Brookfield Infrastructure Partners LP (BIP) 2011 Q4 法說會逐字稿

Hello, this is the Chorus Call conference operator. Welcome to the Brookfield Infrastructure Partners' conference call and webcast to present the Company's 2011 year-end results to unitholders. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. (Operator Instructions).

At this time I would like to turn the conference over to Tracey Wise, Vice President Investor Relations and Communications. Please go ahead, Ms. Wise.

Thank you, operator, and good morning. Thank you all for joining us for Brookfield Infrastructure's fourth-quarter and year-end 2011 earnings conference call. On the call today is Chief Executive Officer Sam Pollock, who will discuss highlights for the quarter and year, provide comments on our strategy and the outlook for our business. Also joining us is John Stinebaugh, our Chief Financial Officer, who will review our financial results.

Following their remarks we look forward to taking your questions and comments. At this time I would like to remind you that in responding to questions and in talking about our growth initiatives and our financial and operating performance we may make forward-looking statements.

These statements are subject to known and unknown risks and future results may differ materially. For further information on known risk factors I would encourage you to review our annual report on Form 20F, which is available on our website.

With that I would like to now turn the call over to Sam Pollock.

Thank you, Tracey, and good morning everyone. I will start with just some brief comments, then I will turn it over to John to review our results.

In the first half of 2011 we were operating in a business environment that had considerable positive momentum. However, midyear we began to face economic headwinds as political indecision in the United States and Europe, as well as monetary tightening in China, began to dampen global consumer confidence.

While Brookfield Infrastructure was impacted by these negative developments, this was nonetheless an exceptional year for the Company. We grew our funds from operation per unit by 35% to $2.41, and we increased our distributions per unit by 20% over 2010 levels. As a result, Brookfield Infrastructure units appreciated by 35% on the Toronto Stock Exchange, providing a total return to our unitholders of 42%.

Our strong performance also reflected significant investor interest in companies such as ours with secure cash flows and growth generated from self-sustaining business models.

As we enter 2012 we are positioned to deliver further growth for our unitholders. With the equity offering that we closed in October of 2011 we have fully funded our capital backlog on which we expect to earn returns well in excess of our 12% to 15% objective.

We also have significant capacity to fund new organic growth projects and take advantage of attractive acquisition opportunities. In consideration of our outlook for the upcoming year the Board of Directors has approved a 7% increase in our quarterly distribution at $0.375 per unit. This increase is consistent with our annual distribution growth target of 3% to 7%.

With that let me now turn it over to John to review our results.

Thanks, Sam. In 2011 we earned FFO of $392 million compared with $197 million in 2010. This doubling of our FFO was primarily driven by our merger with Prime Infrastructure. Our performance in 2011 also highlights the benefits of our diversification, which has enabled Brookfield Infrastructure to generate very consistent cash flow despite the impact of these challenging economic conditions may have had on any of our businesses.

During the year our utilities business generated FFO of $275 million compared with $144 million in 2010. On a run rate basis our Australian coal terminal's cash flow increased by approximately 15% over the prior year due to its regulatory rate reset in January 2011, as well as favorable foreign exchange movements.

Our Chilean transmission business posted a steady increase in FFO driven by revenue indexation and contributions from growth investments.

The significant growth in our UK regulated distribution business was largely attributable to a sharp increase in developer contributions due to a greater number of electricity connections in our product mix.

For the year our utilities business earned an AFFO yield of 16%, which we believe is very attractive in light of the low risk profile of this segment.

In our transport and energy business our FFO was $167 million in 2011 compared to $91 million in 2010. This segment faced challenging operating conditions during the year. Our North American gas transmission business was adversely affected by the implementation of a FERC rate settlement, as well as weak market conditions caused by low natural gas prices, and the commissioning of 9 billion cubic feet per day of new pipeline infrastructure.

Our railroad's performance was depressed by a severe drought in Western Australia, which reduced our revenues from grain by 40% compared with 2010. This business begins 2012 with a strong tailwind as a result of the record grain harvest in Western Australia that has 40% above normal levels.

Our port business performance was consistent with last year as an increasing cash flow in the UK offset a decline in cash flow in Continental Europe. In 2012 our UK port is beginning to generate incremental revenue from the Corus steel mill, whose new owners have completed over 90% of the upgrades required to reopen this facility.

We expect that our UK ports revenues will step up during the first half of 2012 as this facility comes online. Overall, the AFFO yield for our transport and energy segment was 7% for the year, clearly below our expectations. We expect AFFO for this segment to improve substantially over the next several years once the expansion program at our railroad is fully commission and operating conditions improve at our port and gas transmission businesses.

In 2011, our timber business significantly increased its profitability with FFO of $33 million versus $11 million in the prior year. This improvement in performance was driven by substantial demand for timber in China and other Asian countries, particularly in the first half of the year.

With government efforts to cool down the housing sector, demand from China moderated in the second half of the year, but demand from Japan and Korea remained strong. Average realized prices in 2011 increased 14% over 2010 levels.

In light of these favorable market conditions, we increased our harvest by 28% over the prior-year level to 99% of our long-run sustainable yield. A significant portion of this increase was shipped to Asia, and exports comprised 47% of total log sales for the year.

The AFFO yield for our timber business was 6% in 2011. We expect that demand from Asia will remain strong. As the US housing market begins to recover we plan to increase our harvest to 120% of long-run sustainable yield to begin monetizing our surplus inventory.

On the financing front, during the past year we executed a number of transactions that further solidified our balance sheet. In October we issued $650 million of equity net of expenses. We used the proceeds to make the investment in our Chilean toll road and to pay down our credit facility which we had drawn to fund investments in our railroad.

This 28 million unit equity offering was executed on a cross-border basis, demonstrating the broad access that we have to the equity capital markets in both the United States and Canada. Additionally, we closed an AUD350 million credit facility to fund the expansion program at our railroad.

With the combination of these financings, we have fully funded our capital backlog. Furthermore, we ended the year with $1.5 billion of group line liquidity, including $700 million of capacity under our corporate credit facility, which is available to pursue new investments.

In 2012 we will seek to proactively refinance our debt portfolio and extend maturities. We're planning on retiring debt at our natural gas transmission business and a subsidiary holding company debt assumed with the Prime merger, which in total aggregates approximately $300 million. We intend to fund these retirements with a long-term debenture issued by Brookfield Infrastructure.

I will now turn the call over to Sam to discuss our growth initiatives and provide the outlook for our business.

Thank you, John. Let me begin with our growth initiative. In 2011 we advanced a number of organic growth initiatives, investing a total of $540 million in our business.

During the year we commissioned $360 million of projects that have begun producing cash flow. And we increased our construction work in progress to $290 million. We expect that the construction work in progress will be commissioned by late 2012, or at least the majority of that, when many of these projects will begin generating revenue.

We were also successful in making selective acquisitions that complemented our existing networks and we established new operating platforms for future growth.

In our utility segment we began construction on our Texas transmission system, a project launched two years ago that we expect to complete in early 2013. We also augmented our utilities business with the acquisition of a stake in a US transmission company and subsequent to year-end a stake in a South American electricity distribution business. For these two acquisitions we invested a total of $63 million and increased our ratebase by $124 million.

In our transport and energy business we continued to advance our railroad expansion program in Australia. By 2014 the expansions are projected to increase the tonnage that we transport by 50% and produce incremental EBITDA of $150 million per year.

To date we invested approximately $265 million in capital expenditures associated with these projects. The majority of this investment is associated with the upgrade of approximately 185 kilometers of rail lines into the Port of Geraldton. As at the end of January 2012 we have installed approximately 40% of this required track, and we expect to complete the project on time and on budget by the end of 2012.

In December we established a toll road platform with an investment of approximately $160 million to acquire a ring road that circled Santiago, Chile. Over the next few years we hope to expand this platform with as further investments in high-quality toll roads in South America and Europe.

Now looking forward, in 2012 and beyond we are expecting a choppy recovery in the world economy. We are optimistic that the outlook for Australia and South America, two of our more important markets, will remain strong. We believe that demand for infrastructure will continue to be robust in these regions, driven by the substantial buildout of resource projects and the requirement to meet growing consumer demand for goods and services.

However, these markets are sensitive to developments in China and India, both of which are experiencing economic challenges not previously experienced during the recent development. While we're are not anticipating any major disruptions, we will monitor the situation closely.

We believe there will be modest growth in North America as the effects of the deleveraging that began four years finishes filtering through the economy. However, the European sovereign debt crisis is not resolved and the impact of recent fiscal austerity have yet to play out.

Furthermore, the global banking sector is under stress due to uncertainty created by regulatory policies that are designed to safeguard the financial systems. Given this backdrop, we believe there will be considerable volatility in these developed markets as economies are fragile, consumer confidence is low and there is limited flexibility to cope with exogenous events.

The long-term objective of Brookfield Infrastructure is to grow its FFO per unit by 3% to 7% per annum, utilizing a conservative approach to managing risk and allocating capital. As we are not currently anticipating margin expansion at our European ports or US natural gas transmission business due to challenging operating conditions, our existing backlog of organic projects will be the driver of our growth in the near term.

In order to position us for further growth in this uncertain economic environment we are now focused on replenishing our pipeline of organic growth projects.

In 2012 one of our most significant organic growth opportunities is the expansion of our Australian coal terminal. We have been granted an allocation of land that at Dudgeon Point that provides us with the ability to double the size of our coal terminal business, which is already among the largest in the world.

We are spending considerable time assessing the feasibility of this project, negotiating long-term contracts with clients and obtaining permits for development of the terminal. The earliest that we would be in a position to commit to construction of a new facility would be in 2013.

Additionally, we are working hard to firm up the next tranche of growth at our Australian railroad, which we expect will be linked to iron ore and coal mining projects in areas such as the Yilgarn, the Mid-West and Collie regions.

All these projects connect to our network and will likely require significant investment in both our rail network and the ports that are linked to our system. Ultimately this growth will depend on global demand for commodities, commercial viability of the associated mining projects and the availability of port capacity.

In conclusion, while our outlook for the global economy is cautious, we remain enthusiastic about Brookfield Infrastructure's prospects for success. Following the commissioning of the projects in our capital backlog over 80% of our cash flow will be regulated or generated under long-term contracts. Furthermore, as many of our assets capture inflation through indexation mechanisms, we should enjoy a compounding effect on our cash flows.

As always, we will look to balance increasing distributions to unitholders with prudently reinvesting our cash flow in attractive growth opportunities.

Operator, that is the end of my comments. I would now like to turn the call back over to you to open the call for questions.

(Operator Instructions). Brendan Maiorana, Wells Fargo.

A question -- hey guys. So, Sam, just maybe to start off with that shadow pipeline that you talked about, I think the Dudgeon Point is around a $3.5 billion potential. I think the rail projects -- the additional rail projects is probably another $500 million. Can you frame up maybe like what your expectations would be for timing on those projects and how returns would compare? Maybe if you could contrast Dudgeon Point to where you guys stand at DBCT, and then the additional rail projects to the current $600 million of rail projects that you have.

Sure. Let me begin with Dudgeon Point. And just to summarize what the opportunity is, as you recall, we were allocated 50% of a 380 hectare piece of land adjacent to our port in Australia. So our share is about 190, and we have the opportunity to build a terminal somewhere in the 60 million to 70 million tons per annum range. Our share of this will be about 70%. It is probably a $5 billion or $6 billion terminal, so the numbers you mentioned are about directionally right, about $3.5 billion.

At the moment where we stand is that we have negotiated with customers where they are funding our feasibility studies to a tune of $40 million for the next 6 to 12 months. And so we are preparing our feasibility work to assess the viability of the project.

We are also at the early stages of negotiating contracts with initially a foundation customer. And then once we have achieved that then we will roll it out to a number of multiuser tenants.

At this stage we haven't made a final decision on exactly how the project will come together. I think our leaning at this moment is probably to have two different facilities. One being a dedicated facility to a customer or a group of customers, and then a multiuser facility and the two of them would share infrastructure. We think that is probably the most attractive given our initial discussions with people.

The types or framework that we would negotiate would be relatively similar to what is in place with DBCT in the sense that it will be a revenue building block approach. The negotiations -- this would not be a regulated asset like DBCT, so we do have the ability to earn higher returns than they would if it was a regulated business.

What we're looking to negotiate, and obviously this is still subject to negotiation, is probably a US dollar generated revenue stream, one that is inflation indexed. And our objective is to earn a minimum 15% plus on our capital. This would be the same sort of take-or-pay contract with full pass-through of capital, both maintenance and growth capital, to the customers and recovery of operating costs.

But we think on a total risk-adjusted basis we think there is a great opportunity there.

On timing on that one, so if your customer feasibility studies are done in 6 to 12 months and then -- and you negotiate contracts maybe sometime during that timeframe or thereafter then you start putting dollars to work, when does it actually start to -- when would that project come online? I recognize it is probably a little bit of a wide timeframe, but if you could give us some goalposts.

I think if everything goes smoothly, which we expect that there's a good chance that it could, that we could be in a position to begin construction in 2013. And that based on that start date the facility could come on stream in phases probably commencing in 2017.

And then the rail?

On the rail, to be honest, it is probably premature to speculate on the various initiatives. We have got multiple discussions with various iron ore and coal producers in the area. At this stage I don't have great visibility into which ones would come first. But the types of contracts would be similar to the ones that we recently signed with the six expansions and new projects that are coming on stream in the next couple of years. So take-or-pay inflation linked.

I think the real issue for us with a number of the new opportunities is that the customers are mostly, not all, but mostly juniors, and as a result we would have to get comfortable with the credit quality of the customer. But those are things we are working on.

We would protect ourselves for any capital we deploy with some sort of either letter of credit or other mechanism. So we would use the same playbook that we did in the most recent expansion.

Is it fair to assume that the return -- EBITDA over cost return that you're getting on this current set of projects, which is around 25% to 30%, that that number given all the costs that you would do for the buildout would probably be a little bit lower in terms of return percentage for the additional projects?

It all depends on exactly where the projects come on stream. Because in situations where we have recently expended capital to upgrade the network, which we have some capital in our budget over the last couple of years that we have invested, then the return on the expansion projects tend to be a bit higher. If it is in new areas where we haven't done some of that pre-work, then there could be more capital and then our returns are slightly lower.

So I am comfortable to target returns in the plus or minus 20%. I think that is an area that I think is very achievable. And if we do better than that that would be a plus.

Then just last one if I could for John and I will jump back in line. The toll road, the Chilean toll road, was that in the other line item in transport and energy? And if so, is there something seasonally that would cause the EBITDA to be relatively low in the quarter, and how should we think about the ramp for 2012?

In terms of the closing of that, it didn't close until mid-December, so there is no real material impact from the toll road in our 2011 financials.

Okay, got it. All right, thank you.

Andrew Kuske, Credit Suisse.

If you could just give us a little bit more color around the Colombian utility acquisition and really just the structure of that and how that was done. I asked the question in part because BAM does have a Colombian fund, and I am just wondering on how that deal was structured.

First let me just give a little bit of background on the deal and why we are excited about it. This is a distribution utility -- an electricity distribution utility in the Boyaca region, which is 150 kilometers away from Bogota. And it is a region that has got good growth with some of the industrial industries that are deploying capital on the cement and on the commodity side.

The regulatory framework in Colombia is very similar to Chile, where you earn a return on replacement cost. So effectively you earn an inflation-protected return. And because it is on replacement cost you don't have to invest additional capital in order to maintain your rate base.

The other thing that we like about it is this is a utility that is grandfathered to participate in all aspects of the electricity industry -- generation, transmission and distribution. So we really think this is going to be a platform for us to build our our business in Colombia.

There are some privatizations of other distribution companies that are smaller that are going to come to market over the next year or two, so we think we are well-positioned to take advantage of those opportunities, as well as other opportunities within the utility sector. So we have got a good management team and we are looking to grow there.

In terms of structure, what we ended up doing a couple of years ago when we were looking to invest in Colombia is it is a country we like quite a lot. It has got a stable political framework as well as fiscal framework. But we hadn't deployed capital there before, so we did arrange to invest alongside local institutions.

So with this transaction our investing alongside local pension funds, as well as some of the other international partners that Brookfield has, and BIP's share of the equity in this investment is approximately 18%.

Is that a direct investment from BIP into the actual assets or is it into the Colombia infrastructure fund?

It is structured so that we have got a direct interest in the asset, but it is alongside the institutions that I mentioned, and ultimately Brookfield is in control of 100% of the equity that has been deployed.

Then just how broadly do you cast the net for infrastructure within Colombia, or even more broadly, I guess on a global basis would you look at things like cell phone towers and telecom infrastructure, not the telecom operations but the actual infrastructure side of that business?

Telecom is an area that some people that are infrastructure investors have looked at. It is not one that we spend a lot of time on. So I wouldn't say that is going to be one of the priority sectors that we have on our radar screen. But we are looking at utility investments that could be on the electricity side, the natural gas side.

There is infrastructure in Colombia in particular that is needed to help get oil -- that there's a lot of investment by E&P companies developing, but you need infrastructure to get it to market, as well as on the coal side. And Colombia, like Peru and Chile, there is a lot of capital to deploy in roads as well. So we would envision that across those sectors there would potentially be opportunity for us to invest.

So you would look at this as being pretty similar to what was done years ago with the Transelec investment into Chile and how that has translated into further investments and further asset classes?

Absolutely. It is our first investment within the country, and we will look to build a broad business within -- infrastructure within Colombia alongside the partners that I mentioned.

I appreciate that. Now if I may just ask another question related to NGPL. Longer-term how do you think about NGPL? Because you have a noncontrolling position of that company -- really of that asset. And it is sizable and it has had some difficulties because of FERC rulings and just the environment for natural gas in North America.

How do you think about that asset over a longer period of time? Is that something that you would seek to dispose of, take a greater stake of?

NGPL is a great franchise. It has had a declining cash flow because of the FERC Section 5, as well as market conditions, but it has got a great franchise area in the Chicago market. It has got over 60% market share. So it is one that over the long term think that it will definitely improve its cash flow and maintain the strength of franchise it has got because it is a market area gas pipeline.

As we have mentioned before, we like to have greater control in businesses, so we would look to figure out a way to convert this into a core asset, or alternatively if we can't convert it into a core asset, we may consider divesting and redeploying capital.

We are not looking to do anything right now, because we don't think we could get fair value in light of the cash flow in the business, but over the longer term we would like to -- we would ultimately like to convert this into a core asset or potentially look to do other strategic things.

Then, just finally, on NGPL, how do you think about the run rate EBITDA or FFO from that asset really in the near term, in the next year or two?

I think if you want to try to estimate a run rate, probably looking at cash flow closer to third quarter would be more indicative. The fourth quarter we did sell some Cushing gas, which is a non-recurring revenue stream. So I think the third quarter would be more indicative of the EBITDA this business could produce.

That is very helpful. Thank you.

Robert Kwan, RBC Capital Markets.

Just first off, a quick question turning back to DBCT, just in terms of some the milestones ahead of the potential 2013 decision, you had mentioned negotiating contracts. Is there any expectation of when we might hear on some timing on that?

At this stage -- it is Sam here -- I don't think I could give you a specific timeframe. I think -- I would hope that maybe by the end of the second quarter that we could give a further update. I think it is probably a little ambitious to think we will have something for you next quarter, but I think it will come together quickly.

I think one of the dynamics at play is that there are significant expansions of coal mines underway in the region and these coal miners are very eager to lock up their logistics chain as quickly as possible. So everyone is motivated to move quickly, but as you know, these things take some time.

Sure. Do you still think there is room for both your port and the Adani port?

Yes. I think as you might recall a couple quarters ago we mentioned that we have requests from about -- customers that represent 130 million tons per annum for our particular facility -- probably 2 times what we currently intend on building.

Adani's pipeline of customers is much smaller. And part of that is owing to the fact that they really intend for a lot of that capacity to be for internal purposes. They have got a large coal mine in the Galilee Basin, which either they will put through their Abbot Point Terminal or they will send to Dudgeon Point. But I think their strategy is probably less focused on a multiuser template that ours is.

Just turning to Europe and your strategy there, and previously you had talked about some of the opportunities being -- buying some assets from European construction/concession firms, and we saw the Chilean toll roads come out of that.

You are talking now about some toll roads on the Continent, and you have actually been talking about that for a bit, but can you -- just give some color as to how the opportunities on the Continent have progressed, maybe what you might be looking at -- or not specific assets but opportunities outside of toll roads? And then specifically what countries do you see the best opportunities, and if there are any countries that you would want to be staying away from right now?

There are a couple of questions here. I think -- let me start just with our pipeline in general. We are active, I would say, in all parts of the world today. From an organic perspective that -- our attention is primarily in the Australian market. And then from new investments we are seeing lots of opportunities in South America at the moment.

North America is -- has been challenging from a cost of capital perspective. We have looked at a number of situations, but there appears to be, or at least based on the access that we have looked at, we have come across a lot of competition.

In Europe it has been less so. We have been able and have had considerable discussions with parties on toll roads and other types of assets. The big challenge in a distressed market, and why things have been probably a little bit slower to develop than we would have liked, is just the bid/ask spread from buyers and sellers tend to be bit wider.

There are less people looking at it. They don't have as much comfort around their market testing. And obviously our -- the values that we ascribe to the assets reflect the market conditions and the risks that are in the market today.

And so the transactions tend to have a little more structuring involved too because of concerns around the euro. So that is a broad explanation as to why some of our efforts in Europe have been a bit slower than we would have liked. But nonetheless we do have lots of irons in the fire and we're still very optimistic that we will be able to get some transactions done.

As to countries in Europe, I think -- the UK is a market, obviously, that we like and that is one where I think we are relatively comfortable with the regulatory framework and the sustainability of its currency.

In Mainland Europe I would say we're probably not focused -- I can tell you where we are not focused. We are not focused in Greece. I think we find that market a little challenging to get our head around.

We have been looking though in Germany, in Spain and even Portugal. I would say we still have some work to do to get comfortable in the peripheral countries, and so our investment committee is still analyzing the issues around that. But I think any transaction we do in those southern countries will probably be structured and limited to very high-quality and businesses that we can get our heads around.

And just to be clear, Sam, when you talked about peripheral countries, was that outside of the Germany, Spain and Portugal or are you talking about Spain and Portugal specifically?

I was talking about Spain and Portugal.

Okay, that is great. Thank you very much.

Bert Powell, BMO Capital Markets.

Sam, in Australia on the WestNet or Brookfield Rail, you talked about the -- taking the tons per annum up 24 million. But in the past you talked about indications that that could go up further,, another 14 million or 15 million tons per annum. Is that still the case from the indications you're hearing from your clients?

Yes. So I guess the short answer is yes. We have a couple of customers, in particular two that are expanding their -- or at least are building their operations right now. And we know that they have ambitions to operate at much higher rates than the base rates that we are currently assuming to be transported and the minimum volumes that we have identified to people.

Probably the one that is most notable and the one that you can follow would be the Karara project by Gindalbie. They're a major customer for us. They're a foundation tenant for our Mid-West rail expansion. And in their material they regularly talk about taking their mining capacity from 10 million tons a year to 18 million and then up to 30 million at one point.

There is lots of port capacity that will have to be built in order to satisfy that, so I don't want you to put those in your numbers right now, because that is down the road, and lots of things have to happen. But that is a project that is backed by Chinese. And if you speak to the proponents of that project they definitely feel that they can get there at some point.

This is the port expansion an opportunity for you?

There are a number of port opportunities in that part of the world. The big one, which we haven't concluded whether or not it makes sense for us to participate it is Oakajee project. It is the one that is just north of Geraldton, and probably the linchpin project to provide the outlet for a lot of the expansions in the Mid-West that we see coming on.

But there also requirements to upgrade the port that is in the southern part of Western Australia -- [Quanah], Esperance probably just name two of them. And those are -- we are, in fact, currently evaluating ways to work with the port authorities and some of the mining companies on partnering to expand that capacity. So those are part of our organic initiatives, our shadow pipeline we call it, that we are trying to move forward.

Just to give it some time frame, what would be a reasonable expectation for those kinds of opportunities? Are you talking 2013, 2014 or are these kind of 2017 beyond?

Good question. I probably want to err on the cautious side. I think these are projects that are probably 2014 to 2017. I think some of them will start seeing the light of day in around 2014.

It is a little unclear as to how long it would take to bring them to market. Some of them are smaller in scale and so -- and very close to surface in relation to some of the iron ore project, and so we may -- those may come quicker than some others that are much more comprehensive projects that could take several years to build.

And in the case of some of the coal opportunities, they already exist. I think a lot of the coal in fact gets shipped internally. But a number of the Indian companies that have acquired those coal companies are looking to export it. And so those definitely could move quicker depending on the speed at which the Indian companies can progress them.

Okay, thanks. And a just last question on the extensions that did come in this quarter, MRL and Extension Hill, I'm assuming those didn't start on day one of the quarter. Can you just give us a sense of either in time or dollar magnitude what those contributed to FFO in the quarter?

Sure, let me start there, and then maybe John will -- can add to it. We had two customers that started in the quarter. They actually didn't start until probably late November. So we will have in the first quarter the first full contribution from them.

They also have a bit of a ramp up. I would expect that these two customers probably on a quarterly basis would contribute plus or minus $12 million of EBITDA. I'm not sure we will get there exactly in the first quarter, but that is probably a good quarterly run rate for them.

Our other projects are progressing well. I think the main -- we have got two more that will be coming on -- in fact, I guess it is probably three more that will be coming on at the balance of this year. We have one customer that will be coming on probably the latter part of the first quarter, so that will be three. We have two more that are coming in the back-end of 2012.

So who comes on in Q2? Is that KLM or Worsley?

So right now -- Extension Hill came on as did MRL. We will have Cliffs come on next. And then we will have Worsley and KLM come on in the latter half of the year.

But who comes -- who in addition to the two this quarter come in in Q2 -- sorry, thought I heard you say that.

That is Cliffs.

It was Cliffs, okay, thanks, perfect.

So we will have three. That one probably won't have much of an impact in the first quarter because they will come on late in the first quarter, I believe.

Okay, perfect.

So the timing -- as with any of these things the timing does ramp up. These projects don't hit the ground running. Most of them have minimum volume guarantees that build up over six months. And so I would be -- you should be cautious in putting your models any additional revenues in the first six months here -- you know, phase it in.

I think by the end of the year though we should have much of the $150 million of incremental EBITDA will be pretty much in place. So going into 2013 we feel pretty good about.

Perfect, thank you.

This concludes the time allocated for questions on today's call. I will now turn to call back over to Mr. Pollock for concluding comments.

Thank you, operator. I just want to thank everyone on the call for participating. And we look forward to speaking with you again next quarter.

Ladies and gentlemen, this concludes today's conference call. You may disconnect your lines. Thank you for your participating and have a pleasant day.