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ACQUISITION OF BUSINESSES | 12 Months Ended
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Dec. 31, 2020
Disclosure of detailed information about business combination [abstract] |
ACQUISITION OF BUSINESSES | ACQUISITION OF BUSINESSES Acquisitions Completed in 2020 a) Acquisition of a telecom tower operation in India On August 31, 2020, Brookfield Infrastructure, alongside institutional partners (the “Summit consortium”), acquired an effective 17% interest in Summit Digitel Infrastructure Private Limited, an Indian telecom tower operation (“Summit”) from Reliance Industries Limited (“RIL”) for $584 million (Summit consortium total of approximately $3.4 billion). Brookfield Infrastructure entered into a voting agreement with an affiliate of Brookfield, providing Brookfield Infrastructure the right to direct the relevant activities of the entity, thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield Infrastructure consolidated the entity effective August 31, 2020. Acquisition costs of approximately $15 million were recorded in Other income (expense) within the Consolidated Statements of Operating Results. Consideration transferred
US$ MILLIONS |
Cash | $ | 584 |
Total Consideration | $ | 584 |
Fair value of assets and liabilities acquired as of August 31, 2020 (provisional)(1):
US$ MILLIONS |
Accounts receivable and other | $ | 408 |
Property, plant and equipment | 7,334 |
Intangible assets(2) | 532 |
Goodwill | 27 |
Accounts payable and other liabilities | (417) |
Non-recourse borrowings | (2,356) |
Lease liabilities | (2,101) |
Deferred income tax liabilities | (22) |
Net assets acquired before non-controlling interest | 3,405 |
Non-controlling interest(3) | (2,821) |
Net assets acquired | $ | 584 |
(1)The fair values of all acquired assets, liabilities, and non-controlling interest for this operation have been determined on a provisional basis given the proximity of the acquisition to the reporting date, pending finalization of the determination of the fair values of the acquired assets and liabilities. Our partnership is in the process of obtaining additional information in order to assess the fair value of property, plant and equipment, intangible assets, and liabilities as well as the initial measurement of right-of-use assets and liabilities as at the date of acquisition. (2)Refer to Note 14, Intangible Assets, for further details. (3)Non-controlling interest represents the consideration paid for the interest not acquired by Brookfield Infrastructure, measured at fair value at the acquisition date, and includes capital provided by non-controlling interest in the form of a shareholder loan to the operating business. The goodwill recorded on acquisition is largely reflective of the potential to obtain long-term contracts for the business’ unutilized capacity of the telecom towers. The goodwill recognized is not deductible for income tax purposes. For the year ended December 31, 2020, Summit contributed revenues of $360 million and a net income of $8 million. b) Partial acquisition of interest in our Colombian natural gas transmission operation On July 15, 2020, Brookfield Infrastructure, alongside institutional partners (the “Vanti consortium”), completed a take private tender offer resulting in the acquisition of an additional 20% interest (Brookfield Infrastructure’s share - approximately 6%) in our Colombian natural gas transmission operation, increasing our ownership of the business to approximately 21%. Total consideration paid was approximately $45 million (Vanti consortium total of $150 million), of which approximately $25 million (Vanti consortium total of approximately $90 million) was funded through equity and the remainder with asset level debt raised on closing. As a result of the partial acquisition, a loss of approximately $10 million was recognized directly in retained earnings (deficit) on the Consolidated Statements of Partnership Capital as a result of the purchase price exceeding the previous carrying value of non-controlling interests. Acquisitions Completed in 2019 c) Acquisition of a Western Canadian natural gas midstream business (federally regulated) On December 31, 2019, Brookfield Infrastructure, alongside institutional partners (the “NorthRiver consortium”), acquired an effective 29% interest in the federally regulated portion of Enbridge Inc.’s Canadian natural gas midstream business for total consideration of $377 million (NorthRiver consortium total of $1.3 billion). Under Brookfield’s ownership, the business will be operated alongside the provincial assets acquired in 2018 and rebranded NorthRiver Midstream Inc. (“NorthRiver”). The acquisition was funded through equity of $246 million (NorthRiver consortium total of $861 million) and the remainder with asset level debt raised on closing. Brookfield Infrastructure entered into a voting agreement with an affiliate of Brookfield, providing Brookfield Infrastructure the right to direct the relevant activities of the entity, thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield Infrastructure consolidated the entity effective December 31, 2019. Acquisition costs of $8 million were recorded as Other income (expense) within the Consolidated Statements of Operating Results in 2019. Consideration transferred
US$ MILLIONS |
Cash | $ | 377 |
Total Consideration | $ | 377 |
Fair value of assets and liabilities acquired as of December 31, 2019:
US$ MILLIONS |
Accounts receivable and other | $ | 5 |
Property, plant and equipment | 1,198 |
Intangible assets | 74 |
Goodwill | 218 |
Deferred income tax assets | 41 |
Accounts payable and other liabilities | (218) |
Net assets acquired before non-controlling interest | 1,318 |
Non-controlling interest(1) | (941) |
Net assets acquired | $ | 377 |
(1)Non-controlling interest represents the consideration paid for the interest not acquired by Brookfield Infrastructure, measured at fair value at the acquisition date. The goodwill recorded on acquisition is largely reflective of the potential to obtain long-term contracts for the business’ unutilized capacity and production growth in certain locations. The goodwill recognized is deductible for income tax purposes. d) Acquisition of a North American rail business On December 30, 2019, Brookfield Infrastructure, alongside institutional partners (the “G&W consortium”), acquired an effective 9% interest in Genesee & Wyoming Inc. (“G&W”), a North American rail infrastructure business, for total consideration of approximately $602 million (G&W consortium total of $6.5 billion). The acquisition was funded through equity of $502 million (G&W consortium total of $5.4 billion) and the remainder with asset level debt raised on closing. Concurrently, Brookfield Infrastructure entered into a voting agreement with affiliates of Brookfield, providing Brookfield Infrastructure the right to direct the relevant activities of the entity, thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield Infrastructure consolidated the entity effective December 30, 2019. Acquisition costs of $38 million were recorded within Other income (expense) in the Consolidated Statements of Operating Results in 2019. Consideration transferred
US$ MILLIONS |
Cash | $ | 602 |
Total Consideration | $ | 602 |
Fair value of assets and liabilities acquired as of December 30, 2019:
US$ MILLIONS |
Cash and cash equivalents | $ | 67 |
Accounts receivable and other | 509 |
Assets classified as held for sale(1) | 1,584 |
Property, plant and equipment | 5,283 |
Intangible assets(2) | 1,992 |
Investment in associate | 48 |
Goodwill | 2,042 |
Accounts payable and other liabilities | (612) |
Non-recourse borrowings | (1,567) |
Liabilities directly associated with assets classified as held for sale(1) | (893) |
Other liabilities | (566) |
Deferred income tax liabilities | (1,111) |
Net assets acquired before non-controlling interest | 6,776 |
Non-controlling interest(3) | (6,174) |
Net assets acquired | $ | 602 |
(1)Brookfield Infrastructure agreed to sell the Australian operations of G&W. As a result, the assets and liabilities of these businesses were classified as held for sale as at December 31, 2020. The sale was completed on February 15, 2020. Refer to Note 5, Disposition of Businesses, for further details. (2)Refer to Note 14, Intangible Assets, for details. (3)Non-controlling interest represents the consideration paid for the interest not acquired by Brookfield Infrastructure, measured at fair value at the acquisition date. The goodwill recorded on acquisition reflects potential growth prospects and a strong market position as a key provider of rail infrastructure in North America. None of the goodwill recognized is deductible for income tax purposes. e) Acquisition of a U.K. telecommunication business On December 19, 2019, Brookfield Infrastructure, alongside institutional partners (the “consortium”), acquired an effective 25% interest in Wireless Infrastructure Group Limited (“WIG”), a U.K. telecommunication business, for total consideration by Brookfield Infrastructure of approximately $141 million (consortium total of $564 million). Brookfield Infrastructure’s consideration consists of $73 million in cash (consortium total of $293 million) and deferred consideration of $68 million (consortium total of $270 million) payable over two years from the close of the transaction. Concurrently, Brookfield Infrastructure entered into a voting agreement with an affiliate of Brookfield, providing Brookfield Infrastructure the right to direct the relevant activities of the entity, thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield Infrastructure consolidated the entity effective December 19, 2019. Acquisition costs of $6 million were recorded as Other income (expense) within the Consolidated Statements of Operating Results in 2019. Consideration transferred
US$ MILLIONS |
Cash | $ | 73 |
Deferred consideration | 68 |
Total Consideration | $ | 141 |
Fair value of assets and liabilities acquired as of December 19, 2019:
US$ MILLIONS |
Cash and cash equivalents | $ | 9 |
Accounts receivable and other | 18 |
Property, plant and equipment | 95 |
Intangible assets(1) | 465 |
Goodwill | 301 |
Accounts payable and other liabilities | (53) |
Non-recourse borrowings | (195) |
Deferred income tax liability | (76) |
Net assets acquired before non-controlling interest | 564 |
Non-controlling interest(2) | (423) |
Net assets acquired | $ | 141 |
(1)Refer to Note 14, Intangible Assets, for details. (2)Non-controlling interest represents the consideration paid for the interest not acquired by Brookfield Infrastructure, measured at fair value at the acquisition date. Upon consolidation of WIG, an additional deferred tax liability of $25 million was recorded. The deferred income tax liability arose as the tax bases of the net assets acquired were lower than their fair values. The inclusion of this liability in the net book value of the acquired business gave rise to goodwill of $25 million, which is recoverable so long as the tax circumstances that gave rise to the goodwill do not change. To date, no such changes have occurred. The remaining goodwill recognized on acquisition is largely reflective of potential customer growth, arising from the business’ position as one of the key telecommunication infrastructure providers in the U.K., and the increasing reliance on core telecom networks. f) Acquisition of a natural gas pipeline in India On March 22, 2019, Brookfield Infrastructure, along with institutional partners (the “EWPL consortium”), acquired an effective 24% interest in a cross country gas pipeline business in India, East-West Pipeline (“EWPL”), for total consideration of $443 million (EWPL consortium total of $1,879 million). The partnership’s share of the acquisition was funded through equity of $226 million (EWPL consortium total of $959 million) and $217 million (EWPL consortium total of $920 million) of asset level debt raised on closing. Concurrently, Brookfield Infrastructure entered into a voting agreement with an affiliate of Brookfield, providing Brookfield Infrastructure the right to direct the relevant activities of the entity, thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield Infrastructure consolidated the entity effective March 22, 2019. Acquisition costs of $3 million were recorded within Other income (expense) in the Consolidated Statements of Operating Results in 2019. Consideration transferred
US$ MILLIONS |
Cash | $ | 443 |
Total Consideration | $ | 443 |
Fair value of assets and liabilities acquired as of March 22, 2019:
US$ MILLIONS |
Accounts receivable and other | $ | 94 |
Property, plant and equipment | 2,134 |
Intangible assets | 295 |
Accounts payable and other liabilities | (66) |
Net assets acquired before non-controlling interest | 2,457 |
Non-controlling interest(1) | (2,014) |
Net assets acquired | $ | 443 |
(1)Non-controlling interest represents the consideration paid for the interest not acquired by Brookfield Infrastructure, measured at fair value at the acquisition date. g) Acquisition of DCI Data Centers On January 4, 2019, Brookfield Infrastructure, alongside institutional partners (the “DCI consortium”), acquired an effective 29% interest in DCI Data Centers (“DCI”), an Australian data storage business, for total consideration of $78 million (DCI consortium total of $272 million). The partnership’s share of the acquisition was funded through equity of $48 million (DCI consortium total of $166 million) and the remainder with asset level debt raised on closing. Concurrently, Brookfield Infrastructure entered into a voting agreement with an affiliate of Brookfield, providing Brookfield Infrastructure the right to direct the relevant activities of the entity, thereby providing Brookfield Infrastructure with control. Accordingly, Brookfield Infrastructure consolidated the entity effective January 4, 2019. Acquisition costs of $11 million were recorded within Other income (expense) in the Consolidated Statements of Operating Results in 2019. Consideration transferred
US$ MILLIONS |
Cash | $ | 78 |
Total Consideration | $ | 78 |
Fair value of assets and liabilities acquired as of January 4, 2019:
US$ MILLIONS |
Accounts receivable and other | $ | 2 |
Investment properties | 211 |
Goodwill | 68 |
Accounts payable and other liabilities | (9) |
Net assets acquired before non-controlling interest | 272 |
Non-controlling interest(1) | (194) |
Net assets acquired | $ | 78 |
(1)Non-controlling interest represents the consideration paid for the interest not acquired by Brookfield Infrastructure, measured at fair value at the acquisition date. The goodwill recorded on acquisition is largely reflective of potential customer growth, arising from the business’ position as one of the key data storage providers in Australia, and the increasing rate of worldwide data consumption. None of the goodwill recognized is deductible for income tax purposes. h) Individually insignificant business combinations The following table summarizes the purchase price allocation in aggregate of individually insignificant business combinations that were completed in 2019.
US$ MILLIONS |
Cash | $ | 24 |
Pre-existing interest in business(1) | 30 |
Total Consideration | $ | 54 |
(1)Prior to the acquisition, Brookfield held an interest in two of the acquirees which were accounted for using the equity method. Fair value of assets and liabilities acquired during the year to date:
US$ MILLIONS |
Cash and cash equivalents | $ | 16 |
Accounts receivable and other | 6 |
Intangible assets | 422 |
Goodwill | 15 |
Accounts payable and other liabilities | (21) |
Non-recourse borrowings | (210) |
Deferred income tax liabilities | (55) |
Net assets acquired before non-controlling interest | 173 |
Non-controlling interest(1) | (119) |
Net assets acquired | $ | 54 |
(1)Non-controlling interest represents the consideration paid for the interest not acquired by Brookfield Infrastructure, measured at fair value at the acquisition date. i) Supplemental information Had the acquisition of Summit been effective January 1, 2020, the revenue and net income of Brookfield Infrastructure would have been approximately $9.6 billion (unaudited) and $0.9 billion (unaudited), respectively, for the year ended December 31, 2020. In determining the pro-forma revenue and net income attributable to our partnership, management has: •Calculated depreciation of property, plant and equipment and amortization of intangible assets acquired on the basis of the fair values at the time of the business combination rather than the carrying amounts recognized in the pre-acquisition financial statements and; •Based borrowing costs on the funding levels, credit ratings and debt and equity position of Brookfield Infrastructure after the business combination.

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