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Brookfield Letter to Unitholders Q1 2021 Overview We are pleased to report that Brookfield Infrastructure had a strong first quarter and that 2021 looks like it will be an excellent year . Coming off an extremely resilient year in 2020 , the business generated funds from operations ( FFO ) of $ 431 million in the first quarter , or $ 0.93 per unit , up 20 % compared to the prior year . This solid start reflects the benefit of inflationary revenue escalators , as well as new contracts and capital expansion projects completed in the last year . Taking into account our recent 5 % distribution increase , our payout ratio for the quarter was 70 % of FFO . Many of our businesses are benefiting from higher volumes associated with robust demand for various industrial and agricultural commodities . Performance for the balance of the year will be further aided by GDP and consumer- related volume growth which has not yet meaningfully contributed to results . The vaccine rollout remains in its early days in many countries . However , in the U.S. and U.K. , where solid progress has been made in vaccinations , we have witnessed immediate improvement in economic growth and consumer activity . We are optimistic that this trend will continue and Brookfield Infrastructure will benefit as more regions participate in this recovery . During the quarter , we also advanced a number of key investment and capital recycling priorities that will support future growth . Brookfield Infrastructure and its institutional partners initiated a $ 5.0 billion takeover offer to shareholders of Inter Pipeline Ltd ( IPL ) to privatize the company . If successful , we will deploy approximately $ 2 billion into high - quality , Canadian midstream assets . On the other hand , the current low interest rate environment is highly conducive to monetizing well contracted , de - risked infrastructure businesses . As previously announced , we signed definitive agreements to divest our North American district energy operations and a stake in our U.S. gas pipeline . We also recently signed an agreement to sell our portfolio of U.K. smart meters at an attractive valuation and several other divestitures are progressing . The proceeds generated by these capital recycling initiatives will be accretively redeployed into new investment opportunities . Results of Operations FFO of $ 431 million for the quarter increased by 20 % over the same period last year as a result of strong base business growth and the contribution from new investments acquired in 2020. FFO grew organically by 8 % due to inflationary tariff increases , modestly higher volumes associated with the early stages of the economic recovery , and the completion of $ 800 million of new capital projects during the last 12 months . Results for the quarter were further supplemented by favorable market dynamics produced by weather events that led to exceptional performance in our midstream segment . These positive factors were partially offset by the impact of foreign exchange in a number of our segments and a higher management fee relative to the prior year . Utilities The utilities segment generated FFO of $ 166 million , an improvement of 7 % over the prior year on a constant currency basis . All businesses within the segment are performing well , with results benefiting from inflation Q1 2021 Letter to Unitholders Brookfield Infrastructure Partners L.P. 1