CAPITAL MANAGEMENT

Our partnership’s approach to capital management is focused on maximizing returns to unitholders and ensuring capital is deployed in a manner consistent with achieving our investment return objectives.

Invested Capital, which tracks the amount of capital that has been contributed to our partnership, is a measure we utilize to assess returns on capital deployed, relative to targeted returns. Investment decisions are based on, amongst other measures and factors, targeted returns on Invested Capital of 12% to 15% annually over the long-term. We measure return on Invested Capital as Adjusted Funds from Operations (“AFFO”), less estimated returns of capital on operations that are not perpetual in nature, divided by the weighted average Invested Capital for the period.

We define AFFO as FFO less capital expenditures required to maintain the current performance of our operations (maintenance capital expenditures). We define Invested Capital as partnership capital removing the impact of the following items: non-controlling interest - in operating subsidiaries, retained earnings or deficit, accumulated other comprehensive income and ownership changes.



US$ MILLIONS	2019			2018
Partnership Capital	$	22,177		$	14,668
Remove impact of the following items since inception:
Non-controlling interest - in operating subsidiaries	(14,113		)	(7,303		)
Deficit	2,048			1,228
Accumulated other comprehensive income	(705		)	(328		)
Ownership changes	(398		)	(109		)
Invested Capital	$	9,009		$	8,156

The following table presents the change in Invested Capital during year ended December 31, 2019:



US$ MILLIONS	2019		2018
Opening balance	$	8,156	$	7,599
Issuance of preferred units, net of repurchases	72		341
Issuances of limited partnership units and redeemable partnership units, net of repurchases	781		(16		)
Issuance of Exchange LP Units	—		232
Ending balance	$	9,009	$	8,156
Weighted Average Invested Capital	$	8,563	$	7,858