ASX Release 12 March 2007 Letter of Intent Received from ATO - BBI to Challenge After market close on Friday 9 March, Babcock & Brown Infrastructure (ASX: BBI) received from the Australian Taxation Office (ATO) a Letter of Intent in relation to ongoing discussions between the ATO and BBI regarding the deductibility of certain payments made to the Queensland Government associated with BBI’s long term lease of the Dalrymple Bay Coal Terminal (DBCT). The ATO states in its Letter of Intent that it believes that the payments are not deductible and that the ATO intends to issue amendments to BBI’s taxable position. BBI strongly disagrees with the ATO’s position and considers the ATO’s position to be incorrect at law. BBI will object to any notice of amended assessment that may be issued by the ATO in accordance with its Letter of Intent. If such objection were to be rejected, BBI intends to vigorously defend its position. The amount of tax in dispute is approximately $68m together with exposure to interest and penalty charges The review by the ATO in relation to this matter was noted in BBI’s recent Half Year Result and Placement presentation. Despite BBI remaining confident of the positions it has taken, it is considered appropriate to update the market on the recent developments in relation to this matter. BBI does not believe that any amended assessment received will have a material adverse effect on its financial position, although an amended assessment may be significant to reported financial results for the period in which it issues, if the ATO’s position is ultimately upheld by the courts. BBI does not expect that any amended assessment will impact its distribution guidance of not less than 14 cents for the 2007 financial year, nor its distribution guidance for the 2008 and 2009 financial years. ENDS Further Enquiries Steven Boulton Helen Liossis Chief Executive Officer Investor Relations Manager
BBI Price at posting:
6.9¢ Sentiment: Hold Disclosure: Held