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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
 6 Months Ended
Jun. 30, 2019
Fair Value Measurement [Abstract]  
Disclosure of financial assets
The following table provides the allocation of financial instruments and their associated classifications as at June 30, 2019:
US$ MILLIONS
Financial Instrument Classification
MEASUREMENT BASIS
Fair value through profit or loss
 
Fair value through OCI
 
Amortized Cost
 
Total
Financial assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
—

 
$
715

 
$
715

Accounts receivable and other
—

 
—

 
1,357

 
1,357

Financial assets (current and non-current)(1)
1,019

 
20

 
178

 
1,217

Marketable securities
92

 
92

 
—

 
184

Total
$
1,111

 
$
112

 
$
2,250

 
$
3,473

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings
$
—

 
$
—

 
$
1,546

 
$
1,546

Non-recourse borrowings (current and non-current)
—

 
—

 
14,200

 
14,200

Accounts payable and other
—

 
—

 
2,775

 
2,775

Preferred shares(2)
—

 
—

 
20

 
20

Financial liabilities (current and non-current)(1)
350

 
—

 
995

 
1,345

Total
$
350

 
$
—

 
$
19,536

 
$
19,886

1.
Derivative instruments which are elected for hedge accounting totaling $694 million are included in financial assets and $133 million of derivative instruments are included in financial liabilities.
2.
$20 million of preferred shares issued to wholly-owned subsidiaries of Brookfield.
The following table provides the allocation of financial instruments and their associated classifications as at December 31, 2018:
US$ MILLIONS
Financial Instrument Classification
MEASUREMENT BASIS
Fair value through profit or loss
 
Fair value through OCI
 
Amortized Cost
 
Total
Financial assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
—

 
$
540

 
$
540

Accounts receivable and other
—

 
—

 
1,171

 
1,171

Financial assets (current and non-current)(1)
989

 
17

 
166

 
1,172

Marketable securities
126

 
47

 
—

 
173

Total
$
1,115

 
$
64

 
$
1,877

 
$
3,056

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings
$
—

 
$
—

 
$
1,993

 
$
1,993

Non-recourse borrowings (current and non-current)
—

 
—

 
13,113

 
13,113

Accounts payable and other
—

 
—

 
1,308

 
1,308

Preferred shares(2)
—

 
—

 
20

 
20

Financial liabilities (current and non-current)(1)
373

 
—

 
907

 
1,280

Total
$
373

 
$
—

 
$
17,341

 
$
17,714

1.
Derivative instruments which are elected for hedge accounting totaling $718 million are included in financial assets and $109 million of derivative instruments are included in financial liabilities.
2.
$20 million of preferred shares issued to wholly-owned subsidiaries of Brookfield.
Disclosure of financial liabilities
The following table provides the allocation of financial instruments and their associated classifications as at June 30, 2019:
US$ MILLIONS
Financial Instrument Classification
MEASUREMENT BASIS
Fair value through profit or loss
 
Fair value through OCI
 
Amortized Cost
 
Total
Financial assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
—

 
$
715

 
$
715

Accounts receivable and other
—

 
—

 
1,357

 
1,357

Financial assets (current and non-current)(1)
1,019

 
20

 
178

 
1,217

Marketable securities
92

 
92

 
—

 
184

Total
$
1,111

 
$
112

 
$
2,250

 
$
3,473

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings
$
—

 
$
—

 
$
1,546

 
$
1,546

Non-recourse borrowings (current and non-current)
—

 
—

 
14,200

 
14,200

Accounts payable and other
—

 
—

 
2,775

 
2,775

Preferred shares(2)
—

 
—

 
20

 
20

Financial liabilities (current and non-current)(1)
350

 
—

 
995

 
1,345

Total
$
350

 
$
—

 
$
19,536

 
$
19,886

1.
Derivative instruments which are elected for hedge accounting totaling $694 million are included in financial assets and $133 million of derivative instruments are included in financial liabilities.
2.
$20 million of preferred shares issued to wholly-owned subsidiaries of Brookfield.
The following table provides the allocation of financial instruments and their associated classifications as at December 31, 2018:
US$ MILLIONS
Financial Instrument Classification
MEASUREMENT BASIS
Fair value through profit or loss
 
Fair value through OCI
 
Amortized Cost
 
Total
Financial assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
—

 
$
540

 
$
540

Accounts receivable and other
—

 
—

 
1,171

 
1,171

Financial assets (current and non-current)(1)
989

 
17

 
166

 
1,172

Marketable securities
126

 
47

 
—

 
173

Total
$
1,115

 
$
64

 
$
1,877

 
$
3,056

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings
$
—

 
$
—

 
$
1,993

 
$
1,993

Non-recourse borrowings (current and non-current)
—

 
—

 
13,113

 
13,113

Accounts payable and other
—

 
—

 
1,308

 
1,308

Preferred shares(2)
—

 
—

 
20

 
20

Financial liabilities (current and non-current)(1)
373

 
—

 
907

 
1,280

Total
$
373

 
$
—

 
$
17,341

 
$
17,714

1.
Derivative instruments which are elected for hedge accounting totaling $718 million are included in financial assets and $109 million of derivative instruments are included in financial liabilities.
2.
$20 million of preferred shares issued to wholly-owned subsidiaries of Brookfield.
Carrying and fair values of financial assets
The fair value of our partnership’s financial assets and financial liabilities are measured at fair value on a recurring basis. The following table summarizes the valuation techniques and significant inputs for Brookfield Infrastructure’s financial assets and financial liabilities:
US$ MILLIONS
Fair value
hierarchy
 
June 30, 2019
 
December 31, 2018
Marketable securities
Level 1(1)
 
$
184

 
$
173

Foreign currency forward contracts
Level 2(2)
 
 
 
 
Financial asset
 
 
$
158

 
$
241

Financial liability
 
 
80

 
23

Interest rate swaps & other
Level 2(2)
 
 
 
 
Financial asset
 
 
$
774

 
$
718

Financial liability
 
 
190

 
257

Other contracts
Level 3(3)
 
 
 
 
Financial asset
 
 
$
107

 
$
47

Financial liability
 
 
80

 
93

1.
Valuation technique: Quoted bid prices in an active market.
2.
Valuation technique: Discounted cash flow. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects our credit risk and the credit risk of various counterparties.
3.
Valuation technique: Discounted cash flow. Future cash flows primarily driven by assumptions concerning the amount and timing of estimated future cash flows and discount rates.
The following table provides the carrying values and fair values of financial instruments as at June 30, 2019 and December 31, 2018:
 
June 30, 2019
 
December 31, 2018
US$ MILLIONS
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Financial assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
715

 
$
715

 
$
540

 
$
540

Accounts receivable and other
1,357

 
1,357

 
1,171

 
1,171

Financial assets (current and non-current)
1,217

 
1,217

 
1,172

 
1,172

Marketable securities
184

 
184

 
173

 
173

Total
$
3,473

 
$
3,473

 
$
3,056

 
$
3,056

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings(1)
$
1,546

 
$
1,593

 
$
1,993

 
$
1,978

Non-recourse borrowings(2)
14,200

 
14,615

 
13,113

 
13,372

Accounts payable and other (current and non-current)
2,775

 
2,775

 
1,308

 
1,308

Preferred shares(3)
20

 
20

 
20

 
20

Financial liabilities (current and non-current)
1,345

 
1,345

 
1,280

 
1,280

Total
$
19,886

 
$
20,348

 
$
17,714

 
$
17,958

1.
Corporate borrowings are classified under level 1 of the fair value hierarchy; quoted prices in an active market are available.
2.
Non-recourse borrowings are classified under level 2 of the fair value hierarchy with the exception of certain borrowings at the U.K. port operation and at our North American residential energy infrastructure operation which are classified under level 1. For level 2 fair values, future cash flows are estimated based on observable forward interest rates at the end of the reporting period.
3.
$20 million of preferred shares issued to wholly-owned subsidiaries of Brookfield.
During the three-month period ended June 30, 2019, no transfers were made between level 1 and 2 or level 2 and 3. The following table categorizes financial assets and liabilities, which are carried at fair value, based upon the level of input.
 
June 30, 2019
 
December 31, 2018
US$ MILLIONS
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Financial assets
 
 
 
 
 
 
 
 
 
 
 
Marketable securities
$
184

 
$
—

 
$
—

 
$
173

 
$
—

 
$
—

Financial assets (current and non-current)
—

 
932

 
107

 
—

 
959

 
47

Financial liabilities
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities (current and non-current)
$
—

 
$
270

 
$
80

 
$
—

 
$
280

 
$
93
Carrying and fair values of financial liabilities
The following table provides the carrying values and fair values of financial instruments as at June 30, 2019 and December 31, 2018:
 
June 30, 2019
 
December 31, 2018
US$ MILLIONS
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Financial assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
715

 
$
715

 
$
540

 
$
540

Accounts receivable and other
1,357

 
1,357

 
1,171

 
1,171

Financial assets (current and non-current)
1,217

 
1,217

 
1,172

 
1,172

Marketable securities
184

 
184

 
173

 
173

Total
$
3,473

 
$
3,473

 
$
3,056

 
$
3,056

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings(1)
$
1,546

 
$
1,593

 
$
1,993

 
$
1,978

Non-recourse borrowings(2)
14,200

 
14,615

 
13,113

 
13,372

Accounts payable and other (current and non-current)
2,775

 
2,775

 
1,308

 
1,308

Preferred shares(3)
20

 
20

 
20

 
20

Financial liabilities (current and non-current)
1,345

 
1,345

 
1,280

 
1,280

Total
$
19,886

 
$
20,348

 
$
17,714

 
$
17,958

1.
Corporate borrowings are classified under level 1 of the fair value hierarchy; quoted prices in an active market are available.
2.
Non-recourse borrowings are classified under level 2 of the fair value hierarchy with the exception of certain borrowings at the U.K. port operation and at our North American residential energy infrastructure operation which are classified under level 1. For level 2 fair values, future cash flows are estimated based on observable forward interest rates at the end of the reporting period.
3.
$20 million of preferred shares issued to wholly-owned subsidiaries of Brookfield.
The fair value of our partnership’s financial assets and financial liabilities are measured at fair value on a recurring basis. The following table summarizes the valuation techniques and significant inputs for Brookfield Infrastructure’s financial assets and financial liabilities:
US$ MILLIONS
Fair value
hierarchy
 
June 30, 2019
 
December 31, 2018
Marketable securities
Level 1(1)
 
$
184

 
$
173

Foreign currency forward contracts
Level 2(2)
 
 
 
 
Financial asset
 
 
$
158

 
$
241

Financial liability
 
 
80

 
23

Interest rate swaps & other
Level 2(2)
 
 
 
 
Financial asset
 
 
$
774

 
$
718

Financial liability
 
 
190

 
257

Other contracts
Level 3(3)
 
 
 
 
Financial asset
 
 
$
107

 
$
47

Financial liability
 
 
80

 
93

1.
Valuation technique: Quoted bid prices in an active market.
2.
Valuation technique: Discounted cash flow. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects our credit risk and the credit risk of various counterparties.
3.
Valuation technique: Discounted cash flow. Future cash flows primarily driven by assumptions concerning the amount and timing of estimated future cash flows and discount rates.
During the three-month period ended June 30, 2019, no transfers were made between level 1 and 2 or level 2 and 3. The following table categorizes financial assets and liabilities, which are carried at fair value, based upon the level of input.
 
June 30, 2019
 
December 31, 2018
US$ MILLIONS
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Financial assets
 
 
 
 
 
 
 
 
 
 
 
Marketable securities
$
184

 
$
—

 
$
—

 
$
173

 
$
—

 
$
—

Financial assets (current and non-current)
—

 
932

 
107

 
—

 
959

 
47

Financial liabilities
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities (current and non-current)
$
—

 
$
270

 
$
80

 
$
—

 
$
280

 
$
93