Adjusted net operating income ("ANOI")(2) for Brookfield Infrastructure totalled $12.1 million ($0.32 per unit) for the quarter ended September 30, 2009 compared to ANOI of $13.1 million ($0.34 per unit) in the third quarter of 2008. As a result of a weak price environment for logs and a reduction in harvest levels to preserve inventory value, ANOI from the timber business decreased $0.9 million in the third quarter of 2009, compared with the same period in 2008. However, Brookfield Infrastructure's transmission business achieved strong performance again in the quarter. Excluding a $5.3 million dividend received in the prior year from TBE, which was sold in the second quarter of this year, ANOI from its transmission segment increased 20% in the third quarter of 2009 primarily due to the positive impact of revenue indexation and returns on growth capital expenditures at Transelec.

The following table presents the results for Brookfield Infrastructure on a total and per unit basis:

                           Three months ended        Nine months ended
US$ millions (except            Sept. 30,                 Sept. 30,
per unit amounts)          2009         2008         2009(3)      2008(4)
                        -----------  -----------  ------------ ------------
ANOI                    $      12.1  $      13.1  $       96.9 $       48.4
  -- per unit(5)        $      0.32  $      0.34  $       2.54 $       1.25
Net income              $      (4.5) $      (1.4) $       55.5 $        6.5
  -- per unit(5)        $     (0.12) $     (0.04) $       1.45 $       0.17
                        -----------  -----------  ------------ ------------

"During the quarter, results for both our transmission and timber businesses exceeded expectations, within the current environment," said Sam Pollock, Chief Executive Officer of Brookfield's Infrastructure Group. "Our timber business continued to feel the impact of the weak U.S. housing market. However, we are seeing signs that pricing in the log market has stabilized and is beginning to recover."

The following table presents both net income and ANOI by segment:

                            Three months ended        Nine months ended
                                 Sept. 30,                Sept. 30,
                              2009        2008        2009         2008
                            ---------   ---------   ---------    ---------
Net income (loss) by
 segment
  Electricity transmission  $     3.0   $     7.4   $    77.8(3) $    24.8
  Timber                         (5.4)       (3.2)      (18.6)        (7.7)
  Corporate                      (2.1)       (5.6)       (3.7)       (10.6)
                            ---------   ---------   ---------    ---------
Net (loss) income           $    (4.5)  $    (1.4)  $    55.5    $     6.5
                            ---------   ---------   ---------    ---------
ANOI by segment
  Electricity transmission  $    14.1   $    17.1   $   108.1(3) $    48.3
  Timber                          0.7         1.6         0.1         10.7
  Corporate                      (2.7)       (5.6)      (11.3)       (10.6)
                            ---------   ---------   ---------    ---------
ANOI                        $    12.1   $    13.1   $    96.9    $    48.4
                            ---------   ---------   ---------    ---------

Operating Platforms

Electricity Transmission Operations

The following table presents Brookfield Infrastructure's electricity transmission segment's proportionate share of financial results. As it is accounted for on a cost basis, TBE's results are reflected as dividend income.

                            Three months ended       Nine months ended
                                 Sept. 30,               Sept. 30,
US$ millions, unaudited    2009         2008         2009        2008(4)
                        -----------  -----------  -----------  -----------
Revenues                $      23.0  $      23.5  $      63.4  $      67.7
Costs attributed to
 revenues                      (4.5)        (4.2)       (12.2)       (10.6)
Dividend income                  --          5.3          3.5         11.0
                        -----------  -----------  -----------  -----------
Net operating income           18.5         24.6         54.7         68.1
Other income (expenses)         1.3         (0.9)         1.7         (1.5)
Gain on sale of
 investment (after tax)          --           --         68.2           --
Interest expense(6)            (5.3)        (5.8)       (15.3)       (16.0)
Cash taxes                     (0.4)        (0.8)        (1.2)        (2.3)
                        -----------  -----------  -----------  -----------
ANOI                           14.1         17.1        108.1         48.3
Depreciation and
 amortization                  (5.2)        (4.4)       (13.8)       (11.9)
Premium on refinancing         (2.8)          --         (2.8)          --
Unrealized losses on
 derivative instruments        (1.0)        (4.7)        (9.1)       (12.1)
Deferred taxes and
 other items                   (2.1)        (0.6)        (4.6)         0.5
                        -----------  -----------  -----------  -----------
Net income              $       3.0  $       7.4  $      77.8  $      24.8
                        -----------  -----------  -----------  -----------

On a proportionate basis, Brookfield Infrastructure's transmission operations earned net operating income and ANOI of $18.5 million and $14.1 million, respectively, in the three-month period ended September 30, 2009, compared with $24.6 million and $17.1 million in the same period in 2008. However, 2008 results include $5.3 million of dividend income from TBE which was sold in June 2009.

For the three-month period ended September 30, 2009, Transelec's proportionate net operating income and ANOI were $12.4 million and $9.8 million, respectively, compared with $12.9 million and $8.5 million in the same period of 2008. The current period includes $1.2 million of revenue attributable to the first six months of the year related to the sub-transmission rate reassessment which was finalized effective January 2009. The third quarter of 2008 includes non-recurring revenue of $1.8 million relating to the retroactive application of the trunk transmission study. Adjusting for these amounts, net operating income and ANOI increased by 1% and 28% respectively, versus the third quarter of 2008, primarily the result of increased revenue from growth capital expenditures and positive Chilean inflation indexation. Operating margins at Transelec were 83% for the three-month period ended September 30, 2009 compared to 86% in the prior year. The primary driver of the decrease in operating margin was engineering revenue which has an operating margin of 15%. The engineering business is a core part of Transelec's growth strategy as it enables participation in higher risk transmission development projects while covering associated overhead.

For the three-month period ended September 30, 2009, Brookfield Infrastructure's Ontario transmission operation's net operating income and ANOI totaled $6.1 million and $4.3 million, respectively, compared with $6.4 million and $3.3 million for the same period in the prior year. The decline in net operating income was largely due to a weakening of the Canadian dollar and, to a lesser extent, a decline in revenues as a result of lower system demand in Ontario. For the quarter, ANOI increased as the impact of a combination of lower cash taxes in the current period and a loss on disposition of obsolete assets in the prior year more than offset the decline in net operating income.

Non-cash expenses are primarily comprised of depreciation and amortization, as well as non-cash inflation indexation on the Chilean peso denominated debt. Depreciation and amortization increased to $5.2 million for the three-month period ended September 30, 2009, from $4.4 million in the comparable period of 2008 due to incremental depreciation booked in conjunction with the expansion of Brookfield Infrastructure's asset base. In the third quarter of 2009, the non-cash impact of inflationary indexation on the Partnership's Chilean peso denominated debt offset the non-cash mark-to-market losses on derivative instruments, compared with a net loss of $1.0 million in the prior year. The derivative instruments relate to Transelec's currency hedging program, whereby 100% of Transelec's U.S. dollar debt has been converted to Chilean pesos to offset interest expense against Chilean peso revenue. In addition, results for the quarter include a premium on refinancing which represents the accounting loss booked in conjunction with the tender for $220 million of Transelec's senior notes due April 2011. These U.S. dollar denominated bonds were refinanced with a bond issue in the local Chilean market at a rate approximately 275 bps lower than the existing notes.

Timber Operations

The following table presents the timber segment's proportionate share of financial results.

                           Three months ended        Nine months ended
                                 Sept. 30,                 Sept. 30,
US$ millions, unaudited    2009         2008         2009         2008
                        -----------  -----------  -----------  -----------
Revenues                $      19.6  $      32.4  $      59.9  $      96.3
Costs attributed to
 revenues                     (13.3)       (23.0)       (41.7)       (64.0)
                        -----------  -----------  -----------  -----------
Net operating income            6.3          9.4         18.2         32.3
Other income                    0.8         (0.2)         1.2          0.4
Interest expense               (6.4)        (7.3)       (19.2)       (21.5)
Cash taxes                       --         (0.3)        (0.1)        (0.5)
                        -----------  -----------  -----------  -----------
ANOI                            0.7          1.6          0.1         10.7
Depreciation and
 amortization                  (8.1)        (8.9)       (20.4)       (27.9)
Unrealized losses on
 investment                      --           --         (6.1)          --
Deferred taxes and
 other items                    2.0          4.1          7.8          9.5
                        -----------  -----------  -----------  -----------
Net income              $      (5.4) $      (3.2) $     (18.6) $      (7.7)
                        -----------  -----------  -----------  -----------

For the three-month period ended September 30, 2009, net operating income and ANOI for Brookfield Infrastructure's timber operations totaled $6.3 million and $0.7 million, respectively, compared to $9.4 million and $1.6 million, in the prior year.

While timber market conditions remain weak, prices appear to have bottomed-out in the second quarter and have begun a modest recovery. In the U.S., the inventory of new homes declined to 0.3 million units, which is consistent with long-term historical average levels and less than 50% of peak levels in late 2006 and 2007. These declines in inventory are contributing to a steady improvement in housing starts in the markets that Brookfield Infrastructure serves. Seasonally adjusted, annualized housing starts increased by 9% from the second quarter to 0.6 million. While an improvement, this level is approximately 68% of the average for the same period in 2008 and less than 42% of the five-year average. Log prices in the Japanese market were stable during the quarter and demand for whitewood in the Korean market remained strong, yielding pricing, net of transportation cost, for whitewood close to peak prices realized in the U.S. market in the summers of 2006 and 2007.

Due to strong pricing for whitewood products into the Korean market, Brookfield Infrastructure has increased harvest levels in its U.S. operation to well above the reduced harvest plan for the quarter. This is consistent with Brookfield Infrastructure's focus on optimizing the long-term value of the business, while continually adapting the harvest plan as necessary to pursue market opportunities that arise.

The following table summarizes the proportionate share of operating metrics for Brookfield Infrastructure timber operations:

                    Three Months Ended            Three Months Ended
                    September 30, 2009            September 30, 2008
            ------------------------------- ------------------------------
            Harvest     Sales      Revenue  Harvest     Sales      Revenue
            (000's (000's  Revenue ($mill- (000's (000's Revenue  ($mill-
UNAUDITED    m(3))   m(3))    /m(3)   ions)  m(3))  m(3))   /m(3)    ions)
            ------ ------- ------- -------- ------ ------ -------- -------
Douglas-fir    112     118 $  78.0 $    9.2    164    190 $   88.9 $  16.9
Whitewood       87      83    60.2      5.0    125    117     58.1     6.8
Other
 species        67      70    64.3      4.5     61     57    108.8     6.2
            ------ ------- ------- -------- ------ ------ -------- -------
               266     271 $  69.0 $   18.7    350    364 $   82.1 $  29.9
HBU and
 other
 sales                                  0.9                            2.5
            ------ ------- ------- -------- ------ ------ -------- -------
Total                              $   19.6                        $  32.4
            ------ ------- ------- -------- ------ ------ -------- -------

                    Nine Months Ended             Nine Months Ended
                   September 30, 2009             September 30, 2008
            ------------------------------ --------------------------------
            Harvest    Sales     Revenue  Harvest     Sales        Revenue
            (000's (000's Revenue ($mill-  (000's (000's  Revenue  ($mill-
UNAUDITED    m(3))   m(3))   /m(3)   ions)  m(3))  m(3))    /m(3)    ions)
            ------ ------ ------- -------- ------ ------- -------- --------
Douglas-fir    386    419 $  78.3 $   32.8    566     599 $   89.1 $   53.4
Whitewood      171    187    61.0     11.4    267     273     62.6     17.1
Other
 species       175    197    73.1     14.4    252     242     94.6     22.9
            ------ ------ ------- -------- ------ ------- -------- --------
               732    803 $  73.0 $   58.6  1,085   1,114 $   83.8 $   93.4
HBU and
 other
 sales                                 1.3                              2.9
            ------ ------ ------- -------- ------ ------- -------- --------
Total                             $   59.9                         $   96.3
            ------ ------ ------- -------- ------ ------- -------- --------

In the Canadian timber operations, harvest and sales volumes decreased 43% and 44%, respectively, in the third quarter of 2009 versus 2008, in line with the harvest plan. To mitigate the impact of weak North American markets, Brookfield Infrastructure maintained a high percentage of appearance grade products in the sales mix exported to Asian markets. Export volumes increased to 60% of shipments in the third quarter of 2009, from 39% in the third quarter of 2008. As a result of the significant component of exports in the product mix, the decline in Brookfield Infrastructure's average realized Douglas-fir log price in the third quarter of 2009 was 18% compared to the third quarter of 2008, while average sales prices of representative products in the U.S. fell by approximately 22%. Average realized prices for whitewood logs in the third quarter of 2009 were supported by strong demand in the Korean market which led to a threefold increase in export volume of this product, compared to the third quarter of 2008.