As filed with the Securities and Exchange Commission on June 1, 2010



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, 2009ORo

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)

Canon's Court
22 Victoria Street,
Hamilton, HM 12, Bermuda(Address of principal executive offices)

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

7 Reid Street, 4th Floor
Hamilton, HM 11, Bermuda
+1 441 296-4480

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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:

63,155,680 Limited Partnership Units as of December 31, 2009

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 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 o

Accelerated filer o

Non-accelerated filer ý


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

ý U.S. GAAP

o 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



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TABLE OF CONTENTS

PAGEINTRODUCTION AND USE OF CERTAIN TERMS


1FORWARD-LOOKING STATEMENTS


3PART I


6Item 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS


6Item 2.

OFFER STATISTICS AND EXPECTED TIMETABLE


6Item 3.

KEY INFORMATION


63.A

SELECTED FINANCIAL DATA


63.B

CAPITALIZATION AND INDEBTEDNESS


73.C

REASONS FOR THE OFFER AND USE OF PROCEEDS


73.D

RISK FACTORS


7Item 4.

INFORMATION ON THE COMPANY


414.A

HISTORY AND DEVELOPMENT OF OUR PARTNERSHIP


414.B

BUSINESS OVERVIEW


434.C

ORGANIZATIONAL STRUCTURE


574.D

PROPERTY, PLANTS AND EQUIPMENT


60Item 4A.

UNRESOLVED STAFF COMMENTS


60Item 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS


60Item 6.

DIRECTORS AND SENIOR MANAGEMENT


896.A

DIRECTORS AND SENIOR MANAGEMENT


896.B

COMPENSATION


966.C

BOARD PRACTICES


966.D

EMPLOYEES


1016.E

SHARE OWNERSHIP


101Item 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS


1017.A

MAJOR SHAREHOLDERS


1017.B

RELATED PARTY TRANSACTIONS


1027.C

INTEREST OF EXPERTS AND COUNSEL


112Item 8.

FINANCIAL INFORMATION


1138.A

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION


1138.B

SIGNIFICANT CHANGES


113Item 9.

THE OFFER AND LISTING


1139.A

PRICING HISTORY


1139.B

PLAN OF DISTRIBUTION


1149.C

MARKET


1149.D

SELLING SHAREHOLDERS


1149.E

DILUTION


1149.F

EXPENSES OF THE ISSUE


114Item 10.

ADDITIONAL INFORMATION


11410.A

SHARE CAPITAL


11410.B

MEMORANDUM AND ARTICLES OF ASSOCIATION


11510.C

MATERIAL CONTRACTS


13610.D

EXCHANGE CONTROLS


13810.E

TAXATION


13810.F

DIVIDENDS AND PAYING AGENTS


16410.G

STATEMENT BY EXPERTS


16410.H

DOCUMENTS ON DISPLAY


16410.I

SUBSIDIARY INFORMATION


165


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PAGEItem 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT NON-PRODUCT RELATED MARKET RISK


165Item 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES


165PART II


165Item 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES


165Item 14.

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


165Item 15.

CONTROLS AND PROCEDURES


166Item 16A.

AUDIT COMMITTEE FINANCIAL EXPERT


167Item 16B.

CODE OF ETHICS


167Item 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES


167Item 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE


167Item 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASER


168Item 16F.

CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT


168Item 16G.

CORPORATE GOVERNANCE


168PART III


169Item 17.

FINANCIAL STATEMENTS


169Item 18.

FINANCIAL STATEMENTS


169Item 19.

EXHIBITS


169


ii

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INTRODUCTION AND USE OF CERTAIN TERMS

Unless otherwise specified, information provided in this Form 20-F is as of December 31, 2009.

Unless
the context requires otherwise, when used in this annual report on Form 20-F, the terms "we", "us" and "our" refer to Brookfield Infrastructure
Partners L.P., Brookfield Infrastructure, the Holding Entities and the operating entities, each as defined below, taken together. All dollar amounts contained in this
Form 20-F are expressed in U.S. dollars and references to "dollars", "$" or "US$" are to U.S. dollars, all references to "C$" are to Canadian dollars and all
references to "A$" are to Australian dollars. In addition, unless the context suggests otherwise, references to:



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FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F contains certain forward-looking statements. Forward-looking statements relate to
expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. 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.

The
forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. These
beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our business, financial
condition, liquidity and results of operations may vary materially from those expressed in our forward looking statements. The following factors, among others, that could cause our actual results to
vary from our forward looking statements:



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Except
as required by applicable law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or
otherwise. In light of these risks, uncertainties and assumptions, the events described by our forward-looking statements might not occur. We qualify any and all of our forward-looking statements by
these cautionary factors. Please keep this cautionary note in mind as you read this Form 20-F.

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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

Actual Basis

The Partnership's sole material asset is its 59% limited partnership interest in Brookfield Infrastructure, which is accounted for
using the equity method. As a result, we believe that the financial statements of Brookfield Infrastructure are more relevant than the Partnership's because they present the financial position and
results of our underlying operations in greater detail. Brookfield owns the remaining 41% of Brookfield Infrastructure, including its general partnership interest, which, through a Redemption-Exchange
Mechanism, can effectively be converted into an equivalent interest in the Partnership.

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

For the Year Ended
December 31,MILLIONS, UNAUDITED

2009

2008

2007Income Statement Key MetricsRevenue

$
29.8

$
32.9

$
33.1Gross margin


14.8


17.9


24.8(Losses) earnings from equity accounted investments


(10.0
)

25.2


(7.8
)Dividend income


3.5


14.3


0.5Gain on sale of investment (after-tax)


68.2





Selling, general and administrative expenses


(16.6
)

(14.0
)

(4.4
)Interest expensecorporate borrowings


(7.7
)

(5.6
)

Interest expensenon-recourse borrowings


(6.8
)

(7.3
)

(6.9
)Net income


47.8


28.0


12.0Per unit net income


1.00


0.72


0.31Adjusted net operating income


117.4


59.7


13.3Per unit adjusted net operating income


2.46


1.54


0.34




As at DecemberBalance Sheet Key Metrics

2009

2008Cash and cash equivalents

$
58.3

$
9.2Total assets


1,962.9


1,174.3Partnership capital


1,799.5


899.9Corporate borrowings





139.5Non-recourse borrowings


114.0


97.6


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The
following is non-GAAP financial information for Brookfield Infrastructure for the periods indicated:

For the Year Ended
December 31,MILLIONS, UNAUDITED

2009

2008

2007Adjusted net operating income(1)

$
117.4

$
59.7

$
13.3


(1)Adjusted net operating income is defined as net income adding back depreciation and amortization, deferred income taxes and a
performance fee accrued, net of minority interest related to those items, which are either directly on the statement of income or are a component of the equity earnings of an underlying investee
company. Adjusted net operating income is a measure of operating performance that is not calculated in accordance with U.S. GAAP. Please see "Management's Discussion and Analysis of Financial
Condition and Results of OperationsReconciliation of Non-GAAP Financial Measures" for a discussion of adjusted net operating income and its limitations as a measure of our
operating performance. The following table presents a reconciliation of adjusted net operating income to net income:


For the Year Ended
December 31,MILLIONS, UNAUDITED

2009

2008

2007Net income

$
47.8

$
28.0

$
12.0Add back or deduct the following:Depreciation, depletion and amortization


54.0


54.3


9.8Deferred taxes


(33.2
)

(14.9
)

(8.4
)Performance fee





(12.8
)

3.1Unrealized loss on derivative instruments


20.7


3.9


Other non-cash items


28.1


1.2


(3.2
)Adjusted net operating income (ANOI)

$
117.4

$
59.7

$
13.3


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
Form 20-F. Additional risks and uncertainties that we do not presently know about or that we currently believe are immaterial may also adversely impact our business, financial
condition, results of operations or the value of our unitholders' units. 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.

Risks Relating to Us and Our Partnership

Our partnership's and Brookfield Infrastructure's financial statements may not present our partnership's
financial results in the most meaningful manner.

Our
partnership's sole material asset is its 59% limited partnership interest in Brookfield Infrastructure, which our partnership accounts for using equity accounting because our
partnership does not control Brookfield Infrastructure. Furthermore, as most of our current operations are accounted for

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using
equity or cost accounting, Brookfield Infrastructure's financial statements do not include a detailed breakdown of the components of net income, cash flows or unitholders' equity for all of our
current operations except Ontario Transmission, which is currently consolidated into Brookfield Infrastructure's financial statements. Although we provide certain income statement and balance sheet
line items for our current operations on a segmented basis in a note to Brookfield Infrastructure's financial statements, such information does not include the level of detail and note discussion that
would be provided if such operations were consolidated into our partnership's or Brookfield
Infrastructure's financial statements. While separate audited financial statements for most of our current operations are included in this Form 20-F, our obligation to provide
similar disclosure in the future will depend on the significance of each of the current operations at each year end relative to our overall assets and income. Accordingly, we may not continue to
provide separate audited financial statements for each or any of our operations on an ongoing basis.

The completion of the BBI Transaction has significantly increased the size of our operations, including operations in new geographic areas and industry segments,
and our manager may have difficulty managing these additional operations.

The
BBI Transaction added eight new operations to our current operations. Some of these operations, including DBCT and NGPL, are in segments that are new for us and Brookfield. We depend
on the diligence and skill of Brookfield's professionals to manage us, including our new operations. These individuals may have difficulty managing the additional operations and may have other
responsibilities within Brookfield's asset management business. In addition, the operations in new geographic areas or new industry segments may introduce unfamiliar challenges or issues for
Brookfield. If Brookfield does not effectively manage the additional operations, we may not achieve our expected results for the BBI Transaction and our existing business, financial condition and
results of operations will be adversely affected.

We do not have a controlling interest in Prime Infrastructure, or Prime, and are therefore dependent on Prime's management.

We
do not have a controlling interest in Prime. Prime's operations depend on the abilities, experience and efforts of Prime's management and other key employees. Should any of these
people be unable or unwilling to continue in their employment, this could potentially have a material adverse effect on the business, financial condition and results of operations of Prime. We are
reliant on Prime's management team to successfully manage the business and operations of Prime, however should Prime's management team fail to perform in accordance with our expectations, it could
have a negative effect on our business, financial condition and results of operations.

Our assets are or may become highly leveraged and we may incur indebtedness in addition to asset-level indebtedness under our credit facility, which contains
certain restrictive covenants, or otherwise.

Our
operating entities have a significant degree of leverage on their assets, including acquisition-related leverage, which is not reflected in our historical financial statements. In
addition, we may increase the leverage on our assets. 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 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.

On
a proportionate basis, the debt balance of all of our current operations was $2,942.5 million as of December 31, 2009, with an annual pro-forma debt service obligation
of approximately $205.6 million. On a pro forma, proportionate basis, we may also incur indebtedness under one or

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more
credit facilities, in addition to any asset-level indebtedness. On June 16, 2009, our partnership closed a $200 million revolving senior secured credit facility which is comprised
of a single tranche that will be available for investments and acquisitions, as well as general corporate purposes.

The
terms of our senior secured credit facility subjects us to financial and operating covenants which restrict our ability to engage in certain types of activities and make
distributions in respect of equity. For example, the facility contains negative covenants that significantly restrict Brookfield Infrastructure including, among others, limitations on debt, liens,
investments, mergers and operating activities, and restrictions from making any distributions on its equity unless immediately prior to, and after giving pro forma effect to, such distribution,
no default has occurred and is continuing and Brookfield Infrastructure meets a minimum interest coverage ratio. If we fail to satisfy any debt service obligations under the facility or breach any
financial or operating covenants thereunder, we will be prohibited from making any distributions until such breach is cured. Under certain circumstances, the lenders could declare all advances
outstanding under the senior secured credit facility to be immediately due and payable and could foreclose on our assets pledged as collateral.

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 than our expense
structure, thus exposing us to currency risk. Fluctuations in currency exchange rates 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 results of operations and financial position.

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 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 U.S. Investment Company Act of 1940, as amended, or the
U.S. Investment Company Act (and similar legislation in other jurisdictions) and if our partnership was deemed an "investment company" under the U.S. Investment Company Act,
applicable restrictions could make it impractical for us to operate as contemplated.

The
U.S. Investment Company Act and the rules thereunder (and similar legislation in other jurisdictions) provide certain protections to investors and impose certain
restrictions on companies that are registered 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 U.S. 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

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would
potentially cause our partnership to be deemed an investment company under the U.S. Investment Company Act, it would be impractical for us to operate as intended. 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, restructuring our partnership and the Holding Entities, 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 U.S. 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.

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, or 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 continuous disclosure obligations
and proxy solicitation if our partnership complies with certain reporting requirements applicable in the
United States, provided that the relevant documents filed with the U.S. Securities Exchange Commission, or the SEC, are filed in Canada and sent to our partnership's security holders in
Canada to the extent and in the manner and within the time required by applicable U.S. requirements. 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 the U.S. Securities Exchange Act, as amended, or the 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 and our partnership is exempt from certain other sections of the Exchange Act that
U.S. domestic issuers would otherwise be subject to, 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 of the governance rules imposed by the NYSE are
inapplicable to our partnership.

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.

Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, management is required to deliver a report that assesses the effectiveness of our internal controls over financial
reporting and our independent registered public accounting firm will be required to deliver an attestation report on management's assessment of, and the operating effectiveness of, our internal
controls over financial reporting in conjunction with their opinion on our audited financial statements. Any failure to maintain adequate internal control 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 control over financial
reporting and could result in a more than remote possibility of errors or misstatements in our consolidated financial statements that would be material. If we or our independent registered public
accounting firm were to conclude that our internal control over financial reporting was 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

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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.

We will adopt new accounting standard for the quarter ending March 31, 2010, and this adoption may have a material impact on our consolidated financial
statements.

In
2007, the SEC adopted rules that permit foreign private issuers to prepare financial statements included in their filings with the SEC, in accordance with International Financial
Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, without reconciliation to U.S. GAAP. Our partnership plans to prepare its financial statements
and the financial statements of Brookfield Infrastructure in accordance with IFRS. This change is being made in light of Brookfield Infrastructure's recent investments in Prime, DBCT and PD Ports
which use IFRS as their primary basis of accounting.

IFRS
are premised on a framework similar to U.S. GAAP; however, significant differences exist in certain matters of recognition, measurement and disclosure. While our partnership
believes that the adoption of IFRS will not have a material impact on its or Brookfield Infrastructure's reported cash flow, it is expected to have a material impact on its and Brookfield
Infrastructure's financial position and results of operations. Our partnership is in the process of determining the impact of a transition to IFRS on its financial statements and the financial
statements of Brookfield Infrastructure. In conjunction with the transition to IFRS, our partnership has established a comprehensive conversion plan that addresses matters including changes in
accounting policy, the restatement of comparative periods, organizational and internal control, the modification of existing systems, in addition to other related business matters. The first financial
statements of the Partnership and Brookfield infrastructure to be prepared in accordance with IFRS will be for the financial statements as at and for the quarter ended March 31, 2010.

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
global economy.

Many
industries, including the industries in which we operate, have been impacted by the substantial declines in global capital markets between the latter half of 2008 and the first
quarter of 2009. This is significant because all of our operating entities depend on the financial health of their customers who may be sensitive to the overall performance of the economy. As such,
adverse local, regional or worldwide economic trends that affect each respective economy could have a material adverse effect on our financial condition and results of operations. Some of the key
impacts of the significant volatility and substantial declines in global capital markets since the latter half of 2008 have included 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. In many regions in which we do business, including the
United States and Canada, these and other factors have precipitated a recession. The demand for services provided by the operations are, in part, dependent upon and correlated to economic
growth of the regions applicable to the assets and the demand for services sought by the customers of the relevant assets. Lower economic growth in a region or regions may, either directly or
indirectly, reduce demand for the services provided by the assets. The substantial decline in the financial markets, and any further declines in financial markets or other key measures of the global
economy, including, but not limited to, new home construction, employment rates, business conditions, inflation, fuel and energy costs, lack of available credit, the state of the financial markets,
interest rates and tax rates may adversely affect our growth and profitability. Specifically, market conditions could materially impact the cost and availability of our financing and our overall
liquidity; the volatility of commodity output prices and currency exchange

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markets
could materially impact our revenues, profits and cash flow; volatile energy, commodity input and consumables prices and currency exchange rates could materially impact our production costs;
and the devaluation and volatility of global stock markets could materially impact the valuation of our units. For example, reduced international demand for the commodities exported by our fee for
service operations may lead to bankruptcies or liquidations of one or more large customers of our fee for service operations which could reduce our revenues and increase our bad debt expense. Any one
of these factors could have a material adverse effect on our condition and results of operations. Volatility and further declines in capital markets could adversely impact our operations and the
trading price of our units. Despite some evidence of stabilization and improvement in most major markets, significant risk remains.

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

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; tax policies; and other political, social and economic
developments that may occur in or affect the countries in which our operating entities operate or the countries in which the customers of our operating entities operate 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 fee for service 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 commodities our fee for service operations rely upon, most notably coal. 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 uninsurable losses and force majeure events.

The
assets of our infrastructure businesses are exposed to unplanned interruptions caused by significant catastrophic events such as cyclones, landslides, explosions, terrorist attacks,
floods, earthquakes, fires, major plant breakdowns, pipeline or electricity line ruptures 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 or penalties or regulatory or contractual non-compliance. Moreover, any loss from such events may not be recoverable under relevant insurance policies.
Business interruption insurance is not always available, or economic, to protect the business from these risks.

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 acts of God, fire, flood, earthquakes, war
and labor strikes. Some force majeure events may adversely affect a party's ability to perform its obligations until it is able to remedy the force majeure event.

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 Chilean transmission operations are not insured against losses from earthquakes and NGPL,
Powerco and IEG

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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 would be prohibitive. While not a risk borne directly by us, 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.

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

Our
utilities, fee for service, timber or social infrastructure operations are capital intensive and require substantial ongoing expenditures for, among other things, additions and
improvements, structures and technology and maintenance and repair of 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.

In
addition, in some of the jurisdictions in which we have utilities, fee for service, timber or social infrastructure operations, such as Chile, 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 cover 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 costs are not fully recovered through the
regulatory framework.

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

Several
of our current operations have workforces that are unionized and, as a result, they 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 labor costs and restrictions of its ability to maximize the efficiency of its operations, which could have a material adverse effect on its operations and financial results.

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

Infrastructure
projects and operational assets are exposed to the risk of accidents that may give rise to personal injury, loss of life, damage to property, disruption to service and
economic loss as well as the potential loss, forfeit or suspension of operating licenses and potential litigation, material compensation having to be made, claims and fines or other legislative
sanction as a result of these accidents, all of which have the potential to impact our cash flow and our ability to make distributions.

Some
of the tasks undertaken by employees are inherently dangerous and have the ability to result in serious injury or death. Occupational health and safety legislation and regulations
differ in each jurisdiction. If a serious accident were to occur, it could result in material compensation payments having to be made, the loss of a license or permit required to carry on the
business, or other legislative sanction, all of which have the potential to impact our cash flow and ability to make distributions.

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, 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

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relating
to forestry practices and the export of logs and several of our utilities and fee for service operations are subject to government regulation of their rates and revenues. 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.

In
addition, our operating entities are subject to laws and regulations relating to pollution and the protection of the environment. National and local environmental laws and regulations
affect the operations of infrastructure projects. Standards are set by these laws and regulations regarding certain aspects of health and environmental quality, and they 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 operations
are, or were, conducted. These laws and regulations may have a detrimental impact on the financial performance of infrastructure projects, through increased compliance costs or otherwise. They are
also subject to laws and regulations governing health and safety matters, protecting both the public and their employees. Any breach of these obligations, or even incidents relating to the environment
or health and safety 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. There is also the risk that our operating entities do not have, or might not obtain, 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 financial performance.

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

Our
utilities, fee for service, timber or social infrastructure 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 easements,
licenses and rights of way necessary 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 adopt 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, it is possible to claim indigenous rights to land, for example in Australia the existence or declaration of native
title may affect the existing or future activities of our fee for service operations and impact on its operational and financial performance.

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
aboriginal peoples may possess 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 ether case, the claims of an
aboriginal group may affect the existing or future activities of our operations and impact on operational and financial performance, or compensation may be required to be paid.

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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. 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 anti-trust 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 assure you 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
anti-trust 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 its 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 and 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.

Investments in infrastructure projects during the construction phase are likely to retain some residual risk.

Investments
in new infrastructure projects during the construction phase are likely to retain some residual risk that the project 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, the 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 labor, material
expenses, and a resultant delay in the commencement of cash flow; and (ii) the insolvency of the head contractor, a major subcontractor and/or a key equipment supplier. Construction costs may
exceed estimates for various reasons, including inaccurate engineering and planning, labor 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

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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.

Brookfield has structured some of our current operations as joint ventures, partnerships and consortium arrangements, and we will do so 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 financial condition and results of operations could suffer as a result.

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, our Chilean
transmission operations are subject to a shareholder agreement which allows for an en bloc 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.

Future acquisitions may subject us to additional risks.

Future
acquisitions will likely involve some or all of the following risks, which could materially and adversely affect our business, results of operations or financial condition: 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 labor, commercial or regulatory disputes or litigation related to the new enterprise; and the risk of environmental or other liabilities associated with the acquired
business.

Risks Relating to Our Utilities Operations

Our utilities operations may be adversely affected by changes in tolls or regulated
rates.

Some
of our utilities operations are regulated with respect to revenues and they recover their investment through tolls or regulated rates which are charged to third parties (including
generating

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companies).
Current tolls and regulated rates are reviewed by the applicable regulatory agency on a regular basis. In general, our utilities operations are entitled to earn revenue that represents a
rate of return on the regulated investment value of assets and to collect provisions for operating, maintenance and administrative costs. If any of the respective regulators in the jurisdictions in
which we operate decide to change the tolls or rates we are allowed to charge or the amounts of the provisions we are allowed to collect, we may not be able to earn a rate of return on our businesses
that we had planned or we may not be able to recover our initial investment cost. Any significant changes in tolls or rates may result in material changes to the revenue or profitability of the
affected operation. Ontario Transmission is currently subject to a rate review, the outcome of the review could adversely affect the return from those operations.

Clients of our utilities operations may default on their obligations under the relevant contractual arrangements.

Some
of our utilities operations have customer contracts as well as concession agreements in place with public and private sector clients. On the public sector side this may include
central government departments, local government bodies and quasi-government agencies. Since it cannot be assumed that a central government will in all cases assume liability for the obligation of
quasi-government agencies or those central government departments will themselves not default on their obligations, the possibility of a default remains. Our utilities operations also have contracts
with private sector clients. There is an increased risk of default by private sector clients compared with public sector clients. For example, we have a single customer which represented approximately
71% of revenues of our Chilean transmission operations in 2009. As this accounts for a majority of its cash flow, our Chilean transmission operations could be materially adversely affected by any
material change in the assets, financial condition or results of operations of that customer.

Our utilities operations are regulated and may be exposed to increased regulation as a result of heightened concerns regarding national
security.

Our
utilities operations involve ongoing commitments to economic regulators, safety regulators and other governmental agencies. This is due to the essential nature of the services
provided by our utilities operations and the fact that the services are usually provided on a monopoly or near monopoly basis. The nature of these commitments exposes us to a higher level of
regulatory control than typically imposed on other businesses.

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, with a view towards enhancing national security, can affect our utilities operations or a project substantially. This may also be due to court decisions and actions of government agencies
that affect our utilities 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, reliability or quality of service. In addition, a decision by a government or regulator to regulate non-regulated assets may significantly
change the economics of our utilities operations.

DBCT is subject to a review of its respective access and pricing arrangements on a periodic basis.

Access undertaking for DBCT

Coal
handling services at DBCT are a declared service under the Queensland Competition Authority Act 1997, or the QCA Act. As such, access to DBCT is regulated by the Queensland
Competition Authority, or QCA. The current access arrangements under the QCA Act have been extended until December 31, 2010. The terms of access arrangements which will be in effect for five

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years
thereafter are not yet finalized. Any new access arrangements may result in material changes to the revenue or profitability of DBCT.

Inclusion of Non Expansionary Capital Expenditure Stage 7 expansion costs in regulated asset base, or RAB.

Phase 1
of Stage 7 expansion of DBCT was commissioned in March 2008. Consequently, DBCT has received revenue since April 2008 on the basis of an Annual
Allowance Revenue, or AAR, determined on estimated construction costs accepted by the QCA. Following commissioning of the Phase 1 of
Stage 7 expansion, DBCT has been finalizing the calculation of the actual costs of the expansion and submitted this to the QCA on 1 October 2009 as part of a Draft Amending Access
Undertaking, or DAAU. The QCA subsequently approved these actual costs on 10 December 2009 at which time they were added to the Regulated Asset Base, or RAB. As a result of the actual
expansion costs being greater than the estimated costs, we have been informed that DBCT's management expects a positive retrospective AAR adjustment of A$4.7 million for the period from the
commissioning date to the forecast acceptance of the DAAU containing the final costs. Furthermore, DBCT is undertaking a program of Non Expansionary Capital Expenditure works, or NECAP Expenditures,
which has been approved by the users of the terminal, the cost of which is also anticipated to be included into the RAB. We have been informed that management of DBCT estimates an increase in RAB for
NECAP Expenditures totaling $21 million. There is a risk that the QCA could deny all or some of DBCT's claims for approval of increases in the RAB relating to NECAP Expenditures, which would
result in a lower than expected value of the RAB moving forward.

Risks Relating to Our Fee for Service Operations

Clients of our fee for service operations may default on their obligations under the relevant contractual
arrangements.

Our
fee for service operations have a broad portfolio of clients, including some of the world's largest mining companies, however should any of our clients experience financial problems
it may have a significant impact on their creditworthiness. We cannot provide assurance that one or more of these clients will not default on their obligations to us or that such a default or defaults
will not have a material adverse effect on our fee for service operations, financial position, future results of operations, or future cash flows. Furthermore, the bankruptcy of one or more of our
clients, 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 results of
operations and financial condition.

Our fee for service operations are regulated and may be exposed to increased regulation as a result of heightened concerns regarding national
security.

Our
fee for service operations involve ongoing commitments to economic regulators, safety regulators and other governmental agencies. This is due to the essential nature of the services
provided by our fee for service operations and the fact that the services are usually provided on a monopoly or near monopoly basis. The nature of these commitments exposes us to a higher level of
regulatory control than typically imposed on other businesses.

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, with a view towards enhancing national security, can affect our fee for service operations or a project substantially. This may also be due to court decisions and actions of government
agencies that affect our fee for service 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

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money
to improve security, reliability or quality of service. In addition, a decision by a government or regulator to regulate non-regulated assets may significantly change the economics
of our fee for service operations.

WestNet Rail may not be able to extend track access agreements and may be exposed to significant liabilities.

WestNet
Rail owns a network of rail infrastructure which comprises 5,100 km of rail. Approximately 45% of the network (2,200 km), or the Grain Lines, is narrow gauge track,
used primarily for the transport of grain. Although it is 45% of the track by length, the Grain Lines only carry about 10% of the total weight transported on WestNet Rail's network (5.7 million
tons per annum, of a total of 52.7 million tons). The Western Australia State government is considering the replacement of some of the sleepers on the WestNet Rail Grain Lines and the closure
of some uneconomic lines. Based on approvals to date, Prime estimates that it has outstanding obligations to re-sleeper one line in the grain network at a cost of A$16.5 million. In
the absence of final State government approval, Prime expects to be in a position where it cannot extend track access agreements for the grain rail network leading to the surrender of the grain rail
network to the Western Australian State government. Prime estimates that it has outstanding obligations to re-sleeper one line in the grain network at a cost of between A$10 million
and A$20 million. Until this matter is finalized, it may be difficult for WestNet Rail to secure the consent of its lenders to extend the term of the existing debt facilities. If the consent
cannot be obtained, a debt maturity of A$619 million for WestNet Rail will occur in June 2011. In addition, in the event of line closures, WestNet Rail may become subject to significant
liabilities to third parties.

NGPL's transportation and storage rates are subject to a rate review by the Federal Energy Regulatory Commission.

The
rates that NGPL charges its customers for the transportation and storage of natural gas in the United States is regulated by the Federal Energy Regulatory Commission, or FERC.
FERC provides a regulated framework for shippers and transmission pipeline owners to reach commercial agreement without direct intervention under a maximum rate regime and there is no periodic rate
case obligation. A customer of NGPL or FERC itself can initiate a rate review of NGPL's rates if they deem them to be unreasonable. In November 2009, FERC announced a review of
rates charged by NGPL and two other natural gas pipeline companies. On April 23, 2010, our partnership announced that a settlement in principle was reached between it and FERC. The settlement
in principle is supported or not opposed
by all active participants in the proceeding. The settlement terms remain confidential, subject to documentation and, following agreement of documentation, subject to approval of the Administrative
Law Judge and the FERC commissioners before the settlement becomes final and binding. The terms of the settlement, if so approved, would resolve all issues set for hearing by the Commission. We
believe the FERC proceeding will likely be resolved in the next twelve months, however, at this time we cannot be certain that the settlement will be finalized nor estimate the impact if such event
does not occur. Kinder Morgan Inc., or KMI, reported in its March 31, 2010 Form 10Q, that it recognized an impairment charge on the carrying value of its 20% investment in NGPL as a
result of the proposed settlement with FERC announced on April 23, 2010. The impairment charge is based on certain assumptions made by KMI, including the expected impact on annual pre-interest,
after-tax cash flows at NGPL over the next several years. Based on the staged implementation of the proposed reductions in various service charges, these cash flows were lower than KMI's previous
expectations for NGPL by approximately $25 million, increasing to $70 million upon full implementation (on a 100% basis).

Brookfield
Infrastructure has an approximate 11% interest in NGPL, through its 40% interest in Prime.

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PD Ports has defined benefit pensions schemes that may be under funded, and PD Ports may have liability associated with the Pilots National Pension Fund which
provides benefits for pilots that work at PD Ports on a contract basis.

PD
Ports records a liability associated with its pension plans equal to the excess of the benefit obligation over the fair value of the plan assets. The amount of such contributions will
be dependent upon a number of factors, principally the actual earnings and changes in values of plan assets and, changes in interest rates. The Pilot's National Pension Fund, or PNPF, which provides
benefits for pilots that work at PD Ports on a contract basis is substantially under-funded. The Trustee of the PNPF Scheme applied to the High Court of the UK, or the Court, in order to seek
directions from the Court as to PD Ports' liability under both the rules of the PNPF Scheme and in law to make up the PNPF Scheme's deficit. The matter has been heard but the Court has not yet
rendered its decision. As this case is extremely complex, it is not possible to state with certainty what the outcome is likely to be and, therefore, what financial effect, if any, there may be on PD
Ports or us.

Risks Relating to Our Timber Operations

The financial performance of our timber operations may be affected by economic recessions
or downturns.

The
vast majority of the products from our timber operations are sensitive to macro-economic conditions in North America and Japan and are thus susceptible to economic recessions or
downturns in these markets. Decreases in the level of residential construction, repair and remodeling activity generally reduce demand for logs and wood products, resulting in lower revenues, profits
and cash flows for lumber mills who are important customers to our timber operations. Depressed commodity prices in lumber, pulp or paper may also cause mill operators to temporarily or permanently
shut down their mills if their product prices fall to a level where mill operation would be uneconomic. Moreover, these operators may be required to temporarily suspend operations at one or more of
their mills to bring production in line with market demand or in response to market irregularities. Any of these circumstances could significantly reduce the prices that we realize for our timber as
well as the volume of our timber that we may be able to sell. In addition to impacting our timber operations' sales, cash flows and earnings, weakness in the market prices of timber products will also
have an effect on our ability to attract additional capital, the cost of that capital and the value of our timberland assets. 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 cashflow of our timber operations.

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 will vary depending on the protected species 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.

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Our timber operations operate in a highly competitive industry, subject to price fluctuations.

Timberland
companies operate in a highly competitive business environment in which companies compete, to a large degree, on the basis of price and also on the basis of service and
ability to provide a steady supply of products over the long-term. The prime competitors to our timber operations are governments, other large forestland owners and small private
forestland owners. 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 labor; 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.

Our Canadian timber operations are subject to federal restrictions which may require them to decrease their planned export of logs.

Currently,
logs from most private timberlands in Canada are not subject to provincial export regulations, but are subject to federal export regulations. As a result, all export logs must
be advertised for local consumption and may be exported only if there is a surplus of domestic supply as indicated by the absence of fair market value offers (based on current domestic prices) from
domestic lumber mills. Accordingly, an increase in domestic demand could result in our Canadian timber operations being required to decrease their planned export of logs. The provincial government in
British Columbia is currently reviewing its log export policy, and may recommend that the federal government impose a policy that may further restrict the export of logs from private lands in British
Columbia. As export market pricing is generally at a premium to the domestic market pricing, any reduction in log exports could have an adverse effect on our Canadian timber operations.

Risks Relating to Prime

Prime's statutory and proportional leverage ratios will deteriorate if Australian Energy Transmission &
Distribution and Cross Sound Cable are no longer classified as assets held for sale.

Prime's
pro forma financial information presented in the short form prospectus dated October 30, 2009 reflects the classification of Prime Australian Energy
Transmission & Distribution, or AET&D, and Cross Sound Cable, or CSC, as assets held for sale under A-IFRS on the basis that it is highly probable (and Prime's directors
expressed their intention) that these assets will be disposed of within the next 12 months. In the event that the AET&D and CSC assets cannot be classified as assets
held for sale or a disposal does not occur, the assets and liabilities and financial performance of these assets will be required to be included in the statutory financial statements of Prime. A
change in classification will result in an increase in Prime's statutory and proportional debt position and a deterioration in Prime's statutory and proportional leverage ratios. Prime's proportionate
leverage at June 30, 2009 would increase from 68% to 76% on a pro forma basis if AET&D and CSC were not treated as held for sale.

Prime may not be able to refinance its debt or may be exposed to interest rate risk.

The
proceeds of Prime's offering of A$1.5 billion of new securities and sale of PD Ports and DBCT in November 2009 was used to repay and restructure its outstanding
corporate debt, increase liquidity, remove material near-term debt maturities and assist in establishing a sustainable capital structure. There is a risk that Prime will not be able to
refinance its entire corporate debt and its assets when due, and Prime's financial condition and business may be materially and adversely affected as a result. In addition, Prime's future financings
may be exposed to interest rate risk. If interest rates

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increase,
an increased proportion of Prime's distributable cash may be required to service its indebtedness.

Prime's ownership in Euroports may be increased or diluted based on the future financial performance of Euroports.

As
part of the partial sale of Euroports to Antin and Arcus by Prime in 2009, a share equalization scheme has been devised which would potentially see Prime's ownership in Euroports
changed. Further ownership of the investors will be determined based on the financial performance of Euroports relative to the original financial projections furnished by Prime to Antin and Arcus.
Financial performance will be measured as at June 30, 2012 and June 30, 2013. Prime's ownership in Euroports may, therefore, increase to a maximum of 66% or decrease to a minimum
of 35%.

Prime is currently in dispute with the Australian Tax Office, or the ATO, relating to certain payments made in relation to the long-term lease
of DBCT.

Prime
is currently in dispute with the ATO regarding the deductibility of certain payments made in relation to the long-term lease of DBCT. The ATO has issued amended
assessments to Prime for the years ended June 30, 2002 through to June 30, 2007. The amended assessments are for primary tax of A$101.9 million plus interest of
A$43.4 million (calculated to June 30, 2009). (Prime has deposited 50% of the primary tax and interest in order to mitigate interest accruing on disputed liability). Based on the
projected tax loss of Prime's tax consolidated group, no additional primary tax
payable would arise in respect of Prime's fiscal 2008 and fiscal 2009 if the ATO's position were upheld. If the ATO's position is upheld, however, there will be an adjustment payable by Prime to
Brookfield and us under the terms of the notes through which Brookfield and we hold our interest in DBCT, by reference to: (a) any amount payable to the ATO by a DBCT entity, and (b) the
net present value of the net loss in tax benefits otherwise available to DBCT, as a result of the decision. The tax benefits projected to be available to DBCT in the future are A$40.7 million
as at July 1, 2009. Prime and DBCT Management Pty Ltd have commenced proceedings in the Federal Court of Australia challenging the amended assessments. The outcome of the above
proceedings may also cause a price adjustment in respect of the price paid by Brookfield and by us.

Prime has been assessed by the Offices of State Revenue, or OSR.

Prime
was issued with assessment notice in the amount of approximately A$71 million in respect of the acquisition in 2006 of the ARG group, which was subsequently restructured
into separate "below rail" (WestNet Rail, 100% owned by Prime) and "above rail" (ARG, 100% owned by Queensland Rail) businesses. Prime disagrees with the assessment and intends to vigorously contest
it. The duty payable is a factor of subjective market valuations, and Prime has contractual rights to recover a percentage of assessed amounts from other transaction participants. If every transaction
that the OSR were reviewing were assessed and Prime were unable to successfully challenge the amendment, Prime has estimated that it would be liable for up to A$91 million (A$51 million
after contractual recovery from other transaction participants).

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 Brookfield Infrastructure, the general partner of which is controlled by Brookfield. As our partnership's only substantial asset is
the limited partnership interests that it holds in Brookfield Infrastructure, our partnership does not have a right to participate directly in

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

Our
partnership and Brookfield Infrastructure 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 Brookfield Infrastructure 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:



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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 financial condition and results of operations may suffer.

Brookfield may increase its ownership of our partnership and Brookfield Infrastructure relative to other unitholders.

Brookfield
holds approximately 41% of the issued and outstanding interests in Brookfield Infrastructure through a 1% general partnership interest and a 40% 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 40% of our issued and outstanding units. See Item 10.B "Memorandum and Articles of AssociationDescription of Brookfield Infrastructure's Limited Partnership
AgreementRedemption-Exchange Mechanism." Brookfield also acquired 0.2% of our units in connection with the satisfaction of Canadian federal and U.S. "backup" withholding tax
requirements upon the spin-off. Brookfield may also acquire additional units of Brookfield Infrastructure pursuant to an equity commitment provided by Brookfield. See Item 7.B
"Related Party TransactionsEquity Commitment and Other Financing." Infrastructure GP LP may also reinvest incentive distributions in exchange for units of Brookfield
Infrastructure. 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 Brookfield Infrastructure in Brookfield Infrastructure's distribution reinvestment plan, with the

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result
that Brookfield will receive additional units of Brookfield Infrastructure. Additional units of Brookfield Infrastructure acquired, directly or 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 Brookfield Infrastructure'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 Brookfield Infrastructure
above 50%.

Brookfield does not owe our unitholders any fiduciary duties under the Master Services Agreement or our other arrangements with
Brookfield.

The
obligations of Brookfield under the Master Services Agreement and our other arrangements with them are contractual rather than fiduciary in nature. As a result, our Managing General
Partner, which is an affiliate of Brookfield, in its capacity as our partnership's general partner, has sole authority and discretion to enforce the terms of such agreements and to consent to any
waiver, modification or amendment of their provisions.

Our
limited partnership agreement and Brookfield Infrastructure'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 such conflicts of interest arise. These modifications may be important to our unitholders because they restrict the remedies available for
actions that might otherwise constitute a breach of fiduciary duty and permit our Managing General Partner and the Infrastructure General Partner to take into account the interests of third parties,
including Brookfield, when resolving conflicts of interest. See Item 7.B "Related Party TransactionsConflicts of Interest and Fiduciary Duties." It is possible that conflicts of
interest 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 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."

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.

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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 following or declining to follow its advice or recommendations. In addition, under our
limited partnership agreement, the liability of the 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

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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; 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; 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.

Risks Relating to Taxation

General

Changes in tax law and practice may have a material adverse effect on our operations 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 such company or entity, as well as the net amount of
distributions payable to our unitholders. Taxes and other constraints that would be applicable to us in such jurisdictions may not be applicable 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.

There
is currently proposed legislation in the U.S. Congress (H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, or the Act), which, if enacted in its current
form and determined to be applicable to our partnership could have adverse consequences, including (a) the (i) re-characterization of capital gain income as "ordinary
income", (ii) potential for interest income subject to the portfolio interest exception to be reclassified as "ordinary income" and subjected to U.S. withholding tax and
(iii) potential for qualified dividend income to be reclassified as "ordinary income" and subjected to a higher rate of U.S. income tax, and (b) significant 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. Based upon the current structure and investments of our
partnership, it is not anticipated that issues (a)(i) and (a)(ii), above (to which the Act is generally intended to apply for income recognized after December 31, 2010), would have an
immediate or material impact to our unitholders. Further, the provisions relating to issue (b), above, as currently drafted do not apply for ten (10) years. However, at this time it is unclear
when or whether such proposed legislation will

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ultimately
become law, and whether the legislation as enacted would be problematic for our partnership. Our Managing General Partner does not believe that the drafters of the proposed legislation
intended that it would be applied to our partnership and are hopeful that if the legislation is enacted the legislative history will provide an exception to the application of the legislation to our
partnership. See discussion under Item 10.E "TaxationCertain Material U.S. Federal Income Tax ConsiderationsPartnership Status of our partnership and Brookfield
Infrastructure".In view of the potential significance of any such U.S. federal income tax law changes and the fact that there are likely to be ongoing developments in
this area, you should consult your own tax advisor as to the potential effects the proposed legislation might have on an investment in our partnership.

Additionally,
under recently enacted U.S. legislation, certain payments of U.S. source income made after December 31, 2012, (including payments attributable to
dispositions of property which produced (or could produce) certain U.S. source income) made to us or by us to or through non-U.S. financial institutions or
non-U.S. entities, could be subject to a 30% withholding tax unless (a) the non-U.S. financial institution enters into an agreement with the IRS to provide
to the IRS information concerning its direct and certain indirect U.S. account holders, or (b) in the case of other non-U.S. entities, such entity provides to the
withholding agent similar information concerning its substantial U.S. beneficial owners. These rules do not apply with respect to payments from obligations that are outstanding as of
March 18, 2012.You should consult your own tax advisors as to the potential effects the recently enacted legislation might have on an investment in our
partnership.

Our partnership's ability to make distributions depends on us receiving sufficient cash distributions from our 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.

We
are subject to local taxes in each of the relevant territories and jurisdictions (such as Canada, the United States, the United Kingdom, Australia and Chile) in which we
have operations, including taxes on
our income, profits or gains and withholding taxes. As a result, our partnership's cash available for distribution is reduced by such taxes and the post-tax return to investors is
similarly reduced by such taxes. We intend that future acquisitions be assessed on a case-by-case basis and, where possible and commercially viable, structured so as to
minimize any adverse tax consequences for us as a result of making such acquisitions.

Each
of our unitholders will be required to include in their income its allocable share of our partnership's items of income, gain, loss, deduction and credit (including, so long as it
is treated as a partnership for tax purposes, our partnership's allocable share of those items of Brookfield Infrastructure) for each of our taxable years ending with or within such unitholder's
taxable year. See Item 10.E "Taxation." With respect to each of our unitholders, the cash distributed to a unitholder may not be sufficient to fund the payment of the full amount of such
unitholder's tax liability in respect of its investment in our partnership because such unitholder's tax liability is dependent on their particular tax situation and we will make simplifying tax
assumptions in determining the amount of the distribution. In addition, the actual amount and timing of distributions will always be subject to the discretion of our Managing General Partner's board
of directors and we cannot assure our unitholders that our partnership will in fact make cash distributions as intended. See Item 8.A "Consolidated Statements and Other Financial Information."
Even if our partnership is unable to distribute cash in an amount that is sufficient to fund our unitholders tax liabilities, each of our unitholders will still be required to pay income taxes on
their share of our partnership's taxable income.

Our unitholders may be subject to taxes and tax filing obligations in jurisdictions in which they are not resident for tax purposes or are not otherwise subject
to tax.

Because
of our unitholders' holdings in our partnership, our unitholders may be subject to taxes and tax return filing obligations in jurisdictions other than the jurisdiction in which
they are a resident for tax purposes or are not otherwise subject to tax. Although we will attempt, to the extent reasonably

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practicable,
to structure our operations and investments so as to minimize income tax filing obligations by our unitholders in such jurisdictions, there may be circumstances in which we are unable to
do so. Income or gains from our holdings may be subject to withholding or other taxes in jurisdictions outside our unitholders' jurisdiction of residence for tax purposes or in which they are not
otherwise subject to tax. If any of our unitholders wish to claim the benefit of an applicable income tax treaty, such unitholders may be required to submit information to our partnership and/or the
tax authorities in such jurisdictions.

Our unitholders may be exposed to transfer pricing risks.

To
the extent that our partnership, Brookfield Infrastructure, 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.

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 are comparable to the fees or other amounts that would be agreed to in an arm's length arrangement. Our Managing General Partner and the
Infrastructure General Partner therefore do not anticipate that the amounts of income (or loss) allocated to our unitholders will be adjusted. 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 (most likely, an expense) that is relevant to the computation
of the income of Brookfield Infrastructure 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 may 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. Our Managing General Partner and the Infrastructure General Partner advise that satisfactory contemporaneous documentation for these purposes has been and will be
prepared in respect of all transactions or arrangements with Brookfield, and in particular with respect to the Master Services Agreement. Accordingly, our Managing General Partner and the
Infrastructure General Partner do not anticipate that the amounts of income (or loss) allocated to our unitholders for tax purposes will be required to be adjusted or that our unitholders, our
partnership, or Brookfield Infrastructure will be subject to transfer pricing penalties described above. However, no assurance can be given in this regard.

A non-U.S. person who holds more than 5% of our units may be subject to special rules under the U.S. Foreign Investment in Real Property
Tax Act of 1980, which may have a material adverse effect on the return to such person from an investment in our units.

A
non-U.S. person who holds more than 5% of our units may be subject to special rules under the U.S. Foreign Investment in Real Property Tax Act of 1980,
or FIRPTA. For purposes of determining whether a non-U.S. person holds more than 5% of our units, special attribution rules apply. Where a non-U.S. person who
holds (or is deemed to hold) more than 5% of our units disposes of units at a time when our partnership is a U.S. Real Property Holding Corporation, or USRPHC, (which determination
includes a five year look back period) any gain will be subject to U.S. taxation at 35%, and such non-U.S. person will have a U.S. tax return filing obligation. Our
Managing General Partner does not believe that our partnership is currently, or has been, a USRPHC. Our partnership is not

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under
any obligation to avoid becoming a USRPHC or to notify unitholders in the event that our Managing General Partner determines it becomes a USRPHC. If any unitholder is a
non-U.S. person and owns or anticipates owning more than 5% of our units, such person should consult their tax advisors. The application of the FIRPTA rules to a
non-U.S. person who holds (or is deemed to hold) more than 5% of our units would result in such non-U.S. person being liable for FIRPTA tax if such
non-U.S. person disposes of our units at a time when we are a USRPHC or have at any time been a USRPHC within the shorter of such non-U.S. person's holding period
or five years preceding the disposition.

United States

If either our partnership or Brookfield Infrastructure were to be treated as a corporation for
U.S. federal income tax purposes, the value of our units may be adversely affected.

The
value of our units to unitholders will depend in part on our partnership and Brookfield Infrastructure being treated as partnerships for U.S. federal income tax purposes.
However, in order for our partnership to be considered 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 of 1986, as amended, or the U.S. Internal Revenue Code, and the partnership
must not be required to register, if it were a U.S. corporation, as an investment company under the U.S. Investment Company Act and related rules. Although our Managing General Partner
and the Infrastructure General Partner intend to manage our affairs so that our partnership would 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. (See, for example, the discussion of pending legislation, H.R. 4213, under Item 10.E "TaxationCertain Material
U.S. Federal Income Tax ConsiderationsPartnership Status of our partnership and Brookfield Infrastructure" below). If our partnership were treated as a corporation for
U.S. federal income tax purposes, (i) the deemed conversion to corporate status would generally result in recognition of gain (but not loss) to U.S. Holders (as such
term is defined in Item 10.E "TaxationCertain Material U.S. Federal Income Tax Considerations"); (ii) our partnership would likely be subject to U.S. corporate
income tax and branch profits tax with respect to income, if any, that is effectively connected to a U.S. trade or business; (iii) distributions to our U.S. Holders would be
taxable as dividends to the extent of our partnership's earnings and profits; (iv) dividends, interest, and certain other passive income our partnership receives from U.S. entities
would, in most instances, be subject to U.S. withholding tax at a rate of 30% (although certain non-U.S. Holders (as such term is defined in Item 10.E
"TaxationCertain Material U.S. Federal Income Tax Considerations") nevertheless may 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; (v) the "portfolio interest" exemption would not apply to interest income of our partnership derived
from entities bearing certain relationships to our partnership (although certain non-U.S. Holders nevertheless may be entitled to certain treaty benefits in respect of their
allocable share of such income); and (vi) our partnership could be classified as a "passive foreign investment company" (as defined in the U.S. Internal Revenue Code), and such
classification would have adverse tax consequences to U.S. Holders with respect to distributions and gain recognized on the sale of our units. 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 corporate status, the value of our partnership's
U.S. assets equaled or exceeded 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 Infrastructure General Partner do not expect that our partnership's U.S. assets will at any time equal or exceed such
thresholds. If Brookfield Infrastructure

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were
to be treated as a corporation for U.S. federal income tax purposes, consequences similar to those described above would apply.

Neither
our partnership nor Brookfield Infrastructure has requested, nor do they plan to request, a ruling from the Internal Revenue Service, or IRS, on their tax status for
U.S. federal income tax purposes or as to any other matter affecting us.

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 IRS or other applicable state and local taxing authorities do not accept our withholding methodology, and such excess withholding tax cost will be an expense borne by our partnership,
and, therefore, all of our unitholders on a pro rata basis.

We
may become subject to U.S. "backup" withholding tax at the applicable rate (currently 28%) or other U.S. withholding taxes (potentially as high as 30%) with respect to
any U.S. or non-U.S. Holder who fails to timely provide our partnership (or the 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 applicable state and local taxing authorities. See "Certain Material
U.S. Federal Income Tax ConsiderationsAdministrative MattersBackup and Other Administrative Withholding Issues". Accordingly, it is important that each of our
unitholders timely provides our partnership (or the clearing agent or other intermediary) with an IRS Form W-9 or IRS Form W-8, as applicable. To
the extent that any unitholder fails to timely provide the applicable forms (or such form is not properly completed), or should the IRS or other applicable state and local taxing authorities
not accept our withholding methodology, our partnership may treat such U.S. "backup" withholding taxes or other U.S. withholding taxes as an expense, which will be borne by all
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.

Tax-exempt entities 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 Brookfield
Infrastructure to avoid generating income connected with the conduct of a trade or business (which income would constitute "unrelated business taxable income" to the extent allocated to a
tax-exempt entity). Our partnership and Brookfield Infrastructure are not prohibited from incurring indebtedness, and at times either or both may do so. If any such indebtedness were used
to acquire property by our partnership or by Brookfield Infrastructure, such property generally would constitute "debt-financed property," and any income or gain realized on such
debt-financed property and allocated to a tax-exempt entity generally would constitute "unrelated business taxable income" to such tax-exempt entity. In addition,
even if such indebtedness were not used either by our partnership or by Brookfield Infrastructure to acquire property but were instead used to fund distributions to our unitholders, if a
tax-exempt entity subject to taxation in the U.S. used such proceeds to make an investment outside our partnership, the IRS could assert that such investment constitutes
debt-financed property to such unitholder with the consequences noted above. Our Managing General Partner and the Infrastructure General Partner expect our partnership and Brookfield
Infrastructure to realize some income from debt-financed property.

A
non-U.S. tax-exempt entity generally could be subject to taxation in the U.S. on its U.S. source unrelated business taxable income and on
certain trade or business income that is effectively connected with the conduct of any trade or business of our partnership or Brookfield
Infrastructure in the United States. Our Managing General Partner and the Infrastructure General Partner intend to use commercially reasonable efforts to structure the activities of our
partnership and Brookfield Infrastructure to avoid generating income treated as effectively connected with the conduct of a U.S. trade or business, but do expect our partnership and Brookfield
Infrastructure to realize some U.S. source investment income, which, if debt-financed, would constitute unrelated business taxable income.

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The
potential for having income characterized as unrelated business taxable income could make our units an unsuitable investment for a tax-exempt entity. A
tax-exempt entity should consult its own tax advisor to determine the U.S. federal income tax consequences with respect to an investment in our units.

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

For
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. person (or otherwise taxable
in the United States) generally will be taxed on their share of our partnership's net taxable income. However, U.S. federal income tax law may limit the deductibility of such a
unitholder's share of our partnership's interest expense. In addition, deductions for such a unitholder's share of our partnership's interest expense may be limited or disallowed for U.S. state
and local tax purposes. Therefore, any such unitholders may be taxed on amounts in excess of such unitholder's share of the net income of our partnership. This could adversely impact the value of our
units if our partnership was to incur (either directly or indirectly) 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."

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 believes that our partnership is not engaged in a U.S. trade or business for U.S. federal income tax purposes, and intends to use commercially
reasonable efforts to structure its activities 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. Accordingly our partnership's non-U.S. Holders will generally not
be subject to U.S. federal income tax on interest, dividends and gains derived from non-U.S. sources. It is possible, however, that the IRS could disagree or that the
U.S. federal tax laws and Treasury regulations could change and our partnership could be deemed to be engaged in a U.S. trade or business, which would have a material
adverse effect on non-U.S. Holders. If, contrary to our Managing General Partner's expectations, our partnership is considered to be engaged in a U.S. trade or business or
realizes gain from the sale or other disposition of a United States Real Property Interest, non-U.S. Holders would be required to file U.S. federal income tax
returns and would be subject to U.S. federal income tax at the regular graduated rates, which our partnership may be required to withhold.

To meet U.S. federal income tax and other objectives, our partnership and Brookfield Infrastructure will invest through foreign and domestic 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 Brookfield Infrastructure will invest through foreign and domestic 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 and credit realized in
the first instance by our operating entities will not flow, for U.S. federal income tax purposes, directly to Brookfield Infrastructure, our partnership, or our unitholders, and any such items
may be subject to a corporate income tax, in the United States and other jurisdictions, at the level of the Holding Entities. Any such additional taxes may adversely affect our ability to
operate solely to maximize our cash flow.

Certain of our Holding Entities or operating entities may be, or may be acquired through, an entity classified as a "passive foreign investment company" for
U.S. federal income tax purposes.

U.S. Holders
face unique U.S. tax issues from indirectly owning interests in a "passive foreign investment company", or PFIC, that may result in adverse U.S. tax
consequences to them. Certain of the existing entities are "passive foreign investment companies" based on the analysis of the existing operating entities and Holding Entities. Furthermore, we may in
the future acquire certain investments

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or
operating entities through one or more Holding Entities which may be treated as corporations for U.S. federal income tax purposes, and such future Holding Entities or other companies in
which we acquire an interest may be or become treated as PFICs. Provided a "QEF election" (as discussed in the section "Certain Material U.S. Federal Income Tax
ConsiderationsConsequences to U.S. HoldersPassive Foreign Investment Companies" below) is made and a QEF information return is filed annually by the
U.S. Holder, the PFIC status is not expected to have a material adverse effect on such U.S. Holder. 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. You should
consult your own tax advisors as to the potential effects that this legislation might have on your filing requirements.

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

If
our unitholders sell their units and are taxable in the United States, they will recognize a gain or loss for U.S. federal income tax purposes equal to the difference
between the amount realized and the adjusted tax basis in those units. Prior distributions to our unitholders in excess of the total net taxable income allocated to them, which decreased the tax basis
in their units, will in effect become taxable income to them for U.S. federal income tax purposes if our units are sold at a price greater than their tax basis in those units, even if the price
is less than the original cost. A portion of the amount realized, whether or not representing gain, may be ordinary income to our unitholders.

Our structure involves complex provisions of U.S. federal income tax law for which no clear precedent or authority may be available. Our structure also is
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. Our unitholders should be aware that the U.S. federal 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 adversely affect
the U.S. federal income tax treatment of publicly traded partnerships, including changes that make it more difficult or impossible for our partnership (and Brookfield Infrastructure) to
meet the "qualifying income" exception to be treated as a partnership for U.S. federal income tax purposes that is not taxable as a corporation and changes that reduce the net amount of
distributions available to our unitholders. (See, for example, the discussion of pending legislation, H.R. 4213, under Item 10.E "TaxationCertain Material U.S. Federal
Income Tax ConsiderationsPartnership Status of our partnership and Brookfield Infrastructure" below). Such changes could also affect or cause us to change the way we conduct our
activities, affect the tax considerations of an investment in our partnership, change the character or treatment of portions of our partnership's income (including changes that recharacterize certain
allocations as potentially non-deductible fees) and adversely affect an investment in our units.

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 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.

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The IRS may not agree with certain assumptions and conventions that we use in attempting 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 an attempt to comply with applicable rules and to report income, gain, deduction, loss and credit to our unitholders in
a manner that reflects such unitholders' beneficial ownership of partnership items, taking into account variation in ownership interests during each taxable year because of trading activity. Because
our partnership cannot match transferors and transferees of our units, our partnership will adopt depreciation, amortization and other tax accounting conventions that may not conform to all aspects of
existing Treasury regulations. In order to maintain the fungibility of all of our units at all times, we 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 accounting principles that we believe are reasonable for our partnership. A successful IRS challenge to any of the foregoing assumptions or conventions could adversely affect the amount of tax
benefits available to our unitholders and could require that items of income, gain, deductions, loss or credit, including interest deductions, be adjusted, reallocated or disallowed in a manner that
adversely affects our unitholders. It also could affect the timing of these tax benefits or the amount of gain on the sale of our units and could have a negative impact on the value of our units or
result in audits of and adjustments to our unitholders' tax returns.

Our unitholders may be subject to state, local and non-U.S. taxes and return filing requirements as a result of holding
our units.

Our
unitholders may be subject to 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 either our partnership or Brookfield Infrastructure does business or owns 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 those requirements. It is the responsibility of each of our unitholders to file all U.S. federal, state, local and non-U.S. tax returns that may be required of
such unitholder.

Our partnership may not be able to furnish to each of our unitholders specific tax information within 90 days after the close of each calendar year, in
which case our unitholders who are U.S. taxpayers would want to anticipate the need to file annually a request for an extension of the due date of their income
tax return.

We
expect that we will be providing Schedule K-1s to our unitholders no later than 90 days after the end of our partnership's fiscal year. If for some
reason we are unable to do so, our unitholders who are U.S. taxpayers would want to anticipate the need to file annually with the IRS (and certain states) a request for an extension past
April 15 or the otherwise applicable due date of their income tax return for the taxable year. See Item 10.E "TaxationCertain Material U.S. Federal Income Tax
ConsiderationsAdministrative MattersInformation Returns".

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

Canada

Tax proposals 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 released for public comment tax proposals, or the REOP Proposals, regarding the deductibility of interest and other expenses for
purposes of the Income Tax Act (Canada), or the Tax Act. 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 arising from our unitholders' units 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 Brookfield Infrastructure will, in and of themselves, generate losses. However, investors
may incur expenses in connection with an acquisition of units in our partnership that could result in a loss that would be affected by the REOP Proposals. The REOP Proposals have been the subject of a
number of submissions to the Minister of Finance (Canada). As part of the 2005 federal budget, the Minister of Finance (Canada) 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 it 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 non-Canadian subsidiaries in which Brookfield Infrastructure directly invests earn income that is foreign accrual property income 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-Canadian subsidiaries in which Brookfield Infrastructure will directly invest are expected to be "controlled foreign affiliates", as defined in the
Tax Act, of Brookfield Infrastructure. If any of such non-Canadian subsidiaries earns income that is "foreign accrual property income", or FAPI, as defined in the Tax Act, in
a taxation year, Brookfield Infrastructure's proportionate share of such FAPI must be included in computing the income of Brookfield Infrastructure for Canadian federal income tax purposes for the
fiscal period of Brookfield Infrastructure in which the taxation year of such controlled foreign affiliate that earned the FAPI ends, whether or not Brookfield Infrastructure actually receives a
distribution of such income. Our partnership will include its share of such FAPI of

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Brookfield
Infrastructure 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 even though they have not and may not
receive an actual cash distribution of such amount.

Unitholders may be required to include imputed amounts in their income in accordance with existing section 94.1 of the Tax Act as proposed to be
amended under tax proposals announced on March 4, 2010, if, having regard to all the circumstances, it is reasonable to conclude that one of the main reasons for the unitholder acquiring or
holding units of our partnership is to derive a benefit from portfolio investments in such a manner that taxes under the Tax Act on income, profits and gains for any year are significantly less
than they would have been if such income, profits and gains had been earned directly the unitholder.

On
March 4, 2010, the Minister of Finance (Canada) 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. The Minister of Finance (Canada) also indicated that legislation to implement the revised tax proposals will be released for
public consultation. Existing section 94.1 of the Tax Act contains rules relating to investments in non-resident entities that could in certain circumstances cause income to
be imputed to unitholders, either directly or by way of allocation of such income imputed to our partnership or to Brookfield Infrastructure. These rules would apply if it is reasonable to conclude,
having regard to all the circumstances, that one of the main reasons for the unitholder, our partnership or Brookfield Infrastructure acquiring or holding an investment in a non-resident
entity is to derive a benefit from portfolio investments in such a manner that taxes under the Tax Act on income, profits and gains 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, 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. If, having regard to the particular circumstances, it is reasonable to
conclude that one of the main reasons for the acquisition or holding of our units by the unitholder, of units of Brookfield Infrastructure by our partnership, or of interests in
non-resident entities (other than a controlled foreign affiliate) by Brookfield Infrastructure, is as stated above, income will be imputed directly to the unitholder or to our partnership
or Brookfield Infrastructure and allocated to the unitholder in accordance with the rules in the Tax Act. However, the precise nature of the revised tax proposals is uncertain as proposed
legislation to implement them is not yet available. There can be no assurance that the revised tax proposals will be enacted as proposed or at all. The rules in section 94.1 of the
Tax Act are complex and unitholders should consult their own tax advisors regarding the application these rules, including the revised tax proposals, to them in their particular circumstances.

Unitholders who are not resident in Canada may be subject to Canadian federal income tax with respect to any Canadian source business income earned by our
partnership or Brookfield Infrastructure if our partnership or Brookfield Infrastructure were considered to carry on business in Canada.

If
our partnership or Brookfield Infrastructure were considered to carry on a business in Canada for purposes of the Tax Act, unitholders who are not resident in Canada or deemed
to be resident in Canada for purposes of the Tax Act, or 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 harbour rule in section 115.2 of the Tax Act and any relief
that may be provided by any relevant income tax treaty or convention.

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Our
Managing General Partner and the Infrastructure General Partner intend to manage the affairs of our partnership and Brookfield Infrastructure, 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 Brookfield Infrastructure 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, or CRA, might contend successfully that either or both of our partnership and Brookfield Infrastructure carries on business in Canada for purposes of the Tax Act.

If
our partnership or Brookfield Infrastructure 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 of the taxation years in which they were 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 Brookfield Infrastructure
on dispositions of "taxable Canadian property".

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 Brookfield
Infrastructure on the disposition of "taxable Canadian property" as defined in the Tax Act (which, subject to the proposed amendments to the definition of "taxable Canadian property" announced
in the 2010 Canadian Federal Budget and contained in Bill C-9 which received second reading in the House of Commons on April 19, 2010, includes, but is not limited to,
property that is used or held in a business carried on in Canada, shares of corporations resident in Canada that are not listed on a designated stock exchange, and listed shares where the number of
shares owned exceeds prescribed amounts) other than "treaty protected property" as defined in the Tax Act. Property of our partnership and Brookfield Infrastructure 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 advise that our partnership and Brookfield Infrastructure are not expected 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 Brookfield Infrastructure unless the disposition is an "excluded disposition" for the purposes 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 that is
an "excluded disposition" 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 a tax treaty. 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) is 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

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to
file a Canadian federal income tax return in respect of a disposition of taxable Canadian property by our partnership or Brookfield Infrastructure.

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, the units are taxable Canadian property, unless the units are treaty-protected property to such non-Canadian limited partner. In general, subject to
the proposed amendments to the definition of "taxable Canadian property" announced in the 2010 Canadian Federal Budget, our units will be taxable Canadian property at the time of disposition or deemed
disposition if, at any time within the 60-month period ending at the time of disposition or deemed disposition, the fair market value of all of the properties of our partnership that were
taxable Canadian property, certain types of resource properties, income interests in trusts resident
in Canada or interests in or options in respect thereof, was greater than 50% of the fair market value of all of its properties. Since our partnership's assets will consist principally of units of
Brookfield Infrastructure, our units would generally be taxable Canadian property if the units of Brookfield Infrastructure held by us were considered to be used or held by us in a business carried on
in Canada or if applying the greater than 50% test to Brookfield Infrastructure, its units were taxable Canadian property at any time during the relevant 60-month period. Under the tax
proposals announced by the Minister of Finance (Canada) on March 4, 2010 as part of the 2010 Canadian Federal Budget, the definition of "taxable Canadian property" will be amended such that our
units will not be taxable Canadian property at the time of a disposition or deemed disposition unless, at any time during the 60-month period preceding the disposition, more than 50% of
the fair market value of our units was derived, directly or indirectly, from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource
properties, (iii) timber resource properties, and (iv) options in respect of or interests or civil law rights in such property. Similarly, under these proposed amendment, units of
Brookfield Infrastructure will not be taxable Canadian property at any time unless, at any time during the 60-month period preceding that time, more than 50% of the fair market value of
its units was derived, directly or indirectly, from property described in (i) to (iv). Legislation to implement these proposed amendments is contained in Bill C-9 which
received second reading in the House of Commons on April 19, 2010. Units of our partnership will be treaty protected property if the gain on the disposition of the units is exempt from tax
under the Tax Act under the terms of an applicable income tax treaty or convention. Our Managing General Partner advises that our units are not expected to be taxable Canadian property but no
assurance can be given in this regard. See Item 10.E "TaxationCertain Material Canadian Federal Income Tax ConsiderationsTaxation of Non-Canadian Limited
Partners." 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.

Non-Canadian limited partners may be subject to Canadian federal 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 Brookfield Infrastructure), are obligated to comply with the procedures set out in section 116 of the Tax Act and obtain a certificate thereunder. 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

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Managing
General Partner advises that our units are not expected to be taxable Canadian property and our Managing General Partner and the Infrastructure General Partner advise that our partnership and
Brookfield Infrastructure are not expected 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 Brookfield Infrastructure 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 Brookfield Infrastructure will be deemed to be a non-resident person in respect of certain amounts 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 by a person resident or deemed to be resident
in Canada to Brookfield Infrastructure 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 Brookfield Infrastructure, we expect the Holding Entities to look-through Brookfield Infrastructure 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 Brookfield Infrastructure. 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 Canadian-United States Tax Convention (1980), or the
Canada-U.S. Tax Treaty, a Canadian resident payer may be required to look-through fiscally transparent partnerships such as our partnership and Brookfield Infrastructure
to the residency of limited partners of our partnership who are entitled to relief under that treaty and take into account reduced rates of Canadian federal withholding tax that such limited partners
may be entitled to under that treaty.

While
we expect the Holding Entities to look-through our partnership and Brookfield Infrastructure in determining the rate of Canadian federal withholding tax applicable to
amounts paid by the Holding Entities to Brookfield Infrastructure, 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 apply to some or all of our unitholders. In such a case, the Holding Entities will withhold Canadian federal
withholding tax from all payments made to Brookfield Infrastructure 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. See Item 10.E "TaxationCertain Material Canadian Federal Income Tax
Considerations" for further detail. Investors should consult their own tax advisors concerning all aspects of Canadian federal withholding taxes.

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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 under the Tax Act (which includes the TSX and the NYSE), our units will be "qualified investments" under the
Tax Act for a trust governed by a registered retirement saving plan, deferred profit sharing plan, registered retirement income fund, registered education saving plan, registered disability
saving plan, and a tax-free savings account. There can also 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 registered plans and certain other taxpayers and with respect to the acquisition or holding of prohibited investments by a
tax-free savings account.

Our
units will not be a "prohibited investment" (within the meaning of the Tax Act) for a tax-free savings account, provided that the holder of such account deals at
arm's length with our partnership for purposes of the Tax Act and does not have a "significant interest" (within the meaning of the Tax Act) in our partnership or in a corporation,
partnership or trust with which our partnership does not deal at arm's length for purposes of the Tax Act.

The Canadian federal income tax consequences to our unitholders could be materially different in certain respects from those described in this
Form 20-F if our partnership or Brookfield Infrastructure is a "specified investment flow-through" partnership.

Under
the rules in the Tax Act, or the SIFT Rules, that apply to "specified Investment flow-through" partnership, or SIFT Partnership, certain income and gains earned
by a SIFT Partnership, will be subject to income tax at a rate similar to a corporation and allocations of such income and gains to its partners will be 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 SIFT Rules (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 (other than an "excluded subsidiary entity" as defined in the SIFT Rules), 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 SIFT
Partnership holds of entities affiliated 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 federal corporate tax rate", plus an amount on account of provincial tax.

Under
the SIFT Rules, our partnership and Brookfield Infrastructure could each be a SIFT Partnership if it is a "Canadian resident partnership". However, Brookfield Infrastructure would
not be a SIFT Partnership if our partnership is a SIFT Partnership regardless of whether Brookfield Infrastructure is a Canadian resident partnership. Our partnership and Brookfield Infrastructure
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 advise that they 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 and Brookfield Infrastructure at any relevant time. However, no assurance can be given in this regard. If our partnership or Brookfield Infrastructure are SIFT
Partnerships under the SIFT Rules, the Canadian 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, even if the SIFT Rules do not apply to our partnership or to Brookfield Infrastructure at any relevant
time, 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.

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ITEM 4.    INFORMATION ON THE COMPANY

4.A    HISTORY AND DEVELOPMENT OF OUR PARTNERSHIP

Our partnership, Brookfield Infrastructure Partners L.P., is a Bermuda exempted limited partnership that was established on
May 21, 2007 under the provisions of the Exempted Partnership Act, 1992 of Bermuda and the Limited Partnership Act, 1883 of Bermuda. Our
registered office is Canon's Court, 22 Victoria Street, Hamilton HM 12, Bermuda. Our head office is 7 Reid Street, 4th Floor, Hamilton HM 11, Bermuda and our telephone number at
that address is +1 441 296-4480. Our partnership and its related entities were established by Brookfield Asset Management to own and operate certain
infrastructure assets on a global basis. We focus on 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 consists of the ownership and operation of utilities businesses, fee for service
businesses and timber assets in North and South America, Australasia and Europe. Our vision is to be a leading owner and operator of high quality infrastructure assets that produce an attractive
risk-adjusted total return for our unitholders. To accomplish this objective, we will seek to leverage Brookfield's best-in-class operating platforms to invest in
targeted assets and actively mange 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 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 and actively managing underlying assets to improve performance. Our Manager is an affiliate of Brookfield. Our sole
material asset is a 59% limited partnership interest in Brookfield Infrastructure, a limited partnership through which we indirectly hold all of our current operations. Brookfield holds the remaining
41% interest in Brookfield Infrastructure through a 1% general partnership interest and a 40% limited partnership interest. Brookfield's 1% general partnership interest in Brookfield Infrastructure
also entitles it to receive incentive distributions from Brookfield Infrastructure. The economic interests in Brookfield Infrastructure noted above do not reflect the exercise of the equity commitment
referred to in this Form 20-F or interests to be acquired under Brookfield Infrastructure's distribution reinvestment plan.

Brookfield
acquired the following interests in our utilities and timber operations prior to the spin-off: (i) a 100% interest in Great Lakes Power
Transmission L.P., or Ontario Transmission, our Ontario transmission operations, in 1982; (ii) a 50% interest in Island Timberlands, our Canadian timber operations, in May 2005;
(iii) a 27.8% interest in Transelec Chile S.A., or Transelec, our Chilean transmission operations, in June 2006; (iv) 7%-18% interests in Transmissoras
Brasileiras de Energia, referred to as TBE, a group of five related transmission investments in Brazil, in 2006; and (v) a 100% interest in Longview, our U.S. timber operations, on
April 20, 2007. Upon completion of the spin-off and certain follow-on transactions, Brookfield transferred to us certain interests in these assets. Brookfield retained
an interest in each of Transelec, Island Timberlands and Longview, and therefore our ownership interests in these operations is different than Brookfield's ownership interests.

Our
Chilean transmission operations were acquired by Brookfield on June 30, 2006 from Hydro Quebec International Inc. and International Finance Corporation by a consortium
of buyers led by Brookfield. As part of the stock purchase agreement between the parties, the buyers agreed to pay a purchase price adjustment of $160 million that was determined on
April 4, 2008 following the final resolution of the 2006 transmission rate proceeding. In conjunction with our disproportionate funding of this purchase price adjustment, our ownership in
Transelec increased to 17.8% from 10.7% at the time of the spin-off.

On
November 4, 2008, we invested $102.8 million directly and indirectly (through the Brookfield Global Timber Fund) into Longview to maintain our interest at the 30% level.
The proceeds were used

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to
partially fund the add-on acquisition of a 67,661 acre tree farm in Washington State for $163 million and repay Longview's outstanding bridge loan whose principal amount
was approximately $250 million.

On
December 5, 2008, we completed the acquisition of Brookfield Multiplex's interest in two social infrastructure Public Private Partnerships, or PPP, the Peterborough Hospital in
the United Kingdom and the Long Bay Forensic and Prison Hospitals in Australia for a total investment of approximately $12.3 million. On February 3, 2009, we completed the
acquisition of Brookfield Multiplex's interest in an additional PPP Project, the Royal Melbourne Showgrounds in Australia for an investment of approximately $3.0 million.

In
January 2009, Brookfield and its partner Isolux, through their joint venture company Wind Energy Texas Transmission, or WETT, were awarded the right to build
$500 million of transmissions lines in Texas to facilitate the delivery of wind power to population centers as part of the Texas Competitive Renewable Energy Zones, or CREZ, program. We
anticipate commercial operation of the project in the beginning of 2013, at which time WETT will be a licensed transmission utility in the state. In the third quarter of 2009, Brookfield contributed
its interest in WETT to a Brookfield sponsored infrastructure partnership in which we own an interest. We anticipate that our ownership will ultimately be approximately 15% of this project.

On
June 30, 2009, we completed the sale of our minority interest in TBE for after-tax proceeds of $275 million, including proceeds from foreign exchange
currency hedges. The sale resulted in the recognition of a $68.2 million after-tax gain over book value. A portion of the proceeds was used to repay corporate borrowings in full,
with the balance available to fund growth capital investments and acquisitions, as well as for general working capital purposes.

On
November 20, 2009, we invested $941.0 million to acquire a 40% interest in Prime Infrastructure (formerly Babcock & Brown Infrastructure), or the BBI Transaction,
and direct interests in two assets from Prime. The first direct investment is in UK-based BBI Port Acquisitions (UK) Limited, or PD Ports, a "landlord" port which is the third-largest by
tonnage in the UK. The second direct investment is in Australia-based Dalrymple Bay Coal Terminal, or DBCT, the largest coal export terminal in the world. Our interests in Natural Gas Pipeline Company
of America, or NGPL, Powerco Limited, or Powerco, International Energy Group, or IEG, Tasmanian Gas Network, or TGN, WestNet Rail Holdings No. 1 Pty Ltd., or WestNet Rail, and
Euroports Holdings S.à.r.l., or Euroports, are held through Prime. In total, our investment in Prime was part of a comprehensive recapitalization in which Prime raised over
$1.6 billion from our partnership, Brookfield and other investors to repay debt. Our partnership invested approximately $940 million of the total investment to acquire a 40% interest in
Prime and 60% interest in two direct investments acquired from BBI, while Brookfield and other co-investors have acquired the remaining 40% interest in the two direct investments.
Following the recapitalization, Prime's proportional debt leverage decreased from 98% to approximately 68%.

Our
participation in the BBI Transaction was financed in part by a public offering of 40,669,411 of our units at a price of C$15.55 per unit that closed in November, 2009. The net
proceeds of the public offering, inclusive of the exercise of the underwriters' over-allotment option, were approximately C$601 million. We funded the balance of our
$940 million investment in the BBI Transaction through the issuance of Redeemable Partnership Units and general partner units of Brookfield Infrastructure to Brookfield at a price of
approximately $13.71 per unit, representing the price of our units issued under the public offering net of underwriting commissions payable by the Partnership, or the Brookfield Investment. Our
unitholders, other than Brookfield, were asked to consider the Brookfield Investment at a special meeting of our unitholders on November 16, 2009. Upon receipt of minority unitholder approval
Brookfield Infrastructure issued Redeemable Partnership Units and general partner units of Brookfield Infrastructure to Brookfield which allowed it to maintain its 41% interest in Brookfield
Infrastructure.

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On
December 31, 2009, the Brookfield sponsored infrastructure partnership, through which a portion of our interest in PD Ports is held, admitted a new limited partner resulting in
the reduction of our ownership interest in this asset. In conjunction with the transaction, we received $9.5 million, representing the original cost of the investment plus a notional interest
charge.

On
January 28, 2010, the Brookfield sponsored infrastructure partnership, through which a portion of our interests in DBCT and PD Ports is held, admitted a new limited partner
resulting in the reduction in our ownership interest in these assets. In addition, we sold a 1.4% interest in DBCT to the new limited partner. In conjunction with the transaction, we received proceeds
of $21.5 million, representing the original cost of these investments plus a notional interest charge. As a result, our interests in DBCT and PD Ports were reduced to 46% and 51%, respectively.
If the Brookfield sponsored infrastructure partnership is successful in reaching its funding target range, we would receive additional proceeds of approximately $14.6 million and our interests
in DBCT and PD Ports would be reduced to approximately 44% and 48%, respectively.

4.B    BUSINESS OVERVIEW

Our Partnership

Our partnership and its related entities own and operate certain infrastructure assets on a global basis. We focus on 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 principally of the ownership and operation of utilities, fee for service, timber and social infrastructure operations, but we intend to
seek acquisition opportunities in other sectors with similar attributes and in which we can deploy our operations oriented approach to create value. Our Manager is an affiliate of Brookfield.

Our
partnership's sole material asset is its 59% limited partnership interest in Brookfield Infrastructure. Brookfield owns the remaining 41% of Brookfield Infrastructure, which through
the Redemption-Exchange Mechanism can be converted into an equivalent interest in our partnership.

Our
operating platforms are summarized below:

Operating Platform

Asset Type

LocationUtilitiesRegulated and contractual return on capital employedEnergy

Gas and electricity transmission

North & South America,Australasia and EuropeTransportation

Coal terminal

AustralasiaFee for serviceAccess fees for the transportation, storage and handling of energy, freight and bulk commoditiesEnergy

Natural gas pipelines

North America and AustralasiaTransportation

Sea ports and railroads

Australasia and EuropeTimberProvide essential products on a sustainable basisTimber

Timberlands

North America


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Current Operations

Utilities

Overview

Our utilities operations are comprised of regulated businesses which earn a regulated return as well as businesses with long term
contracts designed to generate a return over the life of the contract. In this segment of our business, we own and operate assets that earn an allowed return on a regulated or notionally stipulated
asset base. 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 operations, we mitigate exposure to any single regulatory regime. Accordingly, we expect this segment to produce consistent
revenue and margins that should increase with investment of additional capital and inflation. Virtually 100% of our utility operations' EBITDA is supported by regulated or contractual revenues.

Our
objectives for this segment are to operate open access systems that provide safe and reliable service for our customers and to invest capital in expansions of our systems in order to
meet our customers' growth requirements. If we do so, we will put ourselves in a position to earn an appropriate return.

Our
current utilities assets located in Australia, Chile, New Zealand, Europe, and Canada, are held directly, through consortiums and through our interest in Prime. Our interests
in Powerco and IEG Connections, as well as a portion of our interest in DBCT, are held directly by Prime.

Operations



DBCT is a port facility which exports metallurgical and thermal coal mined in the Bowen Basin region of Queensland, Australia which is
one of the lowest cost sources of coal in the world. DBCT is one of the world's largest coal terminals, accounting for 8% of the total global seaborne coal exports and 20% of global metallurgical
seaborne coal exports. The following table sets forth the significant characteristics of DBCT:

Ownership:

Our partnership's effective ownership is 46.0%, owned through our partnership's interest in Prime and direct ownership of convertible notes.Strategic Position:

The Bowen Basin is one of the lowest cost and most prolific series of coal deposits in the world; there are few options to access export markets for this coal other than through DBCT. With completion
of its recent Stage 7 expansion, DBCT has a capacity of 85 million tons per annum, or Mtpa.Regulatory Environment:

DBCT is regulated by the Queensland Competition Authority, or QCA. The current rate agreement expires on December 31, 2010 and DBCT is applying for a five year extension.Customer Base:

DBCT has long term take-or-pay contracts with some of the world's largest mining companies that operate in the Bowen Basin.


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Cash Flow Profile:

DBCT's revenues under its long term take-or-pay contracts are made up of two components: a capacity charge that is allocated to users based on the percentage of total DBCT capacity for which they contract
and a fixed and variable handling charge associated with operating and maintaining the port. The capacity charge is determined every five years by the QCA utilizing a return on regulated asset base methodology, and the handling charge (both fixed and
variable) is structured to be a complete pass through of the costs charged for operating and maintaining DBCT. Capacity is currently 100% contracted through 2014.Growth Opportunities:

Already one of the world's largest coal export terminals, DBCT's capacity has recently been expanded to 85 Mtpa to meet ongoing customer demand. Potential exists to expand DBCT's operations to
facilitate future expansions by mining companies in the Bowen Basin, which is one of the lowest cost sources of coal in the world.




Transelec is the largest electricity transmission system in Chile, with approximately 8,200 km of transmission lines that serve
98% of the population of the country. Transelec's system includes 100% of Chile's 500 kV transmission lines, the highest voltage lines in the country, and approximately 45% and 95% of the
220 kV and 154 kV lines in Chile, respectively. The following table sets forth the significant characteristics of Transelec:

Ownership:

Our partnership's effective ownership is 17.8%.Strategic Position:

Transelec is the backbone transmission system in Chile that serves 98% of the population of the country. Electricity transmission assets provide the critical link for transmission of electricity from
generators to consumers of electricity. As the reliable supply of electricity is integral to economic growth, Transelec is an important element to Chile's continued economic growth.Regulatory Environment:

Chile has a long tradition of transparent, stable regulatory frameworks. Regulated revenues are determined every four years based on a 10% annuity return on replacement cost of the existing
transmission system plus annual payments that provide for recovery of operational, maintenance and administrative costs. Between rate reviews, both revenue components are adjusted by a multi-component inflation factor. Since the regulated assets earn
a 10% annuity return on replacement cost, we effectively earn a real pre-tax 10% return on our regulated asset base. For the transmission sector, the 10% return is imbedded in Chilean law and is not subject to periodic regulatory review.Customer Base:

Approximately 60% of Transelec's revenues are derived from a number of long-term transmission contracts, primarily with power generators. These contracts have a pricing framework that is similar to
the regulatory framework. The largest of these contracts expires in 2016. Following the expiration of these contracts, a majority of this contracted revenue will convert to the regulatory framework.


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Cash Flow Profile:

Due to the regulatory framework and contracts, combined with the essential nature of the service, Transelec has a very secure competitive position. Transelec generates stable revenue with no material
volume risk, and in most instances, has many automatic inflation escalators. Since the Chilean regulatory and contractual frameworks are based on replacement cost, Transelec is not required to invest at its level of depreciation to prevent a decline
in revenue. Since the system is in very good physical condition, maintenance capital expenditures are at relatively low levels. As a result of high profit margins combined with low maintenance capital expenditures, Transelec generates strong cash
flow.Growth Opportunities:

Chile has economic generation that is many miles away from customers. Upgrades and expansions of the electricity transmission system will be required to connect this economic generation to load
centers to satisfy increased electricity demand resulting from economic growth. Transelec is in the second year of a five year plan to invest approximately $1 billion in growth capital expenditures. As at December 31, 2009, Transelec's
capital expenditure backlog (projects that have been awarded to Transelec for which expenditures have not yet been made) was approximately $215 million.




Ontario Transmission's assets consist of approximately 550 km of 44 kV to 230 kV transmission lines in the
province of Ontario. The following table sets forth the significant characteristics of Ontario Transmission:

Ownership:

Our partnership's effective ownership is 100.0%.Strategic Position:

Ontario Transmission's lines comprise an important component of Ontario's transmission system that connects generators in Northern Ontario to electricity demand in Southern Ontario.Regulatory Environment:

Ontario Transmission's revenues are 100% regulated under a historical cost of service regime. Transmission revenues are based on periodic rate cases in which the Ontario Energy Board, or the OEB,
determines allowed revenue that provides for recovery of operations maintenance, and financing costs plus an after-tax return on equity.Customer Base:

Ontario Transmission has a broad customer base. Furthermore, transmission revenues in Ontario are assessed and collected on a province-wide basis, mitigating volume and credit risk.


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Cash Flow Profile:

Based on the 2005 rate review under the previous regulatory framework, Ontario Transmission was allowed to earn a 8.61% return on the equity, which is deemed to be 45% of our rate base. In Ontario,
regulated rate base is equal to the historic cost of the system 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. Due to the regulatory framework combined with the essential nature of the service, Ontario Transmission has a secure competitive position and generates a stable cash
flow. Ontario Transmission is currently in the 2010 rate review process with the OEB.Growth Opportunities:

Ontario has adopted a very aggressive Renewable Portfolio Standard through the passage of the Green Energy Act. A cornerstone of the 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. Ontario has economic generation that is many miles away from customers.
Upgrades and expansions of the electricity transmission system will be required to connect this economic generation to load centers to satisfy increased electricity demand resulting from economic growth. As an incumbent utility, Ontario Transmission
has an advantage in competing for these projects. As an incumbent utility, Ontario Transmission has identified projects where, due to their geographic location and size, there are definitive and unique advantages for building and owning these new
lines.




Powerco is New Zealand's second largest provider of regulated electricity and gas distribution services, with over
410,000 connections across a service area of 39,000 km2 on the North Island of New Zealand. Powerco's business represents approximately 40% of the gas connections
and approximately 16% of the electricity connections throughout New Zealand. The following table sets forth the significant characteristics of Powerco:

Ownership:

Our partnership's effective ownership is 16.8%.Strategic Position:

Powerco owns and operates New Zealand's second largest electricity and gas distribution company with connections to over 410,000 users. It accounts for approximately 40% of the gas and
approximately 16% of the electricity connections throughout New Zealand.


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Regulatory Environment:

Powerco's electricity and gas distribution businesses are subject to regulation in New Zealand. Electricity businesses operate under a price and quality threshold (CPI-X) regime set by the
New Zealand Commerce Commission with the next reset due in April 2010, when X will improve from 2% to 0%. The gas distribution business also operates under price control (CPI-X, where X=0%) with its next reset due in July 2012.
Recently enacted legislation has introduced a purpose statement recognizing the need to provide incentives for service providers to invest in utilities.Customer Base:

Electricity and gas customers are largely residential, generally contracted via retail energy companies.Cash Flow Profile:

Revenue is mainly based on regulated tariffs, with a significant portion being from state owned enterprises. Electricity, which represents 80% of revenue, has grown at a 1.2% compound annual growth
rate over the past five years.Growth Opportunities:

Opportunities for growth are driven by increased energy demand and consumption levels, new connections as a result of new housing developments and regional economic and population growth.




IEG Connections is the second largest independent "last mile" natural gas and electricity connections provider in the UK. IEG
Connections' UK business is a natural gas and electricity connections business servicing approximately 394,000 customers. The following table sets forth the significant characteristics of IEG
Connections:

Ownership:

Our partnership's effective ownership is 39.9% in the International Energy Group.Strategic Position:

IEG Connections is the second largest independent connections business in the UK.Regulatory Environment:

IEG Connections' UK connections business competes with other connections providers to secure contracts to construct new natural gas and electricity connections. Then, once connections are established,
IEG charges the customer a regulated tariff.Customer Base:

IEG Connections' businesses each have a broad, diverse customer base that underpins its cash flow. Customers for the last mile electricity and gas connections business consists mainly the big six UK
energy retailers who serve residential and business users.Cash Flow Profile:

In the UK, installed "last mile" connections businesses charge connection rates that are established based upon the tariff of the distribution utility with which the independent connection provider is
interconnected. During the first 20 years after establishment of a connection, the connection rate is subject to a cap and floor. Thereafter, it fluctuates based upon the applicable distribution company tariff. Due to the average age of its
asset base, IEG Connections' UK business requires minimal maintenance capital expenditures.


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Growth Opportunities:

New connections in gas and electricity as the electricity market opens for independent connections providers and the housing market recovers.


Fee for Service

Overview

Our fee for service businesses are open access systems that provide transportation, storage and handling of energy, freight and bulk
commodities. This segment is comprised of businesses with price floors and ceilings as a result of regulation, such as NGPL and WestNet Rail, as well as unregulated businesses, such as PD Ports and
Euroports. Fee for service businesses typically have high barriers to entry and in many instances have very few substitutes in their local markets. While this segment has greater sensitivity to market
prices and volume than our utilities operations, revenues are generally stable and, in many cases, are supported by long-term contracts or customer relationships. Our fee for service
operations are expected to benefit from increases in demand for commodities as well as increases in the global movement of goods. Furthermore, the diversification within our fee for service
operations mitigates the impact of fluctuations in demand from any particular sector, commodity or customer. Approximately 70% of our fee for service operations' EBITDA is supported by regulated or
contractual revenues.

Our
objectives for this segment are to provide safe and reliable service and meet our customers expansion needs in a capital efficient manner. If we do, we will be able to charge a fair
price for our services and we will be able to earn an attractive return on the capital we invest to increase the capacity of our operations.

Our
current fee for service assets located in the United States, Australia, Europe and China, are held directly, through consortiums and through our interest in Prime. NGPL,
WestNet Rail, Euroports, TGN and IEG Distribution are directly held by Prime.

Operations



NGPL is one of the largest natural gas transmission pipeline and storage systems in the United States. NGPL's
transportation system extends over 15,500 km and delivers approximately 2.2 trillion cubic feet of natural gas per annum. NGPL also has seven major storage facilities with a
combined working gas capacity of 275 billion cubic feet, or BCF. The following table sets forth the significant characteristics of NGPL:

Ownership:

Our partnership's effective ownership is 10.5%.Strategic Position:

NGPL is the largest provider of 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. NGPL is also well connected to other pipelines accessing additional downstream markets, which increase demand for NGPL's services. NGPL provides transportation and storage to approximately 60% of the Chicago and
Northern Indiana markets, and its storage facilities represent approximately 7% of total U.S. natural gas storage capacity.


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The large geographical footprint of NGPL's pipeline system is in close proximity to several of the prolific natural gas supply basins in the U.S. and also provides access to major growing basins including
the Rockies, East Texas, Woodford, Fayetteville, Haynesville as well as LNG supply from the Gulf Coast.Regulatory Environment:

Regulated by the Federal Energy Regulatory Commission, or FERC, under the Natural Gas Act. FERC provides a regulated framework for shippers and transmission pipeline owners to reach commercial
agreement without direct intervention under a maximum rate regime, and there is no periodic rate case obligation. On November 19, 2009, FERC notified NGPL that it has commenced a proceeding pursuant to section 5 of the Natural Gas Act to
review NGPL's rates and determine whether they are just and reasonable.Customer Base:

NGPL has a diverse group of high creditworthy customers composed primarily of investment grade local distribution companies, producers and marketers. Its top ten customers account for over 60% of the
transmission and storage revenues with average contract terms of 3.3 years for transport and 4.1 years for storage customers.Cash Flow Profile:

U.S. gas market fundamentals and the competitive position of NGPL are underpinned by continued demand for NGPL's transmission and storage services. Demand for NGPL's combination of transportation
and storage services has resulted in a strong history of contract renewals.Growth Opportunities:

Geographic proximity to large, emerging natural gas basins provides opportunity to continue extending the pipeline system.




WestNet Rail is a rail infrastructure operator and rail access provider in Western Australia, or WA, with a long-term
arrangement to lease track from the WA government. WestNet Rail leases and operates approximately 5,100 km of track and related infrastructure in Southwestern Australia which serves as a
crucial transport link in the region. The following table sets forth the significant characteristics of WestNet Rail:

Ownership:

Our partnership's effective ownership is 39.9%.Strategic Position:

WestNet Rail is the only rail network in the southwest region of WA providing access to markets for minerals and grain through to the region's six government owned ports.Regulatory Environment:

The Economic Regulatory Authority has established an access regime which governs track segment revenue ceilings, train management, train paths and confidentiality. However, all of WestNet Rail's
customers have negotiated their below-rail access agreements outside of the access regime.


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Customer Base:

WestNet Rail has access agreements with strong blue-chip customers, including a long-term agreement with Queensland Rail. WestNet Rail's top nine customers contribute 90% of its revenue with contract
expiration dates ranging from 2009 to 2016. The majority of customers are leading commodity companies whose WA mining operations are among the lowest cost in the world.Cash Flow Profile:

WestNet Rail's revenue is derived from access charges paid by rail operators or directly by underlying customers. Stability of revenue is underpinned by rail transport being a small yet essential
component of the overall cost of the commodities transported, the critical nature of the minerals and grain industries to the WA economy and long-term contracts with customers to ensure adequate access to the rail network including some take-or-pay
arrangements.Growth Opportunities:

The WestNet Rail system is well positioned to benefit from general increased economic activity in WA. It will also benefit from a number of mine expansions and new projects under development, which
will require access to the system in order to transport these commodities to export markets.




PD Ports is the third largest port operator in the UK by volume, with over 2,000 acres of land, mainly operating as the
statutory harbour authority, or SHA, out of Teesport and Hartlepool in the north of the UK. PD Ports also operates a number of other ports and logistics businesses elsewhere in the UK. PD Ports' asset
base also includes an extensive property base. The following table sets forth the significant characteristics of PD Ports:

Ownership:

Our partnership's effective ownership is 51.0%.Strategic Position:

Teesport is a large deep-water port strategically located in a well developed industrial area. PD Ports' landlord or SHA status and good rail and road access provide barriers to entry.Regulatory Environment:

PD Ports' operations are unregulated with SHA status for the Tees River, which gives the statutory right to collect conservancy tariffs (toll-like dues) payable by ships using the Tees
River.Customer Base:

PD Ports has a number of long term contracts with strong, established counterparties, including large multinational corporations. The majority of its revenues are derived from customers with
significant investment at or within close proximity to Teesport.Cash Flow Profile:

Over 50% of PD Ports' income is earned from conservancy tariffs related to the movement of cargo by established customers using the Tees River. Teesport's freehold land base of 1,558 acres is
strategically located in the vicinity of its port locations which provide additional stability to cash flow through income from long-term property leases.


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Growth Opportunities:

PD Ports is well positioned for container business growth given significant recent and planned investment by large UK retailers to establish regional distribution centers at Teesport and the significant
amount of strategic land available to develop revenues from new tenants.




Euroports owns a portfolio of seven port concession businesses in key strategic locations throughout Europe and in China. Euroports is
a diversified port operator, handling heavy dry bulk, specialty dry bulk, liquid bulk, general cargo and containers. Euroports is one of the largest port operators in Europe and handles over
50 Mtpa of cargo. The following table sets forth the significant characteristics of Euroports:

Ownership:

Our partnership's effective ownership is 23.9%.Strategic Position:

Port operations are positioned in 16 locations across continental Europe and consist of 485 hectares of long term port concessions and over 31 km of quay length. Euroports has extensive
infrastructure in place including cranes, berths, warehouses, inloading and outloading equipment and provides extensive logistics services to its customers, creating barriers to entry.Regulatory Environment:

Euroports operates in an unregulated economic environment.Customer Base:

Euroports mainly serves industrial customers in the immediate vicinity of the ports under varied contract terms. Key customers have been long-term customers of the respective port businesses
continuously for between 10 and 30 years.Cash Flow Profile:

Income is earned from diversified operations with over 50 different types of products handled at 18 terminals located throughout seven countries in Europe. Several of these locations face
limited competition for key products handled, which provides additional stability to cash flow.Growth Opportunities:

Growth opportunities exist in the form of volume growth from increasing demand for bulk and general commodities as well as cross-selling opportunities to develop additional commercial activities with
existing customers.




TGN is the natural gas distributor in Tasmania, supplying gas to residential, commercial and industrial customers via its distribution
networks. With approximately 730 km of distribution pipeline, it delivers around 2 billion cubic feet of gas per annum to approximately 6,500 connections across Tasmania.
The following table sets forth the significant characteristics of TGN:

Ownership:

Our partnership's effective ownership is 39.9%.Strategic Position:

TGN's distribution network is the sole provider of gas distribution services in Tasmania. Sizeable capital expenditures of approximately A$200 million have been incurred to establish this network,
 which creates a significant barrier to new entrants due to the limited market opportunity for customers to support a competing business.


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Regulatory Environment:

There is no economic regulation in Tasmania.Customer Base:

TGN receives revenue from natural gas retailers who supply gas to approximately 6,500 residential, commercial and industrial customers connected to the network.Cash Flow Profile:

TGN's cash flow stream is supported by the low cost of gas compared to electricity for residential customers while the investment made by industrial consumers to connect to natural gas creates a
disincentive to switch.Growth Opportunities:

The natural gas market in Tasmania is relatively new. The network currently fronts approximately 43,000 households with approximately 6,500 connections to date. Commercial and industrial
growth is linked to the Tasmanian economy and alternate energy options including cogeneration opportunities.




IEG Distribution is the sole gas distributor of liquid petroleum gas, or LPG, and natural gas in the Channel Islands and Isle of
Man, or the Offshore Islands. IEG Distribution's business on the Offshore Islands consist of an unregulated natural gas and LPG distribution and supply business. The following table sets forth
the significant characteristics of IEG Distribution:

Ownership:

Our partnership's effective ownership is 39.9% in the International Energy Group.Strategic Position:

IEG Distribution is the sole provider of gas distribution services on the Offshore Islands.Regulatory Environment:

IEG Distribution's assets in the Offshore Islands are not regulated but are subject to government oversight.Customer Base:

The natural gas and LPG distribution customer base on the Offshore Islands is comprised of a large number of commercial and residential end users.Cash Flow Profile:

IEG Distribution's broad customer base and position as sole provider of natural gas and LPG service ensure a consistent cash flow stream in a market that requires these services to meet heating
demands.Growth Opportunities:

Increased energy demand consumption combined with the ability to set prices competitively provides the opportunity for growth in revenues for the business.


Timber

Overview

Our timber operations currently consist of high quality timberlands located in the coastal region of British Columbia, Canada and the
Pacific Northwest region of the United States. These operations are predominantly comprised of premium species and are expected to provide attractive risk adjusted returns on capital employed
over the long-term.

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Operations



Longview owns approximately 651,000 acres of freehold timberlands in Oregon and Washington with an estimated merchantable
inventory of 23.7 million m3 of timber, primarily comprised of high value Douglas-fir and hemlock with a long-run sustainable yield of 2.6 million
m3. The following table sets forth the significant characteristics of Longview:

Ownership:

Our partnership's effective ownership is 30.0%.Strategic Position:

Timber is a vital component of the global economy. Longview's timberlands are primarily comprised of softwood such as Douglas-fir and hemlock that are generally preferred over hardwood for
construction lumber and plywood because of its strength and flexibility. Due to its product mix as well as coastal access, its timberlands have significant flexibility to optimize the products that it harvests against market opportunities to enhance
profitability.Regulatory Environment:

Longview operates in an unregulated economic environment.Customer Base:

Longview has a broad customer base.Cash Flow Profile:

Timber can either be harvested and sold in attractive price environments or "warehoused" for later harvest if and when prices recover. This ability to preserve the value of the timber allows
timberland owners to maximize the long-term value of timberlands by matching harvest opportunities to market conditions. Furthermore, this ability to warehouse timber has historically moderated timber supply and pricing, resulting in the volatility
of timber prices being less than the volatility of prices for finished forest products such as oriented strand board, framing lumber, pulp, newsprint and fine papers.Growth Opportunities:

We believe operating results will meaningfully improve following recovery in new home construction in the U.S. Although it is difficult to predict the timing and magnitude, we believe that we
will achieve increased earnings due to improved pricing and increased harvest levels. As a result of a substantial surplus of merchantable inventory, we expect to increase harvest levels by approximately 85% (relative to 2009 levels) and sustain this
level for a 10-year period before returning to the long-run sustainable yield level.




Island Timberlands owns approximately 634,000 acres of freehold timberlands located principally on Vancouver Island with an
estimated merchantable inventory of 58.0 million m3 of timber, that is primarily comprised of high value Douglas-fir, hemlock
and cedar and with a long-run sustainable yield of 1.8 million m3. Island Timberlands also owns approximately 33,000 acres of "higher and better use", or HBU,
lands, which are properties that we believe will have greater value if used for a purpose other than as timberlands, such as real estate development or conservation. The following table sets forth the
significant characteristics of Island Timberlands:

Ownership:

Our partnership's effective ownership is 37.5%.


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Strategic Position:

Timber is a vital component of the global economy. Island Timberlands' trees are primarily comprised of high-value softwood species such as Douglas-fir and hemlock that are generally preferred over
hardwood for appearance grade products and construction lumber and plywood because of their strength and flexibility. Due to its product mix as well as coastal access, its timberlands have significant flexibility to optimize the products that it
harvests against market opportunities to enhance profitability.Regulatory Environment:

Island Timberlands operates in an unregulated economic environment.Customer Base:

Island Timberlands has a broad base of domestic and international customers.Cash Flow Profile:

Timber's unique operating framework provides it with the flexibility to match its harvest levels to market conditions at that time. Thus, during periods of high prices, harvest levels are increased
and, conversely, during weak pricing environments, timber harvests are curtailed. This ability to preserve the value of the timber allows timberland owners to maximize the long-term value of timberlands by matching harvest opportunities to market
conditions. Furthermore, this ability to warehouse timber has historically moderated timber supply and pricing, resulting in the volatility of timber prices being less than the volatility of prices for finished forest products such as oriented strand
board, framing lumber, pulp, newsprint and fine papers.Growth Opportunities:

We believe operating results will meaningfully improve following a recovery in new home construction in the U.S. Although it is difficult to predict the timing and magnitude, we believe that we
will achieve increased earnings due to improved pricing and increased harvest levels. As a result of a substantial surplus of merchantable inventory, we expect to increase harvest levels by approximately 65% (relative to 2009 levels) and sustain this
level for a 10-year period before returning to the long-run sustainable yield level.


Social Infrastructure

We have an interest in three social infrastructure assets which are PPPs, namely a 50% interest in Long Bay Forensic and Prison
Hospitals located in Sydney, Australia
comprised of a 135-bed forensic hospital, 85-bed prison hospital and administration building; a 30% interest in Peterborough Hospital located in Peterborough,
United Kingdom comprised of a 612-bed acute hospital, 102-bed mental health unit and an integrated care center; and a 50% interest in Royal Melbourne Showgrounds located
in Melbourne, Australia consisting of a special purpose exhibition facility on a 19-hectare site comprising office complexes, open air arenas and large scale tension structures.

Brookfield's Operations-Oriented Approach

To execute our vision, we will seek to leverage our relationship with Brookfield. In each of its core sectors, Brookfield's strategy is
to develop best-in-class operating platforms in order to acquire targeted

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assets
and actively manage them to achieve superior returns on a long-term basis. Brookfield's operations-oriented approach is comprised of the following
attributes:



Acquisition Strategy

As we grow our asset base, we will target acquisitions in the following infrastructure sectors:



We
will seek to leverage Brookfield's best-in-class operating platforms to invest in targeted assets and actively manage them to extract additional value
following acquisition close. 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 arrangements 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 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. Brookfield also recently appointed an affiliate as its
exclusive vehicle for the acquisition of contracted hydro and wind power generation facilities located in Canada.

About Brookfield

Brookfield is a global asset management company focused on property, power and other infrastructure assets with approximately
$100 billion of assets under management and approximately 15,000 employees, including approximately 400 investment professionals, worldwide. Brookfield's strategy, which is part
of our strategy as well, is to combine best-in-class operating platforms and best-in-class transaction execution capabilities to acquire and invest in
targeted assets and actively manage them in order to achieve superior returns.

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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".

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 and the Brookfield logo. Brookfield may terminate the licensing agreement immediately upon termination of our Master Services Agreement and it may be terminated in the circumstances
described under Item 7.B "Related Party TransactionsLicensing Agreement".

Properties

Our partnership's principal office is at 7 Reid Street, 4th Floor, Hamilton HM 11, Bermuda and its registered office is
Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda. Our partnership does not directly own any real property.

Governmental, Legal and Arbitration Proceedings

Our partnership may be named as a party in various claims and legal proceedings which arise in the ordinary course of business. Our
partnership has not been in the previous 12 months and is not currently subject to any material governmental, legal or arbitration proceedings which may have or have had a significant impact on
our partnership's financial position or profitability nor is our partnership aware of such proceedings that are pending or threatened.

4.C    ORGANIZATIONAL STRUCTURE

Organizational Charts

The chart below presents a simplified 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

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below
and the information included under Item 4.B "Business Overview," Item 6.C "Board Practices" and Item 7.B "Related Party Transactions."

LOGO

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Our Partnership

Our partnership, Brookfield Infrastructure Partners L.P., is a Bermuda exempted limited partnership that was established on
May 21, 2007. Our partnership's head office is 7 Reid Street, 4th Floor, Hamilton HM 11, Bermuda, and our registered office is Canon's Court, 22 Victoria Street, Hamilton
HM 12, Bermuda. Our partnership and its related entities own and operate certain infrastructure assets on a global basis.

Our
partnership's sole material asset is its approximate 59% limited partnership interest in Brookfield Infrastructure. Our partnership anticipates that the only distributions that it
will receive in respect of our partnership's limited partnership interests in Brookfield Infrastructure 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 which is not required to make such distributions and our partnership cannot assure you that it will make such distributions
as intended.

Our 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. Because our partnership's only interest in Brookfield Infrastructure consists of limited partnership interests in
Brookfield Infrastructure, which by law do not
entitle the holders thereof to participate in partnership decisions, our Managing General Partner's directors are not entitled to participate in the management or activities of Brookfield
Infrastructure or the Holding Entities, including with respect to any acquisition decisions that they may make.

Brookfield Infrastructure and Holding Entities

Our partnership indirectly holds its interests in operating entities through the Holding Entities. Brookfield Infrastructure owns all
of the common shares of the Holding Entities. Brookfield has provided an aggregate of $20 million of working capital to the 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 Brookfield Infrastructure and has sole authority for the
management and control of Brookfield Infrastructure. The general partner of Infrastructure GP LP is the Infrastructure General Partner, a corporation owned indirectly by Brookfield Asset
Management. Infrastructure GP LP is entitled to receive incentive distributions from Brookfield Infrastructure as a result of its ownership of the general partnership interests of
Brookfield Infrastructure. See Item 7.B "Related Party TransactionsIncentive Distributions."

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See
also the information contained in this 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 Brookfield
Infrastructure's Limited Partnership Agreement" and Item 7.A "Major Shareholders."

4.D    PROPERTY, PLANTS AND EQUIPMENT

Our partnership's principal office is at 7 Reid Street, 4th Floor, Hamilton HM 11, Bermuda and its registered office is
Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda. Our partnership does not directly own any real property.

See
also the information contained in this Form 20-F under Item 3.D "Risk FactorsRisks Relating to Our Operations and the Infrastructure Industry",
"Risks Relating to Our Utilities OperationsOur utilities operations may require substantial capital expenditures in the future," "Our utilities operations may
engage in development projects which may expose us to various risks associated with construction," "Risk Relating to Our Fee for Service operationsChanges in government
regulation could adversely affect economic returns and cash flows," "WestNet Rail may not be able to extend track access agreement," "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 4A.    UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS

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

INTRODUCTION

This management's discussion and analysis, or MD&A should be read in conjunction with the remainder of the information contained in
this Form 20-F. Additional information is available on the Partnership's website at www.brookfieldinfrastructure.com, on the website of the Securities and Exchange Commission at
www.sec.gov and through our SEDAR profile at www.sedar.com

Business Overview

Brookfield Infrastructure Partners L.P., or our Partnership, through its related entities, 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 and other characteristics, tend to
appreciate in value over time. Our current operations consist of utility businesses, fee for service businesses and timber assets in North and South America, Australasia, and Europe. Our vision is to
be a leading owner and operator of high quality infrastructure assets that produce an attractive risk-adjusted total return for our unitholders. To accomplish this objective, we will seek
to leverage Brookfield Asset Management Inc's, or Brookfield, best-in-class operating platforms to acquire targeted 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 will focus on consortiums and partnerships where Brookfield has sufficient influence or control to deploy an operations-oriented approach.

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Performance Targets and Key Measures

Our objective is to earn a total return of 12% to 15% per annum on the infrastructure assets that we acquire, including our current
operations, when measured over the long-term. This return will be generated from the in-place cash flows of our current operations plus growth. We endeavor to manage our
operations to generate increasing adjusted net operating income, or ANOI, per unit over time. If we are successful in doing so, we will be able to increase distributions to unitholders. Additionally,
the increase in our ANOI per unit should result in capital appreciation. We also measure the growth of ANOI per unit. We have performance measures for each of our operating platforms that track the
key value drivers of each one of these segments. See "Operating Platforms" for more detail.

With
respect to our distribution policy, our objective is to pay a distribution that is sustainable on a long-term basis while retaining within our operations sufficient
liquidity for growth capital expenditures and general purposes. We currently believe that a payout of 60% to 70% of our ANOI is appropriate. In light of the per unit ANOI growth that we foresee in our
operations, we are targeting 3% to 7% annual distribution growth.

Basis of Presentation

Our Partnership's sole material asset is its 59% limited partnership interest in Brookfield Infrastructure L.P., or Brookfield
Infrastructure, which is accounted for using the
equity method. As a result, we believe the financial statements of Brookfield Infrastructure are more relevant than our Partnership's because they present the financial position and results of our
underlying operations in greater detail. Brookfield and its affiliates own the remaining 41% of Brookfield Infrastructure, which, through the Redemption-Exchange Mechanism can be converted into an
equivalent interest in the Partnership. See Item 10.B "Memorandum and Articles of AssociationDescription of Brookfield Infrastructure's Limited Partnership
AgreementRedemption-Exchange Mechanism" for more information.

The
results presented in this MD&A reflect the financial position and results of Brookfield Infrastructure's operations for the three years ended December 31, 2009.

For
each of its operationsutilities, fee for service and timberthis MD&A discusses Brookfield Infrastructure's proportionate share of results for its
consolidated operations and equity accounted investments in order to demonstrate the impact of key value drivers of each of these segments on Brookfield Infrastructure's overall performance.

All
figures are provided in U.S. dollars, unless otherwise noted.

OUR OPERATIONS

Our business is comprised of high quality, long-life assets that provide essential products and services for the global
economy. We have a stable cash flow profile with approximately three quarters of our EBITDA supported by regulated or contractual revenues. While each of our businesses have high barriers to entry and
strong competitive positions, we generate cashflows under a number of different revenue frameworks. As a result, we group these businesses into operating platforms based on the similarities in their
underlying economic drivers to assist our unitholders in evaluating their performance and assessing their value.

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Our
operating platforms are summarized below:

Operating Platform

Asset Type

LocationUtilitiesRegulated and contractual return on capital employedEnergy

Gas and electricity transmission

North & South America,Australasia and EuropeTransportation

Coal terminal

AustralasiaFee for serviceAccess fees for the transportation, storage and handling of energy, freight and bulk commoditiesEnergy

Natural gas pipelines

North America and AustralasiaTransportation

Sea ports and railroads

Australasia and EuropeTimberProvide essential products on a sustainable basisTimber

Timberlands

North America


Our
utilities operations are comprised of regulated businesses which earn a return on their asset base as well as businesses with long-term contracts designed to generate a
return on capital over the life of the contract. Our fee for service operations provides transportation, storage and handling services for energy, freight and bulk commodities for which we are paid an
access fee. Profitability is based on the price and volume achieved for the provision of these services. Our timber operations are comprised of timberlands that provide essential products for the
global economy on a sustainable basis.

ACQUISITIONS AND DIVESTITURES

On November 20, 2009, we invested $941.0 million to acquire a 40% interest in Prime Infrastructure, or Prime, and direct
interests in two assets from Prime: DBCT and PD Ports. The acquisition was funded with the proceeds from an approximate $940 million issuance of partnership units and redeemable partnership
units. See "Partnership Capital" for further information regarding the issuance of units.

Our
investment in Prime was part of a comprehensive recapitalization in which Prime raised over $1.6 billion from Brookfield Infrastructure, Brookfield, and other investors to
repay debt. Following the recapitalization, Prime's proportional debt leverage decreased from 98% to approximately 68%.

The
following table outlines sources and uses of cash for our participation in the recapitalization of Prime:

As at November 202009Cash

$
941.0Comprised of:Investment in Prime

$
666.4
(1)Investment in PD Ports


102.9
(2)Investment in DBCT


165.7
(2)Transaction costs


6.0Total

$
941.0


(1)See Our Operations section of this MD&A for a summary of the businesses Prime owns following its recapitalization.(2)A portion of our direct investment is held through a Brookfield sponsored infrastructure fund.


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On December 31, 2009, the Brookfield sponsored infrastructure partnership, through which a portion of our interest in PD Ports is held,
admitted a new limited partner resulting in the reduction of our
ownership interest in this asset. In conjunction with the transaction, we received $9.5 million, representing the original cost of the investment plus a notional interest charge.

On
June 30, 2009, we completed the sale of our minority interest in TBE for after-tax proceeds of $275 million, including proceeds from foreign exchange
currency hedges. The sale resulted in the recognition of a $68.2 million after-tax gain over book value. A portion of the proceeds was used to repay corporate borrowings in full,
with the balance available to fund growth capital investments and acquisitions, as well as for general corporate working capital purposes.

On
February 3, 2009, we completed the acquisition from Brookfield of a 50% interest in the Royal Melbourne Showgrounds PPP project for a purchase price of $3.0 million.

On
December 5, 2008, we acquired from Brookfield a 30% interest in the Peterborough Hospital and a 50% interest in the Long Bay Forensic and Prison Hospitals PPP projects for a
purchase price of $12.3 million.

On
November 4, 2008, we invested $102.8 million directly and indirectly (through the Brookfield Global Timber Fund) into Longview to maintain our interest at the 30% level.
The proceeds were used to partially fund the add-on acquisition of a 67,661 acre tree farm in Washington State for $163 million and repay Longview's outstanding bridge loan
whose principal amount was approximately $250 million.

On
April 4, 2008, we acquired an additional 7.1% interest in Transelec for $134.9 million, increasing our total ownership interest to 17.8%.

Subsequent Events

On January 28, 2010, subsequent to period end, the Brookfield sponsored infrastructure partnership, through which a portion of
our interests in DBCT and PD Ports is held, admitted a new limited partner resulting in the reduction in our ownership interest in these assets. In addition, we sold a 1.4% interest in DBCT to the new
limited partner. In conjunction with the transaction, we received proceeds of $21.5 million, representing the original cost of these investments plus a notional interest charge. As a result,
our interests in DBCT and PD Ports were reduced to 46% and 51%, respectively. If the Brookfield sponsored infrastructure partnership is successful in reaching its fund raising target, we would receive
additional proceeds of approximately $14.6 million and our interests in DBCT and PD Ports would be reduced to approximately 44% and 48%, respectively.

OVERVIEW OF PERFORMANCE

To measure performance, we focus on net income as well as ANOI. We define ANOI as net income excluding the impact of depreciation,
depletion and amortization, deferred taxes and other items as detailed in "Reconciliation Of Non-GAAP Financial Measures" of this MD&A. ANOI is a measure of operating
performance that is not calculated in accordance with, and does not have any standardized meaning prescribed by U.S. GAAP. ANOI is therefore unlikely to be comparable to similar measures
presented by other issuers. ANOI has limitations as an analytical tool. See "Reconciliation Of Non-GAAP Financial Measures" for a more fulsome discussion, including a
reconciliation to the most directly comparable U.S. GAAP measure.

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Results of Operations

The following table summarizes the financial results of Brookfield Infrastructure.

For the Years Ended
December 31MILLIONS, EXCEPT PER UNIT INFORMATION

2009

2008

2007Income Statement Key MetricsRevenues

$
29.8

$
32.9

$
33.1Gross margin


14.8


17.9


20.4(Losses) earnings from equity accounted investments


(10.0
)

25.2


(7.8
)Dividend income


3.5


14.3


0.5Gain on sale of investment (after tax)


68.2





Selling, general and administrative expenses


(16.6
)

(14.0
)

(4.4
)Interest expensecorporate borrowings


(7.7
)

(5.6
)

Interest expensenon-recourse borrowings


(6.8
)

(7.3
)

(6.9
)Net income(1)


47.8


28.0


12.0Per unit net income(1),(2)


1.00


0.72


0.31ANOI(1)


117.4


59.7


13.3Per unit ANOI(1),(2)


2.46


1.54


0.34




As at December 31MILLIONS

2009

2008Balance Sheet Key MetricsCash and cash equivalents

$
58.3

$
9.2Total assets


1,962.9


1,174.3Partnership capital(3)


1,799.5


899.9Corporate borrowings





139.5Non-recourse borrowings

$
114.0

$
97.6


(1)Includes a $68.2 million after-tax gain recognized on sale of TBE ($1.43 per unit).(2)Per unit net income for Brookfield Infrastructure is equivalent to per unit net income for the Partnership as Brookfield Infrastructure units are
exchangeable into Partnership units on a one-for-one basis.(3)Includes redeemable partnership units as they can be converted to an equivalent interest in partnership units through a redemption exchange
mechanism.


Due to our levels of ownership and control, Brookfield Infrastructure's financial statements reflect a mix of: consolidation accounting (Ontario
Transmission); equity accounting (Transelec, DBCT, PD Ports, Island Timberlands, Longview, PPP assets and Prime, which includes NGPL, Powerco, IEG, TGN, DBCT, WestNet Rail and Euroports); and cost
accounting (TBE).

For
the year ended December 31, 2009, we recorded net income of $47.8 million, compared to $28.0 million in the comparable period of 2008. This increase in net
income is attributable mainly to the $68.2 million after-tax gain recognized on the sale of TBE and $17.6 million from six weeks of contribution from our newly acquired
assets. These increases were partially offset by the following:



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Our
partnership was formed on November 27, 2007, accordingly, results for 2007 reflect only one month of Brookfield Infrastructure activity. In addition, since it remained under
common control by Brookfield following its transfer to Brookfield Infrastructure, results reflect the historical results of Ontario Transmission for the full year in 2007. Under GAAP, the historical
results transfer to Brookfield Infrastructure as a result of this continuity of interest. In addition, 2008 results reflect Brookfield Infrastructure's increased 17.8% ownership of Transelec beginning
on April 4, 2008.

As
at December 31, 2009, Brookfield Infrastructure had $1,962.9 million in assets and $1,799.5 million in partnership capital. The increase in assets and partnership
capital is primarily a result of the November 20, 2009 investment in Prime and the direct interests in DBCT and PD Ports which were funded with an equity issuance. There were no corporate
borrowings at period end. The corporate credit facility was repaid in full on July 3, 2009 with proceeds from the TBE sale. In addition, our consolidated and combined balance sheet at
December 31, 2009 reflects $114.0 million in non-recourse borrowings of Ontario Transmission. Please refer to "Acquisitions and Divestitures" further information
regarding the investment in Prime and the TBE sale.

The
following table presents select income statement and balance sheet metrics by segment on a proportionate basis:

Years Ended December 31MILLIONS

2009

2008

2007Net income by segmentUtilities(1)

$
70.4

$
39.9

$
9.8Fee for service


(0.1
)




Timber


(26.0
)

6.7


(6.2
)Corporate and other


3.5


(18.6
)

8.4Net (loss) income

$
47.8

$
28.0

$
12.0ANOI by segmentUtilities(1)

$
128.7

$
64.0

$
17.4Fee for service


12.6





Timber


(2.6
)

12.8


(4.1
)Corporate and other


(21.3
)

(17.1
)

ANOI

$
117.4

$
59.7

$
13.3


(1)Includes a $68.2 million after-tax gain recognized on the sale of TBE.


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As of December 31MILLIONS

2009

2008Total assets by segmentUtilities

$
2,266.1

$
836.6Fee for service


1,406.4


Timber


937.1


956.2Corporate and other


132.4


65.9Total assets

$
4,742.0

$
1,858.7Net debt by segmentUtilities

$
1,445.0

$
344.5Fee for service


969.7


Timber


474.8


474.8Corporate and other


53.0


139.5Total debt

$
2,942.5

$
958.8Partnership capital by segmentUtilities

$
821.1

$
492.1Fee for service


436.7


Timber


462.3


481.4Corporate and other


79.4


(73.6
)Total partnership capital

$
1,799.5

$
899.9


Changes
in net income and ANOI for each segment, as presented above, are discussed in "Operating Platforms" below.

OPERATING PLATFORMS

In this section, we review the operating results of our principal operating platforms; utilities, fee for service and timber.

Utilities Operations

Our utilities operations are comprised of businesses which earn a regulated return as well as businesses with long term contracts
designed to generate a return on capital over the life of the contract. In this segment of our business, we own and operate assets that earn an allowed return on a regulated or notionally stipulated
asset base. The asset base increases in accordance with capital that we invest to upgrade and expand our systems. Depending on the jurisdiction, our asset 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 operations, we mitigate exposure to any single regulatory regime. In addition, due to the economies of scale of
our utilities businesses, we often have significant competitive advantages in competing for projects to expand our asset base. This competitive advantage often enables us to invest capital at
attractive returns. Accordingly, we expect this segment to produce consistent revenue and margins that should increase with investment of additional capital and inflation. Virtually 100% of our
utility operations' EBITDA is supported by regulated or contractual revenues.

Our
objectives for our utilities operations are to operate open access systems that provide safe and reliable service for our customers and to invest capital in expansions in order to
meet our customers'

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growth
requirements. If we do so, we will put ourselves in a position to earn an appropriate return on our assets.

Our
utilities operations are comprised of the following transportation and energy businesses:



The
following table presents our utilities segment's proportionate share of financial results. As it is accounted for on a cost basis, TBE's results prior to its sale in June 2009
are reflected as dividend income.

Years Ended December 31MILLIONS

2009

2008

2007Revenue

$
116.7

$
86.4

$
35.5Costs attributed to revenues


(31.0
)

(15.8
)

(6.4
)Dividend income


3.5


14.3


0.5Net operating income


89.2


84.9


29.6Other income


1.9


1.6


0.3Gain on sale of investment (after-tax)(1)


68.2





Interest expense(2)


(29.6
)

(21.1
)

(8.0
)Cash taxes


(1.0
)

(1.4
)

(4.5
)Adjusted net operating income (ANOI)


128.7


64.0


17.4Depreciation and amortization


(23.3
)

(17.6
)

(8.0
)Premium on refinancing


(2.8
)




Unrealized losses on derivative instruments


(23.1
)

(2.9
)

Deferred taxes and other items


(9.1
)

(3.6
)

0.4Net income

$
70.4

$
39.9

$
9.8


(1)Gain on sale of TBE, net of cash taxes paidplease refer to "Acquisitions and Divestitures" for more
details.(2)Excludes non-cash components of interest expense which are included in the line item unrealized losses on derivative instruments
and other.


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For the year ended December 31, 2009, Transelec's net operating income and ANOI were $48.1 million and $35.6 million,
respectively, compared with $45.0 million and $32.9 million for the prior year. Transelec's results in 2008 reflected non-recurring revenues of $8.5 million as a
result of retroactive application of the 2006 trunk transmission study, and our increased ownership interest from 10.7% to 17.8% in the first quarter of 2008. Adjusting for non-recurring
revenue and the change in ownership, Transelec's net operating income and ANOI increased by 32% and 46% respectively, relative to the prior year, primarily as a result of the rate increases provided
for in the 2006 trunk transmission study, indexation of revenues resulting from inflation and foreign exchange movements and the benefit of growth capital expenditures. After adjusting for
non-recurring revenues in the prior year, operating margins at Transelec were 81% compared to 82% in the prior year.

For
the year ended December 31, 2009, Ontario Transmission's net operating income and ANOI were $22.2 million and $14.8 million, respectively, compared with
$25.6 million and $16.8 million in the prior year. The decline in net operating income, or NOI, was largely due to a weakening of the Canadian dollar, and to a lesser extent, a decline
in revenues as a result of lower demand in Ontario.

Our
newly acquired utilities assets generated NOI and ANOI of $15.4 million and $6.6 million, respectively, for the six weeks following the acquisition.

Dividends
received from our TBE investment in 2009 were $3.5 million for the year compared to $14.3 million in 2008. Dividends from TBE were lower as a result of the sale
of TBE in the second quarter of 2009, which resulted in a $68.2 million after-tax gain.

Non-cash
expenses are primarily comprised of depreciation and amortization, non-cash inflation indexations on Transelec's Chilean peso denominated debt,
unrealized mark-to-market losses on derivative contracts, which are part of our currency hedging program, as well as a premium on the refinancing of a portion of Transelec
debt. Depreciation and amortization totalled to $23.3 million in 2009, an increase from $17.6 million in 2008, as a result of incremental depreciation booked in conjunction with the
expansion of our regulated asset base. Our mark-to-market losses on derivative contracts were $23.1 million
for the year compared to $2.9 million in 2008. Non-cash inflation indexation was $1.0 million in 2009 compared to $12.9 million in 2008, due to a decline in Chilean
inflation.

Results
for 2007 reflect only one month of Brookfield Infrastructure activity as the partnership was formed on November 27, 2007, in addition to results of Ontario Transmission
for the full year.

Our
utility operations have a combination of regulatory and contractual frameworks, some of which are indexed. For our utility operations with revenue indexation, increases in revenue
are primarily a result of inflation, changes in foreign exchange rates and growth capital expenditures. For our remaining operations, revenue increases are primarily attributable to growth capital
expenditures. Growth and maintenance capital expenditures are discussed in "Capital Expenditures".

Business Development and Outlook

In our Ontario Transmission and Powerco businesses, we have regular rate reviews pending that we believe will be resolved in 2010 or
2011. In Ontario, the regulator has acknowledged that the current ROE formula does not provide a reasonable rate of return for regulated utilities and is supportive of changing the ROE formula. We
anticipate that this will result in an increase in our ROE by 150 bps to 175 bps in our pending rate case. For Powerco, the regulator establishes a rate by which revenues are escalated
equal to CPI less an X-factor. In a preliminary ruling, the regulator has indicated an X-factor of 0%, resulting in a rate equal to CPI. We expect that within the next 12 to
18 months, the regulator will also decide on other elements of the allowed revenue.

Within
our utility operations, we have numerous opportunities to upgrade and expand our asset base. While we are required to make certain capital expenditures to maintain safety and
reliability, we

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will
direct discretionary capital to those businesses that provide the highest risk-adjusted returns. In our utility operations, we expect to earn a return on the equity that we invest
which is consistent with our existing return.

Transelec
and IEG Connections have notable opportunities to expand their asset base. As the backbone transmission system in Chile, Transelec is uniquely positioned to participate in the
substantial build-out of the transmission grid required to support expansion of the Chilean economy. IEG Connections competes with local distribution companies as well as other
independent connection companies to win contracts to install natural gas and electric connections to new residential
housing projects in the UK. Following installation, IEG Connections owns and operates the connections and receives payments for use of its system from retail providers that sell energy to the
homeowner. IEG has experienced significant growth in its order book due to recovery of the UK housing market combined with market share gains.

In
January 2009, Brookfield and its partner Isolux, through their joint venture company Wind Energy Texas Transmission, or WETT, were awarded the right to build
$500 million of transmission lines in Texas to facilitate delivery of wind power to population centers as part of the Texas Competitive Renewable Energy Zones, or CREZ, program. We anticipate
commercial operation of the project in the beginning of 2013, at which time WETT will be a licensed transmission utility in the state. Brookfield contributed its interest in WETT to a
Brookfield-sponsored infrastructure partnership in which we own an interest. We anticipate that our ownership will be approximately 15% of this project.

In
addition, we have the potential opportunity to invest in several large scale development projects that are in early stages. We are particularly excited about prospects at DBCT, one of
the world's largest coal export facilities. Situated on the northeast coast of Australia, this terminal serves as the critical link in the export of metallurgical coal from the Bowen Basin, one of the
most prolific, low-cost metallurgical coal basins in the world. With capacity of 85 million tonnes per annum, or Mtpa, DBCT handles approximately 20% of the seaborne metallurgical
coal in the world. For context of size, this terminal ships approximately $13 billion of coal annually, most of which is shipped to steel companies in Japan, Korea, India and China. Due to
global demand for metallurgical coal, the queue to receive coal from DBCT is over 25 days. As a result, there is considerable customer demand to expand the facility. As a first step, we will
conduct a feasibility study, which will be paid for by our customers. DBCT's existing facility can be expanded by up to 5%. Any expansion of greater than 5% will require building a facility at an
adjacent location with capital expenditures in excess of $2 billion.

Fee For Service

Our fee for service operations is comprised of open access systems that provide transportation, storage and handling of energy, freight
and bulk commodities. This operating platform is comprised of businesses with price floors and ceilings as a result of regulation, such as NGPL and WestNet Rail, as well as unregulated businesses,
such as PD Ports and Euroports. Fee for service businesses typically have high barriers to entry and in many instances have very few substitutes in their local markets. While these businesses have
greater sensitivity to market prices and volume than our utilities operations, revenues are generally stable and, in many cases, are supported by long-term contracts or customer
relationships. Our fee for service operations are expected to benefit from increases in demand for commodities as well as increases in the global movement of goods. Furthermore, the diversification
within our fee for services operations mitigates the impact of fluctuations in demand from any particular sector, commodity or customer. Approximately 70% of our fee for service operations' EBITDA is
supported by regulated or contractual revenues.

Our
objectives for our fee for service operations are to provide safe and reliable service to our customers and to meet their expansion needs in a capital efficient manner. If we do so
we will be able

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to
charge a fair price for our services, and we will be able to earn an attractive return on the capital that we invest to increase the capacity of our operations.

Our
fee for service operations are comprised of the following businesses:



The
following table presents our fee for service operations' proportionate share of financial results.

Years Ended December 31MILLIONS

2009

2008

2007Revenues

$
56.9

$


$
Cost attributed to revenues


(32.5
)




Net operating income


24.4





Other expense


(3.0
)




Interest expense


(8.8
)




Adjusted net operating income (ANOI)


12.6





Depreciation, depletion and amortization


(4.0
)




Foreign exchange translation losses








Deferred taxes and other items


(8.7
)




Net income

$
(0.1
)
$


$



The
results of our fee for service operations, which represent six weeks of operations following the completion of the acquisition of our interests in Prime, and PD Ports on
November 20, 2009, were in line with expectations.

Business Development and Outlook

Following our investment in Prime, the United States Energy Regulatory Commission, or FERC, announced in November of 2009 a
review of rates charged by NGPL and two other natural gas pipeline companies. In its complaint, FERC alleges that NGPL is earning a return on equity that is in excess of a reasonable level and that it
is over recovering on fuel gas. On April 23, 2010, our partnership announced that a settlement in principle was reached between it and FERC. The settlement in principle is supported or not
opposed by all active participants in the proceeding. The settlement terms

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remain
confidential, subject to documentation and, following agreement of documentation, subject to approval of the Administrative Law Judge and the FERC commissioners before the settlement becomes
final and binding. The terms of the settlement, if so approved, would resolve all issues set for hearing by the Commission. We believe the FERC proceeding will likely be resolved in the next twelve
months, however, at this time we cannot be certain that the settlement will be finalized nor estimate the impact if such event does not occur. Kinder Morgan Inc., or KMI, reported in its
March 31, 2010 Form 10Q, that it recognized an impairment charge on the carrying value of its 20% investment in NGPL as a result of the proposed settlement with FERC announced on
April 23, 2010. The impairment charge is based on certain assumptions made by KMI, including the expected impact on annual pre-interest, after-tax cash flows at NGPL over the next several
years. Based on the staged implementation of the proposed reductions in various service charges, these cash flows were lower than KMI's previous expectations for NGPL by approximately
$25 million, increasing to $70 million upon full implementation (on a 100% basis). Brookfield Infrastructure has an approximate 11% interest in NGPL, through its 40%
interest in Prime.

In
January 2010, WestNet Rail received a notice for stamp duty assessed in respect of the 2006 acquisition of the ARG Group. Our partnership's share of the assessment is
A$18.5 million (Prime's A$46.4 million). We believe that the assessment is incorrect at law and Prime intends to vigorously challenge it. Prime has funded the assessment from its cash
resources while the matter is pending

Within
our fee for service operations, we strive to increase the throughput of our system in a capital efficient manner to meet out customers' growth requirements. Due to the economies
of scale of our networks or our location, we are often able to earn very attractive returns when we make investments. In this segment, growth investments are discretionary, and we target an
after-tax return on equity of 15% to 20% depending on the risk profile of the project.

We
are very excited about the growth potential of WestNet Rail, a 5,100 km rail network in Western Australia. WestNet Rail provides access to its rail network to companies that
ship primarily bulk commodities (iron ore, alumina, coal, minerals, grain) to ports along the west coast of Australia. Due to the high costs and inefficiency of road transportation, our rail network
often provides the sole economic access route to the export market for our customers. In 2009, WestNet Rail shipped over 50 million tonnes of freight across its network. With the recovery in
the capital markets and the renewed demand for commodities, particularly from China, several large-scale iron ore mining developments in close proximity to our rail network have progressed rapidly and
are proposed to be brought into production in 2011. In 2010, we began evaluating the numerous upgrades to WestNet Rails' network to increase thoughput in order to accommodate these customer initiated
projects. Based on our preliminary analysis, these upgrade projects should require capital expenditure in excess of $400 million.

Our
European and UK ports businesses should continue to grow with the increased movements of goods to and from our terminal locations. In general, volumes of our bulk and general cargo
have been increasing as the economy strengthens; our volumes for containerized goods have also increased as our customers seek to maximize the seaborne movement of their cargo for delivery to
distribution centers near large population areas. Seaborne transportation is increasingly viewed as more efficient and cost effective than other modes of transportation in Europe given poor rail
access, heavily congested roads and the increasing cost of fuel. In addition, through the reduction of road miles traveled to deliver goods, our customers have been able to reduce their carbon
footprint, an area receiving increasing attention from local and federal governments. Our portfolio of ports are strategically located near large population catchment areas and/or distribution centers
which allow our customers to maximize these supply chain objectives.

PD
Ports has been successful over the past few years in attracting leading UK retailers to locate their primary distribution facilities on land adjacent to the port. By locating
portside, our customers

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were
able to improve their logistics supply management chain and reduce the number of road miles that their goods travel to reach their customers in Northern England. Going forward, we will focus our
efforts on attracting other retailers and supply management firms to locate in close proximity to the port, which will drive conservancy revenue as their ships pass through our waterway, port handling
revenue and potentially rent if they locate their facilities on our significant land base at the port.

Timber

Our timber operations consists of high quality timberlands located in the coastal region of British Columbia, Canada and the Pacific
Northwest region of the U.S. These operations are predominantly comprised of premium species and are expected to provide attractive risk adjusted returns on capital employed over
the long-term.

Our
timber operations are comprised of the following businesses:



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

Years Ended December 31MILLIONS

2009

2008

2007Revenue

$
77.4

$
124.8

$
6.1Cost attributed to revenues


(56.2
)

(81.8
)

(5.6
)Net operating income


21.2


43.0


0.5Other income (expense)


1.7


(0.5
)

(1.9
)Interest expense


(25.7
)

(29.0
)

(2.7
)Cash taxes


0.2


(0.7
)

Adjusted net operating income (ANOI)


(2.6
)

12.8


(4.1
)Depreciation, depletion and amortization


(26.3
)

(36.7
)

(1.8
)Performance fee


5.4


12.8


(3.1
)Unrealized loss on investment


(11.9
)




Deferred taxes and other items


9.4


17.8


2.8Net (loss) income

$
(26.0
)
$
6.7

$
(6.2
)


For
the year ended December 31, 2009, our timber operations' net operating income and ANOI totaled $21.2 million and negative $2.6 million, respectively, compared to
$43.0 million and $12.8 million, for the same period in the prior year.

While
timber market conditions continue to be poor, prices have improved steadily since the second quarter of 2009. Seasonally adjusted, annualized U.S. housing starts fell 5%
from the third quarter to 554,000. While an improvement from the lows of the first quarter, this level is approximately one third of long-term trend levels. The inventory of new homes in
the U.S. declined to 234,000 units while existing home inventories declined to 3.29 million units or a 7.2 month supply, both these

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statistics
suggest an increasingly balanced market. Despite these seemingly positive statistics, recovery of U.S. housing starts is expected to remain weak through 2010 and into 2011 as a
result of the significant amount of vacant and foreclosed homes which we anticipate will continue to add to the inventory of existing homes for sale. Despite this difficult outlook, strong
supply-side management has resulted in very low inventories of sawlogs and finished wood products across North America. Prices for most products have increased over 20% from their second
quarter lows. Log prices in the Japanese market were stable through the quarter, and demand for whitewood in the Korean market remained strong, with realized pricing, net of transportation, at levels
close to five-year averages.

Consistent
with our focus on optimizing the long-term value of our business, we continued to harvest at sharply curtailed levels. We continue to adapt our plan as necessary
to pursue market opportunities that arise.

The
following table summarizes our proportionate share of operating metrics for our timber operations:

Year Ended December 31, 2009

Year Ended December 31, 2008

Year Ended December 31, 2007Harvest
(000's m3)

Sales
(000's m3)

Revenue/
m3

Revenue
($ millions)

Harvest
(000's m3)

Sales
(000's m3)

Revenue/
m3

Revenue
($ millions)

Harvest
(000's m3)

Sales
(000's m3)

Revenue/
m3

Revenue
($ millions)Douglas-fir


502


538

$
78

$
42.0


773


793

$
88

$
70.0


828


841

$
91.6

$
77.1Whitewood


237


258


61


15.7


403


419


60


25.0


463


489


65.4


32.0Other species


235


261


70


18.3


246


233


109


25.5


150


149


130.9


19.5974


1,057

$
72

$
76.0


1,422


1,445

$
83

$
120.5


1,441


1,479

$
86.9

$
128.6HBU and other sales











1.4











4.3











2.8Total










$
77.4










$
124.8










$
131.4


In 2009, sales volumes of Douglas-fir and whitewood declined by 32% and 38%, respectively, versus 2008 due to difficult market
conditions in the North American structural lumber market. Sales volumes of other species increased 12% year-over-year, as
a result of better relative market conditions for pulp logs and cedar through the first nine months of the year. To mitigate the impact of weak North American markets, we continued to increase our
proportion of export quality timber from our harvest to take advantage of significantly better prices, net of transportation costs, available in the off-shore markets. Export volumes
represented 42% of shipments in 2009, compared to 35% in 2008. Harvest volumes in our timber operations decreased 32% over 2008 as a result of our decision to reduce near-term harvest
levels to preserve value.

Our
operating margins declined to 28% for the year versus 34% in the prior year due to lower prices offset partially by lower costs per unit. The average realized price for
Douglas-fir decreased by 11% compared to the prior year as declines in prices of products sold to the domestic market were partially offset by a significant percentage of high value
appearance and export grade products sold to offshore markets in our product mix. This compares favorably to the 15% decline in prices of indicative Douglas-fir logs during the same time
period. The average selling price of whitewood increased modestly verus 2008, reflecting strong pricing realized on shipments to the Korean market. The significant change in the average realized price
for other species is mostly attributable to a change in the mix of products included in that category.

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Harvest and delivery costs per unit decreased 6% compared to 2008 primarily due to aggressive efforts to manage fixed costs and an increase in the proportion of harvesting rates
determined through bid processes. This was partially offset by the impact of foreign exchange on Canadian dollar denominated costs in our Canadian timber operations.

Our
share of revenue from HBU land and other sales totalled $1.4 million for the year compared to $4.3 million for 2008.

For
the years ended December 31, 2009 and 2008, depreciation, depletion and amortization was $26.3 million and $36.7 million, respectively. The decrease is due to
reduced harvest levels.

The
unrealized loss on investment relates to our 7% indirect interest in our U.S. timber operations that is held through a private fund and is carried at fair value with changes
to the carrying value recorded in income. Also, during the year, our Canadian timber operations recorded a reversal of a performance fee payable in 2011 as a result of a decline in the valuation of
their HBU lands. We record this accrual below ANOI as it is a non-cash accrual that is subject to a claw-back prior to the determination of the payment amount in 2011.

Results
for 2007 reflect only one month of Brookfield Infrastructure activity as the partnership was formed on November 27, 2007.

Business Development and Outlook

One of the key attributes of our timber operations is operating flexibility that allows us to adapt our harvest levels to market
conditions to maximize the value of our business. Until we believe that sustainable demand will support meaningfully higher prices, we plan to harvest at minimum levels required to service our key
customers and protect key distribution channels while capitalizing on market opportunities that do arise. Based on current conditions, we expect harvest levels at our Canadian and U.S. timber
operations in 2010 to be similar to 2009 levels. Prices need to increase at least 20% from current levels before we would expect to return to target harvest levels. We currently do not expect this
magnitude of price increases before late 2010 or early 2011.

We
believe operating results for our timber operations will improve following recovery in U.S. new home construction. Although it is difficult to predict the timing and amount, we
believe that we will achieve increases in ANOI and net income from this segment of our business for the following reasons:



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In
addition, over the mid-to-long term, we expect that our timber operations will be positively impacted by a number of fundamental factors affecting the supply
of timber in the markets that we serve:



CORPORATE AND OTHER

The following table presents the components of Corporate and other for the years ended December 31, 2009, 2008 and 2007:

Years Ended
December 31MILLIONS

2009

2008

2007General and administrative costs

$
(7.8
)
$
(7.0
)
$
Base management fee


(10.2
)

(7.0
)

Financing costs


(5.0
)

(3.1
)

Corporate expenses


(23.0
)

(17.1
)

Contribution from social infrastructure investments


1.7





Corporate and other

$
(21.3
)
$
(17.1
)
$



General
and administrative costs were higher in 2009 compared to the prior year as a result of transaction costs that were incurred in conjunction with our investment in Prime, DBCT and
PD Ports.

Pursuant
to the Master Services Agreement, we pay a base management fee to the Manager on a quarterly basis, based on our market value. The fee increased over the prior year due to the
approximately $940 million equity offering that was completed in November of 2009.

Financing
costs include dividends paid on our preferred shares, interest expense and standby fees on our committed credit facility, less ancillary interest earned on cash balances. The
amounts above exclude non-cash amortization of financing costs of $2.8 million and $1.3 million for the years December 31, 2009 and 2008, respectively. Financing costs
in 2009 were higher than 2008 as a result of increased borrowing under our corporate facility and inclusion of six weeks of interest expense on Prime's corporate debt offset by a reduction in standby
fees, as we reduced our credit facility from $450 million to $200 million in June 2009. In addition, we recognized $1.2 million of interest income in 2008 as a result of
higher levels of cash balances, compared to $0.2 million in the current period.

Social Infrastructure

In December 2008, we completed the acquisition of equity interests in two PPP projectsLong Bay Forensic and Prison
Hospitals in Australia and Peterborough Hospital in the United Kingdomfor $12.3 million. We completed the acquisition of an equity interest in a third PPP
assetRoyal Melbourne Showgrounds in Australiain February 2009 for an additional purchase price of $3.0 million. Royal Melbourne Showgrounds and Long Bay
Hospitals achieved commercial operation in August 2006 and February 2009, respectively. It is anticipated that Peterborough Hospital will be operational in late 2011. These projects are
expected to generate stable cash flows from long-term contracts with long-term financing arrangements.

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Social
infrastructure operations differ from our utilities, fee for service and timber operations, as social infrastructure concessions have finite lives of between
25-30 years, and cash generated from these projects must fully retire project debt over the term of the concession. Thus, net operating income and ANOI for our social infrastructure
operations include U.S. GAAP net income plus depreciation less debt amortization payments, which approximates the distributions to us from these operations.

On
a proportionate basis, our social infrastructure operations earned $1.7 million of ANOI for the year ended December 31, 2009, compared to nil in 2008 and 2007.

We
have a commitment to fund our share of the additional equity investment in the Peterborough Hospital project totaling approximately £8.0 million. We have entered
into foreign currency contracts to hedge this amount to the equivalent of approximately $11.8 million.

CAPITAL EXPENDITURES

Years Ended
December 31MILLIONS

2009

2008

2007Maintenance capital expenditures by segmentUtilities

$
11.9

$
7.5

$
7.5Fee for service








Timber


6.1


5.2


4.0$
18.0

$
12.7

$
11.5Growth capital expenditures by segmentUtilities

$
24.8

$
14.6

$
20.6Fee for service








Timber








$
24.8

$
14.6

$
20.6


Maintenance
capital expenditures are expenditures that are required to maintain the current revenue generating capability of our asset base; these expenditures do not increase our
revenues. Growth capital investments are investments on which we expect to earn additional revenues. As these investments are typically discretionary, we invest this capital if we believe we can earn
attractive risk-adjusted returns.

The
growth capital expenditures for the utilities operations for 2009 totalled $24.8 million (2008$14.6 million), which primarily represents our share of
growth capital investments at Transelec.

CAPITAL RESOURCES AND LIQUIDITY

The nature of our asset base and the quality of 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 ANOI to unitholders.

Our
principal sources of liquidity are cash flow from our operations, undrawn credit and equity 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.

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Our
total estimated liquidity as at December 31, 2009 was as follows:

MILLIONS

As at December 31, 2009Cash(1)

$
57.9Availability under committed credit facility


200.0Total estimated liquidity

$
257.9


(1)Brookfield Infrastructure cash only.


Our $200 million senior secured revolving credit facility is available for investments and acquisitions, as well as general corporate
purposes. Prior to drawing on the facility, we must satisfy a number of
conditions including compliance with certain financial ratios. At December 31, 2009, $nil was drawn on this facility, and $200 million was available. Commitments under the facility will
be available on a revolving basis until June 2010. All amounts outstanding at that time will be repayable in full in June 2011. The facility is intended to be a bridge to equity
financing rather than a permanent source of capital. We expect to renew the credit facility prior to its maturity.

The
senior secured revolving credit facility restricts Brookfield Infrastructure from making any distributions on its equity unless immediately prior to, and after giving pro forma
effect to, such distribution, no default has occurred and is continuing and (1) Brookfield Infrastructure meets a minimum interest coverage ratio of 2.75 to 1 in the first fiscal
year or 3 to 1 thereafter; a maximum debt to cash flow ratio of 5.5 to 1 in the first year or 5 to 1 thereafter; and maintains minimum liquidity of
$25 million or (2) the distribution is funded with proceeds of certain permitted capital raising or sales of assets.

In
June 2009, we completed the sale of our minority interest in TBE. Proceeds from the sale were $275 million including $70 million of previously realized hedge
gains. Further details regarding the TBE sale are provided under "Acquisitions and Divestitures".

In
addition, Brookfield has provided us with an equity commitment of $200 million. The equity commitment may be called by our partnership and/or Brookfield Infrastructure in
exchange for the issuance of a number of units of our partnership or Brookfield Infrastructure, as the case may be, to Brookfield, corresponding to the amount of the equity commitment called divided
by the five-day, volume-weighted average trading price for our units and expires January 31, 2011.

We
finance our assets principally at the operating entity level with debt which generally has long-term maturities, few restrictive covenants and no recourse to either our
partnership or our operations. At the operating company level, we endeavour to maintain investment grade or crossover ratings.

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We
also strive to ladder our principal repayments over a number of years. On a proportionate basis, scheduled principal repayments as at December 31, 2009 for our borrowings over
the next five years are as follows:

MILLIONS

Average Term
(years)

2010

2011

2012

2013

2014

Beyond

TotalRecourse borrowingsCorporate borrowings


2.9

$


$


$
53.0

$


$


$


$
53.0Total recourse borrowings


2.9








53.0











53.0Non-recourse borrowings(1)(2)Utilities


7.2





341.6





299.7


28.4


775.3


1,445.0Fee for service


7.5


97.6


264.7


143.3


92.1





372.0


969.7Timber


7.8











136.0





338.8


474.8Total non-recourse borrowings(1)(2)


7.3


97.6


606.3


143.3


527.8


28.4


1,486.1


2,889.5Total(1)(2)


7.2

$
97.6

$
606.3

$
196.3

$
527.8

$
28.4

$
1,486.1

$
2,942.5


(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.


Our proportionate share of debt has an average term of 7.2 years. Including non-recourse borrowings, on a proportionate
consolidated basis, our debt-to-capitalization ratio as at December 31, 2009 was 62%.

The
following table summarizes our proportionate share of debt on a segment basis:

Year Ended December 31, 2009

Year Ended December 31, 2008

Year Ended December 31, 2007MILLIONS

Proportionate
Average Debt

Average Cash
Interest Rate

Cash
Interest

Proportionate
Average Debt

Average Cash
Interest Rate

Cash
Interest

Proportionate
Average Debt

Average Cash
Interest Rate

Cash
InterestUtilities

$
512.7


5.8%

$
29.6

$
366.6


6.2%

$
22.6

$
390.8


5.6%

$
23.0Fee for service


111.9


7.8%


8.8

















Timber


474.8


5.4%


25.7


510.6


5.7%


29.0


513.8


5.9%


30.9Corporate borrowings


54.0


3.7%


2.0


17.5


5.7%


1.0








Total

$
1,153.4


5.7%

$
66.1

$
894.7


5.9%

$
52.6

$
904.6


5.9%

$
53.9


Our
equity strategy is to issue equity in conjunction with future acquisitions. However, we may also issue an amount of equity opportunistically to enhance our liquidity to pursue future
acquisitions. On December 22, 2009, we filed shelf registrations to enable us to issue securities in both the U.S. and Canadian markets.

PARTNERSHIP CAPITAL

As at December 31, 2009, our partnership owns limited partnership units that represent 59% of Brookfield Infrastructure's total
outstanding units, and Brookfield owns Redeemable Partnership Units that represent 40% of Brookfield Infrastructure's total outstanding units. The Redeemable Partnership Units, at the request of the
holder, require Brookfield Infrastructure to redeem all or a portion of the holder's units of Brookfield Infrastructure at the market price for cash. 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

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presented
to Brookfield Infrastructure in exchange for one of its units, subject to certain customary adjustments. Based on the number of units outstanding as at December 31, 2009, Brookfield's
aggregate limited partnership interest in our partnership would be 40% 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 1% of Brookfield Infrastructure's total outstanding units. The general partnership units are entitled to
receive incentive distributions which are calculated in increments based on the amount by which quarterly distributions on the limited partnership units of Brookfield Infrastructure exceed specified
target levels as set forth in Brookfield Infrastructure's limited partnership agreement.

During
2009 and 2008, the number of issued and outstanding units of Brookfield Infrastructure units changed as follows:

2009

2008MILLIONS

Book Value

Units

Book Value

UnitsOutstanding at beginning of year

$
709.3


38,661,470

$
940.6


38,842,072Units issued(1)


937.1


68,705,358





Units purchased


(7.6
)

(674,000
)

(2.0
)

(180,602
)Adjustment related to acquired entity


(5.8
)




(44.4
)

Revaluation of redeemable partnership units


173.9





(184.9
)

Outstanding at end of year

$
1,806.9


106,692,828

$
709.3


38,661,470


(1)Includes limited, general partner and redeemable partnership units.


The caption "Adjustment related to acquired entity" is related to the acquisition of Ontario Transmission, an entity that was accounted for as a
reorganization of entities under common control.

As
at December 31, the total number of Brookfield Infrastructure's limited partnership units outstanding was comprised as follows:

2009

2008General partnership units


1,066,928


388,457Limited partnership units


63,155,680


23,160,269Redeemable partnership units


42,470,220


15,112,744Total


106,692,828


38,661,470


In
November 2009, to finance the investments in Prime, DBCT and PD Ports, we completed an approximate $940 million offering consisting of approximately 40.0 million
units of our partnership,
approximately 27.4 million redeemable partnership units and approximately 0.7 million general partnership units at an average price of $13.64 per unit.

Pursuant
to its offering in November 2009, our partnership issued 40,669,411 units at an average price of $13.82. The Partnership has 63,155,680 units outstanding at
December 31, 2009, which are publicly traded on the New York and Toronto stock exchanges. Our Partnership owns all 63,155,680 of Brookfield Infrastructure's limited partnership units
representing an economic interest of 59%.

In
November 2008, we implemented a unit repurchase program. Repurchases were authorized for the period beginning on November 10, 2008 and ending on November 9, 2010.
In the year ended December 31, 2009, 674,000 units were repurchased and cancelled under this program at an average price of $11.48 per unit. Since commencement of the unit repurchase
program in November 2008,

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854,602 units
were repurchased and cancelled at an average price of $11.39 per Unit. See Item 16E. "Purchases of Equity Securities by the Issuer and Affiliated Purchaser"
for more information.

FINANCIAL RISK MANAGEMENT

Our business is impacted by changes in currency rates, interest rates and other financial exposures. As a general policy, we endeavour
to maintain balanced positions where practical or economical to do so, although unmatched positions may be taken. Our principal financial risks are foreign currency and interest rate fluctuations.

We
prefer to hedge financial risks with offsetting items such as debt denominated in local currencies that match the profile of the operations being financed. We also make selective use
of financial instruments, known as derivatives, to hedge financial positions from time-to-time when natural hedges are not available or when derivatives are more cost
effective. 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.

Foreign Currency

A number of our operations are conducted in currencies other than the U.S. dollar. Our policy is to hedge foreign currency
denominated book values and/or cash flows where economical to do so, using foreign currency denominated debt as well as financial contracts. It is not always possible, or economically feasible or
desirable to hedge certain exposures with the result that a portion of our cash flows and equity are exposed to foreign currency fluctuations. We may also enter into financial contracts to further
hedge assets recognizing that in some cases changes to the value of these contracts may be reflected in net income even though the offsetting impact on the value of the assets being hedged may not. We
have economic currency exposure to the Chilean peso, British Pound, Australian dollar and Canadian dollar. On a look-through basis, some of our investments have currency exposure to the
Euro and New Zealand dollar.

Interest Rate

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 endeavour to finance these assets with long-term fixed rate borrowings. We intend to match fund floating rate assets with floating rate
debt and will otherwise minimize the use of floating rate liabilities. Where financing cannot be obtained to match the interest rate exposure of the asset, derivative contracts may be entered into
with credit worthy counterparties.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

We are exposed to market risks in our underlying operations, principally resulting from changes in interest rates and currency
exchange rates. In addition, we have indirect exposure to market risks through our investment in Prime which has exposure to market risks in its underlying operations, primarily resulting from
changes in interest rates and currency exchange rates.

Interest Rate and Inflation Risk

Interest rate risk related to Transelec exists principally with respect to its indebtedness with variable rates. Furthermore, Transelec
is subject to inflation risk as 59% of its debt portfolio is denominated in Unidad de Fomento, or UF, which is an inflation indexed Chilean peso monetary unit that is set daily, in advance, on the
basis of the prior month's inflation rate. However, we believe this is offset by the nature of our revenues which, both contractually and in the regulatory framework, are in large part indexed to
Chilean inflation.

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Transelec
also has financial assets that are sensitive to interest rate changes. These assets include short-term Chilean peso, or CLP, and U.S. dollar
denominated time deposits totaling $49.3 million as at December 31, 2009 that earn interest at the market prevailing rate at the time an investment contract is executed.

The
following table summarizes our proportionate share of Transelec's interest earning assets and debt obligations that are sensitive to changes in interest rates as well as Chilean
inflation at December 31, 2009. For debt obligations, the table presents principal cash flows by expected (contractual) maturity dates.

Expected Maturity DatesDecember 31, 2009

2010

2011

2012

2013

Thereafter

TotalMILLIONSInterest rate sensitivity:Current assets(1)

$
49.3

$


$


$


$


$
49.3Long-term assets(2)











26.6





26.6Current liabilities


(22.3
)













(22.3
)Long-term debt(3)











(26.6
)

(211.9
)

(238.5
)Net floating rate position


27.0











(211.9
)

(184.9
)Chilean inflation sensitivityLong-term debt

$
(22.3
)
$


$


$


$
(211.9
)
$
(234.2
)


(1)Current assets includes short term money market instruments (time deposits etc.) used primarily for cash management purposes.(2)Non current assets includes cash held on restricted deposit, held as security against debt or contract obligations.(3)Long-term debt contains our Chilean transmission operations' debt that is denominated in UF.


Interest rate risk related to Prime exists principally with respect to its indebtedness with variable rates. Prime has $1,486.9 million of
long-term debt (on a proportionate basis) as at December 31, 2009, of which approximately 82% has been issued as floating rate debt. Prime has converted approximately 88%,
75%, 71%, 51%, 46% and 15% of its floating interest rate exposure to fixed rates in 2010, 2011, 2012, 2013, 2014 and thereafter, respectively.

Prime
also has financial assets that are sensitive to interest rate changes. These assets include short-term Australian dollar denominated time deposits totalling
$263.3 million as at December 31, 2009 that earn interest at the market prevailing rate at the time an investment contract is executed.

We
primarily manage interest rate risk through the issuance of fixed rate debt. Where fixed rate debt cannot be obtained, derivative contracts with credit worthy counterparties may
be utilized.

Foreign Currency Risk

Our principal foreign exchange risks involve changes in the value of the Australian dollar, British pound and CLP versus the
U.S. dollar, and to a lesser extent, changes in the Canadian dollar versus the U.S. dollar.

Although
Transelec's revenues are billed in CLP, from an economic perspective, they are a combination of CLP and U.S. dollar amounts that are converted to CLP prior to invoicing.
These revenues are calculated based upon a return on the replacement cost of Transelec's transmission system, which is comprised of components denominated in U.S. dollars as well as CLP. Based
on existing long term
contracts and the current regulated transmission rate proceedings, we estimate that our revenues are 67% CLP and 33% U.S. dollar. Factoring in our CLP debt financings and cross-currency
interest rate swaps, we estimate that Transelec's adjusted net operating income is 47% U.S. dollar and 53% CLP.

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Transelec
has a portfolio of financial contracts to hedge a portion of its currency risk. The table below presents on a proportionate basis information about our debt and derivatives
that are denominated in CLP and UF for our Chilean Transmission operations, and presents this information on a U.S. dollar equivalent basis. For UF-denominated debt obligations, the
table presents principal cash flows, by expected maturity dates. The table below presents on a proportionate basis Transelec's exposure to the various currencies. For foreign currency forward exchange
and swap contracts, the table presents the notional amounts by expected maturity dates.

Expected Maturity DatesDecember 31, 2009

2010

2011

2012

2013

Thereafter

TotalMILLIONSAssetsUSD

$


$
79.0

$


$
26.6

$


$
105.6CLP

















UF

















LiabilitiesUSD


(6.3
)

(43.5
)




(26.6
)




(76.4
)CLP





(44.6
)







(11.8
)

(56.4
)UF


(22.3
)

(49.4
)




(27.2
)

(211.9
)

(310.8
)Net exposuresUSD


(6.3
)

35.5











29.2CLP





(44.6
)







(11.8
)

(56.4
)UF


(22.3
)

(49.4
)




(27.2
)

(211.9
)

(310.8
)


Our
distribution income from Prime will be denominated in Australian dollars. Prime, at its level, is exposed to currency risk arising from cash flows received from its international
operations (those located outside of Australia). This exposure is managed by Prime, who may hedge foreign currency denominated book values and/or cash flows using foreign currency denominated debt as
well as financial contracts.

Our
Canadian timber operations' output is sold into both international and local markets. We view the international timber market as a market that is denominated in U.S. dollars,
whereas the local market is denominated in Canadian dollars. Our local timber sales offset roughly half of our operating and maintenance costs, which are largely Canadian dollar based. Our Canadian
timber operations' project debt financing is U.S. dollar based. Currently our Canadian timber operations do not have any material hedges in place to convert their remaining Canadian dollar
operating and maintenance expense exposure to U.S. dollars, although they are considering entering into a combination of short and mid-term currency swaps to manage this exposure.

Our
PPP projects receive concession payments denominated in local currencies. At December 31, 2009 we had three equity interests in PPP projectsLongbay Forensic and
Prison Hospitals in Australia, the Royal Melbourne Showgrounds in Australia and Peterborough Hospital in the United Kingdom. Currently we do not have any material hedges in place to convert our
Australian dollar denominated concession payments to U.S. dollars, although we are considering entering into a combination of short and mid-term currency swaps to manage this exposure. The
Peterborough Hospital in the United Kingdom is in the construction phase until late 2011 and no cash flows are expected from this project until that time. We have a commitment to fund our share
of the remaining construction costs of the project totaling approximately £8 million. We have entered foreign currency contracts to hedge this amount to the equivalent of
approximately $12 million.

We
will evaluate strategies or instruments to manage our foreign exchange risks on a portfolio basis which may include hedging our foreign currency denominated book values and/or cash
flows using foreign currency denominated debt as well as financial contracts.

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Commodity Risk

Our principal commodity risks are 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 market prices.

Approximately
90% of Transelec's revenues are adjusted on a semi-annual basis 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 Transelec's revenues.

Prime
has direct commodity exposure in certain of its businesses as it collects more natural gas from customers then it consumes. In addition, Prime has indirect commodity
exposure in a number of its businesses as increased demand for commodities increases utilization of their networks. The direct commodity exposure will be significantly reduced if the pending
settlement at NGPL becomes final.

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

CONTRACTUAL OBLIGATIONS

Pursuant to the Master Service 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. Based on the market value of our partnership as of December 31, 2009, this fee is estimated to be approximately $20 million
per annum.

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 generally accepted accounting principles requires management to select
appropriate accounting policies 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 future cash flows utilized in assessing net recoverable amounts and net realizable values; depreciation and amortization; value of
goodwill and intangible assets; ability to utilize tax losses; the determination of the primary beneficiary of variable interest entities; effectiveness of financial hedges for accounting purposes;
and fair values for disclosure purposes.

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 a 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.

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Brookfield
Infrastructure's main critical accounting policy is investment valuation. Brookfield Infrastructure recognizes an impairment charge when a decline in the fair value of its
investments below the carrying value is judged to be other-than-temporary. Brookfield Infrastructure considers various factors in determining whether to recognize an impairment
charge, including the length of time and extent to which the fair value has been less than Brookfield Infrastructure's cost basis, the financial condition and near-term prospects of the
investee, and Brookfield Infrastructure's intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

The
following is a discussion of the critical accounting estimates of the companies in which we hold interests:



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INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

In 2007 the U.S. Securities and Exchange Commission, or SEC, adopted rules that permit foreign private issuers to prepare
financial statements included in their filings with the SEC in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB,
without reconciliation to U.S. generally accepted accounting principles, or U.S. GAAP. As a foreign private issuer, our partnership is in the process of evaluating the merits of
preparing its financial statements and the financial statements of Brookfield Infrastructure in accordance with IFRS. This evaluation is being made in light of Brookfield Infrastructure's investments
in Prime, DBCT and PD Ports which uses IFRS as its primary basis of accounting.

IFRS
are premised on a framework similar to U.S. GAAP, however, significant differences exist in certain matters of recognition, measurement and disclosure. While our partnership
believes that the adoption of IFRS will not have a material impact on its or Brookfield Infrastructure's reported cash flow, it is expected to have a material impact on its and Brookfield
Infrastructure's financial position and results of operations. Our partnership is in the process of determining the impact of a transition to IFRS on its financial statements and the financial
statements of Brookfield Infrastructure.

In
conjunction with evaluating the merits of a transition to IFRS, our partnership is in the process of establishing a comprehensive conversion plan that addresses matters including
changes in accounting policy, the restatement of comparative periods, organizational and internal control, the modification of existing systems, in addition to other related business matters. Our
partnership will transition to IFRS with the first financial statements of our partnership and Brookfield Infrastructure to be prepared in accordance with IFRS being expected to be as at and for the
quarter ended March 31, 2010.

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OUR OPERATIONS

Our approximate ownership interests in underlying operations are as follows:

Brookfield Infrastructure's Interest
As at December 31Ownership Interests

Location

2009

2008UtilitiesDBCT

Australia


50%
(2)(3)

Transelec

Chile


18%


18%Ontario Transmission

Canada


100%


100%Powerco

New Zealand


17%
(1)

IEG Connections

UK


40%


TBE

Brazil





7-18%Fee for ServiceNGPL

U.S.


11%
(1)

WestNet Rail

Australia


40%
(1)

PD Ports

UK


55%
(2)(3)

Euroports

Europe and China


24%
(1)

IEG Distribution

Europe


40%
(1)

TGN

Australia


40%
(1)

TimberLongview

U.S.


30%
(3)

30%
(3)Island Timberlands

Canada


38%


38%


(1)Through its 40% interest in Prime which holds a 26% interest in NGPL, 42% in Powerco, 50% in DBCT, 60.0% in Euroports and 100% in
each of IEG, TGN and WestNet Rail.(2)Through its 40% interest in Prime and its 29% direct investment in DBCT.(3)A portion of our direct interest is held through a Brookfield sponsored private fund.


RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

To measure performance, we focus on net income as well as adjusted net operating income, or ANOI. We define ANOI as net income
excluding the impact of depreciation, depletion and amortization, deferred taxes and other items as shown in the reconciliation below. For our social infrastructure operations we also subtract debt
amortization from ANOI as these are finite life concessions and debt must be fully amortized during the concession term. ANOI is a measure of operating performance that is not calculated in accordance
with, and does not have any standardized meaning prescribed by U.S. GAAP. ANOI is therefore unlikely to be comparable to similar measures presented by other issuers. ANOI has limitations as an
analytical tool:



Because
of these limitations, ANOI 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

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results
as reported under U.S. GAAP. We compensate for these limitations by relying on our U.S. GAAP results and using ANOI only supplementally. However, ANOI 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 U.S. GAAP results, we believe that ANOI provides a more complete understanding of factors and trends affecting our underlying operations. ANOI 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 depletion because we endeavor to manage our timberlands on a sustainable basis over the long term. Furthermore, changes in asset values typically do not decline on a
predetermined schedule, as suggested by accounting depreciation or depletion, but instead will inevitably vary upwards and downwards based on a number of market and other conditions that cannot be
determined in advance. 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. Finally, we add back a performance fee payable to Brookfield by Island Timberlands. This performance fee was calculated based upon a percentage of
the increased appraised value of the timber and HBU land assets held by our Canadian timber operations over a threshold level. We believe it is appropriate to measure our performance excluding the
impact of this accrual as we expect that over time the financial impact of this fee will be more than offset by increased income associated with the increased appraised value of these assets, a
benefit which is not reflected in the period in which the related fee accrues. In addition, as a result of our fee-netting mechanism which is designed to eliminate any duplication of fees,
any performance fees will reduce future incentive distributions that may otherwise be made to Brookfield by Brookfield Infrastructure. As this credit is reflected as a reduction in distributions to
Brookfield, it would not be reflected in ANOI without adding back the performance fee.

The
following table reconciles ANOI to the most directly comparable U.S. GAAP measure, which is net income. In doing so, we add back to net income the amounts recorded in respect
of depreciation, depletion and amortization, deferred taxes and certain other items as well as the minority interest related to those items such that, similar to net income, ANOI reflects Brookfield
Infrastructure's
ownership interest. We urge you to review the U.S. GAAP financial measures within the supplemental information, and to not rely on any single financial measure to evaluate Brookfield
Infrastructure.

Years Ended December 31MILLIONS

2009

2008

2007Net income

$
47.8

$
28.0

$
12.0Add back or deduct the following:Depreciation, depletion and amortization


54.1


54.3


9.8Unrealized losses on derivative instruments


21.2


2.9


Unrealized loss on investment


11.9





Deferred taxes and other items


(17.6
)

(25.5
)

(8.5
)ANOI

$
117.4

$
59.7

$
13.3


The
difference between net income and ANOI is primarily attributable to depreciation and depletion expense which reflects purchase accounting adjustments for Transelec and Longview
associated with their respective acquisitions, deferred taxes due to the step up in tax basis associated with those acquisitions, as well as non-cash expenses in Transelec, primarily
relating to non-cash

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inflation
indexations on its Chilean peso denominated debt, as well as mark-to-market losses on derivative contracts. The unrealized loss on investment relates to our 7%
indirect investment in Longview. This investment is held through a private fund and is carried at fair value with changes to carrying value recorded in the statement of operations.

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:

Name and Municipality of Residence(1)

Age

Position

Principal OccupationDerek Pannell
Toronto, Canada


63

Chairman

DirectorAlex Erskine(2)
Smiths, Bermuda


46

Director

Partner, Appleby, an international law firmJonathan Hagger(2)
Tunbridge Wells, England


61

Director

Chairman, Realty Insurances; and Chairman, GL HearnArthur Jacobson, Jr.(3,4)
Mamaroneck, New York


47

Director

Managing Member, Martinart Partners, L.L.C., a restaurantAnne Schaumburg(2)
Short Hills, New Jersey


60

Director

Director, NRG Energy, Inc.Danesh Varma(3,4)
Kingston-Upon-Thames, England


60

Director

Chief Financial Officer, Labrador Iron Mines Limited, a mining companyJames Wallace(2,3,4)
Sudbury, Ontario


63

Director

President, Pioneer Construction Inc., a construction company


(1)The business address for each of the directors is Canon's Court, 22 Victoria Street, Hamilton, HM 12, Bermuda.(2)Member of the audit committee. Jonathan Hagger is the chairman of the audit committee and also designated as the audit committee financial expert.(3)Member of the nominating and governance committee. James Wallace is the Chairman of the nominating and governance committee.(4)Member of the compensation committee. James Wallace is the Chairman of the compensation committee.


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

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September 2001
and June 2002. Derek is a metallurgical engineer with over 41 years of experience in the mining and metals industry. He is former Chair of the Mining Association of
Canada and board 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.

Alex Erskine.Alex has served as a director of our Managing General Partner since February 4, 2009. He is a Partner and the Global
Team Leader
of the Funds and Investment Services team at Appleby. He practices in the areas of corporate and commercial law, specializing in advising on structuring and operating investment vehicles including
mutual funds, hedge funds, unit trusts, partnerships, and close ended funds. Alex joined Appleby in 1999. He served as Managing Partner of Appleby's British Virgin Islands office from
March 2007 to October 2008. Prior to joining Appleby he was Deputy Legal and Compliance Director of the Asset Management Division of UBS AG. Alex was educated in Ghana and England and
studied law at the University College of Wales, Aberystwyth graduating in 1986 with an L.L.B.Hons. He was called to the Bar of England and Wales in 1996, the Bermuda Bar in 2006 and the British Virgin
Islands Bar in 2007.

Jonathan Hagger.Jonathan has served as a director of our Managing General Partner since February 19, 2008. He is the Chairman of
Realty
Insurances, an international insurance brokerage specializing in real estate and private clients. He is also Chairman of GL Hearn, a real estate advisory firm with national practice covering the UK.
He is also a Director of a number of private companies. Prior to his current positions he was the Chief Financial Officer of Grosvenor Estate, an investment holding organization which includes the
world wide real estate operations of the Grosvenor Group, of which he was Financial Director for 15 years. He is a Fellow of the Institute of Chartered Accountants of England and Wales and the
Association of Corporate Treasurers.

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 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.

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 of
Labrador Iron Mines Limited. He joined Labrador Iron Mines Limited in 2007 and was Chief Financial Officer of Minco PLC from 2006 to 2007. 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.

James Wallace.James has served as a director of our Managing General Partner since November 27, 2007. He is the President of
Pioneer
Construction Inc. James is currently serving on the Boards of the following public issuer: Northstar Aerospace (Canada) Inc. and Brookfield Renewable

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Power Inc.
James resigned from the board of Xstrata Canada Limited (formerly Falconbridge Limited) on March 31, 2009 and has also held positions on the boards Noranda Income Fund, Osprey
Media Income Fund, Rio Algom Ltd., and CTV as well as a number of other private companies in which he has ownership interests. James holds a Bachelor of Science from Laurentian University and a
Masters of Business Administration from the University of Windsor. James is a Certified Management Accountant and holds a CFA designation.

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
15,000 employees, including approximately 400 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:

Name

Age

Years of Experience

Years at Brookfield

Current Position with the ManagerJeffrey Blidner


62


34


9

ChairSamuel Pollock


43


21


16

Chief Executive OfficerJohn Stinebaugh


43


21


5

Chief Financial Officer


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, fee for service, timber and social infrastructure operations. Set forth below is
biographical information for Messrs. Blidner, Pollock, and Stinebaugh.

Jeffrey Blidner.Jeff is a Senior Managing Partner of Brookfield Asset Management with responsibility for strategic planning and
transaction
execution. Jeff is also the Chairman of the Manager. Jeff led the $2.5 billion acquisition of Transelec, as well as Brookfield's $7 billion acquisition of the Multiplex Group,
an Australian-based global property, construction, and development company. Jeff is also the Chairman of the Board of Transelec and is a director of the Board of Prime. Prior to joining Brookfield
Asset Management in 2000, Jeff 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.

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, including the BBI Transaction. Sam joined Brookfield Asset Management in 1994 and, prior to his current role, acted as Brookfield Asset
Management's Chief Investment Officer and led various Brookfield investment and transaction initiatives such as the formation of Tricap Partners and the privatization of O&Y Canada. Sam is a director
of the Board of Prime. 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. He is
responsible for business
development for Brookfield's utility infrastructure business, focusing on acquisitions of utility infrastructure assets in North America and other jurisdictions. John co-led the BBI
Transaction and is a director on the Board of Myria, the company which owns 80% of NGPL, and previously co-led the $2.5 billion acquisition of Transelec. Prior to this, John was
with Credit Suisse Securities (U.S.A.) LLC. He worked in the energy group with

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responsibility
for mergers and acquisitions and leveraged financings. During his tenure at Brookfield Asset Management and Credit Suisse, John worked on announced acquisitions and divestitures of
energy infrastructure companies in excess of $15 billion. John received his Chartered Financial Analyst designation in 1995 and graduated with a degree in economics from Harvard University.

See
also information contained in this 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 Brookfield Infrastructure Group Inc. 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 Securities and Exchange Commission at www.sec.gov and on our SEDAR profile at
www.sedar.com 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 or arrange
for the provision by an appropriate service provider of the following services:



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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, Brookfield Infrastructure and any Holding Entity.

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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
Brookfield Infrastructure'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 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.

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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. The Managing General Partner may only
terminate the Master Services Agreement on behalf of our partnership with the prior unanimous approval of the 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 under performance 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.

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

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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, the indemnified persons will not be liable to the Service Recipients
to the fullest
extent permitted by law, 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

Our Managing General Partner pays each of its directors $50,000 per year for serving on its board of directors and various board
committees. The Managing General Partner pays the chairperson of the board of directors $100,000 per year for serving as chairperson of its board of directors. In connection with the BBI Transaction,
a special fee of $5,000 was paid by the Managing General Partner to each of the independent directors who sat on the special committee that was established to consider the related party aspects of the
BBI Transaction.

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, Brookfield
Infrastructure 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 Brookfield Infrastructure described under Item 7.B "Related Party
TransactionsIncentive Distributions."

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. These individuals are not directors or officers of the partnership
or our Managing General Partner.

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. Our corporate governance practices are not materially different than those required of domestic
companies under the NYSE's listing standards. The following is a summary of certain provisions of those By-laws that affect our partnership's governance.

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Size, Independence and Composition of the Board of Directors

Our Managing General Partner's board of directors is currently set at seven directors. The board may consist of between three and
eleven 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 prohibit 50% or more of the board of directors (or the independent directors as a
group) from being citizens or residents of any one of Canada, the United Kingdom or the United States, and require that all board meetings be held in Bermuda.

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 earlier of his or her death, resignation or removal from office. 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.

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:



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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 generally 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.

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. 50% or more of the audit committee may not be directors who are citizens or residents of any one of Canada, the United Kingdom or the
United States.

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



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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. All meetings of the audit committee will be held in Bermuda. 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 Canon's Court, 22 Victoria 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 entirely of independent directors and 50% or more of the nominating and corporate
governance committee may not be directors who are citizens or residents of any one of Canada, the United Kingdom or the United States.

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. All meetings of the nominating and governance committee will be held in Bermuda. 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 Canon's Court, 22 Victoria 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 solely of independent directors. 50% or more of the compensation committee may not be directors who are
citizens or residents of any one of Canada, the United Kingdom or the United States.

The
compensation committee is responsible for reviewing and making recommendations to the board of directors of the 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. All meetings of the compensation committee will be held in Bermuda. 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 Canon's Court,
22 Victoria 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

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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 Brookfield Infrastructure 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.

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

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partnership.
However, the Infrastructure General Partner's By-laws allow for alternate directors. 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 citizen or resident of Canada, the United Kingdom or the
United States if such residency would cause 50% or more of the board of directors (or the independent directors as a group) to consist of directors who are citizens or residents of any
one of Canada, the United Kingdom or the United States.

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 the Managing General Partner own less than one percent of our units.

ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A    MAJOR SHAREHOLDERS

The following table presents information regarding the beneficial ownership of our limited partnership units by each entity that we
know beneficially owns more than 5% of our partnership's units, as at December 31, 2009.

Units OutstandingName and Address

Units Owned

Percentage(1)Brookfield Asset Management Inc.
Suite 300, Brookfield Place, 181 Bay Street
Toronto, Ontario M5J 2T3


42.5 million
(2)

40.2%
(2)Partners Limited
Suite 300, Brookfield Place, 181 Bay Street
Toronto, Ontario M5J 2T3


44.7 million
(3)

42.3%
(3)


(1)Assumes that all of the Redemption  Exchange Units of Brookfield Infrastructure are exchanged
for our units pursuant to the Redemption Exchange Mechanism described at Item 10.B "Memorandum and Articles of Association  Description of Brookfield
Infrastructure's Limited Partnership Agreement  Redemption Exchange Mechanism."(2)Brookfield Asset Management may be deemed to be the beneficial owner of 42,519,150 of our units that it holds through wholly-owned subsidiaries,
constituting approximately 40.2% of the issued and outstanding units, assuming that all of the Redeemable Partnership Units of Brookfield Infrastructure are exchanged for our units pursuant to the
Redemption Exchange Mechanism described at Item 10.B "Memorandum and Articles of AssociationDescription of Brookfield Infrastructure's Limited Partnership
AgreementRedemption Exchange Mechanism." This includes 48,930 of our units beneficially held by Brookfield Asset Management.(3)Partners Limited owns all of Brookfield Asset Management's Class B Limited Voting Shares and approximately 50% of BAM Investment Corp.'s common
shares. Partners Limited may be deemed to be the beneficial owner of 44,737,799 of our units,


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constituting approximately 42.3% of the issued and outstanding units, assuming that all of the Redemption-Exchange Units of Brookfield Infrastructure are exchanged for our units pursuant to the
Redemption-Exchange Mechanism described at Item 10.B "Memorandum and Articles of Association  Description of Brookfield Infrastructure's Limited
Partnership Agreement  Redemption Exchange Mechanism." This includes 2,218,649 of our units beneficially held by BAM Investment Corp. 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.


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

As
of April 30, 2010, 129,937 of our outstanding limited partnership units were held by 1,606 holders of record in the United States, not including limited partnership
units held of record by Depository Trust and Clearance Corporation, or DTC. As of April 30, 2010, DTC was the holder of record of 62,761,156 limited partnership units.

See
also the information contained in this 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 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, Brookfield Infrastructure, 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.

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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 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, Brookfield
Infrastructure 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, Brookfield Infrastructure 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 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 also recently appointed an affiliate as its exclusive vehicle for the
acquisition of contracted hydro and wind power generation facilities located in Canada. 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 to use reasonable efforts to ensure that any voting rights with respect to any operating entity that are held by
entities over which it has control are 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, Brookfield Infrastructure and the Holding Entities have agreed that none of Brookfield or the Manager, nor any director, officer,
agent, member,

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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 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.

Services Provided under Our Master Services Agreement

The Service Recipients have entered into the Master Services Agreement pursuant to which Brookfield Infrastructure Group Inc.
and certain other affiliates of Brookfield Asset Management who are party thereto agreed to provide or arrange for other service providers to provide management and administration services to our
partnership and the other Service Recipients. 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."

Equity Commitment and Other Financing

Concurrent with the closing of the spin-off, Brookfield provided to our partnership and Brookfield Infrastructure an equity
commitment in the amount of $200 million. The equity commitment may be called by our partnership and/or Brookfield Infrastructure in exchange for the issuance of a number of units of our
partnership or Brookfield Infrastructure, as the case may be, to Brookfield, corresponding to the amount of the equity commitment called divided by the volume weighted average of the trading price for
our units on the principal stock exchange on which our units are listed for the five days immediately preceding the date of the call. The equity commitment is available to be called until
January 31, 2011. The equity commitment is available in minimum amounts of $10 million and the amount available under the equity commitment will be reduced permanently by the amount so
called. Before funds may be called on the equity commitment a number of conditions precedent must be met, including that Brookfield continues to control the Infrastructure GP LP and has
the ability to elect a majority of the board of directors of the Infrastructure General Partner.

The
units of Brookfield Infrastructure to be issued under the equity commitment 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 Brookfield Infrastructure's Limited Partnership
AgreementRedemption-Exchange Mechanism."

If
the equity commitment were called in full by Brookfield Infrastructure, Brookfield's ownership of Brookfield Infrastructure would increase from approximately 41% to approximately 47%
or, if the equity commitment were called in full by our partnership, Brookfield's ownership of our outstanding limited partnership units would increase from approximately 0% to approximately 16%, in
each case assuming that our units' market price is equal to our pro forma book value per unit. However, since

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capital
calls under the equity commitment will be at the five day volume weighted average price of our units, the capital calls will not be economically dilutive to our existing unit holders.

The
rationale for the equity commitment is to provide our partnership and Brookfield Infrastructure with access to equity capital on an as needed basis and to maximize our flexibility.
Brookfield Infrastructure has also established a credit facility with a syndicate of banks. We intend to use the liquidity provided by the equity commitment and credit facility for working capital
purposes, and we may use the proceeds from the equity commitment to fund growth capital investments and acquisitions. Furthermore, Brookfield has informed us that it will also consider providing
bridge financing to us for the purposes of funding acquisitions. The determination of which of these sources of funding
Brookfield Infrastructure will access in any particular situation will be a matter of optimizing needs and opportunities at that time.

Allocation Agreement

On October 8, 2009, our partnership entered into an allocation agreement, or as subsequently amended, the Allocation Agreement,
with Brookfield, Brookfield Infrastructure and BIP Bermuda Holdings I Limited, or Bermuda Holdco, that governed the terms on which the BBI Transaction was financed, which agreement was subsequently
amended on October 20, 2009 and October 30, 2009. The following represents a summary only and reference should be made to the full text of the Allocation Agreement, which can be found at
www.sedar.com.

Pursuant
to the Allocation Agreement our partnership used its reasonable commercial efforts to conduct an offering of our units, on terms reasonably acceptable to our partnership, in
order to raise sufficient funds to fund the investment in Prime, or the BBI Investment, and the acquisition of 60% of the PD Ports and DBCT. Pursuant to the Allocation Agreement, our partnership
invested the gross proceeds of the public offering of our units on November 6, 2009, or the Offering, in Class A Units of Brookfield Infrastructure. Brookfield Infrastructure in turn
invested the proceeds from the issuance of the Brookfield Investment and Class A Units in an issuance of shares of Bermuda Holdco. Bermuda Holdco used the proceeds received from such issuance
of its shares to acquire: first, 60% of the PD Ports and DBCT and second, the proceeds remaining, following the acquisition of PD Ports and DBCT, to the Investment. The Allocation Agreement provided
that since the unitholder resolution with respect to the use of proceeds discussed above, or the Unitholder Resolution, was approved, Brookfield exercised its option to maintain its effective interest
in our partnership immediately prior to the offering by purchasing Redeemable Partnership Units, general partner units and our units held directly or indirectly by Brookfield. Brookfield also
subscribed for general partner units of Brookfield Infrastructure so that the general partner interest would remain at approximately 1%.

The
Allocation Agreement contemplated that approximately 40% of the PD Ports and DBCT would be allocated to third party investors. Third party investors acquired approximately 40% of PD
Ports and DBCT, while we acquired 60% of PD Ports and DBCT. We acquired PD Ports and DBCT through (or alongside) one or more Brookfield-sponsored private funds. The Allocation Agreement
provided that the ownership by Bermuda Holdco, such third party investors and, if applicable, Brookfield, would be on terms substantially similar to the terms of another fund managed by Brookfield on
behalf of third party investors. In particular, the Allocation Agreement provided that: (i) Bermuda Holdco benefited from the same terms as the other investors and PD Ports and DBCT;
(ii) Bermuda Holdco's share of any management fees and carried interest payable to Brookfield was subject to the netting mechanisms set out in the Master Services Agreement; and
(iii) fees for any advisory, development oversight, property management or other services provided by Brookfield would be borne equally by Bermuda Holdco and the other investors in PD Ports and
DBCT in proportion to their relative interests.

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Prime Relationship Agreement

Prime, Brookfield and Brookfield Infrastructure entered into a relationship agreement, or the Prime Relationship Agreement, in
connection with the BBI Transaction, as specified in the implementation agreement dated October 9, 2009, or the Implementation Agreement, Brookfield was provided with certain rights in relation
to the ongoing governance of Prime. The Prime Relationship Agreement provides, among other things, that the Prime board of directors, or the Prime Board, will be made up of eight directors and the
responsible entity for Prime, Babcock & Brown Investor Services Limited's board of directors, or the BBIS Board, will be made of up seven directors. It is intended that at least half of each of
the Prime Board and BBIS Board be comprised of independent non-executive directors. Directors nominated by Brookfield are considered independent if each of the Prime Board and BBIS Board
determine that the directors satisfy the criteria of independence in the ASX Corporate Governance Principles.

The
Prime Relationship Agreement provides the following rights:



Preferred Shares

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

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 Brookfield Infrastructure 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

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AssociationDescription
of Brookfield Infrastructure'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 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 Brookfield Infrastructure held by wholly-owned subsidiaries
of Brookfield 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 the United States Securities Act of 1933, as amended, any of our
partnership's 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 Brookfield Infrastructure as a result of its
ownership of the general partnership interest in Brookfield Infrastructure. The incentive distributions are to be calculated in increments based on the amount by which quarterly distributions on the
limited partnership units of Brookfield Infrastructure exceed specified target levels as set forth in Brookfield Infrastructure's limited partnership agreement. See Item 10.B "Memorandum and
Articles of AssociationDescription of Brookfield Infrastructure'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 Chilean 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 otherwise be entitled from Brookfield Infrastructure pursuant to Brookfield Infrastructure's limited
partnership agreement. See Item 6.A "Directors and Senior ManagementOur Master Services Agreement."

In
addition, until June 30, 2009 operations, maintenance and corporate services were provided to Ontario Transmission by Brookfield on an outsourcedcost recovery
basis, with such costs being recoverable under the regulated revenue requirement of this operation.

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General Partner Distributions

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

Distribution Reinvestment Plan

Brookfield Infrastructure has a distribution reinvestment plan. Brookfield has advised our partnership that it may from
time-to-time reinvest distributions it receives from Brookfield Infrastructure in Brookfield Infrastructure's distribution reinvestment plan. In addition, subject to regulatory
approval and U.S. securities law registration
requirements, our partnership intends to adopt a distribution reinvestment plan. While our partnership has not yet implemented a distribution reinvestment plan, the following is a summary description
of the principal terms of the plan our partnership intends to implement.

Pursuant
to the distribution reinvestment plan, holders of our units will be able to elect to have all distributions paid on our units held by them automatically reinvested in additional
units 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 New York Stock Exchange, or NYSE, for the five trading days immediately preceding the date
the relevant distribution is paid by our partnership.

The
units so purchased will be allocated on a pro rata basis to plan participants. The plan agent will furnish to each plan participant a report of the units purchased for the
plan participant's account in respect of each distribution and the cumulative total purchased for that account. While our partnership will not issue fractional units, a plan participant's
pro rata 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, 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

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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 terminate the distribution reinvestment plan, in its sole discretion, upon notice to the plan participants and the plan agent, but such
action will have no retroactive effect that would prejudice a participant's interest. Our partnership will also be able to amend, modify or suspend the distribution reinvestment plan at any time in
its sole discretion, provided that the plan agent gives written notice of that amendment, modification or suspension to our unitholders, for any amendment, modification or suspension to the
distribution reinvestment plan that in our partnership's opinion may materially prejudice participants.

Our
partnership does not intend to reinvest distributions it receives from Brookfield Infrastructure in Brookfield Infrastructure'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 Brookfield Infrastructure pursuant to Brookfield Infrastructure's distribution reinvestment plan. The units of Brookfield Infrastructure 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 Brookfield Infrastructure'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, Brookfield
Infrastructure'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 Brookfield Infrastructure's Limited Partnership AgreementIndemnification; Limitations
of Liability."

Licensing Agreement

Our partnership and Brookfield Infrastructure 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

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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:



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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, the equity commitment, our limited partnership agreement or Brookfield Infrastructure'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) any calls by Brookfield Infrastructure or our partnership on the equity commitment; (v) acquisitions by us from, and dispositions by
us to, Brookfield; (vi) any other transaction involving Brookfield; and (vii) 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 of Multilateral Instrument 61-101Protection of Minority Security Holders in Special Transactions, or 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 40% 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,

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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 Brookfield Infrastructure'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 limited partnership agreement of Brookfield Infrastructure contain various provisions that modify the fiduciary duties that might otherwise be
owed to us and our unitholders. These duties include the duties of care and loyalty. The duty of loyalty, in the absence of provisions in the limited partnership agreements of our partnership and
Brookfield Infrastructure to the contrary, would generally prohibit the Managing General Partner and Infrastructure General Partner from taking any action or engaging in any transaction as to which it
has a conflict of interest. The limited partnership agreements of our partnership and Brookfield Infrastructure each prohibit the limited partners from advancing claims that otherwise might raise
issues as to compliance with fiduciary duties or applicable law. For example, the agreements provide that our Managing General Partner, the Infrastructure General Partner and their affiliates will not
have any obligation under the limited partnership agreements of our partnership or Brookfield Infrastructure, 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, Brookfield Infrastructure, any Holding Entity or any other holding vehicle established by our partnership. They also allow
affiliates of the Managing General Partner and Infrastructure General Partner to engage in activities that may compete with us or our activities. In addition, the agreements permit our Managing
General Partner and the Infrastructure General Partner to take into account the interests of third parties, including Brookfield, when resolving conflicts of interest.

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.

7.C    INTEREST OF EXPERTS AND COUNSEL

Not applicable.

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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.

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

$
7.15


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

High

LowJanuary 31, 2008 to March 31, 2008

$
21.60

$
14.60April 1, 2008 to June 30, 2008

$
21.00

$
16.95July 1, 2008 to September 30, 2008

$
19.81

$
15.00October 1, 2008 to December 31, 2008

$
16.55

$
9.47January 1, 2009 to March 31, 2009

$
15.00

$
7.15April 1, 2009 to June 30, 2009

$
14.37

$
11.51July 1, 2009 to September 30, 2009

$
18.64

$
11.30October 1, 2009 to December 31, 2009

$
18.45

$
14.26January 1, 2010 to March 31, 2010

$
18.50

$
15.85


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

High

LowNovember 1, 2009 to November 30, 2009

$
16.27

$
14.39December 1, 2009 to December 31, 2009

$
17.35

$
15.28January 1, 2010 to January 31, 2010

$
17.27

$
15.90February 1, 2010 to February 28, 2010

$
17.12

$
15.85March 1, 2010 to March 31, 2010

$
18.50

$
16.46April 1, 2010 to April 30, 2010

$
18.66

$
17.45May 1, 2010 to May 28, 2010

$
17.82

$
14.95


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The
following table sets forth the annual high and low prices for our units on the Toronto Stock Exchange, or 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

$
15.50


The
following table sets forth the quarterly 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 September 30, 2009

$
19.50

$
17.00October 1, 2009 to December 31, 2009

$
19.50

$
15.50January 1, 2010 to March 31, 2010

$
18.80

$
17.00


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

LowNovember 1, 2009 to November 30, 2009

$
17.05

$
15.53December 1, 2009 to December 31, 2009

$
18.00

$
16.06January 1, 2010 to January 31, 2010

$
18.05

$
17.00February 1, 2010 to February 28, 2010

$
17.90

$
17.01March 1, 2010 to March 31, 2010

$
18.80

$
17.20April 1, 2010 to April 30, 2010

$
18.60

$
17.58May 1, 2010 to May 31, 2010

$
18.16

$
16.12


9.B    PLAN OF DISTRIBUTION

Not applicable.

9.C    MARKET

Our units are listed on the NYSE under the symbol "BIP" and on the Toronto Stock Exchange, or 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.

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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 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 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 the Limited Partnership Act 1883 and the Exempted
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
Brookfield Infrastructure and, subject to the approval of the 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 the Limited Partnership Act 1883 and 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.

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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 Brookfield Infrastructure

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 Brookfield Infrastructure.

Capital Contributions

Brookfield and the 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 Brookfield Infrastructure 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 the Managing General Partner in its sole discretion.
However, the 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 the 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 the 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

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will
be the same source and character as the distributions received by such partner with respect to such fiscal year.

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 the 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 the Limited Partnership Act 1883 and otherwise acts in conformity with the provisions of our limited partnership
agreement, such partner's liability under the Limited Partnership Act 1883 and 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 the Limited Partnership Act 1883 or 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 the Limited Partnership Act 1883 specifically 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.

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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 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:



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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:



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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 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 the Limited Partnership Act of 1883 of 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 the Limited Partnership Act 1883 or the Exempted Partnerships Act 1992
in 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

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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 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 the Managing General Partner, is required to
register as an "investment company" under the U.S. 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 U.S. 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.

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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
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 the 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 U.S. 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.

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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, Brookfield Infrastructure, 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, Brookfield Infrastructure, 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."

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 Brookfield Infrastructure, 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, Brookfield Infrastructure, 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, Brookfield Infrastructure, 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, Brookfield Infrastructure, 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, Brookfield Infrastructure, 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, Brookfield Infrastructure, 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

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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, our 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 Brookfield Infrastructure, 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, 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

Under our limited partnership agreement, our partnership is required to prepare financial statements in accordance with
U.S. GAAP. However, our partnership plans to prepare its financial statements and the financial statements of Brookfield Infrastructure in accordance with IFRS. This change is being made in
light of Brookfield Infrastructure's recent investments in Prime, DBCT and PD Ports which use IFRS as their primary basis of accounting. The first financial statements of the Partnership and
Brookfield infrastructure to be prepared in accordance with IFRS will be for the financial statements as at and for the quarter ended March 31, 2010. See also the information contained in this
Form 20-F under Item 3.D "Risk FactorsRisk Relating to Us and Our PartnershipWe will adopt new accounting standard for the quarter ending
March 31, 2010, and this adoption may have a material impact on our consolidated financial statements".

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.

The
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

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reasonably
possible, any other non-U.S. corporation in which we hold an interest. The 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. The 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 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:



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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.

Transfer Agent and Registrar

The Bank of New York 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 Brookfield Infrastructure's Limited Partnership Agreement

The following is a description of the material terms of Brookfield Infrastructure'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 Brookfield Infrastructure and do not have any rights under its
limited partnership agreement. We have included a summary of what we believe are the most important provisions of Brookfield Infrastructure's limited partnership agreement because we conduct our
operations through Brookfield Infrastructure and the Holding Entities and our rights with respect to our equity holding in Brookfield Infrastructure are governed by the terms of Brookfield
Infrastructure's limited partnership agreement.

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 Brookfield Infrastructure'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

Brookfield Infrastructure is a Bermuda exempted limited partnership registered under the Limited Partnership Act 1883 and the Exempted
Partnerships Act 1992. Brookfield Infrastructure 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 Brookfield Infrastructure is to: acquire and hold interests in the Holding
Entities and, subject to the approval of Infrastructure GP LP, any other subsidiary of Brookfield Infrastructure; engage in any activity related to the capitalization and

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financing
of Brookfield Infrastructure'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 the Limited Partnership Act 1883 and our limited partnership agreement.

Units

Brookfield Infrastructure's units are limited partnership interests in Brookfield Infrastructure. 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 Brookfield Infrastructure's limited
partnership agreement or upon the liquidation of Brookfield Infrastructure or as otherwise required by applicable law. Except to the extent expressly provided in Brookfield Infrastructure'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.

In
connection with the spin-off, Brookfield Infrastructure 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. 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

Infrastructure GP LP has broad rights to cause Brookfield Infrastructure to issue additional partnership interests and
may cause Brookfield Infrastructure 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 Infrastructure GP LP in its sole discretion, all without approval of our limited partners.

Redemption-Exchange Mechanism

At any time after two years from the date of closing of the spin-off, one or more wholly-owned subsidiaries of Brookfield
that hold Redeemable Partnership Units will have the right to require Brookfield Infrastructure 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 Brookfield Infrastructure
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 Brookfield Infrastructure 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 Brookfield Infrastructure's units so redeemed will cease.

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Brookfield's
aggregate limited partnership interest in our partnership would be approximately 40% (in addition to the 0.2% of our units that were acquired by Brookfield in
connection with the satisfaction of Canadian federal and U.S. "back-up" withholding tax requirements upon the spin-off) if it exercised its redemption right in full and
our partnership exercised its right of first refusal on the Brookfield Infrastructure units redeemed. Brookfield's total percentage interest in our partnership would be increased if it participates in
Brookfield Infrastructure's distribution reinvestment plan or receives additional units of Brookfield Infrastructure under the equity commitment.

Distributions

Distributions by Brookfield Infrastructure will be made in the sole discretion of the Infrastructure GP LP. However, the
Infrastructure GP LP will not be permitted to cause Brookfield Infrastructure to make a distribution if Brookfield Infrastructure does not have sufficient cash on hand to make the
distribution, the distribution would render Brookfield Infrastructure insolvent or if, in the opinion of the Infrastructure GP LP, the distribution would leave Brookfield Infrastructure
with insufficient funds to meet any future contingent obligations.

Except
as set forth below, prior to the dissolution of Brookfield Infrastructure, distributions of available cash (if any) in any given quarter will be made by Brookfield
Infrastructure as follows, referred to as the Regular Distribution Waterfall:



If,
prior to the dissolution of Brookfield Infrastructure, available cash is deemed by the Infrastructure GP LP, in its sole discretion, to be (i) attributable to
sales or other dispositions of Brookfield Infrastructure's assets and (ii) representative of unrecovered capital, then such available cash shall be distributed to the partners of Brookfield
Infrastructure in proportion to the unreturned capital attributable to Brookfield Infrastructure'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 Brookfield Infrastructure (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 Brookfield Infrastructure, all cash and property of Brookfield Infrastructure in excess of that required to discharge
Brookfield Infrastructure's liabilities will be distributed as follows: (a) 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 (b) all
other cash and/or property will be distributed in the manner set forth below.

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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 Brookfield Infrastructure. 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 Brookfield Infrastructure so as to ensure the uniformity of the economic rights
and entitlements of (i) the previously outstanding Brookfield Infrastructure's partnership interests and (ii) the subsequently-issued Brookfield Infrastructure's partnership interests.

The
limited partnership agreement of Brookfield Infrastructure 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

Brookfield Infrastructure's limited partners, in their capacities as such, may not take part in the management or control of the
activities and affairs of Brookfield Infrastructure and do not have any

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right
or authority to act for or to bind Brookfield Infrastructure or to take part or interfere in the conduct or management of Brookfield Infrastructure.

Limited
partners are not entitled to vote on matters relating to Brookfield Infrastructure, although holders of units are entitled to consent to certain matters as described under
"Amendment of Brookfield Infrastructure'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 Brookfield Infrastructure'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 Brookfield Infrastructure then issued and outstanding. Each unit shall entitle the holder thereof to one vote for the purposes of any
approvals of holders of units.

Meetings

The Infrastructure GP LP may call special meetings of the limited partners 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 the
Infrastructure GP LP or Brookfield. Only holders of record on the date set by the Infrastructure GP LP (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 Brookfield Infrastructure's Limited Partnership Agreement

Amendments to Brookfield Infrastructure's limited partnership agreement may be proposed only by or with the consent of the
Infrastructure GP LP. To adopt a proposed amendment, other than the amendments that do not require limited partner approval discussed below, the Infrastructure GP LP must
seek approval of a majority of Brookfield Infrastructure's 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 Brookfield Infrastructure'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.

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No Limited Partner Approval

Subject to applicable law, the Infrastructure GP LP may generally make amendments to Brookfield Infrastructure's limited
partnership agreement without the approval of any limited partner to reflect:



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In
addition, the Infrastructure GP LP may make amendments to Brookfield Infrastructure's limited partnership agreement without the approval of any limited partner if those amendments, in
the discretion of the Infrastructure GP LP:



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 Brookfield Infrastructure's
limited partnership agreement (other than an amendment pursuant to a merger, sale or other disposition of assets effected in accordance with Brookfield Infrastructure's limited partnership agreement)
will become effective without the approval of holders of at least 90% of Brookfield Infrastructure's units, unless it obtains an opinion of counsel to the effect that the amendment will not cause
Brookfield Infrastructure 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 the
Infrastructure GP LP has not made the election described below under "Election to be Treated as a Corporation") or affect the limited liability under the Limited Partnership
Act of 1883 of any of Brookfield Infrastructure'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.

Election to be Treated as a Corporation

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

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Dissolution

Brookfield Infrastructure shall dissolve and its affairs shall be wound up, upon the earlier of (i) the service of notice by the
Infrastructure GP LP, with the approval of a majority of the members of the independent directors of our Managing General Partner, that in the opinion of the
Infrastructure GP LP the coming into force of any law, regulation or binding authority renders illegal or impracticable the continuation of Brookfield Infrastructure; (ii) the
election of the Infrastructure GP LP if Brookfield Infrastructure, as determined by the Infrastructure GP LP, is required to register as an "investment company" under the
U.S. Investment Company Act or similar legislation in other jurisdictions; (iii) the date that the Infrastructure GP LP withdraws from the our partnership (unless
Brookfield becomes the general partner of Brookfield Infrastructure 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 Brookfield Infrastructure or an order to wind up or liquidate the Infrastructure GP LP; and (v) the date on which the
Infrastructure GP LP decides to dispose of, or otherwise realize proceeds in respect of, all or substantially all of Brookfield Infrastructure's assets in a single transaction or series
of transactions.

Brookfield
Infrastructure shall not dissolve if within 30 days of the date of dissolution (and provided that a notice of dissolution with respect to Brookfield
Infrastructure 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 Brookfield Infrastructure 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 Brookfield Infrastructure.

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 that withdrawing general
partner. If a successor is not elected, or is elected but an opinion of counsel regarding limited liability, tax matters and the U.S. Investment Company Act (and similar legislation in
other jurisdictions) cannot be obtained, Brookfield Infrastructure 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 U.S. 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 a general partner under circumstances where cause exists or withdrawal of a general partner where that withdrawal violates Brookfield Infrastructure's 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 or is removed by the limited partners, 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

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the
departing general 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

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 Brookfield Infrastructure's limited partnership agreement and furnish an opinion of counsel regarding limited liability, tax matters and the U.S. 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 Infrastructure GP LP, the Infrastructure General Partner 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 Brookfield Infrastructure with the same rights they would have if the Infrastructure GP LP and Infrastructure General Partner were not a party to the limited
partnership agreement of Brookfield Infrastructure. An interested party will not be liable to account either to other interested parties or to Brookfield Infrastructure, 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 Brookfield Infrastructure permits an interested party to sell investments to, purchase assets from, vest assets in and enter into any contract,
arrangement or transaction with Brookfield Infrastructure, any of the Holding Entities, any operating entity or any other holding vehicle established by Brookfield Infrastructure and may be interested
in any such contract, transaction or arrangement and shall not be liable to account either to Brookfield Infrastructure, any of the Holding Entities, any operating entity or any other holding vehicle
established by Brookfield Infrastructure 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.

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Outside Activities of the General Partner

Under Brookfield Infrastructure's limited partnership agreement, the general partner will be required to maintain as its sole activity
the role of the general partner of Brookfield Infrastructure. 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 securities of a subsidiary of an Holding Entity or any other holding vehicle established by
Brookfield Infrastructure.

Brookfield
Infrastructure'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 Infrastructure General Partner, the Infrastructure GP LP, Brookfield Infrastructure, any
Holding Entity, operating entity, or any other holding vehicle established by Brookfield Infrastructure. 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 Infrastructure General Partner, the
Infrastructure GP LP, Brookfield Infrastructure, any Holding Entity, operating entity, and any other holding vehicle established by Brookfield Infrastructure (or any of their
respective investors), and shall be deemed not to be a breach of the Infrastructure General Partner's fiduciary duties or any other obligation of any type whatsoever of the general partner. None of
the Infrastructure General Partner, the Infrastructure GP LP, Brookfield Infrastructure, any Holding Entity, operating entity, any other holding vehicle established by Brookfield
Infrastructure or any other person shall have any rights by virtue of Brookfield Infrastructure'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 Brookfield Infrastructure 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 Brookfield Infrastructure'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 Brookfield Infrastructure, any
Holding Entity, operating entity, or any other holding vehicle established by Brookfield Infrastructure. These provisions will not affect any obligation of such indemnified person to present business
or investment opportunities to Brookfield Infrastructure, any Holding Entity, operating entity or any other holding vehicle established by Brookfield Infrastructure pursuant to a separate written
agreement between such persons.

Accounts; Reports

Under Brookfield Infrastructure's limited partnership agreement, the Infrastructure GP LP is required to prepare
financial statements in accordance with U.S. GAAP. In conjunction with our adoption of IFRS as at and for the quarter ended March 31, 2010, we expect to amend the limited partnership
agreement accordingly. Brookfield Infrastructure'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 the Infrastructure GP LP deems appropriate. Brookfield Infrastructure'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. Brookfield Infrastructure's quarterly financial statements are unaudited and are made available publicly as and within the time period required by
applicable laws and regulations.

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The
Infrastructure GP LP is also required to use commercially reasonable efforts to prepare and send to the limited partners of Brookfield Infrastructure on an annual
basis, additional information regarding Brookfield Infrastructure, 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
Infrastructure GP LP will also, where reasonably possible, prepare and send information required by the non-U.S. limited partners of Brookfield Infrastructure 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
Infrastructure GP LP will also, where reasonably possible and applicable, prepare and send information required by limited partners of Brookfield Infrastructure for Canadian federal
income tax purposes.

The
Infrastructure GP LP will deliver to our partnership (i) the financial statements of Brookfield Infrastructure, and (ii) the accounts and financial
statements of any Holding Entity or any other holding vehicle established by Brookfield Infrastructure that is not consolidated with Brookfield Infrastructure or any Holding Entity or holding vehicle
whose accounts are subject to such approval.

Indemnification; Limitations on Liability

Under Brookfield Infrastructure's limited partnership agreement, it is required to indemnify to the fullest extent permitted by law the
Infrastructure General Partner, the Infrastructure GP LP, 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 Brookfield Infrastructure, 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 Brookfield
Infrastructure'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. Brookfield Infrastructure'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

Brookfield Infrastructure's limited partnership agreement is governed by and will be construed in accordance with the laws
of Bermuda.

10.C    MATERIAL CONTRACTS

The following are the only 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:



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Copies
of the agreements noted above will be made available, free of charge, by our Managing General Partner and are available electronically on the website of SEC at www.sec.gov and on
our SEDAR profile at www.sedar.com. Written requests for such documents should be directed to our Corporate Secretary at Canon's Court, 22 Victoria Street, Hamilton HM 12, Bermuda. Copies of
the agreements noted above will also be available for inspection at the offices of the Manager at 181 Bay Street, Suite 300, Brookfield Place, Toronto, Ontario, M5J 2T3 during
normal business hours.

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 Form 20-F under Item 10.E "Taxation."

10.E    TAXATION

The following summary discusses certain material United States, Canadian 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.

CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

This summary discusses certain United States federal income tax consequences related to the holding and disposition of units as
of the date hereof. This summary is based on provisions of the U.S. Internal Revenue Code of 1986, as amended, or the 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 which may be subject to special rules (including, without limitation,
investors that own more than 5% of our units, dealers in securities or currencies, financial institutions or financial services entities, life insurance companies, holders of our units held as part of
a straddle, hedge, constructive sale or conversion transaction with other investments, U.S. Holders 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 which is a pass-through entity for U.S. federal income tax
purposes, persons for whom our units are not a capital asset, or certain expatriates who meet the expatriation rules in Section 877 of the U.S. Internal Revenue Code or former
long-term residents of the United States. Tax-exempt organizations are discussed separately below. The actual tax consequences of the ownership and disposition of our
units will vary depending on your circumstances.

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For
purposes of this discussion, a "U.S. Holder" is a beneficial holder of one or more of our units that is for U.S. federal income tax purposes (1) an individual
citizen or resident of the United States; (2) 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; (3) an
estate the income of which is subject to U.S. federal income taxation regardless of its source or (4) a trust which either (i) is subject to the primary supervision of a court
within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) has a valid election in effect under applicable
U.S. Treasury regulations to be treated as a U.S. person. A "non-U.S. Holder" is a holder that is not a U.S. Holder and who, in addition, is not (i) a
partnership or other fiscally transparent entity, or (ii) an individual present in the United States for 183 days or more in a taxable year who meets certain other conditions
under the substantial presence test under Section 7701(b)(3) of the U.S. Internal Revenue Code and U.S. Treasury Regulation Section 301.7701(b)-1(c).

If
a partnership holds our units, the tax treatment of a partner of such partnership will generally depend upon the status of the partner and the activities of the partnership. If you
are a partner of a partnership holding our units, you should consult your own tax advisors.

A
non-U.S. Holder who holds more than 5% of our units may be subject to special rules under the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA.
For purposes of determining whether a non-U.S. Holder holds more than 5% of our units, special attribution rules apply. Where a non-U.S. person who holds
(or is deemed to hold) more than 5% of our units disposes of units at a time when our partnership is a U.S. Real Property Holding Corporation, or USRPHC (which determination includes a
five year look back period) any gain will be subject to U.S. taxation at 35%, and such non-U.S. person will have a U.S. tax return filing obligation. Our Managing
General Partner does not believe that our partnership is currently, or has been, a USRPHC. Our partnership is not under any obligation to avoid becoming a USRPHC or to notify unitholders in the event
that our Managing General Partner determines it becomes a USRPHC. If any unitholder is a non-U.S. person and owns or anticipates owning more than 5% of our units, such person should
consult their tax advisors. The application of the FIRPTA rules to a non-U.S. Holder who holds (or is deemed to hold) more than 5% of our units would result in such
non-U.S. Holder being liable for FIRPTA tax if such non-U.S. Holder disposes of our units at a time when we are a USRPHC or have at any time been a USRPHC within
the shorter of such non-U.S. Holder's holding period or five years preceding the disposition.

This discussion does not constitute tax advice and is not intended to be a substitute for tax planning. You should consult your own tax advisors concerning the
U.S. federal, state and local income tax consequences particular to your ownership and disposition of our units, as well as any consequences under the laws of any other taxing
jurisdiction.

Partnership Status of our partnership and Brookfield Infrastructure

Each of our partnership and Brookfield Infrastructure has made a protective election to be treated as a partnership for
U.S. federal income tax purposes. An entity that is treated as a partnership for U.S. federal income 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, and deduction 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 are generally 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

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applies.
Our partnership will be publicly traded; however, an exception, referred to as the "Qualifying Income Exception," exists with respect to a publicly traded partnership if at least 90% of such
partnership's gross income for every taxable year consists of "qualifying income" and the partnership would not be required to register under the U.S. 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 our affairs so that our partnership will meet the Qualifying Income Exception in each taxable year (however, the status of certain fees and expense reimbursements we received or may
receive in connection with the BBI Transaction and treat as "qualifying income" or exclude from income is not clear).

There
is currently proposed legislation in the U.S. Congress (H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, or the Act), which, if enacted in its current
form and determined to be applicable to our partnership could have adverse consequences, including (a) the (i) re-characterization of capital gain income as "ordinary
income", (ii) potential for interest income subject to the portfolio interest exception to be reclassified as "ordinary income" and subjected to U.S. withholding tax and
(iii) potential for qualified dividend income to be reclassified as "ordinary income" and subjected to a higher rate of U.S. income tax, and (b) significant 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. Based upon the current structure and investments of our
partnership, it is not anticipated that issues (a)(i) and (a)(ii), above (to which the Act is generally intended to apply for income recognized after December 31, 2010), would have an
immediate or material impact to our unitholders. Further, the provisions relating to issue (b), above, as currently drafted do not apply for ten (10) years. However, at this time it is unclear
when or whether such proposed legislation will ultimately become law, and whether the legislation as enacted would be problematic for our partnership. Our Managing General Partner does not believe
that the drafters of the proposed legislation intended that it would be applied to our partnership and are hopeful that if the legislation is enacted the legislative history will provide an exception
to the application of the legislation to our partnership.In view of the potential significance of any such U.S. federal income tax law changes and the fact that there
are likely to be ongoing developments in this area, you should consult your own tax advisor as to the potential effects the proposed legislation might have on an investment in our
partnership.Subject to the foregoing, our Managing General Partner believes our partnership will be treated as a partnership and not as a corporation for U.S. federal
income tax purposes. The remainder of this section assumes that the proposed tax legislation, even if enacted, would not be applicable to our partnership or to Brookfield Infrastructure.

If
our partnership fails to meet the Qualifying Income Exception, other than a failure which is determined by the U.S. Internal Revenue Service, or the IRS, to be inadvertent and
which is cured within a reasonable time after discovery, or if our partnership is required to register under the U.S. 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 that corporation, and then distributed the stock to the holders of our units in liquidation thereof. This deemed contribution would likely result in recognition of gain (but not loss)
to U.S. Holders. However, U.S. Holders actually or constructively owning less than 5% of our units generally would not recognize the portion of such gain attributable to stock or
securities of non-U.S. corporations which we may hold. If, at the time of the contribution, our partnership has liabilities in excess of the tax basis of its assets, all
U.S. Holders would generally recognize gain in respect of such excess liabilities upon the deemed transfer. Afterwards, our partnership would be treated as a corporation for U.S. federal
income tax purposes.

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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 and deduction would be reflected only on our partnership's tax return rather than being passed through to holders of our units, and our partnership would be subject to
U.S. corporate income tax and branch profits tax with respect to its income, if any, that is effectively connected with a U.S. trade or business. Moreover, under certain circumstances,
our partnership may be classified as a PFIC, for U.S. federal income tax purposes, and you 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 discussed below, distributions made to U.S. Holders would be treated as either taxable dividend
income, which may be eligible for reduced rates of taxation (if such distributions are made prior to January 1, 2011, and are made in respect of our units traded on the NYSE or certain
other requirements are satisfied), to the extent of our partnership's current or accumulated earnings and profits, or in the absence of earnings and profits, as a nontaxable return of capital, to the
extent of the holder's tax basis in our units, or as taxable capital gain, after the holder's basis is reduced to zero. In addition, dividends, interest and certain other passive income that our
partnership receives 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 may 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 may be
entitled to certain treaty benefits in respect of their allocable share of such income). Accordingly, treatment of our partnership as a corporation could materially reduce a holder's
after-tax return and, thus, could result in a substantial reduction of the value of our units. If Brookfield Infrastructure 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 section assumes that our partnership and Brookfield Infrastructure will be treated as partnerships for U.S. federal income tax purposes. We expect that a
substantial portion of the items of income, gain, deduction, loss and credit realized by our partnership will be realized in the first instance by Brookfield Infrastructure 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 Brookfield Infrastructure and the allocation of such items to our partnership.

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 distributive
share of our
partnership's items of income, gain, loss, deduction and credit for each of our partnership's taxable years ending with or within your taxable year. Each item generally will have the same character
and source (either U.S. or foreign) as though you had realized the item directly. You will report those items without regard to whether any distribution has been or will be received from our
partnership. Although we intend to make cash distributions (which we intend to pay to all of our unitholders on a quarterly basis) in an amount that is generally expected to be sufficient to permit
our U.S. Holders to fund their estimated U.S. tax obligations (including any U.S. federal, state and local income taxes) with respect to their distributive shares of our
partnership's net income or gain, based upon your particular tax situation and simplifying assumptions that we will make in determining the amount of such distributions, and whether or not you elect
to reinvest such distributions pursuant to the distribution reinvestment plan, your tax liability may exceed cash distributions made to you, in which case you would have to satisfy tax liabilities
arising from your units in our partnership from your own funds.

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With
respect to U.S. Holders who are individuals, certain dividends paid by a corporation, including certain qualified foreign corporations, to us and that are allocable to such
U.S. Holders prior to January 1, 2011 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 in the taxable year in which such dividends are paid or in the preceding taxable year. 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 we own stock. You should consult your own tax advisors regarding the application of the foregoing rules to 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 a "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 Brookfield Infrastructure will be governed by the limited partnership agreement of Brookfield Infrastructure if such allocations have "substantial economic
effect" or are determined to be in accordance with our partnership's interest in Brookfield Infrastructure. Our Managing General Partner and the Infrastructure 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 tax returns based on such
allocations. If the IRS successfully challenged the allocations made pursuant to either our limited partnership agreement or the limited partnership agreement of Brookfield Infrastructure, the
resulting allocations for U.S. federal income tax purposes may be less favorable than the allocations set forth in such agreements.

Basis.You will have an initial tax basis for 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 in our partnership
(including through the distribution reinvestment plan) will be averaged with the adjusted tax basis of our units you owned prior to the acquisition of such additional units. The amount you pay to
acquire additional units cannot be "traced" to the additional units so acquired. Certain consequences of your "unitary" tax basis are discussed in greater detail below in "Special Considerations for
Purchasers of Additional units."

For
purposes of the foregoing rules, the rules discussed immediately below, and the rules applicable to a sale or your units, our partnership's liabilities will generally include our
partnership's share of any liabilities of Brookfield Infrastructure.

Limits on Deductions for Losses and Expenses.Your deduction of your share of our partnership's losses will be limited to your
tax basis in your
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 your 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 your units, if the lender of those borrowed funds owns an interest in us, is related to you, or can look only

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to
your units for repayment. Your at risk amount will generally 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 your 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 that gain previously suspended by the at risk or basis limitations may no longer be used. You should consult your
own tax advisors 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 Brookfield Infrastructure. While an election may be made by a partnership to
amortize organizational expenses over a 15-year period, we do not intend to make such election for either our partnership or Brookfield Infrastructure. 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. If you
are a non-corporate taxpayer, the deductibility of "investment interest" expense is generally limited to the amount of your "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 you elect 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. Moreover, 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, or (ii) 80% of the amount of the itemized deductions, such reductions to be reduced on
a phased basis in 2009, eliminated in 2010, and, absent U.S. Congressional action, reinstated for tax years after 2010. The operating expenses of our partnership, including our partnership's
allocable share of the base management fee or any other management fees (if any), will likely be treated as miscellaneous itemized deductions subject to the foregoing rule. Alternatively, it is
possible that our partnership and Brookfield Infrastructure will be required to capitalize amounts paid in respect of the base management fee (as well as amounts paid in respect of any other
management fees (if any)). Accordingly, if you are a non-corporate U.S. Holder, you should consult your own tax advisors with respect to the application of these limitations.

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Sale or Exchange of Our Units

You will recognize gain or loss on a sale by you of our units equal to the difference, if any, between the amount realized and your tax
basis in our units sold. 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 on the sale or exchange by you of our units will generally 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 on the date of such sale or exchange. Under certain circumstances, your gain or loss may be long-term capital gain or loss, in part, and
short-term capital gain or loss, in part, under the "split" holding period rules discussed below in "Special Considerations for Purchasers of Additional Units." Assuming you have not
elected to treat your share of our interest
in any PFICs in which we may invest 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 holds 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.

Special Considerations for Purchasers of Additional Units

Where a partner in a partnership acquires portions of his or her interest at different times, applicable U.S. federal income tax
rules provide that the partner has a divided, or "split" holding period in his or her interest. Thus, if you acquire additional units at different times (including acquisitions made through the
distribution reinvestment plan) each unit you own (including the additional units you acquire) will have a "split" holding period: a fraction of each unit will have a holding period commencing on the
date after the acquisition of the additional units under the plan, and a fraction of each unit will have a holding period attributable to your previously-owned, or historic, units, based on the
relative fair market values of the additional units and the historic units (as of the date of the acquisition of the additional units). The foregoing rules apply each time you acquire
additional units (including under the distribution reinvestment plan). Nonetheless, each unit will retain an "averaged" adjusted tax basis as described above in "Basis.".

Subject
to the special tracing approach described below, if you dispose of any units (whether historic or additional units) within one year of acquiring additional units, the disposition
may give rise to both short- term capital gain (or loss), in part, and long-term capital gain (or loss), in part, as a result of each unit's "split" holding period. Likewise,
a cash distribution to you within a year of the acquisition of additional units in excess of your "unitary" adjusted tax basis in all of your units could give rise to both short-term and
long-term capital gain.

You
may under certain circumstances use a "tracing" approach in lieu of having a "split" holding period in your units. The U.S. Treasury Regulations provide that a selling partner
in a "publicly traded partnership" may use the actual holding period of the portion of his or her partnership interest if (1) the interest is divided into identifiable units with ascertainable
holding periods, (2) the partner can identify the portion of the partnership interest transferred, and (3) the partner elects to use the identification method for all sales or exchanges
of his or her interests in the partnership. As described above, our partnership will be a "publicly traded partnership." If you intend to rely on this alternative tracing approach, you must make an
election to do so with your first disposition of units. This election applies only to your holding period in your units, not to your basis, which you may not "trace" under the "unitary" tax basis
rules described above.

You
should consult your own tax advisors regarding the consequences of a "split" holding period in your units, as well the availability and advisability of making the alternative tracing
election.

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Foreign Tax Credit Limitations

You will generally 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. Gains from the sale of our partnership's
investments may be treated as U.S. source gains. Consequently, you may not be able to use the foreign tax credit arising from any foreign taxes imposed on such gains unless such 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 Brookfield Infrastructure have each made the election permitted by Section 754 of the U.S. Internal
Revenue Code (the "the Section 754 Election"). The Section 754 Election is irrevocable 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 our 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 Brookfield Infrastructure.

Generally,
a Section 754 Election would be advantageous to a transferee U.S. Holder if such U.S. Holder's tax basis in its units is higher than our 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 such U.S. Holder's share of our partnership's assets for purposes of calculating, among other items, such U.S. 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 U.S. Holder's tax basis in its units is lower than those
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.

The
calculations involved in the Section 754 Election are complex, and our Managing General Partner and the Infrastructure General Partner advise that they will make them on the
basis of assumptions as to the value of our assets and other matters. You should consult your own tax advisors 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 Treasury Regulations under Section 743 of the U.S. Internal Revenue Code to our partnership's Section 743(b) adjustments, the determination that our
partnership's Section 704(c) allocations are unreasonable, or other reasons. Section 704(c) allocations would be intended to reduce 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 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

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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 will be the U.S. dollar, and our partnership's income or loss will be 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 your own tax advisors regarding the tax treatment of foreign currency gain or loss.

Passive Foreign Investment Companies

A U.S. Holder will be subject to special rules applicable to indirect investments in foreign corporations, including an
investment in a PFIC.

A
PFIC is defined as any foreign corporation with respect to which (after applying the applicable look-through rules under Section 1297(c) of the U.S. Internal
Revenue Code) 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 "passive income." There are no minimum stock ownership requirements for PFICs. Once a corporation qualifies as a PFIC it is as to any person with an
interest in such corporation at any time at which it was a PFIC, subject to certain exceptions, always treated as a PFIC, regardless of whether it satisfies either of the qualification tests in
subsequent years. Any gain on disposition of stock of a PFIC, as well as income realized on certain "excess distributions" by the PFIC, is treated as though realized ratably over the shorter of your
holding period of our units or our holding period for the PFIC. Such gain or income is taxable as ordinary income and dividends paid by a PFIC are not eligible for the preferential tax rate in the
hands of individuals who would otherwise be eligible for the preferential tax rate for dividends. In addition, an interest charge would be imposed on you based on the tax deferred from
prior years.

If
you made an election to treat your share of our interest in a PFIC as a "qualified electing fund", such election a "QEF election", for the first year you are treated as holding such
interest, in lieu of the foregoing treatment, 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 would, among other things, be required to (a) obtain
an information statement (through an intermediary statement supplied by our partnership) with respect to the PFIC and (b) prepare and submit IRS Form 8621 with your annual income tax
return. Once you make 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 make a QEF election after the first year that you are treated as holding in interest
in a PFIC, the adverse tax consequences relating to PFIC stock will continue to apply with respect to the pre-QEF election period, unless you make a "purging election". The purging
election would create a deemed sale of your previously held share of our 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 interests in the PFIC.
U.S. Holders should consult their own tax advisors as to the manner in which such direct inclusions affect their allocable share of our income and their tax basis in their units and the
advisability of making a QEF election or a purging election.

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Alternatively,
in the case of a PFIC that is a publicly traded foreign company, an election may be made to "mark-to-market" the stock of such foreign portfolio
company on an annual basis. Once you make a "mark-to-market" election, such election applies to any additional shares of interest in such entity acquired directly or
indirectly, including through additional units acquired after the "mark-to-market" election is made (such as units acquired under the distribution reinvestment plan). 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. You may treat
as ordinary loss any excess of the adjusted basis of the stock over its fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result of
the election. Although we may in the future acquire PFICs which are publicly traded foreign companies, it is not expected that interests in any of our current operations will be publicly traded. Thus,
a U.S. Holder would not be eligible to make a mark-to-market election in respect of its indirect ownership interest in any of our operating entities.

Based
on our analysis of our operating entities and Holding Entities, as well as our expectations regarding future operations, our Managing General Partner and the Infrastructure General
Partner believe that some of the operating entities may be PFICs and we expect that one or more of the entities acquired in the BBI Transaction will also be PFICs. Although we do not otherwise intend
to invest significant amounts in PFICs, there can be no assurance that a current or future investment will not qualify as a PFIC or that an investment in PFIC stock will be eligible for the
"mark-to-market" election. In addition, we may be required 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. To the extent reasonably 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. 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 discussed above (see also "Sale or Exchange of Our Units," above), we urge you to consider timely filing a QEF election with respect to each entity we are able to identify as a PFIC and
for which we are able to provide the necessary information for the first year we hold an interest in such entity (or for the first year you held units, if later).

An
investment in a PFIC may create a reporting obligation under the "Foreign Bank and Financial Account Reporting" rules as discussed below. 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. You should consult your own tax advisors regarding the PFIC rules, including the potential effects this legislation might
have on your filing requirements and the advisability of making a QEF election or, if applicable, a mark-to-market election, with respect to each PFIC.

Investment Structure

To manage our affairs so as to ensure that our partnership meets the Qualifying Income Exception for the publicly traded partnership
rules (discussed above) and comply with certain requirements in our limited partnership agreement, we may need to structure certain investments through an entity classified as a corporation for
U.S. federal income tax purposes. Such investment structures will be entered into as determined in the sole discretion of our Managing General Partner and the Infrastructure General Partner in
order to create a tax structure that generally is efficient for our unitholders. However, because our unitholders will be located in numerous taxing jurisdictions, no assurances can be given that any
such investment structure will be beneficial to all our unitholders to

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the
same extent, and may even impose additional tax burdens on some of our unitholders. As discussed above, if any such entity were a non-U.S. corporation it may be considered a
PFIC. If any such entity were a U.S. corporation, it would be subject to U.S. federal income tax on its operating income, including any gain recognized on its disposal of its
investments. In addition, if the investment involves U.S. real property, gain recognized on disposition of the investment by a corporation would generally be subject to corporate-level tax,
whether the corporation is a U.S. or a non-U.S. corporation.

Taxes in Other Jurisdictions

In addition to U.S. federal income tax consequences, because of an investment in our partnership, you may be subject to
potential U.S. state and local taxes in the U.S. state or locality in which you are a resident for tax purposes. You may 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 our investors in non-U.S. jurisdictions, but, there may be circumstances in which we are unable to do so.
Income or gains from investments held by us may be subject to withholding or other taxes in jurisdictions outside the United States, subject to the possibility of reduction under applicable
income tax treaties. If you wish to claim the benefit of an applicable income tax treaty, you may be required to submit information to tax authorities in such jurisdictions. You should consult your
own tax advisors regarding the U.S. state, local and non-U.S. tax consequences of an investment in our partnership.

U.S. Withholding Taxes

Although each U.S. Holder is required to provide us with a 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 may be subject to U.S. "backup" withholding at the applicable rate (currently 28%) or other
U.S. withholding taxes (potentially as high as 30%). 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 may 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 may
apply for purposes of determining whether you or the transferee of such units is subject to U.S. withholding taxes in respect of income allocable to, or distributions made on account of, such
units and/or entitled to refunds of any such taxes withheld. See below "Administrative MattersCertain Effects of a Transfer of Units". You should consult your own tax advisors regarding
the treatment of U.S. withholding taxes.

Transferor/Transferee Allocations

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 the holders of our units as of a specified date of such month. As a result, if you transfer your units, you may be allocated
income, gain, loss and deduction realized by our partnership after the date of transfer. Similarly, if you acquire additional units, you may 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 provides guidelines for 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 its 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 respective tax liabilities would be adjusted to your possible
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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 their own tax advisors concerning the potential
U.S. federal estate tax consequences with respect to our units.

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", or "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 "flow through" entity for U.S. federal income tax
purposes that holds operating assets or is otherwise engaged in a trade or business will generally constitute UBTI. Notwithstanding the foregoing, UBTI generally does not include any dividend income,
interest income (or certain other categories of passive income) or capital gains recognized 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 will not be engaged in a trade or business, and anticipates that any operating assets held by us will be held through entities that
are treated as corporations for U.S. federal income tax purposes.

The
exclusion from UBTI for dividends, interest (or other passive income) and capital gains 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. Gain
attributable to the sale of previously debt-financed property continues to be subject to these rules for 12 months after any acquisition indebtedness is satisfied. If an entity
treated as a partnership for U.S. federal income tax purposes incurs acquisition indebtedness, a tax-exempt partner in such partnership would be deemed to have acquisition
indebtedness equal to its allocable portion of such acquisition indebtedness. Our partnership and Brookfield Infrastructure are not prohibited from incurring indebtedness, and at times either or both
may do so. If any such indebtedness were used to acquire property by our partnership or Brookfield Infrastructure, such property would be subject to the rules described above, and, consequently,
tax-exempt U.S. Holders may recognize UBTI as a result of an investment in our partnership. In addition, even if such indebtedness were not used either by our partnership or by
Brookfield Infrastructure to acquire property but were instead used to fund distributions to our unitholders, if a tax-exempt U.S. Holder used such proceeds to make an investment
outside our partnership, the IRS could assert that such investment constitutes "debt-financed property" subject to the rules described above. Our Managing General Partner and the
Infrastructure General Partner expect our partnership and Brookfield Infrastructure to realize some income from debt-financed property.

A
tax-exempt organization is subject to U.S. federal income tax at the regular graduated rates on the net amount of its UBTI, and a tax-exempt organization
deriving gross income characterized as UBTI that exceeds $1,000 in any taxable year is obligated to file a U.S. federal income tax return, even if it has no liability for that year as a
result of deductions against such gross income, including an annual $1,000 statutory deduction.

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The
potential for having income characterized as UBTI may make our units an unsuitable investment for a tax-exempt organization. Tax-exempt U.S. Holders
should consult their own tax advisors regarding all aspects of UBTI.

Investments by U.S. Mutual Funds

U.S. mutual funds that are treated as regulated investment companies, or RICs, for U.S. federal income tax purposes are
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 their 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 will be 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 their own tax advisors about 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 of Brookfield Infrastructure 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. Specifically, our partnership will not make an investment directly, or
through an entity which would be treated as a pass-through entity 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 you are not yourself engaged in a U.S. trade or business, you
will not be subject to U.S. tax return filing requirements and generally will not be subject to U.S. federal income tax on interest and dividends from non-U.S. sources
and gains from the sale or other disposition of securities or of real property located outside of the United States derived by us.

However,
there can be no assurance that the law will not change or that the IRS will not challenge our Managing General Partner's position that our partnership is not engaged in a
U.S. trade or business. If, contrary to our Managing General Partner's expectations, our partnership is considered to be engaged in a U.S. trade or business, you would be required to
file a U.S. federal income tax return even if no effectively connected income is allocable to you. Additionally if our partnership has income that is treated as effectively connected
with a U.S. trade or business, you would be required to report that income and would be subject to U.S. federal income tax at the regular graduated rates. In addition, we may be required
to withhold U.S. federal income tax on your share of such income. If you are a non-U.S. corporation, you also may be subject to branch profits tax at a rate of 30%, or at a
lower treaty rate, if applicable.

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 on 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

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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 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 a 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%. As
such, if you would not be subject to U.S. tax based on your tax status or are eligible for a reduced rate of U.S. withholding, you may need to take additional steps to receive a credit
or refund of any excess withholding tax paid on your account, which may 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 may 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 and/or entitled to refunds of any such
taxes withheld. See "Administrative MattersCertain Effects of a Transfer of units". Additionally, under recently enacted U.S. legislation, certain payments of
U.S. source income made after December 31, 2012, (including payments attributable to dispositions of property which produced (or could produce) certain U.S. source income)
made to us or by us to or through non-U.S. financial institutions or non-U.S. entities, could be subject to a 30% withholding tax unless (a) the
non-U.S. financial institution enters into an agreement with the IRS to provide to the IRS information concerning its direct and certain indirect U.S. account holders, or
(b) in the case of other non-U.S. entities, such entity provides to the withholding agent similar information concerning its substantial U.S. beneficial owners. These
rules do not apply with respect to payments from obligations that are outstanding as of March 18, 2012. You should consult your own tax advisors regarding the treatment of
U.S. withholding taxes in general and the application of the recently enacted legislation to your particular circumstances.

The
disposition of our units on an established securities market by a non-U.S. Holder will not be subject to U.S. federal income tax, so long as (i) such
non-U.S. Holder does not own (and is not deemed to own) more than 5% of our units, and (ii) for the calendar quarter during which such disposition occurs, our units
are regularly quoted by brokers and dealers making a market in our units. Our Managing General Partner does not intend to list our units for trading on any exchange if such listing would adversely
affect the tax consequences from disposing of the units as described above.

A
non-U.S. Holder who holds more than 5% of our units may be subject to special rules under the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA.
For purposes of determining whether a non-U.S. Holder holds more than 5% of our units, special attribution rules apply. Where a non-U.S. person who holds
(or is deemed to hold) more than 5% of our units disposes of units at a time when our partnership is a U.S. Real Property Holding Corporation, or USRPHC, (which determination includes a
five year look back period) any gain will be subject to U.S. taxation at 35%, and such non-U.S. person will have a U.S. tax return filing obligation. Our Managing
General Partner does not believe that our partnership is currently, or has been, a USRPHC. Our partnership is not under any obligation to avoid becoming a USRPHC or to notify unitholders in the event
that our Managing General Partner determines it becomes a USRPHC. If any unitholder is a non-U.S. person and owns or anticipates owning more than 5% of our units, such person should
consult their tax advisors. The application of the FIRPTA rules to a non-U.S. Holder who holds (or is deemed to hold) more than 5% of our units would result in such
non-U.S. Holder being liable for FIRPTA tax if such non-U.S. Holder disposes of our units at a time when we are a USRPHC or have at any time been a

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USRPHC
within the shorter of such non-U.S. Holder's holding period or five years preceding the disposition.

A
non-U.S. tax-exempt entity generally could be subject to taxation in the U.S. on its U.S. source unrelated business taxable income and on
certain trade or business income that is effectively connected with the conduct of any trade or business of our partnership or Brookfield Infrastructure in the United States. Our Managing
General Partner and the Infrastructure General Partner intend to use commercially reasonable efforts to structure the activities of our partnership and Brookfield Infrastructure to avoid generating
income treated as effectively connected with the conduct of a U.S. trade or business, but do expect our partnership and Brookfield Infrastructure to realize some U.S. source investment
income, which, if debt-financed, would constitute unrelated business taxable income. A non-U.S. tax-exempt entity should consult its own tax advisor to
determine the U.S. federal income tax consequences with respect to an investment in our units.

The
U.S. federal estate tax treatment of our units with regard to the estate of a non-citizen who is not a resident of the United States is not entirely clear.
If our units are includable in the U.S. gross estate of such person, then a U.S. federal estate tax might be payable in connection with the death of such person. Individual
non-U.S. Holders who are non-citizens and not residents of the United States should consult their own tax advisors concerning the potential U.S. federal
estate tax consequences with regards to our units.

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 our behalf in connection with any administrative or judicial review of our 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,
tax information (including 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. In preparing this 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.

We
may be audited by the IRS. Adjustments resulting from an IRS audit may require you to adjust a prior year's tax liability, and possibly may result in an audit of your own tax return.
Any audit of your tax return could result in adjustments not related to our tax returns as well as those related to our tax returns.

Foreign Bank and Financial Account Reporting

U.S. persons having a financial interest in or signature authority over a financial account in a foreign country may be required
to file annually with the IRS a "Report of Foreign Bank and Financial Accounts", or an FBAR. The IRS has recently issued guidance on the scope of the FBAR requirement. While individual stocks are not
considered "financial accounts", commingled funds, such as mutual funds, are considered "financial accounts" for FBAR reporting purposes. As part of the recently issued guidance, the IRS requested
comments on whether an ownership interest in a PFIC should create an FBAR filing requirement. It is not clear that an interest in our partnership will be considered an

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interest
in a commingled fund requiring an FBAR, or that an ownership interest in a PFIC will create an FBAR reporting obligation. However, you are urged to consult your tax advisors regarding the
applicability of any such reporting requirement.

Tax Shelter Regulations and Related Reporting Requirements

If we were to engage in a "reportable transaction", we (and possibly you and others) would be required to make a detailed
disclosure of the transaction to the IRS in accordance with recently issued 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 as a
"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 us may be considered a "reportable transaction" if, for example, we 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 amounts may be obligated to disclose its participation in such transaction. Our
participation in a reportable transaction also could increase the likelihood that our U.S. federal income tax information return (and possibly your tax return) would be audited by the
IRS. Certain of these rules are currently unclear, and the scope of reportable transactions can change retroactively, and, therefore, it is possible that they may be applicable in situations 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 may be subject to
(i) significant accuracy-related penalties with a broad scope, (ii) for those persons otherwise entitled to deduct interest on federal tax deficiencies, non-deductibility of
interest on any resulting tax liability, and (iii) 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 assurances can be made that the IRS will not assert
that we have participated in such a transaction.

You
should consult your own tax advisors concerning any possible disclosure obligation under the regulations governing tax shelters with respect to the disposition of our units held
by you.

Taxable Year

Our partnership currently intends to use 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
termination of our partnership would result in the close of its taxable year for all holders of our units. If you report on a taxable year other than a fiscal year ending on our
partnership's year-end, and you are 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 your taxable income for the year of termination. Our partnership would be required to make new tax elections after a termination, including a
new Section 754 Election. A termination could also result in penalties and other adverse tax consequences if we were unable to determine that the termination had

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occurred.
Moreover, a termination might either accelerate the application of, or subject us 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 Schedules K-1 that are issued to the holders of our units, and such 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 taxable year and require that we make a new Section 754 Election) if, within a 12-month period, there is a sale or exchange of 50% or more of our
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.

Backup and Other Administrative Withholding Issues

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. Under the backup withholding rules, you may be subject to backup withholding tax (at the applicable rate, currently 28%) with respect to
distributions paid unless: (i) you are a corporation or come within another exempt category and demonstrate this fact when required or (ii) you 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. If you are an exempt holder, you should
indicate your exempt 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-8BEN. 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.

If
you do not timely provide us with IRS Form W-8, or W-9, as applicable, or such form is not properly completed, we may become subject to
U.S. "backup" withholding taxes in excess of what would have been imposed had our partnership received certifications from all investors. For administrative reasons, and in order to maintain
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 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
certifications). Additionally, under recently enacted U.S. legislation, certain payments of U.S. source income made after December 31, 2012, (including payments attributable to
dispositions of property which produced (or could produce) certain U.S. source income) made to us or by us to or through non-U.S. financial institutions or
non-U.S. entities, could be subject to a 30% withholding tax unless (a) the non-U.S. financial institution enters into an agreement with the IRS to provide
to the IRS information concerning its direct and certain indirect U.S. account holders, or (b) in the case of other non-U.S. entities, such
entity provides to the withholding agent similar information concerning its substantial U.S. beneficial owners. These rules do not apply with respect to payments from obligations that are
outstanding as of March 18, 2012. You should consult your own tax advisors regarding the treatment of U.S. withholding taxes in general and the application of the recently enacted
legislation to your particular circumstances.

Recently Enacted Legislation Affecting Disclosure Obligations for U.S. Individuals

United States legislation was enacted on March 18, 2010, that generally imposes new U.S. return disclosure
obligations (and related penalties for failure to disclose) on U.S. individuals that hold certain

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specified
foreign financial assets. The definition of specified foreign financial assets includes 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. Unitholders are urged to consult their own tax advisors regarding the possible implications of this recently enacted
legislation on their investment in the 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
Brookfield Infrastructure (and, in turn, our partnership) will generally 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. Brookfield Infrastructure 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 other income would be allocated pursuant to the monthly convention
described above. 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 may be distributed to a subsequent unitholder and such subsequent unitholder would be subject to withholding at the time of distribution. Consequently, the
subsequent unitholder, and not the unitholder who was allocated income, would be entitled to claim any available credit with respect to such withholding.

Brookfield
Infrastructure has invested and will continue to invest in certain Holding Entities and operating entities organized in non-U.S. jurisdictions, and income
and gains from such investments may be subject to withholding and other taxes in such jurisdictions. If any such non-U.S. taxes are imposed on income allocable to a
U.S. Holder, and thereafter, such U.S. Holder disposed of its units prior to the date distributions are made in respect of such income, under applicable provisions of the
U.S. Internal Revenue Code and U.S. Treasury Regulations, our unitholder to whom such income was allocated (and not our 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. Complex rules may,
depending on a unitholder's particular circumstances, limit the availability or use of foreign tax credits, and investors are urged to consult their own tax advisors regarding all aspects of foreign
tax credits.

Nominee Reporting

Persons who hold an interest in our partnership as a nominee for another person are required to furnish
to us:



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Brokers
and financial institutions are 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 $50 per failure, up to a maximum of $100,000 per calendar year, is imposed by the U.S. Internal Revenue Code for failure to report that 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 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 adversely affect the U.S. federal income tax treatment of publicly traded partnerships, including changes that make it more difficult or impossible for our partnership
(or Brookfield Infrastructure) to meet the Qualifying Income Exception so as to be treated as a partnership for U.S. federal income tax purposes that is not taxable as a corporation,
changes that recharacterize a partner's share of capital gain, "qualified dividend" and portfolio interest income as ordinary income with possible withholding tax consequences and adverse federal
income tax consequences, and changes that reduce the net amount of distributions available to our unitholders. (See, for example, the discussion of pending legislation, H.R. 4213, under
Item 10.E "TaxationCertain Material U.S. Tax ConsiderationsPartnership Status of our partnership and Brookfield Infrastructure," above.) Such changes could also
affect or cause us to change the way we conduct our activities, affect the tax considerations of an investment in our partnership, change the character or treatment of portions of our partnership's
income (including changes that recharacterize certain allocations as potentially non-deductible fees) and adversely affect an investment in our units.

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 address certain changes in U.S. federal income tax regulations, legislation or interpretation or to elect to treat our partnership as a corporation
for U.S. tax purposes. 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 US AND OUR 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. UNITHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE

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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 a fair summary of the principal Canadian federal income tax consequences of the holding and disposition of units in
our partnership generally applicable to a holder who, for purposes of the Tax Act and at all relevant times, holds our units as capital property and deals at arm's length and is not affiliated
with our partnership, Brookfield Infrastructure, the Managing General Partner, the Infrastructure General Partner, the Infrastructure GP LP and their respective affiliates. Generally,
our units will be considered to be capital property to a holder, provided that the holder does not 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 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 purposes 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, or (iv) a holder an interest in which would be a "tax shelter investment" as defined in the Tax Act, or who acquires a unit as a tax shelter
investment (and this summary assumes that no such persons hold our units). Any such holders should consult their own tax advisors with respect to an investment in our units.

This
summary is based on the current provisions of the Tax Act, the regulations thereunder, or the Regulations, all specific proposals to amend the Tax Act or the
Regulations publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof, or the 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 Proposal 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 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 from those described herein. This summary
is not exhaustive of all possible Canadian federal income tax consequences that may affect holders and prospective holders.

This
summary assumes that neither our partnership nor Brookfield Infrastructure will be considered to carry on business in Canada. Our Managing General Partner and the Infrastructure
General Partner have advised that they intend to conduct the affairs of each of these entities, to the extent possible, so that none 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.

This
summary also assumes that neither our partnership nor Brookfield Infrastructure is a "tax shelter" or "tax shelter investment", each as defined in the Tax Act. However, no
assurance can be given in this regard.

This
summary also assumes that neither our partnership nor Brookfield Infrastructure will be a "SIFT partnership" as defined in subsection 197(1) of the Tax Act at any
relevant time for purposes of the SIFT Rules on the basis that neither our partnership nor Brookfield Infrastructure will be a "Canadian resident partnership" as defined in subsection 248(1) of
the Tax Act 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 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 of our units,
and no representation with respect to the Canadian federal income tax consequences to any particular holder is made. Consequently, holders of

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our units and prospective holders of our units are advised to consult their own tax advisors with respect to their particular circumstances. See also "Risk FactorsRisks Relating
to Taxation.

TAXATION OF CANADIAN RESIDENT LIMITED PARTNERS

The following is a discussion of the consequences under the Tax Act to holders who at all relevant times are resident or deemed
to be resident in Canada under the Tax Act, or Canadian Limited Partners.

Computation of Income or Loss

Each Canadian Limited Partner 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 Canadian Limited Partner's pro rata share of the income (or loss) of our partnership for its fiscal year ending
in, or coincidentally with, the Canadian Limited Partner's taxation year end, whether or not any of that income is distributed to the Canadian Limited Partner 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. 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 our partners will be allocated a share of that income (or loss) in
accordance with our limited partnership agreement. The income (or loss) of our partnership will include our share of the income (or loss) of Brookfield Infrastructure for a fiscal year
determined in accordance with Brookfield Infrastructure's limited partnership agreement. For this purpose, our partnership's fiscal year end and that of Brookfield Infrastructure 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 unitholder 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 unitholder with respect to such fiscal year and the denominator of which is the
aggregate amount of the distributions made by our partnership to unitholders with respect to such fiscal year. Generally, the source and character of items of income allocated to a unitholder with
respect to a fiscal year of our partnership will be the same source and character as the cash distributions received by such unitholder 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 held at each such date by a unitholder is of the total number of units that are
issued and outstanding at each such date. Generally, the source and character of such income or loss allocated to a unitholder 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.

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 of our partnership and Brookfield Infrastructure must be calculated in Canadian currency. Where our partnership
(or Brookfield Infrastructure) 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.

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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 Brookfield Infrastructure 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 Brookfield Infrastructure's income from a source in Canada.

In
general, a Canadian Limited Partner'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
Canadian Limited Partner from that source, and any provisions of the Tax Act applicable to that type of income (or loss) will apply to the Canadian Limited Partner. Our partnership will
invest in limited partnership units of Brookfield Infrastructure. In computing our partnership's income (or loss) under the Tax Act, Brookfield Infrastructure 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 Canadian Limited Partners on account of income (or loss) earned by Brookfield Infrastructure generally will be
determined by reference to the source and character of such amounts when earned by Brookfield Infrastructure.

The
characterization by CRA of gains realized by our partnership or Brookfield Infrastructure 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
Canadian Limited Partner'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 Canadian Limited Partner and will be subject to the normal rules in the Tax Act applicable to such dividends, including the enhanced dividend gross up and tax credit
for eligible dividends when the dividend received by Brookfield Infrastructure is designated as an eligible dividend.

Foreign
taxes paid by our partnership or Brookfield Infrastructure and taxes withheld at source (other than for the account of a particular Canadian Limited Partner) will be allocated
pursuant to the governing partnership agreement. Each Canadian Limited Partner's share of the business-income tax and non-business-income tax paid in a foreign country for a year will be
creditable against its Canadian federal income tax liability to the extent permitted by the detailed 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.

Our
partnership and Brookfield Infrastructure will be deemed to be a non-resident person in respect of certain amounts 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 by a person resident or deemed to be resident
in Canada to Brookfield Infrastructure 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 treaty or convention, provided that the residency status

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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 Brookfield Infrastructure,
we expect the Holding Entities to look-through Brookfield Infrastructure 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 Brookfield Infrastructure. However, there can be no assurance that CRA
would apply its administrative practice in this context. Under the Canada-U.S. Tax Treaty, a Canadian resident payer may be required to look-through fiscally transparent
partnerships such as our partnership and Brookfield Infrastructure to the residency of limited partners of the partnership who are entitled to relief under that treaty and take into account reduced
rates of Canadian federal withholding tax that such limited partners may be entitled to under that treaty.

If
our partnership incurs losses for tax purposes, each Canadian Limited Partner will, subject to the REOP Proposals discussed below, be entitled to deduct in the computation of income
for tax purposes the Canadian Limited Partner's pro rata share of any net losses for tax purposes of our partnership for its fiscal year to the extent that the Canadian Limited Partner'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 Brookfield Infrastructure
will incur losses but no assurance can be given in this regard. Accordingly, Canadian Limited Partners 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 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 Canadian Limited Partners
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 Canadian Limited Partner 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 Brookfield Infrastructure will, in and of themselves, generate losses, but no assurance can be given in this regard.
However, unitholders may incur expenses in connection with an acquisition of units in our partnership that could result in a loss that could be affected by the REOP Proposals. The REOP Proposals have
been the subject of a number of submissions to the Minister of Finance (Canada). As part of the 2005 federal budget, the Minister of Finance (Canada) 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 Canadian Limited Partners, or that any revised proposals may not differ significantly from the REOP Proposals described herein.

On
March 4, 2010, the Minister of Finance (Canada) 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. The Minister of Finance (Canada) also indicated that legislation to implement the revised Tax Proposals will be released for
public consultation. Existing

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section 94.1
of the Tax Act contains rules relating to investments in non-resident entities that could in certain circumstances cause income to be imputed to Canadian Limited
Partners, either directly or by way of allocation of such income imputed to our partnership or to Brookfield Infrastructure. These rules would apply if it is reasonable to conclude, having regard to
all the circumstances, that one of the main reasons for the Canadian Limited Partner, our partnership or Brookfield Infrastructure acquiring or holding an investment in a non-resident
entity is to derive a benefit from portfolio investments in such a manner that taxes under the Tax Act on income,
profits and gains 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, 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. If, having regard to the particular circumstances, it is reasonable to conclude that one of the main reasons for the acquisition or holding of our units by the Canadian Limited Partner, of
units of Brookfield Infrastructure by our partnership, or of interests in non-resident entities (other than a controlled foreign affiliate as defined in the Tax Act, or CFA) by
Brookfield Infrastructure, is as stated above, income will be imputed directly to the Canadian Limited Partner or to our partnership or Brookfield Infrastructure and allocated to the Canadian Limited
Partner in accordance with the rules in the Tax Act. However, the precise nature of the revised Tax Proposals is uncertain as proposed legislation to implement them is not yet available. There
can be no assurance that the revised Tax Proposals will be enacted as proposed or at all. The rules in section 94.1 of the Tax Act are complex and Canadian Limited Partners should
consult their own tax advisors regarding the application these rules, including the revised Tax Proposals, to them in their particular circumstances.

Dividends
paid by the CFAs to Brookfield Infrastructure will be included in computing the income of Brookfield Infrastructure. To the extent that any of the CFAs or any direct or
indirect subsidiary thereof earns income that is characterized as FAPI, in a particular taxation year of the CFA, the FAPI allocable to Brookfield Infrastructure must be included in computing the
income of Brookfield Infrastructure for Canadian federal income tax purposes for the fiscal period of Brookfield Infrastructure in which the taxation year of that CFA ends, whether or not Brookfield
Infrastructure actually receives a distribution of that FAPI. If an amount of FAPI is included in computing the income of Brookfield Infrastructure for Canadian federal income tax purposes, an amount
may be deductible in respect of the "foreign accrual tax" as defined in the Tax Act 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 Brookfield Infrastructure of its shares of the particular CFA in respect of which the FAPI was included. At such time as Brookfield
Infrastructure receives a dividend of this type of income that was previously treated as FAPI, that dividend will effectively not be taxable to Brookfield Infrastructure and there will be a
corresponding reduction in the adjusted cost base to Brookfield Infrastructure of the particular CFA shares.

Disposition of Our Units

The disposition by a Canadian Limited Partner of a unit of our partnership will result in the realization of a capital gain
(or capital loss) by such limited partner. The amount of such capital gain (or capital loss) will generally be the amount, if any, by which the proceeds of disposition of a 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 Canadian Limited Partner'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 Canadian Limited Partner for the 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 Canadian Limited Partner (other than losses which cannot be deducted because they exceed the Canadian Limited Partner's "at-risk" amount) for the fiscal years
of our partnership ending before the relevant time; and less (iv) the Canadian Limited

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Partner's
distributions from our partnership made before the relevant time. The adjusted cost base of each of our units will be subject to the averaging provisions contained in the Tax Act.

Where
a Canadian Limited Partner disposes of all of its units, such person will no longer be a partner of our partnership. If, however, a Canadian Limited Partner is entitled to receive
a distribution from our partnership after the disposition of all such units, then the Canadian Limited Partner 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 Canadian Limited Partner was entitled. Pursuant to
the Tax Proposals, 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 Canadian Limited Partner who has
ceased to be a partner will generally be added (or deducted) in the computation of the adjusted cost base of the Canadian Limited Partner's units at the time of the disposition. These rules are
complex and Canadian Limited Partners should consult their own tax advisors for advice with respect to the specific tax consequences to them of disposing of units of our partnership.

A
Canadian Limited Partner will realize a deemed capital gain if, and to the extent that, the adjusted cost base of the Canadian Limited Partner's units is negative at the end of any
fiscal year of our partnership. In such a case, the adjusted cost base of the Canadian Limited Partner's units will be nil at the beginning of the next fiscal year of our partnership.

In
general, one-half of a capital gain realized by a Canadian Limited Partner must be included in computing such limited partner'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 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.

Where
a Canadian Limited Partner disposes of units to a tax-exempt person, more than one-half of such capital gain may be treated as a taxable capital gain if any
portion of the gain is attributable to an increase in value of depreciable property held by Brookfield Infrastructure. Canadian Limited Partners contemplating such dispositions should consult their
own tax advisors. The Infrastructure General Partner has advised that it does not expect that Brookfield Infrastructure will hold any depreciable property and therefore expects that only
one-half of any capital gains arising from a disposition of our units should be treated as taxable capital gains.

A
Canadian Limited Partner 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 under the Tax Act (which includes the TSX and the NYSE), our
units will be "qualified investments" under the Tax Act for a trust governed by a registered retirement saving plan, deferred profit sharing plan, registered retirement income fund, registered
education saving plan, registered disability saving plan, and a tax-free savings account. There can also 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 registered plans and certain other taxpayers and with respect to the acquisition or
holding of prohibited investments by a tax-free savings account.

Our
units will not be a "prohibited investment" (within the meaning of the Tax Act) for a tax-free savings account, provided that the holder of such account deals at
arm's length with our partnership for purposes of the Tax Act and does not have a "significant interest" (within the meaning of the Tax Act) in our partnership or in a corporation,
partnership or trust with which our partnership does not deal at arm's length for purposes of the Tax Act.

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TAXATION OF NON-CANADIAN LIMITED PARTNERS

The following summary applies to holders who at all relevant times are not resident and are not deemed to be resident in Canada for
purposes of the Tax Act and who do not acquire or hold their investment in our partnership in connection with a business carried on, or deemed to be carried on, in Canada, each a
Non-Canadian Limited Partner. The following summary assumes that our units are not "taxable Canadian property" as defined in the Tax Act and that our partnership and Brookfield
Infrastructure generally will not dispose of properties that are taxable Canadian property (which, subject to the proposed amendments to the definition of "taxable Canadian property" announced in the
2010 Canadian Federal Budget, includes, but is not limited to, property that is used or held in a business carried on in Canada, shares of corporations resident in Canada that are not listed on a
designated stock exchange and listed shares where the number of shares owned exceeds prescribed amounts). Our units will be taxable Canadian property if, at any time within the 60-month
period ending at the time of disposition or deemed disposition, the fair market value of all of the properties of our partnership that were taxable Canadian property, certain types of resource
properties, income interests in trusts resident in Canada or interests in or options in respect thereof, was greater than 50% of the fair market value of all of its properties. Under the Tax Proposals
announced by the Department of Finance (Canada) on March 4, 2010 as part of the 2010 Canadian Federal Budget, the definition of "taxable Canadian property" will be amended such that our units
will not be taxable Canadian property at the time of a disposition or deemed disposition unless, at any time during the 60-month period preceding the disposition, more than 50% of the fair
market value of our units was derived, directly or indirectly, from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource properties,
(iii) timber resource properties, and (iv) options in respect of or interests or civil law rights in such property. Legislation to implement these Tax Proposals is contained in Bill
C-9 which received second reading in the House of Commons on April 19, 2010. Our Managing General Partner and the Infrastructure General Partner advise that our units are not
expected to be taxable Canadian property and that our partnership and Brookfield Infrastructure are not expected to dispose of taxable Canadian property. However, no assurance can be given in
this regard.

Taxation of Income or Loss

A Non-Canadian Limited Partner 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 Brookfield Infrastructure) outside Canada or the non-business income earned by our partnership
(or Brookfield Infrastructure) from sources in Canada. However, a Non-Canadian Limited Partner 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, as the case may be, have advised that they intend to organize and conduct the affairs of our
partnership or Brookfield Infrastructure such that Non-Canadian Limited Partners should not be considered to be carrying on business in Canada solely by virtue of their investment in our
partnership. However, no assurance can be given in this regard.

Our
partnership and Brookfield Infrastructure will be deemed to be a non-resident person in respect of certain amounts 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 by a person resident or deemed to be resident
in Canada to Brookfield Infrastructure 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

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federal
withholding tax applicable to amounts paid by the Holding Entities to Brookfield Infrastructure, we expect the Holding Entities to look-through Brookfield Infrastructure 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 Brookfield Infrastructure. However, there can be no assurance that the CRA would apply its administrative practice in this context. Under the
Canada-U.S. Tax Treaty, a Canadian resident payer may be required to look through fiscally transparent partnerships such as our partnership and Brookfield Infrastructure to the
residency of limited partners of our partnership who are entitled to relief under the treaty and take into account reduced rates of Canadian federal withholding tax that such limited partners may be
entitled to under that treaty.

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 the Exempted Undertakings Tax Protection Act 1966 that, 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 28, 2016. 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 the Stamp 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 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 Form 20-F the contract or document is deemed to modify the description contained in this 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 reports on Form 20-F and other reports on Form 6-K.
The information disclosed in our reports may be

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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
Canon's Court, 22 Victoria 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 Form 20-F under Item 5 "Operating and Financial Review
and Prospects."

ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

At the special meeting of our unitholders held on November 16, 2009, our unitholders approved an amendment to our limited
partnership agreement reducing the quorum requirement for meetings of the limited partners from 50% to 20%. As such, 20% of the outstanding units of the class or classes for which a meeting has been
called (including our units held by the Managing General Partner) represented in person or by proxy shall constitute a quorum at a meeting of limited partners of such class or classes unless any such
action by the limited partners requires approval by limited partners holding a greater percentage of the voting power of such units, in which case the quorum shall be such greater percentage.

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ITEM 15.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of December 31, 2009, an evaluation of the effectiveness of our "disclosure controls and procedures" (as defined in
Rules 13a-15(e) and 15d-15(e) of the United States Securities Exchange Act of 1934, or 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 our 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, 2009, 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 using the framework in Internal ControlIntegrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on our 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, 2009.

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 Registered Public Accounting Firm

The effectiveness of our internal control over financial reporting as of December 31, 2009 has been audited by Deloitte &
Touche, LLP, an independent registered public accounting firm, who has also audited the financial statements of the partnership, as stated in their reports which are included herein.

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Changes in Internal Control

There was no change in our internal control over financial reporting during the year ended December 31, 2009, that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERT

Our Managing General Partner's board of directors has determined that Jonathan Hagger possesses specific accounting and financial
management expertise and that he is an audit committee financial expert as defined by the U.S. Securities and Exchange Commission and 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, or the Code, that applies to the
members of the board of directors of the Managing General Partner, our partnership and any officers or employees of the Managing General Partner. We have posted a copy of the Code on our website at
www.brookfieldinfrastructure.com/aboutus/governance.

ITEM 16C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our Managing General Partner has retained Deloitte & Touche LLP to act as our partnership's and Brookfield
Infrastructure's independent registered chartered accountants.

The
table below summarizes the fees for professional services rendered by Deloitte & Touche LLP for the audit of our annual financial statements for the periods ended
December 31, 2008 and 2009.

December 31,
2009

December 31,
2008THOUSANDS

USD

%

USD

%Audit fees(1)

$
2,255


100
%
$
878


100
%Tax fees(2)











Audit-related fees(3)











Total

$
2,255


100
%
$
878


100
%


(1)Audit fees relate to annual fees for our partnership and Brookfield Infrastructure.(2)Audit-related fees include general audit related accounting advice and fees charged in respect of the Transaction.(3)Tax fees relate to annual tax compliance fees for our partnership and Brookfield Infrastructure.


The audit committee of the Managing General Partner pre-approves all audit and non-audit services provided to our
partnership and Brookfield Infrastructure by Deloitte & Touche LLP. In connection with the original registration statement all fees paid to Deloitte & Touche LLP were paid
by Brookfield Asset Management Inc., and as such have not been disclosed by our partnership.

ITEM 16D.    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE

None.

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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
November 2008, our partnership implemented a unit repurchase program for the 12 months ended November 9, 2009 to purchase up to $25 million of our units though the
facilities of NYSE for cancellation, subject to a regulatory limit of 1,167,043 of our units in the aggregate. All such purchases were subject to compliance with applicable United States
federal securities laws, including Rule 10b-18 under the United States Securities Exchange Act of 1934, as amended, as well as applicable Canadian
securities laws.

In
the year ended December 31, 2009, 674,000 of our units were repurchased and cancelled under this program at an average price of $11.48 per unit. During the unit repurchase
program, 854,602 of our units were repurchased and cancelled at an average price of $11.39 per unit. The following table sets forth the number of units of our partnership purchased and cancelled
pursuant to the above program for the periods indicated.

Period

Total
number
of units
purchased

Average
price paid
per unit
(US$)

Total number of units
purchased as part of
publicly announced
plans or programsJanuary 1, 2009 to January 31, 2009


Nil


N/A


NilFebruary 1, 2009 to February 28, 2009


91,100

$
12.80


91,100March 1, 2009 to March 31, 2009


582,900

$
11.28


582,900April 1, 2009 to April 30, 2009


Nil


N/A


NilMay 1, 2009 to May 31, 2009


Nil


N/A


NilJune 1, 2009 to June 30, 2009


Nil


N/A


NilJuly 1, 2009 to July 31, 2009


Nil


N/A


NilAugust 1, 2009 to August 31, 2009


Nil


N/A


NilSeptember 1, 2009 to September 31, 2009


Nil


N/A


NilOctober 1, 2009 to October 31, 2009


Nil


N/A


NilNovember 1, 2009 to November 30, 2009


Nil


N/A


NilTotal


674,000

$
11.48


674,000


ITEM 16F.    CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT



ITEM 16G.    CORPORATE GOVERNANCE

Our corporate practices are not materially different than those required of domestic companies under the NYSE listing standards.

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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, 2007.2.1

Equity Commitment, dated December 4, 2007, by and among Brookfield Asset Management Inc., Brookfield Infrastructure Partners L.P. and Brookfield Infrastructure L.P.incorporated by reference to
Exhibit 2.1 to our Partnership's Registration Statement on Form 20-F/A filed December 13, 2007.4.1

Second Amended and Restated Limited Partnership Agreement for 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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

Trademark Sublicense Agreement, effective as of May 21, 2007, between Brookfield Infrastructure Partners L.P. and Brookfield Global Asset Management Inc.incorporated by reference to Exhibit 4.5
to our Partnership's Registration Statement on Form 20-F/A filed December 13, 2007.4.6

Trademark Sublicense Agreement, effective as of August 17, 2007, between Brookfield Infrastructure L.P. and Brookfield Global Asset Management Inc.incorporated by reference to Exhibit 4.8
to our Partnership's Registration Statement on Form 20-F/A filed December 13, 2007.


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Number

Description4.7

Securities Purchase Agreement, dated November 19, 2007, between Brookfield Asset Management Inc. and Brookfield Infrastructure Holdings (Canada) Inc.incorporated by reference to Exhibit 4.9
to our Partnership's Registration Statement on Form 20-F/A filed December 13, 2007.4.8

Amendment to Second Amended and Restated Limited Partnership Agreement of Brookfield Infrastructure L.P. dated June 13, 2008 by Brookfield Infrastructure General Partner Limitedincorporated by reference to
Exhibit 4.17 to our Partnership's Annual Report on Form 20-F filed June 30, 2008.4.9

Amendment to Amended and Restated Limited Partnership Agreement, dated June 13, 2008 by Brookfield Infrastructure Partners L.P.incorporated by reference to Exhibit 4.18 to our Partnership's
Annual Report on Form 20-F filed June 30, 2008.4.10

Amended and Restated Credit Agreement, dated June 16, 2009, between Brookfield Infrastructure L.P. and Citibank, N.A., Credit Suisse, Toronto Branch, HSBC Bank Canada, HSBC Bank U.S.A., N.A., Toronto Branch,
Royal Bank of Canada and The Royal Bank of Scotland plc.incorporated by reference to Exhibit 4.10 to our Partnership's Form 6-K dated June 17, 2009.4.11

Implementation Agreement, dated October 8, 2009, between Prime Infrastructure, Brookfield Infrastructure L.P. and Brookfield Asset Management Inc.incorporated by reference to Exhibit 10.1
to our Partnership's Report of Foreign Private Issuer on Form 6-k filed October 22, 2009.4.12

Amended and Restated Allocation Agreement, dated October 20, 2009 between Brookfield Asset Management Inc., Brookfield Infrastructure L.P. and BIP Bermuda Holdings I Limitedincorporated by reference
to Exhibit 10.2 to our Partnership's Report of Foreign Private Issuer on Form 6-k filed October 22, 2009.4.13

Amendment dated November 16, 2009 to the Amended and Restated Limited Partnership Agreement dated as of December 4, 2007, as amended as of June 13, 2008 of Brookfield Infrastructure
Partners L.P.incorporated by reference to Exhibit 99.1 to our Partnership's Report of Foreign Private Issuer on Form 6-k filed March 10, 2010.12.1

Certification of Samuel Pollock, Chief Executive Officer, Brookfield Infrastructure Group Corporation, pursuant to Section 302 of the Sarbanes Oxley Act of 2002.*12.2

Certification of John Stinebaugh, Chief Financial Officer, Brookfield Infrastructure Group Corporation, pursuant to Section 302 of the Sarbanes 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 the Sarbanes 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 the Sarbanes Oxley Act of
2002.*15.1

Consent of Deloitte & Touche LLP relating to the incorporation of the following into this Annual Report on Form 20-F: the financial statements of Brookfield Infrastructure Partners L.P., the consolidated and
combined financial statements of Brookfield Infrastructure L.P., the balance sheet of Brookfield Infrastructure Partners Limited, the consolidated financial statements of Island Timberlands Limited Partnership and the combined financial
statements of Brookfield Global Timber Fund.*15.2

Consent of Deloitte & Touche LLP relating to the incorporation of the consolidated financial statements of Longview Timber Holdings, Corp. into this Annual Report on Form 20-F.*15.3

Consent of Ernst & Young Ltda. relating to the incorporation of the consolidated financial statements and schedules of ETC Holdings Ltd. into this Annual Report on Form 20-F.*


*Filed electronically herewith.


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SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual report on its behalf.

Dated: June 1, 2010

BROOKFIELD INFRASTRUCTURE PARTNERS L.P. by its
general partner, Brookfield Infrastructure Partners LimitedBy:

/s/ ALEX ERSKINEName:

Alex ErskineTitle:

Director


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BROOKFIELD INFRASTRUCTURE PARTNERS L.P.    INDEX TO FINANCIAL STATEMENTS

PageAudited Financial Statements of Brookfield Infrastructure Partners L.P. as of December 31, 2009 and 2008 and for the years
ended December 31, 2009 and 2008 and for the period from May 21, 2007 (inception) to December 31, 2007

F-2Audited Consolidated and Combined Financial Statements of Brookfield Infrastructure L.P. as of December 31, 2009 and 2008
and for each of the three years in the period ended December 31, 2009

F-14Audited Consolidated and Combined Financial Statements of Brookfield Infrastructure Partners Limited as of December 31,
 2009

F-34Audited Consolidated Financial Statements of Island Timberlands Limited Partnership as of and for the years ended December 31, 2009
and 2008 and for each of the three years in the period ended December 31, 2009

F-38Audited Consolidated Financial Statements of Longview Timber Holdings, Corp. as of December 31, 2009 and December 31, 2008 and
for the years ended December 31, 2009 and 2008 and for the period from April 20, 2007 to December 31, 2007

F-59Audited Consolidated Financial Statements of ETC Holdings Ltd. and Subsidiaries as of December 31, 2009 and 2008 and for each
of the three years in the period ended December 31, 2009

F-83Audited Combined Financial Statements of Brookfield Global Timber Fund as of December 31, 2009 and 2008 and for the year ended
December 31, 2009 and the period from October 14, 2008 (inception) to December 31, 2008

F-117


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BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

As of December 31, 2009 and 2008 for the years ended December 31, 2009 and 2008
and for the period from May 21, 2007 (inception) to December 31, 2007

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REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To
the Partners of Brookfield Infrastructure Partners L.P.

We
have audited the accompanying balance sheets of Brookfield Infrastructure Partners L.P. (the "Partnership") as of December 31, 2009 and 2008, and the related
statements of operations, other comprehensive (loss) income, accumulated other comprehensive income, partnership capital and of cash flows for the years ended December 31, 2009 and 2008 and for
the period from May 21, 2007 (inception) to December 31, 2007. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an
opinion on the 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 financial statements present fairly, in all material respects, the financial position of Brookfield Infrastructure Partners L.P. as of December 31,
2009 and 2008, and the results of its operations and its cash flows for the years ended December 31, 2009 and 2008 and for the period from May 21, 2007 (inception) to December 31,
2007, in conformity with accounting principles generally accepted in the United States of America.

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, 2009, 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 May 26, 2010 expressed an unqualified opinion on the Partnership's internal control over financial reporting.

/s/DELOITTE & TOUCHELLP
Independent Registered Chartered Accountants
Licensed Public Accountants
Toronto, Canada
May 26, 2010

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REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To
the Partners of Brookfield Infrastructure Partners L.P.

We
have audited the internal control over financial reporting of Brookfield Infrastructure Partners L.P. (the "Partnership") as of December 31, 2009, based on the
criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. 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 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, 2009, based on the criteria
established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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We
have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements as of and for the years ended
December 31, 2009 and 2008, and for the period from May 21, 2007 (inception) to December 31, 2007 of the Partnership and our report dated May 26, 2010 expressed an
unqualified opinion on those financial statements.

/s/DELOITTE & TOUCHELLP
Independent Registered Chartered Accountants
Licensed Public Accountants
Toronto, Canada
May 26, 2010

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BROOKFIELD INFRASTRUCTURE PARTNERS L.P.        As of December 31, 2009 and 2008        BALANCE SHEETS

US$ MILLIONS

2009

2008AssetsEquity accounted investment (Note 3)

$
1,074.1

$
546.5Total assets


1,074.1


546.5Liabilities and partnership capitalAccumulated other comprehensive income


0.8


8.6Partnership capital (63,155,680 (200823,160,269) units issued and outstanding)


1,073.3


537.9Total liabilities and partnership capital

$
1,074.1

$
546.5


The
accompanying notes are an integral part of these financial statements.

F-6BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE PARTNERS L.P.        For the years ended December 31, 2009 and 2008 and for the period from May 21, 2007  (inception) to
December 31, 2007        STATEMENTS OF OPERATIONS

US$ MILLIONS (EXCEPT PER UNIT INFORMATION)

2009

2008

2007Earnings from equity accounted investment

$
28.2

$
16.8

$
0.7Net income

$
28.2

$
16.8

$
0.7Earnings per unit (Note 5)Basic and diluted

$
0.98

$
0.72

$



The
accompanying notes are an integral part of these financial statements.

BrookfieldInfrastructure
Partners     F-7

---





BROOKFIELD INFRASTRUCTURE PARTNERS L.P.    For the years ended December 31, 2009 and 2008 and for the period  from May 21, 2007 (inception) to December 31, 2007

STATEMENTS OF OTHER COMPREHENSIVE (LOSS) INCOME

US$ MILLIONS

2009

2008

2007Net income

$
28.2

$
16.8

$
0.7Other comprehensive income (loss)Foreign currency translation gain (loss)


25.7


(42.2
)

1.3Net (loss) gain on related hedging items


(33.5
)

49.5


Other comprehensive (loss) income


(7.8
)

7.3


1.3Comprehensive income

$
20.4

$
24.1

$
2.0


STATEMENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME

US$ MILLIONS

2009

2008

2007Accumulated other comprehensive income, opening

$
8.6

$
1.3

$
Other comprehensive (loss) income


(7.8
)

7.3


1.3Accumulated other comprehensive income, closing

$
0.8

$
8.6

$
1.3


STATEMENTS OF PARTNERSHIP CAPITAL

US$ MILLIONS

2009

2008

2007Partnership capital, opening

$
537.9

$
543.4

$
542.7Repurchase of units during the period


(7.6
)

(2.0
)

Distributions to unitholders


(34.8
)

(20.3
)

Issuance of new units


549.6





Net income for the period


28.2


16.8


0.7Partnership capital, closing

$
1,073.3

$
537.9

$
543.4


The accompanying notes are an integral part of these financial statements.

F-8BrookfieldInfrastructure
Partners

---





BROOKFIELD INFRASTRUCTURE PARTNERS L.P.        For the year ended December 31, 2009 and 2008 and for the period from May 21, 2007  (inception) to
December 31, 2007

STATEMENTS OF CASH FLOWS

US$ MILLIONS

2009

2008

2007Operating activitiesNet income

$
28.2

$
16.8

$
0.7Distributions from equity accounted investment


42.4


22.3


Adjustments for non-cash items:Earnings from equity accounted investment


(28.2
)

(16.8
)

(0.7
)Cash from operating activities

$
42.4

$
22.3

$
Investment activitiesInvestment in Brookfield Infrastructure (Note 3)

$
(549.6
)
$


$
Cash used in investment activities

$
(549.6
)
$


$
Financing activitiesDistributions to unitholders

$
(34.8
)
$
(20.3
)
$
Issuance of new units (Note 4)


549.6





Repurchase of units during the period


(7.6
)

(2.0
)

Cash used in financing activities

$
507.2

$
(22.3
)
$
Cash and equivalentsChange during the period








Balance, beginning of period








Balance, end of period

$


$


$



The accompanying notes are an integral part of these financial statements.

BrookfieldInfrastructure
Partners     F-9

---





BROOKFIELD INFRASTRUCTURE PARTNERS L.P.        NOTES TO FINANCIAL STATEMENTS        For the years ended December 31, 2009 and 2008 and for the period
from May 21, 2007 (inception) to December 31, 2007

1.     ORGANIZATION AND DESCRIPTION OF THE BUSINESS

Brookfield Infrastructure Partners L.P. (the "Partnership" or "BIP") was formed as a limited partnership established under the laws of Bermuda,
pursuant to a limited partnership agreement dated May 21, 2007 as amended and restated. BIP holds a 59% interest in Brookfield Infrastructure L.P. ("Brookfield Infrastructure"), a
partnership that has interests in utilities and energy, transportation, timber and social infrastructure operations in North and South America, Australasia and Europe. Effective January 31,
2008, BIP's limited partnership units have traded under the symbol "BIP" on the NYSE. In addition, in September 2009, BIP's limited partnership units began trading on the Toronto Stock Exchange
under the symbol BIP.UN.

2.     SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements represent the financial position and results of operations for BIP on the basis that its
investment in Brookfield Infrastructure is accounted for on an equity accounting basis as it is an entity which the Partnership does not control but over which the Partnership has the ability to exert
significant influence.

These
financial statements are prepared in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP").

All
figures are presented in millions of United States dollars unless otherwise noted.

Recently Issued Accounting Pronouncements

In May 2009, the FASB issued ASC 855, Subsequent Events ("ASC 855") (formerly SFAS No. 165 Subsequent
Events), which defines subsequent events as transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. This guidance defines two
types of subsequent events: (i) events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the
process of preparing financial statements (that is, recognized subsequent events); and (ii) events that provide evidence about conditions that did not exist at the date of the balance sheet but
arose after that date (that is, non-recognized subsequent events). The guidance in ASC 855 is effective for periods ending after June 15, 2009. The adoption of ASC
855 did not have a material impact on BIP's financial statements.

Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions
affecting 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. Actual amounts will differ from those estimates used in the preparation of these financial statements. Investment valuation and income taxes are the primary areas
management has made estimates and assumptions.

F-10BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009 and 2008 and for the period
from May 21, 2007 (inception) to December 31, 2007

Investments

Investments in operations in which the Partnership does not have control, but has the ability to exercise significant influence over
operating and financial policies are accounted for under the equity method. Under the equity method, investments are stated at cost and are adjusted for the Partnership's proportional share of
undistributed equity earnings or losses of the investment and distributions received from the investment.

The
Partnership accounts for its investment in Brookfield Infrastructure, over which it has significant influence, under the equity method.

Investment Valuation

The Partnership recognizes an impairment charge, if any, when a decline in the fair value of its investments below their carrying
values is judged to be other-than-temporary. The Partnership considers various factors in determining whether to recognize an impairment charge, including the length of time
and extent to which the fair value has been less than the Partnership's cost basis, the financial condition and near-term prospects of the investee, and the Partnership's intent and
ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

Foreign Currency Translation and Transactions

The U.S. dollar is the Partnership's functional and reporting currency.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

3.     EQUITY ACCOUNTED INVESTMENTS

The Partnership's net investment in equity accounted entities includes the following:

Book Value
December 31US$ MILLIONS

Ownership %

2009

2008Brookfield Infrastructure L.P.


59%

$
1,074.1

$
546.5


In
November 2009, the Partnership made an additional investment in Brookfield Infrastructure for $549.6 million.

BrookfieldInfrastructure
Partners     F-11

---



BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009 and 2008 and for the period
from May 21, 2007 (inception) to December 31, 2007

The
following table presents certain summarized financial information for the Partnership's investment in Brookfield Infrastructure L.P., on a 100% ownership interest in
the entity:

For the years ended
December 31US$ MILLIONS

2009

2008

2007Revenue

$
29.8

$
32.9

$
33.1Cost of revenue (exclusive of depreciation expense)


(7.5
)

(7.3
)

(1.1
)Depreciation expense


(7.5
)

(7.7
)

(7.2
)Gross margin


14.8


17.9


24.8Selling, general and administrative expenses


(16.6
)

(14.0
)

(4.4
)Dividend income


3.5


14.3


0.5Gain on sale of investment


86.8





Other income


(0.5
)

0.9


(0.4
)88.0


19.1


20.5Interest expense


(14.5
)

(12.9
)

(6.9
)Net income before below noted items


73.5


6.2


13.6Income tax expense


(19.9
)

(1.5
)

(4.4
)Deferred tax recovery (expense)


4.2


(1.9
)

10.6(Losses) earnings from equity accounted investments


(10.0
)

25.2


(7.8
)Net income

$
47.8

$
28.0

$
12.0


As at December 31US$ MILLIONS

2009

2008Current assets

$
76.5

$
62.8Non-current assets


1,886.4


1,111.5Total assets

$
1,962.9

$
1,174.3Current liabilities

$
21.9

$
6.9Non-current liabilities not including redeemable preferred shares


121.5


247.5Preferred shares


20.0


20.0Total liabilities

$
163.4

$
274.4


F-12BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE PARTNERS L.P.

NOTES TO FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009 and 2008 and for the period
from May 21, 2007 (inception) to December 31, 2007

4.     PARTNERSHIP CAPITAL

As at December 31, 2009 the number of issued and outstanding Partnership units changed as follows:

2009

2008US$ MILLIONS (EXCEPT FOR UNIT INFORMATION)

Book Value

Units

Book Value

UnitsOutstanding at beginning of year

$
537.9


23,160,269Issuance of new units


549.6


40,669,411

$
543.4


23,340,871Distributions to unitholders


(34.8
)




(2.0
)

(180,602
)Net income for the period


28.2





(20.3
)

Repurchase of units during the year


(7.6
)

(674,000
)

16.8


Outstanding at end of year

$
1,073.3


63,155,680

$
537.9


23,160,269


In
November 2009, the partnership issued $549.6 million of units on the New York and Toronto Stock Exchanges.

5.     EARNINGS PER UNIT

The components of basic and diluted earnings per unit are summarized in the following table:

US$ MILLIONS (EXCEPT FOR UNIT INFORMATION)

2009

2008Net income

$
28.2

$
16.8Weighted average units outstandingbasic


28,827,168


23,330,630Weighted average units outstandingdiluted


28,827,168


23,330,630


6.     FAIR VALUE MEASUREMENTS

ASC 820Fair Value Measurements and Disclosure ("ASC 820"), formerly SFAS 157 "Fair Value Measurements", defines fair value as the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair
value will be classified and disclosed in one of the following three categories.

Level 1:
Quoted market prices in active markets for identical assets or liabilities.

Level 2:
Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3:
Unobservable inputs that are not corroborated by market data.

The
Partnership adopted ASC 820 on January 1, 2008, on a prospective basis, as required for financial assets and financial liabilities. The Partnership currently does not
have any assets or liabilities that are measured at fair value.

BrookfieldInfrastructure
Partners     F-13

---





BROOKFIELD INFRASTRUCTURE L.P.

As of December 31, 2009 and 2008 and for each of the three years in the period ended December 31, 2009

F-14BrookfieldInfrastructure
Partners

---





REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To
the Partners of Brookfield Infrastructure L.P.:

We
have audited the accompanying consolidated and combined balance sheets of Brookfield Infrastructure L.P. and subsidiaries (the "Partnership") as of December 31,
2009 and 2008, and the related consolidated and combined statements of operations, other comprehensive (loss) income, accumulated other comprehensive income, retained (deficit) earnings and of cash
flows for each of the three years in the period ended December 31, 2009. 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 auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Partnership's internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 and combined financial statements present fairly, in all material respects, the financial position of Brookfield Infrastructure L.P. and
subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009, in conformity
with accounting principles generally accepted in the United States of America.

/s/DELOITTE & TOUCHE LLPIndependent Registered Chartered Accountants
Licensed Public Accountants
Toronto, Canada
May 26, 2010

BrookfieldInfrastructure
Partners     F-15

---





BROOKFIELD INFRASTRUCTURE L.P.        As of December 31, 2009 and 2008        CONSOLIDATED AND COMBINED BALANCE SHEETS

US$ MILLIONS

2009

2008AssetsCurrent assetsCash and cash equivalents

$
58.3

$
9.2Accounts receivable and other


18.2


53.6Total current assets


76.5


62.8Cost accounted investment





195.2Equity accounted investments (Note 3)


1,664.9


716.8Property, plant and equipment (Note 4)


204.7


174.0Other assets


3.8


12.5Deferred taxes


13.0


13.0$
1,962.9

$
1,174.3Liabilities and partnership capitalCurrent liabilitiesAccounts payable and other liabilities

$
21.9

$
6.9Total current liabilities


21.9


6.9Corporate borrowings (Note 13)





139.5Non-recourse borrowings (Note 6)


114.0


97.6Deferred tax liabilities


7.5


10.4Preferred shares (Note 12)


20.0


20.0163.4


274.4Redeemable partnership units (Note 7) (42,470,220 (200815,112,744) units issued and outstanding)


710.6


169.3Partnership capitalRetained (deficit) earnings


(27.7
)

157.0Accumulated other comprehensive income


20.3


33.6Partnership units (64,222,608 (200823,548,726) units issued and outstanding)


1,096.3


540.0$
1,962.9

$
1,174.3


The accompanying notes are an integral part of these financial statements.

F-16BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE L.P.        CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

For the years ended
December 31US$ MILLIONS

2009

2008

2007(Note 2)

(Note 2)Revenue

$
29.8

$
32.9

$
33.1Cost of revenue (exclusive of depreciation expense)


(7.5
)

(7.3
)

(5.5
)Depreciation expense


(7.5
)

(7.7
)

(7.2
)Gross margin


14.8


17.9


20.4Selling, general and administrative expenses


(16.6
)

(14.0
)

Dividend income


3.5


14.3


0.5Gain on sale of investment (Note 11)


86.8





Other (expense) income


(0.5
)

0.9


(0.4
)88.0


19.1


20.5Interest expense


(14.5
)

(12.9
)

(6.9
)Net income before below noted items


73.5


6.2


13.6Income tax expense


(19.9
)

(1.5
)

(4.4
)Deferred tax recovery (expense)


4.2


(1.9
)

10.6(Losses) earnings from equity accounted investments


(10.0
)

25.2


(7.8
)Net income

$
47.8

$
28.0

$
12.0


The accompanying notes are an integral part of these financial statements.

BrookfieldInfrastructure
Partners     F-17

---





BROOKFIELD INFRASTRUCTURE L.P.        CONSOLIDATED AND COMBINED STATEMENTS OF  OTHER COMPREHENSIVE (LOSS) INCOME

For the years ended
December 31US$ MILLIONS

2009

2008

2007(Note 2)

(Note 2)Net income

$
47.8

$
28.0

$
12.0Other comprehensive income (loss)Foreign currency translations gains (losses) on the net investment in foreign operations


43.5


(70.4
)

12.7Net (loss) gains on related hedging items


(56.8
)

82.5


Other comprehensive (loss) income


(13.3
)

12.1


12.7Comprehensive income

$
34.5

$
40.1

$
24.7


The accompanying notes are an integral part of these financial statements.

CONSOLIDATED AND COMBINED STATEMENTS OF  ACCUMULATED OTHER COMPREHENSIVE INCOME

For the years ended
December 31US$ MILLIONS

2009

2008

2007(Note 2)

(Note 2)Accumulated other comprehensive income, opening

$
33.6

$
21.5

$
8.8Other comprehensive (loss) income


(13.3
)

12.1


12.7Accumulated other comprehensive income, closing

$
20.3

$
33.6

$
21.5


The accompanying notes are an integral part of these financial statements.

CONSOLIDATED AND COMBINED STATEMENTS OF RETAINED (DEFICIT) EARNINGS

For the years ended
December 31US$ MILLIONS

2009

2008

2007(Note 2)

(Note 2)Retained earnings, opening

$
157.0

$
22.4

$
14.2Net income


47.8


28.0


12.0Fair value adjustment on redeemable partnership units (Note 7)


(168.1
)

184.9


Distributions to unitholders


(58.6
)

(33.9
)

Adjustment related to acquired entity (Note 7)


(5.8
)

(44.4
)

Distribution from operations








(3.8
)Retained (deficit) earnings, closing

$
(27.7
)
$
157.0

$
22.4


The accompanying notes are an integral part of these financial statements.

F-18BrookfieldInfrastructure
Partners

---





BROOKFIELD INFRASTRUCTURE L.P.        CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

Years Ended December 31US$ MILLIONS

2009

2008

2007(Note 2)

(Note 2)Operating activitiesNet income

$
47.8

$
28.0

$
12.0Adjustment for non-cash items:Gain on sale of investments, net of tax


(68.2
)




Losses (earnings) from equity accounted investments in excess of distributions received


10.0


(25.2
)

7.8(Payments) proceeds from hedge settlement, net (Note 11)


(8.5
)

26.8


Depreciation


7.5


7.7


7.2Deferred tax recovery


(4.2
)

1.9


(10.6
)Change in non-cash working capital


23.7


(6.6
)

(0.4
)Cash from operating activities


8.1


32.6


16.0Investing activitiesAcquisition of interest in Prime


(666.4
)




Proceeds on sale of cost accounted investment


243.5





Acquisition of interest in Brookfield sponsored infrastructure fund


(122.4
)




Acquisition of direct investment in DBCT


(85.5
)




Acquisition of direct investment in PD Ports


(53.1
)




Additions to property, plant and equipment


(6.0
)

(8.2
)

(16.8
)Acquisition of PPP assets (Note 8)


(2.9
)

(12.3
)

Additional investment in Transelec (Note 8)





(134.9
)

Acquisition of Ontario Transmission (Note 8)





(93.6
)

Investment in Brookfield sponsored timber fund (Note 8)


(2.1
)

(92.8
)

Additional investment in Longview


(4.9
)

(10.5
)

Proceeds on sale of direct investment in DBCT


9.5





Increase in non-recourse borrowings





4.0


Cash used in investing activities


(690.3
)

(348.3
)

(16.8
)Financing activitiesIssuance of units


937.0





Repayments of corporate borrowings


(139.5
)




Corporate borrowings





139.5


Distributions to unitholders


(58.6
)

(33.9
)

Repurchase of units (Note 7)


(7.6
)

(2.0
)

Cash contribution upon spin off








197.9Issuance of preferred shares








20.0Cash from financing activities


731.3


103.6


217.9Cash and cash equivalentsChange during the year

$
49.1

$
(212.1
)
$
217.1Balance, beginning of year


9.2


221.3


4.2Balance, end of year

$
58.3

$
9.2

$
221.3Cash interest paid

$
6.8

$
12.4

$
7.1


The accompanying notes are an integral part of these financial statements.

BrookfieldInfrastructure
Partners     F-19

---





BROOKFIELD INFRASTRUCTURE L.P.        NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS        For the years ended December 31, 2009, 2008 and 2007

1.     ORGANIZATION AND DESCRIPTION OF THE BUSINESS

Brookfield Infrastructure L.P. ("Brookfield Infrastructure" or 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. Brookfield Infrastructure consists of interests in utilities and energy, transportation and
timber and social infrastructure operations in North and South America, Australasia and Europe.

In
May 2007, Brookfield Asset Management Inc. ("Brookfield") announced its intention to spin-off a portion of its infrastructure assets through a special
dividend to the holders of its Class A limited voting shares and Class B limited voting shares (the "Spin-off"). Prior to the Spin-off, Brookfield
restructured its infrastructure division so that portions of its operations were owned by Brookfield Infrastructure. At the time of the reorganization, Brookfield owned approximately 61% of the
limited partnership units of Brookfield Infrastructure directly, and a wholly owned subsidiary of Brookfield owned exchangeable units of Brookfield Infrastructure representing approximately 39% of the
limited partnership units of Brookfield Infrastructure. Brookfield transferred 60% of the limited partnership units of Brookfield Infrastructure that it owned to Brookfield Infrastructure
Partners L.P. ("BIP"), a limited partnership, in consideration for units of BIP. These BIP units were then distributed by Brookfield to holders of its Class A limited voting shares and
Class B limited voting shares as a special dividend on January 31, 2008.

2.     SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation

The audited annual consolidated and combined financial statements of Brookfield Infrastructure have been prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S. GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission
(the "SEC"), for the preparation of financial information. We evaluate events and transactions that occur after the balance sheet date as potential subsequent events. We perform this evaluation
through May 26, 2010 the date on which our financial statements were available to be issued.

The
accompanying financial statements reflect Brookfield Infrastructure's accounting for the following investments on the equity accounting basis:



F-20BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007



On
March 12, 2008, Brookfield Infrastructure acquired 100% of the assets and liabilities of the transmission division of Great Lakes Power Limited (GLPL), ("the Ontario
Transmission" operations) which was an entity owned and controlled by Brookfield at the time of the acquisition by Brookfield Infrastructure. This transaction constituted a reorganization of entities
under common control, and has been accounted for in a manner similar to a pooling of interests, resulting in the 2008 and 2007 financial statements being prepared on a combined basis. Accordingly,
these financial statements have been presented giving retroactive effect to the transaction described above using historical carrying costs of the assets and liabilities of the Ontario Transmission
operations for all periods presented.

The
following table illustrates our policy used to account for our significant investments:

METHOD OF ACCOUNTING AT DECEMBER 31, 2009

Ownership %

MethodPrime


39.9%

EquityTranselec


17.8%

EquityLongview


23.0%

EquityIsland Timberlands


37.5%

EquityBrookfield sponsored infrastructure fund


45.5%

EquityBrookfield sponsored timber fund


9.1%

EquityDBCT


15.5%

EquityPD Ports


30.9%

EquityOntario Transmission


100.0%

ConsolidationPPP


30-50%

Equity


All
figures are presented in millions of United States Dollars unless otherwise noted.

Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions
affecting the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts will
differ from those estimates used in the preparation of these financial statements. Investment valuation and income taxes are the primary areas where management has made estimates and assumptions.

BrookfieldInfrastructure
Partners     F-21

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

Investments

Investments in operations in which Brookfield Infrastructure does not have control, but has the ability to exercise significant
influence over operating and financial policies, are accounted for under the equity method. Under the equity method, investments are stated at cost and are adjusted for Brookfield Infrastructure's
proportional share of undistributed equity earnings or losses of the investment and distributions received from the investment.

Investment Valuation

Brookfield Infrastructure recognizes an impairment charge, if any, when a decline in the fair value of its investments below the
carrying value is judged to be other-than-temporary. Brookfield Infrastructure considers various factors in determining whether to recognize an impairment charge, including the
length of time and extent to which the fair value has been less than Brookfield Infrastructure's cost basis, the financial condition and near-term prospects of the investee, and Brookfield
Infrastructure's intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

Income Taxes

Income taxes are recognized using the asset and liability approach. Income tax expense is based on pre-tax financial
accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported
amounts. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the net deferred
tax assets. Brookfield Infrastructure accounts for deferred taxes in accordance with ASC 740Income Taxes ("ASC 740"), which requires that deferred tax assets and liabilities be
recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. ASC 740 also requires that deferred tax assets be
reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

Foreign Currency Translation and Transactions

The U.S. dollar is Brookfield Infrastructure's functional currency. Foreign currency denominated monetary assets and liabilities
of Brookfield Infrastructure where the functional currency is other than the U.S. dollar, are translated at the rate of exchange prevailing at period-end and revenues and expenses
at average rates during the period. Gains or losses on the translation of these items are included in the statement of operations.

The
Ontario Transmission business' functional currency is the Canadian dollar. Ontario Transmission's monetary assets and liabilities are translated at the rate of exchange prevailing at
period-end and revenues and expenses at average rates during the period. Gains or losses on the translation of these items are included in the statement of operations.

Cash and Cash equivalents

Brookfield Infrastructure considers all highly liquid investments with a maturity of three months or less when purchased to be cash
equivalents.

F-22BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

Revenue Recognition

Dividend income is recognized on the ex-dividend date.

The
Ontario Transmission operations business recognizes revenue on an accrual basis, when electricity is wheeled, at the regulated rate established by the Ontario Electricity Board.

Derivative Financial Instruments

Brookfield Infrastructure selectively utilizes derivative financial instruments to manage financial risks primarily relating to foreign
exchange risks. Hedge accounting is applied when the derivative is designated as a hedge of a specific exposure and there is reasonable 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 deferred by the application of hedge accounting is recognized in income over the remaining term of the
original hedging relationship. Realized and unrealized gains and losses on foreign exchange forward contracts designated as hedges of currency risks are included in other comprehensive income when the
currency risk relates to a net investment in a foreign subsidiary and are otherwise included in income in the same period as when the underlying asset, liability or anticipated transaction
affects income.

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 income
in the period the changes occur.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, including costs of acquisition incurred by the Ontario Transmission operations
business, less accumulated depreciation. The cost of the property, plant and equipment is depreciated over the estimated service lives of the assets as follows:

Method

RateBuildings

Straight-line

40 yearsTransmission stations, towers and related fixtures

Straight-line

25 to 40 yearsOther equipment

Straight-line

5 to 40 years


Construction
work in progress is not depreciated until the assets are put into service.

Capitalization of Interest

Interest on funds used in construction is charged to construction work in progress at the prescribed rate of return applicable to the
rate base.

Recently Adopted Accounting Standards

ASC 815Derivatives and Hedging ("ASC 815") (formerly SFAS 161, "Disclosures about Derivative Instruments and
Hedging Activities, and Amendment of FASB Statement No. 133") enhances disclosures for derivative instruments and hedging activities and their effects on an entity's

BrookfieldInfrastructure
Partners     F-23

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

financial
position, financial performance and cash flows. Under ASC 815, an entity is required to disclose the objectives for using derivative instruments in terms of underlying risk and accounting
designation; the fair values, gains and losses of derivatives; as well as credit-risk-related contingent features in derivative agreements. ASC 815 is effective for
fiscal years and interim periods beginning after November 15, 2008. The Partnership has adopted this standard effective January 1, 2009 (see Note 11).

Recently Issued Accounting Pronouncements

In May 2009, the FASB issued ASC 855, Subsequent Events ("ASC 855") (formerly SFAS No. 165 Subsequent
Events), which defines subsequent events as transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. This guidance defines two
types of subsequent events: (i) events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the
process of preparing financial statements (that is, recognized subsequent events); and (ii) events that provide evidence about conditions that did not exist at the date of the balance sheet but
arose after that date (that is, non-recognized subsequent events). In addition, this guidance requires an entity to disclose the date through which subsequent events have been evaluated,
as well as whether that date is the date the financial statements were issued or the date the financial statements were available to be issued. The guidance in ASC 855 is effective for periods
ending after June 15, 2009. The adoption of ASC 855 did not have a material impact on Brookfield Infrastrucure's financial statements.

3.     EQUITY ACCOUNTED INVESTMENTS

Brookfield Infrastructure's net investment in equity accounted entities includes the following:

Book ValueUS$ MILLIONS

Ownership %

December 31, 2009

December 31, 2008Prime


39.9%

$
664.6

$
Transelec


17.8%


256.5


222.9Longview


23.0%


195.3


205.9Island Timberlands


37.5%


183.4


182.8Brookfield sponsored infrastructure fund


45.5%


117.6


Brookfield sponsored timber fund


9.1%


83.7


92.6Direct interest in DBCT


15.5%


82.0


Direct interest in PD Ports


30.9%


50.6


PPP


30%-50%


31.2


12.6$
1,664.9

$
716.8


F-24BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

The
following tables presents certain summarized financial information in total, for all investments in equity accounted affiliates based on a 100% ownership interest in
each entity:

Years ended December 31US$ MILLIONS

2009

2008

2007Gross revenue

$
650.1

$
706.7

$
39.3Costs and expense applicable to gross revenue


(281.8
)

(294.1
)

(20.1
)368.3


412.6


19.2Investment income


13.4


8.3


16.5Cash taxes


0.6


(1.4
)

Equity accounted for investments


5.9





Interest expense


(178.3
)

(176.5
)

(29.6
)Depreciation, depletion and amortization


(156.7
)

(180.6
)

(12.9
)Deferred taxes and other


(103.3
)

51.5


(27.0
)Net (loss) income

$
(50.1
)
$
113.9

$
33.8




As at December 31US$ MILLIONS

2009

2008Current assets

$
2,923.2

$
596.9Non-current assets


12,348.2


6,299.8Total assets

$
15,271.4

$
6,896.7Current liabilities

$
2,297.1

$
193.2Non-current liabilities


6,803.1


4,339.1Total liabilities

$
9,100.2

$
4,532.3


4.     PROPERTY, PLANT AND EQUIPMENT

December 31,
2009

December 31,
2008US$ MILLIONS

Cost

Accumulated
Depreciation

Net
Book Value

Net
Book ValueLand

$
0.9

$


$
0.9

$
0.5Buildings


14.5


4.3


10.2


8.4Transmission stations, towers and related fixtures


257.3


67.4


189.9


163.3Other equipment


3.7





3.7


1.8$
276.4

$
71.7

$
204.7

$
174.0


5.     FAIR VALUE OF FINANCIAL ASSETS AND U.S. GAAP LIABILITIES

ASC 820Fair Value Measurements and Disclosure ("ASC 820"), formerly SFAS 157 "Fair Value Measurements", defines fair value as the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

BrookfieldInfrastructure
Partners     F-25

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

Financial
assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1:
Based on quoted market prices in active markets for identical assets or liabilities.

Level 2:
Based on observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3:
Unobservable inputs that are not corroborated by market data.

The
following table presents additional information about the Partnership's financial assets and liabilities which are measured at fair value on a recurring basis as of
December 31, 2009.

Recurring Fair
Value
MeasurementUS$ MILLIONS

Level 2

TotalRedeemable Partnership units


710.6


710.6


The
fair value of the Redeemable Partnership Units is based on the market value of the traded securities for which the partnership units my be redeemed. At December 31, 2009, the
securities, traded under the symbol "BIP" on the New York Stock Exchange, closed trading at $16.77 per unit. These securities also trade on the Toronto Stock Exchange, under the symbol "BIP.UN"
and closed trading on December 31, 2009 at C$17.59 per unit.

6.     NONRECOURSE BORROWINGS

US$ MILLIONS

December 31,
2009

December 31,
2008Series 1 First Mortgage Bonds

$
114.0

$
97.6


The
Series 1 Bonds bear interest at the rate of 6.6%. Semi-annual payments of interest only are due and payable on June and December 16 each year until and
including June 16, 2013. Equal blended semi-annual payments of principal and interest on the Series 1 Bonds will commence on December 16, 2013 and will continue until
and including June 16, 2023. The remaining principal balance of the Series 1 Bonds will be fully due on June 16, 2023. The Series 1 Bonds are secured by a charge on
generation and transmission present and future real property assets of Ontario Transmission's operations. Interest on the Series 1 Bonds is expensed in accordance with the interest rate
prescribed by regulation. In 2009, the interest rate was 6.6% (20086.6%). The fair market value of the Series 1 Bonds is $133.9 million
(2008$90.9 million) based on current market prices for debt with similar terms.

F-26BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

7.     PARTNERSHIP CAPITAL AND REDEEMABLE PARTNERSHIP UNITS

As at December 31, total number of units outstanding were comprised as follows:

2009

2008General partnership units


1,066,928


388,457Limited partnership units


63,155,680


23,160,269Redeemable partnership units


42,470,220


15,112,744Total


106,692,828


38,661,470


During
2009 and 2008, the number of issued and outstanding Partnership units changed as follows:

2009

2008US$ MILLIONS (EXCEPT UNIT INFORMATION)

Book Value

Units

Book Value

UnitsOutstanding at beginning of year


540.0


23,548,726


586.4


23,729,328Other adjustment related to acquired entity


(5.8
)




(44.4
)

Units issued


569.7


41,347,882





Units repurchased


(7.6
)

(674,000
)

(2.0
)

(180,602
)Outstanding at end of year


1,096.3


64,222,608


540.0


23,548,726


Brookfield
Infrastructure has issued redeemable partnership units that may, at the request of the holder, require Brookfield Infrastructure to redeem all or a portion of the holder's
units of Brookfield Infrastructure at the market price for cash. This right is subject to BIP's right of first refusal which entitles it, at its sole discretion, to elect to acquire any unit so
presented to Brookfield Infrastructure in exchange for one of BIP's units (subject to certain customary adjustments). Brookfield's aggregate limited partnership interest in Brookfield Infrastructure
would be 39% if Brookfield exercised its redemption right in full and BIP fully exercised its right of first refusal. The units are classified as temporary equity and are measured at their redemption
amount which also equals their fair value. As of December 31, 2009 and 2008, fair value of these units were valued at $710.6 million and $169.3 million respectively, and the fair
value adjustment during the year, which was recorded in retained earnings.

During
2009 and 2008, the number of issued and outstanding redeemable Partnership units changed as follows:

2009

2008US$ MILLIONS (EXCEPT UNIT INFORMATION)

Book Value

Units

Book Value

UnitsOutstanding at beginning of year


169.3


15,112,744


354.2


15,112,744Units issued


367.4


27,357,476





Revaluation of redeemable partnership units


173.9





(184.9
)

Outstanding at end of year


710.6


42,470,220


169.3


15,112,744


BrookfieldInfrastructure
Partners     F-27

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

8.     ACQUISITIONS AND DIVESTITURES

On November 20, 2009, Brookfield Infrastructure invested $941.0 million to acquire a 40% interest in Prime, direct interests in two assets from
Prime: DBCT and PD Ports, and an interest in a Brookfield sponsored fund. The acquisition was funded with the proceeds from issuance of partnership units.

The
following table outlines sources and uses of cash for our participation in the recapitalization of Prime:

As at November 20
2009Cash

$
941.0Comprised of:Investment in Prime

$
666.4Investment in PD Ports


102.9
(1)Investment in DBCT


165.7
(1)Transaction costs


6.0Total

$
941.0


(1)A portion of our direct investment is held through a Brookfield sponsored infrastructure fund.


On December 31, 2009, the Brookfield sponsored infrastructure partnership, through which a portion of Brookfield Infrastructure's interest
in PD Ports is held, admitted a new limited partner resulting in the reduction of Brookfield Infrastructure's ownership interest in this asset. In conjunction with the transaction, we received
$9.5 million, representing the original cost of the investment plus a notional interest charge and Brookfield Infrastructure's pro-rata ownership interest was reduced from 55.6%
to 45.5%.

On
June 30, 2009, Brookfield Infrastructure completed the sale of our minority interest in TBE for after-tax proceeds of $275 million, including proceeds from
foreign exchange currency hedges. The sale resulted in the recognition of a $68.2 million after-tax gain over book value. A portion of the proceeds was used to repay corporate
borrowings in full, with the balance available to fund growth capital investments and acquisitions, as well as for general corporate working capital purposes.

On
February 3, 2009, Brookfield Infrastructure completed the acquisition from Brookfield of a 50% interest in the Royal Melbourne Showgrounds PPP project for a purchase price of
$2.9 million.

On
December 5, 2008, Brookfield Infrastructure acquired from Brookfield a 30% interest in the Peterborough Hospital and a 50% interest in the Long Bay Forensic and Prison
Hospitals PPP projects for a purchase price of $12.3 million.

On
November 4, 2008, Brookfield Infrastructure invested $102.8 million directly and indirectly (through the Brookfield sponsored timber fund) into Longview to maintain
Brookfield Infrastructure interest at the 30% level. The proceeds were used to partially fund the add-on acquisition of a tree farm in Washington State and repay Longview's outstanding
bridge loan.

On
April 3, 2008, Brookfield Infrastructure acquired an additional 7.1% interest in Transelec for $134.9 million, increasing Brookfield Infrastructure's total ownership
interest to 17.8%.

F-28BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

9.     INCOME TAXES

Included in the net deferred tax recovery amount of $10.6 million for 2007, is $8.4 million representing the net of $13.0 million deferred
tax assets, and $4.6 million deferred tax liability that arose as a result of the initial tax costs in certain subsidiaries being higher or lower then the initial book value of the investments
that arose on the formation of Brookfield Infrastructure.

10.   RELATED PARTY TRANSACTIONS

In the normal course of operations, Brookfield Infrastructure entered into the transactions described below on market terms with related parties. These
transactions have been measured at exchange value and are recognized in the financial statements.

Brookfield
Infrastructure has placed funds on deposit with its parent. The interest earned on the deposits are at market terms. At December 31, 2009, the partnership's deposit
balance with its parent was $49.9 million (December 31, 2008 $nil), and earned interest of $0.1 million for the year ($ nil million for the year ended
December 31, 2008), at a rate of 0.625%.

Ontario
Transmission has provided advances to and received advances from related parties in the normal course of operations. Ontario Transmission has also provided advances to and
received advances from other divisions of Great Lakes Power Limited ("GLPL"). These advances are non-interest bearing, unsecured and due on demand.

At
year end no amounts were due from related parties (as at December 31, 2008nil) and $0.1 million was due to related parties (as at
December 31, 2008$1.7 million).

11.   TBE DIVESTITURE and DERIVATIVES AND HEDGING

In September 2008, Brookfield Infrastructure exercised an option to sell its minority interest in Transmissoras Brasileiras De Energia ("TBE") to a
Brazilian state owned utility. On June 30, 2009, the sale of the TBE interests was completed and Brookfield Infrastructure received proceeds of $245.2 million. Brookfield Infrastructure
had entered into a foreign exchange hedge to lock in the projected proceeds in U.S. dollars in the prior year. During the year, Brookfield Infrastructure recorded a loss of $8.5 million
from hedge settlements; however, since inception of the hedge program a total gain of $18.2 million was recorded within equity. The sale of TBE resulted in the recognition of a
$68.2 million after tax gain on sale over book value, which includes gains recorded on the foreign exchange hedge which were released from accumulated other comprehensive income.

Brookfield
Infrastructure also hold certain instruments, primarily foreign currency forward contracts, for risk management purposes but without electing any form of hedge accounting.

Brookfield
Infrastructure had in place a forward contract to buy a notional amount of approximately £8 million as a hedge against its future additional investment in
the Peterborough Hospital in the United Kingdom. Brookfield Infrastructure recorded a loss of $0.3 million as a current mark-to-market on the contract in the
statement of operations for the year ended December 31, 2009 (2008$0.3 million).

12.   PREFERRED SHARES

The preferred shareholders are entitled to receive a preferential dividend equal to 6% of the preferred shares redemption value and are redeemable, in whole or in
part, at an amount equal to

BrookfieldInfrastructure
Partners     F-29

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

their
redemption value plus accrued and unpaid dividends at any time after the tenth anniversary of their issuance.

13.   CORPORATE BORROWINGS

Brookfield Infrastructure has a $200 million senior secured revolving credit facility used for general working capital including acquisitions. The facility
is available on a revolving basis for one year unless extended in accordance with the terms of the credit agreement. All amounts outstanding under this facility will be repayable on June 13,
2011. All obligations of Brookfield Infrastructure under the facility are guaranteed by certain subsidiaries of Brookfield Infrastructure and are secured by all of the asset so Brookfield
Infrastructure and the guarantors. Loans under this facility accrue interest at a floating
rate based on LIBOR plus 3.5%. Brookfield Infrastructure is required to pay an unused commitment fee under the facility equal to 35% of the applicable margin per annum. As at December 31, 2009,
$ nil was drawn on the credit facility (December 31, 2008$139.5 million).

14.   SEGMENTED INFORMATION

Brookfield Infrastructure's operating segments are utilities, fee for service and timber. A key measure most often used by the Chief Operating Decision Maker in
assessing performance and in making resource allocation decisions is adjusted net operating income (ANOI) a non-GAAP measure, which enables the determination of cash return on equity
deployed. ANOI is defined as net income excluding the impact of depreciation, depletion and amortization, deferred taxes and other non-cash items. The following table provides each
segment's results based on the format that management organizes its segments in order to make operating decisions and assess performance. Each segment is presented on both a 100% basis and a
proportional basis, taking into account Brookfield

F-30BrookfieldInfrastructure
Partners

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

Infrastructure's
ownership interest in operations accounted for using the consolidation and equity methods. For cost accounted investments, the segment results reflect dividend income.

Utilities

Fee for Service

TimberFOR THE YEAR ENDED DECEMBER 31, 2009
US$ MILLIONS

100%

Partnership
Share

100%

Partnership
Share

100%

Partnership
Share

Corporate

Total(1)Revenues

$
434.2

$
116.7

$
289.6

$
56.9

$
226.7

$
77.4

$
Cost attributed to revenues


(103.3
)

(31.0
)

(158.7
)

(32.5
)

(162.9
)

(56.2
)

(18.0
)Dividend income


3.5


3.5














1.7Net operating income


334.4


89.2


130.9


24.4


63.8


21.2


(16.3
)Other income (expenses)


8.5


1.9


(6.7
)

(1.6
)

7.0


1.7


0.4Gain on sale of investment (after-tax)


68.2


68.2














Interest expense


(107.5
)

(29.6
)

(48.3
)

(8.8
)

(79.1
)

(25.7
)

(5.4
)Cash taxes


(1.0
)

(1.0
)

(13.3
)

(1.4
)

0.6


0.2


Adjusted net operating income (ANOI)


302.6


128.7


62.6


12.6


(7.7
)

(2.6
)

(21.3
)Depreciation, depletion and amortization


(83.7
)

(23.3
)

(19.7
)

(4.0
)

(84.4
)

(26.3
)

(0.4
)Premium on refinancing


(15.7
)

(2.8
)













0.5Unrealized (losses) gains on derivative instruments


(108.3
)

(23.1
)













2.4Unrealized loss on investment














(39.6
)

(11.9
)

Deferred taxes and other items


(19.5
)

(9.1
)

(31.6
)

(8.7
)

44.7


14.8


22.3Net income (loss)

$
75.4

$
70.4

$
11.3

$
(0.1
)
$
(87.0
)
$
(26.0
)
$
3.5

$
47.8




Utilities

TimberFOR THE YEAR ENDED DECEMBER 31, 2008
US$ MILLIONS

100%

Partnership
Share

100%

Partnership
Share

Corporate

Total(1)Revenue

$
367.7

$
86.4

$
368.4

$
124.8

$
Costs attributed to revenue


(59.0
)

(15.8
)

(239.0
)

(81.8
)

(14.0
)Dividend income


14.3


14.3








Net operating income


323.0


84.9


129.4


43.0


(14.0
)Other income (expense)


9.5


1.6


(1.2
)

(0.5
)

1.2Interest expense


(93.2
)

(21.1
)

(90.6
)

(29.0
)

(4.3
)Cash taxes


(1.4
)

(1.4
)

(1.4
)

(0.7
)

Adjusted net operating income (ANOI)


237.9


64.0


36.2


12.8


(17.1
)Depreciation, depletion and amortization


(70.5
)

(17.6
)

(117.8
)

(36.7
)

Deferred taxes and other items


(41.7
)

(6.5
)

91.3


30.6


(1.5
)Net income (loss)

$
125.7

$
39.9

$
9.7

$
6.7

$
(18.6
)
$
28.0


(1)The majority of Brookfield Infrastructure's investments are accounted for using the equity method or cost method of accounting in accordance with
U.S. GAAP (note 2). This results in the earnings from these investments being presented in one line on the Statement of Operations. The above tables presents the detailed components
making up net income for investments accounted for using the consolidation, equity and cost methods in a more fulsome manner. Accordingly, with the exception of net income, the totals of each line
item in the above table will not agree to the Statement of Operations.


BrookfieldInfrastructure
Partners     F-31

---



BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

Utilities

TimberFOR THE YEAR ENDED DECEMBER 31, 2007
US$ MILLIONS

100%

Partnership
Share

100%

Partnership
Share

Corporate

Total(1)Revenue

$
54.3

$
35.5

$
18.1

$
6.1

$
Dividend income


0.6


0.5








Costs attributed to revenue


(9.6
)

(6.4
)

(16.9
)

(5.6
)

Net operating income


45.2


29.6


1.2


0.5


Other income (expense)


3.0


0.3


(5.1
)

(1.9
)

Interest expense


(17.7
)

(8.0
)

(8.6
)

(2.7
)

Cash taxes


(4.5
)

(4.5
)







Adjusted net operating income (ANOI)


26.0


17.4


(12.5
)

(4.1
)

Depreciation, depletion and amortization


(14.4
)

(8.0
)

(5.8
)

(1.8
)

Deferred taxes and other items


(16.0
)

0.4


(0.5
)

(0.3
)

8.4Net (loss) income

$
(4.4
)
$
9.8

$
(18.8
)
$
(6.2
)
$
8.4

$
12.0


15.   COMMITMENTS, CONTINGENCIES AND GUARANTEES

In the normal course of operations, Ontario Transmission operations executes agreements that provide for indemnification and guarantees to third parties in
transactions such as debt issuances. The nature of substantially all of the indemnification undertakings prevents Ontario Transmission operations from making a reasonable estimate of the maximum
potential amount Ontario Transmission operations could be required to pay third parties as the agreements do not specify a maximum amount and the amounts are dependent upon the outcome of future
contingent events, the nature and likelihood of which cannot be determined at this time. Historically, Ontario Transmission operations has not made significant payments under such indemnification
agreements.

The
payments for interest in respect of the First Mortgage Bonds for the next 5 years are as follows:

US$ MILLIONS

2010

2011

2012

2013

2014$
6.5

$
6.5

$
6.5

$
6.5

$
6.5


In
the normal course of operations, Ontario Transmission operations has committed as at December 31, 2009 to spend approximately $50.0 million on capital projects in
future years.

Ontario
Transmission operations may, from time to time, be involved in legal proceedings, claims, and litigation that arise in the ordinary course of business which Ontario Transmission
operations believes would not reasonably be expected to have a material adverse effect on the financial condition of Ontario Transmission operations.

There
are no specified decommissioning costs relating to the Ontario Transmission operations assets. Ontario Transmission operations has a comprehensive repair and capital expenditure
program to ensure that its transmission lines are maintained to optimum industry standards. Replacement of the assets occur in accordance with a long term capital plan and would involve typical costs
of removal as part of that process. In the circumstance where a portion of a line or other assets were removed completely, there may be some contractual obligations under private or crown easements or
other land

F-32BrookfieldInfrastructure
Partners

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BROOKFIELD INFRASTRUCTURE L.P.

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (Continued)

For the years ended December 31, 2009, 2008 and 2007

rights
which require the transmission owner to reinstate the land to a certain standard, typically the shape it was prior to the construction of the transmission assets. As well, certain
environmental, land use and/or utility legislation, regulations and policy may apply in which Ontario Transmission would have to comply with remediation requirements set by the government. The
requirements will typically depend on the specific property characteristics and what criteria the government determines to be appropriate to meet safety and environmental concerns. These asset lives
are indeterminate given their nature. As the individual assets or components reach the end of their useful lives, they are retired and replaced. Historically, certain asset components have been
replaced a number of times, thus creating a perpetual asset with an indeterminate life. As such, the retirement date for these lines cannot be reasonably estimated and therefore, the fair value of the
associated liability cannot be determined at this time. As a result, no liability has been accrued in these financial statements.

Brookfield
Infrastructure acquired an interest in the Peterborough Hospital PPP project in the United Kingdom in 2008. The project is in the construction phase with construction
expected to be complete in late 2011. Brookfield Infrastructure has a commitment to fund its share of the additional equity investment in the project totalling approximately
£8 million, or $12 million.

16.   SUBSEQUENT EVENTS

On January 28, 2010, subsequent to year end, the Brookfield sponsored infrastructure partnership, through which a portion of Brookfield Infrastructure's
interests in DBCT and PD Ports is held, admitted a new limited partner resulting in the reduction in our ownership interest in these assets. In addition, Brookfield Infrastructure sold a 1.4% interest
in DBCT to the new limited partner. In conjunction with the transaction, Brookfield Infrastructure received proceeds of $21.5 million, representing the original cost of these investments plus a
notional interest charge.

BrookfieldInfrastructure
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BROOKFIELD INFRASTRUCTURE PARTNERS LIMITED        As of December 31, 2009

F-34BrookfieldInfrastructure
Partners

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REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To the Directors of
BROOKFIELD INFRASTRUCTURE PARTNERS LIMITED:

We
have audited the accompanying balance sheet of Brookfield Infrastructure Partners Limited (the "Company") as of December 31, 2009. This balance sheet is the
responsibility of the Company's management. Our responsibility is to express an opinion on this balance sheet based on our audit.

We
conducted our audit in accordance with the auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We
believe that our audit provides a reasonable basis for our opinion.

In
our opinion, such balance sheet presents fairly, in all material respects, the financial position of Brookfield Infrastructure Partners Limited as of December 31, 2009, in
conformity with accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHELLP
Independent Registered Chartered Accountants
Licensed Public Accountants
Toronto, Ontario
May 26, 2010

BrookfieldInfrastructure
Partners     F-35

---





BROOKFIELD INFRASTRUCTURE PARTNERS LIMITED        BALANCE SHEET        As of December 31, 2009

2009AssetsCash

$
12,455Investment in Brookfield Infrastructure Partners L.P.


1Receivables and other


299,595Total assets

$
312,051Liabilities and shareholders capitalAccounts payable

$
334,904Shareholders' deficitShare capital


100Retained earnings


(22,953
)Total liabilities and shareholders' deficit

$
312,051


The accompanying notes are an integral part of these financial statements.

F-36BrookfieldInfrastructure
Partners

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BROOKFIELD INFRASTRUCTURE PARTNERS LIMITED        NOTES TO BALANCE SHEET

1.     ORGANIZATION

Brookfield Infrastructure Partners Limited (the "Company") was formed as a company limited by shares under the Companies Act 1981 of Bermuda pursuant to a
memorandum of association dated May 17, 2007. The Company issued four shares of par value $1.00 each upon incorporation. The Company was incorporated to serve as the general partner of
Brookfield Infrastructure Partners L.P.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The balance sheet has been prepared in accordance with accounting principles generally accepted in the United States of America.

In
May 2009, the FASB issued ASC 855, Subsequent Events ("ASC 855") (formerly SFAS No. 165 Subsequent Events), which defines subsequent events as transactions that occur
after the balance sheet date but before financial statements are issued or are available to be issued. This guidance defines two types of subsequent events: (i) events or transactions that
provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements (that is, recognized
subsequent events); and (ii) events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date (that is, non-recognized subsequent
events). In addition, this guidance requires an entity to disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the financial statements were
issued or the date the financial statements were available to be issued. The guidance in ASC 855 is effective for periods ending after June 15, 2009. The adoption of ASC 855 did
not have a material impact on the Company's financial statements.

We
evaluate events and transactions that occur after the balance sheet date as potential subsequent events. We perform this evaluation through May 26, 2010 the date on which our
financial statements were available to be issued.

3.     ACTIVITIES OF THE ENTITY

The Company has receivables and payables incurred in the normal course of operations in its capacity as the general partner of Brookfield Infrastructure
Partners L.P.

BrookfieldInfrastructure
Partners     F-37

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Consolidated financial statements of
ISLAND TIMBERLANDS LIMITED PARTNERSHIPAs of December 31, 2009 and 2008 and for each of the three years in the period ended December 31, 2009

F-38BrookfieldInfrastructure
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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

Table of contents

PageReport of Independent Registered Chartered Accountants

F-40Consolidated statements of operations

F-41Consolidated statements of comprehensive income and accumulated other comprehensive income

F-42Consolidated statements of partners' equity

F-43Consolidated balance sheets

F-44Consolidated statements of cash flows

F-45Notes to the consolidated financial statements

F-46


BrookfieldInfrastructure
Partners     F-39

---





Report of Independent Registered Chartered Accountants

To
the Partners of
Island Timberlands Limited Partnership

We
have audited the consolidated balance sheets of Island Timberlands Limited Partnership (the "Partnership") as at December 31, 2009 and 2008 and the consolidated
statements of operations, comprehensive income and accumulated other comprehensive income, partners' equity and cash flows for each of the three years in the period ended December 31, 2009.
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 an
audit to obtain reasonable assurance 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, these consolidated financial statements present fairly, in all material respects, the financial position of the Partnership as at December 31, 2009 and 2008 and
the results of its operations and its cash flows for each of the three years in the period ended December 31, 2009 in accordance with Canadian generally accepted accounting principles.

The
Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control
over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Partnership's internal control
over financial reporting. Accordingly, we express no such opinion.

/s/
Deloitte & Touche LLP
Independent Registered Chartered Accountants
Vancouver, Canada
January 22, 2010

F-40BrookfieldInfrastructure
Partners

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP        CONSOLIDATED STATEMENTS OF OPERATIONS        Years ended December 31, 2009, 2008 and 2007  (Expressed in
thousands of U.S. dollars)

2009

2008

2007$

$

$Sales


135,617


192,657


212,775Operating costs and expensesManufacturing and production costs


91,740


128,269


139,576Depreciation, depletion and amortization


12,238


18,437


20,263Shipping and handling


11,317


8,412


Selling, general and administrative


7,807


8,944


9,001123,102


164,062


168,840Operating income


12,515


28,595


43,935Other expenses (income)Interest expense


25,119


26,979


26,451Other (income) expenses (Note 11)


(2,968
)

1,108


(3,859
)Gain on sale of assets (Note 6)


(2,562
)

(5,631
)

(7,432
)Gains on sale of assets in Strathcona Helicopters Ltd. (Note 1)


(559
)

(223
)

Management feeperformance bonus (Note 4)


(12,375
)

(35,923
)

8,2986,655


(13,690
)

23,458Net income for the year


5,860


42,285


20,477Allocated as follows:Limited Partners interests


5,860


42,285


20,477General Partner interest








5,860


42,285


20,477


See accompanying notes to the consolidated financial statements.

BrookfieldInfrastructure
Partners     F-41

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP        CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND  ACCUMULATED OTHER COMPREHENSIVE INCOME        Years ended
December 31, 2009, 2008 and 2007  (Expressed in thousands of U.S. dollars)

2009

2008

2007$

$

$Net income


5,860


42,285


20,477Other comprehensive (loss) incomeAmortization of gain on fair values of derivatives designated as cash flow hedges


(77
)

(77
)

(107
)Effect of foreign currency translation of foreign operation


18


(30
)

15Other comprehensive loss


(59
)

(107
)

(92
)Comprehensive income


5,801


42,178


20,385Accumulated other comprehensive income, beginning of year


5,269


5,376


5,468Other comprehensive loss


(59
)

(107
)

(92
)Accumulated other comprehensive income, end of year


5,210


5,269


5,376


See accompanying notes to the consolidated financial statements.

F-42BrookfieldInfrastructure
Partners

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP        CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY        Years ended December 31, 2009, 2008 and 2007  (Expressed in
thousands of U.S. dollars)

2009

2008

2007Limited
Partners

General
Partner

Total

Total

Total$

$

$

$

$Partners' equity, beginning of year


470,450


6


470,456


433,394


452,128Net income


5,860





5,860


42,285


20,477Transitional adjustment














(23
)Distribution of proceeds from Strathcona Helicopters Ltd.


(559
)




(559
)

(223
)

Distributions











(5,000
)

(39,188
)475,751


6


475,757


470,456


433,394Accumulated other comprehensive income


5,210





5,210


5,269


5,376Partners' equity, end of year


480,961


6


480,967


475,725


438,770


See accompanying notes to the consolidated financial statements.

BrookfieldInfrastructure
Partners     F-43

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP        CONSOLIDATED BALANCE SHEETS        As at December 31, 2009 and 2008  (Expressed in thousands of
U.S. dollars)

2009

2008$

$AssetsCurrent assetsCash


2,487


6,998Short-term investment


8,000


Accounts receivable


1,622


2,077Inventories (Note 5)


23,315


26,984Prepaid expenses


926


75036,350


36,809Property, plant and equipment (Note 6)


106,384


106,797Timberlands and logging roads (Note 7)


747,351


754,099Long-term receivable (Note 4)


20,080


7,705910,165


905,410LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities


16,262


16,718Performance bonusinterest payable





1,07316,262


17,791Other liabilities (Note 8)


4,743


4,02021,005


21,811Long-term debt (Note 9)


410,000


410,000Less: Debt issue costs


(1,807
)

(2,126
)408,193


407,874429,198


429,685Partners' equity


480,967


475,725910,165


905,410Contingencies (Note 14)Commitments (Note 16)


See accompanying notes to the consolidated financial statements.

F-44BrookfieldInfrastructure
Partners

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP        CONSOLIDATED STATEMENTS OF CASH FLOWS        Years ended December 31, 2009, 2008 and 2007  (Expressed in
thousands of U.S. dollars)

2009

2008

2007$

$

$Operating activitiesNet income for the year


5,860


42,285


20,477Items not involving cashDepreciation, depletion and amortization


12,238


18,437


20,263Amortization of debt issue costs


319


319


346Return of investment (Note 1)


(559
)

(223
)

Gain on sale of assets


(2,562
)

(5,631
)

(7,432
)Change in non-cash operating itemsAccounts receivable


455


183


487Management feeperformance bonus payable


(12,375
)

(50,353
)

2,648Inventories


3,669


1,898


(5,821
)Prepaid expenses


(176
)

274


(84
)Accounts payable and accrued liabilities


(1,529
)

(6,288
)

3,794Other liabilities


664


(3,229
)

3556,004


(2,328
)

35,033Investing activitiesAcquisition of Timberland assets purchase price adjustment








5,188Additions to property, plant and equipment, and timberlands and logging roads (Note 5)


(6,316
)

(7,702
)

(8,769
)Proceeds from sale of property and equipment


3,801


7,564


14,529Proceeds from sale of assets in Strathcona Helicopters Ltd. (Note 1)


559


223


(1,956
)

85


10,948Financing activitiesDistributions to limited partners





(5,000
)

(39,188
)Distribution of proceeds from Strathcona Helicopters Ltd. (Note 1)


(559
)

(223
)

(559
)

(5,223
)

(39,188
)Increase (decrease) in cash


3,489


(7,466
)

6,793Cash, beginning of year


6,998


14,464


7,671Cash, end of year


10,487


6,998


14,464Cash consists ofCash on hand on deposits


2,487


6,998


14,464Short-term investments


8,000


10,487


6,998


14,464Supplemental cash flow information Interest paid


25,876


26,869


24,858


See accompanying notes to the consolidated financial statements.

BrookfieldInfrastructure
Partners     F-45

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS        December 31, 2009 and 2008  (Expressed in thousands of
U.S. dollars)

1.    PRIMARY BUSINESS ACTIVITY

Island Timberlands Limited Partnership ("Island" or the "Partnership") was formed pursuant to a limited partnership agreement (the "Agreement") made as of March 23, 2005
and as amended and restated as of May 27, 2005 for the purpose of carrying on the business of investment in, and management, operation, and disposition of timberlands in British Columbia,
Canada and such other locales as may be approved in accordance with the Agreement.

Island's
assets consist primarily of timberlands, land, logging roads and equipment, and for part of the year, a 50% interest in Strathcona Helicopters Ltd. ("Strathcona"). All of
the assets are located in the coastal region of British Columbia, Canada. The Partnership's principal business is growing and harvesting timber, and selling logs to worldwide markets. Island's
secondary business interest is real estate development and sales.

Island's
interest in Strathcona was fully dissolved in November 2009 as a result of the winding up of this company which began in 2008. The decision by the Strathcona board was
the result of Island and Western Forest Products Ltd. ("Western") being able to access equivalent services more cost effectively elsewhere in the marketplace.

2.    SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles ("GAAP") which in these circumstances conform, in all
material respects, with United States generally accepted accounting principles ("US GAAP"), except as described in Note 19.







F-46BrookfieldInfrastructure
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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

2.    SIGNIFICANT ACCOUNTING POLICIES (Continued)





BrookfieldInfrastructure
Partners     F-47

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

2.    SIGNIFICANT ACCOUNTING POLICIES (Continued)



Buildings

3%-5%Plant and equipment

10%-20%






F-48BrookfieldInfrastructure
Partners

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

2.    SIGNIFICANT ACCOUNTING POLICIES (Continued)









3.    CHANGES IN ACCOUNTING POLICIES

Effective January 1, 2009, Island adopted the following new accounting standards and recommendations issued by the CICA.





BrookfieldInfrastructure
Partners     F-49

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

3.    CHANGES IN ACCOUNTING POLICIES (Continued)





4.    MANAGEMENT FEEPERFORMANCE BONUS

Pursuant to the terms of the Management Agreement (the "Agreement") between Island and BTM, management fees are payable to BTM as compensation for the services provided by BTM on
behalf of Island. These fees are comprised of a base management fee which is payable quarterly, and a performance fee which becomes payable annually upon the achievement of specified performance
thresholds.

The
performance bonus is calculated annually based on cash distributed by the business combined with independent valuation reports. The final calculation of the annual amount owing with
respect to the performance fee is subject to a clawback calculation for every five year period starting in 2011 and every fifth year thereafter. In accordance with the terms of this clawback clause,
if Island has paid BTM annual performance fees which are in excess of the amount that would have been paid if the performance fee had been calculated for each five year period, rather than annually,
the excess amount will be repaid by BTM to Island.

In
May 2007, the 2006 performance fee payable to BTM was finalized at $39.5 million. This fee was payable in installments over a 7 year-period, bearing
interest at a rate of 6.02%. The performance fee payment in the year ended December 31, 2008 for the second instalment of the 2006 performance fee was $5.7 million
(2007$5.7 million for the first instalment of the 2006 performance fee) along with a performance fee interest payment of $2.0 million during the year.

In
2007 an additional performance fee payable was calculated. It was finalized and fully paid during 2008 in the amount of $8.8 million.

In
2008, as a result of a change in management's estimates in the fee payable based on cash distributions and independent business valuations a total of $35.9 million was recorded
as an accrued clawback. The clawback provision resulted in an estimated long-term receivable of $7.7 million at December 31, 2008.

During
the year ended December 31, 2009, the accrued clawback was increased by $12.4 million resulting in a long-term receivable of $20.1 million. The
final performance bonus will be calculated on December 31, 2010 and will be settled in 2011.

Any
obligation is considered subordinate to the Senior Bonds, and accordingly would not be included in calculating compliance with the covenants of the Trust Indenture. As long as the

F-50BrookfieldInfrastructure
Partners

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

4.    MANAGEMENT FEEPERFORMANCE BONUS (Continued)

Partnership
remains in compliance with the covenants stated in the Trust Indenture, payments may be made on the management fee payable should such an obligation exist.

5.    INVENTORIES

2009

2008$

$Logs and boomsticks


22,030


25,642Materials and supplies


1,285


1,34223,315


26,984


6.    PROPERTY, PLANT AND EQUIPMENT

2009

2008Cost

Accumulated
depreciation

Net book
value

Net book
value$

$

$

$HBU and other land


104,006





104,006


103,852Buildings


1,134


613


521


711Plant and equipment


4,721


2,864


1,857


2,234109,861


3,477


106,384


106,797


In
the year ended December 31, 2009, Island sold HBU and other land for net proceeds of $3,241 (2008$5,983, 2007$14,446), realizing a gain of $2,058
(2008$4,112, 2007$7,349). Island also sold plant and equipment for net proceeds of $560 (2008$1,581, 2007$83) and realized a gain of $504
(2008$1,519, 2007$83).

7.    TIMBERLANDS AND LOGGING ROADS

2009

2008Cost

Accumulated
depletion and
amortization

Net book
value

Net book
value$

$

$

$Timberlands


790,068


62,725


727,343


736,975Reforestation


16,722





16,722


14,016Logging roads


21,990


18,704


3,286


3,108828,780


81,429


747,351


754,099


BrookfieldInfrastructure
Partners     F-51

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

8.    OTHER LIABILITIES

2009

2008$

$Restructuring liabilities


4,220


3,636Asset retirement obligations


523


3844,743


4,020


Pursuant
to the timberland acquisition from Weyerhaeuser Company Limited ("WYL"), Island was obligated to reimburse Cascadia Forest Products Ltd. ("Cascadia")
(now Western, a company under common control of one of the limited partners) for certain restructuring and severance costs related to closure activities. That obligation was settled in 2008
with a final payment of $0.3 million.

At
the time of acquisition, Island also assumed responsibility for certain property subdivisions and environmental obligations that could potentially arise pursuant to the subdivision
process. In 2009, no revisions were made to the estimated future cost. The projected obligations are measured in Canadian dollars, the change in balance sheet amounts is wholly a factor of change in
foreign exchange from year to year.

9.    DEBT

2009

2008$

$U.S. secured bonds repayable on August 30, 2015,
interest at 5.58%


100,000


100,000U.S. secured bonds repayable on August 30, 2025,
interest at 6.17%


210,000


210,000U.S. secured bonds repayable on August 30, 2030,
interest at 6.27%


100,000


100,000410,000


410,000


The
bonds are payable to Island Timberlands Finance Corp. ("IT Finance"), an entity under common control. The bonds are secured by a fixed and floating charge over the Partnership
assets and covenants exist that restrict the Partnership's ability to create additional encumbrances and incur further debt. A debt service reserve account equal to six months' interest has been
guaranteed by issuing two secured irrevocable letters of credit aggregating $12,382. The fair value of the long-term debt at December 31, 2009 has been estimated by management at
$359,677 (2008$417,987).

The
Partnership maintains a $30 million demand secured operating credit facility. There were no borrowings on the facility at December 31, 2009. At December 31,
2009, the Partnership had six letters of credit totaling $12.5 million outstanding under the credit facility.

F-52BrookfieldInfrastructure
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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

10.    PARTNERS' EQUITY

Number of
units
authorized
and issued

Participation
%Limited Partners interests


53,168,984


99.999General Partner interest


1


0.001


11.    OTHER NON-OPERATING EXPENSES/(INCOME)

2009

2008

2007$

$

$Interest income


(73
)

(298
)

(733
)Statutory right of way sale


(1,671
)




Financing fees


499


210


Foreign exchange (gain) loss


(2,035
)

2,458


(2,702
)Remediation costs





208


Severance


323


287


(181
)Changes in estimated restructuring liabilities (Note 8)





(1,647
)

Other


(11
)

(110
)

(243
)(2,968
)

1,108


(3,859
)


12.    RELATED PARTY TRANSACTIONS

In
addition to the related party transactions disclosed elsewhere, the Partnership had the following transactions with related parties which have been recorded at the exchange amounts
agreed to by the parties:



BrookfieldInfrastructure
Partners     F-53

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

12.    RELATED PARTY TRANSACTIONS (Continued)



2009

2008$

$Western


39


(15
)Carma


(70
)

(83
)Brookfield


28,080


6,632IT Finance


(8,262
)

(8,269
)Strathcona





19,787


(1,735
)


13.    EMPLOYEE BENEFIT PLANS

Island
maintains a defined contribution employee pension plan for salaried employees and contributes to an industry plan for hourly employees. Pension expense for the year was $669
(2008$757, 2007$701).

F-54BrookfieldInfrastructure
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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

14.    CONTINGENCIES

Island
is subject to legal claims in the ordinary course of its business. Although there can be no assurance as to the disposition of these matters, it is the opinion of Island's
management, based upon the information currently available, that the expected outcome of these matters, individually or in aggregate, will not have a material adverse effect on the results of
operations or financial condition of the Partnership.

15.    SEGMENT INFORMATION

Island
manages its business as a single operating segment (Note 1). All of the operations and assets are located in British Columbia.

2009

2008

2007$

$

$Sales by location of customerCanada


41,126


67,416


73,365United States


16,349


33,587


72,152Asia


78,142


91,654


67,258135,617


192,657


212,775Sales by product lineLogs and related service


135,617


192,690


212,280Other





(33
)

495135,617


192,657


212,775


16.    COMMITMENTS

At
December 31, 2009, the Partnership was committed to payments under operating leases for equipment and office premises through to 2013. Annual future minimum payments over the
term of these commitments are as follows:

$2010


3,6892011


2,3502012


1,4852013


1,0548,578


BrookfieldInfrastructure
Partners     F-55

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

17.    CAPITAL DISCLOSURES

The
Partnership is subject to externally imposed capital requirements pursuant to its debt financing with a financial institution. Prior to declaring or making distributions to partners,
the debt financing requires the Partnership to maintain certain bank covenant ratio requirements as specified in the loan agreement with the financial institution (Note 9).

18.    FINANCIAL INSTRUMENTS









19.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The
Partnership's consolidated financial statements have been prepared in accordance with Canadian GAAP, which differs in some respects from US GAAP. There are no material measurement
differences that would affect these financial statements had they been prepared in accordance with US GAAP. The following are the significant differences in accounting principles as they pertain to
the consolidated financial statements.



F-56BrookfieldInfrastructure
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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

19.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)



2009

2008

2007$

$

$Income (loss)Revenues





(33
)

496Expenses


(436
)

(398
)

497Net income


436


365


(1
)Cash flows (used in) provided byOperating activities


82


(911
)

22Investing activities


477


1,404


(22
)Financing activities


(559
)

(493
)










BrookfieldInfrastructure
Partners     F-57

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ISLAND TIMBERLANDS LIMITED PARTNERSHIP

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2009 and 2008
(Expressed in thousands of U.S. dollars)

19.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)





F-58BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.

Consolidated
Financial Statements as of
December 31, 2009 and 2008, and for the years
ended December 31, 2009 and 2008, and for the
period April 20 to December 31, 2007, and
Independent Auditors' Report

BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.

TABLE OF CONTENTS

PageINDEPENDENT AUDITORS' REPORT

F-61CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009 AND 2008 AND FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008, AND FOR THE PERIOD APRIL 20, TO
DECEMBER 31, 2007:Balance Sheets

F-62Statements of Operations

F-63Statements of Cash Flows

F-64-5Statements of Equity

F-66Notes to Consolidated Financial Statements

F-67-82


F-60BrookfieldInfrastructure
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LOGO

INDEPENDENT AUDITORS' REPORT

To
the Board of Directors and Shareholders of
Longview Timber Holdings, Corp.
Longview, Washington

We
have audited the accompanying consolidated balance sheets of Longview Timber Holdings, Corp. and subsidiaries (the "Company") as of December 31, 2009 and 2008, and the
related consolidated statements of operations, equity, and cash flows for the years ended December 31, 2009 and 2008, and the period April 20 to December 31, 2007. These financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with generally accepted auditing standards as established by the Auditing Standards Board (United States) and in accordance with the auditing
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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, 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 the Company as of December 31, 2009 and 2008, and the
results of its operations, equity, and its cash flows for the years ended December 31, 2009 and 2008, and for the period April 20 to December 31, 2007, in conformity with
accounting principles generally accepted in the United States of America.

GRAPHIC

February 26,
2010

LOGO


BrookfieldInfrastructure
Partners     F-61

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LONGVIEW TIMBER HOLDINGS, CORP.        CONSOLIDATED BALANCE SHEETS        As of December 31, 2009 and 2008  (Dollars in thousands)

2009

2008ASSETSCURRENT ASSETS:Cash and cash equivalents

$
23,398

$
23,682Accounts and notes receivablenet


3,528


5,296Deferred tax assets (Note 7)


425


1,303Inventories (Note 2)


5,097


6,582Prepaid expenses and other current assets


693


2,331Total current assets


33,141


39,194PROPERTY, PLANT, AND EQUIPMENTNet (Note 3)


2,708


3,446TIMBER, TIMBERLANDS, AND LOGGING ROADSNet (Note 4)


1,856,295


1,923,849INVESTMENT (Note 5)


705


705DEFERRED DEBT ISSUANCE COSTS (Note 6)


10,457


12,734TOTAL

$
1,903,306

$
1,979,928LIABILITIES AND EQUITYCURRENT LIABILITIES:Accounts payable

$
1,988

$
3,462Accounts payablerelated party (Note 11)


3,656


2,212Other tax payable


1,641


765Other accrued liabilities (Note 8)


11,580


12,197Other accrued liabilitiesrelated party (Note 11)





1,801Total current liabilities


18,865


20,437LONG-TERM DEBT (Note 9)


1,070,000


1,070,000LONG-TERM DEBTRelated party (Note 11)





220,575Total liabilities


1,088,865


1,311,012EQUITY:Non-controlling interests (Note 13)


9,856


10,679Shareholders' equity (Note 14)


804,585


658,237Total equity


814,441


668,916TOTAL

$
1,903,306

$
1,979,928


See notes to consolidated financial statements.

F-62BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.        CONSOLIDATED STATEMENTS OF OPERATIONS        For the Years Ended December 31, 2009 and 2008  and the Period April 20 to
December 31, 2007  (Dollars in thousands)

For the Year
Ended Dec. 31,
2009

For the Year
Ended Dec. 31,
2008

For the period
Apr. 20, 2007
to Dec. 31,
2007NET SALES

$
102,966

$
174,225

$
121,224COSTS AND EXPENSES:Cost of goods sold


55,794


91,934


60,976Depletion, depreciation, and amortization


72,223


99,380


67,609GROSS LOSS


(25,051
)

(17,089
)

(7,361
)SELLING, ADMINISTRATIVE AND GENERAL EXPENSES


17,995


22,766


15,182OPERATING LOSS


(43,046
)

(39,855
)

(22,543
)OTHER INCOME (EXPENSE):Interest income


470


763


3,078Interest expense


(75,827
)

(80,935
)

(76,987
)Other incomenet


145


5,494


491Loss on sale of assets


(133
)

(797
)

Gain (loss) on sale of higher and better use lands


944


(1,398
)

Total interest and other expense


(74,401
)

(76,873
)

(73,418
)LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES


(117,447
)

(116,728
)

(95,961
)PROVISION FOR TAXES (NOTE 7):Current


24


(1,444
)

(34
)Deferred


(945
)

(414
)

(189
)Total provision for taxes


(921
)

(1,858
)

(223
)DISCONTINUED OPERATION:Income from operations (Net of taxes $346)








538Loss on sale of assets








(884
)NET LOSS


(118,368
)

(118,586
)

(96,530
)Lessnet loss attributable to non-controlling interest


(1,027
)

(957
)

(827
)NET LOSS ATTRIBUTABLE TO LONGVIEW TIMBER HOLDINGS, CORP.

$
(117,341
)
$
(117,629
)
$
(95,703
)


See notes to consolidated financial statements.

BrookfieldInfrastructure
Partners     F-63

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LONGVIEW TIMBER HOLDINGS, CORP.        CONSOLIDATED STATEMENTS OF CASH FLOWS        For the Years Ended December 31, 2009 and 2008  and the Period April 20 to
December 31, 2007  (Dollars in thousands)

For the Year
Ended Dec. 31,
2009

For the Year
Ended Dec. 31,
2008

For the period
Apr. 20, 2007
to Dec. 31,
2007CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:Net loss

$
(118,368
)
$
(118,586
)
$
(96,530
)Adjustments to reconcile net loss to cash (used in) provided by operating activities:Depletion, depreciation, and amortization


72,223


99,380


67,609Amortization of deferred debt issuance costs


2,233


1,425


Loss on sale of assets


133


797


(Gain) loss on sale of higher and better use lands


(944
)

1,398


Loss on sale of assets from discontinued operation








884Loss on derivative valuation


4,308


3,231


10,883Deferred income taxes


945


414


535Termination of interest rate swap agreements





(53,447
)

Change in assets and liabilities:Accounts and notes receivablenet


1,768


(304
)

(4,991
)Inventories


(667
)

876


(2,410
)Prepaid expenses and other current assets


580


808


73Other non-current assets


922


(559
)

(1,826
)Accounts payable and other accrued liabilities


(2,091
)

9,743


8,876Other accrued liabilitiesrelated party


(357
)

(3,577
)

21,078Other tax payable


(69
)

247


(2,542
)Cash (used in) provided by in operating activities


(39,384
)

(58,154
)

1,639CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:Acquisition, net of cash acquired of $78








(2,226,499
)Disposal of Manufacturing Operations, net of cash transferred of $5








293,318Additions to capital assets


(5,227
)

(175,303
)

(2,387
)Proceeds from the sale of fixed assetsnet of selling costs


5,316


7,120


Cash provided by (used in) investing activities


89


(168,183
)

(1,935,568
)


(Continued)

F-64BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

For the Years Ended December 31, 2009 and 2008
and the Period April 20 to December 31, 2007
(Dollars in thousands)

For the Year
Ended Dec. 31,
2009

For the Year
Ended Dec. 31,
2008

For the period
Apr. 20, 2007
to Dec. 31,
2007CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES:Repayment of bridge loan

$


$
(1,200,000
)
$
(150,000
)Proceeds from bridge loan







$
1,350,000Proceeds from long-term debt





1,070,000


Repayment of short term-borrowings








(14,500
)Interest capitalized into principalrelated party


17,043





Proceeds from long-term debtrelated party





15,787


200,000Proceeds from bridge loansrelated party





256,475


Repayment of bridge loansrelated party





(256,475
)

Additions to deferred debt issuance costs





(10,704
)

Issuance of common stock


21,780


330,172


835,978Issuance of preferred stock








85Non-controlling interest


204


3,460


9,003Dividends


(16
)

(4,644
)

(250,689
)Cash provided by financing activities


39,011


204,071


1,979,877CHANGE IN CASH AND CASH EQUIVALENTS


(284
)

(22,266
)

45,948CASH AND CASH EQUIVALENTSBeginning of year


23,682


45,948


CASH AND CASH EQUIVALENTSEnd of year

$
23,398

$
23,682

$
45,948SUPPLEMENTAL DISCLOSURES:Cash paid for interest

$
54,306

$
71,938

$
51,837Cash paid for taxes

$
850

$
1,500

$
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:Long-term debt related party repayment

$
237,617

$


$
Long-term debt related party interest capitalized into principal

$
17,043

$
3,788

$
Long-term debt related party fee capitalized into principal

$


$
1,000

$



(Concluded)

See notes to consolidated financial statements.

BrookfieldInfrastructure
Partners     F-65

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LONGVIEW TIMBER HOLDINGS, CORP
CONSOLIDATED STATEMENTS OF EQUITY
For the years ended December 31, 2009, 2008
and period April 20 to December 31, 2007
(Dollars in thousands)

Shareholders' EquityPreferred Stock

Common Stock





Accumulated
Other
Comprehensive
LossAdditional
Paid-in
Capital

Accumulated
Deficit

Noncontrolling
InterestShares

Amount

Shares

Amount

TotalBalanceApril 20,2007




$
0




$
0

$
0

$
0

$
0

$
0

$
0Issuance of common stock








7,765,850


78


835,900








9,003


844,981Issuance of preferred stock


125


125











(40
)







85Change in fair value of derivative intruments




















(21,241
)




(21,241
)Net loss

















(95,703
)




(827
)

(96,630
)Comprehensive loss


























(117,771
)Dividends

















(250,689
)







(250,689
)BalanceDecember 31, 2007


125


125


7,765,850


78


835,900


(346,432
)

(21,241
)

8,176


476,606Issuance of common stock








3,254,326


33


330,139








3,625


333,797Change in fair value of derivative intruments




















(18,092
)




(18,092
)Net loss

















(117,629
)




(957
)

(118,586
)Comprehensive loss


























(136,678
)Dividends

















(4,644
)




(165
)

(4,809
)BalanceDecember 31, 2008


125


125


11,020,176


111


1,166,039


(468,705
)

(39,333
)

10,679


668,916Issuance of common stock








3,027,266


30


259,367








220


259,617Amortization of derivative valuation loss




















4,308





4,308Net loss

















(117,341
)




(1,027
)

(118,368
)Comprehensive loss


























(114,060
)Dividends

















(16
)




(16
)

(32
)BalanceDecember 31, 2009


125

$
125


14,047,442

$
141

$
1,425,406

$
(586,062
)
$
(35,025
)
$
9,856

$
814,441


See notes to consolidated financial statements.

F-66BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        As of December 31, 2009 and 2008  and for the Years Ended
December 31, 2009 and 2008,  and the Period April 20 to December 31, 2007

1.    SUMMARY OF ACCOUNTING POLICIES

Nature of Business:

GeneralLongview Timber Holdings, Corp. ("Timber") is a real estate investment trust ("REIT") engaged in the ownership and
management of timberlands in Oregon and Washington, which principally produce logs for sale. All of the facilities are located in the United States ("U.S."). Timber owns and manages
approximately 652,000 acres of valuable timberlands in the Pacific Northwest composed primarily of softwoods.

A
REIT is a company that derives most of its income from investments in real estate, which includes timberlands. A corporation that qualifies as a REIT generally will not be subject to
corporate taxes on income and gains from investments in real estate to the extent that it distributes such income and gains to its shareholders. The principal REIT qualifying investment of Timber
consists of timberlands. As a REIT, Timber will be required to pay federal corporate income tax on earnings from non-real estate investments and on earnings from real estate investments
that are not distributed to its shareholders.

BackgroundOn February 2, 2007, Brookfield Asset Management Inc. ("Brookfield") and Longview Fibre Company
entered into an agreement and plan of merger whereby Brookfield would acquire all of Longview Fibre Company's outstanding common shares for $24.75 per share in cash and would assume all existing debt
(the "Acquisition"). The shareholders approved the Acquisition and the sale was closed on April 20, 2007. Brookfield established Timber, Longview Timber Holdings LLC, and
Longview Timber LLC, to own the timber operations. Longview Timberlands LLC and Longview Timber, Corp. were established as subsidiaries of Longview Fibre Company. Longview
Timberlands LLC and Longview Timber, Corp. were additionally established as subsidiaries of Longview Fibre Company on May 31, 2007. The shares of the wholly-owned subsidiary, Longview
Fibre Paper and Packaging, Inc., that conducted the manufacturing operations were sold subsequent to the Acquisition to a related party.

On
November 4, 2008, Timber purchased approximately 67,600 acres in Washington from Mid-Valley Resources Inc., a subsidiary of Hampton Affiliates
("Hampton Purchase"), a large timber company, for $163 million.

BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

1.    SUMMARY OF ACCOUNTING POLICIES (Continued)

Ownership StructureFollowing the close of the Acquisition by Brookfield, the following ownership structure was formed:

Company

OwnershipLongview Timber Holdings, Corp. ("Timber")

Longview Timber Holdings, Corp. owns 100% of Longview Timber Holdings LLCLongview Timber Holdings LLC

Longview Timber Holdings LLC owns 99% of Longview Timber LLCRemaining 1% is owned by a Brookfield subsidiaryLongview Timber LLC

Longview Timber LLC owns 100% of Longview Fibre CompanyLongview REITLongview Timber LLC owns 1% of Longview Timberlands LLCLongview Fibre Company

Longview Fibre Company owns 99% of Longview Timberlands LLCLongview Fibre Company owns 100% of Longview Timber, Corpa taxable subsidiary


Longview
Timberlands LLC owns and manages substantially all of the timberlands and properties of Timber. Longview Timber, Corp. owns various harvesting assets and conducts the
timber brokerage activities of Timber.

Purchase Price Allocation of the Acquisition

Brookfield
acquired the stock and outstanding debt of Longview Fibre Company on April 20, 2007 for $2,252 million. The purchase was financed with $1,350 million of
bridge financing, $200 million of long-term debt from a related party, and $702 million of cash. The total purchase price was allocated between the Timber Operations and the
Manufacturing Operations based upon the respective fair values of each operation, as follows:

(USD million)

April 20, 2007Timber Operations

$
1958Manufacturing Operations


294Total

$
2,252


Subsequent
to the Acquisition, the Manufacturing Operations were sold to a related party for total proceeds of $253 million, including $92 million of debt
(see Note 17). Additionally and immediately after the Acquisition, the Manufacturing Operations sold eight converting facilities located in the central and eastern United States
to a third party for net proceeds of $48 million.

F-68BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

1.    SUMMARY OF ACCOUNTING POLICIES (Continued)

The
purchase price of the Timber Operations was allocated based upon fair values to the following classes of assets and liabilities:

(USD million)

April 20, 2007Current assets

$
23Capital assets

$
1,938Other non-current assets

$
10Current liabilities

$
(10
)Other non-current liabilities

$
(3
)Total

$
1,958


Basis of PresentationThe consolidated financial statements presented herein are those of Timber and its subsidiaries, and are
derived from the records of such entities after the elimination of intercompany balances and transactions. Reference to Timber also includes, as applicable, reference directly or indirectly to any of
its subsidiaries.

Cash and Cash EquivalentsCash and cash equivalents consist of cash and highly liquid investments purchased with maturities of
three months or less at date of acquisition.

Accounts and Notes Receivable and Allowance for Doubtful AccountsAccounts and notes receivable are comprised mainly of trade
accounts receivable primarily from the sale of products on credit. Credit is extended to customers based on an evaluation of their financial condition. The adequacy of the allowance for doubtful
accounts is based on historical experience and past due status, in addition to management's evaluation of material customer accounts including ability to pay, bankruptcy, payment history, and
other factors.

Bad
debt expense associated with uncollectible accounts was $292 thousand, $32 thousand, and $61 thousand for the periods ended December 31, 2009, 2008, and
2007 respectively.

InventoriesInventories are stated at the lower of cost or market. If actual demand or market conditions are less favorable
than those projected by management, inventory write-downs may be required. Cost is determined on a first-in, first-out basis except for supplies, which are stated using the
average cost method.

Timber, Timberlands, and Logging Roads; Timber Depletion and Logging Roads AmortizationTimber, timberlands and logging roads
are stated at cost, net of accumulated depletion and amortization. Timber, upon reaching the age of 35 years, is considered merchantable and available for harvesting, with all timber younger
than 35 years of age being classified as premerchantable. Timber is tracked on a county-by-county basis whereby capital costs and estimated recoverable timber volumes
are accumulated in the county in which the related timber is located. Expenditures for reforestation, including costs such as site preparation, tree planting, fertilization and herbicide application
for the two years after planting, are capitalized and depleted as timber is harvested. After two years of age,

BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

1.    SUMMARY OF ACCOUNTING POLICIES (Continued)

plantation
maintenance and tree farm management costs, consisting of recurring items necessary to the ownership and administration of the timber and timberlands, are recorded as a current
period expense.

Provision
for depletion of merchantable timber represents a charge per unit of production ("depletion rate") applied to actual harvest volumes. A single depletion rate is applied to all
merchantable timber regardless of its age, species or quality in any particular case. A separate depletion rate was determined and applied specifically for the timberlands acquired in the Hampton
Purchase. The depletion rates are validated to a computer growth index model that tracks the timber volumes through the growth cycle and is based upon actual growth rates from permanent timber growth
plots throughout the Pacific Northwest. The depletion rates will be adjusted periodically for timber maturity, estimated growth, and actual harvest volumes and when there is a significant acquisition
or disposition.

Direct
costs associated with the building of primary and major secondary access logging roads are capitalized and amortized on the straight-line basis over estimated useful
lives ranging from 3 to 15 years. Bridges are amortized over an estimated useful life of 35 years. Costs incurred for logging roads that serve short-term harvest needs are
expensed as incurred. Costs for road base construction of mainline roads, such as clearing and grading, are not amortized and remain a capitalized cost until disposition as they provide permanent
value to the timberlands.

Gains
or losses on timberland exchanges are recognized in earnings when the exchange has commercial substance, in accordance with Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") 845Nonmonetary Transactions(formerly the Statement of Financial Accounting Standards ("SFAS") No. 153, Exchanges of Nonmonetary Assets, an
amendment of APB No. 29). An exchange is considered to have commercial substance when future cash
flows are expected to change significantly as a result of the exchange.

Property, Plant and Equipment, and DepreciationProperty, plant and equipment are recorded at cost, net of accumulated
depreciation. Plant and equipment, include those additions and improvements that add to production capacity or extend useful life. Cost includes interest capitalized during the construction period on
all significant asset acquisitions. Impairment is reviewed annually, or
whenever events or circumstances indicate that the carrying value of an asset or group of assets may not be recovered pursuant to ASC 360Property, Plant and
Equipment(formerly SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets).
Impairment evaluates whether or not the undiscounted future cash flows generated by an asset will exceed its carrying value. If estimated future cash flows indicate the carrying value of an asset or
group of assets may not be recoverable, impairment exists, and the asset's net book value is written down to its estimated fair value. When properties are sold or otherwise disposed of, the cost and
the related accumulated depreciation are removed from the respective accounts, and the resulting profit or loss is recorded in income. The costs of maintenance and repairs are charged to income
when incurred.

Depreciation
is computed on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives of assets range from 40 years for buildings
to 4 to 10 years for machinery and equipment.

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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

1.    SUMMARY OF ACCOUNTING POLICIES (Continued)

Revenue RecognitionRevenues are recognized from sales to customers when title and risk of loss pass to the customer and when
the sales price is fixed or determinable. For substantially all sales, ownership transfers upon receipt by customers of logs ("FOB-destination") or upon shipment to customers of logs
("FOB-shipping point").

Recent Accounting Pronouncements and DevelopmentsIn September 2006, FASB issued ASC 820,Fair
Value Measurements and Disclosures("ASC 820") (formerly SFAS No. 157,Fair Value Measurements), which
defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 does not impose fair value measurements on items not already
accounted for at fair value; rather, it applies, with certain exceptions, to other accounting pronouncements that either require or permit fair value measurements. The provisions of ASC
820 became effective for fiscal years beginning after November 15, 2007. Timber adopted the provisions of ASC 820 for assets and liabilities recognized at fair value on a
recurring basis effective January 1, 2008, and the adoption of ASC 820 did not have a material impact on Timber's consolidated financial statements.

In
December 2007, the FASB issued authoritative guidance, included in ASC 810,Consolidations(formerly SFAS No. 160, Non-controlling Interests in Consolidated
Financial Statements) effective for periods beginning on or after December 15, 2008, that
establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. Timber adopted this guidance during fiscal year
2009. As a result, Timber has presented non-controlling interest as a separate component of equity on the consolidated balance sheets, previously included in long-term
liabilities on the consolidated balance sheets. Timber has presented net income attributable to non-controlling interest separately on
the consolidated statements of operations; previously these amounts were reported as other incomenet on the consolidated statements of operations.

In
May 2009, the FASB issued ASC 855,Subsequent Events("ASC 855") (formerly SFAS No. 165 Subsequent Events), which defines subsequent
events as transactions that occur after the balance sheet date but before financial statements are issued
or are available to be issued. This guidance defines two types of subsequent events: (i) events or transactions that provide additional evidence about conditions that existed at the date of the
balance sheet, including the estimates inherent in the process of preparing financial statements (that is, recognized subsequent events); and (ii) events that provide evidence about conditions
that did not exist at the date of the balance sheet but arose after that date (that is, non-recognized subsequent events). In addition, this guidance requires an entity to disclose the
date through which subsequent events have been evaluated, as well as whether that date is the date the financial statements were issued or the date the financial statements were available to be
issued. The guidance in ASC 855 is effective for periods ending after June 15, 2009. The adoption of ASC 855 did not have a material impact on Timber's consolidated financial
statements.

In
June 2009, the FASB issued ASC 105,Generally Accepted Accounting Principles,("ASC 105") (formerly
SFAS No. 168,Accounting Standards Codification). ASC 105 establishes the ASC as the source of authoritative accounting principles
recognized by the FASB to be applied in the preparation of financial statements in conformity with generally accepted accounting principles. ASC 105 is effective for interim and annual
financial periods ending after September 15, 2009. The adoption of this

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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

1.    SUMMARY OF ACCOUNTING POLICIES (Continued)

standard
as of January 1, 2009 did not have a material effect on Timber's consolidated financial statements.

Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Subsequent EventsTimber has evaluated subsequent events in accordance with ASC 855,Subsequent
Events,through February 26, 2010, which is the date the consolidated financial statements were issued noting no impact on the consolidated financial statements
or disclosures.

Liquidity RiskTimber's objective in managing liquidity risk is to maintain sufficient reserves to meet operational and
investing requirements at any point in time. Management assesses the nature and timing of discretionary payments and harvest levels to mitigate any impact on the financial condition or results of
operations. Timber expects sufficient liquidity to meet its obligations and has the ability to issue additional shares of common stock to fund operations, if necessary.

2.    INVENTORIES

Inventories
at December 31, 2009 and 2008 consisted of the following (dollars in thousands):

2009

2008Logs

$
1,258

$
1,787Seed, cones, seedling budcaps


741


365Rock and gravel


1,436


1,411Nursery bed stock


1,447


2,773Supplies


215


246Total inventories

$
5,097

$
6,582


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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

3.    PROPERTY, PLANT AND EQUIPMENTNET

Property,
plant and equipmentnet at December 31, 2009 and 2008 consisted of the following (dollars in thousands):

2009Cost

Accumulated
Depreciation

Net Book
ValueLand

$
1,440

$


$
1,440Buildings








Equipment


2,243


(975
)

1,268Total property, plant and equipmentnet

$
3,683

$
(975
)
$
2,708




2008Cost

Accumulated
Depreciation

Net Book
ValueLand

$
1,440

$


$
1,440Buildings


73


(3
)

70Equipment


2,421


(485
)

1,936Total property, plant and equipmentnet

$
3,934

$
(488
)
$
3,446


During
the years ended December 31, 2009 and 2008, Timber sold equipment for net proceeds of $111 thousand and $94 thousand realizing a loss of $2 thousand
and a gain of $22 thousand, for the years ended 2009 and 2008, respectively. During the period ended December 31, 2007, there were no disposals.

4.    TIMBER, TIMBERLANDS AND LOGGING ROADSNET

Timber,
timberlands and logging roadsnet at December 31, 2009 and 2008 consisted of the following (dollars in thousands):

2009Cost

Accumulated
Depletion and
Amortization

Net Book
ValueTimber

$
1,883,513

$
(235,672
)
$
1,647,841Timberlands


196,511





196,511Logging roads


12,935


(992
)

11,943Total timber, timberlands and logging roadsnet

$
2,092,959

$
(236,664
)
$
1,856,295


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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

4.    TIMBER, TIMBERLANDS AND LOGGING ROADSNET (Continued)



2008Cost

Accumulated
Depletion and
Amortization

Net Book
ValueTimber

$
1,744,405

$
(165,546
)
$
1,578,859Timberlands


176,130





176,130Hampton Purchase


161,307





161,307Logging roads


7,980


(427
)

7,553Total timber, timberlands and logging roadsnet

$
2,089,822

$
(165,973
)
$
1,923,849


During
the years ended December 31, 2009 and 2008, Timber sold timber and timberlands (including higher and better use lands) for net proceeds of $5 million and
$7 million realizing a gain of $1 million and a loss of $2 million, for the years ended 2008 and 2008, respectively. During the period ended December 31, 2007, there were
no disposals.

Timber
acquired approximately 67,600 acres from Mid-Valley Resources Inc., a subsidiary of Hampton Affiliates on November 4, 2008, for
$163 million. The purchase was financed with $70 million of long-term debt, $16 million of long-term debt from a related party, and $77 million of
cash. A separate depletion rate was calculated for the acquired merchantable timber. Of the purchase price of $163 million$1.5 million was recorded as a prepaid timber deed
in current assets; $.6 million was recorded as inventories; and the remaining was recorded in long-term capital assets.

5.    INVESTMENT

Investment
of $705 thousand represents Timber's interest in IFA Nurseries Inc., a company which provides various reforestation goods and services. Timber accounts for its
investment in IFA Nurseries, Inc., on the cost method.

6.    DEFERRED DEBT ISSUANCE COSTS

Debt issuance costs of $10.5 million, net of amortization, as of December 31, 2009, and $12.7 million, net of amortization, as of December 31, 2008 relate to
the 2008 long-term debt financing and the loan commitment fee paid in 2007. Debt issuance costs are deferred and amortized over the respective terms to maturity.

Amortization
expense for the periods ended December 31, 2009, 2008, and 2007 was $2.2 million, $1.4 million, and $.1 million respectively. Amortization
expense for the next five years is as follows: 2010 through 2012 of $2.2 million, 2013 of $1.3 million, and $2014 of $1 million.

F-74BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

7.    INCOME TAXES

Generally, in any year which Timber qualifies as a REIT under the Internal Revenue Code (the "IRC"), it is not subject to federal income tax on that portion of its income that it
distributes to members. Timber will, however, be subject to corporate tax on built-in gains (the excess of fair market value over tax basis of property at January 1, 2006,
the date of REIT election) on taxable sales of such built-in gain property during the ten years following REIT conversion.

Built-in
gain tax from the sale of REIT property may be off-set by utilization of pre-REIT net operating losses or by reinvesting sale proceeds in
similar property that qualifies as like-kind under requirements of the IRC.

In
order to maintain compliance with REIT tax rules, Timber utilizes a taxable REIT subsidiary for various non-REIT qualifying activities including the harvesting and sale of
logs. The taxable REIT subsidiary is consolidated in reporting by Timber.

Accordingly,
the provision for corporate income taxes relates to deferred tax on certain property sales (from utilization of pre-REIT net operating losses) and on income from
taxable REIT subsidiary operations.

The
provision (benefit) for income taxes for the periods ended December 31, 2009, 2008, and 2007 consisted of the following (dollars in thousands):

For the Year
Ended Dec. 31,
2009

For the Year
Ended Dec. 31,
2008

For the period
April 20, 2007 to
Dec. 31, 2007Current federal tax

$
(24
)
$
1,444

$
34Deferred federal tax


945


414


535Total provision for income taxes

$
921

$
1,858

$
569


An
analysis of the income tax provision (benefit) for the periods ended December 31, 2009, 2008, and 2007 is as follows (dollars in thousands):

For the Year
Ended Dec. 31,
2009

For the Year
Ended Dec. 31,
2008

For the period
April 20, 2007 to
Dec. 31, 2007Expected federal income tax (benefit) at statutory rate

$
(40,747
)
$
(40,520
)
$
(33,297
)REIT losses not subject to income taxes


41,668


42,378


33,769Deferred tax expense from non-REIT activities








97Total provision for income taxes

$
921

$
1,858

$
569


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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

7.    INCOME TAXES (Continued)

The
tax effect of temporary differences giving rise to deferred tax assets at December 31, 2009 and 2008 is as follows (dollars in thousands):

2009

2008Deferred tax assets:REIT net operating loss carry forward from prior years

$
425

$
907Non-REIT operating loss carry forward





396Total deferred tax assets

$
425

$
1,303


Timber
expects to realize the full benefit of its remaining deferred tax assets during 2010.

The
tax years 2006 through 2009 are subject to examination by the tax authorities. With few exceptions, Timber is no longer subject to US federal, state, local examinations by tax
authorities for years before 2006.

Uncertain Tax PositionsIncome tax positions must meet a more likely than not recognition threshold at the effective date to
be recognized upon the adoption of ASC 740Income Taxes("ASC 740") (formerly FASB Interpretation No. 48, "FIN 48") and in
subsequent periods. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
FIN 48 is effective for fiscal years beginning after December 15, 2006 and the adoption of FIN 48 did not have a material effect on these financial statements.

Timber
recognizes tax liabilities in accordance with ASC Topic 740 and adjusts these liabilities when our judgment changes as a result of
the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the
current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

Timber
does not have any reserves for uncertain tax positions as of December 31, 2009.

8.    OTHER ACCRUED LIABILITIES

Other accrued liabilities at December 31, 2009 and 2008, consisted of the following (dollars in thousands):

2009

2008Workers' payroll and benefit liability

$
525

$
571Accrued interest payablelong term debt


11,055


11,626Total other accrued liabilities

$
11,580

$
12,197


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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

9.    LONG-TERM DEBT

In the prior year Timber had a bridge loan of $1.2 billion with three lendersMerrill Lynch USA, Royal Bank of Canada and The Bank of Nova Scotia (the "Bridge
Loan"). On April 3, 2008, the Bridge Loan was refinanced with a combination of long-term debt of $1.0 billion and a short-term related party bridge loan of
$200 million. The long-term debt is provided by Metropolitan Life Insurance Company and a syndicate of lenders. On November 4, 2008, the Hampton Purchase was partially
financed with additional long-term debt of $70 million provided by Metropolitan Life Insurance Company and a syndicate of lenders. The long-term debt is collateralized
with the timber, timberlands, and logging roads.

The
long term debt consists of four fixed interest rate tranches ranging from 4.73% to 6.31%. There are also two variable interest rate tranches ranging from 1.88% to 2.28% at
December 31, 2009. The long term debt matures as follows: $453.3 million on April 3, 2013; $308.3 million on April 3, 2015; and $308.3 million on
April 3, 2018. Timber intends to refinance the long term debt as it matures with similar long term debt facilities. The related interest expense recorded was $53.7 million and
$39.1 million during the years ended December 31, 2009 and 2008 respectively.

Timber's
long-term debt agreements contain customary covenants and default provisions, including a covenant not to exceed a specified debt-to-value
ratio of 0.60. It also includes a restriction on distributions if the cash coverage ratio is less than 1.25 on a rolling eight quarter basis. As of December 31, 2009, Timber did not meet
the cash coverage ratio minimum and therefore only permitted cash distributions will be allowed until such time that Timber's cash coverage ratio is at least 1.25 on a rolling eight quarter
basis. As of December 31, 2009, Timber was in compliance with the covenants of its long-term debt agreements.

The
Bridge Loan was with three lendersMerrill Lynch USA, Royal Bank of Canada and the Bank of Nova Scotia. The Bridge Loan was repaid on April 3, 2008, with the
proceeds of the long-term debt financing. The related interest expense recorded was $14.0 and $54.3 million during the periods ended December 31, 2008 and December 31,
2007, respectively.

10.    EMPLOYEE BENEFIT PLANS

Timber has no participation in any retiree medical plans or health care insurance plans. Timber has a defined contribution pension program for its salaried employees and a limited term
supplemental defined contribution pension program for some of its employees which concluded in 2009. The amount contributed to the limited term supplemental defined contribution pension program was
$101 thousand, $279 thousand, and $251 thousand, for the periods ended December 31, 2009, 2008, and 2007, respectively. Timber also has a matching 401k program. The amount
contributed to the 401k program was $290 thousand, $318 thousand, and $92 thousand, for the periods ended December 31, 2009, 2008, and 2007, respectively.

11.    RELATED PARTIES

The Accounts payablerelated party amount of $3.7 million and $2.2 million as of December 31, 2009 and 2008, respectively, is with
Longview GP LLC ("LVGP"), a U.S. company indirectly owned by

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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

11.    RELATED PARTIES (Continued)

Brookfield.
Pursuant to the terms of the October 9, 2008 amended and restated management agreement between Longview Timber LLC and LVGP, a special distribution is payable to LVGP as
compensation for services provided by LVGP to Longview Timber LLC and its subsidiaries. For the period April 1 to December 31, 2009 the amount is calculated based on 0.65% per
annum of the sum of all effective capital contributions to Longview Timberlands, LLC. For the period April 3, 2008 to March 31, 2009 the amount is calculated based on 1.00% of
effective capital contributions. The special distribution is payable semi-annually. The special distribution expense was $8.2 million and $7.6 million for the year ended
December 31, 2009 and for the period April 3 to December 31, 2008, and $6.0 million for the period ended December 31, 2007, respectively.

Pursuant
to the terms of the initial management agreement between Longview Timberlands LLC, a subsidiary of Timber, and Brookfield Timberlands Management ("BTM"), management fees
were payable to BTM as compensation for services provided by BTM to Longview Timberlands LLC. The fee was calculated annually using independent timberlands appraisal reports and was paid
quarterly to BTM. The management fee expense was $2.8 million for the period January 1 to April 2, 2008. This Agreement concluded on April 2, 2008, and was replaced with
the management agreement between Longview Timber LLC and LVGP.

Pulp
logs sold to PPI was $2.2 million, $18.9 million, and $3.6 million during the periods ended December 31, 2009, 2008, and 2007, respectively. There was a
service agreement between Timber and PPI for various administrative services. The amount paid was $18 thousand and $56 thousand for the periods ended December 31, 2008 and 2007,
respectively. The service agreement effectively concluded in June 2008.

Long-term
debtrelated party at December 31, 2008, reflects debt formerly held by Brascan U.S. Corporation and later transferred to a lending
syndicate consisting of Brookfield Global Timber Fund (BGTF) I, LP, BGTF 1 (Norma), LLC, and Brookfield Infrastructure Corporation (BIC) (the "Lending Syndicate"). On
November 3, 2008, the Lending Syndicate and Timber agreed to defer payment of accrued interest on the long-term debtrelated party from August 20, 2008, until an
undetermined future date. A 1% fee based on the principal balance as of August 20, 2008, and a 50 bps increase in the spread was given as consideration for the deferral. The
long-term debtrelated party as of December 31, 2008 reflects $215.8 million long-term debt; $3.8 million interest payable; and
$1 million payment in kind ("PIK") fee. On December 11, 2009 the long-term debt related party and accrued interest was repaid with the issuance of 2,811,044 common
shares of Timber to the Lending Syndicate valued at $84.53 per share for a total value of $237.6 million. The related interest expense recorded was $15.2 million, $15.0 million,
and $11.7 million for the periods ended December 31, 2009, 2008, and 2007, respectively. The balance payable was recorded in the amount of $1.8 million as of December 31,
2008, as a current liability in other accrued liabilitiesrelated party account.

On
April 3, 2008, Brookfield U.S. Corporation and Trilon Bancorp (Europe) Zrt provided $247.5 million in short-term bridge financing for the purpose of
refinancing the Bridge Loan. An additional $8.9 million was drawn between August and September 2008. The principal balance and all accrued interest were fully repaid in a series of
transactions between October and November 2008. The related interest expense recorded was $7.3 million during the year ended December 31, 2008.

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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

12.    ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Timber used fixed interest rate swap agreements ("swaps") to manage changes in cash flow as a result of changes in interest rate movements on certain of the variable rate debt under the
Bridge Loan.
Timber has designated these swaps as cash flow hedges. To receive hedge accounting treatment, all of the swaps were formally documented at the inception of each hedge and the hedges must be highly
effective at swap inception and at least quarterly in offsetting changes to future cash flows on hedged transactions. If the swaps are highly effective, the change in fair value, net of income taxes,
is recorded in other comprehensive income or loss, except for any ineffectiveness portion of the fair value change, which is recognized in earnings. If the swaps were not to be highly effective, then
Timber would record the change in fair value in earnings.

Timber
terminated the swaps in connection with the re-financing of the Bridge Loan. $53.5 million was paid to the counterparties. The loss on termination is reported
in the consolidated statement of cash flows in the same category as the nature of the item being hedged, in accordance with ASC 230Statement of Cash
Flows(formerly SFAS 104,Statement of Cash FlowsNet Reporting of Certain Cash Receipts and Cash Payments and Classification of Cash
Flows from Hedging Transactions, an Amendment to FASB Statement No. 95).

The
accumulated other comprehensive loss recorded was zero and $21.3 million during the years ended December 31, 2009 and 2008, respectively. The expense recorded was
$4.3 million, $3.2 million, and $10.9 million, for the periods ended December 31, 2009, 2008, and 2007, respectively.

13.    NON-CONTROLLING INTERESTS

Non-controlling interests represent the interests of Longview GP, LLC in the equity of Longview Timber LLC. Longview GP, LLC is a
U.S. company indirectly owned by Brookfield. Longview GP, LLC's equity ownership in the net assets of Timber was $9.9 million and $10.7 million as of
December 31, 2009 and 2008, respectively, which is recorded as non-controlling interest within equity. The non-controlling interest in the net loss was approximately
$1.0 million, $1.0 million, and $800 thousand for the periods ended December 31, 2009, 2008, and 2007, respectively

14.    SHAREHOLDERS' EQUITY

Preferred StockTimber is authorized to issue 125 shares of non-voting preferred stock with a par value of
$1 thousand. On May 10, 2007, Timber issued 125 shares of preferred stock to 125 individual stockholders, each stockholder receiving one share. Preferred stock has a par
value of $1 thousand per share, with liquidation preference of the same amount. The dividend rate for preferred shares is 12.5%. The shares are callable with a premium of 20% through
December 31, 2009. The premium reduces 5% per annum such that there will be no premium after December 31, 2012. Dividends were declared and paid in the amount of $16 thousand for
the years ended December 31, 2009 and 2008, respectively. There were no dividends declared or paid in period ended December 31, 2007.

Longview
Fibre Company, a subsidiary of Timber, is authorized to issue 125 shares of non-voting preferred stock with a par value of $1 thousand. On
May 10, 2007, Longview Fibre Company issued 125 shares of preferred stock to 125 individual stockholders, each stockholder receiving one share.

BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

14.    SHAREHOLDERS' EQUITY (Continued)

Preferred
stock has a par value of $1 thousand per share, with liquidation preference of the same amount. The dividend rate for preferred shares is 12.5%. The shares are callable with a premium
of 20% through December 31, 2009. The premium reduces 5% per annum such that there will be no premium after December 31, 2012. These shares are included in non-controlling
interests, net of issuance costs.

Common StockTimber is authorized to issue 15,000,000 shares of common stock with a par value of $0.01.

Timber
issued 6,281,592 shares of common stock in total, during the years ended December 31, 2009 and 2008, as follows (dollars in thousands):

2009

Description

ContributionJuly 14, 2009


137,596 common shares

$
13,860October 14, 2009


78,626 common shares


7,920December 11, 2009


2,811,044 common shares


237,617Total


3,027,266 common shares

$
259,3972008September 30, 2008


8,174 common shares

$
880October 14, 2008


330,425 common shares


35,579October 28, 2008


2,109,512 common shares


212,500November 3, 2008


806,215 common shares


81,213Total


3,254,326 common shares

$
330,1722007April 20, 2007


6,924,280 common shares

$
692,428May 31, 2007


70 common shares


59,400Oct 31, 2007


841,500 common shares


84,150Total


7,765,850 common shares

$
835,978


Timber's
common stock is owned 66.5% by Brookfield Global Timber Fund I, LP, a U.S. company in which Brookfield has indirect ownership; 8.4% by Brookfield PIV LLC, a
U.S. company in which Brookfield has indirect ownership; 2.1% Brookfield Global Timber Fund I (Norma) LLC, a U.S. company in which Brookfield has indirect ownership; and 23% by
Brookfield Infrastructure Corporation which is 40% owned by Brookfield. There were no significant changes in the common shareholders' ownership percent when the long-term debt related
party and accrued interest was repaid with the issuance of common stock on December 11, 2009. Proceeds from the July 14 and October 14, 2009 issuances of common stock were used
for operational purposes.

F-80BrookfieldInfrastructure
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LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

14.    SHAREHOLDERS' EQUITY (Continued)

DividendsTimber distributed dividends to common shareholders amounting to 0, $4.6 million, and $250.7 million
for the periods ended December 31, 2009, 2008, and 2007 respectively.

15.    COMMITMENTS AND CONTINGENCIES

Legal Matters and LitigationTimber is subject to legal proceedings and claims that arise in the ordinary course of the
business. Although there can be no assurance as to the disposition of these matters and the proceedings, it is the opinion of Timber's management, based upon the information available at this time,
that the expected outcome of these matters, individually or in
aggregate, will not have a materially adverse effect on the ongoing results of operations, the financial condition of the business, or cash flows.

16.    FAIR VALUE MEASUREMENTS

The carrying amounts of Timber's financial assets approximate fair value because of the short-term maturity of the instruments. Timber has $21,001 thousand and
$24,163 thousand of cash equivalents as of December 31, 2009 and 2008, respectively, which are measured at fair value using inputs from the three levels of the fair value hierarchy.
Timber's carrying amounts qualify as level 1 in accordance with ASC 820 as the inputs are unadjusted quoted market prices in active markets for identical assets that Timber has the
ability to access at the measurement date.

17.    DISCONTINUED OPERATIONS

On May 31, 2007, Longview Fibre Company, a subsidiary of Timber, completed the sale of all assets and liabilities (Timber Harvest Assets and Manufacturing Operations) of PPI, a
subsidiary of Longview Fibre Company, to Brascan (US) Corporation, a subsidiary of Brookfield, for total proceeds of
$253 million, including $92 million of the intercompany debt. Subsequently, Longview Timber, Corp and Longview Timberlands LLC, newly-established subsidiaries of Longview Fibre
Company, re-acquired the Timber Harvest Assets from PPI in exchange for $13 million of cash which is equal to the fair market value of the Timber Harvest Assets. This transaction
resulted in Longview Fibre Company selling the Manufacturing Operations of PPI for $240 million, including $92 million of intercompany debt.

BrookfieldInfrastructure
Partners     F-81

---



LONGVIEW TIMBER HOLDINGS, CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2009 and 2008
and for the Years Ended December 31, 2009 and 2008,
and the Period April 20 to December 31, 2007

17.    DISCONTINUED OPERATIONS (Continued)

Details
of assets and liabilities sold, net as a result of restructuring transactions are as follows:

(USD 000's)

As of
May 31, 2007

As of
May 31, 2007Assets:Current assets

$
264,030Capital assets


46,598Other assets


143,710

$
454,338Less liabilitiesCurrent liabilities


100,627Long-term liabilities


205,711


306,338Total




$
148,000


The
results of operations for the Manufacturing Operations from April 20, 2007 to May 31, 2007 and a loss on sale of assets were reported within discontinued operations in
the accompanying consolidated statement of operations. The Consolidated Statement of Cash Flows does not separately report the cash flows of the discontinued operations. Details of revenue and loss
from discontinued operations are as follows:

(USD 000's)

For the period
April 20, 2007 to
May 31, 2007Net sales

$
75,756Income from operations (net of taxes of $346)


538Loss on sale of assets


(884
)Net

$
(346
)


F-82BrookfieldInfrastructure
Partners

---





Consolidated Financial Statements    ETC HOLDINGS LTD. AND SUBSIDIARIES    As of December 31, 2009 and 2008 and  for each of the three years in the period ended December 31, 2009

Index

Report of Registered Public Accounting Firm


F-84Consolidated Financial StatementsConsolidated Balance Sheets


F-85Consolidated Statements of Income (Loss)


F-87Consolidated Statements of Comprehensive Income (Loss)


F-88Consolidated Statements of Deficit


F-89Consolidated Statements of Cash Flows


F-90Notes to the Consolidated Financial Statements


F-91




US$:

United States dollarsThUS$:

Thousands of United States dollarsCh$:

Chilean pesoUF:

Unidad de Fomentoor UF, is an inflation-indexed, Chilean-peso denominated monetary unit. The UF is set daily in advance based on the changes in the Chilean Consumer Price Index (CPI) of the
previous months.


BrookfieldInfrastructure
Partners     F-83

---





REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM

To
the Shareholders and Board of Directors of
ETC Holdings Ltd.

We
have audited the accompanying consolidated balance sheets of ETC Holdings Ltd. and subsidiaries (the "Company") as of December 31, 2009 and 2008, and the related
consolidated statements of income (loss), comprehensive income (loss), deficit and cash flows for each of the three years in the period ended December 31, 2009. These financial statements are
the responsibility of the Company'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. We were not engaged to perform an audit of the Company's internal control over financial
reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ETC Holdings Ltd. and subsidiaries as
of December 31, 2009 and 2008 and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2009 in conformity with
Canadian generally accepted accounting principles, which differ in certain respects from accounting principles generally accepted in the United States of America (see Note 13
to the consolidated financial statements).

LOGO

Santiago,
Chile
February 5, 2010

F-84BrookfieldInfrastructure
Partners

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ETC HOLDINGS LTD. AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS

As of December 31,Note

2009

2008ThUS$

ThUS$ASSETSCurrent AssetsCash and cash equivalents


2g


278,371


130,344Trade accounts receivable





71,915


51,365Miscellaneous receivables





5,469


832Recoverable income taxes


3


4,943


3,229Prepaid expenses





1,372


149Future income taxes


3


614


239Other current assets


4


229


311Derivatives


8


231


6,740Total Current Assets





363,144


193,209Property, Plant, and Equipment


2h, 5Land





33,344


26,201Buildings and infrastructure





1,489,592


1,106,782Machinery and equipment





629,571


484,672Other property, plant and equipment





3,199


2,083Less: Accumulated depreciation





(219,397
)

(121,143
)Total Property, Plant, and Equipment, net





1,936,309


1,498,595Other AssetsInvestments in other companies





450


501Goodwill


2e


610,151


487,927Long-term receivables





2,873


2,456Long-term future income taxes, net


3


111,078


103,509Rights-of-way


2i


269,895


215,760Other intangibles


2i


16,216


17,500Long-term bank deposit


12a


872,064


890,064Derivatives


8





141,324Total Other Assets





1,882,727


1,859,041Total Assets





4,182,180


3,550,845


The accompanying notes numbers 1 to 13 are an integral part of these consolidated financial statements.

BrookfieldInfrastructure
Partners     F-85

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 31,Note

2009

2008ThUS$

ThUS$LIABILITIES AND SHAREHOLDERS' EQUITYCurrent LiabilitiesShort-term bank loans





1,031


1,327Current portion of long-term bonds payable


6,8


157,193


23,381Derivatives


8


1,738


5,099Accounts payable





78,783


58,055Accrued liabilities


9


6,903


5,525Withholdings





3,563


4,287Other current liabilities





566


140Total Current Liabilities





249,777


97,814Long-term LiabilitiesBonds payable


6,8


1,636,544


1,378,623Bank loans


7


870,303


884,741Derivatives


8


55,872


28,819Provisions


9


8,051


3,022Other long-term liabilities





17,413


4,626Total long-term liabilities





2,588,183


2,299,831Contingencies and commitments


12





Non-controlling interest





63


270Shareholders' Equity:


10,11Paid-in capital





1,368,379


1,368,379Accumulated other comprehensive income (loss)





44,091


(191,882
)Deficit





(68,313
)

(23,567
)Subtotal: Accumulated other comprehensive income (loss) and Deficit





(24,222
)

(215,449
)Shareholders' Equity, net





1,344,157


1,152,930Total Liabilities and Shareholders' Equity





4,182,180


3,550,845


The accompanying notes numbers 1 to 13 are an integral part of these consolidated financial statements.

F-86BrookfieldInfrastructure
Partners

---





ETC HOLDINGS LTD. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF INCOME (LOSS)

For the year ended December 31,Note

2009

2008

2007ThUS$

ThUS$

ThUS$Sales revenue


2m


335,303


334,794


242,303Cost of sales





(50,896
)

(40,948
)

(26,461
)Depreciation





(70,280
)

(62,752
)

(59,935
)Administrative, selling and other expenses





(13,560
)

(10,840
)

(14,464
)Other expenses, net





(3,483
)

(5,251
)

(2,345
)Income before financing charges and income taxes





197,084


215,003


139,098Interest income





41,448


73,319


75,561Interest expense, including:





(103,247
)

(228,156
)

(251,574
)Interest on long-term debt





(101,654
)

(227,661
)

(251,067
)Other interest expense





(1,593
)

(495
)

(507
)Foreign exchange gain (loss), net





49,084


(97,233
)

11,774Unrealized (loss) gain on derivatives





(138,814
)

143,716


(34,526
)Income (loss) before income taxes





45,555


106,649


(59,667
)Income taxes


3


(33,393
)

(2,515
)

22,170Non-controlling interest





15


(107
)

30Net income (loss) for the year





12,177


104,027


(37,467
)


The accompanying notes numbers 1 to 13 are an integral part of these consolidated financial statements.

BrookfieldInfrastructure
Partners     F-87

---



ETC HOLDINGS LTD. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the year ended December 31,2009

2008

2007ThUS$

ThUS$

ThUS$Net income (loss) for the year


12,177


104,027


(37,467
)Other comprehensive income (loss):Translation gains (losses) on the net investment in self-sustaining operation


306,937


(313,113
)

98,086Net (losses) gains on related hedging items, net of taxes of ThUS$14,251, ThUS$(11,423) and ThUS$6,460


(69,578
)

55,772


(31,541
)Net losses (gains) on derivatives designated as cash flow hedges net of taxes of ThUS$1,172, ThUS$(841)


5,723


(4,106
)

Reclassification to income of net (gains) losses on cash flow hedges net of taxes of ThUS$1,456 and ThUS$(962)


(7,109
)

4,694


Comprehensive income (loss) for the year


248,150


(152,726
)

29,078


The accompanying notes numbers 1 to 13 are an integral part of these consolidated financial statements.

F-88BrookfieldInfrastructure
Partners

---





ETC HOLDINGS LTD. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF DEFICIT

For the year ended December 31,2009

2008

2007ThUS$

ThUS$

ThUS$Deficit at the beginning of the year


(23,567
)

(83,866
)

(11,232
)Distributions


(56,923
)

(43,728
)

(35,167
)Net income (loss) for the year


12,177


104,027


(37,467
)Deficit at the end of the year


(68,313
)

(23,567
)

(83,866
)


The accompanying notes numbers 1 to 13 are an integral part of these consolidated financial statements.

BrookfieldInfrastructure
Partners     F-89

---



ETC HOLDINGS LTD. AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS

For the year ended December 31,Note

2009

2008

2007ThUS$

ThUS$

ThUS$Cash Flows from Operating Activities:Net income (loss)





12,177


104,027


(37,467
)Adjustments for items that do not represent cash flows:Depreciation





70,280


62,752


59,935Foreign exchange (gains) losses, net





(49,084
)

97,233


(11,774
)Future income taxes





33,393


2,515


(18,829
)Accrued interest to be paid





10,478


52,047


48,865Unrealized (gains) losses on derivatives





138,814


(138,465
)

37,617Other





5,197


(1,289
)

(4,836
)Changes in working capital balances:Trade accounts receivable





(25,187
)

(4,208
)

(9,741
)Prepaid expenses and other assets





(1,141
)

66


(953
)Recoverable taxes





(1,714
)

7,350


(6,879
)Accounts payable and accrued liabilities





(9,532
)

(15,526
)

6,394Net cash provided by operating activities





183,681


166,502


62,332Cash Flows from Financing Activities:Capital contributions








160,808


Proceeds from bonds





430,493





349,319Other proceeds





3,103





Proceeds from loans








41,500


Long-term bank deposit








(41,500
)

Payments of bonds





(219,844
)

(2,506
)

(357,208
)Payments on swap and other contracts





(74,236
)




Distributions





(56,923
)

(43,728
)

(35,167
)Net cash provided by (used in) financing activities





82,593


114,574


(43,056
)Cash Flows from Investing Activities:Acquisition of businessadjustment to purchase price








(160,808
)

Sales of property, plant and equipment








16,329


4,381Purchase of property, plant, and equipment





(151,495
)

(69,372
)

(52,060
)Receipts from (payments on) derivative contracts designated as hedge of net investment








4,328


(25,924
)Net cash flows used in investing activities





(151,495
)

(209,523
)

(73,603
)Effect of exchange rate changes on cash and cash equivalents





33,248


(16,512
)

8,644Total net cash flows for the period





148,027


55,041


(45,683
)Cash and cash equivalents, beginning of the period





130,344


75,303


120,986Cash and cash equivalents, end of the period


2g


278,371


130,344


75,303Supplemental cash flow information:Interest paid





113,812


148,262


172,866Income taxes paid











6,015


The accompanying notes numbers 1 to 13 are an integral part of these consolidated financial statements.

F-90BrookfieldInfrastructure
Partners

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ETC HOLDINGS LTD. AND SUBSIDIARIES        NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1THE COMPANY AND BUSINESS

ETC Holdings Ltd. (the "Company") was formed in Bermuda on June 15, 2006 with an initial share capital of ThUS$ 12. The objective of the Company as per its
Memorandum of Association is to acquire, hold, pledge and dispose of investments in the equity and debt, directly and indirectly of Rentas Eléctricas I Limitada and Rentas
Eléctricas II Limitada (now Transelec Holdings Rentas Limitada) and any other persons and entities that carry on electricity transmission business in Chile, and any activities
that are ancillary thereto. As of December 31, 2009, 2008 and 2007 the principal asset held by the Company through its indirect subsidiary Transelec Holdings Rentas Limitada is its
investment in Transelec S.A. ("Transelec").

References
herein to "parent company" are to ETC Holdings Ltd. and references to the "Company" or the "Group" are to ETC Holdings Ltd. together with its consolidated
subsidiaries (see Note 2b).

On
June 30, 2006, the Company acquired through its indirect subsidiary Rentas Eléctricas IV Limitada 999,900 shares of Transelec (at this time
under the name of HQI Transelec Chile S.A.), representing 99.99% of its share capital, from Hydro-Québec International Transmisión
Sudamérica S.A. and International Finance Corporation. In the same transaction, another Company's subsidiary Rentas Eléctricas III Limitada acquired
100 shares of Transelec representing 0.01% of its share capital from HQ Puno Ltd.

On
October 24, 2006, Rentas Eléctricas IV Limitada acquired from, Rentas Eléctricas III Limitada 100 shares, corresponding to
0.01% of the share capital of HQI Transelec Chile S.A. and having full ownership of this entity, merged the latter by absorption. After the merger Rentas
Eléctricas IV Limitada changed its name first to Nueva Transelec S.A. and then to Transelec S.A.

On
March 26, 2007, Rentas Eléctricas III Limitada became an incorporated company and changed its name to Rentas Eléctricas III S.A. On
May 9, 2007, Rentas Eléctricas Rentas III S.A. acquired 100 shares of
Transelec owned by Transelec Holdings Rentas Limitada, corresponding to 0.01% of its share capital and became owner of 100% of Transelec. As a consequence, Rentas Eléctricas
III S.A. merged Transelec by absorption. The merged entity continues its operations under name Transelec S.A.

Transelec's
business is to exploit and develop electricity transmission systems in Chile. For this purpose it may obtain, acquire and use the respective concessions and permits and
exercise all the rights and faculties that the prevailing legislation confers on electrical companies. Transelec's business also includes providing engineering and management consulting services and
developing other business and industrial activities related to transmission of electricity. Transelec may act directly or through subsidiaries or other related companies, both in Chile and abroad. As
of December 31, 2009, 2008 and 2007 Transelec has one subsidiary Transelec Norte S.A. that is also engaged in the electricity transmission business in Chile.

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a)    Basis of accounting



BrookfieldInfrastructure
Partners     F-91

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

b)    Basis of consolidation



Participation as ofDecember 31, 2009

December 31, 2008

December 31, 2007Direct/
Indirect

%

Direct/
Indirect

%

Direct/
Indirect

%Rentas Eléctricas I Limitada

Direct


99.97

Direct


99.97

Direct


99.97Transelec Holdings Rentas Limitada

Indirect


99.97

Indirect


99.97

Indirect


99.97Transelec S.A.

Indirect


99.97

Indirect


99.97

Indirect


99.97Transelec Norte S.A.

Indirect


99.97

Indirect


99.97

Indirect


99.97


c)     Changes in accounting estimates



d)    Recent accounting pronouncements



F-92BrookfieldInfrastructure
Partners

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ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



e)     Business combination and goodwill



BrookfieldInfrastructure
Partners     F-93

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)





f)     Reporting currency and foreign currency translation



As of December 31,2009

2008

2007Ch$

Ch$

Ch$US$


507.10


636.45


496.89




F-94BrookfieldInfrastructure
Partners

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



As of December 31,2009

2008

2007Ch$

Ch$

Ch$UF


20,942.88


21,452.57


19,622.66




g)     Cash and cash equivalents and Statement of Cash Flows



As of December 31,Description

2009

2008

2007ThUS$

ThUS$

ThUS$Cash and bank


13,282


4,244


980Time deposits


265,089


126,100


68,802Repurchase agreements








5,521Total


278,371


130,344


75,303




h)    Property, plant, and equipment



BrookfieldInfrastructure
Partners     F-95

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ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



Description

YearsTransmission lines


40-50Electrical equipment


15-40Non-hydraulic civil projects


40Other


5-40




i)     Intangibles



F-96BrookfieldInfrastructure
Partners

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ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

j)     Bonds payable



k)    Current and future income taxes



l)     Staff severance indemnities



m)   Revenue recognition and tariff-setting



BrookfieldInfrastructure
Partners     F-97

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)



n)    Derivative contracts and hedging



o)    Vacation accrual



p)    Reclassifications



F-98BrookfieldInfrastructure
Partners

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ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3CURRENT AND FUTURE INCOME TAXES

a)    General information



b)    RecoverablePayable income taxes



As of
December 31,Description

2009

2008ThUS$

ThUS$Provision for income taxes


(757
)

(10,475
)Provisory income tax payments


5,539


4,627Receivable from tax losses absorbed


923


9,678Other


(762
)

(601
)Total


4,943


3,229


c)     Income tax expense



For the year ended
December 31,Description

2009

2008

2007ThUS$

ThUS$

ThUS$Current income tax


(803
)

(10,475
)

(838
)Effect of future income taxes


(32,590
)

7,960


23,008Total


(33,393
)

(2,515
)

22,170


BrookfieldInfrastructure
Partners     F-99

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3CURRENT AND FUTURE INCOME TAXES (Continued)

d)    Future income taxes



As of December 31, 2009

As of December 31, 2008Future income
tax assets

Future income
tax liabilities

Future income
tax assets

Future income
tax liabilitiesTemporary differences

Short-term

Long-term

Short-term

Long-term

Short-term

Long-term

Short-term

Long-termThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$Staff vacation accrual


306











251








Leased assets





73

















Property, plant and equipment





121,660











114,280





Intangibles











20,892











14,695Prepaid expenses











4,951











3,498Forward contracts


96

















100


Tax losses(1)





8,417











10,670





Swap contracts





6,534

















7,575Bonds





2,980











6,854





Off-market contracts











2,727











2,936Staff severance indemnities





103

















428Other


212








119


88


896





59Total future income taxes


614


139,767





28,689


339


132,700


100


29,191Net future income tax assets/liabilities


614


111,078








239


103,509








(1)Total amount of the unused tax losses on which future tax asset was recognized was ThUS$ 49,512 and ThUS$ 62,764 as of December 31,
2009 and 2008. In accordance with current Chilean tax regulations, tax losses do not expire.


NOTE 4OTHER CURRENT ASSETS

The detail of the other current assets as of December 31, are as follows:

As of
December 31,Description

2009

2008ThUS$

ThUS$Accrued interest on the long-term bank deposit (restricted cash)


160


234Other


69


77Total


229


311


F-100BrookfieldInfrastructure
Partners

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are detailed in the table below:

As of December 31, 2009

As of December 31, 2008Description

Cost

Accumulated
depreciation

Net book
value

Cost

Accumulated
depreciation

Net book
valueThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$Land


33,344





33,344


26,201





26,201Buildings and infrastructure:Buildings


28,525


(2,526
)

25,999


20,625


(1,551
)

19,074Access roads


1,113


(77
)

1,036


886


(43
)

843Transmission lines


1,048,464


(107,917
)

940,547


860,595


(49,866
)

810,729Houses and apartments


162


(14
)

148


123


(9
)

114Non-hydraulic civil projects


214,157


(18,577
)

195,580


170,334


(12,400
)

157,934Works in progress


197,171





197,171


54,219





54,219Total Buildings and infrastructure


1,489,592


(129,111
)

1,360,481


1,106,782


(63,869
)

1,042,913Machinery and equipment:Telecommunications equipment


14,085


(4,410
)

9,675


11,389


(3,527
)

7,862Furniture, machinery and office equipment


728


(152
)

576


216


(81
)

135Service furniture and equipment


97


(22
)

75


65


(12
)

53Tools and instruments


2,693


(541
)

2,152


2,089


(331
)

1,758Power generation unit


2,040


(452
)

1,588


1,695


(308
)

1,387Electrical equipment


540,290


(58,449
)

481,841


413,894


(35,527
)

378,367Mechanical, protection and measurement equipment


62,175


(21,392
)

40,783


49,858


(14,425
)

35,433Transport and loading equipment


146


(58
)

88


524


(192
)

332Computers and software


7,317


(4,810
)

2,507


4,942


(2,871
)

2,071Total Machinery and equipment


629,571


(90,286
)

539,285


484,672


(57,274
)

427,398Other Property, plant, and equipment:Construction materials


3,199





3,199


2,083





2,083Total Other property, plant, and equipment


3,199





3,199


2,083





2,083Total property, plant and equipment


2,155,706


(219,397
)

1,936,309


1,619,738


(121,143
)

1,498,595


Depreciation for the year ended December 31, 2009 amounted to ThUS$ 70,280 (ThUS$ 62,752 and ThUS$ 59,935 for the
years ended December 31, 2008 and 2007, respectively).

Assets
under construction classified as Work in progress in the table above are not being depreciated yet.

BrookfieldInfrastructure
Partners     F-101

---





ETC HOLDINGS LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6BONDS PAYABLE

The detail of bonds payable as of December 31, 2009 and 2008 is as follows:

Periodicity

As of December 31,Registration or
identification
number of the
instrumentSeries

Nominal
amount
placed

Currency or
Indexation unit

Effective
interest rate(1)

Maturity date as
of December 31,
2009

Interest
payment

Principal
payment

2009
Book value

2008
Book value

Principal/
InterestThUS$

ThUS$Current portion of long-term bonds:249

B1





UF


6.20%


Mar 1, 2010


Semiannually


Semiannually





164


Interest249

B2





UF


6.20%


Mar 1, 2010


Semiannually


Semiannually


2,122


2,473


InterestFirst issuance(2)

Single





US$


7.88%


Apr 15, 2009


Semiannually


At maturity


3,458


13,690


Interest249

B1


4,000


UF


6.20%


Mar 1, 2010


Semiannually


At maturity


9,262


168


Principal249

B2


60,000


UF


6.20%


Mar 1, 2010


Semiannually


At maturity


129,671


2,506


Principal481

D





UF


4.25%


Jun 15, 2010


Semiannually


At maturity


949


797


Interest480

C





UF


3.50%


Mar 1, 2010


Semiannually


At maturity


3,182


2,339


Interest598

E





UF


3.90%


Feb 2, 2010


Semiannually


At maturity


2,237





Interest598

F





CLP


5.70%


Feb 2, 2010


Semiannually


At maturity


1,428





Interest599

H





UF


4.80%


Feb 2, 2010


Semiannually


At maturity


2,204





Interest598

I





UF


3.50%


Feb 28, 2010


Semiannually


At maturity


860





Interest599

K





UF


4.60%


Mar 1, 2010


Semiannually


At maturity


1,125





InterestFirst issuance(1)

Private Placement





US$


2.03%


Feb 2, 2010


Semiannually


At maturity


695


1,244


InterestTotal current portion of bonds payable

















157,193


23,381Long Term Bonds Payable249

B1


186,000


UF


6.20%


Mar 1, 2022


Semiannually


Semiannually





7,198


Principal249

B2


2,790,000


UF


6.20%


Mar 1, 2022


Semiannually


Semiannually





107,975


PrincipalFirst issuance(2)

Single


245,138,000


US$


7.88%


Apr 15, 2011


Semiannually


At maturity


244,651


472,658


Principal481

D


13,500,000


UF


4.25%


Dec 15, 2027


Semiannually


At maturity


549,361


448.171


Principal480

C


6,000,000


UF


3.50%


Sep 1, 2016


Semiannually


At maturity


239,984


195,398


Principal598

E


3,300,000


UF


3.90%


Aug 1, 2014


Semiannually


At maturity


136,453





Principal598

F


33,600,000


CLP


5.70%


Aug 1, 2014


Semiannually


At maturity


66,259





Principal599

H


3,000,000


UF


4.80%


Aug 1, 2031


Semiannually


At maturity


123,920





Principal598

I


1,500,000


UF


3.50%


Sep 9, 2014


Semiannually


At maturity


61,201





Principal599

K


1,600,000


UF


4.60%


Sep 1, 2031


Semiannually


At maturity


66,078





PrincipalFirst issuance(1)

Private placement


150,000,000


US$


2.03%


May 2, 2013


Quarterly


At maturity


148,637


147,223


PrincipalTotal Long-term bonds payable

















1,636,544


1,378,623


---

F-102BrookfieldInfrastructure
Partners

---



ETC HOLDINGS LTD. AND SUBSIDIARIES    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6BONDS PAYABLE (continued)

Following is a schedule of the long-term debt (bonds) maturity in each of the five years beginning on January 1,
2009 and thereafter:

Year

As of
December 31,
2009ThUS$2010


2,6432011


256,7352012


5,2862013


155,286Thereafter


1,373,787Total


1,793,737


NOTE 7BANK LOANS

All bank loans are due in 2011.

As
of December 31, 2009 and 2008 the balance of the bank loans corresponds to loan obtained from Scotia & Trust (Cayman) Ltd. The loan bears interest of
6 months LIBOR plus 3%. Effective interest rate of the loan is 3.43% as of December 31, 2009.

NOTE 8FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

a)    Classification of financial instruments

As of December 31, 2009

As of December 31, 2008Financial asssets

HFT(1)

L&R(2)

HTM(3)

Total

HFT(1)

L&R(2)

HTM(3)

TotalThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$Cash and cash equivalents


278,371








278,371


130,344








130,344Trade accounts receivable





71,915





71,915





51,365





51,365Accrued interest on the long-term bank deposit (restricted)(4)








160


160








234


234Derivative financial instruments, including:Not designated for hedge accounting(5)


231








231


91,376








91,376Designated as hedges of net investment and cash flow hedges(6)














57,276








57,276Long-term bank deposit








872,064


872,064








890,064


890,064Investments in other companies


450








450


501








501Long-term receivables





2,873





2,873





2,456





2,456Total


279,052


74,788


872,224


1,226,064


279,497


53,821


890,298


1,223,616




BrookfieldInfrastructure
Partners     F-103

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)

As of December 31, 2009

As of December 31, 2008Financial liabilities

HFT(1)

Other than
HFT(1)

HFT(1)

Other than
HFT(1)ThUS$

ThUS$

ThUS$

ThUS$Accounts payable and other short-term payables





78,783





58,055Debt (including current and non-current portion)





2,665,071





2,288,072Derivatives financial instruments, including:Not designated for hedge accounting(7)


41,225





33,918


Designated as hedge of net investment and cash flow hedge(8)


17,183








Other long-term payables





17,413





4,626Total


58,408


2,761,267


33,918


2,350,753


---

b)    Fair value of financial instruments



As of December 31,

As of December 31,Description

2009
Carrying value

2009
Fair value

2008
Carrying value

2008
Fair valueThUS$

ThUS$

ThUS$

ThUS$Long-term bond payable


1,636,544


1,786,230


1,378,623


1,348,715




F-104BrookfieldInfrastructure
Partners

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)



December 31,
2009

Fair Value Measurements at
Reporting DateDescription

Carrying value

Level 1

Level 2

Level 3ThUS$

ThUS$

ThUS$

ThUS$Derivative assets


231





231


Derivative liabilities


(57,610
)




(57,610
)




c)     Use of derivatives



BrookfieldInfrastructure
Partners     F-105

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)



d)    Risk management



F-106BrookfieldInfrastructure
Partners

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)



BrookfieldInfrastructure
Partners     F-107

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)



NOTE 9ACCRUED LIABILITIES AND PROVISIONS

Accrued liabilities as of December 31, 2009 and 2008 are composed as follows:

As of December 31,Description

2009

2008ThUS$

ThUS$Accrued payroll


4,079


3,099Vacation accrual


1,803


1,477Staff severance indemnities (short-term portion)


1,021


949Total


6,903


5,525


Long-term
provisions presented on the balance sheet as of December 31, 2008 includes obligation for staff severance indemnities of ThUS$ 6,768
(ThUS$ 3,022 as of December 31, 2008) determined in accordance with accounting policy described in the Note 21). Total amount of cost benefit for staff severance indemnities
recognized in the year ended December 31, 2009 was ThUS$ 606 (ThUS$ 655 and ThUS$ 1,381 in the years ended December 31, 2008 and 2007, respectively).

F-108BrookfieldInfrastructure
Partners

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10SHAREHOLDERS' EQUITY

The detail of changes in the Shareholders' Equity during the years ended December 31, 2009, 2008 and 2007 is shown in the table below:

Description

Paid-in
capital

Accumulated
other
comprehensive income (loss)

Deficit

TotalThUS$

ThUS$

ThUS$

ThUS$Balance as of January 1, 2007


348,812


(1,674
)

(11,232
)

335,906Increase of capital


858,759








858,759Distributions








(35,167
)

(35,167
)Translation gain on the net investment in self-sustaining operation





98,086





98,086Loss on hedging instruments





(31,541
)




(31,541
)Net loss for the year








(37,467
)

(37,467
)Balance as of December 31, 2007


1,207,571


64,871


(83,866
)

1,188,576Increase of capital


160,808








160,808Distributions








(43,728
)

(43,728
)Translation loss on the net investment in self-sustaining operation





(313,113
)




(313,113
)Gain on hedging instruments





56,360





56,360Net income for the year








104,027


104,027Balance as of December 31, 2008


1,368,379


(191,882
)

(23,567
)

1,152,930Distributions








(56,923
)

(56,923
)Translation gain on the net investment in self-sustaining operation





306,937





306,937Loss on hedging instruments





(70,964
)




(70,964
)Net income for the year








12,177


12,177Balance as of December 31, 2009


1,368,379


44,091


(68,313
)

1,344,157


BrookfieldInfrastructure
Partners     F-109

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10SHAREHOLDERS' EQUITY (Continued)

As
of December 31, 2009 and 2008 the authorized share capital was divided into 1,400,012,000 shares of nominal value of US$ 1 per share. Shareholders in the Company
and their participation as follows as of December 31, 2009 and 2008:

Participation as of
December 31,Shareholder

2009

2008%

%CPP Investment Board Private Holding Inc.


27.728


27.728BIP Bermuda Holdings III Limited


17.750


17.750Bryson International Limited





10.036Brookfield Renewable Power (Barbados) Inc.


10.036


4358520 Canada Inc.


22.101


22.1014358538 Canada Inc.


3.900


3.900InfraPSP Canada Inc.


18.485


18.485Total


100.000


100.000


NOTE 11CAPITAL MANAGEMENT

The capital of the Company consists of the components of shareholders' equity as presented on the Company's consolidated balance sheet.

The
Company's objectives when managing this capital is to maintain an appropriate balance between holding a sufficient amount of capital to support its operations and providing
shareholders with a prudent amount of leverage to enhance returns. Company's financial debt, which consists of debt of
consolidated subsidiaries and totaling to ThUS$ 2,665,071 at December 31, 2009 (ThUS$ 2,288,072 as of December 31, 2008). Part of this debt is secured by the
long-term bank deposit that the Company has in Scotiabank & Trust (Cayman) Ltd. amounting to ThUS$ 872,064 and ThUS$ 890,064 as of as of December 31,
2009 and 2008, respectively.

The
Company is in full compliance with capital requirements and covenants related to equity as of December 31, 2009.

NOTE 12CONTINGENCIES AND RESTRICTIONS

The Company is subject to some covenants in respect of its corporate debt and is in full compliance with all such covenants as at December 31, 2009.

a)    Pledge on assets



F-110BrookfieldInfrastructure
Partners

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12CONTINGENCIES AND RESTRICTIONS (Continued)





b)    Litigations, lawsuits and demands from regulators



BrookfieldInfrastructure
Partners     F-111

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12CONTINGENCIES AND RESTRICTIONS (Continued)





c)     Guarantees



F-112BrookfieldInfrastructure
Partners

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12CONTINGENCIES AND RESTRICTIONS (Continued)



NOTE 13DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Canadian GAAP varies in certain respects from US GAAP. Such differences involve certain methods for measuring the amounts shown in the financial statements that are discussed below. The
principal methods applied in the preparation of the accompanying financial statements which have resulted in the amounts which differ from those that would have otherwise been determined under
US GAAP are described below.

The
reconciliations presented below include only differences related to measurement of items in the financial statements and do not contemplate additional disclosures that may be
required under US GAAP.

a)    Embedded derivatives



BrookfieldInfrastructure
Partners     F-113

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)

b)    Effects of conforming to US GAAP



For the year ended December 31,Description

2009

2008

2007ThUS$

ThUS$

ThUS$Net income (loss) as shown in the Canadian GAAP financial statements


12,177


104,027


(37,467
)Embedded derivatives (paragraph a)


(42,495
)

40,604


14,095Adjustments of deferred income taxes (paragraph a)


7,224


(6,903
)

(2,396
)Net (loss) income under US GAAP


(23,094
)

137,728


(25,768
)Other comprehensive (loss) income, net as shown in the Canadian GAAP financial statements


235,973


(256,753
)

66,545Adjustments to US GAAP








Other comprehensive income (loss) under US GAAP


235,973


(256,753
)

66,545Total comprehensive income (loss) under US GAAP


212,879


(119,025
)

40,777




As of December 31,Description

2009

2008ThUS$

ThUS$Shareholders' equity as shown in the Canadian GAAP financial statements


1,344,157


1,152,930Embedded derivatives (paragraph a)


12,204


54,699Adjustments of deferred income taxes (paragraph a)


(2,075
)

(9,299
)Shareholders' equity under US GAAP


1,354,286


1,198,330


F-114BrookfieldInfrastructure
Partners

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)



For the year ended December 31,Description

2009

2008

2007ThUS$

ThUS$

ThUS$Opening balance


1,198,330


1,200,275


335,906Contribution and increase of capital





160,808


858,759Translation gain (loss) on the net investment in self-sustaining operation


306,937


(313,113
)

98,086(Loss) gain on hedging instruments


(70,964
)

56,360


(31,541
)Net (loss) income for the year


(23,094
)

137,728


(25,768
)Distributions


(56,923
)

(43,728
)

(35,167
)Closing balance


1,354,286


1,198,330


1,200,275


c)     Recent US GAAP accounting pronouncements



BrookfieldInfrastructure
Partners     F-115

---



ETC HOLDINGS LTD. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued)



F-116BrookfieldInfrastructure
Partners

---





Combined Financial Statements of    BROOKFIELD GLOBAL TIMBER FUND    As of December 31, 2009 and 2008  and the year ended December 31, 2009  and for the period from October 14,
2008 (inception) to December 31, 2008

BrookfieldInfrastructure
Partners     F-117

---





REPORT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

To
the investors of
Brookfield Global Timber Fund

We
have audited the accompanying combined statements of net assets, including the combined schedules of investments of Brookfield Global Timber Fund (the "Fund") as of
December 31, 2009 and 2008, and the combined statements of operations, changes in net assets and cash flows for the year ended December 31, 2009 and for the period from
October 14, 2008 (inception) to December 31, 2008. These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, 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 combined financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2009 and 2008, and the results
of its operations and its cash flows for the year ended December 31, 2009 and for the period from October 14, 2008 to December 31, 2008, in conformity with accounting principles
generally accepted in the United States of America.

/s/DELOITTE & TOUCHELLP
Independent Registered Chartered Accountants
Licensed Public Accountants
Toronto, Ontario
March 23, 2010

F-118BrookfieldInfrastructure
Partners

---





BROOKFIELD GLOBAL TIMBER FUND        COMBINED STATEMENTS OF NET ASSETS        As of December 31, 2009 and 2008  (in US$ thousands, except where noted)

Note

2009

2008AssetsInvestment, at estimated fair market value (cost$1,054,780, 2008$1,026,277)


4


871,034


906,606Cash and cash equivalents





4


33Due from related parties


7


3


122Prepaid management fees


7


1,243


Total Assets





872,284


906,761LiabilitiesAccrued expenses





30


218Due to related parties


7





45Total liabilities





30


263Net Assets





872,254


906,498


The accompanying notes are an integral part of these combined financial statements.

BrookfieldInfrastructure
Partners     F-119

---



BROOKFIELD GLOBAL TIMBER FUND        COMBINED SCHEDULES OF INVESTMENTS        As of December 31, 2009  (in US$ thousands, except where noted)

Note

Location

Principal $
or Shares

Cost

Estimated
Fair Value

% of Net
AssetsLongview Timber Holdings, Corp.


3

U.S. PNW


10,816,230


1,054,780


871,034


99.9%Total Investment










1,054,780


871,034


99.9%


As of December 31, 2008
(in US$ thousands, except where noted)

Note

Location

Principal $
or Shares

Cost

Estimated
Fair Value

% of Net
AssetsLongview Timber Holdings, Corp.Common Shares


3

U.S. PNW


8,485,845


855,096


735,425


81.1%Shareholder Loan


3

U.S. PNW


171,181


171,181


171,181


18.9%Total Investment










1,026,277


906,606


100.0%


The accompanying notes are an integral part of these combined financial statements.

F-120BrookfieldInfrastructure
Partners

---





BROOKFIELD GLOBAL TIMBER FUND        COMBINED STATEMENTS OF OPERATIONS        For the year ended December 31, 2009 and  From October 14, 2008 (date of inception)
to December 31, 2008  (in US$ thousands, except where noted)

Note

2009

2008Investment IncomeDividend income


3





3,564Interest income


3


11,732


5,02011,732


8,584ExpensesManagement fees


7


2,225


1,436Organizational expenses


7


190


1,701Professional fees





54


Audit fees





40


302,509


3,167Net Investment Income





9,223


5,417Unrealized loss on investment


4


(64,075
)

(119,671
)Result from Operations





(54,852
)

(114,254
)


The accompanying notes are an integral part of these combined financial statements.

BrookfieldInfrastructure
Partners     F-121

---



BROOKFIELD GLOBAL TIMBER FUND        COMBINED STATEMENTS OF CHANGES IN NET ASSETS        For the year ended December 31, 2009 and  From October 14, 2008 (date of
inception) to December 31, 2008  (in US$ thousands, except where noted)

Note

General
Partner

Limited
Partners

Members'
Capital

TotalNet assets, as of October 14, 2008














Investor's contributions


1


1,699


1,259,316


140,772


1,401,787Net investment income





8


4,048


1,361


5,417Unrealized loss on investment





(199
)

(103,110
)

(16,362
)

(119,671
)Distributions to investors


1





(379,627
)

(1,408
)

(381,035
)Net assets, as of December 31, 2008





1,508


780,627


124,363


906,498Investor's contributions


1


38


18,242


2,328


20,608Net investment income





15


7,947


1,261


9,223Unrealized loss on investment





(107
)

(55,208
)

(8,760
)

(64,075
)Distributions to investors


1











Net assets, as of December 31, 2009





1,454


751,608


119,192


872,254


The accompanying notes are an integral part of these combined financial statements.

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BROOKFIELD GLOBAL TIMBER FUND        COMBINED STATEMENTS OF CASH FLOWS        For the year ended December 31, 2009 and  from October 14, 2008 (date of
inception) to December 31, 2008  (in US$ thousands, except where noted)

2009

2008Cash flow (used in) from operating activitiesNet decrease in net assets from operations


(54,852
)

(114,254
)Adjustments to reconcile to net cash provided by operating activities:Purchase of investment


(28,503
)

(314,800
)Unrealized loss on investment


64,075


119,671Changes in other assets and liabilities, net


(1,357
)

141(20,637
)

(309,242
)Cash flow from (used in) investing activitiesInvestors' contributions


20,608


690,310Distributions to investors





(381,035
)20,608


309,275Net (decrease) increase in cash and cash equivalents


(29
)

33Cash and cash equivalents, beginning of period


33


Cash and cash equivalents, end of period


4


33


The accompanying notes are an integral part of these combined financial statements.

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BROOKFIELD GLOBAL TIMBER FUND        NOTES TO THE FINANCIAL STATEMENTS        For the year ended December 31, 2009 and  from October 14, 2008 (date of
inception) to December 31, 2008  (in US$ thousands, except where noted)

1.    ORGANIZATION AND INVESTMENT OBJECTIVES

These financial statements of Brookfield Global Timber Fund represent the combined financial statements of Brookfield Global Timber Fund I L.P., Brookfield Global Timber Fund I
(Brookfield PIV), LLC and BGTF I (Norma), LLC (collectively referred to as the "Fund" or the "Partnership"). Brookfield Global Timber Fund I L.P. is a Delaware limited partnership
that was organized and commenced operations on October 14, 2008 ("Inception"). Brookfield Global Timber Fund I (Brookfield PIV), LLC is a Delaware limited liability company that was
organized and commenced operations on October 14, 2008. BGTF I (Norma), LLC is a Delaware limited liability company that was organized on December 17, 2008 and commenced
operations on December 22, 2008. The General Partner of Brookfield Global Timber Fund I L.P. is Brookfield Global Timber Fund GP, L.P. (the "GP"), a Delaware limited
partnership, a wholly owned subsidiary of Brookfield Asset Management Inc. ("Brookfield"). The financial statements of the Fund are presented on a combined basis as all of the entities are
under common control and management.

Brookfield
Timberlands Management L.P. (the "Fund Manager"), a wholly owned subsidiary of Brookfield, is the investment manager of the Fund.

The
Fund's final closing occurred on March 31, 2009. The Fund is expected to terminate on March 31, 2019, 10 years from the final closing, unless terminated earlier
or extended in accordance with the provisions of the Fund's Second Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement").

The
commitment period of the Fund ended on March 31, 2009. As a result, no investment may be made by the Fund and no limited partner shall be required to make capital
contributions in respect of investments; provided, however, that the GP may call capital in its discretion to the extent necessary to (i) pay expenses, including the management fee;
(ii) make expenditures in accordance with the annual operating plan of Longview; and (iii) fund amounts which are approved by a seventy-five percent vote of the limited
partners.

On
October 14, 2008, Brookfield Longview Holdings LLC ("BLH"), a wholly owned subsidiary of Brookfield, contributed its investment in Longview Timber Holdings, Corp.
("Longview") consisting of 5,570,118 common shares with a value of $561,102 and loans receivable ("Shareholder Loan") from Longview in the amount of $127,657 to the Fund in exchange for limited
partnership and member interests in the Fund. Additionally, from Inception to November 3, 2008, the Fund received cash contributions from other investors totaling $690,310 in exchange for
limited partnership interests or members' capital in the Fund. These contributions were used by the Fund to acquire 2,915,727 newly issued common shares of Longview along with additional
Shareholder Loan interests. The remaining $380,808 was distributed to Brookfield and its affiliates. On December 22, 2008, an affiliate of Brookfield assigned its interest in the Shareholder
Loan with a principal amount of $22,718 to BGTF I (Norma), LLC.

On
July 14, 2009 and October 14, 2009 the Fund received cash contributions of $14,509 and $6,099, respectively, from investors in exchange for limited partnership and
member interests in the Fund. These contributions were used by the Fund to acquire 166,491 newly issued common shares of Longview and to pay operating expenses of the Fund. On
December 11, 2009 the Fund accepted

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BROOKFIELD GLOBAL TIMBER FUND

NOTES TO THE FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2009 and
from October 14, 2008 (date of inception) to December 31, 2008
(in US$ thousands, except where noted)

1.    ORGANIZATION AND INVESTMENT OBJECTIVES (Continued)

2,163,894 newly
issued common shares of Longview having a value equal to $182,914 as full repayment of the balance of the Shareholder Loan including principal and accrued interest.

Distributions
to investors during the year were nil (2008$381,035).

The
Fund's primary purpose is to hold the investment in Longview whose purpose is to acquire, develop, manage and harvest timber assets. Investment returns are in the form of current
income earned on this investment and the capital appreciation of the investment in Longview, which will be distributed to investors when realized by the Fund.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

These financial statements have been prepared in conformity with generally accepted accounting principles in the United States
of America. The Fund is an investment company and is accounted for in accordance with the American Institute of Certified Public Accountants Audit and Accounting Guide: Investment Companies.

Reporting Entity and Principles of Combination

The combined financial statements include the accounts and transactions of the Fund. All interfund balances and transactions
are eliminated.

Accounting Estimates

The preparation of financial statements requires the Fund to make estimates and assumptions affecting the amount of reported 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. The process of
valuing investments for which no
published market price exists is based on inherent uncertainties and the resulting values may materially differ from values that would have been used had a ready-market existed for the investments and
prices at which the investments may ultimately be sold.

Cash and Cash Equivalents

Cash and cash equivalents represent cash, bank accounts and short-term financial investments with a ready market and
original maturities when purchased of 90 days or less, and are stated at cost plus accrued interest, which approximates market value due to the short-term nature of the investments.

Foreign Currency Translation

The books and records of the Fund are maintained in U.S. dollars. Assets and liabilities denominated in currencies other than
the U.S. dollars are translated into U.S. dollar equivalents using valuation date exchange rates, while revenues and expenses are translated at the transaction date
exchange rates.

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BROOKFIELD GLOBAL TIMBER FUND

NOTES TO THE FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2009 and
from October 14, 2008 (date of inception) to December 31, 2008
(in US$ thousands, except where noted)

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Valuation of Investments

The Fund carries its investments at their estimated fair value as determined by the Fund Manager. The fair value of equity investments
is determined by annual independent appraisals, less the book value of any long-term debt, as applicable, and any such other factor as the Fund Manager may deem relevant.

Income Recognition

Interest income and distributions from investments are accrued and recorded as earned.

Expense Recognition

Fund expenses are recorded as incurred and consist of permitted expenses in accordance with terms of the Fund agreements. Fund expenses
include organizational expenses, operational expenses and other expenses associated with the operation of the Fund.

Management Fee Expense

Management fees are those paid to the Fund Manager. Such amounts are reflected in the accompanying financial statements
when incurred.

Taxation

No provision is made in the accompanying financial statements for taxes since any such liabilities are ultimately the responsibility of
the individual investors and not that of the Fund.

Recently Issued Accounting Pronouncements

In May 2009, the FASB issued ASC 855, Subsequent Events ("ASC 855") (formerly SFAS No. 165 Subsequent
Events), which defines subsequent events as transactions that occur
after the balance sheet date but before financial statements are issued or are available to be issued. This guidance defines two types of subsequent events: (i) events or transactions that
provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements (that is, recognized
subsequent events); and (ii) events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date (that is, non-recognized
subsequent events). In addition, this guidance requires an entity to disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the financial
statements were issued or the date the financial statements were available to be issued. The guidance in ASC 855 is effective for periods ending after June 15, 2009. The adoption of ASC
855 did not have a material impact on the Fund's combined financial statements. We have evaluated subsequent events up to and including March 23, 2010, the date on which our financial
statements were available to be issued.

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BROOKFIELD GLOBAL TIMBER FUND

NOTES TO THE FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2009 and
from October 14, 2008 (date of inception) to December 31, 2008
(in US$ thousands, except where noted)

3.    INVESTMENTS

Fund investments consist of a 77% interest in Longview, held in the form of issued and outstanding common stock. The Fund's initial investments in Longview were made on
October 14, 2008 and on October 28, 2008, coincident with the inception of the Fund and the entry of other investors, respectively. Additional timberlands were acquired by Longview on
November 4, 2008 through an additional investment by the Fund. On July 14, 2009 and October 14, 2009 the Fund made additional investments of $10,672 and $6,099, respectively, to
fund cash requirements of Longview in exchange for 166,491 newly issued common shares of Longview. On December 11, 2009 the Fund accepted 2,163,894 newly issued common shares of
Longview having a value equal to $182,914 as full repayment of the balance of the Shareholder Loan including principal and accrued interest.

In
the year ended December 31, 2009, no dividends were received from Longview (2008$3,564). Interest income from the Shareholder Loan in the year amounted to $11,732
(2008$5,020), which was added to the cost of the investment.

4.    FAIR VALUE MEASUREMENTS

FASB ASC 820 ("ASC 820") establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair
value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active
quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring
fair value.

Investments
measured and reported at fair value are classified and disclosed in one of the following categories:

Level Iquoted
prices available in active markets for identical investments as of the reporting date.

Level IIpricing
inputs other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair values are
determined through the use of models or other valuation methodologies.

Level IIIpricing
inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs into
the determination of fair value require significant management estimation.

In
certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy
is based on the lowest level of input that is significant to the fair value measurement. The Fund's assessment of the significance of a particular input to the fair value measurement in its entirety
requires judgment, and considers factors specific to the investment.

The
Fund adopted ASC 820 on Inception, as required for financial assets and financial liabilities; accordingly, assets and liabilities are classified in their entirety based on
the lowest level of input that is significant to the fair value measurement.

BrookfieldInfrastructure
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BROOKFIELD GLOBAL TIMBER FUND

NOTES TO THE FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2009 and
from October 14, 2008 (date of inception) to December 31, 2008
(in US$ thousands, except where noted)

4.    FAIR VALUE MEASUREMENTS (Continued)

As of December 31, 2009

Description

Level 1

Level 2

Level 3

TotalAssets accounted for at Fair Value:Investment








871,034


871,034Total assets at Fair Value








871,034


871,034


As of December 31, 2008

Description

Level 1

Level 2

Level 3

TotalAssets accounted for at Fair Value:Investment








906,606


906,606Total assets at Fair Value








906,606


906,606


The
table below sets forth a summary of changes in the fair value of the Fund's assets and liabilities with significant valuation inputs classified as Level 3 for the year ended
December 31, 2009 and for the period from Inception to December 31, 2008.

Assets measured at fair value on a recurring basis using significant unobservable input Level 3 for the year ended December 31, 2009

Balance, January 1, 2009


906,606Purchase of investment


28,503Unrealized loss on investment


(64,075
)Balance, December 31, 2009


871,034


Assets measured at fair value on a recurring basis using significant unobservable input Level 3 for the period ended
December 31, 2008

Balance, October 14, 2008


Purchase of investment


1,026,277Unrealized loss on investment


(119,671
)Balance, December 31, 2008


906,606


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BROOKFIELD GLOBAL TIMBER FUND

NOTES TO THE FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2009 and
from October 14, 2008 (date of inception) to December 31, 2008
(in US$ thousands, except where noted)

5.    FINANCIAL HIGHLIGHTS

The following summarizes the Fund's financial highlights for the year ended December 31, 2009 and for the period from Inception to December 31, 2008, consisting of total
return and expense and contributed capital to committed capital ratios.

December 31, 2009

December 31, 2008Supplemental InformationGross internal rate of return


(13.7%
)

Expense ratio to average net assets


0.3%


1.0%Contributed capital to committed capital


100.0%


84.9%


The
expense ratio is calculated based on expenses allocated to the investors prior to the effects of any carried interests. Certain expenses have been annualized while organizational
costs have not been annualized in determining the expense ratio. The computation of such ratios based on the amount of expenses assessed to an individual investor may vary based on different
management fee and incentive arrangements (as applicable) and the timing of investors' capital transactions.

6.    DISTRIBUTIONS

As per the Partnership Agreement, a Limited Partner ("LP") is defined as each of the Persons listed from time to time on the books and records of the Partnership as limited partners, or
any other Person who becomes a limited partner of the Partnership in such Person's capacity as a limited partner of the Partnership. Proceeds attributable to each LP, as applicable, for any
investment which is available for distribution will be distributed in the following order:



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BROOKFIELD GLOBAL TIMBER FUND

NOTES TO THE FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2009 and
from October 14, 2008 (date of inception) to December 31, 2008
(in US$ thousands, except where noted)



7.    RELATED PARTY TRANSACTIONS

Brookfield is the ultimate parent company of the Fund Manager and either directly or through subsidiaries or related parties is also an investor in the Fund. Related party transactions
are recorded at the exchange amount. The Fund has the following related party relationships:

a)    Management Fees

Fees for management services provided by the Fund Manager are paid quarterly in advance at an amount per annum equal to sixty five basis points (0.65%) of
the LP's aggregate contributions to the Fund. The management fees payable are reduced to the extent of management fees paid by Longview to the Fund Manager. For the year ended
December 31, 2009, $2,225 was incurred by the Fund (2008$1,436), of which nil remains payable (December 31, 2008nil). The Fund has prepaid management fees to
the Fund Manager as of December 31, 2009 of $1,243 (December 31, 2008nil) resulting from a reduction in the per annum rate on March 31, 2009.

b)    Carried Interest

Under the terms of the respective Fund agreements, the GP is entitled to a carried interest distribution of 20.0% of the sum of: (i) the cumulative
returns to the LP's less any return of capital; and, (ii) the cumulative returns to the GP calculated according to Note 6, as applicable. As of December 31, 2009, no
carried interest has been paid by the Fund (2008nil). No amounts have yet been estimated as owing as of December 31, 2009 (December 31, 2008nil).

c)     Organizational Expenses

The Fund shall pay or reimburse organizational expenses incurred by the GP or the Fund Manager with respect to the conduct of the business of
the GP, the Fund Manager and the Fund. Organizational expenses include costs incurred in connection with (i) the offering and sale of the interests and partnership interests in any
parallel investment vehicle; (ii) the organization of the Partnership, any Parallel Investment Vehicle, the GP, the Fund Manager and their respective Affiliates; and, (iii) the
negotiation, execution and delivery of agreements in respect of any Parallel Investment Vehicle, the Management Agreement and any related or similar documents, including, without limitation, any
related legal and accounting fees and expenses, travel expenses and filing fees. For the year ended December 31, 2009, $190 (2008$1,701) of organizational expenses were incurred by
the GP on behalf of the Fund.

d)    Contribution of Investment

Certain investors of the Fund related to Brookfield, through its wholly-owned subsidiaries, participate in the Fund through the contribution of common shares in
the Longview investment. Refer to Note 1 for the description of the original contributions made to the Fund and related distributions.

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BROOKFIELD GLOBAL TIMBER FUND

NOTES TO THE FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2009 and
from October 14, 2008 (date of inception) to December 31, 2008
(in US$ thousands, except where noted)

7.    RELATED PARTY TRANSACTIONS (Continued)

e)     Amounts Outstanding

The following prepaid and receivable (payable) balances with related parties are outstanding at the end of the period:

December 31, 2009

December 31, 2008Brookfield Timberlands Management LP


1,243


120Longview Fibre Paper and Packaging Inc.


3


21,246


122Brookfield Asset Management Inc.





(45
)1,246


77


BrookfieldInfrastructure
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