partnership Units held by Brookfield


25


1,365


1,133


887Non-controlling interestin operating subsidiaries





2,784


1,683


1,552Total partnership capital





7,808


5,889


4,923Total liabilities and partnership capital




$
19,718

$
13,269

$
13,352




The accompanying notes are an integral part of the financial statements.

Brookfield Infrastructure     F-5

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.    CONSOLIDATED STATEMENTS OF OPERATING RESULTS

For the Year Ended
December 31,US$ MILLIONS (except per unit information)

Notes

2012

2011
Restated (See Note 3)

2010
Restated (See Note 3)Revenues


21

$
2,004

$
1,636

$
634Direct operating costs





(1,094
)

(899
)

(413
)General and administrative expenses





(95
)

(61
)

(35
)Depreciation and amortization expense





(232
)

(127
)

(29
)583


549


157Interest expense


22


(407
)

(335
)

(144
)Share of earnings from investments in associates


10


1


76


52Fair value gains and other items


4


8





396Fair value adjustments





200


356


12Other expenses





(48
)

(48
)

(15
)Income before income tax





337


598


458Income tax (expense) recoveryCurrent


24


(16
)

(4
)

(6
)Deferred


24


(30
)

(154
)

21Net income




$
291

$
440

$
473Attributable to:Non-controlling interestin operating subsidiaries





185


253


43Non-controlling interestRedeemable Partnership Units held by Brookfield





26


51


128General partner





16


5


5Limited partners





64


131


297Basic and diluted earnings per unit attributable to:Limited partners


25

$
0.47

$
1.13

$
3.91




The accompanying notes are an integral part of the financial statements.

F-6     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Year Ended
December 31,US$ MILLIONS

Notes

2012

2011
Restated (See Note 3)

2010
Restated (See Note 3)Net income for the year




$
291

$
440

$
473Other comprehensive income:Revaluations of property, plant and equipment





556


310


2Foreign currency translation





99


(37
)

112Cash flow hedge


5


(29
)

(94
)

15Net investment hedge


5


(9
)

(30
)

(51
)Other(1)





(9
)

(4
)

26Taxes on the above items


24


(161
)

(71
)

(10
)Equity accounted investments


10


138


120


2585


194


96Comprehensive income




$
876

$
634

$
569Attributable to:Non-controlling interestin operating subsidiaries




$
252

$
233

$
60Non-controlling interestRedeemable Partnership Units held by Brookfield


25

$
173

$
110

$
155General partner


25

$
19

$
7

$
6Limited partners


25

$
432

$
284

$
348


(1)Other reserves relate to unrealized actuarial (losses)/gains.




The accompanying notes are an integral part of the financial statements.

Brookfield Infrastructure     F-7

---





Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.        CONSOLIDATED STATEMENTS OF PARTNERSHIP CAPITAL

Limited Partners'

General Partner

Non-Controlling Interest
Redeemable Partnership Units held by BrookfieldUS$ MILLIONS

Limited
partners'
capital

Retained
earnings

Accumulated
other
comprehensive
income(1)

Limited
partners'

General
partner
capital

Retained
earnings

Accumulated
other
comprehensive
income(1)

General
partner

Redeemable
units held
by
Brookfield

Retained
earnings

Accumulated
other
comprehensive
income(1)

Non-
Controlling
Interest
Redeemable
Partnership
Units held by
Brookfield

Non-
controlling
interest
in operating
subsidiaries

Total
partners'
capitalBalance as at January 1, 2012

$
2,597

$
191

$
261

$
3,049

$
19

$
3

$
2

$
24

$
942

$
66

$
125

$
1,133

$
1,683

$
5,889Net income





64





64





16





16





26





26


185


291Other comprehensive income








368


368








3


3








147


147


67


585Comprehensive income





64


368


432





16


3


19





26


147


173


252


876Unit issuance


358








358














142








142





500Partnership distributions





(206
)




(206
)




(16
)




(16
)




(82
)




(82
)




(304
)Acquisition of interests (note 4)






































943


943Subsidiary distributions to non-controlling interest






































(94
)

(94
)Other items





(1
)




(1
)
















(1
)




(1
)




(2
)Balance as at December 31, 2012

$
2,955

$
48

$
629

$
3,632

$
19

$
3

$
5

$
27

$
1,084

$
9

$
272

$
1,365

$
2,784

$
7,808


(1)Refer to note 26 for an analysis of accumulated other comprehensive income by item.




Limited Partners'

General Partner

Non-Controlling Interest
Redeemable Partnership Units held by BrookfieldUS$ MILLIONS, Restated (See Note 3)

Limited
partners'
capital

Retained
earnings

Accumulated
other
comprehensive
income(1)

Limited
partners'

General
partner
capital

Retained
earnings

Accumulated
other
comprehensive
income(1)

General
partner

Redeemable
units held by
Brookfield

Retained
earnings

Accumulated
other
comprehensive
income(1)

Non-
Controlling
Interest
Redeemable
Partnership
Units held by
Brookfield

Non-
controlling
interest
in operating
subsidiaries

Total
partners'
capitalBalance as at January 1, 2011

$
2,136

$
217

$
108

$
2,461

$
19

$
4

$


$
23

$
745

$
76

$
66

$
887

$
1,552

$
4,923Net income





131





131





5





5





51





51


253


440Other comprehensive income (loss)








153


153








2


2








59


59


(20
)

194Comprehensive income





131


153


284





5


2


7





51


59


110


233


634Unit issuance


461








461














197








197





658Partnership distributions





(156
)




(156
)




(6
)




(6
)




(60
)




(60
)




(222
)Acquisition of interests (note 4)






































40


40Subsidiary distributions to non-controlling interest






































(142
)

(142
)Other items





(1
)




(1
)
















(1
)




(1
)




(2
)Balance as at December 31, 2011

$
2,597

$
191

$
261

$
3,049

$
19

$
3

$
2

$
24

$
942

$
66

$
125

$
1,133

$
1,683

$
5,889


(1)Refer to note 26 for an analysis of accumulated other comprehensive income by item.


Limited Partners'

General Partner

Non-Controlling Interest
Redeemable Partnership Units held by BrookfieldUS$ MILLIONS, Restated (See Note 3)

Limited
partners'
capital

Retained
(deficit)
earnings

Accumulated
other
comprehensive
income(1)

Limited
partners'

General
partner
capital

Retained
earnings

Accumulated
other
comprehensive
income(1)

General
partner

Redeemable
units held by
Brookfield

Retained
(deficit)
earnings

Accumulated
other
comprehensive
income(1)

Non-
Controlling
Interest
Redeemable
Partnership
Units held by
Brookfield

Non-
controlling
interest
in operating
subsidiaries

Total
partners'
capitalBalance as at January 1, 2010

$
1,079

$
(10
)
$
57

$
1,126

$
19

$


$
(1
)
$
18

$
728

$
(6
)
$
39

$
761

$
1,305

$
3,210Net income





297





297





5





5





128





128


43


473Other comprehensive income








51


51








1


1








27


27


17


96Comprehensive income





297


51


348





5


1


6





128


27


155


60


569Unit issuance


1,057








1,057














17








17





1,074Partnership distributions





(70
)




(70
)




(1
)




(1
)




(46
)




(46
)




(117
)Acquisition of interests






































174


174Other items






































13


13Balance as at December 31, 2010

$
2,136

$
217

$
108

$
2,461

$
19

$
4

$


$
23

$
745

$
76

$
66

$
887

$
1,552

$
4,923


(1)Refer to note 26 for an analysis of accumulated other comprehensive income by item.




The accompanying notes are an integral part of the financial statements.

F-8     Brookfield Infrastructure

---





Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.        CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended
December 31,US$ MILLIONS

Notes

2012

2011

2010Operating ActivitiesNet income




$
291

$
440

$
473Adjusted for the following items:Earnings from investments in associates, net of distributions received


10


62


(45
)

19Fair value adjustments





(200
)

(356
)

(12
)Depreciation and amortization expense





232


127


29Fair value gains and other items


4


(8
)




(396
)Provisions and other items





72


39


24Deferred tax expense (recovery)


24


30


154


(21
)Changes in non-cash working capital, net


35


156


(19
)

(38
)Cash from operating activities





635


340


78Investing ActivitiesAcquisition of subsidiaries, net of cash acquired and disposals


4


(641
)

(7
)

142Investments in associates


10


(728
)

(189
)

Long lived assets, net of disposals





(637
)

(507
)

(37
)Sale of financial assets





232





Net settlement of foreign exchange contracts





10


(60
)

(33
)Cash (used by) from investing activities





(1,764
)

(763
)

72Financing ActivitiesDistribution to unitholders


27


(304
)

(222
)

(117
)Corporate debt issuance


19


408





Corporate borrowings (repayments)


18


546


(18
)

18Subsidiary borrowings (repayments)





182


135


(9
)Partnership units issued


25


500


658


5Subsidiary distributions to non-controlling interest





(94
)

(142
)

Cash from (used by) financing activities





1,238


411


(103
)Cash and cash equivalentsChange during the year




$
109

$
(12
)
$
47Impact of foreign exchange on cash





1


11


Balance, beginning of year





153


154


107Balance, end of year




$
263

$
153

$
154


Supplemental cash flow information is provided in note 35.




The accompanying notes are an integral part of the financial statements.

Brookfield Infrastructure     F-9

---





Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.        NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS        For the years ended December 31, 2012, 2011 and 2010
and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 1.  ORGANIZATION AND DESCRIPTION OF THE BUSINESS

Brookfield Infrastructure Partners L.P. (the "partnership") owns and operates utility, transport and energy businesses and timber assets in North
and South America, Australasia, and Europe. The partnership was formed as a limited partnership established under the laws of Bermuda, pursuant to a limited partnership agreement dated May 17,
2007, as amended and restated. The partnership is a subsidiary of Brookfield Asset Management Inc. ("Brookfield"). The partnership's limited partnership units are listed on the New York
Stock Exchange and the Toronto Stock Exchange under the symbols "BIP" and "BIP.UN", respectively. The registered office is 73 Front Street, Hamilton, Bermuda.

F-10     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 2.  SUBSIDIARIES

The following provides information about the partnership's principal subsidiaries as of December 31, 2012 and 2011.

Ownership
interestDefined Name

Name of entity

Country of
incorporation

2012
%(8)

2011
%UtilitiesU.K. regulated distribution operation

Brookfield Utilities UK Holdings Limited (formerly Gas Transportation Company Limited)(1)

U.K.


100
(2)
100Ontario electricity transmission operation

Great Lakes Power L.P.

Canada


100

100Australian regulated terminal operation

DBCT Management Pty Ltd

Australia


71

71New England electricity transmission operation

Cross-Sound Cable Company LLC

USA


23

23Colombian regulated distribution operation

Empresa de Energia de Boyaca S.A.(3)

Colombia


17

TransportAustralian railroad operation

Brookfield Rail Holdings No. 1 Pty Ltd

Australia


100

100U.K. port operation

Brookfield Port Acquisitions (U.K.) Limited

United Kingdom


59

59Chilean toll roads

Sociedad Concesionaria Vespucio Norte Express S.A.(4)

Chile


51

EnergyAustralian energy distribution operation

Tasmania Gas Networks

Australia


100

100European energy distribution operation

International Energy Group

United Kingdom


100

100North American district energy operation

Enwave Energy Corporation(5)

Canada


25

North American gas storage operation

Warwick Gas Storage L.P.(6)

Canada


22

TimberU.S. freehold timberlands

Longview Timber Holdings Corp

USA


30

30Canadian freehold timberlands

Island Timberlands Limited Partnership(7)

Canada


25

38Corporate & OtherHolding LP

Brookfield Infrastructure L.P.

Bermuda


72

72


---

Brookfield Infrastructure     F-11

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011



The reporting periods of the subsidiaries are consistent with those of the partnership.

NOTE 3.  SIGNIFICANT ACCOUNTING POLICIES

These
consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards
Board ("IFRS").

The
consolidated financial statements were authorized for issue by the Board of Directors on April 30, 2013.

The
financial statements are prepared on a going concern basis. Standards and guidelines not effective for the current accounting period are described in note 3(u).

These
consolidated financial statements include the accounts of the partnership and its consolidated (direct and indirect) subsidiaries over which the partnership has control.
Subsidiaries are consolidated from the date of acquisition, being the date on which the company obtains control, and continue to be consolidated until the date when control is lost. Control exists
when the partnership has the power, directly or indirectly to govern the financial and operating policies of an entity so as to

F-12     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

obtain
benefits from its activities. Together, the partnership and its subsidiaries are referred to as "Brookfield Infrastructure" in these financial statements.

Non-controlling
interests may be initially measured either at fair value or at the non-controlling interests' proportionate share of the fair value of the
acquiree's identifiable net assets. The choice of measurement basis is made on an acquisition by acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling
interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in partnership capital in addition to changes in ownership
interests. Total comprehensive income is attributed to non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

Holding LP
has issued Redeemable Partnership Units held by Brookfield, which may, at the request of the holder, require the Holding LP to redeem the units for cash
consideration equal to the market price of the partnership's limited partnership units. This right is subject to the partnership's right of first refusal which entitled it, at its sole discretion, to
elect to acquire any unit so presented to Holding LP in exchange for one of the partnership's units (subject to certain customary adjustments). Brookfield Infrastructure has reclassified the
Redeemable Partnership Units that were previously presented as limited partnership units (formerly limited partners' equity) to a separate component of non-controlling interest
(See note 3(s)).

All
intercompany balances, transactions, revenues and expenses are eliminated in full.

Associates
are entities over which the partnership has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the
investee but is not control or joint control over those policies. The partnership accounts for investments over which it has significant influence using the equity method, and are recorded as
Investments in associates on the Consolidated Statements of Financial Positions.

Interests
in investments accounted for using the equity method are initially recorded at cost. If the cost of the associate is lower than the proportionate share of the investment's
underlying fair value, the partnership records a gain on the difference between the cost and the underlying fair values of the identifiable net assets of the associate. If the cost of the associate is
greater than the partnership's proportionate share of the underlying fair value, goodwill and other adjustments arising from the purchase price allocation relating to the associate is included in the
carrying amount of the investment. Subsequent to initial recognition, the carrying value of the partnership's interest in an investee is adjusted for the partnership's share of comprehensive income
and distributions to the investee.

Profit
and losses resulting from transactions with an associate are recognized in the consolidated financial statements based on the interest of unrelated investors in
the associate.

Effective
December 31, 2010, the partnership entered into voting arrangements with various affiliates of Brookfield, Brookfield Infrastructure's ultimate parent company, whereby
the partnership effectively gained control of the Holding LP. The partnership entered into similar arrangements in respect of Brookfield's indirect holdings in its U.S. and Canadian freehold
timberlands, Australian regulated terminal operation and U.K. port operation, subject to certain limitations. This reorganization

Brookfield Infrastructure     F-13

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

does
not represent a business combination under IFRS 3,Business Combinations("IFRS 3R"), as all combining businesses are ultimately
controlled by the same parties both before and after the voting arrangements were completed. IFRS 3R does not include specific measurement guidance for transfers of businesses or subsidiaries
between entities under common control. Accordingly, Brookfield Infrastructure has developed a policy to account for such transactions taking into consideration other guidance set out under the IFRS
framework and pronouncements of other standard-setting bodies. The consolidated financial statements of Brookfield Infrastructure are presented to reflect continuing control
as follows:



The
U.S dollar is the functional and presentation currency of Brookfield Infrastructure. Each of Brookfield Infrastructure's subsidiaries, associates and jointly controlled entities
determines its own functional currency and items included in the financial statements of each subsidiary and associates are measured using that functional currency.

Assets
and liabilities of foreign operations having a functional currency other than the U.S. dollar are translated at the rate of exchange prevailing at the reporting date and
revenues and expenses at average rates during the period. Gains or losses on translation are included as a component of equity. On disposal of a foreign operation, the component of other comprehensive
income relating to that foreign operation is reclassified to net income. Gains or losses on foreign currency denominated balances and transactions that are designated as hedges of net investments in
these operations are reported in the same manner. On partial disposal of a foreign operation, the proportionate share of the component of other comprehensive income relating to that foreign operation
is reclassified to non-controlling interests in that foreign operation.

Foreign
currency denominated monetary assets and liabilities are translated using the rate of exchange prevailing at the reporting date and non-monetary assets and
liabilities measured at fair value are translated at the rate of exchange prevailing at the date when the fair value was determined. Revenues and expenses are measured at average rates during the
period. Gains or losses on translation of these items are included in net income. Gains and losses on transactions which hedge these items are also included in net income. Foreign currency denominated
non-monetary assets and liabilities, measured at historic cost, are translated at the rate of exchange at the transaction date.

F-14     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Acquisitions
of subsidiaries and businesses are accounted for using the acquisition method, other than those between and among entities under common control. The consideration of each
acquisition is measured at the aggregate of the fair values (at the acquisition date) of assets transferred by the acquirer, liabilities incurred or assumed, and equity instruments issued by
Brookfield Infrastructure in exchange for control of the acquiree. Acquisition related costs are recognized in the Statement of Operating Results as incurred and included in other expenses on the
consolidated statement of operating results.

Where
applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its
acquisition-date fair value. Subsequent changes in fair values are adjusted against the cost of the acquisition where they qualify as measurement period adjustments. All other subsequent
changes in the fair value of contingent consideration classified as liabilities will be recognized in the Statement of Operating Results, whereas changes in the fair values of contingent consideration
classified within partnership capital are not subsequently re-measured.

Where
a business combination is achieved in stages, Brookfield Infrastructure's previously held interests in the acquired entity are remeasured to fair value at the acquisition date,
that is, the date Brookfield Infrastructure attains control and the resulting gain or loss, if any, is recognized in the Statement of Operating Results. Amounts arising from interests in the acquiree
prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to Statement of Operating Results, where such treatment would be appropriate if that
interest were disposed of.

If
the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, Brookfield Infrastructure reports provisional
amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new
information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.

The
measurement period is the period from the date of acquisition to the date Brookfield Infrastructure obtains complete information about facts and circumstances that existed as of the
acquisition date. The measurement period is subject to a maximum of one year subsequent to the acquisition date.

If,
after reassessment, Brookfield Infrastructure's interest in the fair value of the acquiree's identifiable net assets exceeds the sum of the consideration transferred, the amount of
any non-controlling interests in the acquiree and the fair value of the acquirer's previously
held equity interest in the acquiree (if any), the excess is recognized immediately in income or loss as a bargain purchase gain.

Contingent
liabilities acquired in a business combination are initially measured at fair value at the date of acquisition. At the end of subsequent reporting periods, such contingent
liabilities are measured at the higher of the amount that would be recognized in accordance with IAS 37,Provisions, Contingent Liabilities and Contingent
Assets("IAS 37") and the amount initially recognized less cumulative amortization recognized in accordance with IAS 18,Revenue
Recognition("IAS 18").

Brookfield Infrastructure     F-15

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Cash
and cash equivalents include cash on hand and short-term investments with original maturities of three months or less.

Trade
receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less any allowance for uncollectability.

Brookfield
Infrastructure uses the revaluation method of accounting for all classes of property, plant and equipment. Certain assets which are under development for future use as
property, plant and equipment are also accounted for using the revaluation method. Property, plant and equipment is initially measured at cost and subsequently carried at its revalued amount, being
the fair value at the
date of the revaluation less any subsequent accumulated depreciation and any accumulated impairment losses. Revaluations are made on an annual basis to ensure that the carrying amount does not differ
significantly from fair value. Where the carrying amount of an asset is increased as a result of a revaluation, the increase is recognized in other comprehensive income and accumulated in equity
within the revaluation surplus reserve, unless the increase reverses a previously recognized impairment recorded through net income, in which case that portion of the increase is recognized in net
income. Where the carrying amount of an asset is decreased, the decrease is recognized in other comprehensive income to the extent of any balance existing in revaluation surplus in respect of the
asset, with the remainder of the decrease recognized in net income.

An
item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset
and is recognized in the Statements of Operating Results.

Depreciation
of an asset commences when it is available for use. Property, plant and equipment are depreciated on a straight line basis over the estimated useful lives of each component
of the assets as follows:

Buildings

Up to 50 yearsTransmission stations, towers and related fixtures

Up to 40 yearsLeasehold improvements

Up to 49 yearsPlant and equipment

Up to 39 yearsNetwork systems

Up to 40 yearsTrack lease premium

41 yearsDistrict energy system

50 yearsGas storage assets

20 years


Depreciation
on property, plant and equipment is calculated on a straight-line basis so as to write-off the net cost of each asset over its expected useful life
to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life,

F-16     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

whichever
is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, with
the effect of any changes recognized on a prospective basis.

Subsequent
acquisitions of leasehold assets are shown as leasehold improvements.

Standing
timber is measured at fair value after deducting estimated selling costs and recorded as timber on the Statements of Financial Position. Estimated selling costs include
commissions, levies, delivery costs, transfer taxes and duties. The fair value of standing timber is calculated as the present value of anticipated future cash flows for standing timber before tax.
The calculation is based on existing, sustainable felling plans and assessments regarding growth, timber prices and felling and silviculture costs. The discount rate is based upon a normal timberland
owner's weighted average cost of capital before tax for the geographic location of the standing timber. Changes in fair value are recorded in net income during the period of change. Brookfield
Infrastructure determines fair value using external valuations on an annual basis.

Land
under standing timber is accounted for using the revaluation method and included in property, plant and equipment.

Harvested
timber is included in inventory and is measured at the lower of fair value less estimated costs to sell at the time of harvest and net realizable value.

Brookfield
Infrastructure uses the fair value method to account for real estate classified as investment property. A property is determined to be an investment property when it is
principally held to earn rental income or for capital appreciation, or both. Investment property is initially measured at cost including transaction costs. Subsequent to initial recognition,
investment properties are carried at fair value. Gains or losses arising from changes in fair value are included in income.

Land
of Brookfield Infrastructure's U.S. and Canadian freehold timberlands, which has been determined to have a higher and better use and which is no longer used for the harvest and
growth of timber is classified as investment property.

Fair
values are primarily determined by discounting the expected future cash flows of each property, generally over a term of 10 years, using a discount and terminal
capitalization rate reflective of the characteristics, location and market of each property. The future cash flows of each property are based upon, among other things, rental income from current
leases and assumptions about rental income from future leases reflecting current conditions, less future cash outflows in respect of such current and future leases. Brookfield Infrastructure
determines fair value using both internal and external valuations.

At
each reporting date Brookfield Infrastructure assesses whether for assets, other than those measured at fair value with changes in value recorded in net income, there is any
indication that such assets are impaired. An impairment is recognized if the recoverable amount, determined as the higher

Brookfield Infrastructure     F-17

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

of
the estimated fair value less costs to sell or the discounted future cash flows generated from use and eventual disposal from an asset or cash generating unit is less than their carrying value.
Impairment losses are recorded as fair value adjustments in the Statements of Operating Results. The projections of future cash flows take into account the relevant operating plans and management's
best estimate of the most probable set of conditions anticipated to prevail. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash generating unit is increased to
the lesser of the revised estimate of recoverable amount and the carrying amount that would have been recorded had no impairment loss been recognized previously.

Intangible
assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date. Brookfield
Infrastructure's intangible assets are comprised primarily of conservancy rights, service concession arrangements and customer order backlogs.

Subsequent
to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization (unless indefinite lived) and accumulated
impairment losses, on the same basis as intangible assets acquired separately.

Public
service concessions that provide Brookfield Infrastructure the right to charge users for a service in which the service and fee is regulated by the grantor are accounted for as an
intangible asset.

Concession
arrangements were acquired as part of the acquisition of the Australian regulated terminal operation and Chilean toll roads and were recognized at their fair value. The
intangible asset at the
Australian regulated terminal operation relates to the right to control and use a specific coal port terminal for a contractual length of time and is amortized over the life of the contractual
arrangement (91 years remaining). The intangible assets at the Chilean toll roads relate to the right to control and operate a road and charge users a specified tariff for a contractual length
of time and is amortized over the life of the contractual arrangement (20 years remaining).

The
conservancy right was acquired as part of the acquisition of the U.K. Port operation and was recorded at its fair value. As a right in perpetuity issued by the Statutory
Harbour Authority in the U.K., the conservancy right is classified as having an indefinite life, and is subject to an annual impairment review.

The
customer order backlog was acquired as part of the acquisition of the U.K. regulated distribution operation and was recorded at its fair value. The customer order backlog
represents the present value of future earnings derived from the build out of contracted connections as at the acquisition date at the U.K. regulated distribution operation. The customer order
backlog is amortized over the life of its estimated useful life of 50 years.

Intangible
assets acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization of the Australian regulated terminal operation
concession arrangement and U.K. regulated distribution customer order backlog intangible assets are recognized on a straight-line basis over the intangible assets' estimated useful
lives. Amortization of the Chilean toll road reflects the pattern of consumption of the intangible asset over the estimated useful life of the concession arrangement. The estimated useful life and
amortization method are reviewed at the end of

F-18     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

each
annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Gains
or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized
in the Statements of Operating Results when the asset is derecognized.

Goodwill
represents the excess of the price paid for the acquisition of an entity over the fair value of the net tangible and intangible assets and liabilities acquired. Goodwill is
allocated to the cash generating unit to which it relates. Brookfield Infrastructure identifies cash generating units as identifiable groups of assets that are largely independent of the cash inflow
from other assets or groups of assets.

Goodwill
is evaluated for impairment annually or more often if events or circumstances indicate there may be impairment. Impairment is determined for goodwill by assessing if the
carrying value of a cash generating unit, including the allocated goodwill, exceeds its recoverable amount determined as the greater of the estimated fair value less costs to sell or the value in use.
Impairment losses recognized in respect of a cash generating unit are first allocated to the carrying value of goodwill and any excess is allocated to the carrying amount of assets in the cash
generating unit. Any goodwill impairment is charged to income in the period in which the impairment is identified. Impairment losses on goodwill are not subsequently reversed.

On
disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gain or loss on disposal of the operation.

Revenue
is recognized to the extent that it is probable that the economic benefits will flow to Brookfield Infrastructure and the revenue and costs incurred or to be incurred can be
reliably measured.

Revenue
is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of customer returns, trade allowances, rebates and other similar
allowances.

When
the partnership receives a transfer of cash or property, plant and equipment from a customer, it assesses whether the constructed or acquired item of property, plant and equipment
meets the definition of an asset. If the definition of an asset is met, the partnership recognizes the item of property, plant and equipment at its cost and recognizes revenue or deferred revenue, as
applicable, for the same amount based on the appropriate revenue recognition policy.

Brookfield
Infrastructure recognizes revenue when the specific criteria have also been met for each of Brookfield Infrastructure's activities as described below. Cash received by
Brookfield Infrastructure from customers is recorded as deferred revenue until revenue recognition criteria are met.

Brookfield Infrastructure     F-19

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Utilities

Revenue from utilities infrastructure is derived from the distribution and transmission of energy as well as from Brookfield
Infrastructure's Australian regulated terminal. Distribution and transmission revenue is recognized when services are rendered based upon usage or volume during that period. Terminal infrastructure
charges are charged at set rates per tonne of coal based on each customer's annual contracted tonnage and is then recognized on a pro-rata basis each month. Brookfield Infrastructure's
Australian regulated terminal also recognizes variable handling charges based on tonnes of coal shipped through the terminal.

Transport

Revenue from transport infrastructure consists primarily of freight and transportation services revenue. Revenue is recognized at the
time of the provision of services and rendered based primarily on usage or volume throughput during the period.

Energy

Revenue from energy infrastructure consists primarily of energy distribution and storage as well as district energy services. Revenue
is recognized when services are provided and rendered based primarily on usage or volume throughput during the period.

Timber

Revenue from the sale of logs and related products and services to external customers is recognized when significant risk and rewards
of ownership are transferred, which is generally when the product is shipped and title passes, and collectability is reasonably assured.

F-20     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The
following summarizes Brookfield Infrastructure's classification and measurement of financial assets and liabilities:

Classification

MeasurementFinancial assetsCash and cash equivalents

Loans and receivables

Amortized costAccounts receivable and other

Loans and receivables

Amortized costRestricted cash and deposits

Loans and receivables

Amortized costOther financial assetsDerivative assets

FVTPL(1)

Fair valueOther financial assets

Loans and receivables/
Available-for-sale

Amortized cost/
Fair valueFinancial liabilitiesCorporate borrowings

Other liabilities

Amortized costNon-recourse borrowings

Other liabilities

Amortized cost(2)Accounts payable and other

Other liabilities

Amortized costPreferred shares

Other liabilities

Amortized costOther financial liabilities

FVTPL

Fair value


---

Brookfield Infrastructure selectively utilizes derivative financial instruments primarily to manage financial risks, including interest rate and
foreign exchange risks. Derivative financial instruments are recorded at fair value. Hedge accounting is applied when the derivative is designated as a hedge of a specific exposure and there is
assurance that it will continue to be effective as a hedge based on an expectation of offsetting cash flows or fair value. Hedge accounting is discontinued prospectively when the derivative no longer
qualifies as a hedge or the hedging relationship is terminated. Once discontinued, the cumulative change in fair value of a derivative that was previously recorded in other comprehensive income by the
application of hedge accounting is recognized in net income over the remaining term of the original hedging relationship as amounts related to the hedged item are recognized in net income. The assets
or liabilities relating to unrealized mark-to-market gains and losses on derivative financial instruments are recorded in Financial Assets and Financial Liabilities,
respectively.

Realized
and unrealized gains and losses on foreign exchange contracts, designated as hedges of currency risks relating to a net investment in a subsidiary with a functional currency
other than the U.S. dollar are included in equity and are included in net income in the period in which the subsidiary is disposed of or to the extent partially disposed and control is not
retained. Derivative financial instruments that are designated as hedges to offset corresponding changes in the fair value of assets

Brookfield Infrastructure     F-21

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

and
liabilities and cash flows are measured at estimated fair value with changes in fair value recorded in net income or as a component of equity as applicable.

Unrealized
gains and losses on interest rate contracts designated as hedges of future variable interest payments are included in equity as a cash flow hedge when the interest rate risk
relates to an anticipated variable interest payment. The periodic exchanges of payments on interest rate swap contracts designated as hedges of debt are recorded on an accrual basis as an adjustment
to interest expense. The periodic exchanges of payments on interest rate contracts designated as hedges of future interest payments are amortized into net income over the term of the corresponding
interest payments.

Derivative
financial instruments that are not designated as hedges are carried at estimated fair value, and gains and losses arising from changes in fair value are recognized in net
income in the period the changes occur. Realized and unrealized gains on other derivatives not designated as hedges are recorded in other expenses.

Other
financial assets are classified as loans and receivables or available-for-sale securities based on their nature and use within the Partnership's business
and are recorded initially at fair value. Other financial assets classified as available-for-sale are subsequently measured at fair value at each reporting date with the change
in fair value recorded in other comprehensive income. Other financial assets classified as loans and receivables are subsequently measured at amortized cost using the effective interest method, less
any impairment. Assets classified as Loans and receivables or available-for-sale are impaired when the Partnership will not be able to collect all amounts due according to the
original terms of the instrument.

Income
tax expense represents the sum of the tax currently payable and deferred tax.

Current
income tax assets and liabilities are measured at the amount expected to be paid to tax authorities, net of recoveries based on the tax rates and laws enacted or substantively
enacted at the reporting date. Current income tax relating to items recognized directly in partnership capital are also recognized directly in partnership capital.

Deferred
income tax liabilities are provided for using the liability method on temporary differences between the tax bases used in the computation of taxable income and carrying amounts
of assets and liabilities in the financial statements. Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to
the extent that it is probable that deductions, tax credits and tax losses can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill
or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable income nor the accounting income. The carrying
amount of deferred income

F-22     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

tax
assets are reviewed at each reporting date and reduced to the extent it is no longer probable that the income tax asset will be recovered.

Deferred
tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where
Brookfield Infrastructure is able to control the reversal of the temporary difference and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets
arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable income against
which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred
income tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax
rates (and tax laws) that
have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in
which Brookfield Infrastructure expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred
tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income
taxes levied by the same taxation authority within a single taxable entity or Brookfield Infrastructure intends to settle its current tax assets and liabilities on a net basis in the case where there
exist different taxable entities in the same taxation authority and when there is a legal enforceable right to set off current tax assets against current tax liabilities.

Non-current
assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through
continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present
condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When
Brookfield Infrastructure is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale
when the criteria described above are met, regardless of whether Brookfield Infrastructure will retain a non-controlling interest in its former subsidiary after the sale.

Non-current
assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs
to sell.

Non-current
assets classified as held for sale and the assets of a disposal group are presented separately from other assets in the Statements of Financial Position. The
liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the consolidated statements of financial position.

Property,
plant and equipment and intangible assets once classified as held for sale are not depreciated or amortized.

Brookfield Infrastructure     F-23

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Provisions
are recognized when Brookfield Infrastructure has a present obligation (legal or constructive) as a result of a past event, it is probable that Brookfield Infrastructure will
be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The
amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks
and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the obligation, its carrying amount is the present value of those
cash flows.

When
some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually
certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Brookfield
Infrastructure has changed its accounting policy pertaining to the classification of Redeemable Partnership Units. The Redeemable Partnership Units that were previously
presented as limited partnership units (formerly limited partners' equity) have been reclassified to a separate component of non-controlling interest entitled: "Non-controlling
interestRedeemable Partnership Units held by Brookfield" on the basis that the change between the two acceptable accounting policies results in the partnership's consolidated financial
statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the partnership's consolidated financial positions and statements of
operating results.

The
partnership previously reflected the Redeemable Partnership Units issued to Brookfield by the Holding LP as limited partnership capital in accordance with
IAS 32Financial Instruments: Presentation since Brookfield Infrastructure can, at its sole discretion, elect to satisfy a redemption request by Brookfield of the Redeemable
Partnership Units by issuing an equal number of LP units (See note 25). This change in accounting policy has no impact on the partnership's reported consolidated net income,
consolidated comprehensive income or net income per partnership unit for the years ended December 31, 2011 and 2010. The net impact of this change in accounting policy on the partnership's
consolidated statements of financial position, consolidates statements of partnership

F-24     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

capital,
consolidated statements of operating results and consolidated statements of comprehensive income are as shown in the following table:

As at December 31, 2011

As at January 1, 2011US$ MILLIONS

Previously
Presented

Restated

Previously
Presented

RestatedConsolidated Statements of Financial PositionNon-controlling interestRedeemable Partnership Units held by Brookfield

$


$
1,133

$


$
887Limited Partners'


4,182


3,049


3,348


2,461Consolidated Statements of Partnership CapitalNon-controlling interestRedeemable Partnership Units held by Brookfield

$


$
1,133

$


$
887Limited Partners'


4,182


3,049


3,348


2,461




For the year ended December 31,2011

2010US$ MILLIONS

Previously
Presented

Restated

Previously
Presented

RestatedConsolidated Statements of Operating ResultsNet income attributable to:Non-controlling InterestRedeemable Partnership Units held by Brookfield

$


$
51

$



128Limited Partners'


182


131


425


297Consolidated Statements of Comprehensive IncomeComprehensive income attributable to:Non-controlling InterestRedeemable Partnership Units held by Brookfield

$


$
110

$



155Limited Partners'


394


284


503


348


The
preparation of financial statements requires management to make critical judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses that are not readily apparent from other sources, during the reporting period. These estimates
and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical
judgments made by management and utilized in the normal course of preparing Brookfield Infrastructure's financial statements are outlined below.

Brookfield Infrastructure     F-25

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

IFRS 3R
does not include specific measurement guidance for transfers of businesses or subsidiaries between entities under common control. Accordingly, Brookfield Infrastructure
has developed a policy to account for such transactions taking into consideration other guidance in the IFRS framework and pronouncements of other standard-setting bodies. Brookfield Infrastructure's
policy is to record assets and liabilities recognized as a result of transactions between entities under common control at the carrying value on the transferor's financial statements, and to have the
Statements of Financial Position, Statements of Operating Results, Statements of Comprehensive Income and Statements of Cash Flows reflect the results of combining entities for all periods presented
for which the entities were under the transferor's common control, irrespective of when the combination takes place.

Brookfield
Infrastructure's accounting policy relating to assets held for sale is described in note 3(p). In applying this policy, judgment is applied in determining whether
certain assets should be reclassified to
assets held for sale on the consolidated Statements of Financial Position. Judgment is also applied in determining whether the results of operations associated with the assets should be recorded in
discontinued operations on the consolidated Statements of Operating Results. Brookfield Infrastructure will reclassify the results of operations associated with certain assets to discontinued
operations where the assets represent a component of the Partnership whose operations and cash flows can be clearly distinguished, operationally and for financial reporting purposes, from the rest of
the Partnership.

Brookfield
Infrastructure's accounting policies relating to derivative financial instruments are described in note 3(n). The critical judgments inherent in these policies relate
to applying the criteria to the assessment of the effectiveness of hedging relationships.

Property,
plant and equipment is revalued on a regular basis. When determining the value of property, plant and equipment using the revaluation method, Brookfield Infrastructure uses the
following critical assumptions and estimates: the timing of forecasted revenues; future sales prices and margins; future sales volumes; future regulatory rates; maintenance and other capital
expenditures; discount rates; terminal capitalization rates; terminal valuation dates; useful lives and residual values.

The
fair value of standing timber is determined with the assistance of an independent valuation expert using recognized valuation techniques. Key estimates and assumptions in determining
the fair value of standing timber are: the timing of forecasted revenues and timber prices; estimated selling costs; sustainable felling plans; growth assumptions; silviculture costs; discount rates;
terminal capitalization rates and terminal valuation dates.

F-26     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The
fair value of investment property is determined with the assistance of an independent valuation expert using recognized valuation techniques, comprising both the discounted cash flow
method and the yield method. In some cases, the fair values are determined based on recent real estate transactions with similar characteristics and location to those of Brookfield Infrastructure
assets.

The
determination of the fair value of investment property requires the use of estimates such as future cash flows from assets (such as lettings, tenants' profiles, future revenue
streams, capital values of fixtures and fittings, plant and machinery, any environmental matters and the overall repair and condition of the property) and discount rates applicable to those assets.
These estimates are based on local market conditions existing at reporting date.

Brookfield
Infrastructure accounts for business combinations using the acquisition method of accounting. This method requires the application of fair values for both the consideration
given and the assets and liabilities acquired. The calculation of fair values is often predicated on estimates and judgments including future cash flows, revenue streams and
value-in-use calculations (refer to note 4 for details of business combinations). The determination of the fair values may remain provisional for up to 12 months
from the date of acquisition due to the time required to obtain independent valuations of individual assets and to complete assessments of provisions. When the accounting for a business combination
has not been completed as at the reporting date, this is disclosed in the financial statements, including observations on the estimates and judgments made as of the reporting date.

The
impairment assessment of goodwill and intangibles with indefinite lives requires an estimation of the value-in-use or fair value less costs to sell of the
cash-generating units to which goodwill has been allocated. Brookfield Infrastructure uses the following critical assumptions and estimates: the tax circumstances that gave rise to the
goodwill, timing and amount of future cash flows expected from the cash-generating unit; discount rates; terminal capitalization rates; terminal valuation dates; useful lives and residual
values.

Other
estimates utilized in the preparation of the partnership's financial statements are: depreciation and amortization rates and useful lives; recoverable amount of goodwill and
intangible assets; ability to utilize tax losses and other tax measurements.

Other
critical judgments utilized in the preparation of the partnership's financial statements include the determination of functional currency.

On
January 1, 2012, Brookfield Infrastructure adopted amendments to IAS 12,Income Taxes. Under these amendments, an entity
is required to measure the deferred tax relating to an asset depending whether the entity expects to recover the carrying amount of the asset through use or sale. Implementation of amendments to
IAS 12 did not have a material impact on Brookfield Infrastructure's consolidated financial statements.

Brookfield Infrastructure     F-27

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

In
May 2011, the IASB issued three standards: IFRS 10, Consolidated Financial Statements ("IFRS 10"), IFRS 11, Joint Arrangements ("IFRS 11"),
IFRS 12, Disclosure of Interests in Other Entities ("IFRS 12"), and amended two standards: IAS 27, Separate Financial Statements ("IAS 27"), and IAS 28, Investments
in Associates and Joint Ventures ("IAS 28"). Each of the new and amended standards has an effective date for annual periods beginning on or after January 1, 2013.

IFRS 10
replaces IAS 27 and SIC-12, Consolidation-Special Purpose Entities ("SIC-12"). The consolidation requirements previously included in
IAS 27 have been included in IFRS 10, whereas the amended IAS 27 sets standards to be applied in accounting for investments in subsidiaries, joint ventures, and associates when an
entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements. IFRS 10 uses control as the single basis for consolidation,
irrespective of the nature of the investee, eliminating the risks and rewards approach included in SIC-12. An investor must possess the following three elements to conclude if it controls
an investee: power over the investee's financial and operating decisions, exposure or rights to variable returns from involvement with the investee, and the ability to use power over the investee and
its exposure or rights to variable returns. IFRS 10 requires continuous reassessment of changes in an investor's power over the investee and changes in the investor's exposure or rights to
variable returns. Brookfield Infrastructure is currently evaluating the impact of IFRS 10 and the amendments to IAS 27 on its consolidated financial statements.

IFRS 11
supersedes IAS 31, Interest in Joint Ventures and SIC-13, Jointly Controlled EntitiesNon-Monetary Contributions by Venturers.
IFRS 11 is applicable to all parties that have an interest in a joint arrangement. IFRS 11 establishes two types of joint arrangements: joint operations and joint ventures. In a joint
operation, the parties to the joint arrangement have rights to the assets and obligations for the liabilities of the arrangement, and recognize their share of the assets, liabilities, revenues and
expenses in accordance with applicable IFRS. In a joint venture, the parties to the arrangement have rights to the net assets of the arrangement and account for their interest using the equity method
of accounting under IAS 28. IAS 28 prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for
investments in associates and joint ventures. Brookfield Infrastructure is currently evaluating the impact of IFRS 11 and the amendments to IAS 28 on its consolidated financial
statements.

IFRS 12
integrates the disclosure requirements on interests in other entities and requires a parent company to disclose information about significant judgments and assumptions it
has made in determining whether it has control, joint control, or significant influence over another entity and the type of joint arrangement when the arrangement has been structured through a
separate vehicle. An entity should also provide these disclosures when changes in facts and circumstances affect the entity's conclusion during the reporting period. Brookfield Infrastructure is
currently evaluating the impact of IFRS 12 on its consolidated financial statements.

In
May 2011, the IASB issued IFRS 13, Fair Value Measurements ("IFRS 13"). IFRS 13 establishes a single source of fair value measurement guidance and sets out
fair value measurement disclosure requirements. The standard requires that information be provided in the financial statements

F-28     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

that
enables the user to assess the methods and inputs used to develop fair value measurements, and for reoccurring fair value measurements that use significant unobservable inputs, and the effect of
the measurements on profit or loss or other comprehensive income. IFRS 13 is effective for annual periods beginning on or after January 1, 2013. Brookfield Infrastructure is
currently evaluating the impact of IFRS 13 on its consolidated financial statements.

In
June 2011, the IASB made amendments to IAS 1, Presentation of Financial Statements ("IAS 1"). The amendments require that items of other comprehensive income are
grouped into two categories: items that will be reclassified subsequently to profit or loss; and items that will be reclassified subsequently directly to equity. Income tax on items of other
comprehensive income are required to be allocated on the same basis. The amendments to IAS 1 are effective for annual periods beginning on or after July 1, 2012. Brookfield
Infrastructure does not expect the amendments to IAS 1 to have a material impact on its consolidated financial statements.

IFRS 9
Financial Instruments ("IFRS 9") was issued by the IASB on November 12, 2009 and will replace IAS 39, Financial Instruments: Recognition and
Measurement ("IAS 39"). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39.
The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets.
The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after
January 1, 2015. Brookfield Infrastructure is currently evaluating the impact of IFRS 9 on its consolidated financial statements.

NOTE 4.  ACQUISITIONS OF BUSINESSES

(a)   Acquisition of U.K. Regulated Distribution operation

On November 13, 2012, Brookfield Infrastructure acquired a 100% interest in Inexus Group Limited, its U.K. regulated distribution operation, for
consideration of $468 million. As Brookfield Infrastructure has the right to elect the majority of the Board of Directors thereby providing Brookfield Infrastructure with control, the
partnership will consolidate the entity. Acquisition costs of $1 million were expensed at the acquisition date and recorded as other expenses on the consolidated statement of operating results.

Brookfield Infrastructure     F-29

---





Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The following summarizes the major classes of consideration transferred and the assets acquired and liabilities assumed at the acquisition date:

Consideration transferred

US$ MILLIONSCash

$
468Net consideration

$
468


Fair value of assets and liabilities acquired as at November 13, 2012 (provisional)(1):

US$ MILLIONSCash

$
5Accounts receivable and other


14Intangible assets


97Deferred income tax assets


106Property, plant and equipment


1,410Accounts payable and other


(70
)Non-recourse borrowings


(545
)Financial liabilities


(323
)Deferred income tax liability


(253
)Net assets acquired

$
441


(1)The fair values of all acquired assets, liabilities and goodwill for this operation has been determined on a provisional basis as
this business was acquired in close proximity to the year end, pending finalization of the post-acquisition review of the fair value of the acquired
net assets.


The excess of the contribution transferred by Brookfield over its share of the fair value of the operations' net assets was recognized on the
Statement of Financial Position as follows:

US$ MILLIONSConsideration paid

$
468Fair value of net assets acquired before non-controlling interest


(441
)Goodwill arising on acquisition

$
27


The
goodwill recorded on acquisition represents the value of the anticipated growth in the number of new sales connections adding to the regulated asset base. None of the goodwill
recognized is expected to be deductible for income tax purposes.

Brookfield
Infrastructure's results from operations for the twelve months ended December 31, 2012 include $20 million of revenue and $7 million of net loss from the
U.K. regulated distribution operation.

F-30     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

(b)   Acquisition of Chilean Toll Roads

On December 16, 2011, Brookfield Infrastructure invested $159 million for a 25% interest in Sociedad Concesionario Vespucio Norte
Express S.A. ("AVN"), a Chilean toll road, through a Brookfield sponsored partnership. At that time, the investment was classified as an investment in an associate and accounted for using the
equity method.

On
October 1, 2012, Brookfield Infrastructure acquired an additional 26% interest in AVN for $170 million, bringing Brookfield Infrastructure's total ownership interest to
51%. Concurrently, Brookfield Infrastructure entered into a voting agreement with an affiliate of Brookfield, providing Brookfield Infrastructure the right to elect the majority of the Board of
Directors of the entity thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield Infrastructure consolidates the entity. Acquisition costs of $1 million were expensed
at the acquisition date and recorded as other expenses on the consolidated statement of operating results.

Brookfield
Infrastructure accounted for this transaction as a deemed disposition of its 25% interest in AVN for consideration equal to the fair market value of the equity interest with a
concurrent acquisition of 51% of AVN. The deemed disposition was accounted for as follows:

US$ MILLIONSFair value of net assets in AVN as of date of obtaining control

$
163Less: carrying value of investment in AVN immediately before obtaining control


171Loss on deemed disposition of equity interest ("remeasurement loss")


(8
)Amounts recognized in OCI in relation to AVN


16Fair value gains and other items arising from AVN acquisition

$
8


(1)Fair value gains and other items arising from the acquisition of $8 million was recognized as fair value gains and other items
on the Statements of Operating Results.


The following summarizes the major classes of consideration transferred and the assets acquired and liabilities assumed at the
acquisition date:

Consideration transferred

US$ MILLIONSCash

$
170Fair value of net assets in AVN as of date of obtaining control


163Net consideration

$
333


Brookfield Infrastructure     F-31

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Fair value of assets and liabilities acquired as at October 1, 2012 (provisional)(1):

US$ MILLIONSCash

$
69Accounts receivable and other(2)


53Intangible assets


1,443Accounts payable and other


(32
)Non-recourse borrowings


(772
)Deferred income tax liability


(108
)Non-controlling interest(3)


(320
)Net assets acquired

$
333


(2)The fair values of all acquired assets, liabilities and goodwill for this operation has been determined on a provisional basis as
this business was acquired in close proximity to the period end, pending finalization of the post-acquisition review of the fair value of the acquired
net assets.(3)The gross contractual amount of the acquired identifiable accounts receivable and other is $38 million. The estimated
contractual cash flows not expected to be collected at the acquisition date is $10 million.(4)Non-controlling interest represents the interest not acquired by Brookfield Infrastructure and was measured as the
proportionate share of the fair value of assets and liabilities at the acquisition date.


No goodwill arose on acquisition as the consideration transferred by Brookfield Infrastructure equaled its share of the fair value of the Chilean
toll roads.

See
note 3(s), "Critical Accounting Judgments and Key Sources of Estimation Uncertainty", for further discussion of significant assumptions used in measuring these
fair values.

Brookfield
Infrastructure's results from operations for the twelve months ended December 31, 2012 include $27 million of revenue and $9 million of net income from
the Chilean toll roads.

(c)   Acquisition of North American District Energy operation

On October 31, 2012, Brookfield Infrastructure acquired a 25% interest in Enwave Energy Corporation, its North American district energy operation, for
consideration of $74 million through a Brookfield sponsored infrastructure fund. Concurrently, Brookfield Infrastructure entered into a voting agreement with an affiliate of Brookfield,
providing Brookfield Infrastructure the right to elect the majority of the Board of Directors of the entity thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield
Infrastructure consolidates the entity. Acquisition costs of less than $1 million were expensed
at the acquisition date and recorded as other expense on the consolidated statement of operating results.

F-32     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The
following summarizes the major classes of consideration transferred and the assets acquired and liabilities assumed at the acquisition date:

Consideration transferred

US$ MILLIONSCash

$
74Net consideration

$
74


Fair value of assets and liabilities acquired as at October 31, 2012 (provisional)(1):

US$ MILLIONSAccounts receivable and other

$
9Property, plant and equipment


560Accounts payable and other


(15
)Non-recourse borrowings(2)


(187
)Deferred income tax liability


(77
)Net assets acquired before non-controlling interest


290Non-controlling interest(3)


(216
)Net assets acquired

$
74


(1)The fair values of all acquired assets, liabilities and goodwill for this operation has been determined on a provisional basis as
this business was acquired in close proximity to the period end, pending finalization of the post-acquisition review of the fair value of the acquired
net assets.(2)Non-recourse borrowings which has $100 million of holding company debt drawn on the
acquisition date.(3)Non-controlling interest represents the interest not acquired by Brookfield Infrastructure and was measured as the
proportionate share of the fair value of assets and liabilities at the acquisition date.


No goodwill arose on acquisition as the consideration transferred by Brookfield Infrastructure equaled its share of the fair value of the North
American district energy operation.

Brookfield
Infrastructure's results from operations for the twelve months ended December 31, 2012 include $13 million of revenue and $nil of net income from the North
American district energy operation.

(d)   Acquisition of North American Gas Storage Business

On April 25, 2012, Brookfield Infrastructure acquired a 22% interest in Warwick Gas Storage LP, its North American gas storage business, for
consideration of $16 million through a Brookfield sponsored infrastructure fund. Concurrently, Brookfield Infrastructure entered into a voting agreement with an affiliate of Brookfield,
providing Brookfield Infrastructure the right to elect the majority of the Board of Directors of the entity thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield
Infrastructure consolidates the entity. Acquisition costs of $1 million were expensed at the acquisition date and recorded as other expenses on the consolidated statement of operating results.

Brookfield Infrastructure     F-33

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The
following summarizes the major classes of consideration transferred and the assets acquired and liabilities assumed at the acquisition date:

Consideration transferred

US$ MILLIONSCash

$
16Net consideration

$
16


Fair value of assets and liabilities acquired as at April 25, 2012:

US$ MILLIONSCash

$
2Property, plant and equipment


126Accounts payable and other


(3
)Non-recourse borrowings(1)


(17
)Financial liabilities


(31
)Deferred income tax liability


(4
)Net assets acquired before non-controlling interest


73Non-controlling interest(2)


(57
)Net assets acquired

$
16


(1)Non-recourse borrowings includes $17 million of holding company debt drawn on the
acquisition date.(2)Non-controlling interest represents the interest not acquired by Brookfield Infrastructure and was measured as the
proportionate share of the fair value of assets and liabilities at the acquisition date.


No goodwill arose on acquisition as the consideration transferred by Brookfield Infrastructure equaled its share of the fair value of the North
American gas storage business.

Brookfield
Infrastructure's results from operations for the twelve months ended December 31, 2012 include $11 million of revenue and $2 million of net loss from the
North American gas storage business.

(e)   Acquisition of Colombian Regulated Distribution Operation

On January 27, 2012, Brookfield Infrastructure acquired a 17% interest in Empresa de Energia de Boyaca S.A., its Colombian distribution operation,
for consideration of $55 million through a Brookfield sponsored infrastructure fund, as a platform to build a broad based electricity business in Colombia. Concurrently, Brookfield
Infrastructure entered into a voting agreement with an affiliate of Brookfield, providing Brookfield Infrastructure with the right to elect the Board of Directors of the entity thereby providing
Brookfield Infrastructure with control. Accordingly, Brookfield Infrastructure consolidates the entity. Acquisition costs of $4 million were expensed at the acquisition date and recorded as
other expense on the consolidated statement of operating results.

F-34     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The
following summarizes the major classes of consideration transferred and the assets acquired and liabilities assumed at the acquisition date:

Consideration transferred

US$ MILLIONSCash

$
55Net consideration

$
55


Fair value of assets and liabilities acquired as at January 27, 2012:

US$ MILLIONSCash

$
44Property, plant and equipment


633Accounts payable and other


(15
)Financial liabilities


(40
)Non-recourse borrowings(1)


(172
)Deferred income tax liability


(152
)Net assets acquired before non-controlling interest


298Non-controlling interest(2)


(261
)Net assets acquired

$
37


(1)Non-recourse borrowings includes $139 million of holding company debt drawn on the
acquisition date.(2)Non-controlling interest represents the interest not acquired by Brookfield Infrastructure and was measured at fair value
at the acquisition date. Brookfield Infrastructure determined fair value utilizing the income method based on calculating the estimated future discounted cash flows of the Colombian regulated
distribution operation. Key valuation assumptions include a discount rate of 13% and a terminal valuation of approximately 20 years.


The excess of the contribution transferred by Brookfield over its share of the fair value of the Colombian regulated distribution operations' net
assets was recognized on the Statement of Financial Position as follows:

US$ MILLIONSConsideration paid

$
55Consideration paid by non-controlling interest

$
261Total consideration paid


316Fair value of net assets acquired before non-controlling interest


(298
)Goodwill arising on acquisition

$
18


The
goodwill recorded on acquisition represents the expected growth arising from its position as an incumbent in a fragmented electricity distribution industry in a region with emerging
coal, steel and

Brookfield Infrastructure     F-35

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

cement
industries. None of the goodwill recognized is expected to be deductible for income tax purposes.

Brookfield
Infrastructure's results from operations for the twelve months ended December 31, 2012, include $188 million of revenue, and $5 million of net income from
the Colombian regulated distribution operation.

(f)    Acquisition of Prime

On November 20, 2009, Brookfield Infrastructure acquired 40% of Prime for cash consideration of $666 million. At that time, the investment was
classified as an investment in an associate and accounted for using the equity method. Prime held various interests in assets, including an Australian regulated terminal operation, Australian railroad
operation, Australian energy distribution operation and European energy distribution operation.

On
December 8, 2010, Brookfield Infrastructure acquired the remaining 60% in Prime in a transaction whereby Prime security holders received 0.24 partnership units per Prime
security held and A$0.20 per Prime security held in a special distribution. Pursuant to the acquisition, Brookfield Infrastructure acquired control of Prime, issuing 49.8 million units with a
value at issuance of $1.1 billion. Brookfield Infrastructure acquired control of Prime and accounted for the transaction in accordance with IFRS 3R.

As
a part of the acquisition, Prime security holders were given the option to sell their units at a price of A$4.55 per unit. Brookfield Infrastructure funded this purchase with the sale
of Brookfield Infrastructure units to Brookfield, its ultimate parent company. Through this option, Brookfield Infrastructure issued 0.9 million units for $17 million. All of the
proceeds were used to purchase Prime units.

Effective
December 31, 2010, the partnership also entered into an arrangement with an affiliate of Brookfield whereby the partnership gained effective control of its Australian
regulated terminal operation. The arrangement has been accounted for in accordance with Brookfield Infrastructure's accounting policy with respect to transfers between entities under common control.
See note 3(b) for further details.

Brookfield
Infrastructure accounted for these transactions as a deemed disposition of its 40% interest in Prime and its interest in the Australian regulated terminal operation for
consideration equal to the fair market value of the equity interest combined with a concurrent acquisition of 100% of

F-36     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Prime
and the Australian regulated terminal operation. The deemed disposition was accounted for as follows:

US$ MILLIONSFair value of net assets in Prime and Australian regulated terminal as of date of obtaining control

$
1,002Less: Carrying value of investment in Prime and Australian regulated terminal immediately before obtaining control


777Gain on deemed disposition of equity interest ("remeasurement gain")


225Amounts recognized in OCI in relation to Prime and Australian regulated terminal


14Fair value gains and other items arising from Prime acquisition

$
239


The
following summarizes the major classes of consideration transferred, and the assets acquired and liabilities assumed at the acquisition date as a result of the concurrent acquisition
of Prime and the Australian regulated terminal operation.

Consideration transferred

US$ MILLIONS2010:Cash (net of equity issuance costs)

$
(5
)Equity instruments


(1,069
)Fair value of interest in Prime and Australian regulated terminal


(1,002
)Net consideration

$
(2,076
)


Brookfield Infrastructure     F-37

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Fair value of assets and liabilities acquired as at December 8, 2010:

US$ MILLIONS2010:Cash

$
125Accounts receivable and other


2,150Property, plant and equipment


2,067Intangible assets


2,490Investments in associates


797Deferred income tax asset


372Accounts payable and other


(2,348
)Non-recourse borrowings


(2,606
)Deferred income tax liability


(615
)Non-controlling interest(1)


(199
)Net assets acquired

$
2,233


(1)The non-controlling interest in Prime recognized at the acquisition date relates to the remaining interest in the
Australian regulated terminal operation owned by third parties and was measured at fair value of the non-controlling interest, amounting to $199 million.


Excess of fair value over consideration paid

An excess of fair value over consideration paid of $157 million was recognized as follows:

US$ MILLIONSFair value of net assets acquired

$
2,233Consideration paid


(2,076
)Bargain purchase gain

$
157


Brookfield
Infrastructure reassessed the identification and measurement of assets and liabilities and the measurement of costs. This reassessment resulted in no changes and thus the
bargain purchase gain of $157 million and remeasurement gain of $239 million were recognized immediately as fair value gains and other items on the Statements of Operating Results.
Brookfield Infrastructure considers that the gain is reflective of industry conditions at the time of the negotiation of the acquisition.

See
note 3(s), "Critical Accounting Judgments and Key Sources of Estimation Uncertainty", for further discussion of significant assumptions used in measuring these
fair values.

As
this transaction resulted in a bargain purchase gain there was no recognized goodwill which would be expected to be deductible for income tax purposes.

Had
the U.K. regulated distribution operation, Chilean toll roads, North American district energy operation, North American gas storage business, and Colombian regulated
distribution operation business combinations been effective January 1, 2012, the revenue of Brookfield Infrastructure from
continuing operations would have been $2,531 million (unaudited) and the income for the year from continuing operations would have been $137 million (unaudited). Brookfield
Infrastructure considers

F-38     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

these
pro-forma numbers to represent an approximate measure of the performance of the consolidated group on an annualized basis and to provide a reference point for comparison in future
periods. In determining the pro-forma revenue and income, management has:



NOTE 5.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is the amount of consideration that would be agreed upon in an arm's-length transaction between knowledgeable, willing
parties who are under no compulsion to act. Fair values are determined by reference to quoted bid or ask prices, as appropriate. Where bid and ask prices are unavailable, the closing price of the most
recent transaction of that instrument is used. In the absence of an active market, fair values are determined based on prevailing market rates (bid and ask prices, as appropriate) for
instruments with similar characteristics and risk profiles or internal or external valuation models, such as option pricing models and discounted cash flow analysis, using observable
market inputs.

Fair
values determined using valuation models require the use of assumptions concerning the amount and timing of estimated future cash flows and discount rates. In determining those
assumptions, Brookfield Infrastructure looks primarily to external readily observable market inputs such as interest rate yield curves, currency rates, and price and rate volatilities as applicable.
The fair value of interest rate swap contracts which form part of financing arrangements is calculated by way of discounted cash flows using market interest rates and applicable credit spreads.

Classification of Financial Instruments

Financial instruments classified as fair value through profit or loss are carried at fair value on the Consolidated Statements of
Financial Position. Changes in the fair values of financial instruments classified as fair value through profit or loss are recognized in net income.

Gains
or losses arising from changes in the fair value of fair value through profit or loss financial assets are presented in the Consolidated Statements of Operating Results, within
Other Expenses, in the period in which they arise.

Brookfield Infrastructure     F-39

---





Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Carrying Value and Fair Value of Financial Instruments

The following table provides the allocation of financial instruments and their associated financial instrument classifications as at
December 31, 2012:

US$ MILLIONS

FVTPL

Loans and Receivables/
Other LiabilitiesFinancial Instrument Classification
MEASUREMENT BASIS

(Fair Value)

(Amortized Cost)

TotalFinancial assetsCash and cash equivalents

$


$
263

$
263Accounts receivable and other assets





372


372Restricted cash





17


17Financial assets (current and non-current)(1)


99





99Total

$
99

$
652

$
751Financial liabilitiesCorporate borrowings

$


$
946

$
946Non-recourse borrowings (current and non-current)





6,993


6,993Accounts payable and other liabilities





582


582Preferred Shares





20


20Financial liabilities (current and non-current)(1)


650


235


885Total

$
650

$
8,776

$
9,426


(1)Derivative instruments which are elected for hedge accounting totaling $1 million are included in Other financial assets and
$234 million of derivative instruments are included in Other financial liabilities.


F-40     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The following table provides the allocation of financial instruments and their associated financial instrument classifications as at
December 31, 2011:

US$ MILLIONS

FVTPL

Loans and Receivables/
Other LiabilitiesFinancial Instrument Classification
MEASUREMENT BASIS

(Fair Value)

(Amortized Cost)

TotalFinancial assetsCash and cash equivalents

$


$
153

$
153Accounts receivable and other assets





415


415Restricted cash





28


28Financial assets (current and non-current)(1)


109





109Total

$
109

$
596

$
705Financial liabilitiesCorporate borrowings

$


$


$
Non-recourse borrowings





4,885


4,885Accounts payable and other liabilities





670


670Preferred shares





20


20Financial liabilities (current and non-current)(1)


245





245Total

$
245

$
5,575

$
5,820


(1)Derivative instruments which are elected for hedge accounting totaling $99 million are included in Other financial assets and
$205 million of derivative instruments are included in Other financial liabilities.


The following table provides the carrying values and fair values of financial instruments as at December 31, 2012 and
December 31, 2011:

Dec. 31, 2012

Dec. 31, 2011US$ MILLIONS

Carrying Value

Fair Value

Carrying Value

Fair ValueFinancial assetsCash and cash equivalents

$
263

$
263

$
153

$
153Accounts receivable and other assets


597


597


415


415Restricted cash


17


17


28


28Financial assets (current and non-current)


99


99


109


109Total

$
976

$
976

$
705

$
705Financial liabilitiesCorporate borrowings

$
946

$
946

$


$
Non-recourse borrowings


6,993


7,292


4,885


4,838Accounts payable and other liabilities


582


582


670


670Preferred shares


20


20


20


20Financial liabilities (current and non-current)


855


855


245


245$
9,396

$
9,695

$
5,820

$
5,773


Brookfield Infrastructure     F-41

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Hedging Activities

Brookfield Infrastructure uses derivatives and non-derivative financial instruments to manage or maintain exposures to
interest and currency risks. For certain derivatives which are used to manage exposures, Brookfield Infrastructure determines whether hedge accounting can be applied. When hedge accounting can be
applied, a hedge relationship can be designated as a fair value hedge, cash flow hedge or a hedge of foreign currency exposure of a net investment in a foreign operation with a functional currency
other than the U.S. dollar. To qualify for hedge accounting the derivative must be highly effective in accomplishing the objective of offsetting changes in the fair value or cash flows
attributable to the hedged risk both at inception and over the life of the hedge. If it is determined that the derivative is not highly effective as a hedge, hedge accounting is discontinued
prospectively.

Cash Flow Hedges

Brookfield Infrastructure uses the following cash flow hedges: interest rate swaps to hedge the variability in cash flows related to a
variable rate asset or liability. The settlement dates typically coincide with the dates on which the interest is payable on the underlying debt, and the amount accumulated in equity is reclassified
to income or loss over the period that the floating rate interest payments on debt affect income or loss. For the year ended December 31, 2012, pre-tax net unrealized losses of
$29 million (2011: losses of $94 million, 2010: gain of $15 million) were recorded in other comprehensive income for the effective portion of the cash flow hedges. As at
December 31, 2012, there was a net unrealized derivative liability balance of $146 million relating to derivative contracts designated as cash flow hedges (2011: $118 million).

Net Investment Hedges

Brookfield Infrastructure uses foreign exchange contracts and foreign currency denominated debt instruments to manage its foreign
currency exposures arising from net investments in foreign operations having a functional currency other than the U.S. dollar. For the year ended December 31, 2012, unrealized
pre-tax net losses of $19 million (2011: gains of $30 million, 2010: losses of $18 million) were recorded in other comprehensive income for the effective portion of
hedges of net investments in foreign operations. Further, Brookfield Infrastructure recognized a $10 million gain (2011: loss of $60 million, 2010: loss of $33 million) in other
comprehensive income relating to the net settlement of foreign exchange contracts in the period. As at December 31, 2012, there was a net unrealized derivative liability balance of
$6 million relating to derivative contracts designated as net investment hedges (2011: net unrealized derivative asset balance of $12 million).

F-42     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Fair Value Hierarchical Levels

Fair value hierarchical levels are directly determined by the amount of subjectivity associated with the valuation inputs of these
assets and liabilities, and are as follows:

Level 1



Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.Level 2



Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or
liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life. Fair valued assets and liabilities that are included in this category are primarily certain derivative contracts, other
financial assets carried at fair value in an inactive market and redeemable fund units.Level 3



Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the
measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to determining the estimate. Fair valued assets and liabilities that are included in this category are power purchase
contracts, subordinated mortgaged-backed securities, interest rate swap contracts, derivative contracts, certain equity securities carried at fair value which are not traded in an active market and the non-controlling interest's share of net assets
of limited life funds.


Assets
and liabilities measured at fair value on a recurring basis include $99 million (2011: $109 million) of financial assets and $885 million (2011:
$245 million) of financial liabilities which are measured at fair value using valuation inputs based on management's best estimates. The following table categorizes
financial assets and liabilities, which are carried at fair value, based upon the level of input to the valuations as described above:

Dec. 31, 2012

Dec. 31, 2011US$ MILLIONS

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3Financial assetsCash equivalents

$


$
12

$


$


$
5

$
Other financial assets (current and non-current)





99








109


Financial liabilitiesOther financial liabilities (current and non-current)

$


$
885

$


$


$
245

$



(1)Other financial assets and liabilities relate to derivative instruments.


Brookfield Infrastructure     F-43

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 6.  CASH AND CASH EQUIVALENTS

US$ MILLIONS

2012

2011Cash

$
251

$
148Cash equivalents


12


5Total cash and cash equivalents

$
263

$
153


NOTE 7.  ACCOUNTS RECEIVABLE AND OTHER

US$ MILLIONS

2012

2011Current:Accounts receivable

$
343

$
179Prepayments & other assets


29


36Total current

$
372

$
215Non-current:Deferred financing costs(1)

$
3

$
10Other assets


222


190Total non-current

$
225

$
200


(1)Deferred financing costs are amortized to interest expense over the term of the borrowing.


NOTE 8.  INVENTORY

US$ MILLIONS

2012

2011Current:Raw Materials and consumables

$
108

$
87Carrying amount of inventories

$
108

$
87


The
amount of write down of inventories recognized as an expense in 2012 is $nil (2011: $nil, 2010: $nil), which is recognized in direct operating costs on the Statements of Operating
Results.

F-44     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 9.  FINANCIAL ASSETS

US$ MILLIONS

2012

2011Current:Foreign currency contracts

$


$
19Other


3


4Total current

$
3

$
23Non-current:Restricted cash(1)

$
17

$
28Cross currency interest rate swaps


96


86Total non-current

$
113

$
114


(1)Restricted cash can only be used as a reserve for servicing debt under certain financing arrangements. These restricted cash balances
have not been included in the year end cash balances for the purposes of the Statements of Cash Flows.


NOTE 10.  INVESTMENTS IN ASSOCIATES

The following table presents the ownership interest and carrying values of Brookfield Infrastructure's investments in associates:

Ownership Interest

Carrying ValueUS$ MILLIONS

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2012

Dec. 31, 2011Australasian energy distribution


42%


42%

$
384

$
296European port operation


40%


40%


147


142North American gas transmission operation


26%


26%


594


395South American transmission operation(1)


28%


18%


669


373Texas electricity transmission project(2)


11%


11%


15


5South American toll road(3)


n/a


25%


n/a


159Brazilian toll road(4),


15%





346


Other(5)


30-50%


30-50%


24


30Total







$
2,179

$
1,400


(1)In October 2012, Brookfield Infrastructure agreed to purchase an additional 10% investment in its South American transmission
operations from Brookfield for proceeds of $235 million, subject to satisfaction of customary conditions, increasing Brookfield Infrastructure's total ownership to 28%. The purchase was
completed in January 2013 with an effective date of October 1, 2012.(2)Brookfield Infrastructure has significant influence via a relationship agreement with Brookfield. Accordingly, Brookfield
Infrastructure equity accounts for the entity.(3)Brookfield Infrastructure invested $159 million in a Chilean toll road asset in December 2011 through a Brookfield
sponsored partnership. On October 1, 2012, Brookfield Infrastructure acquired an additional 26% interest in AVN for $170 million, through a Brookfield sponsored partnership, bringing
Brookfield Infrastructure's total ownership interest to 51%. Concurrently, Brookfield Infrastructure entered into a voting agreement with an affiliate of Brookfield, providing Brookfield
Infrastructure with the right to elect the majority of the Board of Directors of the entity thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield Infrastructure
consolidates the entity.


Brookfield Infrastructure     F-45

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

(4)On December 3, 2012, Brookfield Infrastructure, through a joint venture formed between a Brookfield sponsored fund and Abertis
Infraestructuras, S.A. ("Abertis"), acquired 15% of a Brazilian toll road asset. Brookfield Infrastructure has significant influence through Brookfield's position in the joint venture.
Accordingly, Brookfield Infrastructure equity accounts for the entity.(5)Other includes Brookfield Infrastructure's Social Infrastructure assets.


The following table represents the change in the balance of investments in associates:

US$ MILLIONS

2012

2011Balance at beginning of year

$
1,400

$
1,089Share of income for the year


1


76Share of reserves for the yearOCI


138


120Foreign currency translation


58


(50
)Distributions


(63
)

(31
)Net additions


816


196Deemed disposal


(171
)

Balance at end of year

$
2,179

$
1,400


The
following table presents the gross assets and liabilities of Brookfield Infrastructure's investments in associates:

US$ MILLIONS

2012

2011Financial positionTotal assets

$
23,976

$
18,717Total liabilities


(16,563
)

(13,564
)Net assets

$
7,413

$
5,153


The
following table presents the gross and net income of the Brookfield Infrastructure's investments in associates:

US$ MILLIONS

2012

2011

2010Financial performanceTotal revenue

$
2,298

$
2,443

$
1,942Total income for the year


15


398


147Brookfield Infrastructure's share of associates' income


1


76


52


The
fair value as at December 31, 2012, of Brookfield Infrastructure's investments in associates for which there are published price quotations is $nil (2011: $nil,
2010: $nil).

F-46     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 11.  PROPERTY, PLANT AND EQUIPMENT

US$ MILLIONS

Utility
Assets

Transport
Assets

Energy
Assets

Timberland
Assets

Total
AssetsGross Carrying Amount:Balance at January 1, 2011

$
765

$
1,567

$
293

$
560

$
3,185Additions (disposals)


94


439


16


(2
)

547Reclassified from held for sale


151











151Fair value adjustment


13


233


8





254Reversal of impairment losses recognized in profit or loss











19


19Net foreign currency exchange differences


(27
)

1





(7
)

(33
)Balance at December 31, 2011

$
996

$
2,240

$
317

$
570

$
4,123Additions (disposals)


90


434


34


(14
)

544Acquisitions through business combinations


2,035


3


686





2,724Fair value adjustment


110


277


32





419Reversal of impairment losses recognized in profit or loss











95


95Net foreign currency exchange differences


89


46


13





148Balance at December 31, 2012

$
3,320

$
3,000

$
1,082

$
651

$
8,053Accumulated depreciation:Balance at January 1, 2011

$
(31
)
$
(18
)



$
(5
)
$
(54
)Depreciation expense


(27
)

(50
)

(13
)

(2
)

(92
)Fair value adjustment


35


35








70Net foreign currency exchange differences


21


6


(3
)

2


26Balance at December 31, 2011

$
(2
)
$
(27
)
$
(16
)
$
(5
)
$
(50
)Depreciation expense


(64
)

(96
)

(23
)

(1
)

(184
)Fair value adjustment


58


82


13





153Reversal of impairment losses recognized in profit or loss











1


1Net foreign currency exchange differences


(2
)

(2
)

1





(3
)Balance at December 31, 2012

$
(10
)
$
(43
)
$
(25
)
$
(5
)
$
(83
)Net book value:December 31, 2012

$
3,310

$
2,957

$
1,057

$
646

$
7,970December 31, 2011

$
994

$
2,213

$
301

$
565

$
4,073


The effective date of revaluation for all asset classes is December 31, 2012 and 2011. Brookfield Infrastructure determined fair value
under the income method. Assets under development were revalued where fair value could be reliably measured.

At
December 31, 2012, Brookfield Infrastructure carried out a review of the fair value of its Utility property, plant and equipment, resulting in a gain from revaluation of
$168 million (2011: $48 million) which was recognized in revaluation surplus in the Statements of Comprehensive Income. Key valuation assumptions include a weighted average discount rate
of 10% (2011: 12%) and a weighted average terminal valuation date of approximately 13 years (2011: 10 years). The carrying amount of Utility

Brookfield Infrastructure     F-47

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

property,
plant and equipment that would have been recognized had the assets been carried under the cost model is $3,094 million (2011: $946 million).

At
December 31, 2012, Brookfield Infrastructure carried out a review of the fair value of its Transport property, plant and equipment. A gain from revaluation of
$359 million (2011: $268 million) was recognized in revaluation surplus in the Statements of Comprehensive Income. Key valuation assumptions include a weighted average discount rate of
11% (2011: 8%) and a weighted average terminal valuation date of approximately 10 years (2011: 10 years). The carrying amount of Transport assets that would have been recognized had the
assets been carried under the cost model is $2,322 million (2011: $1,937 million).

At
December 31, 2012, Brookfield Infrastructure carried out a review of the fair value of its Energy property, plant and equipment. A gain from revaluation of $45 million
(2011: $8 million) was recognized in revaluation surplus in the Statements of Comprehensive Income. Key valuation assumptions include a weighted average discount rate of 11% (2011: 12%) and a
weighted average terminal valuation date of approximately 16 years (2011: 10 years). The carrying amount of Energy assets that would have been recognized had the assets been carried
under the cost model is $1,012 million (2011: $301 million).

At
December 31, 2012, Brookfield Infrastructure carried out a review of the fair value of its U.S. and Canadian freehold timberlands' property, plant and equipment. The review led
to the recognition of a gain from revaluation of $95 million (2011: gain from revaluation of $19 million) which, as a reversal of a prior period impairment, has been recognized as fair
value adjustments in the Statements of Operating Results. Fair value was determined based on an independent appraisal. Key valuation assumptions include a weighted average real discount rate of 6%
(2011: 7%) and an average terminal valuation date of approximately 90 years (2011: 90 years). The carrying amount of Timber assets that would have been recognized had the assets been
carried under the cost model is $550 million (2011: $565 million). The reversal of impairment losses in the years ended December 31, 2012 and 2011 resulted primarily from a
decrease in discount rates based on comparable transactions observed in the market and a recovery in timber prices.

NOTE 12.  INTANGIBLE ASSETS

US$ MILLIONS

2012

2011Cost

$
4,566

$
2,955Accumulated amortization


(69
)

(31
)Net intangible assets

$
4,497

$
2,924


F-48     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Intangible
assets are allocated to the following cash generating units:

US$ MILLIONS

Dec. 31, 2012

Dec. 31, 2011Australian regulated terminal

$
2,592

$
2,555Chilean toll roads


1,421


U.K. port operation


348


330Other(1)


136


39Total

$
4,497

$
2,924


(1)Other intangibles are comprised of easements and permits to use and operate on government land.


The intangible asset at Brookfield Infrastructure's Australian regulated terminal operation and Chilean toll roads relate to service concession
arrangements.

The
terms and conditions of access to the Australian regulated terminal's services, including tariffs that can be charged to the users, are regulated by the Queensland Competition
Authority. Brookfield Infrastructure's Australian regulated terminal operation has Standard Access Agreements with the users of the terminal which entails 100% take or pay contracts at a designated
tariff rate based on the asset value. The concession arrangement has an expiration date of 2051 and with an option to extend the arrangement an additional 50 years.

The
terms and conditions of the Chilean toll roads concession, including tariffs that can be charged to the users and the duties to be performed by the operator, are regulated by the
Ministerio de Obras Publicas ("MOP"). The service concession provides the operator the right to charge a tariff to vehicles which use the road over the term of the concession in exchange for operating
the road, including preserving the road based on a defined maintenance and construction schedule. Tariffs are adjusted annually for Chilean Consumer Price Index plus a maximum of 3.5%, in addition to
congestion charges which may be levied should specified traffic levels be reached. The concession arrangement has an expiration date of 2033 at which point the constructed assets will be returned to
the MOP.

The
intangible asset at Brookfield Infrastructure's U.K. port operation relates to a conservancy right. As a right in perpetuity issued by the Statutory Harbour Authority in the
U.K., the conservancy right is classified as having an indefinite life, and is subject to an annual impairment review.

The
carrying value as at December 31, 2012, of Brookfield Infrastructure's indefinite lived intangibles is $348 million (2011: $330 million).

Brookfield Infrastructure     F-49

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The
following table presents the change in the balance of the intangible assets:

US$ MILLIONS

2012

2011Costs at beginning of the year

$
2,955

$
2,907Additions


24


20Acquisitions through business combinations


1,541


Reclassified from held for sale





37Foreign currency translation


46


(9
)Costs at end of year

$
4,566

$
2,955


The
following table presents the accumulated amortization and accumulated impairment losses for Brookfield Infrastructure's intangible assets:

US$ MILLIONS

2012

2011Accumulated amortization at beginning of year

$
(31
)
$
(4
)Amortization


(35
)

(28
)Foreign currency translation


(3
)

1Accumulated amortization at end of year

$
(69
)
$
(31
)


NOTE 13.  STANDING TIMBER

US$ MILLIONS

Standing
TimberGross Carrying Amount:Balance at January 1, 2011

$
2,578Additions


Disposals


Gain arising from growth


186Decrease resulting from harvest


(201
)Fair value adjustment


324Net foreign currency exchange


Other


3Balance at December 31, 2011

$
2,890Additions


Disposals


Gain arising from growth


155Decrease resulting from harvest


(170
)Fair value adjustment


122Balance at December 31, 2012

$
2,997


F-50     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

As
at December 31, 2012, Brookfield Infrastructure carried out a review of the recoverable amount of its standing timber. The review led to the recognition of a gain from
revaluation of $122 million (2011: $324 million) in Brookfield Infrastructure's U.S. and Canadian freehold timberlands, which has been recognized in the Statements of Operating Results.
Fair values are determined by calculating the discounted future cash flows of the standing timber. A valuation by an independent appraiser is completed annually for the purposes of the Partnership's
determination of fair value. Key valuation assumptions include a weighted average real discount rate of 7% (2011: 7%) and an average terminal valuation of approximately 90 years (2011:
90 years).

NOTE 14.  GOODWILL

US$ MILLIONS

Dec. 31,
2012

Dec. 31,
2011Cost

$
591

$
591Acquisitions through business combinations(1)


45


Total

$
636

$
591


(1)Refer to Note 4 for further detail.


Upon the acquisition of U.S freehold timberlands by Brookfield Infrastructure, a deferred tax liability of approximately $591 million was
recorded. The deferred tax liability arose because tax bases of the net assets, to Brookfield, were significantly lower than their fair value. The inclusion of this liability in the net book value of
the acquired business gave rise to goodwill of approximately $591 million. This goodwill is attributable to a single cash-generating unit (CGU) and is tested for impairment annually
using a fair value less costs to sell model. Key valuation assumptions include a real discount rate of 5.8% (2011: 6.3%) and a terminal valuation period of approximately 100 years (2011:
100 years).

NOTE 15.  INVESTMENT PROPERTIES

US$ MILLIONS

U.K. port
operation

HBU(1)

TotalGross carrying amount:Balance at January 1, 2011

$
140

$
35

$
175Additions





4


4Disposals


(2
)




(2
)Fair value adjustments


11


4


15Foreign exchange differences


3


(1
)

2Balance at December 31, 2011

$
152

$
42

$
194Additions





15


15Disposals


(3
)




(3
)Fair value adjustments


4


(2
)

6Foreign exchange differences


4


1


1Balance at December 31, 2012

$
157

$
56

$
213


---

Brookfield Infrastructure     F-51

---





Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

At December 31, 2012, an $4 million gain and $2 million loss were recognized for the U.K. Port operation and HBU properties,
respectively (2011: $11 million gain and $4 million gain, respectively). Fair values are generally determined by calculating the discounted future cash flows of the properties. A
valuation by an independent appraiser is completed annually for the purposes of the Partnership's determination of fair value.

NOTE 16.  ACCOUNTS PAYABLE AND OTHER

US$ MILLIONS

Note

2012

2011Current:Accounts payable(1)



$
260

$
166Other liabilities




204


181Deferred revenue

(i)


104


14Provisions




14


9Total current



$
582

$
370Non-current:Deferred revenue

(i)


344


257Provisions




69


7Pension liability(2)




75


5Other liabilities




32


31Total non-current



$
520

$
300


---

Brookfield Infrastructure's exposure to currency and liquidity risk related to trade and other payables is disclosed in note 33.

Deferred
revenue relates primarily to cash contributions from third parties to build or upgrade existing network capabilities at Brookfield Infrastructure's Australian railroad
operation. The deferred revenue is recorded on receipt of cash payments and recognized as revenue over the life of the contracted track access arrangement with the contributor.

F-52     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 17.  FINANCIAL LIABILITIES

US$ MILLIONS

2012

2011Current:Foreign currency forward contracts

$
8

$
Interest rate swaps


38


11Total current financial liabilities

$
46

$
11Non-current:Deposit payable(1)

$
235

$
Interest rate swaps


229


201Inflation swaps


336


33Other financial liabilities


39


Total non-current financial liabilities

$
839

$
234


NOTE 18.  BORROWINGS

Brookfield
Infrastructure has a $855 million senior secured revolving credit facility used for general working capital including acquisitions. The $855 million is available
on a revolving basis for the full term of the facility. All amounts outstanding under this facility will be repayable on September 13, 2016. All obligations of Brookfield Infrastructure under
the facility are guaranteed by certain subsidiaries of Brookfield Infrastructure and are secured on a subordinated basis by the assets of Brookfield Infrastructure and the guarantors. Loans under this
facility accrue interest at a floating rate based on LIBOR plus 1.25%. Brookfield Infrastructure is required to pay an unused commitment fee under the facility of 25% of the applicable margin per
annum. As at December 31, 2012, $546 million was drawn on the credit facility (2011: $nil) and $92 millions of letters of credit issued (2011: $51 million). Subsequent to
year end, Brookfield Infrastructure amended the facility to increase the available commitments to $900 million.

Brookfield Infrastructure     F-53

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

On
October 10, 2012, wholly-owned subsidiaries of Brookfield Infrastructure executed a C$400 million, five-year medium term note offering in the Canadian bond
market with a coupon of 3.5%, which was swapped into U.S. dollars on a matched maturity basis at an all-in rate of 2.7%.

The
current and non-current balances of non-recourse borrowings are as follows:

US$ MILLIONS

December 31, 2012

December 31, 2011Current

$
663

$
145Non-current


6,330


4,740Total

$
6,993

$
4,885


Principal
repayments on non-recourse borrowings due over the next five years and thereafter are as follows:

US$ MILLIONS

Utilities

Transport

Energy

Timber

Corporate

Total2013

$
59

$
46

$
105

$
453

$


$
6632014


981


960


15








1,9562015


23


15


1


408





4472016


352


15


87








4542017


15


15


22








52Thereafter


1,777


943


88


613





3,421TotalDec. 31, 2012

$
3,207

$
1,994

$
318

$
1,474

$


$
6,993TotalDec. 31, 2011

$
2,337

$
868

$
94

$
1,472

$
114

$
4,885


The
weighted average interest rate of non-recourse borrowings are as follows:

US$ MILLIONS

Utilities

Transport

Energy

Timber

Corporate

TotalDec. 31, 2012


4%


6%


5%


6%


3%


5%Dec. 31, 2011


7%


8%


7%


6%


9%


7%


Principal
repayments on non-recourse borrowings in their local currency are as follows:

US$ MILLIONS

Dec 31, 2012

Local Currency

Dec 31, 2011

Local CurrencyU.S. dollars

$
1,629

US$

$
1,629

$
2,236

US$


2,236Australian dollars


2,714

A$


2,611


1,668

A$


1,635Canadian dollars


333

C$


330


115

C$


118British pounds


1,387

£


854


752

£


484New Zealand dollars




N$





114

N$


147Chilean Unidad de Fomento


754

UF
(1)

16







Colombian Peso


176

COP


311,176




COP





(1)Chilean Unidad de Fomento is an inflation adjusted unit of account indexed to the Chilean
Peso.


F-54     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 19.  SUBSIDIARY PUBLIC ISSUERS

In June 2012, wholly-owned subsidiaries of Brookfield Infrastructure, Brookfield Infrastructure Finance ULC, Brookfield Infrastructure
Finance LLC, Brookfield Infrastructure Finance Pty Ltd, Brookfield Infrastructure Finance Limited, and Brookfield Infrastructure Preferred Equity Inc. (collectively, the
"Issuers"), registered with securities commissions for the distribution of debt securities or Class A preference shares. The Issuers may offer and sell these instruments in one or more
issuances in the aggregate, of up to C$750 million (or the equivalent in other currencies). The debt securities or preference shares would be unconditionally guaranteed by Brookfield
Infrastructure Partners L.P., Brookfield Infrastructure L.P., and wholly-owned subsidiaries, Brookfield Infrastructure Holdings (Canada) Inc., Brookfield Infrastructure
Corporation and BIP Bermuda Holdings I Limited.

The
following debt securities were issued as of December 31, 2012:

On
October 10, 2012, wholly-owned subsidiaries of Brookfield Infrastructure executed a C$400 million, five-year medium term note offering in the Canadian bond
market with a coupon of 3.5%, which was swapped into U.S. dollars on a matched maturity basis at an all-in rate of 2.7%.

The
following tables set forth consolidated summary financial information for Brookfield Infrastructure and the Issuers:

For the twelve months ended December 31, 2012

Brookfield
Infrastructure(1)

The Issuers

Subsidiaries of
the Partnership
other than the
Issuers(2)

Consolidating
Adjustments(3)

Brookfield
Infrastructure
ConsolidatedRevenue

$


$


$
2,004

$


$
2,004Net Income attributable to Partnership


64





579


(537
)

106For the twelve months ended December 31, 2011Revenue

$


$


$
1,636




$
1,636Net Income attributable to Partnership


131





556


(500
)

187As at December 31, 2012Current assets

$


$
3

$
757

$
(3
)
$
757Long-term assets


3,592


403


18,961


(3,995
)

18,961Current liabilities





3


1,291


(3
)

1,291Long-term liabilities





403


12,166


(1,950
)

10,619Non-controlling interestsRedeemable Partnership Units held by Brookfield








1,365





1,365Non-controlling interests
in operating subsidiaries








2,784





2,784As at December 31, 2011Current Assets

$


$


$
478




$
478Long-term assets


3,007





12,791


(3,007
)

12,791Current liabilities








526





526Long-term liabilities








8,271


(1,417
)

6,854Non-controlling interestsRedeemable Partnership Units held by Brookfield








1,133





1,133Non-controlling interests
in operating subsidiaries








1,683





1,683


(1)Includes investments in all subsidiaries of the Partnership under the
equity method.(2)Includes investments in all subsidiaries of the Partnership other than the Issuers on a consolidated basis.


Brookfield Infrastructure     F-55

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

(3)Includes elimination of intercompany transactions and balances necessary to present Brookfield Infrastructure on a consolidated
basis.


NOTE 20.  PREFERRED SHARES

As at December 31, 2012, Brookfield Infrastructure (Canada) Holdings Inc, Brookfield Infrastructure Corporation, and BIP Bermuda Holdings I Limited (wholly
owned subsidiaries of Brookfield Infrastructure) have issued 196,000, 1 and 400,000 preferred shares, respectively, for proceeds of $5 million, $5 million and $10 million,
respectively (2011: $5 million, $5 million and $10 million, respectively). Each preferred share is non-voting preferred and is redeemable at $25 per share (except in
the case of the preferred shares issued by Brookfield Infrastructure Corporation, which is redeemable for $5 million) together with any accrued and unpaid dividends at the option of the issuer
on or after the tenth anniversary of the date of issue, subject to certain restrictions, and that entitle the holder thereof to a fixed cumulative 6% preferential cash dividend payable quarterly as
and when declared by the issuer's board of directors. At December 31, 2012, there are no dividends in arrears.

NOTE 21.  REVENUES

Brookfield Infrastructure's revenue arises from the rendering of services by the following operating segments:

US$ MILLIONS

2012

2011

2010UtilitiesRegulated Terminal Operation

$
441

$
412

$
25Electricity Transmission


59


44


36Regulated Distribution


356


94


7TransportRail


287


205


15Ports


204


209


185Toll Roads


27





EnergyEnergy Transmission, Distribution & Storage


138


151


12District Energy


13





Timber


479


521


354$
2,004

$
1,636

$
634


F-56     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 22.  INTEREST EXPENSE

US$ MILLIONS

2012

2011

2010Interest on corporate facility

$
5

$
5

$
Interest on non-recourse borrowings


397


324


1365


6


8$
407

$
335

$
144


NOTE 23.  PAYROLL EXPENSE

The partnership has no employees or directors; therefore Brookfield Infrastructure does not remunerate key management personnel. Key decision makers of Brookfield
Infrastructure are all employees of the ultimate parent company who provide management services under Brookfield Infrastructure's Master Services Agreement.

Throughout
the year, the Managing General Partner in its capacity as the partnership's general partner, incurs director fees, a portion of which are charged to the partnership in
accordance with the limited partnership agreement. Less than $1 million in director fees were incurred during the year ended December 31, 2012 (2011: less than $1 million, 2010:
less than $1 million).

For
the year ended December 31, 2012, payroll expense at Brookfield Infrastructure's subsidiaries was $175 million (2011: $169 million; 2010: $112 million).

NOTE 24.  INCOME TAXES

The partnership is a flow-through entity for tax purposes and as such is not subject to Bermudian taxation. However, income taxes are recognized for
the amount of taxes payable by the partnership's corporate subsidiaries and for the impact of deferred tax assets and liabilities related to such subsidiaries.

Brookfield Infrastructure     F-57

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The
sources of deferred income tax balances are as follows:

US$ MILLIONS

2012

2011Deferred income tax assetsTax losses carried forward

$
293

$
153Financial instruments and other


248


186$
541

$
339Deferred income tax liabilitiesProperty, plant and equipment, investment properties and standing timber

$
(1,680
)
($
1,064
)Intangible assets


(683
)

(430
)$
(2,363
)
$
(1,494
)Net deferred income tax liabilities

$
(1,822
)
$
(1,155
)Reflected in the balance sheet as followsDeferred tax assets

$
142

$
405Deferred tax liabilities


(1,964
)

(1,560
)Net deferred income tax liabilities

$
(1,822
)
$
(1,155
)


The
sources of deferred income tax balances and movements are as follows:

Recognized inUS$ MILLIONS

Jan. 1
2012

Net Income

OCI

Other

Acquisitions/
Dispositions

Dec. 31
2012Deferred tax assets related to non-capital losses and capital losses

$
153

$
67

$
(11
)
$


$
84

$
293Deferred tax liabilities related to differences in tax and book basis, net


(1,308
)

(97
)

(150
)

(20
)

(540
)

(2,115
)Net deferred tax liabilities

$
(1,155
)
$
(30
)
$
(161
)
$
(20
)
$
(456
)
$
(1,822
)




Recognized inUS$ MILLIONS

Jan. 1
2011

Net Income

OCI

Other

Acquisitions/
Dispositions

Dec. 31
2011Deferred tax assets related to non-capital losses and capital losses

$
150

$
13

$


$
(10
)



$
153Deferred tax liabilities related to differences in tax and book basis, net


(1,070
)

(167
)

(71
)







(1,308
)Net deferred tax liabilities

$
(920
)
$
(154
)
$
(71
)
$
(10
)



$
(1,155
)


The
amount of non-capital and capital losses and deductible temporary differences for which no deferred income tax assets have been recognized is approximately
$613 million (2011$357 million).

F-58     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Of
the $613 million deductible temporary differences not recognized, $468 million (2011$260 million) relates to capital losses which carry forward indefinitely and
have no expiry dates. The remaining $145 million (2011$97 million) relate to non-capital losses, of which $59 million (2011$nil) expire
between 2024 and 2030 and $86 million (2011$97 million) carry forward indefinitely and have no expiry dates.

The
major components of income tax expense include the following:

US$ MILLIONS

2012

2011

2010Tax expense (benefit) comprises:Current income tax expense

$
16

$
4

$
6Deferred income tax expense / (benefit)


30


154


(21
)Total income tax expense / (benefit)

$
46

$
158

$
(15
)Net income before income tax expense reconciles income to tax expense (recovery) as follows:Net income before income tax

$
337

$
598

$
458Income tax expense calculated at the domestic rates applicable to profits in the country concerned


122


190


91Change in substantively enacted tax rates


(13
)

(15
)

(5
)Earnings from investments in associates


1


(7
)

Non-taxable portion of loss / (gain)


5


1


(82
)Income not assessable


(22
)

(32
)

(16
)Withholding taxes





3


2Permanent differences and other


(47
)

18


(5
)Income tax expense / (benefit) recognized in profit or loss

$
46

$
158

$
(15
)


As
the partnership is not subject to tax, the above reconciliation has been prepared using a composite statutory rate for jurisdictions where the partnership's subsidiaries operate. The
composite rate has increased due to changes in the related operating income in the various subsidiaries and changes in local statutory rates.

The
partnership recognized $16 million of pre-acquisition deferred tax asset as a result of a business combination transaction that took place during the year.

The
partnership has approximately $1,465 million (2011: $1,083 million) of temporary differences associated with investments in subsidiaries and associates for which no
deferred taxes have been provided.

Brookfield Infrastructure     F-59

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

US$ MILLIONS

2012

2011

2010Deferred tax arising on income and expenses recognized in other comprehensive income:Revaluation of property, plant and equipment

$
(161
)
$
(94
)
$
Cash flow hedge


6


22


(2
)Other


(6
)

1


(8
)Total income tax expense recognized directly in other comprehensive income

$
(161
)
$
(71
)
$
(10
)


NOTE 25.  PARTNERSHIP CAPITAL

Brookfield Infrastructure's capital structure is comprised of three classes of partnership units: general partnership units, limited partnership units and
Redeemable Partnership Units held by Brookfield.

Limited
partnership units entitle the holder to their proportionate share of distributions.

General
partnership units entitle the holder the right to govern the financial and operating policies of Brookfield Infrastructure. Further, in its capacity as the general partner of the
Holding LP, the general partner is entitled to incentive distribution rights which are based on the amount by which quarterly distributions on partnership units exceed specified target levels.
To the extent distributions on partnership units exceed $0.305 per quarter, the incentive distribution rights are entitled to 15% of incremental distributions above this threshold. To the extent that
distributions on partnership units exceed $0.33 per unit, the incentive distribution rights are entitled to 25% of incremental distributions above this threshold. During the year, the partnership paid
incentive distributions of $16 million (2011: $4 million, 2010: $nil).

The
Holding LP has issued 56.1 million Redeemable Partnership Units to Brookfield, which may, at the request of the holder, require the Holding LP to redeem the
units at the market price of the partnership. This right is subject to the partnership's right of first refusal which entitles it, at its sole discretion, to elect to acquire any unit so presented to
the Holding LP in exchange for one of the partnership's units (subject to certain customary adjustments). Both the LP Units issued by Brookfield Infrastructure and the Redeemable
Partnership Units issued by the Holding LP have the same economic attributes in all respects, except for the redemption right described above. The Redeemable Partnership
Units participate in earnings and distributions on a per unit basis equivalent to the per unit participation of the LP Units of Brookfield Infrastructure. The partnership reflects the
Redeemable Partnership Units issued to Brookfield by the Holding LP as non-controlling interestRedeemable Partnership Units held by Brookfield. Brookfield Infrastructure
reclassified the Redeemable Partnership Units that were previously presented as limited partnership units (formerly limited partners' equity) (See note 3).

There
are no units reserved for issue under options or other contacts.

F-60     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

(a)   General and Limited Partnership Capital

General
partnership units

Limited
partnership units

TotalUNITS MILLIONS

2012

2011

2012

2011

2012

2011Authorized to issueOn issue at January 1


1.1


1.1


132.3


112.9


133.4


114.0Issued for cash








11.3


19.4


11.3


19.4On issue at December 31


1.1


1.1


143.6


132.3


144.7


133.4




General
partner

Limited
partners'

TotalUS$ MILLIONS

2012

2011

2012

2011

2012

2011Opening balance

$
19

$
19

$
2,597

$
2,136

$
2,616

$
2,155Share issuance








358


461


358


461Ending balance

$
19

$
19

$
2,955

$
2,597

$
2,974

$
2,616


In
August 2012, Brookfield Infrastructure issued 11.3 million Limited Partnership units at $33.25 per unit under our shelf registrations in the U.S. and Canada. In total,
$370 million of gross proceeds were raised through the issuance and $15 million in equity issuance costs were incurred.

In
October 2011, Brookfield Infrastructure issued 19.4 million Limited Partnership units at $24.75 per unit under our shelf registrations in the U.S. and Canada. In total,
$481 million of gross proceeds were raised through this issuance and $20 million in equity issuance costs were incurred.

In
June 2010, we implemented a distribution reinvestment plan ("the Plan") that allows eligible holders of the partnership to purchase additional units by reinvesting their
cash distributions. Under the Plan, units are acquired at a price per unit calculated by reference to the volume weighted average of the trading price for our units on the New York Stock
Exchange for the five trading days immediately preceding the relevant distribution date. During the period, our partnership issued less than 1 million units for proceeds of $3 million
(2011: less than 1 million units for less than $1 million, 2010: less than 1 million units for proceeds of less than $1 million) under the Plan.

The
weighted average number of general partnership units outstanding for the year ended December 31, 2012 was 1.1 million (2011: 1.1 million; 2010:
1.1 million). The weighted average number of limited partnership units outstanding for the year ended December 31, 2012 was 136.9 million (2011: 116.5 million; 2010:
66.3 million).

Brookfield Infrastructure     F-61

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

(b)   Non-controlling interestRedeemable Partnership Units held by Brookfield

Non-controlling
interestRedeemable Partnership Units held by BrookfieldUNITS MILLIONS

2012

2011Authorized to issueOn issue at January 1


51.7


43.4Issued for cash


4.4


8.3On issue at December 31


56.1


51.7




Non-controlling interestRedeemable Partnership Units held by BrookfieldUS$ MILLIONS

2012

2011Opening balance

$
942

$
745Share issuance


142


197Ending balance

$
1,084

$
942


In
August 2012, Brookfield Infrastructure issued 4.4 million Redeemable Partnership Units to Brookfield for proceeds of $142 million.

In
October 2011, Brookfield Infrastructure issued 8.3 million Redeemable Partnership Units to Brookfield for proceeds of $677 million.

The
weighted average number of Redeemable Partnership Units held by Brookfield outstanding for the year ended December 31, 2012 was 53.5 million (2011: 44.9 million;
2010: 42.5 million).

F-62     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 26.  ACCUMULATED OTHER COMPREHENSIVE INCOME

(a)   Attributable to Limited Partners'

US$ MILLIONS

Revaluation
Surplus

Foreign
Currency
Translation

Net
Investment
Hedges

Cash Flow
Hedges

Other
Reserves

Accumulated Other
Comprehensive IncomeBalance at December 31, 2009

$
16

$
30

$
5

$
6

$


$
57Other comprehensive income (loss)


7


70


(34
)

1


7


51Balance at December 31, 2010

$
23

$
100

$
(29
)
$
7

$
7

$
108Other comprehensive income (loss)


248


(25
)

(22
)

(48
)




153Balance at December 31, 2011

$
271

$
75

$
(51
)
$
(41
)
$
7

$
261Other comprehensive income (loss)


343


61


(6
)

(22
)

(8
)

368Balance at December 31, 2012

$
614

$
136

$
(57
)
$
(63
)
$
(1
)
$
629


(b)   Attributable to General Partner

US$ MILLIONS

Revaluation
Surplus

Foreign
Currency
Translation

Net
Investment
Hedges

Cash Flow
Hedges

Other
Reserves

Accumulated
Other
Comprehensive IncomeBalance at December 31, 2009

$


$
(1
)
$


$


$


$
(1
)Other comprehensive income (loss)





1











1Balance at December 31, 2010

$


$


$


$


$


$
Other comprehensive income (loss)


3








(1
)




2Balance at December 31, 2011

$
3

$


$


$
(1
)
$


$
2Other comprehensive income (loss)


3


1


(1
)







3Balance at December 31, 2012

$
6

$
1

$
(1
)
$
(1
)
$


$
5


(c)   Attributable to Non-controlling interestRedeemable Partnership Units held by Brookfield

US$ MILLIONS

Revaluation
Surplus

Foreign
Currency
Translation

Net
Investment
Hedges

Cash Flow
Hedges

Other
Reserves

Accumulated
Other
Comprehensive IncomeBalance at December 31, 2009

$
11

$
20

$
4

$
4

$


$
39Other comprehensive income (loss)


4


35


(17
)

1


4


27Balance at December 31, 2010

$
15

$
55

$
(13
)
$
5

$
4

$
66Other comprehensive income (loss)


96


(10
)

(8
)

(18
)

(1
)

59Balance at December 31, 2011

$
111

$
45

$
(21
)
$
(13
)
$
3

$
125Other comprehensive income (loss)


137


25


(3
)

(9
)

(3
)

147Balance at December 31, 2012

$
248

$
70

$
(24
)
$
(22
)
$


$
272


Brookfield Infrastructure     F-63

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 27.  DISTRIBUTIONS

For the year ended December 31, 2012, distributions to partnership unitholders were $288 million or $1.50 per partnership unit (2011:
$218 million or $1.32 per unit, 2010: $117 million or $1.10 per unit).

Additionally,
incentive distributions were made to the general partner of $16 million (2011: $4 million, 2010: $nil).

NOTE 28.  CONTINGENT ASSETS & LIABILITIES

Brookfield Infrastructure, including its associates, had bank and customs guarantees and letters of credit outstanding to third parties totaling
$130 million. These guarantees are supported by cash on deposit with banks.

The
Partnership and is subsidiaries are contingently liable with respect to litigation and claims that arise in the normal course of operations.

NOTE 29.  CONTRACTUAL COMMITMENTS

In the normal course of business, the partnership will enter into contractual obligations which include commitments relating primarily to contracted project costs
for various growth initiatives and network upgrades at our Australian railroad operation and committed expenditures associated with gas and electricity sales contracts at our U.K. regulated
distribution operation. As at December 31, 2012, the partnership had $425 million (2011: $487 million) of such commitments outstanding.

In
addition, pursuant to the Master Service Agreement, on a quarterly basis, Brookfield Infrastructure pays a base management fee to wholly owned subsidiaries of Brookfield
(the "Manager") equal to 0.3125% per quarter (1.25% annually) of the market value of the partnership. This fee is recorded on the Statements of Operating Results in general and administrative
expenses.

NOTE 30.  RETIREMENT BENEFIT PLANS

Brookfield Infrastructure offers pension plans to employees of its subsidiaries. Brookfield Infrastructure's obligations under its defined benefit pension plans
are determined periodically through the preparation of actuarial valuations. The benefit plans' expense for 2012 was less than $1 million (2011: $4 million, 2010: $9 million). The
discount rate used was 4.7% (2011: 5.0%, 2010: 5.5%) with an increase in the rate of compensation of 3.3% (2011: 3.9%, 2010: 4.1%) and an investment return rate of 5.0% (2011: 5.6%,
2010: 6.2%).

US$ MILLIONS

2012

2011Plan assets

$
227

$
229Less accrued benefit obligation


(302
)

(234
)Accrued benefit liability

$
(75
)
$
(5
)


F-64     Brookfield Infrastructure

---





Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 31.  RELATED PARTY DISCLOSURES

In the normal course of operations, Brookfield Infrastructure entered into the transactions below with related parties on market terms. These transactions have
been measured at fair value and are recognized in the financial statements.

The
immediate parent of Brookfield Infrastructure is the Managing General Partner of the partnership. The ultimate parent of Brookfield Infrastructure is Brookfield. Other related
parties of Brookfield Infrastructure represent its subsidiary and operating entities.

Throughout
the year, the Managing General Partner, in its capacity as the partnership's general partner, incurs director fees, a portion of which are charged at cost to the Partnership
in accordance with the limited partnership agreement. Less than $1 million in director fees were incurred during the year ended December 31, 2012 (2011: less than $1 million,
2010: less than $1 million).

Since
inception, Brookfield Infrastructure had a management agreement with its external managers, wholly owned subsidiaries of Brookfield.

Pursuant
to the Master Services Agreement, on a quarterly basis, Brookfield Infrastructure pays a base management fee, referred to as the Base Management Fee, to the Manager equal to
0.3125% per quarter (1.25% annually) of the market value of the partnership. The Base Management Fee was $86 million for the year ended December 31, 2012 (2011: $53 million, 2010:
$28 million).

For
purposes of calculating the Base Management Fee, the market value of the partnership is equal to the volume weighted average of the closing prices of the partnership's units on the
NYSE (or other exchange or market where the partnership's units are principally traded) for each of the last five trading days of the applicable quarter multiplied by the number of issued and
outstanding units of the partnership on the last of those days (assuming full conversion of Brookfield's interest in Brookfield Infrastructure into units of the partnership), plus the amount of
third-party debt, net of cash, with recourse to the partnership, Brookfield Infrastructure, the Holding LP and certain holding entities held directly by the Holding LP.

During
the year, $9 million was reimbursed at cost to the Manager (2011: $9 million, 2010: $16 million). These amounts represent third party costs that were paid for
by Brookfield on behalf of Brookfield Infrastructure relating to general and administrative expenses, and acquisition related expenses of Brookfield Infrastructure. These expenses were charged to
Brookfield Infrastructure at cost.

Brookfield
Infrastructure has placed funds on deposit with Brookfield. Interest earned on the deposits is at market terms. At December 31, 2012, Brookfield Infrastructure's
deposit balance with Brookfield
was less than $1 million (2011: $76 million) and earned interest of less than $1 million for the year (2011: less than $1 million, 2010: less than $1 million).

In
October 2012, Brookfield Infrastructure agreed to purchase an additional 10% investment in its South American transmission operations from Brookfield for proceeds of
$235 million, subject to satisfaction of customary conditions, increasing Brookfield Infrastructure's total ownership to 28%. The

Brookfield Infrastructure     F-65

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

purchase
was completed in January 2013 with an effective date of October 1, 2012. The transaction was measured at fair value as determined by an external valuation.

Brookfield
Infrastructure's North American district energy operation has various right-of-way easements on market terms with subsidiaries of Brookfield Office
Properties Inc.

In
August 2011, Brookfield Infrastructure transferred its ownership in CSC to a Brookfield sponsored infrastructure fund for insignificant proceeds. Concurrently, the partnership
entered into a voting agreement with Brookfield, whereby the partnership effectively maintains control of CSC. No gains or losses have been recognized relating to this transfer.

In
May 2011, Brookfield Infrastructure disposed of its interest in its U.S. hydro facility to an affiliate of Brookfield for proceeds of $10 million representing the
original cost of the investment plus a notional interest charge. A $2 million gain was recognized relating to this disposal on the Statement of Operating Results in Other expenses.

NOTE 32.  DERIVATIVE FINANCIAL INSTRUMENTS

Brookfield Infrastructure's activities expose it to a variety of financial risks, including market risk (i.e. currency risk, interest rate risk, commodity
risk and other price risk), credit risk and liquidity risk. Brookfield Infrastructure and its subsidiaries selectively use derivative financial instruments principally to manage these risks.

The
aggregate notional amount of Brookfield Infrastructure's derivative positions at December 31, 2012 and 2011 is as follows:

MILLIONS

Note

Dec. 31, 2012

Dec. 31, 2011Foreign exchange contracts

(a)

$
677

$
569Interest rates swaps

(b)


6,040


4,044$
6,717

$
4,613


The
following table presents the change in fair values of Brookfield Infrastructure's derivative positions during the years ended December 31, 2012 and 2011:

MILLIONS

Unrealized Gains
During 2012

Unrealized
Losses
During 2012

Net Change
During 2012

Net Change
During 2011Foreign exchange derivatives

$


$
(28
)
$
(28
)
$
37Interest rate derivative


45


(116
)

(71
)

(90
)$
45

$
(144
)
$
(99
)
$
(53
)


F-66     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Brookfield
Infrastructure held the following foreign exchange contracts with notional amounts at December 31, 2012 and 2011.

Notional Amount (U.S. Dollars)

Average Exchange RateMILLIONS

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2012

Dec. 31, 2011Foreign exchange contractsAustralian dollars

$
336

$
138


1.02


1.02British pounds


221


208


1.60


1.57European Union euros


78


68


1.25


1.43New Zealand dollars


42


27


0.79


0.81Foreign exchange optionsAustralian dollars





128





1.05$
677

$
569


At
December 31, 2012, Brookfield Infrastructure held interest rate swap contracts having an aggregate notional amount of $5,632 million (2011: $3,931 million).
Brookfield Infrastructure's subsidiary held inflation linked swaps having an aggregate notional amount of $408 million (2011: $113 million).

Other Information Regarding Derivative Financial Instruments

The following table presents the notional amounts underlying Brookfield Infrastructure's derivative instruments by term to maturity as
at December 31, 2012 and the comparative notional amounts at

Brookfield Infrastructure     F-67

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

December 31,
2011, for both derivatives that are fair value through profit or loss and derivatives that qualify for hedge accounting:

Dec. 31, 2012

Dec. 31, 2011MILLIONS

< 1 year

1 to 5 years

> 5 years

Total Notional
Amount

Total Notional
AmountFair value through profit or lossForeign exchange derivatives

$
316

$
104

$


$
420

$
324Interest rate derivativesInterest rate swaps


182








182


488Interest rate caps





34





34


33Inflation linked swap








408


408


113$
498

$
138

$
408

$
1,044

$
958Elected for hedge accountingForeign exchange derivatives

$
257

$


$


$
257

$
245Interest rate derivativesInterest rate swaps


1,308


2,801


1,307


5,416


3,410$
1,565

$
2,801

$
1,307

$
5,673

$
3,655


The
following table classifies derivatives elected for hedge accounting during the years ended December 31, 2012 and 2011 as either cash flow hedges or net investment hedges.
Changes in the fair value of the effective portion of the hedges are recorded in either other comprehensive income or net income, depending on the hedge classification, whereas changes in the fair
value of the ineffective portion of the hedge are recorded in net income:

2012

2011AS AT AND FOR THE YEARS ENDED
(MILLIONS)

Notional

Effective
Portion

Ineffective
Portion

Notional

Effective
Portion

Ineffective
PortionCash flow hedges

$
5,416

$
(29
)
$
(23
)
$
3,410

$
(94
)
$
(1
)Net investment hedges


257


(20
)




245


30


$
5,673

$
(49
)
$
(23
)
$
3,655

$
(64
)
$
(1
)


The
interest rate swaps settle on a quarterly basis. The Partnership will settle the difference between the contracted fixed and floating interest rate on a net basis.
All interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the Partnership's cash flow exposure
resulting from variable interest rates on
borrowings. The interest rate swaps and the interest payments on the borrowings occur simultaneously and the amount accumulated in equity is reclassified to profit or loss over the period that the
floating rate interest payments on borrowings affect profit or loss.

F-68     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

NOTE 33.  FINANCIAL RISK MANAGEMENT

Brookfield Infrastructure recognizes that risk management is an integral part of good management practice.

Brookfield
Infrastructure is exposed to the following risks as a result of holding financial instruments; capital risk; liquidity risk; market risk (i.e. interest rate risk and
foreign currency risk); and credit risk. The following is a description of these risks and how they are managed:

Brookfield
Infrastructure manages its capital structure to be able to continue as a going concern while maximizing the return to stakeholders. Brookfield Infrastructure's overall capital
strategy remains unchanged from 2011.

The
capital structure of Brookfield Infrastructure consists of debt, offset by cash and cash equivalents, and partnership capital comprised of issued capital and accumulated gains.

US$ MILLIONS

2012

2011Subsidiary and corporate borrowings

$
7,939

$
4,885Preferred shares


20


20Cash and cash equivalents


(263
)

(153
)Net Debt


7,696


4,752Total partnership capital


7,808


5,889Total capital and net debt


15,504


10,641Net debt to capitalization ratio


50
%

45
%


The
Board, along with senior management of the Manager, reviews Brookfield Infrastructure's capital structure and as part of this review, considers the cost of capital and the risk
associated with each class of capital.

Brookfield
Infrastructure manages its debt exposure by financing its operations on a non-recourse basis with prudent levels of debt, ensuring a diversity of funding sources
as well as laddering its maturity profile to minimize refinance risk. Brookfield Infrastructure also strives to borrow in the currency where the asset operates, where possible, in order to hedge its
currency risk.

Generally,
Brookfield Infrastructure's equity strategy is to issue equity in conjunction with future acquisitions. However, Brookfield Infrastructure may also issue an amount of equity
opportunistically to enhance its liquidity to pursue investments. In December 2009, Brookfield Infrastructure filed shelf registrations to enable it to issue securities in both the U.S. and
Canadian markets.

Brookfield
Infrastructure's financing plan is to fund its recurring growth capital expenditures with cash flow generated by its operations after maintenance capital expenditure, as well
as debt financing that is sized to maintain its credit profile. To fund large scale development projects and acquisitions, Brookfield Infrastructure will evaluate a variety of capital sources
including proceeds from selling non-core assets, equity and debt financing. The partnership will seek to raise additional equity if

Brookfield Infrastructure     F-69

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Brookfield
Infrastructure believes it can earn returns on these investments in excess of the cost of the incremental partnership capital.

As
disclosed within borrowings (note 17), Brookfield Infrastructure has various loan facilities in place. In certain cases, the facilities have financial covenants which are
generally in the form of interest cover ratios and leverage ratios. Brookfield Infrastructure does not have any market capitalization covenants attached to any of its borrowings, nor does it have any
other externally imposed capital requirement.

During
the years ended December 31, 2012, 2011 and 2010, there were no breaches of any loan covenants within Brookfield Infrastructure.

Brookfield
Infrastructure attempts to maintain sufficient financial liquidity at all times so that it is able to participate in attractive opportunities as they arise, better withstand
sudden adverse changes in economic circumstances and maintain a relatively high distribution of its Funds from operations ("FFO") to unitholders. Brookfield Infrastructure's principal sources of
liquidity are cash flows from its operations, undrawn credit facilities and access to public and private capital markets. Brookfield Infrastructure also structures the ownership of its assets to
enhance its ability to monetize them to provide additional liquidity, if necessary.

Brookfield
Infrastructure's estimated corporate liquidity as at December 31 is as follows:

US$ MILLIONS

2012

2011Cash(1)

$
2

$
79Availability under committed credit facility(1)


855


700Draws on credit facility(1)


(546
)

Commitments under credit facility(1)


(92
)

(51
)Estimated corporate liquidity(1)

$
219

$
728


---

Brookfield Infrastructure's $855 million committed revolving credit facility is available for investments and acquisitions, as well as
general corporate purposes. Commitments under the facility will be available on a revolving basis until September. All amounts outstanding at that time will be repayable in full. The facility is
intended to be a bridge to equity financing rather than a permanent source of capital. At December 31, 2012, $546 million was drawn on this facility (2011: $nil) and $92 million
was committed to letters of credit (2011: $51 million).

The
following tables detail the contractual maturities for Brookfield Infrastructure's financial liabilities. The tables reflect the undiscounted cash flows of financial liabilities
based on the earliest

F-70     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

date
on which Brookfield Infrastructure can be required to pay. The tables include both interest and principal cash flows.

December 31, 2012
US$ MILLIONS

Less than
1 year

1-2 years

2-5 years

5+ years

Total
contractual
cash flowsNon-derivative financial liabilities:Accounts payable and other liabilities

$
558

$
101

$


$
75

$
734Interest-bearing liabilities


635


2,892


1,424


3,131


8,082Finance lease liabilities


7


9


6


26


48Other financial liabilities





235








235Derivative liabilities:Net settled interest rate swaps


38


2





35


75Net settled foreign currency exchange forward contracts


8











8Net settled inflation swaps








52


285


337Other derivative liabilities











39


39




December 31, 2011
US$ MILLIONS

Less than
1 year

1-2 years

2-5 years

5+ years

Total
contractual
cash flowsNon-derivative financial liabilities:Accounts payable and other liabilities

$
354

$
14

$
21

$
26

$
415Interest-bearing liabilities


362


1,825


1,306


2,731


6,224Finance lease liabilities


4


3


8





15Other financial liabilities


6


7


4





17Derivative liabilities:Net settled interest rate swaps


51


73


63


26


213Net settled foreign currency exchange forward contracts














Net settled inflation swaps


2


31








33Other derivative liabilities








32





32


Market
risk is defined for these purposes as the risk that the fair value or future cash flows of a financial instrument held by Brookfield Infrastructure will fluctuate because of the
change in market prices. Market risk includes the risk of changes in interest rates and foreign currency exchange rates.

Brookfield
Infrastructure seeks to minimize the risks associated with foreign currency exchange rates and interest rates primarily through the use of derivative financial instruments to
hedge these risk exposures. The use of financial derivatives is governed by Brookfield Infrastructure's Treasury Policy. Brookfield Infrastructure does not enter into, or trade financial instruments,
including derivative financial instruments, for speculative purposes.

Brookfield Infrastructure     F-71

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The
Treasury Policy provides written principles on the use of financial derivatives. With respect to its treasury policy, senior management of Brookfield Infrastructure's external
manager perform the monitoring, review and approval role and report to the Board on a regular basis.

Financial
instruments held by Brookfield Infrastructure that are subject to market risk include other financial assets, borrowings, and derivative instruments, such as interest rate and
foreign currency contracts.

Interest Rate Risk Management

Brookfield Infrastructure's primary objectives with respect to interest rate risk management are to
ensure that:



To
achieve these objectives, in general terms, Brookfield Infrastructure's funding mix comprises both fixed and floating rate debt. Fixed rate debt is achieved either through fixed rate
debt funding or through the use of financial derivate instruments. In addition, where possible, interest rate risk is minimized by matching the terms of interest rate swap contracts in regulated
businesses to the term of the rate period, thus providing natural hedges.

The
sensitivity analyses below reflect Brookfield Infrastructure's exposure to interest rates for both derivative and non-derivative instruments at the reporting date,
assuming that a 10 basis point increase or decrease in rates takes place at the beginning of the financial year and is held constant throughout the reporting period. The sensitivity analyses
assumes a 10 basis point change to reflect the current methodology employed by Brookfield Infrastructure in assessing interest rate risk. Such parallel shift in the yield curve by
10 basis points would have had the following impact, assuming all other variables were held constant:

2012

2011

2010US$ MILLIONS

10 bp
decrease

10 bp
increase

10 bp
decrease

10 bp
increase

10 bp
decrease

10 bp
increaseNet income (loss)

$
4

$
(4
)
$
3

$
(2
)
$
(2
)
$
Other comprehensive (loss) income

$
(14
)
$
14

$
(2
)
$
3

$
3

$



Foreign Currency Risk Management

Brookfield Infrastructure has exposure to foreign currency risk in respect of currency transactions, the value of Brookfield
Infrastructure's net investment, cash flows and capital expenditures that are

F-72     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

denominated
outside of the U.S. Brookfield Infrastructure's approach to foreign currency risk management is:



The
tables below set out Brookfield Infrastructure's currency exposure at December 31, 2012, 2011 and 2010:

2012
US$ MILLIONS

AUD

GBP

NZD

EUR

CLP

COP

BRL

USD

CAD

TotalAssets:Current assets

$
174

$
174

$


$


$
122

$
142

$


$
112

$
22

$
746Non-current assets


5,913


3,349


384


147


1,425


752


335


5,698


969


18,972$
6,087

$
3,523

$
384

$
147

$
1,547

$
894

$
335

$
5,810

$
991

$
19,718Liabilities:Current liabilities

$
167

$
256

$


$


$
71

$
52

$


$
622

$
123

$
1,291Non-current liabilities


3,763


2,474








817


441





2,754


370


10,6193,930


2,730








888


493





3,376


493


11,910Non-controlling interestin operating subsidiaries


(147
)

(124
)







(319
)

(331
)




(1,596
)

(267
)

(2,784
)Non-controlling interestRedeemable Partnership Units held by Brookfield


(546
)

(182
)

(104
)

(40
)

(92
)

(19
)

(91
)

(228
)

(63
)

(1,365
)Net investment

$
1,464

$
487

$
280

$
107

$
248

$
51

$
244

$
610

$
168

$
3,659




2011
US$ MILLIONS

AUD

GBP

NZD

EUR

CLP

USD

CAD

TotalAssets:Current assets

$
149

$
129

$


$


$


$
197

$
3

$
478Non-current assets


5,280


1,539


296


142


159


5,114


261


12,791$
5,429

$
1,668

$
296

$
142

$
159

$
5,311

$
264

$
13,269Liabilities:Current liabilities

$
150

$
167

$
114

$


$


$
91

$
4

$
526Non-current liabilities


3,283


1,064











2,374


133


6,8543,433


1,231


114








2,465


137


7,380Non-controlling interestin operating subsidiaries


(177
)

(117
)










(1,389
)




(1,683
)Non-controlling interestRedeemable Partnership Units held by Brookfield


(490
)

(86
)

(49
)

(38
)

(43
)

(393
)

(34
)

(1,133
)Net investment

$
1,329

$
234

$
133

$
104

$
116

$
1,064

$
93

$
3,073


Brookfield Infrastructure     F-73

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011



2010
US$ MILLIONS

AUD

GBP

NZD

EUR

USD

CAD

TotalAssets:Current assets

$
2,019

$
92

$


$


$
133

$
6

$
2,250Non-current asset


4,592


1,442


280


114


4,454


220


11,102$
6,611

$
1,534

$
280

$
114

$
4,587

$
226

$
13,352Liabilities:Current liabilities

$
2,561

$
114

$


$


$
88

$
5

$
2,768Non-current liabilities


2,312


1,055


113





2,054


127


5,6614,873


1,169


113





2,142


132


8,429Non-controlling interestin operating subsidiaries


(207
)

(99
)







(1,246
)




(1,552
)Non-controlling interestRedeemable Partnership Units held by Brookfield


(403
)

(70
)

(44
)

(30
)

(315
)

(25
)

(887
)Net investment

$
1,128

$
196

$
123

$
84

$
884

$
69

$
2,484


The following tables detail Brookfield Infrastructure's sensitivity to a 10% increase and decrease in the U.S. dollar against the relevant
foreign currencies, with all other variables held constant as at reporting date. 10% is the sensitivity rate used when reporting foreign currency risk internally. The sensitivity analysis is performed
as follows:



Impact on Net Income2012

2011

2010US$ MILLIONS

-10%

+10%

-10%

+10%

-10%

+10%USD/NZD

$
(2
)
$
2

$
(1
)
$
1

$


$
USD/AUD


(10
)

10








26


(26
)USD/EUR


(3
)

3


(2
)

2


(1
)

1USD/GBP








5


(5
)

1


(1
)USD/BRL

















USD/COP

















USD/CLP


2


(2
)










USD/CDN


2


(2
)

1


(1
)

1


(1
)


F-74     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011



Impact on Partnership Capital2012

2011

2010US$ MILLIONS

-10%

+10%

-10%

+10%

-10%

-10%USD/NZD

$
25

$
(25
)
$
16

$
(16
)
$
16

$
8USD/AUD


111


(111
)

166


(166
)

166


46USD/EUR


3


(3
)

7


(7
)

7


3USD/GBP


24


(24
)

10


(10
)

10


21USD/CLP


25


(25
)

16


(16
)

16


USD/COP


5


(5
)










USD/BRL


24


(24
)










USD/CDN


17


(17
)

13


(13
)

13


8


Credit
risk is the risk of loss due to the failure of a borrower or counterparty to fulfill its contractual obligations.

From
a treasury perspective, counterparty credit risk is managed through the establishment of authorized counterparty credit limits which ensure that Brookfield Infrastructure only deals
with credit worthy counterparties and that counterparty concentration is addressed and the risk of loss is mitigated. Credit limits are sufficiently low to restrict Brookfield Infrastructure from
having credit exposures concentrated with a single counterparty but rather encourages spreading such risks among several parties. The limits are set at levels that reflect Brookfield Infrastructure's
scale of activity and allow it to manage its treasury business competitively.

Brookfield
Infrastructure does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on
liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit-rating agencies. Exposure to credit risk is
limited to the carrying amount of the assets on the consolidated statement of financial position.

NOTE 34.  SEGMENT INFORMATION

IFRS 8,Operating Segments,requires operating segments to be determined based on internal reports that are
regularly reviewed by the Executive Management and the Board of Directors for the purpose of allocating resources to the segment and to assessing its performance. Key measures used by the Chief
Operating Decision Maker ("CODM") in assessing performance and in making resource allocation decisions are funds from operations ("FFO") and earnings before interest, tax, depreciation and
amortization ("Adjusted EBITDA"), measures not defined by IFRS, which enable the determination of cash return on the equity deployed. FFO is calculated as net income excluding the impact of
depreciation and amortization, fair value adjustments, unrealized gains or losses on derivative instruments, deferred taxes, interest charges and fair value adjustments on Redeemable Partnership Units
and other non-cash items. Adjusted EBITDA is calculated as FFO excluding the impact of interest and taxes.

Brookfield Infrastructure     F-75

---





Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

During the year ended December 31, 2012, the Partnership made acquisitions of $90 million in energy distribution and storage assets. The Partnership
has included a separate segment for its Energy assets as management believes that information about this segment would be useful to users of the financial statements and these Energy assets are
analyzed on a stand-alone basis from an allocation of resource and capital, and evaluation of performance perspective by the CODM. The Partnership has restated the corresponding items of segment
information for the prior periods presented.

Total attributable to Brookfield InfrastructureContribution
from
investments in
associates

Attributable to
non-
controlling
interestFOR THE YEAR ENDED
DECEMBER 31, 2012
US$ MILLIONS

Utilities

Transport

Energy

Timber

Corporate
& Other

Brookfield
Infrastructure

As per IFRS
financials on
F-6(1)Revenues

$
774

$
738

$
316

$
143

$


$
1,971

$
(726
)
$
759

$
2,004Costs attributed to revenues


(305
)

(463
)

(172
)

(95
)




(1,035
)

403


(462
)

(1,094
)General and administrative costs














(95
)

(95
)







(95
)Adjusted EBITDA


469


275


144


48


(95
)

841


(323
)

297Other income


8


6


2


3


11


30


(4
)




26Interest expense


(167
)

(106
)

(70
)

(28
)

(22
)

(393
)

138


(152
)

(407
)Cash taxes


(2
)

(7
)




(1
)

(6
)

(16
)

7


(7
)

(16
)FFO


308


168


76


22


(112
)

462


(182
)

138Depreciation and amortization


(123
)

(118
)

(59
)







(300
)

122


(54
)

(232
)Deferred taxes


11


(2
)

31


(34
)

31


37


(31
)

(36
)

(30
)Fair value adjustments











63





63





137


200Fair value gains and other items














8


8








8Other expenses


(85
)

(15
)

(48
)

(5
)

(11
)

(164
)

90





(74
)Share of earnings from associates




















1





1Net income attributable to non-controlling interest























(185
)

(185
)Net income attributable to partnership(2)

$
111

$
33

$


$
46

$
(84
)
$
106

$


$


$
106


---

F-76     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Total attributable to Brookfield InfrastructureContribution
from
investments in
associates

Attributable to
non-
controlling
interestFOR THE YEAR ENDED
DECEMBER 31, 2011
US$ MILLIONS

Utilities

Transport

Energy

Timber

Corporate
& Other

Brookfield
Infrastructure

As per IFRS
financials on
F-6(1)Revenues

$
644

$
640

$
311

$
155

$


$
1,750

$
(694
)
$
580

$
1,636Costs attributed to revenues


(226
)

(460
)

(168
)

(95
)




(949
)

403


(353
)

(899
)General and administrative costs














(61
)

(61
)







(61
)Adjusted EBITDA


418


180


143


60


(61
)

740


(291
)

227Other income


6


4





2


7


19


(3
)

7


23Interest expense


(149
)

(83
)

(73
)

(28
)

(25
)

(358
)

128


(105
)

(335
)Cash taxes





(4
)




(1
)

(4
)

(9
)

5





(4
)FFO


275


97


70


33


(83
)

392


(161
)

129Depreciation and amortization


(91
)

(58
)

(54
)







(203
)

96


(20
)

(127
)Deferred taxes


(11
)

(15
)

16


(42
)

(21
)

(73
)

(2
)

(79
)

(154
)Fair value adjustments


45


6





93





144


(45
)

257


356Other expenses


(55
)

(6
)

(9
)

7


(10
)

(73
)

36


(34
)

(71
)Share of earnings from associates




















76





76Net income attributable to non-controlling interest























(253
)

(253
)Net income attributable to partnership(2)

$
163

$
24

$
23

$
91

$
(114
)
$
187

$


$


$
187




Total attributable to Brookfield InfrastructureContribution
from
investments in
associates

Attributable to
non-
controlling
interestFOR THE YEAR ENDED
DECEMBER 31, 2010
US$ MILLIONS

Utilities

Transport

Energy

Timber

Corporate
& Other

Brookfield
Infrastructure

As per IFRS
financials on
F-6(1)Revenues

$
331

$
402

$
146

$
106

$


$
985

$
(685
)
$
334

$
634Costs attributed to revenues


(104
)

(303
)

(76
)

(70
)




(553
)

372


(232
)

(413
)General and administrative costs














(42
)

(42
)




7


(35
)Adjusted EBITDA


227


99


70


36


(42
)

390


(313
)

109Other income





2





3


5


10


(2
)

(8
)

Interest expense


(81
)

(46
)

(33
)

(28
)

(11
)

(199
)

125


(70
)

(144
)Cash taxes


(2
)

(4
)

3





(1
)

(4
)

5


(7
)

(6
)FFO


144


51


40


11


(49
)

197


(185
)

24Depreciation and amortization


(60
)

(51
)

(21
)







(132
)

110


(7
)

(29
)Deferred taxes


(15
)

30


(9
)

5


(22
)

(11
)

6


26


21Fair value adjustments














396


396








396Fair value gains and other items











10





10





2


12Other expenses


(24
)

6


1


(2
)

(11
)

(30
)

17


(2
)

(15
)Share of earnings from associates




















52





52Net income attributable to non-controlling interest























(43
)

(43
)Net income attributable to partnership(2)

$
45

$
36

$
11

$
24

$
314

$
430

$


$


$
430


---

Brookfield Infrastructure     F-77

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

The following table reconciles our consolidated revenues to our proportionate revenues for the following periods:

Twelve months ended December 31MILLIONS

2012

2011

2010Brookfield Infrastructure's consolidated revenues

$
2,004

$
1,636

$
634Less: Non-controlling interest associated with the above


(759
)

(580
)

(334
)1,245


1,056


300Add: Proportionate share of revenue of investments in associates


726


694


685Total proportionate revenue

$
1,971

$
1,750

$
985


Segment assets

For the purpose of monitoring segment performance and allocating resources between segments, Brookfield Infrastructure's Executive
Management and Board of Directors monitor the assets, including investments accounted for using the equity method, attributable to each segment.

The
following is an analysis of Brookfield Infrastructure's assets by reportable operating segment for the years under review:

Total attributable to Brookfield InfrastructureContribution
from
investments
in associates

Attributable
to non-
controlling
interest



As per
IFRS
financials
on F-5(1)AS AT
DECEMBER 31, 2012
US$ MILLIONS

Utilities

Transport

Energy

Timber

Other

Brookfield
Infrastructure

Working
capital
adjustmentTotal assets

$
5,525

$
4,412

$
1,849

$
1,017

$
(122
)
$
12,681

$
(2,072
)
$
6,530

$
2,579

$
19,718




Total attributable to Brookfield InfrastructureContribution
from
investments in
associates

Attributable
to non-
controlling
interest



As per
IFRS
financials
on F-5(1)AS AT
DECEMBER 31, 2011
US$ MILLIONS

Utilities

Transport

Energy

Timber

Other

Brookfield
Infrastructure

Working
capital
adjustmentTotal assets

$
3,787

$
2,736

$
1,613

$
1,112

$
55

$
9,303

$
(2,000
)
$
4,228

$
1,738

$
13,269


---

F-78     Brookfield Infrastructure

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Geographic Information

Revenues from external customers

US$ MILLIONS

2012

2011

2010Australia

$
763

$
646

$
41United Kingdom


465


425


202Canada


296


308


226United States of America


265


257


165Colombia


188





Chile


27





$
2,004

$
1,636

$
634


Brookfield
Infrastructure has no revenues from any one major customer which are higher than 10% of Brookfield Infrastructure's total revenues.

Non-current Assets(1)

US$ MILLIONS

2012

2011North and South America

$
8,562

$
5,521Australasia


6,472


5,119Europe


3,683


1,632$
18,717

$
12,272


---

NOTE 35.  SUPPLEMENTAL CASH FLOW INFORMATION

For the Year Ended
December 31,US$ MILLIONS

2012

2011

2010Interest paid

$
360

$
312

$
136Income taxes paid

$
11

$
5

$
4


Amounts
paid and received for interest were reflected as operating cash flows in the consolidated Statements of Cash Flows. Interest paid is net of debt related hedges.

Amounts
paid for income taxes were reflected as either operating cash flows or investing cash flows in the consolidated Statements of Cash Flow depending upon the nature of the
underlying transaction.

Brookfield Infrastructure     F-79

---



Table of Contents

BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2012, 2011 and 2010 and as of December 31, 2012 and 2011 and January 1, 2011

Details
of "Changes in non-cash working capital, net" on the Statements of Cash Flows are as follows:

For the Year Ended
December 31,US$ MILLIONS

2012

2011

2010Accounts receivable

$
(61
)
$
(11
)
$
(14
)Prepayments and other


(99
)

(53
)

(5
)Accounts payable and other


316


45


(19
)Changes in non-cash working capital, net

$
156

$
(19
)
$
(38
)


NOTE 36.  SUBSEQUENT EVENTS

Subsequent
to period end, the U.K. regulated distribution operation executed a £600 million refinancing with an average term of 13 years and weighted
average interest rate of 4%.

Subsequent
to period end, the Australian railroad operation executed an AUD $1,300 million refinancing, comprised of an AUD $619 million bank facility with an average term
of 4 years and weighted average interest rate of 5% and note issuance of AUD $681 million with an average term of 10 years and weighted average interest rate of 7%.

F-80     Brookfield Infrastructure

---