babcock & brown infrastructure's (bbi) dalrymp, page-9

Non-cash expenses make the bottom line a loss. Depreciation has been discussed on a previous thread ("depreciation counts").
BBI will be cash flow positive again this FY. Remember also that each year, the depreciation of approx $330M also reduces the book value of the assets. BBI conservatively value assets in the books as "purchase price minus depreciation". An asset sale in 2009/10 will see a bigger net profit than what would have been booked in 2008/09.
So if we have conservative book values for assets that are DECREASING each year in the books due to accumulated depreciation, the implied NAV has to INCREASE.

The risk for BBI shareholders is that ACTUAL sale prices are not equal to or greater than BOOK VALUE. I believe that risk is well and truly allowed for at a share price of 7.5c. I see no evidence of asset impairment. Quite the contrary, Powerco sold at 25% above book value. I would argue the risk should reflect no more than a 50% discount in light of the world financial crisis. That implies a NAV of 62c so BBI trades at a mind boggling 88% discount to my worst case scenario valuation.