00017883482020FYfalseNYSEP5Y.1111100017883482020-01-012020-12-310001788348dei:BusinessContactMember2020-01-012020-12-31xbrli:shares00017883482020-12-31iso4217:USD00017883482019-12-3100017883482019-01-012019-12-3100017883482018-01-012018-12-310001788348bipc:CombinedIssuedCapitalMember2019-12-310001788348ifrs-full:RetainedEarningsMember2019-12-310001788348bipc:OwnershipChangesMember2019-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMember2019-12-310001788348ifrs-full:ParentMember2019-12-310001788348ifrs-full:NoncontrollingInterestsMember2019-12-310001788348ifrs-full:RetainedEarningsMember2020-01-012020-12-310001788348ifrs-full:ParentMember2020-01-012020-12-310001788348ifrs-full:NoncontrollingInterestsMember2020-01-012020-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-12-310001788348bipc:CombinedIssuedCapitalMember2020-01-012020-12-310001788348bipc:OwnershipChangesMember2020-01-012020-12-310001788348ifrs-full:IssuedCapitalMember2020-01-012020-12-310001788348bipc:CombinedIssuedCapitalMember2020-12-310001788348ifrs-full:IssuedCapitalMember2020-12-310001788348ifrs-full:RetainedEarningsMember2020-12-310001788348bipc:OwnershipChangesMember2020-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMember2020-12-310001788348ifrs-full:ParentMember2020-12-310001788348ifrs-full:NoncontrollingInterestsMember2020-12-310001788348bipc:CombinedIssuedCapitalMember2018-12-310001788348ifrs-full:RetainedEarningsMember2018-12-310001788348bipc:OwnershipChangesMember2018-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMember2018-12-310001788348ifrs-full:ParentMember2018-12-310001788348ifrs-full:NoncontrollingInterestsMember2018-12-3100017883482018-12-310001788348ifrs-full:RetainedEarningsMember2019-01-012019-12-310001788348ifrs-full:ParentMember2019-01-012019-12-310001788348ifrs-full:NoncontrollingInterestsMember2019-01-012019-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-12-310001788348bipc:CombinedIssuedCapitalMember2019-01-012019-12-310001788348bipc:CombinedIssuedCapitalMember2017-12-310001788348ifrs-full:RetainedEarningsMember2017-12-310001788348bipc:OwnershipChangesMember2017-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMember2017-12-310001788348ifrs-full:ParentMember2017-12-310001788348ifrs-full:NoncontrollingInterestsMember2017-12-3100017883482017-12-310001788348ifrs-full:RetainedEarningsMember2018-01-012018-12-310001788348ifrs-full:ParentMember2018-01-012018-12-310001788348ifrs-full:NoncontrollingInterestsMember2018-01-012018-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMember2018-01-012018-12-310001788348bipc:CombinedIssuedCapitalMember2018-01-012018-12-3100017883482020-03-30xbrli:pure0001788348srt:SubsidiariesMember2020-03-300001788348bipc:HoldersofexchangeablesharesMember2020-03-300001788348ifrs-full:ParentMember2020-03-300001788348bipc:HoldersofexchangeablesharesexcludingParentMember2020-03-30bipc:agreement0001788348bipc:SeniorUnsecuredRevolvingCreditFacilityMember2020-03-300001788348bipc:SeniorUnsecuredRevolvingCreditFacilityMember2020-03-302020-03-300001788348srt:SubsidiariesMemberbipc:SeniorUnsecuredRevolvingCreditFacilityMember2020-03-300001788348ifrs-full:ParentMemberbipc:SeniorUnsecuredRevolvingCreditFacilityMember2020-03-3000017883482020-03-302020-03-30iso4217:USDxbrli:shares0001788348bipc:U.K.RegulatedDistributionOperationMember2020-01-012020-12-310001788348bipc:U.K.RegulatedDistributionOperationMember2019-01-012019-12-310001788348bipc:U.K.RegulatedDistributionOperationMember2018-01-012018-12-310001788348bipc:BrazilRegulatedGasTransmissionOperataionMember2020-01-012020-12-310001788348bipc:BrazilRegulatedGasTransmissionOperataionMember2019-01-012019-12-310001788348bipc:BrazilRegulatedGasTransmissionOperataionMember2018-01-012018-12-310001788348ifrs-full:TopOfRangeMemberifrs-full:BuildingsMember2020-01-012020-12-310001788348ifrs-full:TopOfRangeMemberbipc:MachineryAndEqipmentMember2020-01-012020-12-310001788348ifrs-full:TopOfRangeMemberifrs-full:NetworkInfrastructureMember2020-01-012020-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMemberbipc:CashAndCashEquivalents1Member2020-12-310001788348ifrs-full:FinancialAssetsAtAmortisedCostCategoryMemberbipc:CashAndCashEquivalents1Member2020-12-310001788348bipc:CashAndCashEquivalents1Member2020-12-310001788348ifrs-full:TradeReceivablesMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348ifrs-full:TradeReceivablesMemberifrs-full:FinancialAssetsAtAmortisedCostCategoryMember2020-12-310001788348ifrs-full:TradeReceivablesMember2020-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMemberbipc:OtherFinancialAssetsMember2020-12-310001788348ifrs-full:FinancialAssetsAtAmortisedCostCategoryMemberbipc:OtherFinancialAssetsMember2020-12-310001788348bipc:OtherFinancialAssetsMember2020-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348ifrs-full:FinancialAssetsAtAmortisedCostCategoryMember2020-12-310001788348ifrs-full:FinancialLiabilitiesAtFairValueThroughProfitOrLossCategoryMemberbipc:TradeAndOtherPayablesMember2020-12-310001788348bipc:TradeAndOtherPayablesMemberifrs-full:FinancialLiabilitiesAtAmortisedCostCategoryMember2020-12-310001788348bipc:TradeAndOtherPayablesMember2020-12-310001788348ifrs-full:FinancialLiabilitiesAtFairValueThroughProfitOrLossCategoryMemberbipc:NonRecourseBorrowingsMember2020-12-310001788348bipc:NonRecourseBorrowingsMemberifrs-full:FinancialLiabilitiesAtAmortisedCostCategoryMember2020-12-310001788348bipc:NonRecourseBorrowingsMember2020-12-310001788348ifrs-full:FinancialLiabilitiesAtFairValueThroughProfitOrLossCategoryMemberbipc:ExchangeableandClassBSharesMember2020-12-310001788348ifrs-full:FinancialLiabilitiesAtAmortisedCostCategoryMemberbipc:ExchangeableandClassBSharesMember2020-12-310001788348bipc:ExchangeableandClassBSharesMember2020-12-310001788348ifrs-full:FinancialLiabilitiesAtFairValueThroughProfitOrLossCategoryMemberbipc:OtherFinancialLiabilitiesMember2020-12-310001788348ifrs-full:FinancialLiabilitiesAtAmortisedCostCategoryMemberbipc:OtherFinancialLiabilitiesMember2020-12-310001788348bipc:OtherFinancialLiabilitiesMember2020-12-310001788348ifrs-full:FinancialLiabilitiesAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348ifrs-full:FinancialLiabilitiesAtAmortisedCostCategoryMember2020-12-310001788348bipc:OtherFinancialAssetsMember2020-12-310001788348bipc:OtherFinancialLiabilitiesMember2020-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMemberbipc:CashAndCashEquivalents1Member2019-12-310001788348ifrs-full:FinancialAssetsAtAmortisedCostCategoryMemberbipc:CashAndCashEquivalents1Member2019-12-310001788348bipc:CashAndCashEquivalents1Member2019-12-310001788348ifrs-full:TradeReceivablesMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2019-12-310001788348ifrs-full:TradeReceivablesMemberifrs-full:FinancialAssetsAtAmortisedCostCategoryMember2019-12-310001788348ifrs-full:TradeReceivablesMember2019-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMemberbipc:OtherFinancialAssetsMember2019-12-310001788348ifrs-full:FinancialAssetsAtAmortisedCostCategoryMemberbipc:OtherFinancialAssetsMember2019-12-310001788348bipc:OtherFinancialAssetsMember2019-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2019-12-310001788348ifrs-full:FinancialAssetsAtAmortisedCostCategoryMember2019-12-310001788348ifrs-full:FinancialLiabilitiesAtFairValueThroughProfitOrLossCategoryMemberbipc:TradeAndOtherPayablesMember2019-12-310001788348bipc:TradeAndOtherPayablesMemberifrs-full:FinancialLiabilitiesAtAmortisedCostCategoryMember2019-12-310001788348bipc:TradeAndOtherPayablesMember2019-12-310001788348ifrs-full:FinancialLiabilitiesAtFairValueThroughProfitOrLossCategoryMemberbipc:NonRecourseBorrowingsMember2019-12-310001788348bipc:NonRecourseBorrowingsMemberifrs-full:FinancialLiabilitiesAtAmortisedCostCategoryMember2019-12-310001788348bipc:NonRecourseBorrowingsMember2019-12-310001788348ifrs-full:FinancialLiabilitiesAtFairValueThroughProfitOrLossCategoryMemberbipc:OtherFinancialLiabilitiesMember2019-12-310001788348ifrs-full:FinancialLiabilitiesAtAmortisedCostCategoryMemberbipc:OtherFinancialLiabilitiesMember2019-12-310001788348bipc:OtherFinancialLiabilitiesMember2019-12-310001788348ifrs-full:FinancialLiabilitiesAtFairValueThroughProfitOrLossCategoryMember2019-12-310001788348ifrs-full:FinancialLiabilitiesAtAmortisedCostCategoryMember2019-12-310001788348bipc:OtherFinancialAssetsMember2019-12-310001788348bipc:OtherFinancialLiabilitiesMember2019-12-310001788348bipc:ExchangeableandClassBSharesMember2019-12-310001788348bipc:ClassCSharesMember2020-12-310001788348ifrs-full:CashFlowHedgesMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2020-01-012020-12-310001788348ifrs-full:CashFlowHedgesMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2019-01-012019-12-310001788348ifrs-full:CashFlowHedgesMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2018-01-012018-12-310001788348ifrs-full:CashFlowHedgesMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2020-12-310001788348ifrs-full:CashFlowHedgesMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2019-12-310001788348ifrs-full:InterestRateSwapContractMemberifrs-full:RecurringFairValueMeasurementMemberifrs-full:Level2OfFairValueHierarchyMemberifrs-full:DiscountedCashFlowMember2020-12-310001788348ifrs-full:InterestRateSwapContractMemberifrs-full:RecurringFairValueMeasurementMemberifrs-full:Level2OfFairValueHierarchyMemberifrs-full:DiscountedCashFlowMember2019-12-310001788348ifrs-full:InterestRateSwapContractMemberifrs-full:RecurringFairValueMeasurementMemberifrs-full:Level2OfFairValueHierarchyMemberifrs-full:DiscountedCashFlowMember2020-12-310001788348ifrs-full:InterestRateSwapContractMemberifrs-full:RecurringFairValueMeasurementMemberifrs-full:Level2OfFairValueHierarchyMemberifrs-full:DiscountedCashFlowMember2019-12-310001788348country:BR2020-12-310001788348country:BR2019-12-310001788348ifrs-full:GrossCarryingAmountMember2018-12-310001788348ifrs-full:AccumulatedDepreciationAndAmortisationMember2018-12-310001788348bipc:AccumulatedFairValueAdjustmentsMember2018-12-310001788348ifrs-full:GrossCarryingAmountMember2019-01-012019-12-310001788348ifrs-full:AccumulatedDepreciationAndAmortisationMember2019-01-012019-12-310001788348bipc:AccumulatedFairValueAdjustmentsMember2019-01-012019-12-310001788348ifrs-full:GrossCarryingAmountMember2019-12-310001788348ifrs-full:AccumulatedDepreciationAndAmortisationMember2019-12-310001788348bipc:AccumulatedFairValueAdjustmentsMember2019-12-310001788348ifrs-full:GrossCarryingAmountMember2020-01-012020-12-310001788348ifrs-full:AccumulatedDepreciationAndAmortisationMember2020-01-012020-12-310001788348bipc:AccumulatedFairValueAdjustmentsMember2020-01-012020-12-310001788348ifrs-full:GrossCarryingAmountMember2020-12-310001788348ifrs-full:AccumulatedDepreciationAndAmortisationMember2020-12-310001788348bipc:AccumulatedFairValueAdjustmentsMember2020-12-310001788348bipc:Propertyplantandequipment1Memberifrs-full:InterestRateMeasurementInputMemberifrs-full:RecurringFairValueMeasurementMemberifrs-full:DiscountedCashFlowMember2020-12-310001788348bipc:Propertyplantandequipment1Memberifrs-full:RecurringFairValueMeasurementMemberifrs-full:DiscountedCashFlowMember2020-01-012020-12-310001788348bipc:Propertyplantandequipment1Memberifrs-full:InterestRateMeasurementInputMemberifrs-full:RecurringFairValueMeasurementMemberifrs-full:DiscountedCashFlowMember2019-12-310001788348bipc:Propertyplantandequipment1Memberifrs-full:RecurringFairValueMeasurementMemberifrs-full:DiscountedCashFlowMember2019-01-012019-12-310001788348bipc:BrazilianRegulatedGasTransmissionOperationMember2020-12-310001788348bipc:BrazilianRegulatedGasTransmissionOperationMember2019-12-310001788348bipc:U.K.RegulatedDistributionOperationMember2020-12-310001788348bipc:U.K.RegulatedDistributionOperationMember2019-12-310001788348ifrs-full:GoodwillMember2019-12-310001788348ifrs-full:GoodwillMember2018-12-310001788348ifrs-full:GoodwillMember2020-01-012020-12-310001788348ifrs-full:GoodwillMember2019-01-012019-12-310001788348ifrs-full:GoodwillMember2020-12-310001788348ifrs-full:NotLaterThanOneYearMember2020-12-310001788348ifrs-full:LaterThanOneYearAndNotLaterThanTwoYearsMember2020-12-310001788348ifrs-full:LaterThanTwoYearsAndNotLaterThanThreeYearsMember2020-12-310001788348ifrs-full:LaterThanThreeYearsMember2020-12-310001788348bipc:ExchangeableSharesMember2020-01-012020-12-310001788348bipc:ExchangeableandClassBSharesMember2020-01-012020-12-310001788348bipc:ExchangeableSharesMember2019-12-310001788348bipc:ClassBSharesMember2019-12-310001788348ifrs-full:IssuedCapitalMember2019-12-310001788348bipc:ClassBSharesMember2020-01-012020-12-310001788348bipc:ExchangeableSharesMember2020-12-310001788348bipc:ClassBSharesMember2020-12-310001788348bipc:NonRecourseBorrowingsMember2020-12-310001788348bipc:NonRecourseBorrowingsMember2019-12-310001788348bipc:NonRecourseBorrowingsMember2020-01-012020-12-310001788348ifrs-full:GrossCarryingAmountMemberifrs-full:NotLaterThanOneYearMemberbipc:NonRecourseBorrowingsMember2020-12-310001788348ifrs-full:LaterThanOneYearAndNotLaterThanTwoYearsMemberifrs-full:GrossCarryingAmountMemberbipc:NonRecourseBorrowingsMember2020-12-310001788348ifrs-full:LaterThanTwoYearsAndNotLaterThanThreeYearsMemberifrs-full:GrossCarryingAmountMemberbipc:NonRecourseBorrowingsMember2020-12-310001788348ifrs-full:GrossCarryingAmountMemberbipc:NonRecourseBorrowingsMemberifrs-full:LaterThanThreeYearsAndNotLaterThanFourYearsMember2020-12-310001788348ifrs-full:GrossCarryingAmountMemberifrs-full:LaterThanFourYearsAndNotLaterThanFiveYearsMemberbipc:NonRecourseBorrowingsMember2020-12-310001788348ifrs-full:GrossCarryingAmountMemberifrs-full:LaterThanFiveYearsMemberbipc:NonRecourseBorrowingsMember2020-12-310001788348ifrs-full:GrossCarryingAmountMemberbipc:NonRecourseBorrowingsMember2020-12-310001788348bipc:DeferredFinancingCostsMemberbipc:NonRecourseBorrowingsMember2020-12-310001788348ifrs-full:WeightedAverageMemberbipc:NonRecourseBorrowingsMember2020-12-310001788348ifrs-full:WeightedAverageMemberbipc:NonRecourseBorrowingsMember2019-12-310001788348currency:USDbipc:NonRecourseBorrowingsMember2020-12-310001788348currency:USDbipc:NonRecourseBorrowingsMember2019-12-310001788348currency:GBPbipc:NonRecourseBorrowingsMember2020-12-31iso4217:GBP0001788348currency:GBPbipc:NonRecourseBorrowingsMember2019-12-310001788348bipc:NonRecourseBorrowingsMembercurrency:BRL2020-12-31iso4217:BRL0001788348bipc:NonRecourseBorrowingsMembercurrency:BRL2019-12-310001788348bipc:NonRecourseBorrowingsMember2020-12-310001788348bipc:NonRecourseBorrowingsMember2020-01-012020-12-310001788348bipc:NonRecourseBorrowingsMember2019-12-310001788348bipc:NonRecourseBorrowingsMember2019-01-012019-12-310001788348bipc:NonRecourseBorrowingsMember2018-12-310001788348bipc:U.K.RegulatedDistributionOperationMember2020-12-310001788348bipc:BrazilianRegulatedGasTransmissionOperationMember2020-12-310001788348bipc:NonWhollyOwnedSubsidiariesMember2020-12-310001788348bipc:U.K.RegulatedDistributionOperationMember2019-12-310001788348bipc:BrazilianRegulatedGasTransmissionOperationMember2019-12-310001788348bipc:NonWhollyOwnedSubsidiariesMember2019-12-310001788348bipc:BrazilianRegulatedGasTransmissionOperationMember2020-01-012020-12-310001788348bipc:NonWhollyOwnedSubsidiariesMember2020-01-012020-12-310001788348bipc:BrazilianRegulatedGasTransmissionOperationMember2019-01-012019-12-310001788348bipc:NonWhollyOwnedSubsidiariesMember2019-01-012019-12-310001788348bipc:BrazilianRegulatedGasTransmissionOperationMember2018-01-012018-12-310001788348bipc:NonWhollyOwnedSubsidiariesMember2018-01-012018-12-310001788348bipc:GasTransmissionMember2020-01-012020-12-310001788348bipc:GasTransmissionMember2019-01-012019-12-310001788348bipc:GasTransmissionMember2018-01-012018-12-310001788348bipc:DistributionMember2020-01-012020-12-310001788348bipc:DistributionMember2019-01-012019-12-310001788348bipc:DistributionMember2018-01-012018-12-310001788348bipc:ConnectionsMember2020-01-012020-12-310001788348bipc:ConnectionsMember2019-01-012019-12-310001788348bipc:ConnectionsMember2018-01-012018-12-310001788348bipc:ServiceLineOtherMember2020-01-012020-12-310001788348bipc:ServiceLineOtherMember2019-01-012019-12-310001788348bipc:ServiceLineOtherMember2018-01-012018-12-310001788348country:BR2020-01-012020-12-310001788348country:BR2019-01-012019-12-310001788348country:BR2018-01-012018-12-310001788348country:GB2020-01-012020-12-310001788348country:GB2019-01-012019-12-310001788348country:GB2018-01-012018-12-31bipc:customer0001788348bipc:CustomerConcentrationRisk1Member2020-01-012020-12-310001788348country:GB2020-12-310001788348country:GB2019-12-310001788348bipc:ClassCSharesMember2019-12-310001788348bipc:ClassCSharesMemberifrs-full:IssuedCapitalMember2019-12-310001788348bipc:ClassCSharesMember2020-01-012020-12-310001788348bipc:ClassCSharesMemberifrs-full:IssuedCapitalMember2020-01-012020-12-310001788348bipc:ClassCSharesMember2020-12-310001788348bipc:ClassCSharesMemberifrs-full:IssuedCapitalMember2020-12-310001788348ifrs-full:IssuedCapitalMemberbipc:ExchangeableSharesMember2020-12-310001788348ifrs-full:IssuedCapitalMemberbipc:ClassBSharesMember2020-12-310001788348bipc:FinancialInstrumentsAndOtherMember2020-12-310001788348bipc:FinancialInstrumentsAndOtherMember2019-12-310001788348ifrs-full:UnusedTaxLossesMember2020-12-310001788348ifrs-full:UnusedTaxLossesMember2019-12-310001788348bipc:PropertyPlantAndEquipmentAndInvestmentPropertiesMember2020-12-310001788348bipc:PropertyPlantAndEquipmentAndInvestmentPropertiesMember2019-12-310001788348bipc:IntangibleAssetsMember2020-12-310001788348bipc:IntangibleAssetsMember2019-12-310001788348ifrs-full:UnusedTaxLossesMember2020-01-012020-12-310001788348ifrs-full:TemporaryDifferenceMember2019-12-310001788348ifrs-full:TemporaryDifferenceMember2020-01-012020-12-310001788348ifrs-full:TemporaryDifferenceMember2020-12-310001788348ifrs-full:UnusedTaxLossesMember2018-12-310001788348ifrs-full:UnusedTaxLossesMember2019-01-012019-12-310001788348ifrs-full:TemporaryDifferenceMember2018-12-310001788348ifrs-full:TemporaryDifferenceMember2019-01-012019-12-310001788348bipc:RevaluationOfPropertyPlantAndEquipmentMember2020-01-012020-12-310001788348bipc:RevaluationOfPropertyPlantAndEquipmentMember2019-01-012019-12-310001788348bipc:RevaluationOfPropertyPlantAndEquipmentMember2018-01-012018-12-310001788348ifrs-full:CashFlowHedgesMember2020-01-012020-12-310001788348ifrs-full:CashFlowHedgesMember2019-01-012019-12-310001788348ifrs-full:CashFlowHedgesMember2018-01-012018-12-310001788348bipc:LimitedPartners1Memberifrs-full:RevaluationSurplusMember2018-12-310001788348bipc:LimitedPartners1Memberifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2018-12-310001788348ifrs-full:ReserveOfCashFlowHedgesMemberbipc:LimitedPartners1Member2018-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMemberbipc:LimitedPartners1Member2018-12-310001788348bipc:LimitedPartners1Memberifrs-full:RevaluationSurplusMember2019-01-012019-12-310001788348bipc:LimitedPartners1Memberifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2019-01-012019-12-310001788348ifrs-full:ReserveOfCashFlowHedgesMemberbipc:LimitedPartners1Member2019-01-012019-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMemberbipc:LimitedPartners1Member2019-01-012019-12-310001788348bipc:LimitedPartners1Memberifrs-full:RevaluationSurplusMember2019-12-310001788348bipc:LimitedPartners1Memberifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2019-12-310001788348ifrs-full:ReserveOfCashFlowHedgesMemberbipc:LimitedPartners1Member2019-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMemberbipc:LimitedPartners1Member2019-12-310001788348bipc:LimitedPartners1Memberifrs-full:RevaluationSurplusMember2020-01-012020-12-310001788348bipc:LimitedPartners1Memberifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2020-01-012020-12-310001788348ifrs-full:ReserveOfCashFlowHedgesMemberbipc:LimitedPartners1Member2020-01-012020-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMemberbipc:LimitedPartners1Member2020-01-012020-12-310001788348bipc:LimitedPartners1Memberifrs-full:RevaluationSurplusMember2020-12-310001788348bipc:LimitedPartners1Memberifrs-full:ReserveOfExchangeDifferencesOnTranslationMember2020-12-310001788348ifrs-full:ReserveOfCashFlowHedgesMemberbipc:LimitedPartners1Member2020-12-310001788348ifrs-full:AccumulatedOtherComprehensiveIncomeMemberbipc:LimitedPartners1Member2020-12-310001788348ifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMember2020-12-310001788348ifrs-full:LaterThanFiveYearsMember2020-12-310001788348bipc:ServiceProviderAffiliateMember2020-01-012020-12-310001788348bipc:ServiceProviderAffiliateMember2019-01-012019-12-310001788348bipc:ServiceProviderAffiliateMember2018-01-012018-12-310001788348bipc:SubsidiaryOfCommonParent1Memberbipc:BrookfieldOfficePropertiesInc.Member2020-01-012020-12-310001788348bipc:SubsidiaryOfCommonParent1Memberbipc:BrookfieldOfficePropertiesInc.Member2019-01-012019-12-310001788348bipc:SubsidiaryOfCommonParent1Memberbipc:BrookfieldOfficePropertiesInc.Member2018-01-012018-12-310001788348bipc:BrookfieldInfrastructureMember2020-12-3100017883482020-07-290001788348ifrs-full:InterestRateSwapContractMember2020-12-310001788348ifrs-full:InterestRateSwapContractMember2019-12-310001788348ifrs-full:InterestRateSwapContractMember2020-01-012020-12-310001788348ifrs-full:InterestRateSwapContractMember2019-01-012019-12-310001788348bipc:InterestRateAndCrossCurrencyInterestRateSwapsMember2020-12-310001788348bipc:InterestRateAndCrossCurrencyInterestRateSwapsMember2019-12-310001788348bipc:InflationLinkedSwapContractMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348bipc:InflationLinkedSwapContractMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2019-12-310001788348bipc:InflationRateSwapsAndOtherMemberifrs-full:NotLaterThanOneYearMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348ifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMemberbipc:InflationRateSwapsAndOtherMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348bipc:InflationRateSwapsAndOtherMemberifrs-full:LaterThanFiveYearsMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348bipc:InflationRateSwapsAndOtherMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348bipc:InflationRateSwapsAndOtherMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2019-12-310001788348ifrs-full:NotLaterThanOneYearMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348ifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348ifrs-full:LaterThanFiveYearsMemberifrs-full:FinancialAssetsAtFairValueThroughProfitOrLossCategoryMember2020-12-310001788348ifrs-full:NotLaterThanOneYearMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMemberifrs-full:InterestRateSwapContractMember2020-12-310001788348ifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMemberifrs-full:InterestRateSwapContractMember2020-12-310001788348ifrs-full:LaterThanFiveYearsMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMemberifrs-full:InterestRateSwapContractMember2020-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMemberifrs-full:InterestRateSwapContractMember2020-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMemberifrs-full:InterestRateSwapContractMember2019-12-310001788348ifrs-full:NotLaterThanOneYearMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2020-12-310001788348ifrs-full:LaterThanOneYearAndNotLaterThanFiveYearsMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2020-12-310001788348ifrs-full:LaterThanFiveYearsMemberifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2020-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2020-12-310001788348ifrs-full:FinancialAssetsAtFairValueThroughOtherComprehensiveIncomeCategoryMember2019-12-310001788348ifrs-full:FinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeCategoryMemberifrs-full:CashFlowHedgesMember2020-12-310001788348ifrs-full:FinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeCategoryMemberifrs-full:CashFlowHedgesMember2020-01-012020-12-310001788348ifrs-full:FinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeCategoryMemberifrs-full:CashFlowHedgesMember2019-12-310001788348ifrs-full:FinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeCategoryMemberifrs-full:CashFlowHedgesMember2019-01-012019-12-310001788348ifrs-full:LaterThanTwoYearsAndNotLaterThanFiveYearsMember2020-12-310001788348ifrs-full:NotLaterThanOneYearMember2019-12-310001788348ifrs-full:LaterThanOneYearAndNotLaterThanTwoYearsMember2019-12-310001788348ifrs-full:LaterThanTwoYearsAndNotLaterThanFiveYearsMember2019-12-310001788348ifrs-full:LaterThanFiveYearsMember2019-12-310001788348ifrs-full:InterestRateRiskMember2020-01-012020-12-310001788348ifrs-full:InterestRateRiskMember2019-01-012019-12-310001788348ifrs-full:InterestRateRiskMember2018-01-012018-12-310001788348currency:GBP2020-12-310001788348currency:BRL2020-12-310001788348bipc:GBPAndBRLMember2020-12-310001788348currency:GBP2019-12-310001788348currency:BRL2019-12-310001788348bipc:GBPAndBRLMember2019-12-310001788348currency:GBP2018-12-310001788348currency:BRL2018-12-310001788348bipc:GBPAndBRLMember2018-12-310001788348currency:GBPifrs-full:CurrencyRiskMember2020-01-012020-12-310001788348currency:GBPifrs-full:CurrencyRiskMember2019-01-012019-12-310001788348currency:GBPifrs-full:CurrencyRiskMember2018-01-012018-12-310001788348currency:BRLifrs-full:CurrencyRiskMember2020-01-012020-12-310001788348currency:BRLifrs-full:CurrencyRiskMember2019-01-012019-12-310001788348currency:BRLifrs-full:CurrencyRiskMember2018-01-012018-12-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 20-F
  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 31, 2020
OR
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
  SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-33632
BROOKFIELD INFRASTRUCTURE CORPORATION
(Exact name of Registrant as specified in its charter)
British Columbia, Canada
(Jurisdiction of incorporation or organization)
250 Vesey Street, 15th Floor
New York, New York, 10281
United States
(Address of principal executive offices)
Michael Ryan
250 Vesey Street, 15th Floor
New York, New York, 10281
United States
+1-212-417-7000
bip.enquiries@brookfield.com
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered pursuant to Section 12(b) of the Act:
Title of class Trading Symbol(s) Name of each exchange on which registered
Class A Exchangeable Subordinate Voting Shares BIPC
New York Stock Exchange; Toronto Stock Exchange
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
44,960,449 Class A Exchangeable Subordinate Voting Shares as of December 31, 2020
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.        Yes ☐ No ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.        Yes ☐ No ☒ 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).        Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or an emerging growth company. See definition of “accelerated filer”, “large accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one)
Large accelerated filer ☐   Accelerated filer ☐  
Non-accelerated filer ☒
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued
its audit report. ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
☐ U.S. GAAP  
☒ International Financial Reporting Standards as issued by the
International Accounting Standards Board
  ☐ Other
If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.       
Item 17 Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ☐ No ☒ 



TABLE OF CONTENTS
      PAGE
INTRODUCTION AND USE OF CERTAIN TERMS
1
FORWARD-LOOKING STATEMENTS
6
12
Item 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
12
Item 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
12
Item 3.
KEY INFORMATION
12
3.A
SELECTED FINANCIAL DATA
12
3.B
CAPITALIZATION AND INDEBTEDNESS
12
3.C
REASONS FOR THE OFFER AND USE OF PROCEEDS
12
3.D
RISK FACTORS
12
Item 4.
INFORMATION ON THE COMPANY
50
4.A
HISTORY AND DEVELOPMENT OF BROOKFIELD INFRASTRUCTURE
50
4.B
BUSINESS OVERVIEW
52
4.C
ORGANIZATIONAL STRUCTURE
61
4.D
PROPERTY, PLANT AND EQUIPMENT
63
Item 4A.
UNRESOLVED STAFF COMMENTS
64
Item 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
64
5.A
OPERATING RESULTS
70
5.B
LIQUIDITY AND CAPITAL RESOURCES
87
5.C
RESEARCH AND DEVELOPMENT
95
5.D
TREND INFORMATION
95
5.E
OFF BALANCE SHEET ARRANGEMENTS
96
5.F
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
97
5.G
SAFE HARBOR
97
Item 6.
DIRECTORS AND SENIOR MANAGEMENT
98
6.A
DIRECTORS AND SENIOR MANAGEMENT
98
6.B
COMPENSATION
106
6.C
BOARD PRACTICES
107
6.D
EMPLOYEES
112
6.E
SHARE OWNERSHIP
112
Item 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
113
7.A
MAJOR SHAREHOLDERS
113
7.B
RELATED PARTY TRANSACTIONS
114
7.C
INTEREST OF EXPERTS AND COUNSEL
168
Item 8.
FINANCIAL INFORMATION
169
8.A
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
169
8.B
SIGNIFICANT CHANGES
169
Item 9.
THE OFFER AND LISTING
169
9.A
PRICING HISTORY
169
9.B
PLAN OF DISTRIBUTION
169
9.C
MARKETS
169
9.D
SELLING SHAREHOLDERS
169
9.E
DILUTION
169
9.F
EXPENSES OF THE ISSUE
169
Item 10.
ADDITIONAL INFORMATION
169
10.A
SHARE CAPITAL
169
10.B
MEMORANDUM AND ARTICLES OF ASSOCIATION
169
195
i


197
10.E
TAXATION
197
10.F
DIVIDENDS AND PAYING AGENTS
216
10.G
STATEMENT BY EXPERTS
216
10.H
DOCUMENTS ON DISPLAY
216
10.I
SUBSIDIARY INFORMATION
217
Item 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT NON-PRODUCT RELATED MARKET RISK
217
Item 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
217
PART II
218
Item 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
218
Item 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
218
Item 15.
CONTROLS AND PROCEDURES
218
Item 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
218
Item 16B.
CODE OF ETHICS
219
Item 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
219
Item 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE
219
Item 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASER
220
Item 16F.
CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
220
Item 16G.
CORPORATE GOVERNANCE
220
Item 16H.
MINE SAFETY DISCLOSURES
220
PART III
221
Item 17.
FINANCIAL STATEMENTS
221
Item 18.
FINANCIAL STATEMENTS
221
Item 19.
EXHIBITS
221

ii


INTRODUCTION AND USE OF CERTAIN TERMS
Unless the context requires otherwise, when used in this annual report on Form 20-F, the terms “we”, “us”, “our” and “our company” refer to Brookfield Infrastructure Corporation, including any predecessors thereof, together with all of its subsidiaries. References to “Brookfield Infrastructure” mean the partnership collectively with Holding LP, the Brookfield Infrastructure Holding Entities and the Brookfield Infrastructure Operating Entities (but excluding our company) (each as defined below). References to “our group” mean, collectively, our company and Brookfield Infrastructure. All dollar amounts contained in this annual report on Form 20-F are expressed in U.S. dollars, unless specified otherwise, and references to “dollars”, “$”, “US$” or “USD” are to U.S. dollars, all references to “C$” or “CAD” are to Canadian dollars, all references to “A$” or “AUD” are to Australian dollars, all references to “reais”, “BRL” or “R$” are to Brazilian reais, all references to “£” or “GBP” are to pound sterling and all references to “€” or “EUR” are to Euros, and, unless the context suggests otherwise, references to:

“AFFO” means Adjusted Funds from Operations;
“articles” means the notice of articles and articles of our company;
“audit committee” means the audit committee of our board;
“BCBCA” means the Business Corporations Act (British Columbia);
“BIPC” are to Brookfield Infrastructure Corporation;
“board” means the board of directors of our company;
“Brookfield” are to Brookfield Asset Management and any affiliate of Brookfield Asset Management, other than our group;
“Brookfield Accounts” means Brookfield and/or other Brookfield-sponsored vehicles, consortiums and/or partnerships (including private funds, joint ventures and similar arrangements);
“Brookfield Asset Management” are to Brookfield Asset Management Inc.;
“Brookfield Infrastructure” means the partnership collectively with Holding LP, the Brookfield Infrastructure Holding Entities and the Brookfield Infrastructure Operating Entities (but excluding our company);
“Brookfield Infrastructure Debt Issuers” means Brookfield Infrastructure Finance ULC, Brookfield Infrastructure Finance LLC, Brookfield Infrastructure Finance Limited and Brookfield Infrastructure Finance Pty Ltd., collectively;
“Brookfield Infrastructure Holding Entities” means certain subsidiaries of Holding LP, including Canada HoldCo, through which the partnership holds all of its interest in the Brookfield Infrastructure Operating Entities;
“Brookfield Infrastructure Operating Entities” means the entities which directly or indirectly hold the partnership’s current operations and assets that the partnership may acquire in the future, including any assets held through joint ventures, partnerships and consortium arrangements;
“Brookfield Personnel” means the partners, members, shareholders, directors, officers and employees of Brookfield;
Brookfield Infrastructure Corporation     1


“business” means the infrastructure business of our company, which includes our utilities business through BUUK and our regulated gas transmission business through NTS;
“BUUK” means BUUK Infrastructure No 1 Limited;
“Canada HoldCo” means Brookfield Infrastructure Holdings (Canada) Inc., an indirect subsidiary of the partnership;
“Canada SubCo” means BIPC Holdings Inc, a wholly-owned subsidiary of our company;
“CDS” means CDS Clearing and Depository Services Inc.;
“chair” means the chairperson of the board;
“class B shares” means the class B multiple voting shares in the capital of our company, as further described under Item 10.B “Description of Our Share Capital — Class B Shares”, and “class B share” means any one of them;
“class C shares” means the class C non-voting shares in the capital of our company, as further described under Item 10.B “Description of Our Share Capital — Class C Shares”, and “class C share” means any one of them;
“code” means the Code of Business Conduct and Ethics;
“collateral account” means the non-interest bearing trust account established by Brookfield or its affiliates to be administered by the rights agent;
“committees” means the audit committee and the nominating and governance committee;
“company” means Brookfield Infrastructure Corporation;
“company notice” has the meaning ascribed thereto under Item 7.B “Related Party Transactions - Relationship with Brookfield — Rights Agreement — Satisfaction of Secondary Exchange Rights”;
“conflicts management policy” has the meaning ascribed thereto under Item 7.B “Related Party Transactions - Relationship with Brookfield”;
“CRA” means the Canada Revenue Agency;
“customary rates” means the same or substantially similar services provided by Brookfield to one or more third parties;
“DTC” means the Depository Trust Company;
“EDGAR” means the Electronic Data Gathering, Analysis, and Retrieval system at www.sec.gov;
“Enercare” means Enercare Inc.;
“ESG” means environmental, social and governance;
“Exchange LP” means Brookfield Infrastructure Partners Exchange L.P.;
“exchangeable shares” means the class A exchangeable subordinate voting shares in the capital of our company, as further described under Item 10.B “Description of Our Share Capital — Exchangeable Shares”, and “exchangeable share” means any one of them;
2        Brookfield Infrastructure Corporation


“FFO” means Funds from Operations;
“group” means collectively, our company and Brookfield Infrastructure;
“GTAs” means inflation-adjusted gas transportation agreements;
“Holding LP” are to Brookfield Infrastructure L.P.;
“IFRS” means International Financial Reporting Standards as issued by the International Accounting Standards Board;
“Infrastructure Special LP” means Brookfield Infrastructure Special L.P.;
“initial distribution date” means March 31, 2020;
“investing affiliate” has the meaning ascribed thereto under Item 7.B “Relationship with Brookfield — Conflicts of Interest and Fiduciary Duties — Investments by the Investing Affiliate”;
“IRS” means the Internal Revenue Service;
“LIBOR” means the London Inter-bank Offered Rate;
“Licensing Agreements” are to the licensing agreements described in Item 7.B “Related Party Transactions — Relationship with Brookfield - Licensing Agreements”;
“Master Services Agreement” are to the amended and restated master services agreement dated as of March 13, 2015, as amended on March 31, 2020, among the Service Recipients, Brookfield, the Service Providers and others;
“NAREIT” means the National Association of Real Estate Investment Trusts, Inc.;
“nominating and governance committee” means the nominating and governance committee of the board;
“non-resident holder” has the meaning ascribed thereto under Item 10.E “Taxation - Certain Material Canadian Federal Income Tax Considerations — Taxation of Holders Not Resident in Canada”;

“Non-U.S. Holder” has the meaning ascribed thereto under Item 10.E “Taxation — Certain Material U.S. Federal Income Tax Considerations”;
“NTS” means Nova Transportadora do Sudeste S.A.;
“NTS entities” means collectively, the entities through which our company holds our interest in NTS;
“NYSE” means the New York Stock Exchange;
“operating performance compensation” means performance-based compensation;
the “partnership” means Brookfield Infrastructure Partners L.P.;
“pre-approval policy” means the written policy on auditor independence that our board of directors has adopted;
Brookfield Infrastructure Corporation     3


“preferred shares” has the meaning ascribed thereto under Item 10.B “Memorandum and Articles of Association”;
“preferred units” means the preferred limited partnership units of the partnership;
“proposed amendments” has the meaning ascribed thereto under Item 10.E “Taxation — Certain Material Canadian Federal Income Tax Considerations”;
“PSG” means Brookfield’s Public Securities Group;
“RDSP” means registered disability savings plan;
“Redeemable Partnership Unit” is a limited partnership unit of the Holding LP;
“Registration Rights Agreement” has the meaning ascribed thereto under Item 7.B “Related Party Transactions - Relationship with Brookfield - Registration Rights Agreement”;
“Relationship Agreement” means the amended and restated relationship agreement dated as of March 28, 2014, as amended from time to time, between, among others, Brookfield Asset Management Inc., the partnership and Holding LP;

“resident holder” has the meaning ascribed thereto under Item 10.E “Taxation - Certain Material Canadian Federal Income Tax Considerations — Taxation of Holders Resident in Canada”;
“RESP” means registered education savings plan;
“rights agent” means Wilmington Trust, National Association;
“Rights Agreement” has the meaning ascribed thereto under Item 7.B “Related Party Transactions - Relationship with Brookfield - Rights Agreement”;
“RRIF” means registered retirement income fund;
“RRSP” means registered retirement savings plan;
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002 (United States), as amended;
“SEC” means the United States Securities and Exchange Commission;
“SEDAR” means the System for Electronic Document Analysis and Retrieval at www.sedar.com;
“Service Providers” means Brookfield Infrastructure Group L.P., Brookfield Asset Management Private Institutional Capital Adviser (Canada), LP, Brookfield Asset Management Barbados Inc., Brookfield Global Infrastructure Advisor Limited, Brookfield Infrastructure Group (Australia) Pty Limited and, unless the context otherwise requires, includes any other affiliate of Brookfield Asset Management that provides services to us pursuant to the Master Services Agreement or any other service agreement or arrangement;
“Service Recipients” means the partnership, Holding LP, certain of the Brookfield Infrastructure Holding Entities and BIPC in their capacity as recipients of services under the Master Services Agreement;
“shareholder” means a holder of exchangeable shares;
4        Brookfield Infrastructure Corporation


“special distribution” means the special distribution of the partnership to holders of units of one (1) exchangeable share per nine (9) units held completed on March 31, 2020, as further described in Item 4.A “History and Development of Brookfield Infrastructure - History and Development of our Business”;
“Tax Act” means the Income Tax Act (Canada);
“TFSA” means tax-free savings account;
“Treasury Regulations” means the U.S. Treasury Regulations promulgated under the U.S. Internal Revenue Code;
“TSX” means the Toronto Stock Exchange;
“U.K.” means United Kingdom;
“unitholder” means a holder of units;
“units” means non-voting limited partnership units of the partnership, other than the preferred units;
“U.S. Internal Revenue Code” means the U.S. Internal Revenue Code of 1986, as amended;
“U.S. Holder” has the meaning ascribed thereto under Item 10.E “Taxation — Certain Material U.S. Federal Income Tax Considerations”;
“U.S. Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated from time to time thereunder; and
“Voting Agreement” has the meaning ascribed thereto under Item 7.B “Related Party Transactions - Relationship with Brookfield Infrastructure - Voting Agreements”.
Brookfield Infrastructure Corporation     5




FORWARD-LOOKING STATEMENTS
This annual report on Form 20-F contains certain “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws, including the Private
Securities Litigation Reform Act of 1995. These forward-looking statements and information relate to, among other things, our group’s business, operations, objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates and anticipated events or trends. In some cases, you can identify forward-looking statements and information by terms such as “anticipate,” “believe,” “could,” “estimate,” “likely,” “expect,” “intend,” “may,” “continue,” “plan,” “potential,” “objective,” “tend,” “seek,” “target,” “foresee,” “aim to,” “outlook,” “endeavor,” “will,” “would” and “should” or the negative of those terms or other comparable terminology. In particular, our statements with respect to the continuity plans and preparedness measures we have implemented in response to the novel coronavirus (“COVID-19”) pandemic and its expected impact on our group’s businesses, operations, earnings and results, are forward-looking statements. These forward-looking statements and information are not historical facts but reflect our current expectations regarding future results or events and are based on information currently available to us and on assumptions we believe are reasonable.

Although we believe that our anticipated future results, performance or achievements expressed or implied by these forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve assumptions, known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our group’s business, financial condition, liquidity and results of operations and our plans and strategies may vary materially from those expressed in the forward-looking statements and forward-looking information in this annual report on Form 20-F.

Factors that could cause our actual results to differ materially from those contemplated or implied by the forward- looking statements and information in this annual report on Form 20-F include, without limitation:

commodity risks;

alternative technologies could impact the demand for, or use of, the businesses and assets that our group owns and operates and could impair or eliminate the competitive advantage of our group’s businesses and assets;

the competitive market for acquisition opportunities and the inability to identify and complete acquisitions as planned;

our group’s ability to renew existing contracts and win additional contracts with existing or potential customers;

timing and price for the completion of unfinished projects;

infrastructure operations may require substantial capital expenditures;

6        Brookfield Infrastructure Corporation



exposure to environmental risks, including increasing environmental legislation and the broader impacts of climate change;

exposure to increased economic regulation and adverse regulatory decisions;

First Nations claims to land, adverse claims or governmental claims may adversely affect our group’s infrastructure operations;

some of our group’s current operations are held in the form of joint ventures or partnerships or through consortium arrangements;

some of our group’s businesses operate in jurisdictions with less developed legal systems and could experience difficulties in obtaining effective legal redress, which creates uncertainties;

actions taken by national, state, or provincial governments, including nationalization, or the imposition of new taxes, could materially impact the financial performance or value of our group’s assets;

reliance on technology and exposure to cyber-security attacks;

customers may default on their obligations;

reliance on tolling and revenue collection systems;

Brookfield’s influence over our group and our group’s dependence on Brookfield as the Service Providers;

the lack of an obligation of Brookfield to source acquisition opportunities for our group;

our group’s dependence on Brookfield and its professionals;

the role and ownership of Brookfield in the partnership, the Holding LP and our company may change and interests in the general partner of the partnership may be transferred to a third party without unitholder or shareholder consent;

Brookfield may increase its ownership of the partnership or our company;

the Master Services Agreement and our other arrangements with Brookfield do not impose on Brookfield any fiduciary duties to act in the best interests of holders of exchangeable shares or units;

conflicts of interest between the partnership, our company, their respective unitholders and shareholders, on the one hand, and Brookfield, on the other hand;

our group’s arrangements with Brookfield may contain terms that are less favorable than those which otherwise might have been obtained from unrelated parties;

the general partner of the partnership may be unable or unwilling to terminate the Master Services Agreement;

the limited liability of, and our group’s indemnification of, our Service Providers;

Brookfield Infrastructure Corporation     7



the partnership or our company may not be able to continue paying comparable or growing cash
distributions to holders of exchangeable shares or units in the future;

the exchangeable shares can be significantly impacted by the market price of the partnerships’ units and the combined business performance of our group as a whole;

the company’s lack of operating history;

the partnership and the company are holding entities that rely on their subsidiaries to provide the funds necessary to pay its distributions and meet its financial obligations;

our company is exempt from certain requirements of Canadian securities laws and we are not subject to the same disclosure requirements as a U.S. domestic issuer;

our company may become regulated as an investment company under the U.S. Investment Company Act of 1940, as amended (“Investment Company Act”);

the effectiveness of our internal controls;

our group’s assets are or may become highly leveraged and our group intends to incur indebtedness about the asset level;

the acquisition of distressed companies may subject our group to increased risks, including the incurrence of additional legal or other expenses;

the redemption of exchangeable shares by the company at any time or upon notice from the
holder of the class B shares;

future sales and issuances of exchangeable shares or units or securities exchangeable for
exchangeable shares or units, or the perception of such sales or issuances, could depress the
trading price of the exchangeable shares or units;

unitholders do not have a right to vote on partnership matters or to take part in the management of the partnership;

market price of the exchangeable shares and units may be volatile;

dilution of existing shareholders;

investors may find it difficult to enforce service of process and enforcement of judgments against the partnership or our company;

the partnership and the company are holding entities that rely on their subsidiaries to provide the funds necessary to pay its distributions and meet its financial obligations;

foreign currency risk and risk management activities;

changes in tax law and practice;

general economic conditions and risks relating to the economy;

pandemics or epidemics, including risks associated with the global pandemic caused by COVID-19, and the related global impact on commerce and travel and substantial volatility in
8        Brookfield Infrastructure Corporation



stock markets worldwide, which may result in a decrease of cash flows and impairment losses and/or revaluations of our group’s investments and infrastructure assets;

adverse changes in currency exchange rates;

availability and cost of credit;

government policy and legislation change;

exposure to uninsurable losses and force majeure events;

labor disruptions and economically unfavorable collective bargaining agreements;

exposure to occupational health and safety related accidents;

high levels of government regulation upon many of our group’s operating entities, including with respect to rates set for our regulated businesses;

our group’s infrastructure business is at risk of becoming involved in disputes and possible litigation;

our ability to finance our operations due to the status of the capital markets;

changes in our credit ratings;

our operations may suffer a loss from fraud, bribery, corruption or other illegal acts; and

other factors described in this annual report on Form 20-F, including, but not limited to, those described under Item 3.D “Risk Factors” herein and elsewhere in this annual report on
Form 20-F.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on these forward-looking statements and information, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. In light of these risks, uncertainties and assumptions, the events described by these forward-looking statements and information might not occur. These risks could cause our group’s actual results and our group’s plans and strategies to vary from these forward-looking statements and information. We qualify any and all of these forward-looking statements and information by these cautionary factors. Please keep this cautionary note in mind as you read this annual report on Form 20-F. We disclaim any obligation to update or revise publicly any forward-looking statements or information, whether written or oral, as a result of new information, future events or otherwise, except as required by applicable law.

Each exchangeable share has been structured with the intention of providing an economic return equivalent to one unit of the partnership. We therefore expect that the market price of our exchangeable shares will be significantly impacted by the market price of the units and the combined business performance of our group as a whole. In addition to carefully considering the disclosure made in this 20-F, you should carefully consider the disclosure made by Brookfield Infrastructure in its continuous disclosure filings. Copies of the partnership’s continuous disclosure filings are available electronically on EDGAR on the SEC’s website at www.sec.gov or on SEDAR at www.sedar.com.
Brookfield Infrastructure Corporation     9



CAUTIONARY STATEMENT REGARDING THE USE OF NON-IFRS ACCOUNTING MEASURES
To measure performance, we focus on net income, a measure under IFRS, as well as certain non-IFRS measures, including FFO, AFFO, and adjusted EBITDA (“Adjusted EBITDA”), along with other measures.

FFO
To measure performance, among other measures, we focus on net income as well as FFO. We define FFO as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. We also exclude from FFO dividends paid on the exchangeable shares of our company that are presented as interest expense, as well as the interest expense on loans payable to the partnership which represent the partnership’s investment in our company. FFO is a measure of operating performance that is not calculated in accordance with, and does not have any standardized meaning prescribed by IFRS as issued by the International Accounting Standards Board. FFO is therefore unlikely to be comparable to similar measures presented by other issuers. FFO has limitations as an analytical tool. Specifically, our definition of FFO may differ from the definition used by other organizations, as well as the definition of funds from operations used by the Real Property Association of Canada and NAREIT, in part because the NAREIT definition is based on U.S. GAAP, as opposed to IFRS.
AFFO
We define AFFO as FFO less capital expenditures required to maintain the current performance of our operations (maintenance capital expenditures). AFFO is a measure of operating performance that is not calculated in accordance with, and does not have any standardized meaning prescribed by, IFRS. AFFO is therefore unlikely to be comparable to similar measures presented by other issuers and has limitations as an analytical tool.
Adjusted EBITDA
In addition to FFO and AFFO, we focus on Adjusted EBITDA, which we define as net income excluding the impact of depreciation and amortization, interest expense, current and deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. Adjusted EBITDA is a measure of operating performance that is not calculated in accordance with, and does not have any standardized meaning prescribed by, IFRS. Adjusted EBITDA is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted EBITDA has limitations as an analytical tool.
10        Brookfield Infrastructure Corporation



Proportionate Debt
Proportionate debt is presented based on our proportionate share of borrowings obligations relating to our investments in various portfolio businesses. Proportionate net debt is proportionate debt net of our proportionate share of cash. The proportionate financial information is not, and is not intended to be, presented in accordance with IFRS. We provide proportionate debt and net debt measures because we believe it assists investors and analysts in estimating our overall performance and understanding the leverage pertaining specifically to our company’s share of its invested capital in a given investment. When used in conjunction with Adjusted EBITDA, proportionate debt is expected to provide useful information as to how our company has financed its businesses at the asset-level. We believe our proportionate presentation, when read in conjunction with our company’s reported results under IFRS, including consolidated debt, provides a more meaningful assessment of how our operations are performing and capital is being managed.
For further details regarding our use of FFO, AFFO, Adjusted EBITDA, and proportionate debt, as well as a reconciliation of net income to these performance measures, please see the “Reconciliation of Non-IFRS Financial Measures” section in Item 5.A “Operating Results”.
Brookfield Infrastructure Corporation     11


PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3.    KEY INFORMATION
3.A    SELECTED FINANCIAL DATA
Not applicable.
3.B    CAPITALIZATION AND INDEBTEDNESS
Not applicable.
3.C    REASONS FOR THE OFFER AND USE OF PROCEEDS
Not applicable.
3.D    RISK FACTORS
Summary of Risk Factors

The following summarizes some, but not all, of the risks provided below. Please carefully consider all of the information discussed in this Item 3.D “Risk Factors” in this annual report for a detailed description of these and other risks.

Risks Relating to Our Group’s Operating Entities, Operating Geographies and the Infrastructure Industry
Risks relating to demand for commodities, such as natural gas or minerals;
Risks relating to impact of alternative technologies on our business and cyber security attacks;
Risks relating to successful identification, completion and integration of acquisitions;
Risks relating to competition with other market participants;
Risks relating to construction or expansion of projects, environmental damage and future capital expenditures;
Risks relating to economic regulation and adverse regulatory decisions in the countries we operate, including nationalization or the imposition of new taxes;
Risks relating to adverse claims or governmental rights asserted against the lands used for our infrastructure assets;
Risks relating to our transactions and joint ventures, partnerships and consortium arrangements;
Risks relating to tolling and revenue collection systems.

12        Brookfield Infrastructure Corporation


Risks Relating to Our Relationship with Brookfield
Risks relating to our dependence on Brookfield and the Service Providers, and conflicts of interests therewith;
Risks relating to our inability to have access to all infrastructure acquisitions that Brookfield identifies;
Risks relating to the departure of some or all of Brookfield’s professionals;
Risks relating to Brookfield’s ownership position in our company and the partnership;
Risks relating to the lack of any fiduciary obligations imposed on Brookfield to act in the best interests of the Service Recipients, our company or our shareholders;
Risks relating to the limited liability of the Service Providers to the partnership, our company and the other Service Recipients;
Risks relating to our inability to terminate the Master Services Agreement;
Risks relating to our guarantees of certain debt obligations.

Risks Relating to our Company
Risks relating to the company’s lack of operating history;
Risks relating to the company’s role as a holding company;
Risks associated with the effectiveness of our company’s internal controls;
Risks relating to our assets becoming highly leveraged;
Risks relating to the acquisition of distressed companies which may subject our group to increased risks, including the incurrence of additional legal or other expenses.

Risks Relating to the Exchangeable Shares
Risks relating to our ability to continue paying comparable or growing cash dividends;
Risks relating to our ability to redeem the exchangeable shares at any time;
Risks relating to the market price and volatility of our exchangeable shares and the units;
Risks relating to market sentiment around exchanges of exchangeable shares into units and the issuance of additional securities in lieu of incurring indebtedness;
Risks relating to the Rights Agreement terminating on March 31, 2025;
Risks relating to the ability to enforce service of process and enforcement of judgments against us and directors and officers of the Service Providers;
Risks relating to our sole discretion to elect whether shareholders receive cash or units upon a liquidation, exchange or redemption event;
Risks relating to the delisting of our exchangeable shares;
Risks relating to the application of applicable Canadian or U.S. rules relating to takeover bids, issuer bids and tender offers.

Risks Related to Taxation
Risks related to United States and Canadian taxation, and the effects thereof on our group’s business and operations.


Brookfield Infrastructure Corporation     13


General Risks
Risks relating to general economic and political conditions, changes in governmental policy and legislation, and the markets in which we operate;
Risks relating to developments associated with the COVID-19 pandemic;
Risks relating to foreign currency;
Risks relating to access to debt or equity markets, our ability to access credit markets and changes in our credit ratings;
Risks relating to natural disasters, weather events, uninsurable losses and force majeure events;
Risks relating to labor disruptions and economically unfavorable collective bargaining agreements;
Risks relating to occupational health and safety and accidents;
Risks relating to fraud, bribery, corruption, other illegal acts, inadequate or failed internal processes or systems, or from external events;
Risks relating to contractual disputes and litigation.

You should carefully consider the following factors in addition to the other information set forth in this annual report on Form 20-F. If any of the following risks actually occur, our business, financial condition and results of operations and the value of the exchangeable shares would likely suffer. Each
exchangeable share has been structured with the intention of providing an economic return equivalent to
one unit of the partnership. We therefore expect that the market price of our exchangeable shares will be significantly impacted by the market price of the units and the combined business performance of our group as a whole. In addition to carefully considering the risks factors contained in this annual report on Form 20-F and described below, you should carefully consider the risk factors applicable to Brookfield Infrastructure’s business and an investment in units, described in the partnership’s annual report on Form 20-F.
Risks Relating to Our Group’s Operating Entities, Operating Geographies and the Infrastructure Industry
Some of our group’s operating subsidiaries depend on continued strong demand for commodities, such as natural gas or minerals, for their financial performance. Material reduction in demand for these key commodities can potentially result in reduced value for assets, or in extreme cases, a stranded asset.
Some of our group’s operating subsidiaries are critically linked to the transport or production of key commodities. While our group endeavors to protect against short to medium-term commodity demand risk wherever possible by structuring our contracts in a way that minimizes volume risk (e.g., minimum guaranteed volumes and ‘take-or-pay’ arrangements), these contract terms are finite and in some cases, contracts contain termination or suspension rights for the benefit of the customer. Accordingly, a long-term and sustained downturn in the demand for or price of a key commodity linked to one of our group’s operating subsidiaries may result in termination, suspension or default under a key contract, or otherwise have a material adverse impact on the financial performance or growth prospects of that particular operation, notwithstanding our group’s efforts to maximize contractual protections.

14        Brookfield Infrastructure Corporation


If a critical upstream or downstream business entity ceased to operate, this could materially impact our group’s financial performance or the value of one or more of our group’s operating businesses. In extreme cases, our group’s infrastructure could become redundant, resulting in an inability to recover a return on or of capital and potentially triggering covenants and other terms and conditions under associated debt facilities.
Alternative technologies could impact the demand for, or use of, the business and assets that our group’s entities own and operate and could impair or eliminate our group’s competitive advantage of our businesses and assets.
There are alternative technologies that may impact the demand for, or use of, the businesses and assets that our group owns and are operated by our group’s operating subsidiaries. While some such alternative technologies are in earlier stages of development, ongoing research and development activities may improve such alternative technologies. For example, changes in the materials used in construction may reduce the demand for thermal coal and iron ore. Additionally, off-grid energy solutions may reduce the need for electricity and gas generation networks and pipelines, and technologies that enable remote working opportunities could reduce traffic on our group’s toll roads. If this were to happen, the competitive advantage of our group’s businesses and assets may be significantly impaired or eliminated and our business, financial condition, results of operations and cash flow could be materially and adversely affected as a result.
The completion of new acquisitions can have the effect of significantly increasing the scale and scope of our operations, including operations in new geographic areas and industry sectors, and the Service Providers may have difficulty managing these additional operations. In addition, acquisitions involve risks to our business
A key part of our group’s strategy involves seeking acquisition opportunities upon Brookfield’s recommendation and allocation of opportunities to our company. Acquisitions may increase the scale, scope and diversity of our operating businesses. We depend on the diligence and skill of Brookfield’s professionals and our Service Providers to manage our group, including integrating all of the acquired business’ operations with our existing operations. These individuals may have difficulty managing the additional operations and may have other responsibilities within Brookfield’s asset management business. If Brookfield does not effectively manage the additional operations, our existing business, financial condition and results of operations may be adversely affected.
Acquisitions will likely involve some or all of the following risks, which could materially and adversely affect our business, financial condition or results of operations: the difficulty of integrating the acquired operations and personnel into our current operations; the ability to achieve potential synergies; potential disruption of our current operations; diversion of resources, including Brookfield’s time and attention; the difficulty of managing the growth of a larger organization; the risk of entering markets in which we have little experience; the risk of becoming involved in labor, commercial or regulatory disputes or litigation related to the new enterprise; the risk of environmental or other liabilities associated with the acquired business; and the risk of a change of control resulting from an acquisition triggering rights of third parties or government agencies under contracts with, or authorizations held by the operating business being acquired. While it is our practice to conduct extensive due diligence investigations into businesses being acquired, it is possible that due diligence may fail to uncover all material risks in the business being acquired, or to identify a change of control trigger in a material contract or authorization, or that a contractual counterparty or government agency may take a different view on the interpretation of such a provision to that taken by us, thereby resulting in a dispute. The discovery of any material liabilities subsequent to an acquisition, as well as the failure of an acquisition to perform according to expectations, could have a material adverse effect on our group’s business, financial condition and results of operations. In addition, if returns are lower than anticipated from acquisitions, we may not be able to achieve growth in our dividends in line with our stated goals and the market value of our exchangeable shares may decline.
Brookfield Infrastructure Corporation     15


Our group operates in a highly competitive market for acquisition opportunities.
Our group’s acquisition strategy is dependent to a significant extent on the ability of Brookfield to identify acquisition opportunities that are suitable for our group. Our group faces competition for acquisitions primarily from investment funds, operating companies acting as strategic buyers, construction companies, commercial and investment banks, and commercial finance companies. Many of these competitors are substantially larger and have considerably greater financial, technical and marketing resources than are available to our group. Some of these competitors may also have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of acquisitions and to offer terms that our group is unable or unwilling to match. Due to the capital intensive nature of infrastructure acquisitions, in order to finance acquisitions our group will need to compete for equity capital from institutional investors and other equity providers, including Brookfield, and our group’s ability to consummate acquisitions will be dependent on such capital continuing to be available. Increases in interest rates could also make it more difficult to consummate acquisitions because our group’s competitors may have a lower cost of capital which may enable them to bid higher prices for assets. In addition, because of our group’s affiliation with Brookfield, there is a higher risk that when our group participates with Brookfield and others in joint ventures, partnerships and consortiums on acquisitions we may become subject to antitrust or competition laws that we would not be subject to if our group were acting alone. These factors may create competitive disadvantages for our group with respect to acquisition opportunities.
Our group cannot provide any assurance that the competitive pressures our group faces will not have a material adverse effect on our group’s business, financial condition and results of operations or that Brookfield will be able to identify and make acquisitions on our group’s behalf that are consistent with our group’s objectives or that generate attractive returns for our group’s respective shareholders or unitholders. Our group may lose acquisition opportunities if our group does not match prices, structures and terms offered by competitors, if our group is unable to access sources of equity or obtain indebtedness at attractive rates or if our group becomes subject to antitrust or competition laws. Alternatively, our group may experience decreased rates of return and increased risks of loss if our group matches prices, structures and terms offered by competitors.
Our group may be unable to complete acquisitions, dispositions and other transactions as planned.
Our group’s acquisitions, dispositions and other transactions are subject to a number of closing conditions, including, as applicable, security holder approval, regulatory approval (including competition authorities) and other third party consents and approvals that are beyond our group’s control and may not be satisfied. In particular, many jurisdictions in which our group seeks to invest (or divest) impose government consent requirements on investments by foreign persons. Consents and approvals may not be obtained, may be obtained subject to conditions which adversely affect anticipated returns, and/or may be delayed and delay or ultimately preclude the completion of acquisitions, dispositions and other transactions. Government policies and attitudes in relation to foreign investment may change, making it more difficult to complete acquisitions, dispositions and other transactions in such jurisdictions. Furthermore, interested stakeholders could take legal steps to prevent transactions from being completed. If all or some of our group’s acquisitions, dispositions and other transactions are unable to be completed on the terms agreed, our group may need to modify or delay or, in some cases, terminate these transactions altogether, the market value of our group’s respective securities may significantly decline and our group may not be able to achieve the expected benefits of the transactions.
16        Brookfield Infrastructure Corporation


Infrastructure assets may be subject to competition risk.
Some assets may be affected by the existence of other competing assets owned and operated by other parties. There can be no assurance that our group’s businesses can renew all their existing contracts or win additional contracts with their existing or potential customers. The ability of our group’s businesses to maintain or improve their revenue is dependent on price, availability and customer service as well as on the availability of access to alternative infrastructure. In the case where the relevant business is unable to retain customers and/or unable to win additional customers to replace those customers it is unable to retain, the revenue from such assets will be reduced.
Investments in infrastructure projects prior to or during a construction or expansion phase are likely to be subject to increased risk.
A key part of our group’s growth strategy involves identifying and taking advantage of organic growth opportunities within our existing businesses. These opportunities typically involve development and construction of new infrastructure or expansion or upgrades to existing infrastructure. Investments in new infrastructure projects during a development or construction phase are likely to be subject to additional risk that the project will not receive all required approvals, will not be completed within budget, within the agreed timeframe and to the agreed specifications and, where applicable, will not be successfully integrated into the existing assets. During the construction phase, major risks include: (i) a delay in the projected completion of the project, which can result in an increase in total project construction costs through higher capitalized interest charges and additional labor, material expenses, and a resultant delay in the commencement of cash flow; (ii) the insolvency of the head contractor, a major subcontractor and/or a key equipment supplier; (iii) construction costs exceeding estimates for various reasons, including inaccurate engineering and planning, labor and building material costs in excess of expectations and unanticipated problems with project start-up; and (iv) defects in design, engineering or construction (including, without limitation, latent defects that do not materialize during an applicable warranty or limitation periods). Such unexpected increases may result in increased debt service costs, operations and maintenance expenses and damage payments for late delivery. This may result in the inability of project owners to meet the higher interest and principal repayments arising from the additional debt required.
In addition, construction projects may be exposed to significant liquidated damages to the extent that commercial operations are delayed beyond prescribed dates or that performance levels do not meet guaranteed levels.
All of our group’s infrastructure operations may require substantial capital expenditures in the future.
Utilities, transport and energy operations, including our current utilities operations and the operations of Brookfield Infrastructure, are capital intensive and require substantial ongoing expenditures for, among other things, additions and improvements, and maintenance and repair of plant and equipment. Any failure to make necessary capital expenditures to maintain our group’s operations in the future could impair the ability of our group’s operations to serve existing customers or accommodate increased volumes. In addition, our group may not be able to recover such investments based upon the rates our group’s operations are able to charge.
In some of the jurisdictions in which our group has operations, certain maintenance capital expenditures may not be covered by the regulatory framework. If our group’s operations in these jurisdictions require significant capital expenditures to maintain our group’s asset base, our group may not be able to recover such costs through the regulatory framework. In addition, we may be exposed to disallowance risk in other jurisdictions to the extent that capital expenditures and other costs are not fully recovered through the regulatory framework.
Brookfield Infrastructure Corporation     17


Our group’s operating subsidiaries are exposed to the risk of environmental damage.
Our group’s operating subsidiaries are exposed to the risk of environmental damage. Many of our group’s assets are involved in using, handling or transporting substances that are toxic, combustible or otherwise hazardous to the environment. Furthermore, some of our group’s assets have operations in or in close proximity to environmentally sensitive areas or densely populated communities. There is a risk of a leak, spillage or other environmental emission at one of these assets, which could cause regulatory infractions, damage to the environment, injury or loss of life. Such an incident if it occurred could result in fines or penalties imposed by regulatory authorities, revocation of licenses or permits required to operate the business or the imposition of more stringent conditions in those licenses or permits, or legal claims for compensation (including punitive damages) by affected stakeholders. In addition, some of our group’s assets may be subject to regulations or rulings made by environmental agencies that conflict with existing obligations we have under concession or other permitting agreements. Resolution of such conflicts may lead to uncertainty and increased risk of delays or cost over-runs on projects. All of these have the potential to significantly impact the value or financial performance of our group.
Our group’s operating subsidiaries are exposed to the risk of increasing environmental legislation and the broader impacts of climate change.
With an increasing global focus and public sensitivity to environmental sustainability and environmental regulation becoming more stringent, our group’s assets could be subject to increasing environmental responsibility and liability. For example, many jurisdictions in which our group operates are considering implementing, or have implemented, schemes relating to the regulation of carbon emissions. As a result, there is a risk that the consumer demand for some of the energy sources supplied by our group will be reduced. The nature and extent of future regulation in the various jurisdictions in which Brookfield Infrastructure’s operations are situated is uncertain, but is expected to become more complex and stringent.
It is difficult to assess the impact of any such changes on our group. These schemes may result in increased costs to our group’s operations that may not be able to be passed onto our group’s customers and may have an adverse impact on prospects for growth of some businesses. To the extent such regimes (such as carbon emissions schemes or other carbon emissions regulations) become applicable to the operations of our group (and the costs of such regulations are not able to be fully passed on to consumers), our group’s financial performance may be impacted due to costs applied to carbon emissions and increased compliance costs.
Our group’s operating subsidiaries are also subject to laws and regulations relating to the protection of the environment and pollution. Standards are set by these laws and regulations regarding certain aspects of environmental quality and reporting, provide for penalties and other liabilities for the violation of such standards, and establish, in certain circumstances, obligations to remediate and rehabilitate current and former facilities and locations where our group’s operations are, or were, conducted. These laws and regulations may have a detrimental impact on the financial performance of our group’s infrastructure operations and projects through increased compliance costs or otherwise. Any breach of these obligations, or even incidents relating to the environment that do not amount to a breach, could adversely affect the results of our group’s operating subsidiaries and their reputations and expose them to claims for financial compensation or adverse regulatory consequences.
Our group’s operating subsidiaries may also be exposed directly or indirectly to the broader impacts of climate change, including extreme weather events, export constraints on commodities, increased resource prices and restrictions on energy and water usage.
18        Brookfield Infrastructure Corporation


Our group’s operating subsidiaries may be exposed to higher levels of regulation than in other sectors and breaches of such regulations could expose our group’s operating subsidiaries to claims for financial compensation and adverse regulatory consequences.
In many instances, our group’s ownership and operation of infrastructure assets involves an ongoing commitment to a governmental agency. The nature of these commitments exposes the owners of infrastructure assets to a higher level of regulatory control than typically imposed on other businesses. For example, several of our group’s utilities operations are subject to government safety and reliability regulations that are specific to their industries. The risk that a governmental agency will repeal, amend, enact or promulgate a new law or regulation or that a governmental authority will issue a new interpretation of the law or regulations, could affect our operating entities substantially.
Sometimes commitments to governmental agencies involve the posting of financial security for performance of obligations. If obligations are breached these financial securities may be called upon by the relevant agency.
There is also the risk that our group’s operating subsidiaries do not have, might not obtain, or may lose permits necessary for their operations. Permits or special rulings may be required on taxation, financial and regulatory related issues. Even though most permits and licenses are obtained before the commencement of operations, many of these licenses and permits have to be renewed or maintained over the life of the business. The conditions and costs of these permits, licenses and consents may be changed on any renewal, or, in some cases, may not be renewed due to unforeseen circumstances or a subsequent change in regulations. In any event, the renewal or non-renewal could have a material adverse effect on our group’s business, financial condition and results of operations.
The risk that a government will repeal, amend, enact or promulgate a new law or regulation or that a regulator or other government agency will issue a new interpretation of the law or regulations, may affect our group’s operations or a project substantially. This may also be due to court decisions and actions of government agencies that affect these operations or a project’s performance or the demand for its services. For example, a government policy decision may result in adverse financial outcomes for our group through directions to spend money to improve security, safety, reliability or quality of service.
The lands used for our group’s infrastructure assets may be subject to adverse claims or governmental rights.
Our group’s operations require large areas of land on which to be constructed and operated. The rights to use the land can be obtained through freehold title, leases and other rights of use. Although we believe that we have valid rights to all material easements, licenses and rights of way for our infrastructure operations, not all of our easements, licenses and rights of way are registered against the lands to which they relate and may not bind subsequent owners. Additionally, different jurisdictions have adopted different systems of land title and in some jurisdictions, it may not be possible to ascertain definitively who has the legal right to enter into land tenure arrangements with the asset owner. In some jurisdictions where our group has operations, it is possible to claim indigenous or aboriginal rights to land and the existence or declaration of native title may affect the existing or future activities of our group’s utilities, transport or energy operations and impact on their business, financial condition and results of operations.
In addition, a government, court, regulator, or indigenous or aboriginal group may make a decision or take action that affects an asset or project’s performance or the demand for its services. In particular, a regulator may restrict our access to an asset, or may require us to provide third parties with access, or may affect the pricing structure so as to lower our revenues and earnings. Adverse claims or governmental rights may affect the existing or future activities of our group’s operations, impact on our group’s business, financial condition and results of operations, or require that compensation be paid.
Brookfield Infrastructure Corporation     19


Some of our group’s transactions and current operations are structured as joint ventures, partnerships and consortium arrangements, including our interest in NTS, and we intend to continue to operate in this manner in the future, which may reduce Brookfield’s and our group’s influence over our groups operating subsidiaries and may subject our group to additional obligations.
Some of our group’s transactions and current operations are structured as joint ventures, partnerships and consortium arrangements, including our interest in NTS. An integral part of our strategy is to participate with institutional investors in Brookfield-sponsored or co-sponsored consortiums for single asset acquisitions and as a partner in or alongside Brookfield-sponsored or co-sponsored partnerships that target acquisitions that suit our group’s profile. These arrangements are driven by the magnitude of capital required to complete acquisitions of infrastructure assets, strategic partnering arrangements to access operating expertise, and other industry-wide trends that our group believes will continue. Such arrangements involve risks not present where a third party is not involved, including the possibility that partners or co-venturers might become bankrupt or otherwise fail to fund their share of required capital contributions. Additionally, partners or co-venturers might at any time have economic or other business interests or goals different from our group and Brookfield.
While our group’s strategy is to structure these arrangements to afford our group certain protective rights in relation to operating and financing activities, joint ventures, partnerships and consortium investments may provide for a reduced level of influence over an acquired company because governance rights are shared with others. For example, these arrangements are structured to provide the partnership with veto rights over key operational activities and to require these arrangements to distribute available funds generated by the arrangement, subject to maintaining prudent reserves. Accordingly, decisions relating to the underlying operations and financing activities, including decisions relating to the management and operation, the investment of capital within the arrangement, and the timing and nature of any exit, will be made by a majority or supermajority vote of the investors or by separate agreements that are reached with respect to individual decisions. For example, although we own a controlling stake in our interest in NTS, the arrangements in place with our consortium partners require that certain actions with respect to our investment in NTS and our influence over its business operations require supermajority or greater approval of the consortium, which we cannot carry on our own. As a further example, when our group participates with institutional investors in Brookfield-sponsored or co-sponsored consortiums for asset acquisitions and as a partner in or alongside Brookfield-sponsored or co-sponsored partnerships, there is often a finite term to the investment or a date after which partners are granted liquidity rights, which could lead to the investment being sold prior to the date our group would otherwise choose. In addition, such operations may be subject to the risk that the other investors may make business, financial or management decisions with which our group does not agree or the management of applicable company may take risks or otherwise act in a manner that does not serve our group’s interests. Because our group may have a reduced level of influence over such operations, our group may not be able to realize some or all of the benefits that our group believes will be created from our group and Brookfield’s involvement. If any of the foregoing were to occur, our group’s business, financial condition and results of operations could suffer as a result.
In addition, because some of our group’s transactions and current operations are structured as joint ventures, partnerships or consortium arrangements, the sale or transfer of interests in some of our group’s operations, including our interest in NTS, are or may be subject to rights of first refusal or first offer, tag along rights or drag along rights and some agreements provide for buy-sell or similar arrangements. Such rights may be triggered at a time when our group may not want them to be exercised and such rights may inhibit our ability to sell our group’s interest in an entity within our group’s desired time frame or on any other desired basis.
20        Brookfield Infrastructure Corporation


Some of our group’s operating subsidiaries operate in jurisdictions with less developed legal systems and could experience potential difficulties in obtaining effective legal redress and create uncertainties.
Some of our businesses operate in jurisdictions with less developed legal systems than those in more established economies. In these jurisdictions, our group could be faced with potential difficulties in obtaining effective legal redress; a higher degree of discretion on the part of governmental authorities; a lack of judicial or administrative guidance on interpreting applicable rules and regulations; inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; and relative inexperience of the judiciary and courts in such matters.
In addition, in certain jurisdictions, our group may find that the commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements could be uncertain, creating particular concerns with respect to permits, approvals and licenses required or desirable for, or agreements entered into in connection with, our group’s business in any such jurisdiction. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that joint ventures, licenses, permits or approvals (or applications for licenses, permits or approvals) or other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness of and enforcement of such arrangements in these jurisdictions cannot be assured.
Action taken by national, state or provincial governments, including nationalization or the imposition of new taxes, could materially impact the financial performance or value of our group’s assets.
Our group’s assets, including BUUK and NTS, are located in many different jurisdictions, each with its own government and legal system. Different levels of political risk exist in each jurisdiction and it is possible that action taken by a national, state or provincial government, including the nationalization of a business or the imposition of new taxes, could materially impact our financial performance or in extreme cases deprive our group of one or more of its businesses without adequate compensation.
Our group’s business relies on the use of technology, and as a result, our group may be exposed to cyber-security attacks.
Our group’s business places significant reliance on information and other technology. This technology includes our group’s computer systems used for information, processing, administrative and commercial operations and the operating plant and equipment used by our group’s business. In addition, our group’s business also relies upon telecommunication services to interface with its widely distributed business network and customers. The information and embedded systems of key business partners and regulatory agencies are also important to our group’s operations. Our group’s business relies on this technology functioning as intended.
The computer systems used by our group’s business may be subject to cybersecurity risks or other breaches of information technology security, noting the increasing frequency and severity of these kinds of incidents. In particular, the information technology systems used by our group’s business may be subject to cyber terrorism intended to obtain unauthorized access to our proprietary information and that of our group’s business partners, destroy data or disable, degrade or sabotage these systems, through the introduction of computer viruses, fraudulent emails, cyber-attacks and other means, and could originate from a variety of sources including our group’s own employees or unknown third parties. Further, the operating equipment used by our group’s business may not continue to perform as it has in the past, and there is a risk of equipment failure due to wear and tear, latent defect, design or operator errors or early obsolescence, among other things
Brookfield Infrastructure Corporation     21


A breach of our group’s cyber security measures or the failure or malfunction of any of our group’s computerized business systems, associated backup or data storage systems could cause our group to suffer a disruption in one or more parts of our group’s business and experience, among other things, financial loss, a loss of business opportunities, misappropriation or unauthorized release of confidential or personal information, damage to our group’s systems and those with whom our group does business, violation of privacy and other laws, litigation, regulatory penalties and remediation and restoration costs as well as increased costs to maintain our group’s systems. For example, the European General Data Protection Regulation, which came into effect in May 2018, includes stringent operational requirements for entities processing personal information and significant penalties for non-compliance.
A breach of our group’s cyber/data security measures, the failure of any such computerized system or of the operating equipment used by our group’s assets for a significant time period could have a material adverse effect on our group’s business prospects, financial condition, results of operations and cash flow and it may not be possible to recover losses suffered from such incidents under our group’s insurance policies. Although our group continues to develop defenses to such attacks, our group can provide no assurance it will be successful in preventing or ameliorating damage from such an attack on our group and, as the manner in which cyber-attacks are undertaken has become more sophisticated, there is a risk that the occurrence of cyber-attack may remain undetected for an extended period.
Our group’s operating subsidiaries depend on relevant contractual arrangements.
Many of our group’s operating subsidiaries rely on revenue from customers under contracts. There is a risk that customers will default under these contracts. Our group cannot provide assurance that one or more customers will not default on their obligations to our group or that such a default or defaults will not have a material adverse effect on our operations, financial position, future results of operations, or future cash flows. Furthermore, the bankruptcy of one or more of our group’s customers, or some other similar proceeding or liquidity constraint, might make it unlikely that our group would be able to collect all or a significant portion of amounts owed by the distressed entity or entities. In addition, such events might force such customers to reduce or curtail their future use of our group’s products and services, which could have a material adverse effect on our group’s business, financial condition and results of operations.
Our Brazilian business is dependent on a sole customer for the majority of our revenues. Our future success in this market is dependent upon the continued demand by this customer and expansion of our customer base. Any decline in or loss of demand from this customer for any reason may have a negative impact on our revenues, and an adverse effect on our business, financial condition and results of operations. In addition, our dependence on a single customer in this market exposes us to the risk that current or future economic conditions could negatively affect our major customer and cause them to significantly reduce operations or file for bankruptcy.
Our group endeavors to minimize risk wherever possible by structuring our group’s contracts in a way that minimizes volume risk (e.g. minimum guaranteed volumes and ‘take-or-pay’ arrangements), however it is possible that the take-or-pay arrangements may not be fully effective. In addition, the contract terms are finite and in some cases the contracts contain termination or suspension rights for the benefit of the customer.
Certain of our group’s assets with revenues contracted under contracts will be subject to re-contracting risk in the future. Our group cannot provide assurance that we will be able to re-negotiate these contracts once their terms expire, or that even if we are able to do so, that our group will be able to obtain the same prices or terms our group currently receives. If our group is unable to renegotiate these contracts, or unable to receive prices at least equal to the current prices we receive, our group’s business, financial condition, results of operation and prospects could be adversely affected.
22        Brookfield Infrastructure Corporation


Our group relies on tolling and revenue collection systems.
Revenues at some of our group’s assets depend on reliable and efficient tolling, metering or other revenue collection systems. There is a risk that, if one or more of our group’s businesses are not able to operate and maintain these tolling, metering or other revenue collection systems in the manner expected, or if the cost of operation and maintenance is greater than expected, our group’s assets, business, financial condition, and risks of operations could be materially adversely affected. Users of our group’s facilities who do not pay tolls or other charges may be subject to either direct legal action from the relevant business, or in some cases may be referred to the state for enforcement action. Our group bears the ultimate risk if enforcement actions against defaulting customers are not successful or if enforcement actions are more costly or take more time than expected.
Risks Relating to Our Relationship with Brookfield
Brookfield exercises substantial influence over our group and we are highly dependent on the Service Providers.
Brookfield is the sole shareholder of the partnership’s general partner and holds, directly and indirectly, approximately 19.3% of our exchangeable shares. In addition, Brookfield Infrastructure, which itself is controlled by Brookfield, holds all of our issued and outstanding class B shares, having a 75% voting interest, and class C shares, which entitle the partnership to all of the residual value in our company after payment in full of the amount due to holders of exchangeable shares and class B shares and subject to the prior rights of holders of preferred shares. Together, Brookfield and Brookfield Infrastructure hold an approximate 79.8% voting interest in our company. As a result, Brookfield is able to control the appointment and removal of our directors and the directors of the partnership’s general partner and, accordingly, exercise substantial influence over our group. In addition, the Service Providers, which include wholly-owned subsidiaries of Brookfield, provide management and administration services to our group pursuant to the Master Services Agreement. With the exception of our group’s operating subsidiaries, our group generally does not have any employees and depends on the management and administration services provided by the Service Providers. Other subsidiaries of Brookfield also provide management services to certain of our group’s operating subsidiaries, including NTS. The partners, members, shareholders, directors, officers and employees of Brookfield, or Brookfield Personnel, and support staff that provide services to our group are not required to have as their primary responsibility the management and administration of our group or to act exclusively for our group. Any failure to effectively manage our group’s current operations or to implement our group’s strategy could have a material adverse effect on our group’s business, financial condition and results of operations.
Brookfield has no obligation to source acquisition opportunities for our group and our group may not have access to all infrastructure acquisitions that Brookfield identifies.
Our ability to grow depends on Brookfield’s ability to identify and present our group with acquisition opportunities. However, Brookfield has no obligation to source acquisition opportunities for our group. In addition, Brookfield has not agreed to commit to our group any minimum level of dedicated resources for the pursuit of infrastructure-related acquisitions. There are a number of factors which could materially and adversely impact the extent to which suitable acquisition opportunities are made available from Brookfield, for example:
there is no accepted industry standard for what constitutes an infrastructure asset. For example, Brookfield may consider certain assets that have both real-estate related characteristics and infrastructure related characteristics to be real estate and not infrastructure;
Brookfield Infrastructure Corporation     23


it is an integral part of Brookfield’s (and our group) strategy to pursue the acquisition of infrastructure assets through consortium arrangements with institutional investors, strategic partners and/or financial sponsors and to form partnerships (including private funds, joint ventures and similar arrangements) to pursue such acquisitions on a specialized or global basis. Although Brookfield has agreed that it will not enter any such arrangements that are suitable for our group without giving our group an opportunity to participate in them, there is no minimum level of participation to which our group will be entitled;
the same professionals within Brookfield’s organization that are involved in sourcing and executing acquisitions that are suitable for our group are responsible for sourcing and executing opportunities for the vehicles, consortiums and partnerships referred to above, as well as having other responsibilities within Brookfield’s broader asset management business. Limits on the availability of such individuals will likewise result in a limitation on the availability of acquisition opportunities for our group;
Brookfield will only recommend acquisition opportunities that it believes are suitable and appropriate for our group. Our focus is on assets where we believe that our operations-oriented approach can be deployed to create value. Accordingly, opportunities where Brookfield cannot play an active role in influencing the underlying assets may not be consistent with our acquisition strategy and, therefore, may not be suitable for our group, even though they may be attractive from a purely financial perspective. Legal, regulatory, tax and other commercial considerations will likewise be an important consideration in determining whether an opportunity is suitable and/or appropriate for our group and will limit our group’s ability to participate in certain acquisitions; and
in addition to structural limitations, the question of whether a particular acquisition is suitable and/or appropriate is highly subjective and is dependent on a number of portfolio construction and management factors including our liquidity position at the relevant time, the expected risk return profile of the opportunity, its fit with the balance of our group’s investments and related operations, other opportunities that we may be pursuing or otherwise considering at the relevant time, our interest in preserving capital in order to secure other opportunities and/or to meet other obligations, and other factors. If Brookfield determines that an opportunity is not suitable or appropriate for us, it may still pursue such opportunity on its own behalf, or on behalf of a Brookfield-sponsored vehicle, partnership or consortium.
In making determinations about acquisition opportunities and investments, consortium arrangements or partnerships, Brookfield may be influenced by factors that result in a misalignment or conflict of interest and may take the interests of others into account, as well as our group’s own interests. See Item 7.B “Related Party Transactions—Conflicts of Interest and Fiduciary Duties.”
Among others, we may pursue acquisition opportunities indirectly through investments in Brookfield-sponsored vehicles, consortiums and partnerships or directly (including by investing alongside such vehicles, consortiums and partnerships). Any references in this Item 3.D.–“Risk Factors” to our acquisitions, investments, assets, expenses, portfolio companies or other terms should be understood to mean such items held, incurred or undertaken directly by us or indirectly by us through our investment in such Brookfield-sponsored vehicles, consortiums and partnerships.
24        Brookfield Infrastructure Corporation



The departure of some or all of Brookfield’s professionals could prevent us and Brookfield Infrastructure from achieving our objectives.
Our group depends on the diligence, skill and business contacts of Brookfield’s professionals and the information and opportunities they generate during the normal course of their activities. Our future success will depend on the continued service of these individuals, who are not obligated to remain employed with Brookfield. Brookfield has experienced departures of key professionals in the past and may do so in the future, and we cannot predict the impact that any such departures will have on our group’s ability to achieve its objectives. The departure of a significant number of Brookfield’s professionals for any reason, or the failure to appoint qualified or effective successors in the event of such departures, could have a material adverse effect on our group’s ability to achieve its objectives. The Master Services Agreement does not require Brookfield to maintain the employment of any of its professionals or to cause any particular professionals to provide services to us or on our behalf.
Brookfield’s and Brookfield Infrastructure’s ownership position of our company entitles them to a significant percentage of our dividends, and Brookfield may increase its ownership relative to other shareholders.
Brookfield owns, directly and indirectly, approximately 19.3% of our exchangeable shares, entitling it to all dividends exchangeable shareholders will receive. In addition, Brookfield Infrastructure owns all of the issued and outstanding class B shares of our company, which represent a 75% voting interest, and all of the issued and outstanding class C shares of our company, which entitle the partnership to all of the residual value in our company after payment in full of the amount due to holders of exchangeable shares and class B shares and subject to the prior rights of holders of preferred shares. Together, Brookfield and Brookfield Infrastructure hold an approximate 79.8% voting interest in our company. Brookfield Infrastructure’s ownership of class C shares entitles it to receive dividends as and when declared by our board. Accordingly, Brookfield and Brookfield Infrastructure’s ownership position of exchangeable shares and class C shares of our company allows them to receive a substantial percentage of our dividends. In addition, Brookfield may increase its ownership position in our company. Brookfield may purchase additional exchangeable shares of our company in the open market or pursuant to a private placement, which may result in Brookfield increasing its ownership of our exchangeable shares relative to other shareholders, which could reduce the amount of cash available for distribution to public shareholders.

Brookfield Infrastructure Corporation     25


None of British Columbia corporate law, the Master Services Agreement and our other arrangements with Brookfield impose on Brookfield any fiduciary duties to act in the best interests of our shareholders or the partnership’s unitholders.
None of British Columbia corporate law, the Master Services Agreement and our other arrangements with Brookfield impose on Brookfield any duty (statutory or otherwise) to act in the best interests of the Service Recipients, nor do they impose other duties that are fiduciary in nature.
Our organizational and ownership structure may create significant conflicts of interest that may be resolved in a manner that is not in the best interests of our company or the best interests of our shareholders.
Our organizational and ownership structure involves a number of relationships that may give rise to conflicts of interest between our company and our shareholders, on the one hand, and Brookfield and Brookfield Infrastructure, on the other hand. For example, our board mirrors the board of the general partner of the partnership, except that our board has one additional non-overlapping board member to assist us with, among other things, resolving any conflicts of interest that may arise from our relationship with Brookfield Infrastructure. In certain instances, the interests of Brookfield or Brookfield Infrastructure may differ from the interests of our company and our shareholders, including with respect to the types of acquisitions made, the timing and amount of distributions by our company, the reinvestment of returns generated by our operations, the use of leverage when making acquisitions and the appointment of outside advisors and service providers. Further, Brookfield may make decisions, including with respect to tax or other reporting positions, from time to time that may be more beneficial to one type of investor or beneficiary than another, or to Brookfield rather than to our company and our shareholders.
Brookfield holds, directly and indirectly, approximately 19.3% of our exchangeable shares. In accordance with our articles, the holders of the class B shares are entitled to cast, in the aggregate, a number of votes equal to three times the number of votes attached to the exchangeable shares (which carry one vote per exchangeable share), and except as otherwise expressly provided in the articles or as required by law, the holders of exchangeable shares and class B shares vote together and not as separate classes. Brookfield Infrastructure, which itself is controlled by Brookfield, holds all of our issued and outstanding class B shares, having a 75% voting interest in our company, and class C shares of our company, which entitle the partnership to all of the residual value in our company after payment in full of the amount due to holders of exchangeable shares and class B shares and subject to the prior rights of holders of preferred shares. As a result, Brookfield is able to control the election and removal of our directors and the directors of the partnership’s general partner and, accordingly, exercises substantial influence over our group.
26        Brookfield Infrastructure Corporation


In addition, the Service Providers, being wholly-owned subsidiaries of Brookfield, provide management services to us pursuant to the Master Services Agreement. Pursuant to the Master Services Agreement, on a quarterly basis, Brookfield Infrastructure will pay a quarterly base management fee to the Service Providers equal to 0.3125% (1.25% annually) of the market value of Brookfield Infrastructure. We reimburse Brookfield Infrastructure for our proportionate share of such fee. For purposes of calculating the base management fee, the market value of Brookfield Infrastructure is equal to the aggregate value of all outstanding units on a fully-diluted basis, preferred units and securities of the other Service Recipients (including our exchangeable shares and the exchangeable limited partnership units issued by Exchange LP in connection with Brookfield Infrastructure’s acquisition of an effective 30% interest in Enercare) that are not held by Brookfield Infrastructure, plus all outstanding third party debt with recourse to a Service Recipient, less all cash held by such entities. Brookfield Infrastructure Special GP, a subsidiary of Brookfield, also receives incentive distributions based on the amount by which quarterly distributions on Holding LP units (other than Holding LP Class A Preferred Units) as well as economically equivalent securities, such as the exchangeable shares, of the other Service Recipients exceed specified target levels as set forth in Holding LP’s limited partnership agreement. This relationship may give rise to conflicts of interest between our company and our shareholders, on the one hand, and Brookfield, on the other, as Brookfield’s interests may differ from the interests of Brookfield Infrastructure, our company or our shareholders.
Brookfield Infrastructure’s arrangements with Brookfield were negotiated in the context of an affiliated relationship and may contain terms that are less favorable than those which otherwise might have been obtained from unrelated parties.
The terms of Brookfield Infrastructure’s arrangements with Brookfield, that apply to our company, were effectively determined by Brookfield. These terms, including terms relating to compensation, contractual or fiduciary duties, conflicts of interest and Brookfield’s ability to engage in outside activities, including activities that compete with us, our activities and limitations on liability and indemnification, may be less favorable than otherwise might have resulted if the negotiations had involved unrelated parties.
The liability of the Service Providers is limited under our arrangements with them and we have agreed to indemnify the Service Providers against claims that they may face in connection with such arrangements, which may lead them to assume greater risks when making decisions relating to us than they otherwise would if acting solely for their own account.
Under the Master Services Agreement, the Service Providers have not assumed any responsibility other than to provide or arrange for the provision of the services described in the Master Services Agreement in good faith and will not be responsible for any action that our company takes in following or declining to follow their advice or recommendations. The liability of the Service Providers under the Master Services Agreement is similarly limited, except that the Service Providers are also liable for liabilities arising from gross negligence. In addition, our company has agreed to indemnify the Service Providers to the fullest extent permitted by law from and against any claims, liabilities, losses, damages, costs or expenses incurred by an indemnified person or threatened in connection with our operations, investments and activities or in respect of or arising from the Master Services Agreement or the services provided by the Service Providers, except to the extent that the claims, liabilities, losses, damages, costs or expenses are determined to have resulted from the conduct in respect of which such persons have liability as described above. These protections may result in the Service Providers tolerating greater risks when making decisions than otherwise would be the case, including when determining whether to use leverage in connection with acquisitions. The indemnification arrangements to which the Service Providers are a party may also give rise to legal claims for indemnification that are adverse to our company.
Brookfield Infrastructure Corporation     27


The role and ownership of Brookfield may change.
Our arrangements with Brookfield do not require Brookfield to maintain any ownership level in our group, and Brookfield may sell the units or exchangeable shares that it holds in the partnership or our company, respectively. Brookfield may sell or transfer all or part of its interests in the Service Providers without the approval of our group, which could result in changes to the management of our group and its current growth strategy. Additionally, our group cannot predict with any certainty the effect that any changes in ownership level of Brookfield of our group would have on the trading price of our exchangeable shares, the units or our group’s ability to raise capital or make investments in the future. As a result, the future of the group would be uncertain and our group’s business, financial condition and results of operations may suffer.
Our company is not entitled to terminate the Master Services Agreement. Only the general partner of the partnership may terminate the Master Services Agreement, and it may be unable or unwilling to do so.
Our company is not entitled to terminate the Master Services Agreement. Only the general partner of the partnership may terminate the Master Services Agreement, and it may be unable or unwilling to do so. The Master Services Agreement provides that the Service Recipients may terminate the agreement only if: the Service Providers default in the performance or observance of any material term, condition or covenant contained in the agreement in a manner that results in material harm to the Service Recipients and the default continues unremedied for a period of sixty (60) days after written notice of the breach is given to the Service Providers; the Service Providers engage in any act of fraud, misappropriation of funds or embezzlement against any Service Recipient that results in material harm to us; the Service Providers are grossly negligent in the performance of their duties under the agreement and such negligence results in material harm to the Service Recipients; or upon the happening of certain events relating to the bankruptcy or insolvency of the Service Providers. The Master Services Agreement cannot be terminated for any other reason, including if the Service Providers or Brookfield experience a change of control or due solely to the poor performance or under-performance of our group’s operations or assets, and the agreement continues in perpetuity, until terminated in accordance with its terms. Because the general partner of the partnership is an affiliate of Brookfield, it may be unwilling to terminate the Master Services Agreement, even in the case of a default. If the Service Providers’ performance does not meet the expectations of investors, and the general partner of the partnership is unable or unwilling to terminate the Master Services Agreement, our group is not entitled to terminate the agreement and the market price of our exchangeable shares or the units could suffer. Furthermore, the termination of the Master Services Agreement would terminate our group’s rights under the Relationship Agreement and the Licensing Agreement. See Item 7.B “Related Party Transactions - Relationship with Brookfield — Relationship Agreement” and Item 7.B “Related Party Transactions - Relationship with Brookfield — Licensing Agreement” for more details.
28        Brookfield Infrastructure Corporation


We guarantee certain debt obligations of Brookfield Infrastructure, which may adversely affect our financial health and make us more vulnerable to adverse economic conditions.
Canada SubCo, a wholly-owned subsidiary of our company, has agreed to fully and unconditionally guarantee certain unsecured debt securities and preferred securities issued by Brookfield Infrastructure, as well as Brookfield Infrastructure’s obligations under certain credit facilities, thereby causing us to become liable for such obligations. In light of the guarantees, our company is exposed to the credit risk of Brookfield Infrastructure. If Brookfield Infrastructure is unable or fails to pay any of its indebtedness in respect of which our company has provided a guarantee, we may be required to pay all amounts due under such indebtedness, which may affect our financial health and make us more vulnerable to adverse economic conditions. See Item 7.B “Related Party Transactions - Relationship with Brookfield Infrastructure — Credit Support” for more details.
Risks Relating to our Company
Each exchangeable share has been structured with the intention of providing an economic return equivalent to one unit and therefore we expect that the market price of our exchangeable shares will be significantly impacted by the market price of the units and the combined business performance of our group as a whole.
Each exchangeable share has been structured with the intention of providing an economic return equivalent to one unit and, in addition to contemplating identical dividends to the distributions paid on one unit, each exchangeable share is exchangeable at the option of the holder for one unit (subject to adjustment to reflect certain capital events) or its cash equivalent (the form of payment to be determined at the election of our group). See Item 10.B “Description of Our Share Capital—Exchange by Holder—Adjustments to Reflect Certain Capital Events.” Our company currently intends to satisfy any exchange requests on the exchangeable shares through the delivery of units rather than cash. As a result, the business operations of Brookfield Infrastructure, and the market price of the units, are expected to have a significant impact on the market price of the exchangeable shares, which could be disproportionate in circumstances where the business operations and results of our company on a standalone basis are not indicative of such market trends. Exchangeable shareholders will have no ability to control or influence the decisions or business of Brookfield Infrastructure.
Our company is a newly formed corporation with no separate operating history and any historical and pro forma financial information does not reflect the financial condition or operating results we would have achieved during the periods presented, and therefore may not be a reliable indicator of our future financial performance.
Our company was formed on August 30, 2019 and has only recently commenced its activities. Although our assets and operating businesses have been under the Brookfield Infrastructure’s control prior to the formation of our company, their combined results have not previously been reported on a stand-alone basis and any historical and pro forma financial statements may not be indicative of our future financial condition or operating results and will make it difficult to assess our ability to operate profitably and pay dividends to our shareholders.

Brookfield Infrastructure Corporation     29


Our company is a holding company and its material assets consist solely of interests in our operating subsidiaries.
Our company has no independent means of generating revenue. We depend on distributions and other payments from our operating businesses to provide us with the funds necessary to meet our financial obligations. Our operating businesses are legally distinct from our company and some of them are or may become restricted in their ability to pay dividends and distributions or otherwise make funds available to our company pursuant to local law, regulatory requirements and their contractual agreements, including agreements governing their financing arrangements. Our operating businesses will generally be required to service their debt obligations before making distributions to our company.
Our company is a “foreign private issuer” under U.S. securities law. Therefore, we are exempt from requirements applicable to U.S. domestic registrants listed on the NYSE.
Although our company is subject to the periodic reporting requirement of the Exchange Act, the periodic disclosure required of foreign private issuers under the Exchange Act is different from periodic disclosure required of U.S. domestic registrants. Therefore, there may be less publicly available information about our company than is regularly published by or about other companies in the United States. Our company is exempt from certain other sections of the Exchange Act to which U.S. domestic issuers are subject, including the requirement to provide our shareholders with information statements or proxy statements that comply with the Exchange Act. In addition, insiders and large shareholders of our company are not obligated to file reports under Section 16 of the Exchange Act, and we are permitted to follow certain home country corporate governance practices instead of those otherwise required under the NYSE Listed Company Manual for domestic issuers. We currently intend to follow the same corporate practices as would be applicable to U.S. domestic companies under the U.S. federal securities laws and NYSE corporate governance standards; however, as our company is externally managed by the Service Providers pursuant to the Master Services Agreement, we do not have a compensation committee. However, we may in the future elect to follow our home country law for certain of our other corporate governance practices (being Bermuda and British Columbia for the partnership and our company, respectively), as permitted by the rules of the NYSE, in which case our shareholders would not be afforded the same protection as provided under NYSE corporate governance standards to U.S. domestic registrants. Following our home country governance practices as opposed to the requirements that would otherwise apply to a U.S. domestic company listed on the NYSE may provide less protection than is accorded to investors of U.S. domestic issuers.
Our company’s operations in the future may be different than our current business.
Our operations are currently utilities businesses, but we may own interests in other infrastructure operations in the future. Brookfield Infrastructure’s operations today include utilities, transport, midstream and data businesses in North and South America, Europe and Asia Pacific. The risks associated with the operations of Brookfield Infrastructure, or our future operations, may differ than those associated with our business.
30        Brookfield Infrastructure Corporation


Our company is not, and does not intend to become, regulated as an investment company under the Investment Company Act of 1940, or the Investment Company Act (and similar legislation in other jurisdictions) and, if our company were deemed an “investment company” under the Investment Company Act, applicable restrictions could make it impractical for us to operate as contemplated.
The Investment Company Act (and similar legislation in other jurisdictions) provides certain protections to investors and imposes certain restrictions on companies that are required to be regulated as investment companies. Among other things, such rules limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities and impose certain governance requirements. Our company has not been and does not intend to become regulated as an investment company and our company intends to conduct its activities so it will not be deemed to be an investment company under the Investment Company Act (and similar legislation in other jurisdictions). In order to ensure that we are not deemed to be an investment company, we may be required to materially restrict or limit the scope of our operations or plans. We are limited in the types of acquisitions that we may make, and we may need to modify our organizational structure or dispose of assets which we would not otherwise dispose. Moreover, if anything were to happen which would cause our company to be deemed an investment company under the Investment Company Act, it would be impractical for us to operate as contemplated. Agreements and arrangements between and among us and Brookfield would be impaired, the type and number of acquisitions that we would be able to make as a principal would be limited and our business, financial condition and results of operations would be materially adversely affected. Accordingly, we would be required to take extraordinary steps to address the situation, such as the amendment or termination of the Master Services Agreement, the restructuring of our company and our operating subsidiaries, the amendment of our governing documents or the dissolution of our company, any of which could materially adversely affect the value of our exchangeable shares.
Our failure to maintain effective internal controls could have a material adverse effect on our business in the future and the price of our exchangeable shares.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and stock exchange rules promulgated in response to the Sarbanes-Oxley Act. A number of our current operating subsidiaries are and potential future acquisitions will be private companies and their systems of internal controls over financial reporting may be less developed as compared to public company requirements. Any failure to maintain adequate internal controls over financial reporting or to implement required, new or improved controls, or difficulties encountered in their implementation, could cause material weaknesses or significant deficiencies in our internal controls over financial reporting and could result in errors or misstatements in our consolidated financial statements that could be material. If we or our independent registered public accounting firm were to conclude that our internal controls over financial reporting were not effective, investors could lose confidence in our reported financial information and the price of our exchangeable shares could decline. Our failure to achieve and maintain effective internal controls could have a material adverse effect on our business, our ability to access capital markets and investors’ perception of us. In addition, material weaknesses in our internal controls could require significant expense and management time to remediate.
Our group uses leverage and such indebtedness may result in our group or our group’s operating businesses being subject to certain covenants that restrict our group’s ability to engage in certain types of activities or to make distributions to equity.
Many of our group’s operating subsidiaries, including BUUK and NTS, have entered into or will enter into credit facilities or have incurred or will incur other forms of debt, including for acquisitions. The total quantum of exposure to debt within our group is significant, and we may become more leveraged in the future.
Brookfield Infrastructure Corporation     31


Leveraged assets are more sensitive to declines in revenues, increases in expenses and interest rates, and adverse economic, market and industry developments. A leveraged company’s income and net assets also tend to increase or decrease at a greater rate than would otherwise be the case if money had not been borrowed. As a result, the risk of loss associated with a leveraged company, all other things being equal, is generally greater than for companies with comparatively less debt. In addition, the use of indebtedness in connection with an acquisition may give rise to negative tax consequences to certain investors. Leverage may also result in a requirement for short-term liquidity, which may force the sale of assets at times of low demand and/or prices for such assets. This may mean that our group is unable to realize fair value for the assets in a sale.
Our group’s credit facilities also contain, and will contain in the future, covenants applicable to the relevant borrower and events of default. Covenants can relate to matters including limitations on financial indebtedness, dividends, acquisitions, or minimum amounts for interest coverage, adjusted EBITDA, cash flow or net worth. If an event of default occurs, or minimum covenant requirements are not satisfied, this can result in a requirement to immediately repay any drawn amounts or the imposition of other restrictions including a prohibition on the payment of distributions to equity.

Our group may acquire distressed companies and these acquisitions may subject our group to increased risks, including the incurrence of additional legal or other expenses.
As part of our group’s acquisition strategy, our group may acquire distressed companies. This could involve acquisitions of securities of companies in event-driven special situations, such as acquisitions, tender offers, bankruptcies, recapitalizations, spinoffs, corporate and financial restructurings, litigation or other liability impairments, turnarounds, management changes, consolidating industries and other catalyst-oriented situations. Acquisitions of this type involve substantial financial and business risks that can result in substantial or total losses. Among the problems involved in assessing and making acquisitions in troubled issuers is the fact that it frequently may be difficult to obtain information as to the condition of such issuer. If, during the diligence process, our group fails to identify issues specific to a company or the environment in which our company operates, our group may be forced to later write down or write off assets, restructure our group’s operations, or incur impairment or other charges that may result in other reporting losses.
As a consequence of our group’s role as an acquirer of distressed companies, our group may be subject to increased risk of incurring additional legal, indemnification or other expenses, even if we are not named in any action. In distressed situations, litigation often follows when disgruntled shareholders, creditors and other parties seek to recover losses from poorly performing investments. The enhanced litigation risk for distressed companies is further elevated by the potential that Brookfield or entities within our group may have controlling or influential positions in these companies.
32        Brookfield Infrastructure Corporation


Risks Relating to the Exchangeable Shares
Our company may redeem the exchangeable shares at any time without the consent of the holders.
Our board, in its sole discretion and for any reason, and without the consent of holders of exchangeable shares, may elect to redeem all of the then outstanding exchangeable shares at any time upon sixty (60) days’ prior written notice, including without limitation following the occurrence of any of the following redemption events: (i) the total number of exchangeable shares outstanding decreases by 50% or more over any twelve-month period; (ii) a person acquires 90% of the units in a take-over bid (as defined by applicable securities law); (iii) unitholders of the partnership approve an acquisition of the partnership by way of arrangement or amalgamation; (iv) unitholders of the partnership approve a restructuring or other reorganization of the partnership; (v) there is a sale of all or substantially all of the partnership assets; (vi) there is a change of law (whether by legislative, governmental or judicial action), administrative practice or interpretation, or a change in circumstances of our company and our shareholders, that may result in adverse tax consequences for our company or our shareholders; or (vii) our board, in its sole discretion, concludes that the unitholders of the partnership or holders of exchangeable shares are adversely impacted by a fact, change or other circumstance relating to our company. For greater certainty, unitholders do not have the ability to vote on such redemption and the board’s decision to redeem all of the then outstanding exchangeable shares will be final. In addition, the holder of class B shares may deliver a notice to our company specifying a redemption date upon which our company shall redeem all of the then outstanding exchangeable shares, and upon sixty (60) days’ prior written notice from our company to holders of the exchangeable shares and without the consent of holders of exchangeable shares, our company shall be required to redeem all of the then outstanding exchangeable shares on such redemption date. In the event of such redemption, holders of exchangeable shares will no longer own a direct interest in our company and will become unitholders of the partnership or receive cash based on the value of a unit, even if such holders desired to remain holders of exchangeable shares. Such redemption could occur at a time when the trading price of the exchangeable shares is greater than the trading price of the units, in which case holders would receive units (or its cash equivalent) with a lower trading price.
See Item 10.B “Memorandum and Articles of Association — Description of Our Share Capital — Exchangeable Shares — Redemption by Issuer”. In the event that an exchangeable share held by a holder is redeemed by our company or exchanged by the holder, the holder will be considered to have disposed of such exchangeable share for Canadian income tax purposes. See Item 10.E “Taxation — Certain Material Canadian Federal Income Tax Considerations” for more information.
Brookfield Infrastructure Corporation     33


Holders of exchangeable shares do not have a right to elect whether to receive cash or units upon a liquidation, exchange or redemption event. Rather, our group has the right to make such election in its sole discretion.
In the event that (i) there is a liquidation, dissolution or winding up of our company or the partnership, (ii) our company or the partnership exercises its right to redeem (or cause the redemption of) all of the then outstanding exchangeable shares, or (iii) a holder of exchangeable shares requests an exchange of exchangeable shares, holders of exchangeable shares shall be entitled to receive one unit per exchangeable share held (subject to adjustment to reflect certain capital events described in this annual report on Form 20-F and certain other payment obligations in the case of a liquidation, dissolution or winding up of our company or the partnership) or its cash equivalent. The form of payment will be determined at the election of our group so a holder will not know whether cash or units will be delivered in connection with any of the events described above. Our company and the partnership currently intend to satisfy any exchange requests on the exchangeable shares through the delivery of units rather than cash. See Item 10.B “Memorandum and Articles of Association - Description of Our Share Capital — Exchangeable Shares”.
Any holder requesting an exchange of their exchangeable shares for which our company or the partnership elects to provide units in satisfaction of the exchange amount may experience a delay in receiving such units, which may affect the value of the units the holder receives in an exchange.
Each exchangeable share is exchangeable at the option of the holder for one unit (subject to adjustment to reflect certain capital events) or its cash equivalent (the form of payment to be determined at the election of our group). See Item 10.B “Memorandum and Articles of Association - Description of Our Share Capital — Exchange by Holder — Adjustments to Reflect Certain Capital Events.” In the event cash is used to satisfy an exchange request, the amount payable per exchangeable share will be equal to the NYSE closing price of one unit on the date that the request for exchange is received by the transfer agent. As a result, any decrease in the value of the units after that date will not affect the amount of cash received. However, any holder whose exchangeable shares are exchanged for units will not receive such units for up to ten (10) business days after the applicable request is received. During this period, the market price of units may decrease. Any such decrease would affect the value of the unit consideration to be received by the holder of exchangeable shares on the effective date of the exchange.
The partnership is required to maintain an effective registration statement in order to exchange any exchangeable shares for units. If a registration statement with respect to the units issuable upon any exchange, redemption or acquisition of exchangeable shares (including in connection with any liquidation, dissolution or winding up of our company) is not current or is suspended for use by the SEC, no exchange or redemption of exchangeable shares for units may be effected during such period.

34        Brookfield Infrastructure Corporation


The exchangeable shares may not trade at the same price as the units.
Although the exchangeable shares are intended to provide an economic return that is equivalent to the units, there can be no assurance that the market price of exchangeable shares will be equal to the market price of units at any time. If our company redeems the exchangeable shares (which can be done without the consent of the holders) at a time when the trading price of the exchangeable shares is greater than the trading price of the units, holders will receive units (or its cash equivalent) with a lower trading price. Factors that could cause differences in such market prices may include:
perception and/or recommendations by analysts, investors and/or other third parties that these securities should be priced differently;
actual or perceived differences in distributions to holders of exchangeable shares versus holders of the units, including as a result of any legal prohibitions;
business developments or financial performance or other events or conditions that may be specific to only Brookfield Infrastructure or our company; and
difficulty in the exchange mechanics between exchangeable shares and units, including any delays or difficulties experienced by the transfer agent in processing the exchange requests.
If a sufficient amount of exchangeable shares are exchanged for units, then the exchangeable shares may be de-listed.
The exchangeable shares trade on the NYSE and the TSX. However, if a sufficient amount of exchangeable shares are exchanged for units, or our company exercises our redemption right at any time including if the total number of exchangeable shares decreases by 50% or more over any twelve-month period, our company may fail to meet the minimum listing requirements on the NYSE and the TSX, and the NYSE or the TSX may take steps to de-list the exchangeable shares. Though holders of exchangeable shares will still be entitled to exchange each such share at any time for one unit (subject to adjustment to reflect certain capital events described in Item 10.B “Memorandum and Articles of Association- Description of our Share Capital”), or its cash equivalent (the form of payment to be determined at the election of our group), a de-listing of the exchangeable shares would have a significant adverse effect on the liquidity of the exchangeable shares, and holders thereof may not be able to exit their investments in the market on favorable terms.
Brookfield Infrastructure Corporation     35


The market price of the exchangeable shares and units may be volatile, and holders of exchangeable shares and/or units may lose a significant portion of their investment due to drops in the market price of exchangeable shares and/or units.
The market price of the exchangeable shares and the units may be volatile and holders of such securities may not be able to resell their securities at or above the implied price at which they acquired such securities or otherwise due to fluctuations in the market price of such securities, including changes in market price caused by factors unrelated to our company or Brookfield Infrastructure’s operating performance or prospects. Specific factors that may have a significant effect on the market price of the exchangeable shares and the units include:
changes in stock market analyst recommendations or earnings estimates regarding the exchangeable shares or units, other companies and partnerships that are comparable to our company or Brookfield Infrastructure or are in the industries that they serve;
with respect to the exchangeable shares, changes in the market price of the units, and vice versa;
actual or anticipated fluctuations in our company and partnership’s operating results or future prospects;
reactions to public announcements by our company and Brookfield Infrastructure;
strategic actions taken by our company or Brookfield Infrastructure;
adverse conditions in the financial market or general U.S. or international economic conditions, including those resulting from war, incidents of terrorism and responses to such events; and
sales of such securities by our company, Brookfield Infrastructure or significant stockholders.
Exchanges of exchangeable shares for units may negatively affect the market price of the units, and additional issuances of exchangeable shares would be dilutive to the units.
Each exchangeable share is exchangeable by the holder thereof for one unit (subject to adjustment to reflect certain capital events) or its cash equivalent (the form of payment to be determined at the election of our group). See Item 10.B “Memorandum and Articles of Association - Description of Our Share Capital — Exchange by Holder — Adjustments to Reflect Certain Capital Events.” If our group elects to deliver units in satisfaction of any such exchange request, a significant number of additional units may be issued from time to time which could have a negative impact on the market price for units. Additionally, any exchangeable shares issued by our company in the future will also be exchangeable in accordance with the terms of the exchangeable shares and, accordingly, any future exchanges satisfied by the delivery of units would dilute the percentage interest of existing holders of the units and may reduce the market price of the units.
We or the partnership may issue additional shares or units in the future, including in lieu of incurring indebtedness, which may dilute holders of our equity securities. We or the partnership may also issue securities that have rights and privileges that are more favorable than the rights and privileges accorded to our equity holders.
Subject to the terms of any of our securities then outstanding, we may issue additional securities, including exchangeable shares, class B shares, class C shares, preference shares, options, rights and warrants for any purpose and for such consideration and on such terms and conditions as our board may determine. Subject to the terms of any of our securities then outstanding, our board will be able to determine the class, designations, preferences, rights, powers and duties of any additional securities, including any rights to share in our profits, losses and dividends, any rights to receive our company’s assets upon our dissolution or liquidation and any redemption, conversion and exchange rights. Subject to the terms of any of our securities then outstanding, our board may use such authority to issue such additional securities, which would dilute holders of such securities, or to issue securities with rights and privileges that are more favorable than those of our exchangeable shares.
36        Brookfield Infrastructure Corporation


Similarly, under the partnership’s limited partnership agreement, subject to the terms of any preferred units then outstanding, the partnership’s general partner may issue additional partnership securities, including units, preferred units, options, rights, warrants and appreciation rights relating to partnership securities for any purpose and for such consideration and on such terms and conditions as the board of the partnership’s general partner may determine. Subject to the terms of any of the partnership securities then outstanding, the board of the partnership’s general partner will be able to determine the class, designations, preferences, rights, powers and duties of any additional partnership securities, including any rights to share in the partnership’s profits, losses and dividends, any rights to receive the partnership’s assets upon its dissolution or liquidation and any redemption, conversion and exchange rights. Subject to the terms of any of the partnership securities then outstanding, the board of the partnership’s general partner may use such authority to issue such additional partnership securities, which would dilute holders of such securities, or to issue securities with rights and privileges that are more favorable than those of the units.
The sale or issuance of a substantial number of our exchangeable shares, the units or other equity securities of our company or the partnership in the public markets, or the perception that such sales or issuances could occur, could depress the market price of our exchangeable shares and impair our ability to raise capital through the sale of additional exchangeable shares. We cannot predict the effect that future sales or issuances of our exchangeable shares, units or other equity securities would have on the market price of our exchangeable shares. Subject to the terms of any of our securities then outstanding, holders of exchangeable shares will not have any pre-emptive right or any right to consent to or otherwise approve the issuance of any securities or the terms on which any such securities may be issued.
Our company cannot assure you that it will be able to pay dividends equal to the levels currently paid by the partnership and holders of exchangeable shares may not receive dividends equal to the distributions paid on the units and, accordingly, may not receive the intended economic equivalence of those securities.
The exchangeable shares are intended to provide an economic return per exchangeable share equivalent to one unit (subject to adjustment to reflect certain capital events). See Item 10.B “Memorandum and Articles of Association - Description of Our Share Capital — Exchange by Holder — Adjustments to Reflect Certain Capital Events.” However, dividends are at the discretion of our board of directors and unforeseen circumstances (including legal prohibitions) may prevent the same dividends from being paid on each security. Accordingly, there can be no assurance that dividends and distributions will be identical for each exchangeable share and unit, respectively, in the future, which may impact the market price of these securities. Dividends on our exchangeable shares may not equal the levels currently paid by the partnership for various reasons, including, but not limited to, the following:
our company may not have enough unrestricted funds to pay such dividends due to changes in our company’s cash requirements, capital spending plans, cash flow or financial position;
decisions on whether, when and in which amounts to make any future dividends will be dependent on then-existing conditions, including our company’s financial conditions, earnings, legal requirements, including limitations under British Columbia law, restrictions on our company’s borrowing agreements that limit our ability to pay dividends and other factors we deem relevant; and
our company may desire to retain cash to improve our credit profile or for other reasons.
Brookfield Infrastructure Corporation     37


Non-U.S. shareholders are subject to foreign currency risk associated with our company’s dividends.
A significant number of our shareholders reside in countries where the U.S. dollar is not the functional currency. Our dividends are denominated in U.S. dollars but are settled in the local currency of the shareholder receiving the dividend. For each non-U.S. shareholder, the value received in the local currency from the dividend will be determined based on the exchange rate between the U.S. dollar and the applicable local currency at the time of payment. As such, if the U.S. dollar depreciates significantly against the local currency of the non-U.S. shareholder, the value received by such shareholder in its local currency will be adversely affected.
The exchangeable shares are not units and will not be treated as units for purposes of the application of applicable Canadian or U.S. rules relating to takeover bids, issuer bids and tender offers.
Units and exchangeable shares are not securities of the same class. As a result, holders of exchangeable shares will not be entitled to participate in an offer or bid made to acquire units, and holders of units will not be entitled to participate in an offer or bid made to acquire exchangeable shares. In the event of a takeover bid for units, a holder of exchangeable shares who would like to participate would be required to tender his or her exchangeable shares for exchange, in order to receive a unit, or the cash equivalent, at the election of our group, pursuant to the exchange right. If an issuer tender offer or issuer bid is made for the units at a price in excess of the market price of the units and a comparable offer is not made for the exchangeable shares, then the conversion factor for the exchangeable shares may be adjusted. See Item 10.B “Memorandum and Articles of Association - Description of Our Share Capital — Exchangeable Shares — Exchange by Holder — Adjustments to Reflect Certain Capital Events” for more information on the circumstances in which adjustments may be made to the conversion factor.
The Rights Agreement will terminate on March 31, 2025.
The Rights Agreement will terminate on March 31, 2025, unless otherwise terminated earlier pursuant to its terms. After such date, holders of exchangeable shares will no longer have the benefit of the protections provided for by the Rights Agreement and will be reliant solely on the rights provided for in our company’s articles. In the event that our company or the partnership fails to satisfy a request for exchange after the expiry of the Rights Agreement, a tendering holder will not be entitled to rely on the secondary exchange rights.
See Item 10.B “Memorandum and Articles of Association - Description of Our Share Capital — Exchange by Holder” and Item 7.B “Related Party Transactions - Relationship with Brookfield — Rights Agreement”.
U.S. investors in our exchangeable shares may find it difficult or impossible to enforce service of process and enforcement of judgments against us and our board and the Service Providers.
We were established under the laws of the Province of British Columbia, and most of our subsidiaries are organized in jurisdictions outside of the United States. In addition, our executive officers are located outside of the United States. Certain of our directors and officers and the Service Providers reside outside of the United States. A substantial portion of our assets are, and the assets of our directors and officers and the Service Providers may be located outside of the United States. It may not be possible for investors to effect service of process within the United States upon our directors and officers and the Service Providers. It may also not be possible to enforce against us, or our directors and officers and the Service Providers, judgments obtained in U.S. courts predicated upon the civil liability provisions of applicable securities law in the United States.
38        Brookfield Infrastructure Corporation


Risks Related to Taxation
General
Changes in tax law and practice may have a material adverse effect on the operations of the partnership, our company, the Brookfield Infrastructure Holding Entities, and the Brookfield Infrastructure Operating Entities and, as a consequence, the value of the Brookfield Infrastructure assets and the ability of the partnership and our company to make distributions to unitholders and holders of exchangeable shares, respectively.
The Brookfield Infrastructure structure, including the structure of the Brookfield Infrastructure Holding Entities and the Brookfield Infrastructure Operating Entities, is based on prevailing taxation law and practice in the local jurisdictions in which Brookfield Infrastructure operates. Any change in tax legislation (including in relation to taxation rates) and practice in these jurisdictions could adversely affect these entities, as well as the ability of the partnership and our company to make distributions to unitholders and holders of exchangeable shares, respectively. Taxes and other constraints that would apply to the Brookfield Infrastructure entities in such jurisdictions may not apply to local institutions or other parties, and such parties may therefore have a significantly lower effective cost of capital and a corresponding competitive advantage in pursuing such acquisitions.
We may be exposed to transfer pricing risks.
To the extent that the partnership, our company, the Holding LP, the Brookfield Infrastructure Holding Entities or the Brookfield Infrastructure Operating Entities enter into transactions or arrangements with parties with whom they do not deal at arm’s length, including Brookfield, the relevant tax authorities may seek to adjust the quantum or nature of the amounts included or deducted from taxable income by such entities if they consider that the terms and conditions of such transactions or arrangements differ from those that would have been made between persons dealing at arm’s length. This could result in more tax (and penalties and interest) being paid by such entities, and therefore the return to unitholders and holders of exchangeable shares could be reduced.

We believe that the base management fee and any other amount that is paid to the Service Providers will be commensurate with the value of the services being provided by the Service Providers and comparable to the fees or other amounts that would be agreed to in an arm’s length arrangement. However, no assurance can be given in this regard.
Brookfield Infrastructure Corporation     39


United States
The exchange of exchangeable shares for units may result in the U.S. federal income taxation of any gain realized by a U.S. Holder.
Depending on the facts and circumstances, the exchange of exchangeable shares for units by a U.S. Holder may result in the U.S. federal income taxation of any gain realized by such U.S. Holder. In general, a U.S. Holder exchanging exchangeable shares for units pursuant to the exercise of the exchange right will recognize capital gain or loss (i) if the exchange request is satisfied by the delivery of units by Brookfield pursuant to the Rights Agreement or (ii) if the exchange request is satisfied by the delivery of units by our company and the exchange is, within the meaning of Section 302(b) of the U.S. Internal Revenue Code, in “complete redemption” of the U.S. Holder’s equity interest in our company, a “substantially disproportionate” redemption of stock, or “not essentially equivalent to a dividend”, applying certain constructive ownership rules that take into account not only the exchangeable shares and other equity interests in our company actually owned but also other equity interests in our company treated as constructively owned by such U.S. Holder for U.S. federal income tax purposes. If an exchange request satisfied by the delivery of units by our company is not treated as a sale or exchange under the foregoing rules, then it will be treated as a taxable distribution equal to the amount of cash and the fair market value of property received (such as units) without any offset for a U.S. Holder’s tax basis in the exchangeable shares exchanged.
In general, if the partnership satisfies an exchange request by delivering units to a U.S. Holder pursuant to the partnership’s exercise of the partnership call right, then the U.S. Holder’s exchange of exchangeable shares for units will qualify as tax-free under Section 721(a) of the U.S. Internal Revenue Code, unless at the time of such exchange, the partnership (i) is a publicly traded partnership treated as a corporation or (ii) would be an “investment company” if it were incorporated for purposes of Section 721(b) of the U.S. Internal Revenue Code. In the case described in (i) or (ii) of the preceding sentence, a holder that is a U.S. taxpayer may recognize gain upon the exchange. We understand that the general partner of the partnership believes that the partnership will be treated as a partnership and not as a corporation for U.S. federal income tax purposes. In addition, based on the shareholders’ rights in the event of the liquidation or dissolution of our company (or the partnership) and the terms of the exchangeable shares, which are intended to provide an economic return equivalent to the economic return on the units (including identical distributions), and taking into account the expected relative values of the partnership’s assets and its ratable share of the assets of its subsidiaries for the foreseeable future, we understand that the general partner of the partnership currently expects that a U.S. Holder’s exchange of exchangeable shares for units pursuant to the exercise of the partnership call right will not be treated as a transfer to an investment company for purposes of Section 721(b) of the U.S. Internal Revenue Code. Accordingly, we understand that the general partner of the partnership currently expects a U.S. Holder’s exchange of exchangeable shares for units pursuant to the partnership’s exercise of the partnership call right to qualify as tax-free under Section 721(a) of the U.S. Internal Revenue Code. However, no definitive determination can be made as to whether any such future exchange will qualify as tax-free under Section 721(a) of the U.S. Internal Revenue Code, as this will depend on the facts and circumstances at the time of the exchange. Many of these facts and circumstances are not within the control of the partnership, and no assurance can be provided as to the position, if any, taken by the general partner of the partnership with regard to the U.S. federal income tax treatment of any such exchange. Nor can any assurance be given that the IRS will not assert, or that a court would not sustain, a position contrary to any future position taken by the partnership. If Section 721(a) of the U.S. Internal Revenue Code does not apply, then a U.S. Holder who exchanges exchangeable shares for units pursuant to the partnership’s exercise of the partnership call right will be treated as if such holder had sold its exchangeable shares to the partnership in a taxable transaction for cash in an amount equal to the value of the units received.

40        Brookfield Infrastructure Corporation


Even if a U.S. Holder’s transfer of exchangeable shares in exchange for units pursuant to the partnership’s exercise of the partnership call right qualifies as tax-free under Section 721(a) of the U.S. Internal Revenue Code, we understand that the general partner of the partnership currently expects for the partnership and Holding LP to immediately undertake subsequent transfers of such exchangeable shares that would result in the allocation to such U.S. Holder of any gain realized under Section 704(c)(1) of the U.S. Internal Revenue Code. Under this provision, if appreciated property is contributed to a partnership, the contributing partner must recognize any gain that was realized but not recognized for U.S. federal income tax purposes with respect to the property at the time of the contribution (referred to as “built-in gain”) if the partnership sells such property (or otherwise transfers such property in a taxable exchange) at any time thereafter or distributes such property to another partner within seven years of the contribution in a transaction that does not otherwise result in the recognition of “built-in gain” by the partnership. If, contrary to the current expectations of the general partner of the partnership, Section 704(c)(1) does not apply as a result of any such subsequent transfers by the partnership or Holding LP of exchangeable shares transferred by a U.S. Holder for units in an exchange qualifying as tax-free under Section 721(a) of the U.S. Internal Revenue Code, then such U.S. Holder could, nonetheless, be required to recognize part or all of the built-in gain in its exchangeable shares deferred as a result of such exchange under Section 737 or Section 707(a) of the U.S. Internal Revenue Code, depending on whether the partnership or Holding LP were to make certain types of distributions to such U.S. Holder following the exchange.
For a more complete discussion of the U.S. federal income tax consequences of the exchange of exchangeable shares for units, see Item 10.E “Taxation — Certain Material U.S. Federal Income Tax Considerations — Consequences to U.S. Holders — Ownership and Disposition of Exchangeable Shares” below. The U.S. federal income tax consequences of exchanging exchangeable shares for units are complex, and U.S. Holders should consult their own tax advisers regarding such consequences in light of their particular circumstances.
Distributions on exchangeable shares made to Non-U.S. Holders may be subject to U.S. withholding tax if Section 871(m) of the U.S. Internal Revenue Code applies.
Distributions on exchangeable shares made to Non-U.S. Holders generally will not be subject to U.S. federal income tax, except that U.S. withholding tax may apply to any portion of a distribution made on exchangeable shares that is treated as a deemed dividend under Section 871(m) of the U.S. Internal Revenue Code. Specifically, a 30% withholding tax generally applies to deemed dividend amounts (“dividend equivalents”) with respect to certain contractual arrangements held by non-U.S. persons which reference any interest in an entity if that interest could give rise to a U.S.-source dividend. Under Treasury Regulations, a Section 871(m) transaction is treated as directly referencing the assets of a partnership that holds significant investments in certain securities (such as stock of a U.S. corporation). The partnership indirectly holds stock of a U.S. corporation through the Holding LP, and the exchangeable shares are intended to be structured so that distributions are identical to distributions on units. Accordingly, the contractual arrangements relating to the exchangeable shares could be subject to Section 871(m) of the U.S. Internal Revenue Code, as discussed below.

Brookfield Infrastructure Corporation     41


Whether U.S. withholding tax applies with respect to a Section 871(m) transaction depends, in part, on whether it is classified for purposes of Section 871(m) of the U.S. Internal Revenue Code as a “simple” contract or “complex” contract. No direct authority addresses whether the contractual arrangements relating to the exchangeable shares constitute a simple contract or a complex contract. Our company intends to take the position and believes that such contractual arrangements do not constitute a simple contract. In such case, under Treasury Regulations, as modified by an IRS Notice, such contractual arrangements should not be subject to Section 871(m) of the U.S. Internal Revenue Code before January 1, 2023, and no portion of a distribution made on exchangeable shares before such date should be subject to U.S. withholding tax by reason of treatment as a dividend equivalent under Section 871(m). For distributions made on exchangeable shares on or after January 1, 2023, Section 871(m) of the U.S. Internal Revenue Code will apply if the contractual arrangements relating to the exchangeable shares meet a “substantial equivalence” test. If this is the case, U.S. federal withholding tax (generally at a rate of 30%) is expected to apply to any portion of a distribution on exchangeable shares that is treated as a dividend equivalent and paid on or after January 1, 2023.
This 30% withholding tax may be reduced or eliminated under the U.S. Internal Revenue Code or an applicable income tax treaty, provided that the Non-U.S. Holder properly certifies its eligibility by providing an IRS Form W-8. If, notwithstanding the foregoing, our company is unable to accurately or timely determine the tax status of a Non-U.S. Holder for purposes of establishing whether reduced rates of withholding apply, then U.S. withholding tax at a rate of 30% may apply to any portion of a distribution on exchangeable shares that is treated as a dividend equivalent under Section 871(m) of the U.S. Internal Revenue Code. A dividend equivalent may also be subject to a 30% withholding tax under the Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act of 2010 (“FATCA”), unless a Non-U.S. Holder properly certifies its FATCA status on IRS Form W-8 or other applicable form and satisfies any additional requirements under FATCA.
Notwithstanding the foregoing, our company’s position that the contractual arrangements relating to the exchangeable shares do not constitute a simple contract does not bind the IRS. The Treasury Regulations under Section 871(m) of the U.S. Internal Revenue Code require complex determinations with respect to contractual arrangements linked to U.S. equities, and the application of these regulations to the exchangeable shares is uncertain. Accordingly, the IRS could challenge our company’s position and assert that the contractual arrangements relating to the exchangeable shares constitute a simple contract, in which case U.S. withholding tax currently would apply, generally at a rate of 30% (subject to reduction or elimination under the U.S. Internal Revenue Code or an applicable income tax treaty), to that portion, if any, of a distribution on exchangeable shares that is treated as referencing a U.S.-source dividend paid to the partnership or the Holding LP. Non-U.S. Holders should consult their own tax advisers regarding the implications of Section 871(m) of the U.S. Internal Revenue Code and FATCA for their ownership of exchangeable shares with regard to their particular circumstances.
For a more complete discussion of the U.S. federal income tax consequences to Non-U.S. Holders of owning exchangeable shares, see Item 10.E “Taxation — Certain Material U.S. Federal Income Tax Considerations — Consequences to Non-U.S. Holders — Ownership and Disposition of Exchangeable Shares” below. The U.S. federal income tax consequences of owning exchangeable shares are complex, and Non-U.S. Holders should consult their own tax advisers regarding such consequences in light of their particular circumstances.
42        Brookfield Infrastructure Corporation


Canada
Canadian federal income tax considerations described herein may be materially and adversely impacted by certain events.
If BIPC ceases to qualify as a “mutual fund corporation” under the Tax Act, the income tax considerations described under the heading “Certain Material Canadian Federal Income Tax Considerations” would be materially and adversely different in certain respects.
In general, there can be no assurance that Canadian federal income tax laws respecting the treatment of mutual fund corporations or otherwise respecting the treatment of our company will not be changed in a manner that adversely affects our shareholders, or that such tax laws will not be administered in a way that is less advantageous to our company or our shareholders.
General Risks
All of our group’s operating subsidiaries are subject to general economic and political conditions and risks relating to the markets in which our group operates.

The industries in which our group operates are impacted by political and economic conditions, and in particular, adverse events in financial markets, which may have a profound effect on global or local economies. Some key impacts of general financial market turmoil include contraction in credit markets resulting in a widening of credit spreads, devaluations and enhanced volatility in global equity, commodity and foreign exchange markets and a general lack of market liquidity. A slowdown in the financial markets or other key measures of the global economy or the local economies of the regions in which our group operates, including, but not limited to, new home construction, employment rates, business conditions, inflation, fuel and energy costs, commodity prices, lack of available credit, the state of the financial markets, interest rates and tax rates may adversely affect our group’s growth and profitability.
The demand for services provided by our group’s operating subsidiaries are, in part, dependent upon and correlated to general economic conditions and economic growth of the regions applicable to the relevant asset. Poor economic conditions or lower economic growth in a region or regions may, either directly or indirectly, reduce demand for the services provided by an asset.
In addition, our group may be affected by political uncertainties in the United States and Europe, which may have global repercussions, including in markets where our group currently operates or intends to expand into in the future.
Brookfield Infrastructure Corporation     43


Risks Associated with the COVID-19 Pandemic
The rapid spread of the COVID-19 virus, which was declared by the World Health Organization to be a pandemic on March 11, 2020, and actions taken globally in response to COVID-19, have significantly disrupted international business activities. The COVID-19 pandemic has resulted in governments around the world implementing stringent measures to help control the spread of the virus, including quarantines, social distancing protocols, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments, school closures and other measures. Governments and central banks around the world have enacted fiscal and monetary stimulus measures to counteract the effects of the COVID-19 pandemic and various other response measures, however, the overall magnitude and long-term effectiveness of these actions remain uncertain. Our group’s business relies, to a certain extent, on free movement of goods, services, and capital from around the world, which has been significantly restricted as a result of COVID-19. Although our group has implemented response plans and mitigation measures designed to maintain its operations despite the outbreak of the virus, our group may experience in the future direct or indirect impacts from the pandemic. Such impacts have and may include delays in development or construction activities in our group’s business and reduced volumes within our transport segment. There is also some risk that our group’s contract counterparties could fail to meet their obligations to us.
Given the ongoing and dynamic nature of the circumstances surrounding COVID-19, it is difficult to predict how significant the impact of COVID-19, including any responses to it, will be on the global economy or for how long any disruptions are likely to continue. The extent of such impact will depend on future developments, which are highly uncertain, continually evolving and difficult to predict, including, but not limited to, new information which may emerge concerning the severity of COVID-19, additional actions which may be taken to contain COVID-19 or treat its impact, such as re-imposing previously lifted measures or putting in place additional restrictions, and the pace, availability, distribution and acceptance of effective vaccines. Such developments could have an adverse effect on our assets, liabilities, business, financial condition, results of operations and cash flow.

Our group is subject to foreign currency risk and our risk management activities may adversely affect the performance of our operations.
A significant portion of our group’s current operating subsidiaries, including BUUK and NTS, are in countries where the U.S. dollar is not the functional currency. These operations pay distributions in currencies other than the U.S. dollar, which our group must convert to U.S. dollars prior to making distributions, and certain of our group’s operating subsidiaries have revenues denominated in currencies different from our group’s expense structure, thus exposing our group to currency risk. Fluctuations in currency exchange rates could reduce the value of cash flows generated by our operating subsidiaries or could make it more expensive for our group’s customers to purchase our services and consequently reduce the demand for our group’s services. In addition, a significant depreciation in the value of such foreign currencies may have a material adverse effect on our group’s business, financial condition and results of operations.
When managing our group’s exposure to such market risks, our group may use forward contracts, options, swaps, caps, collars and floors or pursue other strategies or use other forms of derivative instruments. The success of any hedging or other derivative transactions that our group enters into generally will depend on our ability to structure contracts that appropriately offset our group’s risk position. As a result, while our group may enter into such transactions in order to reduce our group’s exposure to market risks, unanticipated market changes may result in poorer overall investment performance than if the derivative transaction had not been executed. Such transactions may also limit the opportunity for gain if the value of a hedged position increases.
44        Brookfield Infrastructure Corporation


General economic and business conditions that impact the debt or equity markets could impact our group’s ability to access credit markets.
General economic and business conditions that impact the debt or equity markets could impact the availability of credit to, and cost of credit for, our group. Our group has revolving credit facilities and other short-term borrowings. The amount of interest charged on these will fluctuate based on changes in short-term interest rates. Any economic event that affects interest rates or the ability to refinance borrowings could materially adversely impact our group’s financial condition. Movements in interest rates could also affect the discount rates used to value our group’s assets, which in turn could cause their valuations calculated under IFRS to be reduced resulting in a material reduction in our group’s equity value.
In addition, some of our group’s operations either currently have a credit rating or may have a credit rating in the future. A credit rating downgrade may result in an increase in the cost of debt for the relevant businesses and reduced access to debt markets.
Some assets in our group’s portfolio have a requirement for significant capital expenditure. For other assets, cash, cash equivalents and short-term investments combined with cash flow generated from operations are believed to be sufficient for it to make the foreseeable required level of capital investment. However, no assurance can be given that additional capital investments will not be required in these businesses. If our group is unable to generate enough cash to finance necessary capital expenditures through operating cash flow, then our group may be required to issue additional equity or incur additional indebtedness. The issue of additional equity would be dilutive to existing shareholders at the time. Any additional indebtedness would increase our group’s leverage and debt payment obligations, and may negatively impact our group’s business, financial condition and results of operations.
Our group’s business relies on continued access to capital to fund new investments and capital projects. While our group aims to prudently manage our group’s capital requirements and ensure access to capital is always available, it is possible our group may over commit ourselves or misjudge the requirement for capital or the availability of liquidity. Such a misjudgment may require capital to be raised quickly and the inability to do so could result in negative financial consequences or in extreme cases bankruptcy.
All of our group’s operating subsidiaries are subject to changes in government policy and legislation.
Our group’s financial condition and results of operations could also be affected by changes in economic or other government policies or other political or economic developments in each country or region, as well as regulatory changes or administrative practices over which our group has no control such as: the regulatory environment related to our group’s business operations, concession agreements and periodic regulatory resets; interest rates; benchmark interest rate reforms, including changes to the administration of the London Inter-bank Offered Rate (“LIBOR”); currency fluctuations; exchange controls and restrictions; inflation; tariffs; liquidity of domestic financial and capital markets; policies relating to climate change or policies relating to tax; and other political, social, economic, and environmental and occupational health and safety developments that may occur in or affect the countries in which our group’s operating subsidiaries are located or conduct business or the countries in which the customers of our group’s operating subsidiaries are located or conduct business or both.
Brookfield Infrastructure Corporation     45


In addition, operating costs can be influenced by a wide range of factors, many of which may not be under the control of the owner/operator, including the need to comply with the directives of central and local government authorities. For example, in the case of our group’s utility, transport and energy operations, our group cannot predict the impact of future economic conditions, energy conservation measures, alternative fuel requirements, or governmental regulation all of which could reduce the demand for or availability of commodities our group’s transport and energy operations rely upon, most notably coal and natural gas. It is difficult to predict government policies and what form of laws and regulations will be adopted or how they will be construed by the relevant courts, or to the extent which any changes may adversely affect us our group. For example, the withdrawal of the U.K. from the European Union in January 2020 may contribute to further global economic uncertainty and could significantly disrupt the free movement of goods, services, and people between the U.K. and the European Union, which could result in increased legal and regulatory complexities, as well as potential higher costs of conducting business in Europe and have a material adverse effect on our business, financial condition and results of operations.
The Financial Conduct Authority in the U.K. has announced that it will cease to compel banks to participate in LIBOR after 2021. LIBOR is widely used as a benchmark rate around the world for derivative financial instruments, bonds, and other floating-rate instruments. This change to the administration of LIBOR, and any other reforms to benchmark interest rates, could create risks
and challenges for our group. For example, the gradual elimination of LIBOR rates may have an impact on over-the-counter derivative transactions including potential contract repricing. In addition, the discontinuance of, or changes to, benchmark interest rates may require adjustments to agreements to which we and other market participants are parties, as well as to related systems and processes. This may result in market uncertainty until a new benchmark rate is established and potentially increased costs under such agreements.

Our group may be exposed to natural disasters, weather events, uninsurable losses and force majeure events.
Force majeure is the term generally used to refer to an event beyond the control of the party claiming that the event has occurred, including but not limited to acts of God, fires, floods, earthquakes, wars and labor strikes. The assets of our group’s infrastructure businesses are exposed to unplanned interruptions caused by significant catastrophic events such as cyclones, landslides, explosions, terrorist attacks, war, floods, earthquakes, fires, major plant breakdowns, pipeline or electricity line ruptures, accidents, extreme weather events or other disasters. Operational disruption, as well as supply disruption, could adversely affect the cash flow available from these assets. In addition, the cost of repairing or replacing damaged assets could be considerable and could give rise to third-party claims. In some cases, project agreements can be terminated if the force majeure event is so catastrophic as to render it incapable of remedy within a reasonable time period. Repeated or prolonged interruption may result in a permanent loss of customers, substantial litigation, damage, or penalties for regulatory or contractual non-compliance. Moreover, any loss from such events may not be recoverable in whole or in part under relevant insurance policies. Business interruption insurance is not always available, or available on reasonable economic terms to protect the business from these risks.
Given the nature of the assets operated by our group’s operating subsidiaries, we may be more exposed to risks in the insurance market that lead to limitations on coverage and/or increases in premium. The ability of our group’s operating subsidiaries to obtain the required insurance coverage at a competitive price may have an impact on the returns generated by them and accordingly the returns our group receives.
46        Brookfield Infrastructure Corporation


Performance of our group’s operating subsidiaries may be harmed by future labor disruptions and economically unfavorable collective bargaining agreements.
Performance of our group’s operating subsidiaries may be harmed by future labor disruptions and economically unfavorable collective bargaining agreements. Our group’s current operations or other business operations have workforces that are unionized or that in the future may become unionized and, as a result, are required to negotiate the wages, benefits and other terms with many of their employees collectively. If an operating entity were unable to negotiate acceptable contracts with any of its unions as existing agreements expire, it could experience a significant disruption of its operations, higher ongoing labor costs and restrictions on its ability to maximize the efficiency of its operations, which could have a material adverse effect on its business, financial condition and results of operations.
In addition, in some jurisdictions where our group has operations, labor forces have a legal right to strike, which may have an impact on our group’s operations, either directly or indirectly, for example if a critical upstream or downstream counterparty was itself subject to a labor disruption which impacted our ability to operate. Our group’s operating subsidiaries are exposed to occupational health and safety and accident risks. Infrastructure projects and operational assets are highly exposed to the risk of accidents that may give rise to personal injury, loss of life, disruption to service and economic loss. Some of the tasks undertaken by employees and contractors are inherently dangerous and have the potential to result in serious injury or death.

Our group’s operations are exposed to occupational health and safety and accident risks.
Infrastructure projects and operational assets are highly exposed to the risk of accidents that may give rise to personal injury, loss of life, disruption to service and economic loss. Some of the tasks undertaken by employees and contractors are inherently dangerous and have the potential to result in serious injury or death.
Our group’s operating subsidiaries are subject to laws and regulations governing health and safety matters, protecting both members of the public and their employees and contractors. Occupational health and safety legislation and regulations differ in each jurisdiction. Any breach of these obligations, or serious accidents involving our group’s employees, contractors or members of the public could expose them to adverse regulatory consequences, including the forfeit or suspension of operating licenses, potential litigation, claims for material financial compensation, reputational damage, fines or other legislative sanction, all of which have the potential to impact the results of our operating entities and our ability to make distributions. Furthermore, where our group does not control a business, our group has a limited ability to influence health and safety practices and outcomes.
Brookfield Infrastructure Corporation     47


Many of our group’s operations are subject to economic regulation and may be exposed to adverse regulatory decisions.
Our group’s operations are subject to economic regulation and may be exposed to adverse regulatory decisions. Due to the essential nature of some of the services provided by our group’s assets and the fact that some of these services are provided on a monopoly or near monopoly basis, many of our group’s operations are subject to forms of economic regulation. This regulation can involve different forms of price control and can involve ongoing commitments to economic regulators and other governmental agencies. The terms upon which access to our group’s facilities is provided, including price, can be determined or amended by a regulator periodically. Future terms to apply, including access charges that our group’s operations are entitled to charge, cannot be determined with any certainty, as our group does not have discretion as to the amount that can be charged. New legislation, regulatory determinations or changes in regulatory approaches may result in regulation of previously unregulated businesses or material changes to the revenue or profitability of our group’s operations. In addition, a decision by a government or regulator to regulate non-regulated assets may significantly and negatively change the economics of these businesses and the value or financial performance of our group.
Our group’s infrastructure business is at risk of becoming involved in disputes and possible litigation.
Our group’s infrastructure business is at risk of becoming involved in disputes and possible litigation, the extent of which cannot be ascertained. Any material or costly dispute or litigation could adversely affect the value of the assets or future financial performance of our group. In addition, as a result of the actions of the operating subsidiaries, our group could be subject to various legal proceedings concerning disputes of a commercial nature, or to claims in the event of bodily injury or material damage. The final outcome of any proceeding could have a negative impact on the business, financial condition or results of operations of our group during a given quarter or financial year.
Our group’s operating subsidiaries’ ability to finance our operations is subject to various risks relating to the state of the capital markets.
Our group’s financing strategy involves both the issuance of partnership level equity and the issuance of corporate debt. Our group, including BUUK and NTS, has corporate debt and limited recourse project level debt, the majority of which is non-recourse that will need to be replaced from time to time. Our financings may contain conditions that limit our ability to repay indebtedness prior to maturity without incurring penalties, which may limit our capital markets flexibility. As such, a number of risks arise with respect to refinancing our group’s existing indebtedness, including, among other factors, dependence on continued operating performance of our group’s assets, future electricity market prices, future capital markets conditions, the level of future interest rates and investors’ assessment of our group’s credit risk at such time. In addition, certain of our group’s financings are, and future financings may be exposed to floating interest rate risks, and if interest rates increase, an increased proportion of our group’s cash flow may be required to service indebtedness.
Future acquisitions, development and construction of new facilities and other capital expenditures, including those arising from our group’s committed backlog of organic growth projects, will be financed out of cash generated from our group’s operations, borrowings and possible future sales of equity. Further, our group may look to finance transactions through our capital recycling program, resulting in the disposition of certain of our group’s assets. As a large portion of our group’s capital is invested in physical assets and securities, relying on capital recycling as a means of financing could be difficult, as such assets can be hard to sell, especially if market conditions are poor. A lack of liquidity could limit our group’s ability to vary our portfolio or assets promptly in response to changing economic or investment conditions. Additionally, if financial or operating difficulties of other owners result in distress sales, such sales could depress asset values in the markets in which our group operates.
48        Brookfield Infrastructure Corporation


In addition to the above, our group’s ability to obtain financing to finance our group’s growth is dependent on, among other factors, the overall state of the capital markets, continued operating performance of our group’s assets, future electricity market prices, the level of future interest rates and investors’ assessment of our group’s credit risk at such time, and investor appetite for investments in infrastructure assets in general and in our group’s securities in particular. To the extent that external sources of capital become limited or unavailable or available on onerous terms, our ability to fund acquisitions and make necessary capital investments to construct new or maintain existing facilities will be impaired, and as a result, our group’s business, financial condition, results of operations and prospects may be materially adversely affected.
Changes in our group’s credit ratings may have an adverse effect on our group’s financial position and ability to raise capital.
Our group cannot assure you that any credit rating assigned to us or any of our subsidiaries’ debt securities will remain in effect for any given period of time or that any rating will not be lowered or withdrawn entirely by the relevant rating agency. A lowering or withdrawal of such ratings may have an adverse effect on our group’s financial position and ability to raise capital.

Our group may suffer a significant loss resulting from fraud, bribery, corruption, other illegal acts, inadequate or failed internal processes or systems, or from external events.
Our group may suffer a significant loss resulting from fraud, bribery, corruption, other illegal acts by our employees or those of Brookfield (including those in parts of the Brookfield group that do not engage or interact with Brookfield Infrastructure), inadequate or failed internal processes or systems, or from external events, such as security threats affecting our ability to operate. Both Brookfield and our group operate in different markets and rely on our group’s employees to follow our group’s policies and processes as well as applicable laws in their activities. Risk of illegal acts or failed systems is managed through our infrastructure, controls, systems and people, complemented by a focus on enterprise-wide management of specific operational risks such as fraud, bribery and corruption, as well as personnel and systems risks. Specific programs, policies, standards and methodologies have been developed to support the management of these risks. However, these cannot guarantee that such conduct does not occur and if it does, it can result in direct or indirect financial loss, reputational impact or regulatory consequences.
Brookfield Infrastructure Corporation     49


ITEM 4. INFORMATION ON THE COMPANY
4.A    HISTORY AND DEVELOPMENT OF BROOKFIELD INFRASTRUCTURE
Overview of our Company
Our company was established on August 30, 2019 by Brookfield Infrastructure to be an alternative investment vehicle for investors who prefer owning our infrastructure operations through a corporate structure. Our company owns and operates high-quality, long-life assets that generate stable cash flows, require relatively minimal maintenance capital expenditures and, by virtue of barriers to entry or other characteristics, tend to appreciate in value over time. Our current operations consist principally of the ownership and operation of regulated gas transmission systems in Brazil and of regulated distribution operations in the U.K., but upon Brookfield’s recommendation and allocation of opportunities to our company, we intend to seek acquisition opportunities in other sectors with similar attributes and in which we can deploy our operations-oriented approach to create value.
Although our current operations are utilities located in the U.K. and Brazil, shareholders have exposure to eight markets across the transport, midstream, and data operating segments by virtue of the exchange feature of our company’s exchangeable shares. The exchangeable shares of our company are structured with the intention of being economically equivalent to the units of the partnership. We believe economic equivalence is achieved through identical dividends and distributions on the exchangeable shares and the partnership’s units and each exchangeable share being exchangeable at the option of the holder for one unit of the partnership at any time. Given the economic equivalence, we expect that the market price of the exchangeable shares will be significantly impacted by the market price of the partnership’s units and the combined business performance of our company and Brookfield Infrastructure as a whole. In making an investment decision relating to our securities, investors should carefully consult the documents prepared by the partnership.
Our group’s mission is to own and operate a globally diversified portfolio of high-quality infrastructure assets that will generate sustainable and growing distributions over the long-term for our shareholders. To accomplish this objective, our group will seek to leverage its operating segments to acquire infrastructure assets and actively manage them to extract additional value following our group’s initial investment. As the business matures and cash flows have been de-risked, we seek to recycle capital and re-invest in assets that are expected to generate higher returns. An integral part of our group’s strategy is to participate along with institutional investors in Brookfield-sponsored infrastructure funds that target acquisitions that suit our group’s profile. Our group focuses on investments in which Brookfield has sufficient influence or control to deploy an operations-oriented approach.
Our group targets a total return of 12% to 15% per annum on the infrastructure assets that it owns, measured over the long term. Our group intends to generate this return from the in-place cash flows from our operations plus growth through investments in upgrades and expansions of our asset base, as well as acquisitions. The partnership determines its distributions based primarily on an assessment of our operating performance. Our group uses FFO to assess operating performance and can be used on a per unit basis as a proxy for future distribution growth over the long-term. See Item 5 “Operating and Financial Review and Prospects—Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more detail.
The partnership’s distributions are underpinned by stable, highly regulated and contracted cash flows generated from operations. The partnership’s objective is to pay a distribution that is sustainable on a long-term basis and has set its target payout ratio at 60-70% of the partnership’s FFO. The partnership targets 5% to 9% annual distribution growth in light of growth it foresees in its operations.
50        Brookfield Infrastructure Corporation


On February 2, 2021, the board of directors of the general partner of the partnership approved a 5% increase in the partnership’s quarterly distribution to $0.51 per unit (or $2.04 per unit annualized). Over the last 10 years, the partnership has increased its annual distribution from $0.79 per unit to $2.04 per unit, a compound annual growth rate of 10%.
Our board may declare dividends at its discretion. However, each of our exchangeable shares has been structured with the intention of providing an economic return equivalent to one unit of the partnership. It is expected that dividends on our exchangeable shares will be declared and paid at the same time and in the same amount as distributions are declared and paid on the units of the partnership. Accordingly, on February 2, 2021, our board approved a quarterly dividend of $0.51 per exchangeable share (or $2.04 per exchangeable share annualized), starting with the dividend to be paid in March 2021.
Currently, the Service Providers, which are wholly-owned subsidiaries of Brookfield, provide certain management, administrative and advisory services to Brookfield Infrastructure for a fee pursuant to the Master Services Agreement. Our company is also externally managed by the Service Providers. See Item 6.A “Directors and Senior Management - Our Master Services Agreement”.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information relating to our company. The site is located at http://www.sec.gov. Similar information can also be found on our website at https://bip.brookfield.com/bipc. In addition to carefully considering the disclosure made in this document, shareholders are strongly encouraged to carefully review the partnership’s periodic reporting. The partnership is required to file reports, including annual reports on Form 20-F, and other information with the SEC. The partnership’s SEC filings are available to the public from the SEC’s website noted above. Copies of documents that have been filed with the Canadian securities authorities can be obtained at www.sedar.com. Information about the partnership, including its SEC filings, is also available on its website at https://bip.brookfield.com. The information found on, or accessible through, our website does not form part of this annual report on Form 20-F.
History and Development of our Business
Our company was formed as a corporation established under the BCBCA on August 30, 2019 and is a subsidiary of the partnership. Brookfield is our company’s ultimate parent. The exchangeable shares are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol “BIPC”. The registered head office of our company is 250 Vesey Street, New York, NY, 10281, United States.
On March 30, 2020, the partnership contributed its U.K. regulated distribution operation and Brazilian regulated gas transmission operation to our company in exchange for loans receivable, exchangeable shares, class B shares and class C shares. On March 31, 2020, the partnership completed a special distribution whereby unitholders, as of record date March 20, 2020, received one exchangeable share for every nine units held (the “special distribution”). A subsidiary of the partnership owns all of the issued and outstanding class B shares which represent a 75% voting interest in our company, and all of the issued and outstanding class C shares of our company. The class C shares entitle the partnership to the residual value in our company after payment in full of the amount due to holders of exchangeable shares and class B shares.
Holders of exchangeable shares hold an aggregate 25.0% voting interest in our company.
On July 29, 2020, Brookfield completed a secondary offering of approximately 5 million exchangeable shares, inclusive of the over-allotment option. Subsequent to the offering, Brookfield holds approximately 19.3% of the issued and outstanding exchangeable shares of our company and holds an approximate 4.8% voting interest in our company through its ownership of exchangeable shares. Together, Brookfield and Brookfield Infrastructure hold an approximate 79.8% voting interest in our company subsequent to the secondary offering.
Brookfield Infrastructure Corporation     51


4.B    BUSINESS OVERVIEW
Our Operations
Our company is an indirect subsidiary of the partnership, one of the world’s largest diversified infrastructure owner and operators. Our company, through its subsidiaries, is an owner and operator of regulated utility investments in South America and the U.K. As of December 31, 2020, we own interests in a regulated gas and electricity business in the U.K., and a regulated natural gas transmission business in Brazil. Over 90% of our revenues are supported by the underlying regulatory framework or long-term contracts in the businesses we own. These stable cash flows help provide visibility and certainty around our company’s dividend.
Our operating segments are summarized below:
Overview
Our business is comprised of a U.K. regulated distribution operation and a Brazilian regulated natural gas transmission operation. These businesses earn a return on a regulated or notionally stipulated asset base, which we refer to as rate base, or from revenues in accordance with long-term concession agreements. Our rate base increases with capital that we invest to upgrade and expand our systems. Depending on the jurisdiction, our rate base may also increase by inflation and maintenance capital expenditures and decrease by regulatory depreciation. The return that we earn is typically determined by a regulator for prescribed periods of time. Thereafter, it may be subject to customary reviews based upon established criteria. Our diversified portfolio of assets allows us to mitigate exposure to any single regulatory regime. In addition, due to the franchise frameworks and economies of scale of our businesses, we often have significant competitive advantages in competing for projects to expand our rate base and earn incremental revenues. Accordingly, we expect this segment to produce stable revenue and margins over time that should increase with investment of additional capital and inflation. Nearly all of our utilities segment’s revenues are regulated or contractual.
The objectives for our utilities segment are to invest capital in the expansion of our rate base, as well as to provide safe and reliable service for our customers on a cost-efficient basis. If we do so, we will be in a position to earn an appropriate return on our rate base and strengthen our market position. Our performance can be measured by the growth in our rate base, the return on our rate base, and the growth in our AFFO.
Our utilities segment is comprised of the following:
Approximately 2,000 kilometers of natural gas pipelines in Brazil
Approximately 3.6 million gas and electricity connections
Approximately 1.5 million installed smart meters
For a description of our principal capital expenditures in the last three fiscal years, see Item 5.B “Liquidity and Capital Resources— Capital Backlog and Capital Expenditures”.

52        Brookfield Infrastructure Corporation


Brazil
Our regulated gas transmission operation in Brazil operates over 2,000 kilometers of natural gas transportation pipelines in the states of Rio de Janeiro, Sao Paulo and Minas Gerais. The total capacity of 158 million cubic meters is fully contracted under long-term “ship-or-pay”, inflation adjusted gas transportation agreements (“GTAs”) that have an average remaining life of 9 years. These assets operate as authorizations that expire between 2039 and 2041.
Strategic Position
Our natural gas transmission operation in Brazil provides the backbone of Brazil’s southeast natural gas transportation system, supplying natural gas to a region responsible for approximately 50% of Brazil’s demand, including Rio de Janeiro and Sao Paulo. The operation benefits from stable long-term cash flows, with 100% of its 158 million cubic meter capacity fully contracted under long-term “ship-or-pay”, inflation adjusted GTAs that have an average remaining life of 9 years
Regulatory Environment
The natural gas transmission industry in Brazil is regulated by the Brazilian National Agency of Petroleum, Natural Gas, and Biofuels (“ANP”). Each GTA provides owners with a return on regulatory asset base and tariffs calculated on an inflation adjusted regulatory weighted average cost of capital fixed for the term of the agreement. These assets operate as authorizations that expire between 2039 and 2041, upon which the assets will revert back to the government.
Growth Opportunities
We believe that attractive growth opportunities exist for our transmission operation. Our natural gas transmission operation in Brazil is strategically located in the region where the majority of Brazilian economic activity and pre-salt offshore oil production occurs. We believe this operation is well positioned to absorb increasing demand as natural gas is used as an efficient and low carbon intensive energy solution for both home and industry.
United Kingdom
Our regulated distribution operation is the leading independent “last-mile”, multi-utility connection provider, with approximately 3.6 million connections.
Strategic Position
Our regulated distribution operation is critical to the markets in which it is located. Our system is currently a market leader in terms of new gas and electricity connection sales to the new-build housing market, and total installed connections among independent utilities. The operation generates stable cash flows underpinned by a diverse customer base throughout England, Scotland and Wales. Our U.K. customers consist primarily of large energy retailers who serve residential and commercial users.
Brookfield Infrastructure Corporation     53


Regulatory Environment
Our regulated distribution operation competes with other connection providers to secure contracts to construct, own and operate connections to the home for seven product lines which include: natural gas, electricity, fiber, water, wastewater, district heating, and cooling. Once connections are established, we charge retailers rates based on the tariff of the distribution utility with which we are interconnected. These tariffs are set on the basis of a regulated asset base. The connection rate is typically adjusted annually and provides inflation protection as it escalates at inflation minus a factor determined by the U.K. regulator. During the first 20 years after the commissioning of a connection, the gas connection rate is subject to a cap and floor that escalates by an inflation factor. Connections revenue does not vary materially with volume transported over our system.    

Growth Opportunities
We believe that our regulated distribution operation will be able to grow organically. Growth in our operation is expected to benefit from (i) the progressive build out of our large existing backlog of connections, (ii) continued strong momentum in the new-build housing sector, and (iii) the establishment of new product offerings such as water, fiber, and district energy, which will increase our bundled service offering to new and existing customers. In addition, we continue to benefit from participation in the U.K. smart meter roll out program as we installed approximately 280,000 smart meters from U.K. energy retailers in 2020, bringing our total installed meters to approximately 1.5 million smart meters to date. We believe we have the opportunity to bring the total portfolio to 2.1 million meters based on our existing agreements.
Our Growth Strategy
Our group’s vision is to be a leading owner and operator of high-quality infrastructure assets. We will seek to grow by deploying our group’s operations-oriented approach to enhance value and by leveraging our group’s relationship with Brookfield to pursue acquisitions. To execute our group’s strategy, we seek to:
incorporate our group’s technical insight into the evaluation and execution of acquisitions;
maintain a disciplined approach to acquisitions;
actively manage our group’s assets to improve operating performance; and
employ a hands-on approach to key value drivers such as capital investments, development projects, follow-on acquisitions and financings.
We believe that our group’s relationship with Brookfield will provide us with competitive advantages in comparison with a stand-alone infrastructure company in the following respects:
ability to leverage Brookfield’s transaction structuring expertise;
ability to pursue acquisitions of businesses that own infrastructure assets together with other assets that have a riskier cash flow profile;
ability to acquire assets developed by Brookfield through its operating platforms; and
ability to participate alongside Brookfield and in or alongside Brookfield-sponsored or co-sponsored consortiums, partnerships and companies.


54        Brookfield Infrastructure Corporation


Intellectual Property
Our company is automatically entitled to the benefits and certain obligations under the Licensing Agreement that Brookfield Infrastructure has entered into with Brookfield, by virtue of the fact that our company is a controlled subsidiary of the partnership. Pursuant to the Licensing Agreement, Brookfield has granted a non-exclusive, royalty-free license to use the name “Brookfield” and the Brookfield logo. Other than under this limited license, we do not have a legal right to the “Brookfield” name and the Brookfield logo on a global basis. Brookfield may terminate the Licensing Agreement immediately upon termination of our Master Services Agreement and it may be terminated in the circumstances described under Item 7.B “Related Party Transactions - Relationship with Brookfield - Licensing Agreement”.
Governmental, Legal and Arbitration Proceedings
Our group, and our company specifically may be named as a party in various claims and legal proceedings which arise in the ordinary course of business. Our group has not been in the previous 12 months and is not currently subject to any material governmental, legal or arbitration proceedings which may have or have had a significant impact on our company’s financial position or profitability nor is our company aware of such proceedings that are pending or threatened.
Employees
Our company does not employ any of the individuals who carry out the management and activities of our infrastructure business, other than employees of our operating subsidiaries. The personnel that carry out these activities are employees of Brookfield, and their services are provided to Brookfield Infrastructure and our company or for their benefit under our Master Services Agreement. For a discussion of the individuals from Brookfield’s management team that are involved in our infrastructure business, see Item 6.A “Directors and Senior Management”. Our operating subsidiaries currently employ approximately 1,700 individuals within the U.K. and Brazil.
Environmental, Social and Governance (“ESG”) Management
As described under Item 4.A “History and Development of Brookfield Infrastructure” and Item 4.C “Organizational Structure - Brookfield and the Service Providers,” Brookfield has an approximate 28.5% interest in our group, and affiliates of Brookfield Asset Management provide services to us under the Master Services Agreement.
Grounded in our group’s history as owners and operators of real assets, strong ESG management has always been a fundamental part of our asset management approach. We believe that having a robust ESG strategy is crucial for us to create productive, profitable businesses over the long-term creating value for our unitholders and shareholders. We understand that well-run businesses are those that have a solid moral authority from all stakeholders to execute their business plans.
ESG management is fully integrated into the full asset life cycle from initial due diligence through the investment management process. We understand that good governance is essential to sustainable business operations. ESG is guided by Brookfield’s ESG Steering Committee, which comprises senior executives at Brookfield and each of its major business operations. The ESG Steering Committee’s mandate is to set the ESG strategy, oversee and coordinate ESG initiatives, share best practices across businesses and encourage improvements in ESG performance.

Brookfield Infrastructure Corporation     55


The measurement and reduction of greenhouse gas (“GHG”) emissions over time has become a key area of focus for investors. Each of Brookfield’s public entities and institutional funds, including our partnership, are striving towards net zero emissions on an avoided carbon, Scope 1 and Scope 2 basis. On that basis, Brookfield Asset Management (“BAM”) is currently net negative across its entire $600 billion asset portfolio, largely due to its ownership of one of the world’s largest pure-play renewable power businesses. Through our affiliation with BAM, not only will we benefit from broad expertise regarding the implementation and maintenance of industry-leading ESG policies and protocols, but also the ability to offset and avoid our current emissions using favorable group-level attributes.

2020 Highlights
In 2020, Brookfield and our group made progress on a number of initiatives as part of our continued effort to strengthen ESG practices.
We have continued to integrate ESG into our investment management decision making by formally incorporating guidance developed by the Sustainability Accounting Standards Board (“SASB”), a globally recognized standard-settings organization for ESG information, into our ESG Due Diligence Guidelines. Our investment teams leverage SASB guidance to ensure consideration of material ESG risks and opportunities as investments are evaluated.
Climate change mitigation and adaptation continues to be a key area of focus and we have made progress in a number of areas:
We advanced our alignment with the Task Force on Climate-related Financial Disclosures (TCFD), a globally recognized framework for assessing climate change risks and opportunities.
We completed the measurement of greenhouse gas (GHG) emissions for our asset manager and obtained a high-level understanding of Brookfield’s carbon footprint, guided by the principles of the GHG Protocol. Using this information, we have implemented carbon measurement and reduction programs across our businesses. We will track and report GHG emissions consistent with the Partnership for Carbon Accounting Financials (“PCAF”) standards, and we will develop and regularly publish decarbonization plans consistent with the Paris agreement.
Brookfield became a signatory to the United Nations-supported Principles for Responsible Investment (PRI) in early 2020. In line with PRI’s reporting process, we look forward to preparing for our first official PRI reporting submission, which we expect to take place in 2022.
As part of Brookfield’s social initiatives, we have progressed our commitment to both diversity and inclusion into our culture. Notably, we are broadening our efforts beyond gender. As part of this, we created an internal Global Diversity Advisory Group, which reports directly to senior management. The mandate of the group is to provide insight into the concerns, challenges, and successes around attracting and retaining members from underrepresented groups and find ways to increase our engagement with them.
Brookfield’s ongoing efforts are reported in our annual ESG Report in more detail, which can be found on brookfield.com/responsibility.
56        Brookfield Infrastructure Corporation


Overview of ESG & the Investment Process
Brookfield employs a framework of having a common set of ESG principles across its business, while at the same time recognizing that the geographic and sector diversity of our portfolio requires a tailored approach. The following are Brookfield’s and our group’s ESG principles:
Ensure the well-being and safety of employees
Employee Well-Being: Meet or exceed all applicable labor laws and standards in jurisdictions where we operate, which includes respecting human rights, offering competitive wages and implementing nondiscriminatory hiring practices.
Health & Safety: Aim to have zero serious safety incidents within our businesses by working toward implementing consistent health and safety principles across the organization.
Be good stewards in the communities in which we operate
Community Engagement: Engage with community groups that might be affected by our actions to ensure that their interests, safety and well-being are appropriately integrated into our decision-making.
Philanthropy: Encourage our employees to participate in the communities in which we operate.
Mitigate the impact of our operations on the environment
Environmental Stewardship: Strive to minimize the environmental impact of our operations and improve our efficient use of resources over time.
Conduct business according to the highest ethical and legal/regulatory standards
Governance, Ethics and Fairness: Operate with high ethical standards by conducting business activities in compliance with applicable legal and regulatory requirements, and with our Code of Business Conduct and Ethics.
Transparency: Be accessible to our investors and stakeholders by being responsive to requests for information and timely in our communication.
ESG management is embedded throughout our group’s investment process, starting with the due diligence of a potential investment through to the exit process. During the due diligence phase, our group utilizes its operating expertise and Brookfield’s ESG Due Diligence Guidelines to identify material ESG risks and opportunities relevant to a potential investment. In completing these initial assessments, we utilize internal experts and, as needed, third-party consultants.
To ensure ESG considerations are fully integrated in the due diligence phase, our group’s investment team prepares a detailed memorandum outlining the merits of the transaction and disclosing potential risks, mitigants and opportunities. Senior management discusses material ESG issues and potential mitigation strategies, including but not limited to, bribery and corruption risks, health and safety risks, and legal risks, as well as environmental and social risks.
Brookfield Infrastructure Corporation     57


Post-acquisition, the management teams at our portfolio companies are accountable for the preparation and implementation of ESG initiatives within their operations. Tailored integration plans are created by those teams to ensure any material ESG-related risks identified during diligence are prioritized. This is consistent with our group’s overall approach to overseeing our businesses and it ensures full alignment between responsibility, authority, experience and execution. This approach is particularly important given the wide range of industries and locations in which our group invests that require tailored ESG risk identification and management systems to mitigate unique risks and capitalize on distinct opportunities. Given the size of our group’s portfolio, our businesses execute a significant number of ESG initiatives on an annual basis.
Environmental Initiatives
Our group’s businesses continuously strive to mitigate the impact of their operations on the environment. Specifically, in Brazil, our natural gas transmission business has a sustainability policy which covers environmental initiatives and programs in place to minimize any potential negative impacts in the surrounding environment. This includes a significant system integrity project, which detects and prevents pipeline failures caused by stress corrosion cracking. In an effort to minimize potential environmental risks, our team ensures appropriate maintenance programs are in place and the integrity of the pipelines are tested on a regular basis.
In addition to the initiatives described above, our natural gas transmission business has launched a Forest Offset Program, in which the operation works to remediate native forests in human-degraded areas and offset vegetation that has been cleared to build or operate new facilities. The Program has committed to remediate and offset more than 1,000 hectares in Brazil.
Our UK regulated distribution operator plays a key role in the integrated energy and utility solution of a large regeneration project in London, King’s Cross Central, supplying heat and electricity onsite. Through our district heat network, we deliver low carbon heat, electricity, high-speed fiber and wastewater services to the area. This world-class energy and utility network that we have designed, implemented and now operate, delivers ~60% savings in carbon emissions.
Social Initiatives
Our group’s priority is ensuring a safe, inclusive and diverse workplace for our employees and portfolio companies. The health and safety of our operating employees, including our contractors, is integral to our success. This is why our group targets zero serious safety incidents and encourages a culture of safe practice and leadership. To ensure this message is effectively and consistently communicated, our group holds a quarterly forum with all its portfolio companies to share best practices and lessons learned.
Our group is also deeply aware of the benefits that diversity and inclusion add to a workplace and to our group’s ability to achieve better business outcomes. Brookfield released a Positive Work Environment Policy for use by our group’s portfolio companies, which consolidates Brookfield’s previous regional harassment policies into one global policy and sets a consistent and high standard across all jurisdictions by explicitly expressing commitment to maintaining a workplace free from discrimination, violence and harassment. Further, to ensure that protecting a positive work environment is everyone’s responsibility, the policy requires all employees to report violations experienced or witnessed. Each of our group’s portfolio companies requires compliance with the Positive Work Environment Policy to ensure it is meeting these standards.
58        Brookfield Infrastructure Corporation


In Brazil, we sponsor a program to bring musical education to public schools in nine under-developed municipalities located near our pipeline. The program partnered with the Brazilian Symphonic Orchestra to provide teacher development and support to local children in learning to play instruments and perform in concerts.
Governance Initiatives
On the governance side, our group undertook several initiatives in key areas. In recent years, data privacy and cyber-security have become key ESG priorities for global companies. Our group has continued to focus on strengthening our risk mitigation in this area through a number of measures. For example, our group has established an information security steering committee, which ensures that our group’s cybersecurity efforts are aligned across the organization. In addition, our group’s cyber-security program consists of key internal and external initiatives, from vulnerability scanning of our group’s data systems to improving our group’s employees’ cyber-security awareness through mandatory firm-wide training sessions.
Emerging Markets Operations
Brookfield and its predecessor corporations have invested in Brazil for over 100 years and Brookfield Infrastructure has been invested in Brazil since its inception in 2008, with Brazilian operations including NTS. Our group and Brookfield employ a number of key practices in managing the various risks associated with the emerging markets in which they operate, including Brazil. These practices include the following:
Oversight of Subsidiaries. Our company’s corporate structure has been designed to ensure that our company controls, or has an appropriate measure of direct oversight over, the operations of NTS. A majority of the equity interests in NTS are held by Nova Infraestrutura Fundo de Investimento em Participações, or NIF, which is in turn externally managed by Brookfield Brasil Asset Management Investmentos Ltda., or Brookfield Brazil, a subsidiary of Brookfield. Pursuant to the Voting Agreement, our company has the right to remove Brookfield Brazil as the manager of NIF at any time.
Transfer of Funds. Brookfield, by virtue of its control of NTS, may cause NTS to make distributions to our group.
Local Management and Advisors. NTS is staffed by some personnel seconded from Brookfield and our group to NTS and resident in the local jurisdiction, which ensures a degree of oversight and control in the day-to-day operations which would not be present in a passive investment. Our group also retains legal advisors with knowledge of the local laws and regulations. Some of these legal advisors are employees of our group, and others are external counsel who work in the foreign jurisdiction and are fluent in English and the local languages, familiar with the local laws, and resident or formerly resident in the local jurisdictions.
Internal Audit. As part of our group’s internal audit plan, each year our group’s internal auditor conducts an on-site internal audit with respect to specific matters as instructed by our audit committee. The audit report is reviewed and discussed by our audit committee.
Strategic Direction. The board of directors of the general partner of the partnership is responsible for the overall stewardship of our group and, as such, supervises the management of the business and affairs of our group. Our board of directors and the board of directors of the general partner of the partnership is responsible for reviewing the strategic business plans and corporate objectives, and approving acquisitions, dispositions, investments, capital expenditures and other transactions and matters that are thought to be material to the partnership and our company, respectively, including those that occur relating to NTS.
Brookfield Infrastructure Corporation     59


In addition to the above practices, many of Brookfield Infrastructure’s directors and Brookfield’s directors and executive officers have acquired experience conducting business in Brazil. The board of directors of the general partner of the partnership and the board of directors of our company are composed of directors residing in Canada, Bermuda, Mexico, the U.K. and the United States who have experience with various international issuers. In addition, Brookfield has a global presence and an international network of corporate and regional offices that allows it to work with local management and oversee the operations of our group’s subsidiaries in Brazil and elsewhere in the world.
60        Brookfield Infrastructure Corporation


4.C    ORGANIZATIONAL STRUCTURE
Organizational Charts
The chart below presents a summary of our ownership and organizational structure. Please note that on this chart all interests are 100% unless otherwise indicated and “GP Interest” denotes a general partnership interest and “LP Interest” denotes a limited partnership interest. These charts should be read in conjunction with the explanation of our ownership and organizational structure below and the information included under Item 4.B “Business Overview,” Item 6.C “Board Practices” and Item 7.B “Related Party Transactions.”

BIPC-20201231_G1.JPG
Brookfield Infrastructure Corporation     61



(1)Brookfield’s general partner interest is held through Brookfield Infrastructure Partners Limited, a Bermuda company that is
wholly−owned by Brookfield.
(2)Brookfield’s special general partner interest is held through Brookfield Infrastructure Special L.P., a Bermuda limited partnership, the sole general partner of which is Brookfield Infrastructure Special GP Limited, a Bermuda company that is wholly−owned by Brookfield.
(3)Brookfield’s limited partnership interest in the Holding LP, held in Redeemable Partnership Units, is redeemable for cash or exchangeable for units in accordance with a redemption−exchange mechanism, pursuant to which Brookfield can acquire units in exchange for Redeemable Partnership Units on a one for one basis, which could result in Brookfield eventually owning approximately 29.3% of the issued and outstanding units assuming exchange of all Redeemable Partnership Units (including the issued and outstanding units that Brookfield owned as of December 31, 2020) but excluding Brookfield’s exchangeable shares.
(4)The Service Providers provide services to Brookfield Infrastructure pursuant to a master services agreement.
(5)Brookfield has provided an aggregate of $20 million of working capital to these holding entities through a subscription for preferred shares.
(6)Holders of the class B shares hold a 75% voting interest in our company. The class C shares are non-voting.
(7)Holders of the exchangeable shares hold a 25% voting interest in our company.
(8)As of December 31, 2020, Brookfield and its affiliates own approximately 19.3% of the issued and outstanding exchangeable shares in our company and the remaining approximate 80.7% is held by public investors.
Our Company
Our company was incorporated under the BCBCA on August 30, 2019. See Item 4.A “History and Development of Brookfield Infrastructure – History and Development of our Business”.
The Partnership
The partnerships owns and operates high quality, long-life assets that generate stable cash flows, require relatively minimal maintenance capital expenditures and, by virtue of barriers to entry and other characteristics, tend to appreciate in value over time.
The partnership is a Bermudian exempted limited partnership that was established on May 21, 2007 and spun off from Brookfield on January 31, 2008.
The partnership’s sole material asset is its managing general partnership interest and preferred limited partnership interest in the Holding LP. The partnership serves as the Holding LP’s managing general partner and has sole authority for the management and control of the Holding LP. The partnership anticipates that the only distributions that it will receive in respect of the partnership’s managing general partnership interest and preferred limited partnership interest in the Holding LP will consist of amounts that are intended to assist the partnership in making distributions to its unitholders in accordance with the partnership’s distribution policy, to its preferred unitholders in accordance with the terms of its preferred units and to allow the partnership to pay expenses as they become due. The declaration and payment of cash distributions by the partnership is at the discretion of the general partner of the partnership.

Brookfield and the Service Providers
Brookfield has an approximate 29.3% interest in the partnership assuming exchange of the Redeemable Partnership Units. The partnership and the other Service Recipients, including our company, have each appointed affiliates of Brookfield Asset Management as their Service Providers to provide certain management, administrative and advisory services, for a fee, under the Master Services Agreement. In connection with the special distribution, the Master Services Agreement was amended to contemplate our company receiving management services comparable to the services provided to Brookfield Infrastructure by the Service Providers.

62        Brookfield Infrastructure Corporation


Brookfield is a global asset management company focused on property, renewable energy, infrastructure and private equity assets with approximately $600 billion of assets under management, more than 150,000 operating employees and approximately 1,000 investment professionals worldwide. Brookfield’s strategy is to combine best-in-class operating segments and transaction execution capabilities to acquire and invest in targeted assets and actively manage them in order to achieve superior returns on a long-term basis.
To execute its vision of being a leading owner and operator of high quality infrastructure assets that produce an attractive risk-adjusted total return for its unitholders, the partnership seeks to leverage its relationship with Brookfield and in particular, its operations-oriented approach, which is comprised of the following attributes:
strong business development capabilities, which benefit from deep relationships within, and in-depth knowledge of, its target markets;
technical knowledge and industry insight used in the evaluation, execution, risk management and financing of development projects and acquisitions;
project development capabilities, with expertise in negotiating commercial arrangements (including offtake arrangements and engineering, procurement and construction contracts), obtaining required permits and managing construction of network upgrades and expansions, as well as greenfield projects;
operational expertise, with considerable experience optimizing sales of its products and structuring and executing contracts with end users to enhance the value of its assets; and
development and retention of the highest quality people in its operations.
Our group does not employ any of the individuals who carry out the current management of our group. The personnel that carry out these activities are employees of Brookfield, and their services are provided to our group or for the benefit of our group under the Master Services Agreement.
The following sets forth our company’s significant subsidiaries, the jurisdiction of incorporation and the percentage ownership held by our company.
Ownership
Interest (%)
Voting
Interest (%)
Defined Name Name of entity Jurisdiction of
Organization
2020 2020
U.K. regulated distribution operation
BUUK Infrastructure No 1 Limited U.K. 80 80
Brazilian regulated gas transmission operation Nova Transportadora do Sudeste S.A.
Brazil 28 90
4.D   PROPERTY, PLANT AND EQUIPMENT
Our company’s head office is located at 250 Vesey Street, 15th Floor, New York NY 10281 and our registered office is located at 1055 West Georgia Street, Suite 1500, P.O Box 11117, Vancouver, British Columbia V6E 4N7. We do not directly own any real property.
See also the information contained in this annual report on Form 20-F under Item 3.D “Risk Factors—Risks Relating to Our Operations and the Infrastructure Industry—All of our group’s infrastructure operations may require substantial capital expenditures in the future,” “—Investments in infrastructure projects prior to or during a construction or expansion phase are likely to be subject to increased risk,” “—All of our group’s operating subsidiaries are subject to changes in government policy and legislation,”, Item 5 “Operating and Financial Review and Prospects—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 18 “Financial Statements” regarding information on Property, Plant and Equipment on a consolidated basis.
Brookfield Infrastructure Corporation     63


ITEM 4A.    UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”)
Introduction
The exchangeable shares of our company are structured with the intention of being economically equivalent to the units of the partnership. We believe economic equivalence is achieved through identical dividends and distributions on the exchangeable shares and the partnership’s units and each exchangeable share being exchangeable at the option of the holder for one unit of the partnership at any time. Given the economic equivalence, we expect that the market price of the exchangeable shares will be significantly impacted by the market price of the partnership’s units and the combined business performance of our company and Brookfield Infrastructure as a whole. In addition to carefully considering the disclosure made in this document, shareholders are strongly encouraged to carefully review the partnership’s annual reporting. The partnership is required to file reports, including annual reports on Form 20-F, and other information with the SEC. The partnership’s SEC filings are available to the public from the SEC’s website at http://www.sec.gov. Copies of documents that have been filed with the Canadian securities authorities can be obtained at www.sedar.com.
Performance Targets and Key Measures
Our group targets a total return of 12% to 15% per annum on the infrastructure assets that we own, measured over the long term. Our group intends to generate this return from the in-place cash flows from our operations plus growth through investments in upgrades and expansions of our asset base, as well as acquisitions. The partnership determines its distributions based primarily on an assessment of our operating performance. Our group uses funds from operations (“FFO”) to assess operating performance and it can be used on a per unit basis as a proxy for future distribution growth over the long-term. For further details, see the “Performance Disclosures” section of this MD&A.
64        Brookfield Infrastructure Corporation


Continuity of Interests
Our company was established on August 30, 2019 by the partnership. The partnership owns and operates high quality, long-life assets that generate stable cash flows, require relatively minimal maintenance capital expenditures and, by virtue of barriers to entry and other characteristics, tend to appreciate in value over time. The partnership’s current operations consist of utilities, transport, midstream and data businesses in North and South America, Europe and Asia Pacific. On March 30, 2020, the partnership contributed two regulated utility investments in Brazil and the U.K. (the “businesses”) to our company in exchange for loans receivable, exchangeable shares, class B shares and class C shares. On March 31, 2020, the partnership completed the special distribution of the exchangeable shares to holders of units and continues to hold all of the class B and class C shares of our company. The partnership directly and indirectly controlled our company prior to the special distribution and continues to control our company subsequent to the special distribution through its interests in our company. As a result of this continuing common control, there is insufficient substance to justify a change in the measurement of our company. In accordance with our company’s and the partnership’s accounting policy, our company has reflected the businesses in its financial position and financial performance using the partnership’s carrying values prior to the contribution of the businesses to our company.
To reflect this continuity of interests, our consolidated financial statements provide comparative information of our company for the periods prior to March 30, 2020, as previously reported by the partnership. The economic and accounting impact of contractual relationships created or modified in conjunction with the contribution of the businesses to our company have been reflected prospectively from the date of the contribution and have not been reflected in the results of operations or financial position of our company prior to March 30, 2020, as such items were in fact not created or modified prior thereto. Accordingly, the financial information for the periods prior to March 30, 2020 is presented based on the historical financial information for our company as previously reported by the partnership. For the period after March 30, 2020, the results are based on the actual results of our company, including the impact of contractual relationships created or modified in association with the contribution of the businesses to our company. As the partnership holds all of the class C shares of our company, which is the only class of shares presented as equity, net income and equity attributable to common equity have been allocated to the partnership prior to and after March 30, 2020.
Brookfield Infrastructure Corporation     65


Basis of Presentation
For the periods prior to March 30, 2020, the financial statements represent a combined carve-out of the assets, liabilities, revenues, expenses, and cash flows of the businesses that were contributed to our company effective March 30, 2020. During this period, all of the assets and liabilities presented were controlled by the partnership. The partnership directly and indirectly controlled our company prior to the special distribution and continues to control our company subsequent to the special distribution through its interests in our company. As a result of this continuing common control, there is insufficient substance to justify a change in the measurement of our company. In accordance with our company and the partnership’s accounting policy, effective March 30, 2020, the assets and liabilities were transferred to our company at their carrying values. All intercompany balances, transactions, revenues and expenses within our company have been eliminated. Additionally, certain corporate costs have been allocated on the basis of direct usage where identifiable, with the remainder allocated based on management’s best estimate of costs attributable to our company. Management believes the assumptions underlying the historical financial information, including the assumptions regarding allocated expenses, reasonably reflect the utilization of services provided to or the benefit received by our company during the periods presented. However, due to the inherent limitations of carving out the assets, liabilities, operations and cash flows from larger entities, the historical financial information may not necessarily reflect our company’s financial position, operations and cash flow for future periods, nor do they reflect the financial position, results of operations and cash flow that would have been realized had our company been a stand-alone entity during the periods presented.
Subsequent to March 30, 2020, our company is no longer allocated general corporate expenses of the parent company as the functions to which they related are now provided through the Master Services Agreement. The base management fee related to the services received under the Master Services Agreement has been recorded as part of general and administrative expenses in the consolidated financial statements.
Financial data provided has been prepared using accounting policies in accordance with IFRS. Non-IFRS measures used in this MD&A are reconciled to or calculated from such values. All dollar references, unless otherwise stated, are in millions of United States Dollars (“USD”).
When we discuss our performance measures, we present our company’s proportionate share of results, in order to demonstrate the impact of key value drivers of each of these operating entities on the overall performance. Therefore, proportionate results will differ from results presented in accordance with IFRS as they exclude the share of earnings of investments not held by our company apportioned to each of the above noted items. However, net income attributable to the parent company for each operating entity is consistent with results presented in accordance with IFRS.
66        Brookfield Infrastructure Corporation


Dividend Policy
The partnership’s distributions are underpinned by stable, highly regulated and contracted cash flows generated from operations. The partnership’s objective is to pay a distribution that is sustainable on a long-term basis and has set its target payout ratio at 60-70% of the partnership’s FFO.
The partnership’s annual distribution is reviewed with the board of directors of the general partner of the partnership in the first quarter of each year.
The board of directors of the general partner of the partnership approved a 5% increase in the partnership’s quarterly distribution to $0.51 per unit (or $2.04 per unit annualized), starting with the distribution paid in March 2021. This increase reflects the forecasted contribution from the partnership’s recently commissioned capital projects, as well as, the expected cash yield on recent acquisitions. The partnership targets 5% to 9% annual distribution growth in light of growth it foresees in its operations.
Our board may declare dividends at its discretion. However, each of our exchangeable shares has been structured with the intention of providing an economic return equivalent to one unit of the partnership. It is expected that dividends on our exchangeable shares will be declared and paid at the same time and in the same amount as distributions are declared and paid on the units of the partnership. Accordingly, on February 2, 2021, our board approved an equivalent quarterly dividend of $0.51 per exchangeable share (or $2.04 per exchangeable share annualized), starting with the dividend to be paid in March 2021.
Voting Rights
Except as otherwise expressly provided in the notice of articles and articles of our company or as required by law, each holder of exchangeable shares is entitled to receive notice of, and to attend and vote at, all meetings of our shareholders. Each holder of exchangeable shares is entitled to cast one vote for each exchangeable share held at the record date for determination of shareholders entitled to vote on any matter. The holders of the class B shares are entitled to cast, in the aggregate, a number of votes equal to three times the number of votes attached to the exchangeable shares. Except as otherwise expressly provided in the articles of our company or as required by law, the holders of exchangeable shares and class B shares vote together and not as separate classes. Holders of exchangeable shares hold an aggregate 25% voting interest in our company. Holders of class C shares have no voting rights.
Critical Accounting Policies and Estimates
The preparation of financial statements requires management to make critical judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses that are not readily apparent from other sources, during the reporting period. These estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgments made by management and utilized in the normal course of preparing our company’s consolidated financial statements are outlined below.
Brookfield Infrastructure Corporation     67


Common control transactions
IFRS 3 (2008), Business Combinations does not include specific measurement guidance for transfers of businesses or subsidiaries between entities under common control. Accordingly, our company has developed a policy to account for such transactions taking into consideration other guidance in the IFRS framework and pronouncements of other standard-setting bodies. Our company’s policy is to record assets and liabilities recognized as a result of transactions between entities under common control at the carrying value on the transferor’s financial statements, and to have the Consolidated Statements of Financial Position, Consolidated Statements of Operating Results, Consolidated Statements of Changes in Equity and Statements of Cash Flows reflect the results of combining entities for all periods presented for which the entities were under the transferor’s common control, irrespective of when the combination takes place.
Financial instruments
Our company’s accounting policies relating to derivative financial instruments are described in Note 3(m), “Basis of Presentation and Significant Accounting Policies”, of our consolidated financial statements. The critical judgments inherent in these policies relate to applying the criteria to the assessment of the effectiveness of hedging relationships. Estimates and assumptions used in determining the fair value of financial instruments are equity and commodity prices; future interest rates; the credit worthiness of our company relative to its counterparties; the credit risk of our company and counterparty; estimated future cash flows; and discount rates.
Revaluation of property, plant and equipment
Property, plant and equipment is revalued on a regular basis. The critical estimates and assumptions underlying the valuation of property, plant and equipment are set out in Note 7, “Property, Plant and Equipment” in our financial statements included in this annual report on Form 20-F. Our company’s property, plant, and equipment is measured at fair value on a recurring basis with an effective date of revaluation for all asset classes of December 31, 2020 and 2019. Our company determined fair value under the income method with due consideration to significant inputs such as the discount rate, terminal value multiple and overall investment horizon.
Fair values in business combinations
Our company accounts for business combinations using the acquisition method of accounting. This method requires the application of fair values for both the consideration given and the assets and liabilities acquired. The calculation of fair values is often predicated on estimates and judgments including future cash flows discounted at an appropriate rate to reflect the risk inherent in the acquired assets and liabilities. The determination of the fair values may remain provisional for up to 12 months from the date of acquisition due to the time required to obtain independent valuations of individual assets and to complete assessments of provisions. When the accounting for a business combination has not been completed as at the reporting date, this is disclosed in the financial statements, including observations on the estimates and judgments made as of the reporting date.
68        Brookfield Infrastructure Corporation


Impairment of goodwill and intangibles with indefinite lives
The impairment assessment of goodwill and intangible assets with indefinite lives requires estimation of the value-in-use or fair value less costs of disposal of the cash-generating units or groups of cash generating units to which goodwill or the intangible asset has been allocated. Our company uses the following critical assumptions and estimates: the circumstances that gave rise to the goodwill, timing and amount of future cash flows expected from the cash-generating units; discount rates; terminal capitalization rates; terminal valuation dates and useful lives.
Other estimates utilized in the preparation of our company’s financial statements are: depreciation and amortization rates and useful lives; recoverable amount of goodwill and intangible assets; ability to utilize tax losses and other tax measurements.
Other critical judgments utilized in the preparation of our company’s financial statements include the methodologies for calculating amortization, determination of operating segments and determination of control.
Brookfield Infrastructure Corporation     69


5.A OPERATING RESULTS
Consolidated Results
In this section we review our consolidated performance and financial position as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018. Further details on the key drivers of our operations and financial position are contained within the “Performance Disclosures” section of this MD&A.
The following table summarizes the financial results of our company for the years ended December 31, 2020, 2019 and 2018:
US$ MILLIONS For the year ended
December 31,
Summary Statements of Operating Results 2020 2019 2018
Revenues $ 1,430  $ 1,619  $ 1,561 
Direct operating costs (244) (244) (236)
General and administrative expenses (33) (30) (24)
Depreciation and amortization expense (283) (308) (319)
Interest expense (214) (156) (127)
Mark-to-market on hedging items and foreign currency revaluation (61) (4)
Remeasurement of exchangeable and class B shares (511) —  — 
Other expense (47) (44) (36)
Income tax expense (269) (272) (234)
Net (loss) income (232) 570  581 
Net (loss) income attributable to the partnership (552) 197  202 
2020 vs. 2019
For the year ended December 31, 2020, our company reported net losses of $232 million, of which $552 million was attributable to the partnership. This compares to net income of $570 million for the year ended December 31, 2019, of which $197 million was attributable to the partnership. Income for the current year benefited from capital commissioned into rate base at our U.K. regulated distribution business and inflation-indexation at our Brazilian regulated gas transmission business. These positive impacts were more than offset by revaluation losses recognized on our company’s exchangeable shares that are classified as liabilities under IFRS, and the impact of foreign exchange.
Total revenues decreased by $189 million relative to the prior year. Underlying gas transmission revenues in Brazil increased by $83 million due to inflation-indexation, however this was more than offset by the impact of foreign exchange as the depreciation of the Brazilian real reduced our revenues denominated in U.S. dollars by $283 million relative to 2019. Distribution revenues in the U.K. increased primarily from the benefits of inflationary-indexation and higher volumes associated with new utility connections, which contributed additional revenues of $8 million and $31 million, respectively. These positive factors were partially offset by a $34 million reduction in connections income following a decrease in construction activity compared to the prior year.
Direct operating costs remained relatively consistent compared to the prior year as increased costs due to inflation and organic growth were offset by the impact of foreign exchange.
70        Brookfield Infrastructure Corporation


General and administrative expenses totaled $33 million for the year ended December 31, 2020, an increase of $3 million compared to the same period in 2019. This line item primarily consists of the base management fee that is paid to Brookfield based on our company’s and the partnership’s combined market value plus net recourse debt, and allocated to our company based on proportionate weighted average shares outstanding during the period.
Depreciation and amortization expense for the year ended December 31, 2020 was $283 million, a decrease of $25 million compared to the prior year. The decrease is predominantly due to the impact of foreign exchange of $43 million, partially offset by incremental depreciation on capital expenditures made over the last year.
Interest expense for the year ended December 31, 2020 was $214 million, an increase of $58 million compared to 2019. Interest expense increased as a result of $66 million of dividends declared and paid on our company’s exchangeable shares. Due to their exchangeable features, these shares are classified as liabilities and dividends are therefore presented as interest expense. The current year also includes interest of $39 million incurred on loans payable to the partnership which were issued on March 30, 2020. These increases were partially offset by lower interest rates on our variable rate non-recourse debt at our Brazilian regulated gas transmission business and the impact of foreign exchange which reduced interest expense by $45 million and $9 million, respectively.
Mark-to-market losses on hedging items and foreign currency revaluations totaled $61 million for the year ended December 31, 2020, compared to mark-to-market gains of $5 million in the prior year. These losses are predominantly due to unrealized foreign currency losses on loans payable to the partnership.
Remeasurement losses for the year ended December 31, 2020 were $511 million. These losses were a result of the revaluation of the exchangeable shares classified as liabilities due to their exchangeable features. The remeasurement reflects the change in the public price of units based on the NYSE closing price.
Other expense for the year ended December 31, 2020 was $47 million, which remained relatively consistent with the prior year.
Income tax expense for the year ended December 31, 2020 was $269 million. This is relatively consistent with the prior year as the impact of a non-recurring deferred tax expense that was recognized as a result of an increase in U.K.’s tax rate from 17% to 19% enacted in March 2020, and an increase in taxes at our Brazilian regulated gas transmission business as a result of higher taxable revenues were more than offset by the impact of foreign exchange.
2019 vs. 2018
For the year ended December 31, 2019, our company reported net income of $570 million, of which $197 million was attributable to the partnership. This compares to net income of $581 million for the year ended December 31, 2018, of which $202 million was attributable to the partnership. Net income for the current year benefited from increased connections activity and increased capital commissioned into our rate base at our U.K. regulated distribution business, and inflation-indexation at our Brazilian regulated gas transmission business. These positive impacts were more than offset by a $29 million increase in interest expense as a result of the issuance of $1.5 billion of senior notes at our Brazilian regulated gas transmission business, and the impact of foreign exchange which decreased our net income in U.S. dollars by $53 million.
Brookfield Infrastructure Corporation     71


Total revenues increased by $58 million relative to the prior year. Gas transmission revenues increased by $125 million due to inflationary increase to our tariffs. This increase was partially offset by the impact of foreign exchange as the depreciation of the Brazilian real reduced our revenues denominated in U.S. dollars by $96 million relative to 2018. Distribution revenues in the U.K. increased primarily from the benefits of inflationary-indexation and higher volumes associated with new utility connections, which contributed additional revenues of $11 million and $24 million of revenues, respectively. This was partially offset by the impact of foreign exchange which lowered revenues by $14 million. Revenues earned from the installation of new utility connections totaled $152 million in the current year, an increase of $13 million compared to 2018 levels due to higher levels of new housing starts in the U.K.
Direct operating costs increased by $8 million compared to the prior year. Direct operating costs associated with gas transportation services in Brazil decreased by $1 million as the impact of inflation was more than offset by a weaker Brazilian real which reduced costs by $10 million. Direct costs associated with our U.K. distribution business increased by $14 million due to higher in-place connections relative to the prior year, partially offset by the impact of foreign exchange of $5 million.
General and administrative expenses totaled $30 million for the year ended December 31, 2019, an increase of $6 million compared to the same period in 2018. This line item primarily consists of the base management fee that is paid to Brookfield based on the partnership’s market value plus net recourse debt, and allocated to our Business based on estimated proportionate fair value. The base management fee increased from the prior year due to an increase to the partnership’s market value plus net recourse debt primarily as a result of a higher unit trading price.
Depreciation and amortization expense for the year ended December 31, 2019 was $308 million, a decrease of $11 million compared to the prior year. The decrease is predominantly due to the impact of foreign exchange of $21 million, partially offset by the impact of higher asset values from our annual revaluation process and capital expenditures made during the year.
Interest expense for the year ended December 31, 2019 was $156 million, an increase of $29 million compared to the same period in 2018. Interest expense increased predominantly due to a full year of contribution from the issuance of $1.5 billion of five-year senior notes at our Brazilian regulated gas transmission business in May 2018.
Mark-to-market gains on hedging items for the year ended December 31, 2019 were $5 million compared to losses of $4 million for the twelve-month period ended December 31, 2018. Amounts in both the current and comparative period consist primarily of mark-to-market movements on hedging activities at our U.K. regulated distribution business.
Other expense for the year ended December 31, 2019 was $44 million, an increase of $8 million compared to the prior year predominantly due to increased accretion expense on deferred consideration at our Brazilian regulated gas transmission business.
Income tax expense for the twelve-month period ended December 31, 2019 was $272 million, an increase of $38 million from the prior year. The increase is primarily due to income tax associated with higher earnings from our Brazilian regulated gas transmission business.
72        Brookfield Infrastructure Corporation


Statements of Financial Position
The following table summarizes the statement of financial position of our company as at December 31, 2020, and December 31, 2019:
US$ MILLIONS As of
Summary Statements of Financial Position Key Metrics December 31, 2020 December 31, 2019
Cash and cash equivalents $ 192  $ 204 
Property, plant and equipment 5,111  4,497 
Intangible assets 2,948  3,936 
Total assets 9,344  9,853 
Exchangeable and class B shares 2,221  — 
Non-recourse borrowings 3,477  3,526 
Loans payable to Brookfield Infrastructure 1,143  — 
Total liabilities 9,916  6,576 
Equity in net assets attributable to the partnership (1,722) 1,654 
Total equity (572) 3,277 
Total assets were $9.3 billion at December 31, 2020, compared to $9.9 billion at December 31, 2019. During the year ended December 31, 2020, our company added $0.4 billion to property, plant, and equipment, however, these increases were more than offset by the impact of foreign exchange which lowered U.S. dollar assets by $0.9 billion.
Our accounting policy is to carry property, plant and equipment at fair value and intangible assets at amortized cost. Our company carried out an assessment of the fair value of its property, plant and equipment as at December 31, 2020, resulting in a gain from revaluation of $215 million. Our valuation of property, plant and equipment is underpinned by regulated cash flow. Our local revenues have been predominantly unimpacted to date by the recent changes in the macroeconomic environment as we earn a regulated return on an asset base for making the infrastructure available to users with minimal volume and price risk.
Our exchangeable and class B shares are classified as liabilities due to their exchangeable and cash redemption features. Upon issuance on March 31, 2020, the shares were recognized at their fair value of $38.09 per share based on the NYSE opening price of one unit. Subsequent to initial recognition, the shares are measured at amortized cost and remeasured to reflect changes in the contractual cash flows associated with the shares. These contractual cash flows are based on the price of one unit. As at December 31, 2020, the shares were remeasured to reflect the NYSE closing price of one unit, $49.40 per share.
Non-recourse borrowings decreased by $49 million to $3,477 million at December 31, 2020. Additional borrowings of $171 million used to fund growth initiatives was more than offset by the impact of foreign exchange as the Brazilian real weakened relative to the U.S. dollar during the year ended December 31, 2020.
As of December 31, 2020, our company had loans payable of $1,143 million to subsidiaries of Brookfield Infrastructure. The loans are payable within 10 years and bear a weighted average interest of approximately 5% annually.
Total equity was negative $572 million at December 31, 2020, compared to positive $3,277 million at December 31, 2019. The decrease is mainly due to the change in capital structure of our company upon transfer of the Brazilian regulated transmission business and the U.K. regulated distribution business from the partnership to our company in exchange for consideration which included intercompany loans and exchangeable shares of our company that are classified as liabilities under IFRS.

Brookfield Infrastructure Corporation     73


Foreign Currency Translation
A discussion of the most significant currency exchange rates that impact our company are set forth below as at and for the periods indicated:
Period End Rate Average Rate
As of December 31, For the year ended December 31,
2020 2019 2018 2020 vs 2019 2019 vs 2018 2020 2019 2018 2020 vs 2019 2019 vs 2018
Brazilian real 0.1924 0.2481 0.2581 (22) % (4) % 0.1939 0.2534 0.2736 (23) % (7) %
British pound 1.3670 1.3255 1.2760 3  % % 1.2840 1.2767 1.3350 1  % (4) %
The net assets of our U.K. regulated distribution business and our Brazilian regulated transmission business represent 67% and 33%, respectively, of our equity in foreign subsidiaries.
The following table disaggregates the impact of foreign currency translation on the equity of our company by the most significant non-U.S. currencies for the periods indicated:
US$ MILLIONS For the year ended December 31,
2020 2019 2018
Brazilian real $ (550) $ (116) $ (658)
British pound 57  57  (67)
(493) (59) (725)
Currency hedges 5 
$ (488) $ (54) $ (721)
Attributable to:
The partnership $ (100) $ 17  $ (237)
Non-controlling interests (388) (71) (484)
$ (488) $ (54) $ (721)
The impact of foreign currency translation on our company, including those attributable to non-controlling interests for the year ended December 31, 2020, was a reduction to equity of $488 million (2019: $54 million, 2018: $721 million). The reduction of equity during the year ended December 31, 2020 was primarily the result of the Brazilian real weakening by 22%.
Average currency exchange rates impact the U.S. dollar equivalents of revenues and net income from non-U.S. operations on a comparative basis. During the year ended December 31, 2020, the average exchange rate of the Brazilian real weakened by 23%, reducing our revenues and net income in U.S. dollars while the British pound remained relatively consistent with the prior year.






74        Brookfield Infrastructure Corporation


Summary of Quarterly Financial Information
2020 2019
US$ MILLIONS Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Revenues $ 375  $ 349  $ 322  $ 384  $ 406  $ 406  $ 404  $ 403 
Net (loss) income (17) (222) (194) 201 145 141 143 141
Net (loss) income attributable to the partnership (102) (301) (266) 117 51 50 48 48
Our businesses, given their regulated and contractual nature, provide stable, predictable revenues and margins. During the year ended December 31, 2020, our company’s revenue increased, on a constant currency basis, by $90 million in comparison to the prior year. This increase was more than offset by the impact of the depreciation of the Brazilian real which reduced our revenues denominated in U.S. dollars by $283 million relative to 2019 and was the primary driver of quarter on quarter revenue variances. Quarterly variances in our company’s net income and net income attributable to the partnership are primarily due to revaluation gains and losses recognized on our company’s exchangeable shares that are classified as liabilities under IFRS. During the year ended December 31, 2020, revaluation losses totaled $511 million.

Summary Financial Information Related to the Partnership
As the market price of our exchangeable shares is expected to be significantly impacted by the market price of the units and the combined business performance of our group as a whole, we are providing the following summary financial information regarding the partnership. For further details please review the partnership’s periodic reporting referenced in the introductory section of this MD&A.
US$ MILLIONS For the year ended December 31,
IFRS measures 2020 2019 2018
Revenue $ 8,885  $ 6,597  $ 4,652 
Net income 904  650  806 
US$ MILLIONS As of
IFRS measures December 31, 2020 December 31, 2019
Total assets $ 61,331  $ 56,308 
Total liabilities 39,658  34,131 
Total partnership capital 21,673  22,177 
US$ MILLIONS For the year ended December 31,
Non-IFRS measures 2020 2019 2018
Adjusted EBITDA(1)
$ 1,993  $ 1,899  $ 1,613 
Funds from Operations (FFO)(1)
1,454  1,384  1,231 
Adjusted Funds from Operations (AFFO)(1)
1,173  1,096  982 
(1)The partnership’s definitions of these non-IFRS financial measures are consistent with that of our company. For a definition of each of these non-IFRS measures, please refer to the “Reconciliation of Non-IFRS Financial Measures” section within this MD&A.

Brookfield Infrastructure Corporation     75


PERFORMANCE DISCLOSURES
To measure performance, we focus on net income, an IFRS measure, as well as certain non-IFRS measures, including FFO, AFFO, and Adjusted EBITDA. FFO, AFFO, and Adjusted EBITDA are proportionate measures and are not calculated in accordance with, and do not have any standardized meaning prescribed by IFRS as issued by the IASB.
We believe our presentation of FFO, AFFO, and Adjusted EBITDA are useful to investors because it supplements investors’ understanding of our operating performance by providing information regarding our ongoing performance that excludes items we believe do not directly affect our core operations. Our presentation of FFO, AFFO, and Adjusted EBITDA also provide investors enhanced comparability of our ongoing performance across periods. Our presentation of FFO, AFFO, and Adjusted EBITDA is consistent with the partnership.
For further details regarding our use of FFO, AFFO, and Adjusted EBITDA, as well as a reconciliation of net income to these measures, see the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.
US$ MILLIONS For the year ended December 31,
Key Metrics 2020 2019 2018
Adjusted EBITDA(1)
$ 512  $ 555  $ 528 
Funds from Operations (FFO)(2)
401  432  428 
Adjusted Funds from Operations (AFFO)(3)
388  415  412 
(1)Adjusted EBITDA is defined as net income excluding the impact of depreciation and amortization, interest expense, current and deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. Refer to the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.
(2)FFO is defined as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. We also exclude from FFO dividends paid on the exchangeable shares of our company that are presented as interest expense, as well as the interest expense on loans payable to the partnership which represent the partnership’s investment in our company. Refer to the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.
(3)AFFO is defined as FFO less maintenance capital expenditures. Refer to the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.
For the year ended December 31, 2020, FFO and Adjusted EBITDA decreased by $31 million and $43 million, respectively, compared to the same period in the prior year. During the current period, FFO and Adjusted EBITDA benefited from inflation-indexation at our Brazilian regulated gas transmission business and capital commissioned into rate base at our U.K. regulated distribution business. FFO further benefited from lower interest rates on our variable rate non-recourse debt at our Brazilian regulated gas transmission business. These positive factors were more than offset by the depreciation of the Brazilian real and lower connections activity at our U.K. regulated distribution business. Adjusting for a weaker Brazilian real, FFO would have increased by 4% from the same period in the prior year.
The following table disaggregates our operating performance between our utilities operations and the corporate, general and administrative costs.
US$ MILLIONS For the year ended December 31, 2020
Key Metrics Utilities Corporate Total
Adjusted EBITDA(1)
$ 545  $ (33) $ 512 
Funds from Operations (FFO)(2)
434  (33) 401 
Adjusted Funds from Operations (AFFO)(3)
421  (33) 388 
76        Brookfield Infrastructure Corporation


US$ MILLIONS For the year ended December 31, 2019
Key Metrics Utilities Corporate Total
Adjusted EBITDA(1)
$ 585  $ (30) $ 555 
Funds from Operations (FFO)(2)
462  (30) 432 
Adjusted Funds from Operations (AFFO)(3)
445  (30) 415 
US$ MILLIONS For the year ended December 31, 2018
Key Metrics Utilities Corporate Total
Adjusted EBITDA(1)
$ 552  $ (24) $ 528 
Funds from Operations (FFO)(2)
452  (24) 428 
Adjusted Funds from Operations (AFFO)(3)
436  (24) 412 
(1)Adjusted EBITDA is defined as net income excluding the impact of depreciation and amortization, interest expense, current and deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. Refer to the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.
(2)FFO is defined as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. We also exclude from FFO dividends paid on the exchangeable shares of our company that are presented as interest expense, as well as the interest expense on loans payable to the partnership which represent the partnership’s investment in our company. Refer to the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.
(3)AFFO is defined as FFO less maintenance capital expenditures. Refer to the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.

Utilities
Results of Operations
Our company earns a return on a regulated or notionally stipulated asset base, which we refer to as rate base. Our rate base reflects the current amount, either as defined by the regulator or as implied by our contracted cash flows, on which we earn our return. Our rate base increases with capital that we invest to expand our systems and is indexed to local inflation. The return that we earn is typically determined by a regulator for prescribed periods of time or is derived based on the contracted cash flows we have secured. We believe that the rate base is useful for investors as it provides them with an understanding of the unlevered returns our asset base can currently generate and enhances comparability across other utility investments as it assists in assessing the operating performance of our company by eliminating the effect of its current capital structure and tax profile.
The following table presents our proportionate share of the rate base of our utilities business as at 2020, 2019 and 2018:
As of December 31,
US$ MILLIONS 2020 2019 2018
Rate base $ 3,485  $ 3,371  $ 3,012 

Brookfield Infrastructure Corporation     77


The following table presents our proportionate share of key measures of our utilities business for the years ended 2020, 2019 and 2018:
  For the year ended December 31,
US$ MILLIONS 2020 2019 2018
Adjusted EBITDA(1),(4)
$ 545  $ 585  $ 552 
Funds from Operations (FFO)(2),(4)
434  462  452 
Adjusted Funds from Operations (AFFO)(3),(4)
421  445  436 
(1)Adjusted EBITDA is defined as net income excluding the impact of depreciation and amortization, interest expense, current and deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. Refer to the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.
(2)FFO is defined as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. We also exclude from FFO dividends paid on the exchangeable shares of our company that are presented as interest expense, as well as the interest expense on loans payable to the partnership which represent the partnership’s investment in our company. Refer to the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.
(3)AFFO is defined as FFO less maintenance capital expenditures. Refer to the “Reconciliation of Non-IFRS Financial Measures” section of this MD&A.
(4)Adjusted EBITDA, FFO and AFFO provided in the table above do not reflect the annual base management fee our company pays for the periods indicated to Brookfield pursuant to the Master Services Agreement as described below in this MD&A under “Corporate, General and Administrative Services”.
2020 vs. 2019
For the year ended December 31, 2020, adjusted EBITDA and FFO for our utilities businesses were $545 million and $434 million, respectively, compared to $585 million and $462 million, respectively, in 2019. Adjusted EBITDA in the current year benefited from inflation-indexation and capital commissioned into rate base. These benefits were more than offset by lower connections activity at our U.K. regulated distribution business and the impact of foreign exchange. FFO was also impacted by the aforementioned factors but benefited from a decrease in interest expense as a result of lower interest rates on our variable rate non-recourse debt at our Brazilian regulated transmission operation.
2019 vs. 2018
For the year ended December 31, 2019, adjusted EBITDA and FFO for our utilities businesses were $585 million and $462 million, respectively, compared to $552 million and $452 million, respectively, in 2018. EBITDA in 2019 benefited from strong connections activity at our U.K. regulated distribution business, inflation-indexation and capital commissioned into rate base. FFO also benefited from the aforementioned factors, however, these positive impacts were partially offset by an increase in interest expense as a result of a full year impact of the $1.5 billion five-year senior notes at our Brazilian regulated gas transmission business, and the impact of foreign exchange, mainly caused by the depreciation of the Brazilian real against the U.S. dollar.
The following table presents the roll-forward of our proportionate rate base for the years ended 2020, 2019 and 2018:
  For the year ended December 31,
US$ MILLIONS 2020 2019 2018
Rate base, start of period $ 3,371  $ 3,012  $ 3,190 
Capital expenditures commissioned 251  287  300 
Inflation and other indexation 146  168  52 
Regulatory depreciation (40) (40) (42)
Foreign exchange and other (243) (56) (488)
Rate base, end of period $ 3,485  $ 3,371  $ 3,012 
78        Brookfield Infrastructure Corporation


Our rate base increased compared to the prior year as a result of new connections at our U.K. regulated distribution business and inflation-indexation at our Brazilian regulated gas transmission business. These positive impacts were almost entirely offset by the impact of foreign exchange.
Capital Backlog and Capital Expenditures
Capital expenditures completed during the periods provided in the table below consist of organic growth projects at our U.K. regulated distribution business. There have been no material capital expenditures at our company’s Brazilian operations during the periods provided below. Projects include the build-out of last-mile natural gas, electricity, fiber, water, wastewater and district heating connections for the home. Additionally, during 2019 and 2020, our U.K. business has adopted approximately 510,000 installed smart meters. The table below summarizes our proportionate share of capital backlog, which represents projects that have been awarded or filed with regulators that are expected to occur over the next three years, and the historical capital expenditures for the periods presented related to our existing utility order book and contracted smart meter adoptions:
  For the year ended December 31,
US$ MILLIONS 2020 2019 2018
Capital backlog, start of period $ 466  $ 551  $ 735 
Additional capital project mandates 212  332  267 
Less: capital expenditures (302) (334) (336)
Foreign exchange and other (11) (83) (115)
Capital backlog, end of period 365  466  551 
Construction work in progress 258  200  145 
Total capital to be commissioned $ 623  $ 666  $ 696 
These capital projects are financed with a combination project-level financing, which has no recourse to our company, as well as operating cash flows generated and retained within our company. Capital backlog consists primarily of a contracted order book of gas and electricity connections at our U.K. regulated gas distribution business that is expected to be commissioned over the next three years. Our order book currently totals over 1 million connections. Capital backlog decreased as additional capital project mandates were more than offset by capital expenditures made during the period and the impact of foreign exchange.
Corporate, General and Administrative Services
Pursuant to the Master Services Agreement, the partnership pays Brookfield an annual base management fee equal to 1.25% of the partnership’s and our company’s combined market value plus net recourse debt. The discussion below reflects the management fees pursuant to the Master Services Agreement allocated to our company for the periods presented. The allocation was based on proportionate weighted average shares outstanding during the period.
2020 vs. 2019
For the year ended December 31, 2020, the base management fee under the Master Services Agreement was $30 million, consistent with the prior year. Our company also incurred $3 million in other general and administrative expenses during the year.
2019 vs. 2018
For the year ended December 31, 2019, the base management fee under the Master Services Agreement was $30 million compared to $24 million in the prior year. The base management fee for the year ended December 31, 2019 increased from the comparative period predominantly due to a higher trading price of the units.
Brookfield Infrastructure Corporation     79


RECONCILIATION OF NON-IFRS FINANCIAL MEASURES
We focus on FFO to measure operating performance, along with IFRS measures such as net income. In addition, we also assess AFFO and Adjusted EBITDA. These non-IFRS measures are presented for our utilities operations both before and after the allocation of corporate, general and administrative expenses. Providing underlying performance for our utilities operations prior to allocated corporate expenses assists the comparability of our performance relative to other public utilities companies.
Adjusted EBITDA, FFO, and AFFO are presented based on our proportionate share of results in operations accounted for using the consolidation method whereby we control the investment. Proportionate financial information is not, and is not intended to be, presented in accordance with IFRS. The presentation of the assets and liabilities and revenues and expenses do not represent our legal claim to such items, and the removal of financial statement amounts that are attributable to non-controlling interests does not extinguish our company’s legal claims or exposures to such items.
As a result, proportionate revenues, costs attributable to revenues, general and administrative costs, interest expense, other income, depreciation and amortization, deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses are reconciling items that will differ from results presented in accordance with IFRS.
We provide proportionate financial results because we believe it assists investors and analysts in estimating our overall performance and understanding our company’s share of results from its underlying investments which have varying economic ownership interests and financial statement presentations when determined in accordance with IFRS. We believe our proportionate financial information, when read in conjunction with our company’s reported results under IFRS, provides the most meaningful assessment of how our operations are performing and capital is being managed. The presentation of proportionate results has limitations as an analytical tool, including the following:
The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses;
Other companies may calculate proportionate results differently than we do.
The tables below present the results of our company in the format that management uses to make operating decisions and assess performance.
Net income is the most directly comparable IFRS measure to FFO, AFFO, and Adjusted EBITDA. We urge investors to review the IFRS financial measures within the MD&A and to not rely on any single financial measure to evaluate our company.
80        Brookfield Infrastructure Corporation


We define FFO as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, and non-cash valuation gains or losses. We also exclude from FFO dividends paid on the exchangeable shares of our company that are presented as interest expense, as well as the interest expense on loans payable to the partnership which represent the partnership’s investment in our company.
FFO has limitations as an analytical tool:
FFO does not include depreciation and amortization expense; because we own capital assets with finite lives, depreciation and amortization expense recognizes the fact that we must maintain or replace our asset base in order to preserve our revenue generating capability;
FFO does not include deferred income taxes, which may become payable if we own our assets for a long period of time; and
FFO does not include certain non-recurring charges such as breakage and transaction costs or non-cash valuation gains and losses.
FFO is a measure of operating performance that is not calculated in accordance with and does not have any standardized meaning prescribed by IFRS as issued by the IASB. FFO is therefore unlikely to be comparable to similar measures presented by other issuers. FFO has limitations as an analytical tool. Specifically, our definition of FFO may differ from the definition used by other organizations, as well as the definition of Funds from Operations used by the REALPAC and the NAREIT, in part because the NAREIT definition is based on U.S. GAAP, as opposed to IFRS.
FFO is a key measure that we use to evaluate the performance of our operations and forms the basis for our company’s distribution policy.
We believe that FFO, when viewed in conjunction with our IFRS results, provides a more complete understanding of factors and trends affecting our underlying operations. FFO allows us to evaluate our company on the basis of cash return on invested capital by removing the effect of non-cash and other items.
We add back depreciation and amortization to remove the implication that our assets decline in value over time since we believe that the value of most of our assets will be sustained over time, provided we make all necessary maintenance expenditures. Specifically, in our financial statements we use the revaluation approach in accordance with IAS 16, Property, Plant and Equipment, whereby depreciation expense is determined based on a revalued amount, thereby reducing comparability with our peers who do not report under IFRS as issued by the IASB or who do not employ the revaluation approach to measuring property, plant and equipment. We add back deferred income taxes because we do not believe this item reflects the present value of the actual cash tax obligations we will be required to pay, particularly if our operations are held for a long period of time. We add back non-cash valuation gains or losses recorded in net income as they are non-cash and indicate a point-in-time approximation of value on items we consider long-term. We add back breakage and transaction costs as they are capital in nature. We also add back dividends paid on the exchangeable shares of our company that are presented as interest expense, as well as interest expense on loans payable to the partnership as these items represent the partnership’s investment in our company.
Brookfield Infrastructure Corporation     81


In addition, we focus on AFFO, which is defined as FFO less capital expenditures required to maintain the current performance of our operations (maintenance capital expenditures). While FFO provides a basis for assessing current operating performance, it does not take into consideration the cost to sustain the operating performance of the asset base. In order to assess the long-term, sustainable operating performance of our company, we observe that in addition to FFO, investors use AFFO by taking into account the impact of maintenance capital expenditures. AFFO is a measure of operating performance that is not calculated in accordance with, and does not have any standardized meaning prescribed by IFRS as issued by the IASB. AFFO is therefore unlikely to be comparable to similar measures presented by other issuers and has limitations as an analytical tool.
We also focus on Adjusted EBITDA which we define as net income excluding the impact of depreciation and amortization, interest expense, current and deferred income taxes, breakage and transaction costs and non-cash valuation gains or losses. Adjusted EBITDA provides a supplemental understanding of the performance of our company and enhanced comparability across periods and relative to our peers. Adjusted EBITDA excludes the impact of interest expense and current income taxes to remove the effect of the current capital structure and tax profile in assessing the operating performance of our company. Adjusted EBITDA is a measure of operating performance that is not calculated in accordance with, and does not have any standardized meaning prescribed by IFRS as issued by the IASB. Adjusted EBITDA is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted EBITDA has limitations as an analytical tool.
Proportionate debt is presented based on our proportionate share of borrowings obligations relating to our investments in various portfolio businesses. Proportionate net debt is proportionate debt net of our proportionate share of cash. The proportionate financial information is not, and is not intended to be, presented in accordance with IFRS. We provide proportionate debt and net debt measures because we believe it assists investors and analysts in estimating our overall performance and understanding the leverage pertaining specifically to our company’s share of its invested capital in a given investment. When used in conjunction with Adjusted EBITDA, proportionate debt is expected to provide useful information as to how our company has financed its businesses at the asset-level. We believe our proportionate presentation, when read in conjunction with our company’s reported results under IFRS, including consolidated debt, provides a more meaningful assessment of how our operations are performing and capital is being managed. The presentation of proportionate debt has limitations as an analytical tool, including the following:
Proportionate debt amounts do not represent our consolidated obligation for debt underlying a consolidated investment. If an individual project does not generate sufficient cash flows to service the entire amount of its debt payments, our company may determine, in our discretion, to pay the shortfall through an equity injection to avoid defaulting on the obligation. Such a shortfall may not be apparent from or may not equal the difference between aggregate proportionate Adjusted EBITDA for all of our portfolio investments and aggregate proportionate debt for all of our portfolio investments; and
Other companies may calculate proportionate debt differently than we do.
Because of these limitations, our proportionate financial information should not be considered in isolation or as a substitute for our financial statements as reported under IFRS.
82        Brookfield Infrastructure Corporation


A reconciliation of the most closely-related IFRS measure, net income, to FFO and AFFO is as follows:
  For the year ended December 31,
US$ MILLIONS 2020 2019 2018
Net income $ (232) $ 570  $ 581 
Add back or deduct the following:
Depreciation and amortization 283  308  319 
Income tax expense 269  272  234 
Mark-to-market on hedging items and other 108  39  40 
Remeasurement of exchangeable and class B shares 511  —  — 
Dividends classified as interest expense and interest expense on intercompany loan 105  —  — 
Other expenses (158) (160) (134)
Consolidated Funds from Operations 886  1,029  1,040 
FFO attributable to non-controlling interests(1)
(485) (597) (612)
FFO 401  432  428 
Maintenance capital expenditures (13) (17) (16)
AFFO $ 388  $ 415  $ 412 
(1)By adjusting for the amount of FFO attributable to non-controlling interests, our company is able to remove the portion of FFO earned at non-wholly owned affiliates that is not attributable to the partnership. We believe our proportionate financial information, when read in conjunction with the reported results of our company under IFRS, provides the most meaningful assessment of how our operations are performing. Please refer to the discussion of limitations of the proportional results as an analytical tool within this section.
All reconciling amounts from net income to FFO presented above are taken directly from the consolidated financial statements, and in the case of “FFO attributable to non-controlling interests”, our company’s proportionate share of FFO relating thereto are derived using the accounting policies consistent with those applied in our company’s consolidated financial statements; FFO for these items is calculated on the same basis as combined entities, as disclosed above, and is calculated by applying the same ownership percentages used in calculating the corresponding elimination of non-controlling interests in accordance with IFRS 10, Consolidated Financial Statements.
For the year-ended December 31, 2020, the difference between net income and FFO is predominantly due to depreciation and amortization, remeasurement losses, and FFO attributable to non-controlling interests. Depreciation and amortization decreased from the prior year due to the impact of foreign exchange. The remeasurement losses for the year ended December 31, 2020 were due to revaluation of the exchangeable shares and class B shares classified as liabilities, based on the NYSE opening price of one unit on the issuance date, and the closing price of one unit on December 31, 2020, to reflect the change in contractual cash flows associated with the shares subsequent to issuance. FFO attributable to non-controlling interests decreased from the prior year as the benefit of organic growth was more than offset by the impact of foreign exchange
The difference between net income and AFFO is due to the aforementioned items in addition to maintenance capital expenditures of $13 million for the year ended December 31, 2020 (2019: $17 million, 2018: $16 million).
Brookfield Infrastructure Corporation     83


The following table reconciles net income, the most directly comparable IFRS measure, to Adjusted EBITDA, a non-IFRS measure. Adjusted EBITDA is presented based on our proportionate share of results in operations accounted for using the consolidation methods.
  For the year ended December 31,
US$ MILLIONS 2020 2019 2018
Net income $ (232) $ 570  $ 581 
Add back or deduct the following:
Depreciation and amortization 283  308  319 
Interest expense 214  156  127 
Income tax expense 269  272  234 
Mark-to-market losses and other expenses 108  39  40 
Remeasurement of exchangeable and class B shares 511  —  — 
Consolidated Adjusted EBITDA 1,153  1,345  1,301 
Adjusted EBITDA attributable to non-controlling interests(1)
(641) (790) (773)
Adjusted EBITDA $ 512  $ 555  $ 528 
(1)By adjusting for the amount of Adjusted EBITDA attributable to non-controlling interests, our company is able to remove the portion of Adjusted EBITDA earned at non-wholly owned subsidiaries that is not attributable to the partnership. We believe our proportionate financial information, when read in conjunction with the reported results of our company under IFRS, provides the most meaningful assessment of how our operations are performing. Please refer to the discussion of the limitations of proportional results as an analytical tool within this section.
All reconciling amounts presented above are taken directly from the consolidated financial statements, and in the case of “Adjusted EBITDA attributable to non-controlling interests”, our company’s proportionate share of Adjusted EBITDA relating thereto are derived using the accounting policies consistent with those applied in our company’s consolidated financial statements. Adjusted EBITDA for these items is calculated on the same basis as combined entities, as disclosed above, and is calculated by applying the same ownership percentages used in calculating the corresponding elimination of non-controlling interests in accordance with IFRS 10, Consolidated Financial Statements.
For the year ended December 31, 2020, the difference between net income and Adjusted EBITDA is predominantly due to depreciation and amortization, remeasurement losses, interest expense and Adjusted EBITDA attributable to non-controlling interests. Depreciation and amortization decreased from the prior year due to the impact of foreign exchange. The remeasurement losses for the year ended December 31, 2020 were due to revaluation of the exchangeable shares and class B shares classified as liabilities, based on the NYSE opening price of one unit on the issuance date, and the closing price of one unit on December 31, 2020, to reflect the change in contractual cash flows associated with the shares subsequent to issuance. Interest expense increased compared to the prior year as a result of dividends, presented as interest expense, declared and paid on our company’s exchangeable shares and interest incurred on related party loans, issued on March 30, 2020. For the year ended December 31, 2020, our company declared and paid dividends totaling $66 million, while interest incurred on related party loans totaled $39 million. These increases were partially offset by the decrease in interest expense on our variable rate non-recourse debt at our Brazilian regulated gas transmission business. Adjusted EBITDA attributable to non-controlling interests decreased as the benefit of organic growth was more than offset by the impact of foreign exchange.

84        Brookfield Infrastructure Corporation


RELATED PARTY TRANSACTIONS
In the normal course of operations, our company entered into the transactions below with related parties. The ultimate parent of our company is Brookfield. Other related parties of our company represent Brookfield’s subsidiary and operating entities.
Since inception, the partnership has had a management agreement, the Master Services Agreement, with the Service Providers which are wholly-owned subsidiaries of Brookfield.
For the periods prior to March 30, 2020, our company’s financial statements include general corporate expenses of the parent company which were not historically allocated to our company’s operations. These expenses relate to management fees payable to Brookfield. These allocated expenses have been included as appropriate in our company’s Consolidated Statements of Operating Results. Key decision makers of our company are employees of Brookfield. However, the financial statements may not include all of the expenses that would have been incurred and may not reflect our company’s combined results of operations, financial position and cash flows had it been a standalone company during the periods presented. It is not practicable to estimate the actual costs that would have been incurred had our company been a standalone company during the periods presented as this would depend on multiple factors, including organizational structure and infrastructure.
Subsequent to the special distribution on March 31, 2020, our company is no longer allocated general corporate expenses of the parent company as the functions which they relate to are now provided through the Master Services Agreement. The base management fee related to the services received under the Master Services Agreement has been recorded as part of general and administrative expenses in the consolidated financial statements.
Pursuant to the Master Services Agreement, on a quarterly basis, our group pays a base management fee to the Service Providers equal to 0.3125% per quarter (1.25% annually) of the combined market value of the partnership and our company. Our company reimburses the partnership for our proportionate share of the management fee. For purposes of calculating the base management fee, the market value of the partnership is equal to the aggregate value of all the outstanding units (assuming full conversion of Brookfield’s Redeemable Partnership Units in Brookfield Infrastructure into units), preferred units and securities of the other Service Recipients (including the exchangeable shares and the exchangeable units of Brookfield Infrastructure Partners Exchange LP) that are not held by Brookfield Infrastructure, plus all outstanding third-party debt with recourse to a Service Recipient, less all cash held by such entities. The amount attributable to our company is based on weighted average units and shares outstanding after retroactively adjusting for the special distribution.
The base management fee attributable to our company was $30 million for the year ended December 31, 2020 (2019: $30 million, 2018: $24 million).
Our company’s affiliates provide connection services in the normal course of operations on market terms to affiliates and associates of Brookfield Property Partners L.P. For the year ended December 31, 2020, revenues of $0.5 million were generated (2019: $2 million, 2018: $4 million) and $nil expenses were incurred (2019: $nil, 2018: $nil).
Brookfield Infrastructure Corporation     85


As discussed in Note 1(b)(iii), Organization and Description of our Company in our consolidated financial statements, our company entered into two credit agreements with Brookfield Infrastructure, one as borrower and one as lender, each providing for a ten-year revolving $1 billion credit facility for purposes of providing our company and Brookfield Infrastructure with access to debt financing on an as-needed basis and to maximize our flexibility and facilitate the movement of cash within our group. We intend to use the liquidity provided by the credit facilities for working capital purposes and to fund growth capital investments and acquisitions. The determination of which of these sources of funding our company will access in any particular situation will be a matter of optimizing needs and opportunities at that time.
The credit facilities are available in U.S. or Canadian dollars, and advances will be made by way of LIBOR, base rate, CDOR, or prime rate loans. Both operating facilities bear interest at the benchmark rate plus an applicable spread, in each case subject to adjustment from time to time as the parties may agree. In addition, each credit facility contemplates potential deposit arrangements pursuant to which the lender thereunder would, with the consent of a borrower, deposit funds on a demand basis to such borrower’s account at a reduced rate of interest. As of December 31, 2020, $nil was drawn on the credit facilities under the credit agreements with Brookfield Infrastructure.
Prior to the completion of the special distribution, BIPC Holdings Inc., a wholly owned subsidiary of our company, fully and unconditionally guaranteed (i) any unsecured debt securities issued by Brookfield Infrastructure Finance ULC, Brookfield Infrastructure Finance LLC, Brookfield Infrastructure Finance Limited and Brookfield Infrastructure Finance Pty Ltd. (collectively, the “Brookfield Infrastructure Debt Issuers”), in each case as to payment of principal, premium (if any) and interest when and as the same will become due and payable under or in respect of the trust indenture dated October 10, 2012 among the Brookfield Infrastructure Debt Issuers and Computershare Trust Company of Canada under which such securities are issued, (ii) the senior preferred shares of BIP Investment Corporation (“BIPIC”), as to the payment of dividends when due, the payment of amounts due on redemption and the payment of amounts due on the liquidation, dissolution or winding up of BIPIC, (iii) from time to time, certain of the partnership’s preferred units, as to payment of distributions when due, the payment of amounts due on redemption and the payment of amounts due on the liquidation, dissolution or winding up of the partnership, and (iv) the obligations of Brookfield Infrastructure under its bilateral credit facilities. These arrangements do not have or are not reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
As of December 31, 2020, our company had loans payable of $1,143 million (2019: $nil) to subsidiaries of Brookfield Infrastructure. The loans are payable within ten years and bear a weighted average interest of approximately 5% annually. Interest incurred during the year ended December 31, 2020 was $39 million (2019: $nil). The carrying value of the loan approximates its fair value.
As at December 31, 2020, our company had accounts payable of $2 million (2019: $nil) to subsidiaries of Brookfield Infrastructure and accounts receivable of $7 million (2019: $nil) from subsidiaries of Brookfield Infrastructure.
On July 29, 2020, Brookfield completed a secondary offering of approximately 5 million exchangeable shares, inclusive of the over-allotment option, for net proceeds of approximately C$305 million. Subsequent to the offering, Brookfield holds approximately 19.3% of the issued and outstanding exchangeable shares of our company.

86        Brookfield Infrastructure Corporation


5.B    LIQUIDITY AND CAPITAL RESOURCES
The nature of our asset base and the quality of our associated cash flows enable us to maintain a stable and low cost capital structure. We attempt to maintain sufficient financial liquidity at all times so that we are able to participate in attractive opportunities as they arise, better withstand sudden adverse changes in economic circumstances and maintain our distributions to shareholders. Our principal sources of liquidity are cash flows from our operations, capital recycling, access to public and private capital markets, access to the partnership’s undrawn credit facility and equity commitment and group wide liquidity. We structure the ownership of our assets to enhance our ability to monetize them to provide additional liquidity. In certain instances, subsidiaries may be subject to limitations on their ability to declare and pay dividends to our company. However, no significant limitations existed at December 31, 2020 and 2019.
Our company assesses liquidity on a group-wide basis, consistent with the partnership, because shareholders have exposure to a broader base of infrastructure investments by virtue of the exchange feature of our company’s exchangeable shares. Our group-wide liquidity consisted of the following:
US$ MILLIONS As of
December 31, 2020 December 31, 2019
Cash $ 192  $ 204 
Credit facilities 280  437 
Drawn amounts (109) (373)
363  268 
Partnership liquidity 3,106  2,699 
Total group liquidity $ 3,469  $ 2,967 
As of December 31, 2020, we believe that our company’s liquidity is sufficient to meet its present requirements.
We finance our assets principally at the operating company level with debt that generally has long-term maturities, few restrictive covenants and no recourse to either our company or our other operations.

Brookfield Infrastructure Corporation     87


On a consolidated basis as of December 31, 2020, scheduled principal repayments over the next five years are as follows:

US$ MILLIONS
Average Term (years) 2021 2022 2023 2024 2025 Beyond Total
Non-recourse borrowing 8 $ 12  $ —  $ 1,335  $ 109  $ 157  $ 1,873  $ 3,486 
On a proportionate basis as of December 31, 2020, scheduled principal repayments over the next five years are as follows:
US$ MILLIONS Average Term (years) 2021 2022 2023 2024 2025 Beyond Total
Utilities 9 $ 3 $ $ 544 $ 87 $ 126 $ 1,498 $ 2,258
Total proportionate non-recourse borrowings(1)
9 $ 3 $ $ 544 $ 87 $ 126 $ 1,498 $ 2,258
Proportionate cash retained in businesses
Utilities
$ 57
Total proportionate cash retained $ 57
Proportionate net debt
Utilities
$ 2,201
Total proportionate net debt $ 2,201
Percentage of total proportionate non-recourse borrowings —  % —  % 24  % % % 66  % 100  %
(1)Represents non-recourse debt to our company as the holders have recourse only to the underlying operations.
Proportionate debt is presented to assist investors in understanding the capital structure of our underlying investments that are consolidated in our financial statements, but are not wholly-owned. When used in conjunction with Adjusted EBITDA, proportionate debt is expected to provide useful information as to how our company has financed its businesses at the asset-level. The only differences between consolidated debt presented under IFRS and proportionate debt are the adjustments to remove the share of debt of consolidated investments not attributable to our company and the impact of deferred financing costs. Management utilizes proportionate debt in understanding the capital structure of our underlying investments that are consolidated in our financial statements, but are not wholly-owned. Proportionate debt provides useful information as to how our company has financed its businesses at the asset-level and provides a view into our return on the capital that we invest at a given degree of leverage.
Proportionate debt can be reconciled to consolidated debt as follows:
  As of
US$ MILLIONS December 31, 2020 December 31, 2019
Consolidated debt $ 3,477  $ 3,526 
Borrowings attributable to non-controlling interest (1,228) (1,409)
Deferred financing costs 9 
Proportionate debt $ 2,258  $ 2,126 
88        Brookfield Infrastructure Corporation


Our company entered into two credit agreements with Brookfield Infrastructure, one as borrower and one as lender, each providing for a ten-year revolving $1 billion credit facility for purposes of providing our company and Brookfield Infrastructure with access to debt financing on an as-needed basis and to maximize our flexibility and facilitate the movement of cash within our group. We intend to use the liquidity provided by the credit facilities for working capital purposes and to fund growth capital investments and acquisitions. The determination of which of these sources of funding our company will access in any particular situation will be a matter of optimizing needs and opportunities at that time.
FINANCIAL INSTRUMENTS
Foreign Currency Hedging Strategy
To the extent that we believe it is economic to do so, our strategy is to hedge a portion of our equity investments and/or cash flows exposed to foreign currencies by our company. The following key principles form the basis of our foreign currency hedging strategy:
We leverage any natural hedges that may exist within our operations
We utilize local currency debt financing to the extent possible
We may utilize derivative contracts to the extent that natural hedges are insufficient
Most of the foreign exchange exposure of our group is hedged directly by the partnership and therefore, as of December 31, 2020, our company has $nil (2019: $nil) foreign exchange contracts in place to hedge against foreign currency risk.
The following table presents our exposure to foreign currencies as of December 31, 2020.
US$ MILLIONS GBP BRL
Equity Investment—US$ $ 1,504  $ 141 
FX contracts—US$ —  — 
Net unhedged—US$ $ 1,504  $ 141 
% of equity investment hedged
—  % —  %
For additional information, see Note 4, “Fair Value of Financial Instruments”, Note 20, “Derivative Financial Instruments” and Note 21, “Financial Risk Management” in our consolidated financial statements.
OTHER MARKET RISKS
Inflation Risk
Certain of our operating entities are subject to inflation risk. However, we believe this is offset by the nature of our revenues which are in large part indexed to inflation. Our U.K. regulated distribution operations charge retailers’ rates based on the tariff of the distribution utility with which we are interconnected. These tariffs are set on the basis of regulated asset base and escalates with inflation. Our Brazilian regulated gas transmission operation charges tariffs calculated on an inflation adjusted regulatory weighted average cost of capital.
Commodity Risk
Revenues from our Brazilian regulated gas transmission business are adjusted by a multi-factor inflation index that is designed to approximate changes in prices of the underlying components of the replacement cost of our transmission system. Due to the construction of the system, metals, such as aluminum, are a material percentage of replacement cost. Thus, changes in the price of these metals could impact future revenues.
Brookfield Infrastructure Corporation     89


CAPITAL REINVESTMENT
From a treasury management perspective, our company manages its cash reserves with a view to minimizing foreign exchange and administrative costs, as well as enhancing our ability to secure asset level debt financing. While capital is primarily raised at the corporate level to fund the equity component of organic growth capital expenditures, actual funding of projects may be executed by injecting cash into subsidiaries or utilizing operating cash flow generated and retained by our company. Importantly, the physical movement of cash has no relevance on our company’s ability to fund capital expenditures or make distributions.
CAPITAL EXPENDITURES
Due to the capital-intensive nature of the asset base of our company, ongoing capital investment is required for additions and enhancements, life-cycle maintenance and repair of plant and equipment related to our operations. Our company reviews all capital expenditures and classifies them in one of the two following categories:
Growth capital expenditures: capital outlays underpinned by incremental revenues that will enhance our company’s returns. These projects are eligible for inclusion in the rate base of our utilities businesses; and
Maintenance capital expenditures: required capital outlays to maintain the current operating state and reliability of the system while ensuring regulatory and safety requirements are upheld.
We manage separate review and approval processes for each of the two categories of capital expenditures. Growth capital expenditures are underwritten in isolation and must meet our company’s target after-tax equity return threshold of 12-15%. Projects that meet these return targets are presented to the Capital Expenditure Committee which comprises senior personnel of the general partner of the partnership. The committee reviews proposed project plans considering the target returns and funding plans, in addition to analyzing the various execution risks associated with these projects. Once a project receives approval from the Capital Expenditure Committee, it is generally added to the backlog.
Maintenance capital expenditures follow a different, though equally robust process, as failure to make necessary investment to maintain our operations could impair the ability of our company to serve our customer base or continue existing operations. Firstly, the operations teams involved with a particular business performs a detailed review of all planned and proposed maintenance capital expenditures during the annual budgeting process. These plans are reviewed in the context of the businesses’ maintenance capital approach that is agreed upon with the business at the time of acquisition and take into account drivers of performance that include public and worker health and safety, environmental and regulatory compliance, system reliability and integrity. Maintenance capital projects that receive approval at the asset level are then presented to our company’s corporate asset management teams that are responsible for overseeing our company’s operations, and have ample experience in managing utilities assets. Through an iterative process with the companies’ senior operating executives, the plan is refined through a comprehensive review including prioritization of non-discretionary projects and comparisons to industry benchmarks. Once agreed, maintenance capital expenditure plans are approved and form part of the annual and five-year business plans that are presented to the partnership’s senior executive team. Once approved, these maintenance plans are executed in the following year and performance relative to these plans is closely monitored by both the operations and asset management teams.
90        Brookfield Infrastructure Corporation


In addition to the various levels of internal reviews, our company will engage a reputable, globally recognized engineering services firm annually to perform an independent review of its overall approach to maintenance capital expenditures and detailed capital program. Each year the engineering services firm will review a portion of the portfolio, covering all assets on a three-year rotating basis. For each asset under review in a given year, the engineering services firm will review the historical and forecasted spend against industry standards, regulatory requirements or other benchmarking data, and determine the reasonableness of the maintenance capex program based on the nature of the business and the age and condition of the assets. We have also engaged an accounting firm to review the findings of the report provided by the engineering services firm and to assess the control activities related to our process for compiling the annual sustaining maintenance capital expenditure ranges.
Our group has completed reviews at our U.K. and Brazilian operations within the last four years. The results from both engagements conducted by the firms confirm that our stated ranges of annual sustaining maintenance capital expenditures are reasonable and in-line with industry standard for assets of a similar nature.
REVIEW OF CONSOLIDATED STATEMENTS OF CASH FLOWS
The following table summarizes the consolidated statements of cash flows for the years ended December 31, 2020, 2019, and 2018:
US$ MILLIONS
Summary Statements of Operating Results
For the year ended December 31,
2020 2019 2018
Cash from operating activities $ 730  $ 1,083  $ 1,065 
Cash used by investing activities (399) (441) (435)
Cash used by financing activities (317) (514) (568)

2020 vs. 2019
Cash from operating activities
Cash from operating activities totaled $730 million during the year ended December 31, 2020, a decrease of $353 million compared to the prior year. Operating cash flows decreased as the benefits of inflation indexation and capital commissioned into rate base were more than offset by the impact of foreign exchange, which reduced our operating cash flows denominated in U.S dollars by $193 million, interest expense paid on intercompany loans and our exchangeable shares, which are classified as liabilities, and lower connections revenue at our U.K. regulated distribution business.
Cash used by investing activities
Cash used by investing activities was $399 million during the year ended December 31, 2020, compared to $441 million in the prior year. The decrease was primarily due to timing of capital investment and fewer new connections and smart meter adoptions at our U.K. regulated distribution business compared to the prior year as a result of government imposed construction restrictions in light of the COVID-19 pandemic.
Cash used by financing activities
Cash used by financing activities was $317 million during the year ended December 31, 2020, compared to $514 million used in 2019. The decrease was primarily due to higher distributions paid to the partnership and non-controlling interest in the prior year, partially offset by a decrease in net borrowings of $90 million during the current year.

Brookfield Infrastructure Corporation     91


2019 vs. 2018
Cash from operating activities
Cash from operating activities totaled $1,083 million during the year ended December 31, 2019, which increased by $18 million from the prior year due to increases in net income adjusted for non-cash items such as mark-to-market of our foreign currency derivatives. The primary drivers of higher operating cash flow were inflation-indexation, capital commissioned into rate base and organic revenue growth that exceeded the incremental costs.
Cash used by investing activities
Cash used by investing activities was $441 million during the year ended December 31, 2019, which remained relatively consistent with the prior year. Current and prior year investing activities mainly relate to investment in long-lived assets within our U.K. regulated distribution business, including the connection of approximately 200,000 new utilities and the addition of approximately 230,000 smart meters.
Cash from financing activities
Cash used by financing activities was $514 million during the year ended December 31, 2019, as compared to $568 million generated in 2018. The decrease was primarily due to a reduction in capital provided to parent and non-controlling interests by $1,342 million, partially offset by an increase in net borrowings of $1,288 million.
SHARE CAPITAL
Our company’s equity interests include exchangeable shares held by the public shareholders and class B and class C shares held by the partnership. Dividends on each of our exchangeable shares are expected to be declared and paid at the same time and in the same amount per share as distributions on each unit of the partnership. Ownership of class C shares entitle holders to receive dividends as and when declared by our board.
Our company’s capital structure is comprised of the following shares:
As of
December 31, 2020 December 31, 2019
Exchangeable shares 44,960,449  — 
Class B shares 1  — 
Class C shares 1,402,451  — 

92        Brookfield Infrastructure Corporation


In conjunction with the special distribution, our company issued approximately 46.3 million exchangeable shares, 1 class B share and 1.4 million class C shares. Exchangeable shares are exchangeable at the option of the holder at any time at a price equal to the market price of a unit. Our company has the option to satisfy the exchange either by delivering a unit or the cash equivalent of a unit. Our company intends to settle any exchange requests with units. During the year ended December 31, 2020, our shareholders exchanged approximately 1.4 million exchangeable shares for an equal number of units. Class B shares and class C shares are redeemable for cash in an amount equal to the market price of a unit. There have been no redemptions of class B shares or class C shares to date. Due to the exchange feature of the exchangeable shares and the cash redemption feature of the class B and class C shares, the exchangeable shares, the class B shares, and class C shares are classified as financial liabilities. However, class C shares, the most subordinated class of all common shares, meet certain qualifying criteria and are presented as equity instruments given the narrow scope presentation exceptions existing in IAS 32.
During the year ended December 31, 2020, our company declared and paid dividends on our exchangeable shares at a rate of $0.485 per share resulting in total dividends paid of $66 million. Dividends paid on our exchangeable shares are presented as interest expense in our audited consolidated financial statements. No dividends were declared on our class B shares or class C shares during the year.
Our company may from time-to-time, subject to applicable law, purchase exchangeable shares for cancellation in the open market, provided that any necessary approval has been obtained.
In November 2020, we announced that the TSX accepted a notice filed by our company of its intention to commence a normal course issuer bid to repurchase outstanding exchangeable shares. Please refer to Item 16.E “Purchases of Equity Securities by the Issuer and Affiliated Purchaser” for further details.


Brookfield Infrastructure Corporation     93


PRICE RANGE AND TRADING VOLUME OF LISTED UNITS
The units are listed and posted for trading on the TSX under the symbol “BIP.UN”. The following table sets forth the price ranges (after accounting for the effect of special distribution) and trading volumes of the units as reported by the TSX for the periods indicated, in Canadian dollars:
Units
High (C$) Low (C$) Volume
2021
January 1, 2021 - February 11, 2021 69.47  62.15  9,035,075 
2020
January 1, 2020 - March 31, 2020 67.56  35.30  39,585,409 
April 1, 2020 - June 30, 2020 59.56  49.07  31,084,436 
July 1, 2020 - September 30, 2020 63.95 53.74 20,641,486 
October 1, 2020 - December 31, 2020 68.65  56.96  22,740,278 
2019
January 1, 2019 - March 31, 2019 50.55  43.10  29,127,353 
April 1, 2019 - June 30, 2019 51.91  49.74  22,502,301 
July 1, 2019 - September 30, 2019 59.41  51.00  22,378,844 
October 1, 2019 - December 31, 2019 63.53  57.30  19,906,261 
2018
January 1, 2018 - March 31, 2018 50.56  46.01  14,752,921 
April 1, 2018