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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)
 6 Months Ended
Jun. 30, 2020
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, 2020:
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
$
—

 
$
—

 
$
1,380

 
$
1,380

Accounts receivable and other
—

 
—

 
1,635

 
1,635

Financial assets (current and non-current)(1)
938

 
86

 
308

 
1,332

Marketable securities
187

 
119

 
—

 
306

Total
$
1,125

 
$
205

 
$
3,323

 
$
4,653

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings
$
—

 
$
—

 
$
3,074

 
$
3,074

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

 
—

 
17,860

 
17,860

Accounts payable and other
—

 
—

 
2,271

 
2,271

Preferred shares(2)
—

 
—

 
20

 
20

Financial liabilities (current and non-current)(1)
759

 
—

 
1,624

 
2,383

Total
$
759

 
$
—

 
$
24,849

 
$
25,608

1.
Derivative instruments which are elected for hedge accounting totaling $717 million are included in financial assets and $538 million of derivative instruments are included in financial liabilities.
2.
$20 million of preferred shares issued to wholly-owned subsidiaries of Brookfield.
The following table provides the allocation of financial instruments and their associated classifications as at December 31, 2019:
US$ 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
$
—

 
$
—

 
$
827

 
$
827

Accounts receivable and other
—

 
—

 
1,960

 
1,960

Financial assets (current and non-current)(1)
893

 
16

 
144

 
1,053

Marketable securities
69

 
73

 
—

 
142

Total
$
962

 
$
89

 
$
2,931

 
$
3,982

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings
$
—

 
$
—

 
$
2,475

 
$
2,475

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

 
—

 
18,544

 
18,544

Accounts payable and other
—

 
—

 
2,410

 
2,410

Preferred shares(2)
—

 
—

 
20

 
20

Financial liabilities (current and non-current)(1)
490

 
—

 
1,683

 
2,173

Total
$
490

 
$
—

 
$
25,132

 
$
25,622

1.
Derivative instruments which are elected for hedge accounting totaling $694 million are included in financial assets and $285 million of derivative instruments are included in financial liabilities.
2.
$20 million of preferred shares issued to wholly-owned subsidiaries of Brookfield.
Disclosure of financial liabilities
The following table provides the allocation of financial instruments and their associated classifications as at June 30, 2020:
US$ 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
$
—

 
$
—

 
$
1,380

 
$
1,380

Accounts receivable and other
—

 
—

 
1,635

 
1,635

Financial assets (current and non-current)(1)
938

 
86

 
308

 
1,332

Marketable securities
187

 
119

 
—

 
306

Total
$
1,125

 
$
205

 
$
3,323

 
$
4,653

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings
$
—

 
$
—

 
$
3,074

 
$
3,074

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

 
—

 
17,860

 
17,860

Accounts payable and other
—

 
—

 
2,271

 
2,271

Preferred shares(2)
—

 
—

 
20

 
20

Financial liabilities (current and non-current)(1)
759

 
—

 
1,624

 
2,383

Total
$
759

 
$
—

 
$
24,849

 
$
25,608

1.
Derivative instruments which are elected for hedge accounting totaling $717 million are included in financial assets and $538 million of derivative instruments are included in financial liabilities.
2.
$20 million of preferred shares issued to wholly-owned subsidiaries of Brookfield.
The following table provides the allocation of financial instruments and their associated classifications as at December 31, 2019:
US$ 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
$
—

 
$
—

 
$
827

 
$
827

Accounts receivable and other
—

 
—

 
1,960

 
1,960

Financial assets (current and non-current)(1)
893

 
16

 
144

 
1,053

Marketable securities
69

 
73

 
—

 
142

Total
$
962

 
$
89

 
$
2,931

 
$
3,982

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings
$
—

 
$
—

 
$
2,475

 
$
2,475

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

 
—

 
18,544

 
18,544

Accounts payable and other
—

 
—

 
2,410

 
2,410

Preferred shares(2)
—

 
—

 
20

 
20

Financial liabilities (current and non-current)(1)
490

 
—

 
1,683

 
2,173

Total
$
490

 
$
—

 
$
25,132

 
$
25,622

1.
Derivative instruments which are elected for hedge accounting totaling $694 million are included in financial assets and $285 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, 2020
 
December 31, 2019
Marketable securities
Level 1(1)
 
$
306

 
$
142

Foreign currency forward contracts
Level 2(2)
 
 
 
 
Financial asset
 
 
$
157

 
$
140

Financial liability
 
 
52

 
97

Interest rate swaps & other
Level 2(2)
 
 
 
 
Financial asset
 
 
$
862

 
$
765

Financial liability
 
 
617

 
311

Other contracts
Level 3(3)
 
 
 
 
Financial asset
 
 
$
5

 
$
4

Financial liability
 
 
90

 
82

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 and interest rates (from observable forward exchange and interest 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, 2020, 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, 2020
 
December 31, 2019
US$ MILLIONS
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Financial assets
 
 
 
 
 
 
 
 
 
 
 
Marketable securities
$
306

 
$
—

 
$
—

 
$
142

 
$
—

 
$
—

Financial assets (current and non-current)
—

 
1,019

 
5

 
—

 
905

 
4

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

 
$
669

 
$
90

 
$
—

 
$
408

 
$
82


The following table provides the carrying values and fair values of financial instruments as at June 30, 2020 and December 31, 2019:
 
June 30, 2020
 
December 31, 2019
US$ MILLIONS
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Financial assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,380

 
$
1,380

 
$
827

 
$
827

Accounts receivable and other
1,635

 
1,635

 
1,960

 
1,960

Financial assets (current and non-current)
1,332

 
1,332

 
1,053

 
1,053

Marketable securities
306

 
306

 
142

 
142

Total
$
4,653

 
$
4,653

 
$
3,982

 
$
3,982

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings(1)
$
3,074

 
$
3,169

 
$
2,475

 
$
2,507

Non-recourse borrowings(2)
17,860

 
17,929

 
18,544

 
18,891

Accounts payable and other (current and non-current)
2,271

 
2,271

 
2,410

 
2,410

Preferred shares(3)
20

 
20

 
20

 
20

Financial liabilities (current and non-current)
2,383

 
2,383

 
2,173

 
2,173

Total
$
25,608

 
$
25,772

 
$
25,622

 
$
26,001

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, 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.
Carrying and fair values of financial liabilities
During the three-month period ended June 30, 2020, 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, 2020
 
December 31, 2019
US$ MILLIONS
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Financial assets
 
 
 
 
 
 
 
 
 
 
 
Marketable securities
$
306

 
$
—

 
$
—

 
$
142

 
$
—

 
$
—

Financial assets (current and non-current)
—

 
1,019

 
5

 
—

 
905

 
4

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

 
$
669

 
$
90

 
$
—

 
$
408

 
$
82


The following table provides the carrying values and fair values of financial instruments as at June 30, 2020 and December 31, 2019:
 
June 30, 2020
 
December 31, 2019
US$ MILLIONS
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Financial assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,380

 
$
1,380

 
$
827

 
$
827

Accounts receivable and other
1,635

 
1,635

 
1,960

 
1,960

Financial assets (current and non-current)
1,332

 
1,332

 
1,053

 
1,053

Marketable securities
306

 
306

 
142

 
142

Total
$
4,653

 
$
4,653

 
$
3,982

 
$
3,982

 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
Corporate borrowings(1)
$
3,074

 
$
3,169

 
$
2,475

 
$
2,507

Non-recourse borrowings(2)
17,860

 
17,929

 
18,544

 
18,891

Accounts payable and other (current and non-current)
2,271

 
2,271

 
2,410

 
2,410

Preferred shares(3)
20

 
20

 
20

 
20

Financial liabilities (current and non-current)
2,383

 
2,383

 
2,173

 
2,173

Total
$
25,608

 
$
25,772

 
$
25,622

 
$
26,001

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, 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, 2020
 
December 31, 2019
Marketable securities
Level 1(1)
 
$
306

 
$
142

Foreign currency forward contracts
Level 2(2)
 
 
 
 
Financial asset
 
 
$
157

 
$
140

Financial liability
 
 
52

 
97

Interest rate swaps & other
Level 2(2)
 
 
 
 
Financial asset
 
 
$
862

 
$
765

Financial liability
 
 
617

 
311

Other contracts
Level 3(3)
 
 
 
 
Financial asset
 
 
$
5

 
$
4

Financial liability
 
 
90

 
82

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 and interest rates (from observable forward exchange and interest 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.