UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2021
Commission file number 001-39250
BROOKFIELD INFRASTRUCTURE CORPORATION
(Exact name of Registrant as specified in its charter)
250 Vesey Street, 15th Floor
New York, New York, 10281
United States
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F  x             Form 40-F  ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  
The information contained in Exhibit 99.1 of this Form 6-K is incorporated by reference into the registrant's registration statements on Form F-3 (File No. 333-255051).



The following documents, which are attached as exhibits hereto, are incorporated by reference herein:
Exhibit
Title
99.1
Brookfield Infrastructure Corporation’s interim report for the quarter ended September 30, 2021
99.2
Certification of Samuel Pollock, Chief Executive Officer, Brookfield Infrastructure Corporation, pursuant to Canadian law
99.3
Certification of David Krant, Chief Financial Officer, Brookfield Infrastructure Corporation, pursuant to Canadian law



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BROOKFIELD INFRASTRUCTURE CORPORATION
Date: November 5, 2021 By:
/s/ MICHAEL RYAN
Name: Michael Ryan
Title: Corporate Secretary



Exhibit 99.1
Brookfield Infrastructure Corporation
Interim Report Q3 2021
UNAUDITED INTERIM CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS OF BROOKFIELD INFRASTRUCTURE CORPORATION
AS OF SEPTEMBER 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2021 AND 2020

INDEX
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28

Brookfield Infrastructure Corporation (our “company”) owns and operates high quality, essential, long-life assets that generate stable cash flows and require relatively minimal maintenance capital expenditures. Our current operations consist of utilities businesses in South America and Europe.



BROOKFIELD INFRASTRUCTURE CORPORATION
UNAUDITED INTERIM CONDENSED AND CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of
US$ MILLIONS Notes September 30, 2021 December 31, 2020
Assets
Cash and cash equivalents 5 $ 406  $ 192 
Accounts receivable and other 5 522  394 
Due from Brookfield Infrastructure 14 585  — 
Current assets 1,513  586 
Property, plant and equipment 6 4,581  5,111 
Intangible assets 7 2,733  2,948 
Goodwill 8 500  528 
Financial assets 5 33  27 
Other assets 24  101 
Deferred income tax asset 53  43 
Total assets $ 9,437  $ 9,344 
Liabilities and Equity
Liabilities
Accounts payable and other 5 $ 550  $ 505 
Non-recourse borrowings 5, 9   11 
Financial liabilities 5, 10 987  23 
Loans payable to Brookfield Infrastructure 14 260  — 
Exchangeable and class B shares 5, 10 3,539  2,221 
Current liabilities 5,336  2,760 
Non-recourse borrowings 5, 9 3,577  3,466 
Loans payable to Brookfield Infrastructure 14   1,143 
Financial liabilities 5, 10   1,008 
Other liabilities 106  96 
Deferred income tax liability 12 1,608  1,443 
Total liabilities 10,627  9,916 
Equity
Brookfield Infrastructure Partners L.P.(1)
13 (1,932) (1,722)
Non-controlling interest 742  1,150 
Total equity (1,190) (572)
Total liabilities and equity $ 9,437  $ 9,344 
1.     Common equity is attributable to the partnership prior to the special distribution and subsequently as a result of the partnership holding all of the class C shares issued by our company. Please refer to Note 2(c), Basis of Presentation and Significant Accounting Policies, for further details.

The accompanying notes are an integral part of the unaudited interim condensed and consolidated financial statements.

2 Brookfield Infrastructure Corporation


BROOKFIELD INFRASTRUCTURE CORPORATION
UNAUDITED INTERIM CONDENSED AND CONSOLIDATED STATEMENTS OF OPERATING RESULTS
For the three-month
period ended September 30
For the nine-month
period ended September 30
US$ MILLIONS Notes 2021 2020 2021 2020
Revenues 11 $ 414  $ 349  $ 1,229  $ 1,055 
Direct operating costs (71) (60) (212) (176)
General and administrative expenses (12) (9) (32) (23)
Depreciation and amortization expense 6, 7 (65) (69) (210) (212)
266  211  775  644 
Interest expense 10, 14 (77) (59) (208) (153)
Remeasurement of exchangeable and class B shares 10 108  (292) (168) (432)
Mark-to-market on hedging items and foreign currency revaluation
5 23  (14) (2) (36)
Other (expense) income 3 (30) (7) 116  (32)
Income (loss) before income tax 290  (161) 513  (9)
Income tax expense
Current (60) (44) (164) (123)
Deferred 12 (17) (17) (157) (83)
Net income (loss) $ 213  $ (222) $ 192  $ (215)
Attributable to:
Brookfield Infrastructure Partners L.P.(1)
$ 122  $ (301) $ (99) $ (450)
Non-controlling interest 91  79  291  235 
1.Net income is attributable to the partnership prior to the special distribution as well as subsequently as a result of the partnership holding all of the class C shares issued by our company. Please refer to Note 2(c), Basis of Presentation and Significant Accounting Policies, for further details.
2.Earnings per share have not been presented in the financial statements, as the underlying shares do not constitute “ordinary shares” under IAS 33 Earnings per share. See Note 2(q), Basis of Presentation and Significant Accounting Policies, for further details.

The accompanying notes are an integral part of the unaudited interim condensed and consolidated financial statements.

 
Q3 2021 Interim Report 3


BROOKFIELD INFRASTRUCTURE CORPORATION
UNAUDITED INTERIM CONDENSED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the three-month
period ended September 30
For the nine-month
period ended September 30
US$ MILLIONS Notes 2021 2020 2021 2020
Net income (loss) $ 213  $ (222) $ 192  $ (215)
Other comprehensive (loss) income:
Items that will not be reclassified subsequently to profit or loss:
Tax impact of remeasurement of revaluation surplus 12   —  (87) (27)
  —  (87) (27)
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation (163) (67) (747)
Cash flow hedges 5 1  (2) 1 
Taxes on the above items (1) —  (1) (2)
(163) (67) (742)
Total other comprehensive (loss) income (163) (154) (769)
Comprehensive income (loss) $ 50  $ (218) $ 38  $ (984)
Attributable to:
Brookfield Infrastructure Partners L.P.(1)
$ 51  $ (268) $ (178) $ (693)
Non-controlling interests (1) 50  216  (291)
1.Comprehensive income is attributable to the partnership prior to the special distribution as well as subsequently as a result of the partnership holding all of the class C shares issued by our company. Please refer to Note 2(c), Basis of Presentation and Significant Accounting Policies, for further details.

The accompanying notes are an integral part of the unaudited interim condensed and consolidated financial statements.


4 Brookfield Infrastructure Corporation


BROOKFIELD INFRASTRUCTURE CORPORATION
UNAUDITED INTERIM CONDENSED AND CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE-MONTH PERIOD ENDED September 30, 2021
$US MILLIONS
Share capital Retained earnings Ownership changes Accumulated other comprehensive income Brookfield Infrastructure Partners L.P. Non-controlling interest Total equity
Balance as at June 30, 2021 $ 53  $ (46) $ (2,379) $ 389  $ (1,983) $ 835  $ (1,148)
Net income —  122  —  —  122  91  213 
Other comprehensive loss —  —  —  (71) (71) (92) (163)
Comprehensive income (loss) —  122  —  (71) 51  (1) 50 
Distributions to non-controlling interest —  —  —  —    (92) (92)
Balance as at September 30, 2021 $ 53  $ 76  $ (2,379) $ 318  $ (1,932) $ 742  $ (1,190)

FOR THE THREE-MONTH PERIOD ENDED September 30, 2020
$US MILLIONS
Share capital Retained earnings Ownership changes Accumulated other comprehensive income Brookfield Infrastructure Partners L.P. Non-controlling interest Total equity
Balance as at June 30, 2020 $ 53  $ 436  $ (2,347) $ 247  $ (1,611) $ 1,094  $ (517)
Net (loss) income —  (301) —  —  (301) 79  (222)
Other comprehensive income (loss) —  —  —  33  33  (29)
Comprehensive (loss) income —  (301) —  33  (268) 50  (218)
Distributions to non-controlling interest —  —  —  —  —  (75) (75)
Balance as at September 30, 2020 $ 53  $ 135  $ (2,347) $ 280  $ (1,879) $ 1,069  $ (810)







Q3 2021 Interim Report 5


BROOKFIELD INFRASTRUCTURE CORPORATION
UNAUDITED INTERIM CONDENSED AND CONSOLIDATED STATEMENTS OF EQUITY
FOR THE NINE-MONTH PERIOD ENDED September 30, 2021
$US MILLIONS
Share capital Retained earnings Ownership changes Accumulated other comprehensive income Brookfield Infrastructure Partners L.P. Non-controlling interest Total equity
Balance as at January 1, 2021 $ 53  $ 33  $ (2,347) $ 539  $ (1,722) $ 1,150  $ (572)
Net (loss) income
—  (99) —  —  (99) 291  192 
Other comprehensive loss —  —  —  (79) (79) (75) (154)
Comprehensive (loss) income —  (99) —  (79) (178) 216  38 
Distributions to non-controlling interest —  —  —  —    (373) (373)
Acquisition of non-controlling interest(1)
—  —  —  —    (196) (196)
Other items(1),(2)
—  142  (32) (142) (32) (55) (87)
Balance as at September 30, 2021 $ 53  $ 76  $ (2,379) $ 318  $ (1,932) $ 742  $ (1,190)
1.     See Note 4, Acquisition of Businesses for further details.
2.     See Note 3, Disposition of Businesses for further details.
FOR THE NINE-MONTH PERIOD ENDED September 30, 2020
$US MILLIONS
Combined share capital Share capital Retained earnings Ownership changes Accumulated other comprehensive income Brookfield Infrastructure Partners L.P. Non-controlling interest Total equity
Balance as at January 1, 2020 $ 431  $ —  $ 585  $ 115  $ 523  $ 1,654  $ 1,623  $ 3,277 
Net (loss) income —  —  (450) —  —  (450) 235  (215)
Other comprehensive loss —  —  —  —  (243) (243) (526) (769)
Comprehensive loss —  —  (450) —  (243) (693) (291) (984)
Distributions to, net of contributions from, Brookfield Infrastructure Partners L.P.
(33) —  —  —  —  (33) —  (33)
Distributions to non-controlling interest —  —  —  —  —  —  (263) (263)
Reorganization(1)
(398) —  —  (2,462) —  (2,860) —  (2,860)
Share issuance —  53  —  —  —  53  —  53 
Balance as at September 30, 2020 $ —  $ 53  $ 135  $ (2,347) $ 280  $ (1,879) $ 1,069  $ (810)
1.     See Note 2(c), Basis of Presentation and Significant Accounting Policies for further details.

The accompanying notes are an integral part of the unaudited interim condensed and consolidated financial statements.



6 Brookfield Infrastructure Corporation


BROOKFIELD INFRASTRUCTURE CORPORATION
UNAUDITED INTERIM CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three-month
period ended September 30
For the nine-month
period ended September 30
US$ MILLIONS Notes 2021 2020 2021 2020
Operating Activities
Net income (loss) $ 213  $ (222) $ 192  $ (215)
Adjusted for the following items:
Depreciation and amortization expense 6,7 65  69  210  212 
Mark-to-market on hedging items and other 5 21  25  (99) 73 
Remeasurement of exchangeable and class B shares 10 (108) 292  168  432 
Deferred income tax expense 17  17  157  83 
Changes in non-cash working capital, net 15 52  56  (9) — 
Cash from operating activities 260  237  619  585 
Investing Activities
Disposal of subsidiaries, net of cash disposed 3   —  817  — 
Purchase of long-lived assets, net of disposals 6,7 (109) (107) (305) (291)
Settlement of foreign exchange and other hedging items 5   —  (76) — 
Cash (used by) generated from investing activities (109) (107) 436  (291)
Financing Activities
Distributions to Brookfield Infrastructure Partners L.P.(1)
  —    (33)
Distributions to non-controlling interest (92) (75) (373) (263)
Acquisition of partial interest from non-controlling interest   —  (283) — 
Proceeds from non-recourse borrowings 9   50  377  485 
Repayment of non-recourse borrowings 9   —  (211) (380)
Repayment of intercompany borrowings 14   (3) (340) (3)
Cash used by financing activities (92) (28) (830) (194)
Cash and cash equivalents
Change during the period 59  102  225  100 
Impact of foreign exchange on cash (23) (13) (11) (54)
Balance, beginning of period 370  161  192  204 
Balance, end of period $ 406  $ 250  $ 406  $ 250 
1.Represents distributions paid to the partnership prior to March 30, 2020. Please refer to Note 2(c), Basis of Presentation and Significant Accounting Policies, for further details. Subsequent to March 30, 2020, dividends paid on our exchangeable shares are presented as interest expense on the Consolidated Statements of Operating Results.

The accompanying notes are an integral part of the unaudited interim condensed and consolidated financial statements.
Q3 2021 Interim Report 7


NOTES TO THE UNAUDITED INTERIM CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2021 AND 2020
1. ORGANIZATION AND DESCRIPTION OF OUR COMPANY
a)Brookfield Infrastructure Corporation
Brookfield Infrastructure Corporation and its subsidiaries, own and operate regulated utilities investments in Brazil and the United Kingdom (the “businesses”). Our company was formed as a corporation established under the British Columbia Business Corporation Act on August 30, 2019 and is a subsidiary of Brookfield Infrastructure Partners L.P. (the “partnership”), which we also refer to as the parent company and Brookfield Infrastructure. The partnership, our company and our respective subsidiaries, are referred to collectively as our group. Brookfield Asset Management Inc. (“Brookfield”) is our company’s ultimate parent. The class A exchangeable subordinate voting shares (“exchangeable shares”) of Brookfield Infrastructure Corporation are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol “BIPC”. The registered head office of Brookfield Infrastructure Corporation is 250 Vesey Street, New York, NY, United States. The exchangeable shares of our company are structured with the intention of being economically equivalent to the units of the partnership. 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.
b)Special Distribution of our Company
On March 31, 2020, the partnership completed a special distribution (the “special distribution”) whereby limited partnership unitholders of Brookfield Infrastructure Partners L.P. as of March 20, 2020 (the “Record Date”) received one exchangeable share for every nine limited partnership units (“units”) held.
Immediately prior to the special distribution, a subsidiary of the partnership, Brookfield Infrastructure L.P. (“Holding LP”), completed a distribution of the exchangeable shares to all the holders of its equity units (the “Holding LP Distribution”). As a result of the Holding LP Distribution, (i) Brookfield and its subsidiaries (other than entities within our group) received approximately 13.7 million exchangeable shares and (ii) the partnership received approximately 32.6 million exchangeable shares, which it subsequently distributed to unitholders pursuant to the special distribution. Immediately following the special distribution, (i) holders of units held approximately 70.4% of the issued and outstanding exchangeable shares of our company, (ii) Brookfield and its affiliates held approximately 29.6% of the issued and outstanding exchangeable shares, and (iii) a subsidiary of the partnership owned all of the issued and outstanding class B multiple voting shares, or class B shares, which represent a 75.0% voting interest in our company, and all of the issued and outstanding class C non-voting shares, or class C shares, of our company. The class C shares 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.
Holders of exchangeable shares hold an aggregate 25.0% voting interest in our company. Immediately after the special distribution, Brookfield, through its ownership of exchangeable shares, held an approximate 7.4% voting interest in our company. Holders of exchangeable shares, excluding Brookfield, held an approximate 17.6% aggregate voting interest in our company. Together, Brookfield and Brookfield Infrastructure held an approximate 82.4% voting interest in our company.
The following describes the agreements resulting from the special distribution:
i)Exchangeable shares
At any time, holders of exchangeable shares shall have the right to exchange all or a portion of their exchangeable shares for one unit of the partnership per exchangeable share held or its cash equivalent based on the NYSE closing price of one unit on the date that the request for exchange is received. Due to their exchangeable features, the exchangeable shares are classified as liabilities.
Our board has the right upon sixty (60) days’ prior written notice to holders of exchangeable shares to redeem all of the then outstanding exchangeable shares at any time and for any reason, in its sole discretion and subject to applicable law, including without limitation following the occurrence of certain redemption events.
ii)Class B shares and class C shares
At any time, holders of class B shares and class C shares will have the right to redeem for cash in an amount equal to the market price of a unit. Due to this cash redemption feature, both 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 International Accounting Standard 32, Financial Instruments: Presentation (“IAS 32”).

8 Brookfield Infrastructure Corporation


iii)Credit facilities
Prior to the special distribution, 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 to facilitate the movement of cash within our group. Our credit facility will permit our company to borrow up to $1 billion from Brookfield Infrastructure and the other will constitute an operating credit facility that will permit Brookfield Infrastructure to borrow up to $1 billion from our company. Each credit facility will contemplate potential deposit arrangements pursuant to which the lender thereunder would, with the consent of the borrower, deposit funds on a demand basis to such borrower’s account at a reduced rate of interest.
Further details of the credit agreements with Brookfield Infrastructure are described in Note 14, Related Party Transactions.
iv)Equity Commitment
Prior to the completion of the special distribution, Brookfield Infrastructure provided our company an equity commitment in the amount of $1 billion. The equity commitment may be called by our company in exchange for the issuance of a number of class C shares or preferred shares, as the case may be, to Brookfield Infrastructure, corresponding to the amount of the equity commitment called divided (i) in the case of a subscription for class C shares, by the volume-weighted average of the trading price for one exchangeable share on the principal stock exchange on which our exchangeable shares are listed for the five (5) days immediately preceding the date of the call, and (ii) in the case of a subscription for preferred shares, $25.00. The equity commitment will be reduced permanently by the amount so called.
The rationale for the equity commitment is to provide our company with access to equity capital on an as-needed basis and to maximize our flexibility.
v)Other arrangements with Brookfield
Wholly-owned subsidiaries of Brookfield will provide management services to our company pursuant to the partnership’s existing master services agreement. Please refer to Note 2(b), Basis of Presentation and Significant Accounting Policies, for further details. There will be no change in how the base management fee and incentive distribution fees are calculated, though our company is responsible for reimbursing the partnership for our proportionate share of the total base management fee.
Further details of the Master Services Agreements are described in Note 14, Related Party Transactions.
2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
a)Statement of Compliance
These unaudited interim condensed and consolidated financial statements, (“interim financial statements”) of our company and its subsidiaries have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”) and using the accounting policies described below.
These interim financial statements were authorized for issuance by the Board of Directors of our company on November 5, 2021.
b)Basis of presentation
The interim financial statements are prepared on a going concern basis.
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. 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 which they related are now provided through the amended and restated master services agreement dated as of March 13, 2015, among the Service Recipients (as defined therein), Brookfield Asset Management Inc. (“Brookfield”), the Service Providers (as defined therein) and others, as amended (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 interim financial statements.
Q3 2021 Interim Report 9


c)Continuity of Interests
As described above, Brookfield Infrastructure Corporation was established on August 30, 2019 by the partnership. On March 30, 2020, the partnership contributed 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, these interim 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 periods 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.
Prior to March 30, 2020, intercompany transactions between the partnership and our company have been included in these interim financial statements and are considered to be forgiven at the time the transaction is recorded and reflected as “Distributions to, net of contributions from, Brookfield Infrastructure Partners L.P.”. “Distributions to, net of contributions from, Brookfield Infrastructure Partners L.P.” as shown in the unaudited interim condensed and consolidated statements of changes in equity represents the parent company’s historical investment in our company, accumulated net income and the net effect of the transactions and allocations from the parent company. The total net effect of transactions with the parent company is reflected in the unaudited interim condensed and consolidated statements of cash flows as a financing activity and in the unaudited interim condensed and consolidated statements of financial position as equity attributable to Brookfield Infrastructure Partners L.P.
d)Foreign Currency Translation
The U.S dollar is the functional and presentation currency of our company. Each of our company’s affiliates determines its own functional currency and items included in the financial statements of each affiliate are measured using that functional currency.
Assets and liabilities of foreign operations having a functional currency other than the U.S. dollar are translated at the rate of exchange prevailing at the reporting date and revenues and expenses at average rates during the period. Gains or losses on translation are included as a component of other comprehensive income. On disposal of a foreign operation resulting in the loss of control, the component of other comprehensive income due to accumulated foreign currency translation relating to that foreign operation is reclassified to net income. On partial disposal of a foreign operation in which control is retained, the proportionate share of the component of other comprehensive income or loss relating to that foreign operation is reclassified to non-controlling interests in that foreign operation.
Foreign currency denominated monetary assets and liabilities are translated using the rate of exchange prevailing at the reporting date and non-monetary assets and liabilities measured at fair value are translated at the rate of exchange prevailing at the date when the fair value was determined. Revenues and expenses are measured at average rates during the period. Gains or losses on translation of these items are included in net income. Gains and losses on transactions which hedge these items are also included in net income or loss. Foreign currency denominated non-monetary assets and liabilities, measured at historic cost, are translated at the rate of exchange at the transaction date.
e)Business Combinations
Business acquisitions in which control is acquired are accounted for using the acquisition method, other than those between and among entities under common control. The consideration of each acquisition is measured at the aggregate of the fair values at the acquisition date of assets transferred by the acquirer, liabilities incurred or assumed, and equity instruments issued by our company in exchange for control of the acquiree. Acquisition related costs are recognized in the Consolidated Statements of Operating Results as incurred and included in other expenses.
10 Brookfield Infrastructure Corporation


Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in fair values are adjusted against the cost of the acquisition where they qualify as measurement period adjustments. All other subsequent changes in the fair value of contingent consideration classified as liabilities will be recognized in the Consolidated Statements of Operating Results, whereas changes in the fair values of contingent consideration classified within share capital are not subsequently re-measured.
Where a business combination is achieved in stages, our company’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date, that is, the date our company attains control and the resulting gain or loss, if any, is recognized in the Consolidated Statements of Operating Results. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to the Consolidated Statements of Operating Results, where such treatment would be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, our company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.
The measurement period is the period from the date of acquisition to the date our company obtains complete information about facts and circumstances that existed as of the acquisition date. The measurement period is subject to a maximum of one year subsequent to the acquisition date.
If, after reassessment, our company’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree if any, the excess is recognized immediately in profit or loss as a bargain purchase gain.
Contingent liabilities acquired in a business combination are initially measured at fair value at the date of acquisition. At the end of subsequent reporting periods, such contingent liabilities are measured at the higher of the amount that would be recognized in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”) and the amount initially recognized less the cumulative amount of income recognized in accordance with IFRS 15, Revenue from Contracts with Customers.
f)Cash and Cash Equivalents
Cash and cash equivalents include short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
g)Accounts Receivable
Trade receivables are recognized initially at their transaction price and subsequently measured at amortized cost using the effective interest method, less any loss allowance for expected credit losses.
h)Property, Plant and Equipment
Our company uses the revaluation method of accounting for all classes of property, plant and equipment. Property, plant and equipment is initially measured at cost and subsequently carried at its revalued amount, being the fair value at the date of the revaluation less any subsequent accumulated depreciation and any accumulated impairment losses. Revaluations are made on at least an annual basis, and on a sufficient basis to ensure that the carrying amount does not differ significantly from fair value. Where the carrying amount of an asset is increased as a result of a revaluation, the increase is recognized in other comprehensive income or loss and accumulated in equity within the revaluation surplus reserve, unless the increase reverses a previously recognized impairment recorded through net income, in which case that portion of the increase is recognized in net income. Where the carrying amount of an asset is decreased, the decrease is recognized in other comprehensive income to the extent of any balance existing in revaluation surplus in respect of the asset, with the remainder of the decrease recognized in net income. Revaluation gains are included in other comprehensive income but are not subsequently recycled into profit or loss.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Consolidated Statements of Operating Results. However, any balance accumulated in revaluation surplus is subsequently recorded in retained earnings when an asset is derecognized and not transferred to profit or loss.
Q3 2021 Interim Report 11


Depreciation of an asset commences when it is available for use. Property, plant and equipment are depreciated on a straight line or declining-balance basis over the estimated useful lives of each component of the assets as follows:
Buildings
Up to 50 years
Machinery and equipment
Up to 5 years
Network systems
Up to 60 years
Depreciation on property, plant and equipment is calculated on a straight-line or declining-balance basis so as to depreciate the net cost of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each annual reporting period, with the effect of any changes recognized on a prospective basis.
i)Asset Impairment
At each reporting date, our company assesses whether for assets, other than those measured at fair value with changes in values recorded in profit or loss, there is any indication that such assets are impaired. This assessment includes a review of internal and external factors which includes, but is not limited to, changes in the technological, political, economic or legal environment in which the entity operates in, structural changes in the industry, changes in the level of demand, physical damage and obsolescence due to technological changes. An impairment is recognized if the recoverable amount, determined as the higher of the estimated fair value less costs of disposal or the discounted future cash flows generated from use and eventual disposal from an asset or cash generating unit is less than its carrying value. The projections of future cash flows take into account the relevant operating plans and management’s best estimate of the most probable set of conditions anticipated to prevail. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash generating unit is increased to the lesser of the revised estimate of recoverable amount and the carrying amount that would have been recorded had no impairment loss been recognized previously.
j)Intangible Assets
Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date. Our company’s intangible assets are comprised primarily of service concession arrangements and customer order backlogs.
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization unless indefinite-lived and accumulated impairment losses, on the same basis as intangible assets acquired separately.
Public service concessions that provide our company the right to charge users for a service in which the service and fee is regulated by the grantor are accounted for as an intangible asset under IFRIC 12, Service Concession Arrangements.
Concession arrangements were acquired as part of the acquisition of the Brazilian regulated gas transmission operation and were initially recognized at their fair values. The intangible assets at the Brazilian regulated gas transmission operation relate to pipeline concession contracts, amortized on a straight-line basis over the estimated useful life of the underlying infrastructure.
The customer order backlog was acquired as part of the acquisition of the U.K. regulated distribution operation and was initially recorded at its fair value. The customer order backlog represents the present value of future earnings derived from the build out of contracted connections at the acquisition date of the U.K. regulated distribution operation. The customer order backlog is amortized over its estimated useful life of 15 years.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.
k)Goodwill
Goodwill represents the excess of the price paid for the acquisition of an entity over the fair value of the net tangible and intangible assets and liabilities acquired. Goodwill is allocated to the cash generating unit or units to which it relates. Our company identifies cash generating units as identifiable groups of assets that are largely independent of the cash inflows from other assets or groups of assets.
Goodwill is evaluated for impairment annually or more often if events or circumstances indicate there may be impairment. Impairment is determined for goodwill by assessing if the carrying value of a cash generating unit or group of cash generating units, including the allocated goodwill, exceeds its recoverable amount determined as the greater of the estimated fair value less costs of disposal or the value in use. Impairment losses recognized in respect of a cash generating unit are first allocated to the carrying value of goodwill and any excess is allocated to the carrying amount of assets in the cash generating unit. Any goodwill impairment is recognized in period in which the impairment is identified. Impairment losses on goodwill are not subsequently reversed.
On disposal of an affiliate, the attributable amount of goodwill is included in the determination of the gain or loss on disposal of the operation.
12 Brookfield Infrastructure Corporation


l)Revenue Recognition
Our company recognizes revenue when it transfers control of a product or service to a customer.
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties.
Our company recognizes revenue when the specific criteria set out below have been met. Cash received by our company from customers is recorded as deferred revenue until the revenue recognition criteria set out below are met.
Revenue from utilities infrastructure is derived from the transmission of natural gas and the distribution of energy. Distribution and transmission revenue each contain a single performance obligation that is recognized over time. The connection revenue relating to our company’s regulated distribution operation contains a distinct performance obligation that is recognized over the period that the connection is constructed, based on an input method of progress recognition on the basis that this methodology is most reflective of the underlying transfer of control. The payment terms for all of our revenue streams require payment upon completion, except for connections income whereby payment is typically collected up-front prior to the completion of any services.
m)Financial Instruments and Hedge Accounting
i)Financial Instrument Classification
Our company classifies cash and cash equivalents and accounts receivable and other as amortized cost. Derivative assets are classified as fair value through profit or loss (“FVTPL”), except for derivatives in certain hedging relationships. Other financial assets are classified as either amortized cost or fair value through other comprehensive income (“FVTOCI”).
Financial assets classified as FVTPL or FVTOCI are subsequently measured at fair value at each reporting date. For financial assets classified as FVTPL, the change in fair value is recorded through profit or loss. For financial assets classified as FVTOCI, the change in fair value is recorded in other comprehensive income. The cumulative gains or losses related to FVTOCI equity instruments are not reclassified to profit or loss on disposal, whereas the cumulative gains or losses on all other FVTOCI assets are reclassified to profit or loss on disposal. For financial instruments at amortized cost or debt instruments at FVTOCI, our company assesses if there have been significant increases in credit risk since initial recognition to determine whether lifetime or 12-month expected credit losses should be recognized. Any related loss allowances are recorded through profit or loss.
Non-recourse borrowings and accounts payable and other, are classified as amortized cost, except for derivatives embedded in related financial instruments. Embedded derivatives and any other derivative liabilities are classified as FVTPL and are subsequently measured at fair value, except for derivatives in certain hedging relationships. Other financial liabilities are classified as either FVTPL or amortized cost.
ii)Hedge Accounting
Our company selectively utilizes derivative financial instruments primarily to manage financial risks, including interest rate and foreign exchange risks. Derivative financial instruments are recorded at fair value. Hedge accounting is applied when the derivative is designated as a hedge of a specific exposure and that the hedging relationship meets all of the hedge effectiveness requirements. Hedge accounting is discontinued prospectively when the derivative no longer qualifies as a hedge or the hedging relationship is terminated. Once discontinued, the cumulative change in fair value of a derivative that was previously recorded in other comprehensive income by the application of hedge accounting is recognized in profit or loss over the remaining term of the original hedging relationship as amounts related to the hedged item are recognized in profit or loss. The assets or liabilities relating to unrealized mark-to-market gains and losses on derivative financial instruments are recorded in financial assets and financial liabilities, respectively.
Unrealized gains and losses on interest rate contracts designated as hedges of future variable interest payments are included in equity as a cash flow hedge when the interest rate risk relates to an anticipated variable interest payment. The periodic exchanges of payments on interest rate swap contracts designated as hedges of debt are recorded on an accrual basis as an adjustment to interest expense.
n)Income Taxes
Income tax expense represents the sum of the tax accrued in the period and deferred income tax.
i)Current income tax
Current income tax assets and liabilities are measured at the amount expected to be paid to tax authorities, net of recoveries based on the tax rates and laws enacted or substantively enacted at the reporting date. Current income tax relating to items recognized directly in share capital are also recognized directly in share capital and other comprehensive income.
Q3 2021 Interim Report 13


ii)Deferred income tax
Deferred income tax liabilities are provided for using the liability method on temporary differences between the tax bases used in the computation of taxable income and carrying amounts of assets and liabilities in the interim financial statements. Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that deductions, tax credits and tax losses can be utilized. Such deferred income tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the taxable income nor the accounting income, other than in a business combination. The carrying amount of deferred income tax assets are reviewed at each reporting date and reduced to the extent it is no longer probable that the income tax asset will be recovered.
Deferred income tax liabilities are recognized for taxable temporary differences associated with investments in affiliates, except where our company is able to control the reversal of the temporary difference and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable income against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred income tax liabilities and assets reflect the tax consequences that would follow from the manner in which our company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority within a single taxable entity or our company intends to settle its current tax assets and liabilities on a net basis in the case where there exist different taxable entities in the same taxation authority and when there is a legally enforceable right to set off current tax assets against current tax liabilities.
o)Assets Held for Sale
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification subject to limited exceptions.
When our company is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether our company will retain a non-controlling interest in its former subsidiary after the sale.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.
Non-current assets classified as held for sale and the assets of a disposal group are presented separately from other assets in the Consolidated Statements of Financial Position and are classified as current. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the Consolidated Statements of Financial Position.
Once classified as held for sale, property, plant and equipment and intangible assets are not depreciated or amortized, respectively.
p)Provisions
Provisions are recognized when our company has a present obligation, either legal or constructive, as a result of a past event, it is probable that our company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
14 Brookfield Infrastructure Corporation


q)Earnings per Share
Our company‘s basic and diluted earnings per share have not been presented in the interim financial statements. As outlined in Note 10, Financial Liabilities, and Note 13, Equity, exchangeable and class B shares are classified as financial liabilities, while class C shares are classified as financial liabilities, but presented as equity instruments given the narrow scope presentation exceptions existing in IAS 32. As each share classification represents a financial liability, they do not constitute ordinary shares. Refer to the aforementioned notes for further details.
r)Operating Segments
IFRS 8, Operating Segments, requires operating segments to be determined based on information that is regularly reviewed by the Executive Management and the Board of Directors for the purpose of allocating resources to the segment and to assess its performance. Our company has one operating segment, utilities, comprised of our U.K. regulated distribution operation and our Brazilian regulated gas transmission operation.
s)Critical Accounting Judgments and Key Sources of Estimation Uncertainty
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 and estimates made by management and utilized in the normal course of preparing our company’s interim financial statements are outlined below.
i)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 interim statements of financial position, operating results, changes in equity and 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.
ii)Financial instruments
Our company’s accounting policies relating to derivative financial instruments are described in Note 2(m), Financial Instruments and Hedge Accounting. 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.
iii)Revaluation of property, plant and equipment
Property, plant and equipment is revalued on a regular basis. 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.
iv)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.
Q3 2021 Interim Report 15


v)Impairment of goodwill, 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.
In March 2020, the World Health Organization declared a global pandemic related to COVID-19. To date, there has been significant stock market volatility, significant fluctuations in the commodity and foreign exchange markets, restrictions on the conduct of business in many jurisdictions, and the global movement of people and some goods has become restricted. Our company has assessed the impact of the current economic environment on our asset valuations. In making these assessments, we have assumed that the sharp curtailment of economic activities, as a result of social distancing rules imposed by governments worldwide, will not materially persist in the long-term. As a provider of essential services, our businesses have remained in operations while we continue to safeguard the health of our employees. In addition, our businesses are subject to regulated cash flows with minimal volume risk. Based on our company’s assessment, no impairments to our asset values were required as at September 30, 2021. Please refer to Note 6, Property Plant and Equipment and Note 7, Intangible Assets.
3. DISPOSITION OF BUSINESSES
a) Disposition of our U.K. regulated distribution business’s portfolio of smart meters
On May 12, 2021, our U.K. regulated distribution business sold its smart meters business for gross consideration of approximately $820 million. After the repayment of debt and working capital requirements at the business, our company received net proceeds of approximately $340 million. The business recognized a gain of approximately $195 million in Other income (expense) on the Consolidated Statements of Operating Results, of which approximately $155 million is attributable to our company. Our company’s share of accumulated revaluation surplus of $142 million was reclassified from accumulated other comprehensive income directly to retained earnings and recorded within Other items on the Consolidated Statements of Equity. Our company’s share of net losses relating to previous foreign exchange movements of $17 million was reclassified from accumulated other comprehensive income to Other income (expense) on the Consolidated Statements of Operating Results.
4. ACQUISITION OF BUSINESSES
a) Acquisition of additional interest in our Brazilian regulated gas transmission operation
On April 30, 2021, Brookfield Infrastructure, alongside institutional partners (the “NTS consortium”), acquired an additional 3% interest (NTS consortium total of 10%) in our Brazilian regulated gas transmission operation, increasing our company’s ownership of the business to approximately 31%. Total consideration paid was $87 million (NTS consortium total of $283 million), all of which was funded using asset level debt raised on closing. As a result of the purchase price exceeding the previous carrying value of non-controlling interests, a loss of $32 million was recognized directly in ownership changes and recorded within Other items on the Consolidated Statements of Equity.
16 Brookfield Infrastructure Corporation


5. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values are determined by reference to quoted bid or ask prices, as appropriate. Where bid and ask prices are unavailable, the closing price of the most recent transaction of that instrument is used. In the absence of an active market, fair values are determined based on prevailing market rates such as bid and ask prices, as appropriate for instruments with similar characteristics and risk profiles or internal or external valuation models, such as option pricing models and discounted cash flow analyses, using observable market inputs.
Fair values determined using valuation models require the use of assumptions concerning the amount and timing of estimated future cash flows and discount rates. In determining those assumptions, our company looks primarily to external readily observable market inputs such as interest rate yield curves, currency rates, and price and rate volatilities as applicable. The fair value of interest rate swap contracts which form part of financing arrangements is calculated by way of discounted cash flows using market interest rates and applicable credit spreads.
Classification of Financial Instruments
Financial instruments classified as fair value through profit or loss are carried at fair value on the Consolidated Statements of Financial Position. Changes in the fair values of financial instruments classified as fair value through profit or loss are recognized in profit or loss. Mark-to-market adjustments on hedging items for those in an effective hedging relationship and changes in the fair value of securities designated as fair value through other comprehensive income are recognized in other comprehensive income.
Carrying Value and Fair Value of Financial Instruments
The following table provides the allocation of financial instruments and their associated financial instrument classifications as at September 30, 2021:
US$ MILLIONS
Financial Instrument Classification
MEASUREMENT BASIS Fair value through profit or loss Amortized Cost Total
Financial assets
Cash and cash equivalents $   $ 406  $ 406 
Accounts receivable and other (current and non-current)   472  472 
Financial assets(1)
33    33 
Due from Brookfield Infrastructure   585  585 
Total $ 33  $ 1,463  $ 1,496 
Financial liabilities
Accounts payable and other (current and non-current) $   $ 377  $ 377 
Non-recourse borrowings (current and non-current)   3,577  3,577 
Exchangeable and class B shares(2)
  3,539  3,539 
Financial liabilities (current and non-current)(1)
  987  987 
Loans payable to Brookfield Infrastructure   260  260 
Total $   $ 8,740  $ 8,740 
1.Derivative instruments which are elected for hedge accounting totaling $33 million are included in financial assets and $nil of derivative instruments are included in financial liabilities.
2.Class C shares are also classified as financial liabilities due to their cash redemption feature. As discussed in Note 1(b)(ii), Organization and Description of our Company, the class C shares meet certain qualifying criteria and are presented as equity. See Note 13, Equity.
Q3 2021 Interim Report 17


The following table provides the allocation of financial instruments and their associated financial instrument classifications as at December 31, 2020:
US$ MILLIONS
Financial Instrument Classification
MEASUREMENT BASIS Fair value through profit or loss Amortized Cost Total
Financial assets
Cash and cash equivalents $ —  $ 192  $ 192 
Accounts receivable and other (current and non-current) —  427  427 
Financial assets(1)
27  —  27 
Total $ 27  $ 619  $ 646 
Financial liabilities
Accounts payable and other (current and non-current) $ —  $ 334  $ 334 
Non-recourse borrowings (current and non-current) —  3,477  3,477 
Exchangeable and class B shares(2)
—  2,221  2,221 
Financial liabilities (current and non-current)(1)
69  962  1,031 
Total $ 69  $ 6,994  $ 7,063 
1.Derivative instruments which are elected for hedge accounting totaling $27 million are included in financial assets and $nil of derivative instruments are included in financial liabilities.
2.Class C shares are also classified as financial liabilities due to their cash redemption feature. As discussed in Note 1(b)(ii), Organization and Description of our Company, the class C shares meet certain qualifying criteria and are presented as equity. See Note 13, Equity.
The following table provides the carrying values and fair values of financial instruments as at September 30, 2021 and December 31, 2020:
September 30, 2021 December 31, 2020
US$ MILLIONS Carrying Value Fair Value Carrying Value Fair Value
Financial assets
Cash and cash equivalents $ 406  $ 406  $ 192  $ 192 
Accounts receivable and other (current and non-current) 472  472  427  427 
Financial assets 33  33  27  27 
Due from Brookfield Infrastructure 585  585  —  — 
Total $ 1,496  $ 1,496  $ 646  $ 646 
Financial liabilities
Accounts payable and other (current and non-current) $ 377  $ 377  $ 334  $ 334 
Non-recourse borrowings (current and non-current)(1)
3,577  3,668  3,477  3,723 
Exchangeable and class B shares(2)
3,539  3,539  2,221  2,221 
Financial liabilities (current and non-current) 987  987  1,031  1,031 
Loans payable to Brookfield Infrastructure 260  260  1,143  1,143 
Total $ 8,740  $ 8,831  $ 8,206  $ 8,452 
1.Non-recourse borrowings are classified under level 2 of the fair value hierarchy. For level 2 fair values, future cash flows are estimated based on observable forward interest rates at the end of the reporting period.
2.Class C shares are also classified as financial liabilities due to their cash redemption feature. As discussed in Note 1(b)(ii), Organization and Description of our Company, the class C shares meet certain qualifying criteria and are presented as equity. For the purpose of the disclosure above, the class C shares have a fair value of $79 million as at September 30, 2021.
18 Brookfield Infrastructure Corporation


Hedging Activities
Our company uses derivatives and non-derivative financial instruments to manage or maintain exposures to interest and currency risks. For certain derivatives which are used to manage exposures, our company determines whether hedge accounting can be applied. When hedge accounting can be applied, a hedge relationship can be designated as a fair value hedge, cash flow hedge or a hedge of foreign currency exposure of a net investment in a foreign operation with a functional currency other than the U.S. dollar. To qualify for hedge accounting, the derivative must be designated as a hedge of a specific exposure and the hedging relationship must meet all of the hedge effectiveness requirements in accomplishing the objective of offsetting changes in the fair value or cash flows attributable to the hedged risk both at inception and over the life of the hedge. If it is determined that the hedging relationship does not meet all of the hedge effectiveness requirements, hedge accounting is discontinued prospectively.
Cash Flow Hedges
Our company uses interest rate swaps to hedge the variability in cash flows related to a variable rate asset or liability and highly probable forecasted issuances of debt. The settlement dates coincide with the dates on which the interest is payable on the underlying debt, and the amount accumulated in equity is reclassified to profit or loss over the period that the floating rate interest payments on debt affect profit or loss. For the three and nine-month periods ended September 30, 2021, pre-tax net unrealized gains of $1 million (2020: loss of $2 million and gain of $7 million, respectively) were recorded in other comprehensive income for the effective portion of the cash flow hedges. As of September 30, 2021, there was a net derivative asset balance of $33 million relating to derivative contracts designated as cash flow hedges (December 31, 2020: $27 million).
Fair Value Hierarchical Levels—Financial Instruments
Fair value hierarchical levels are directly determined by the amount of subjectivity associated with the valuation inputs of these assets and liabilities, and are as follows:
Level 1     Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2     Inputs other than quoted prices included in Level 1 are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Fair valued assets and liabilities that are included in this category are primarily certain derivative contracts and other financial assets carried at fair value in an inactive market.
Level 3     Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to determining the estimate. Fair valued assets and liabilities that are included in this category are interest rate swap contracts, derivative contracts, certain equity securities carried at fair value which are not traded in an active market and the non-controlling interest’s share of net assets of limited life funds.
The fair value of our company’s financial assets and financial liabilities are measured at fair value on a recurring basis. The following table summarizes the valuation techniques and significant inputs for our company’ financial assets and financial liabilities:
US$ MILLIONS Fair value
hierarchy
September 30, 2021 December 31, 2020
Interest rate swaps & other
Level 2(1)
Financial assets $ 33  $ 27 
Financial liabilities   69 
1.    Valuation technique: discounted cash flow. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects our credit risk and the credit risk of various counterparties.
Assets and liabilities measured at fair value on a recurring basis include $33 million (December 31, 2020: $27 million) of financial assets and $nil (December 31, 2020: $69 million) of financial liabilities which are measured at fair value using valuation inputs based on management’s best estimates.
During the nine-month period ended September 30, 2021, no transfers were made between level 1 and 2 or level 2 and 3.
Q3 2021 Interim Report 19


6. PROPERTY, PLANT AND EQUIPMENT
US$ MILLIONS Gross carrying amount Accumulated depreciation Accumulated fair value adjustments Total
Balance at January 1, 2020 $ 3,696  $ (567) $ 1,368  $ 4,497 
Additions, net of disposals 358  —  364 
Non-cash additions (3) — 
Depreciation expense —  (131) —  (131)
Fair value adjustments —  —  215  215 
Net foreign currency exchange differences 137  (24) 50  163 
Balance at December 31, 2020 $ 4,197  $ (719) $ 1,633  $ 5,111 
Additions, net of disposals 278  4    282 
Non-cash disposals (601) 161  (217) (657)
Depreciation expense   (99)   (99)
Net foreign currency exchange differences (47) 7  (16) (56)
Balance at September 30, 2021 $ 3,827  $ (646) $ 1,400  $ 4,581 
Property, plant and equipment of our company is predominantly comprised of last mile utility connections at our U.K. regulated distribution operation which provides essential services and generate regulated cash flows. Tariffs are set on the basis of a regulated asset base, provides inflation protection, and are typically adjusted annually. Our U.K. operation has a diverse customer base throughout England, Scotland, and Wales, which underpins its cash flows.
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. Assets under development were revalued where fair value could be reliably measured.
Due to continuous changes in the macroeconomic environment and the interruption to global supply chains, our company reviewed the significant inputs to the valuation of our property, plant, and equipment. In our assessment, we considered the nature of the operations’ cash flows, whether the asset is exposed to volume risk, the applicable regulatory framework and the business’ actual performance against plan, amongst other factors. While some of the assumptions used in determining fair values have changed, the overall valuation of our assets have not been significantly impacted. In making the assessment, we have also assumed that the economic impact of COVID-19 will not materially persist in the long-term. Our company undertook a process to assess the appropriateness of the discount rates considering changes to risk-free rates, changes to credit spreads as well as changes to our businesses’ operating cash flows and changes to any risk premium inherent in such cash flows. These considerations led us to conclude the discount rates for the current period should remain consistent with year end rates. Our company considered changes to risk-free borrowing rates, equity risk premiums as well as any impact to asset level cash flows built into the models which we believe at this time addresses future cash flow risks. Terminal values and investment horizons are largely unaffected as our company employs a long-term investment strategy for critical infrastructure assets. In addition, our company has had to make assumptions with respect to the length and severity of these restrictions and closures as well as the recovery period in estimating the impact and timing of future cash flows. Based on our analysis, no impairments to our property, plant and equipment were required as at September 30, 2021.

20 Brookfield Infrastructure Corporation


7. INTANGIBLE ASSETS
As of
US$ MILLIONS September 30, 2021 December 31, 2020
Cost $ 3,395  $ 3,527 
Accumulated amortization (662) (579)
Total $ 2,733  $ 2,948 
Intangible assets are allocated to the following cash generating units:
As of
US$ MILLIONS September 30, 2021 December 31, 2020
Brazilian regulated gas transmission operation $ 2,689  $ 2,903 
U.K. regulated distribution operation 44  45 
Total $ 2,733  $ 2,948 
Our company’s intangible assets are primarily related to concession arrangements with the local energy regulator, Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (“ANP”), at our Brazilian regulated gas transmission operation. Total capacity is fully contracted under long-term “ship-or-pay” gas transportation agreements (“GTA”) and therefore the business is exposed to no volume or price risk. Each GTA takes into account a return on regulatory asset base (“RAB”), and the tariffs are calculated on an inflation adjusted regulatory weighted average cost of capital (“WACC”) fixed for the life of GTAs. On April 8, 2021, new legislation was passed in Brazil which provides our Brazilian regulated gas transmission operation the right to operate the gas pipelines perpetually.
The intangible assets at our U.K. regulated distribution operation relate to customer order backlogs, which represents the present value of future earnings derived from the build out of contracted connections at the acquisition date of the U.K. regulated distribution operation.
Due to continuous changes in the macroeconomic environment and the interruption to global supply chains as a result of COVID-19, our company performed an evaluation of potential impairment indicators on each of our intangible assets during the nine-month period ended September 30, 2021. Based on the analysis performed, our intangible assets remain largely unaffected, with no impairment required. Our intangible assets represent long-term critical infrastructure supported by regulated or highly contracted revenues which help protect value over the long term.
The following table presents the change in the cost balance of intangible assets:
US$ MILLIONS For the nine-month period ended September 30, 2021 For the 12 month period ended December 31, 2020
Cost at beginning of the period $ 3,527  $ 4,479 
Additions, net of disposals 23  35 
Foreign currency translation (155) (987)
Ending Balance $ 3,395  $ 3,527 
The following table presents the accumulated amortization for our company’s intangible assets:
US$ MILLIONS For the nine-month period ended September 30, 2021 For the 12 month period ended December 31, 2020
Accumulated amortization at beginning of the period $ (579) $ (543)
Amortization (111) (152)
Foreign currency translation 28  116 
Ending Balance $ (662) $ (579)
Q3 2021 Interim Report 21


8. GOODWILL
The following table presents the carrying amount for our company’s goodwill:
As of
US$ MILLIONS September 30, 2021 December 31, 2020
Balance at beginning of the period $ 528  $ 667 
Foreign currency translation and other (28) (139)
Ending Balance $ 500  $ 528 
Goodwill mainly arose from the recognition of a deferred tax liability due to purchase price accounting upon the acquisition of our Brazilian regulated gas transmission business. The operating performance at our Brazilian regulated gas transmission business benefits from stable, long-term, contracted cash flows and has been largely unimpacted by recent changes in the macroeconomic environment. As such, no impairment indicators were noted during the nine-month period ended September 30, 2021. Our company also noted no changes to the tax circumstances that gave rise to the goodwill as at September 30, 2021.
9. BORROWINGS
Non-Recourse Borrowings
As of
US$ MILLIONS September 30, 2021 December 31, 2020
Current $   $ 11 
Non-current 3,577  3,466 
Total $ 3,577  $ 3,477 
Non-recourse borrowings have increased by $100 million since year-end. The increase is primarily attributable to debt raised by our Brazilian regulated gas transmission business in connection with our recent acquisition, partially offset by net repayments of $117 million at our U.K. regulated distribution business and the impact of foreign exchange as the foreign currencies underlying non-recourse borrowings depreciated relative to the U.S. dollar during the nine-month period ended September 30, 2021.
10. FINANCIAL LIABILITIES
As of
US$ MILLIONS September 30, 2021 December 31, 2020
Current:
Inflation swaps $   $ 23 
Deferred consideration (a) 987  — 
Total current financial liabilities $ 987  $ 23 
Non-current:
Inflation swaps $   $ 46 
Deferred consideration (a)   962 
Total non-current financial liabilities $   $ 1,008 
a) Deferred consideration
Deferred consideration is related to the April 4, 2017 acquisition of Nova Transportadora do Sudeste S.A. (“NTS”), our Brazilian regulated gas transmission business. The deferred consideration is denominated in U.S. dollars and accrues interest at 3.35% compounded annually. The financial liability is measured at amortized cost and is payable on the fifth anniversary of the date of acquisition.
22 Brookfield Infrastructure Corporation


Exchangeable shares, class B shares and class C shares
The exchangeable and class B shares are classified as liabilities due to their exchangeable and cash redemption features. Upon issuance, exchangeable and class B shares are recognized at their fair value. Subsequent to initial recognition, the exchangeable and class B shares are recognized 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.
In August 2021, the partnership acquired a controlling interest in Inter Pipeline Limited (“IPL”) for consideration comprised of cash, exchangeable shares and class B exchangeable limited partnership units (“BIPC exchangeable LP units”) of Brookfield Infrastructure Corporation Exchange Limited Partnership (“BIPC Exchange LP”). BIPC Exchange LP is a subsidiary of the partnership and holders of BIPC exchangeable LP units have the right to require the partnership to purchase BIPC exchangeable LP units and deliver one exchangeable share for each BIPC exchangeable LP unit purchased. During the period ended September 30, 2021, our company issued 17.9 million exchangeable shares in connection with the partnership’s acquisition of IPL and 0.2 million exchangeable shares in connection with exchange requests from BIPC Exchange LP unit holders. Upon issuance, the exchangeable shares were recognized at their fair value.
During the nine-month period ended September 30, 2021, our shareholders exchanged 14,357 exchangeable shares for an equal number of units. As at September 30, 2021, the exchangeable and class B shares were remeasured to reflect the NYSE closing price of one unit, $56.11 per share. Remeasurement gains or losses associated with these shares are recorded in the Consolidated Statements of Operating Results. Our company declared and paid dividends of $32 million and $78 million on its exchangeable shares outstanding during the three and nine-month periods ended September 30, 2021, respectively (2020: $22 million and $44 million, respectively). Dividends paid on exchangeable shares are presented as interest expense in the Consolidated Statements of Operating Results.
The following tables provide a continuity schedule of outstanding exchangeable shares and class B shares along with our corresponding liability and remeasurement gains and losses.
Exchangeable shares outstanding
(Shares)
Class B shares outstanding
(Shares)
Exchangeable and class B shares
(US$ Millions)
Balance at January 1, 2020 —  —  $ — 
Share issuance 46,349,323  1,765 
Shares exchanged to partnership units (1,388,874) —  (55)
Remeasurement of liability     511 
Balance at December 31, 2020 44,960,449  1  $ 2,221 
Share issuance 17,939,772    1,140 
Share issuance - BIPC exchangeable LP unit exchanges 182,213    11 
Shares exchanged to partnership units (14,357)   (1)
Remeasurement of liability     168 
Balance at September 30, 2021 63,068,077  1  $ 3,539 

Similar to class B shares, class C shares are classified as liabilities due to their cash redemption feature. 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. Refer to Note 13, Equity, for further details related to class C shares.
Q3 2021 Interim Report 23


11. REVENUE
a)Revenues by service line
Substantially all of these revenues are recognized over time as services are rendered. The following table disaggregates revenues by service line:
For the three-month
period ended September 30
For the nine-month
period ended September 30
US$ MILLIONS 2021 2020 2021 2020
Gas Transmission $ 277  $ 228  $ 807  $ 706 
Distribution 87  85  283  249 
Connections 42  29  120  84 
Other 8  19  16 
Total $ 414  $ 349  $ 1,229  $ 1,055 
During the three and nine-month periods ended September 30, 2021, revenues benefited from inflationary tariff increases and capital commissioned into rate base.
b)Revenues from external customers
The following table disaggregates revenues by geographical region:
For the three-month
period ended September 30
For the nine-month
period ended September 30
US$ MILLIONS 2021 2020 2021 2020
Brazil $ 277  $ 228  $ 807  $ 706 
United Kingdom 137  121  422  349 
Total $ 414  $ 349  $ 1,229  $ 1,055 
Our company’s revenues are generated from a diverse customer base, with only one customer that makes up greater than 10% of our company’s consolidated revenues. For the three and nine-month periods ended September 30, 2021, revenue generated from this customer was $277 million and $807 million, respectively (2020: $228 million and $706 million, respectively). Our company has completed a review of the credit risk of key counterparties. Based on their liquidity position, business performance, and aging of our accounts receivable, we do not have any significant changes in expected credit losses at this time. Our company continues to monitor the credit risk of our counterparties in light of the economic impact of COVID-19 but has experienced no issues to date.
12. INCOME TAXES
On May 24, 2021, Finance Bill 2021 in the U.K. became substantively enacted. As a result, effective April 2023, the U.K. tax rate will increase from 19% to 25%. During the nine-month period ended September 30, 2021, net income and accumulated other comprehensive income included $96 million and $87 million of deferred tax expenses, respectively, related to the rate change. There was no impact to the results for the three-month period ended September 30, 2021.
13. EQUITY
Our company’s equity is comprised of the following shares:
Class C shares
Shares outstanding
(Shares)
Share capital
(US$ Millions)
Balance at January 1, 2020   $  
Share issuance 1,402,451  53 
Balance at December 31, 2020 and September 30, 2021 1,402,451  $ 53 
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. 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 the class C shares are classified as financial liabilities. However, class C shares, the most subordinated of all common shares, meet certain qualifying criteria and are presented as equity instruments given the narrow scope presentation exceptions existing in IAS 32. Refer to Note 10, Financial Liabilities, for further details related to exchangeable and class B shares.
The value of share capital, which relates to the class C shares, is determined based on the opening price of a unit on March 31, 2020, the date of special distribution.














24 Brookfield Infrastructure Corporation


14. 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, our 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 interim financial statements.
Pursuant to the Master Services Agreement, on a quarterly basis, the partnership pays a base management fee, referred to as the Base Management Fee, to the Service Provider 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 L.P.) 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 $11 million and $29 million for the three and nine-month periods ended September 30, 2021, respectively (2020: $8 million and $21 million, respectively).
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 three and nine-month periods ended September 30, 2021, revenues of less than $1 million were generated (2020: less than $1 million) and $nil expenses were incurred (2020: $nil).
As discussed in Note 1(b)(iii), Organization and Description of our Company in our unaudited interim 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 market interest rate. As of September 30, 2021, $nil (December 31, 2020: $nil) was drawn on the credit facilities under the credit agreements with Brookfield Infrastructure. During the three-month period ended September 30, 2021, our company established a demand deposit receivable from Brookfield Infrastructure of $585 million as partial consideration for exchangeable shares issued during the period. In addition, our company and Brookfield Infrastructure agreed to settle the existing loans payable to Brookfield Infrastructure as of September 30, 2021 of $260 million in exchange for an equivalent demand loan payable to Brookfield Infrastructure. The demand deposit receivable from and demand loan payable to Brookfield Infrastructure accrue interest at 0.2% per annum.
Q3 2021 Interim Report 25


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., which we refer to collectively as 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 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.
During the nine-month period ended September 30, 2021, our company settled $887 million of loans payable to subsidiaries of Brookfield Infrastructure, of which $547 million was settled in exchange for the issuance of additional exchangeable shares. Our company and Brookfield Infrastructure agreed to settle the existing loans payable balance as of September 30, 2021 of $260 million in exchange for an equivalent demand loan payable to Brookfield Infrastructure bearing interest at a rate of 0.2% per annum. Interest incurred on loans payable to Brookfield Infrastructure during the three and nine-month periods ended September 30, 2021 was $6  million and $32 million, respectively (2020: $13 million and $26 million, respectively).
As at September 30, 2021, our company had accounts payable of $8 million (December 31, 2020: $2 million) to subsidiaries of Brookfield Infrastructure and accounts receivable of $20 million (December 31, 2020: $7 million) from subsidiaries of Brookfield Infrastructure.
In connection with the partnership’s acquisition of IPL, the partnership entered into a forward subscription agreement with our company to subscribe for exchangeable shares in order to facilitate the delivery of exchangeable shares to shareholders of IPL who elect to receive exchangeable shares as consideration for their tendered IPL shares. During the three and nine-month periods ended September 30, 2021, our company recorded a mark-to-market loss of $19 million (2020: nil) on the forward subscription agreement.
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.


26 Brookfield Infrastructure Corporation


15. SUPPLEMENTAL CASH FLOW INFORMATION
  For the three-month
period ended September 30
For the nine-month
period ended September 30
US$ MILLIONS 2021 2020 2021 2020
Interest paid $ 47  $ 49  $ 174  $ 144 
Income taxes paid $ 5  $ 10  $ 150  $ 110 
Amounts paid and received for interest were reflected as operating cash flows in the Consolidated Statements of Cash Flows. Interest paid is net of debt related hedges.
Amounts paid for income taxes were reflected as either operating cash flows or investing cash flows in the Consolidated Statements of Cash Flows depending upon the nature of the underlying transaction.
Details of “Changes in non-cash working capital, net” on the Consolidated Statements of Cash Flows are as follows:
  For the three-month
period ended September 30
For the nine-month
period ended September 30
US$ MILLIONS 2021 2020 2021 2020
Accounts receivable $ (17) $ 13  $ (73) $ (28)
Accounts payable and other 69  43  64  28 
Changes in non-cash working capital, net $ 52  $ 56  $ (9) $ — 
16. SUBSEQUENT EVENTS
Brookfield Infrastructure’s acquisition of additional interest in Inter Pipeline
Subsequent to quarter-end, Brookfield Infrastructure, alongside institutional partners (“the IPL consortium”), acquired an additional 14% interest (IPL consortium total of 24%) in IPL for total consideration of $0.9 billion (IPL consortium of $1.6 billion). In connection with this transaction, our company issued an additional 8.1 million exchangeable shares to the partnership in accordance with the forward subscription agreement between the partnership and our company (refer to Note 14, Related Party Transactions, for further details relating to the forward subscription agreement). Our company recorded a mark-to-market gain of approximately $20 million in connection with this issuance.

Q3 2021 Interim Report 27


MANAGEMENT’S DISCUSSION AND ANALYSIS
AS OF SEPTEMBER 30, 2021 AND DECEMBER 31, 2020 AND
FOR THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2021 AND 2020
INTRODUCTION
The following Management’s Discussion and Analysis (“MD&A”) is the responsibility of management of Brookfield Infrastructure Corporation (our “company”). This MD&A is dated November 5, 2021 and has been approved by the Board of Directors of our company for issuance as of that date. The Board of Directors carries out its responsibility for review of this document principally through its audit committee, comprised exclusively of independent directors. The audit committee reviews and, prior to its publication, approves this MD&A, pursuant to the authority delegated to it by the Board of Directors. The terms “we,” “us” and “our” refer to Brookfield Infrastructure Corporation, and our company’s direct and indirect operating entities as a group. This MD&A should be read in conjunction with our company’s most recently issued annual and interim financial statements. Additional information is available on our website at bip.brookfield.com/bipc, on SEDAR’s website at www.sedar.com and on EDGAR’s website at www.sec.gov.
The class A exchangeable subordinate voting shares (each, an “exchangeable share”) of our company are structured with the intention of being economically equivalent to the non-voting limited partnership units (“units”) of Brookfield Infrastructure Partners L.P. (the “partnership”, the “parent company” or, collectively with its subsidiaries, but excluding our company, “Brookfield Infrastructure”) (NYSE: BIP; TSX: BIP.UN). 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 periodic reporting. The partnership is required to file reports, including annual reports on Form 20-F, and other information with the United States Securities and Exchange Commission (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. 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, https://bip.brookfield.com is not incorporated into and does not form a part of this MD&A.
In addition to historical information, this MD&A contains forward-looking statements. Readers are cautioned that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. See “Cautionary Statements Regarding Forward-Looking Statements”.
Continuity of Interests
Brookfield Infrastructure Corporation 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 United Kingdom (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.
28 Brookfield Infrastructure Corporation


To reflect this continuity of interests, these interim 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 (see Note 1(b), Organization and Description of 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 periods 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.
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 our 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 which they related are now provided through the amended and restated master services agreement dated as of March 13, 2015, among the Service Recipients (as defined therein), Brookfield Asset Management Inc. (“Brookfield”), the Service Providers (as defined therein) and others, as amended (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 interim financial statements.
In August 2021, the partnership acquired a controlling interest in Inter Pipeline Limited (“IPL”) for consideration comprised of cash, exchangeable shares and class B exchangeable limited partnership units (“BIPC exchangeable LP units”) of Brookfield Infrastructure Corporation Exchange Limited Partnership (“BIPC Exchange LP”). BIPC Exchange LP is a subsidiary of the partnership and holders of BIPC exchangeable LP units have the right to require the partnership to purchase BIPC exchangeable LP units and deliver one exchangeable share for each BIPC exchangeable LP unit purchased. Satisfaction of redemption requests is the obligation of the partnership, and not that of our company.
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. As a result, proportionate revenues, costs attributable to revenues, other income, interest expense, depreciation and amortization, deferred taxes, fair value adjustments and other items 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.
Overview of our Company
Our company is a Canadian corporation incorporated under, and governed by, the laws of British Columbia. We were established by the partnership to be an alternative investment vehicle for investors who prefer owning our infrastructure operations through a corporate structure. While our current operations are utilities located in the U.K. and Brazil, shareholders have exposure to eight other markets across the transport, midstream, and data operating segments by virtue of the exchange feature of our company’s exchangeable shares. While our company has the option to settle the exchange obligation with cash or units of the partnership, we intend to deliver units.
Q3 2021 Interim Report 29


Our U.K. regulated distribution operations benefit from inflationary tariff increases (inflation indexation) and volume growth through the installation of new utility connections. Revenues generated at our Brazilian regulated gas transmission operations are capacity based and primarily affected by an inflationary rate increase. The U.K. regulated distribution operations’ revenues predominantly relate to the distribution of gas and electricity as well as the revenues generated from new connection construction. Our Brazilian regulated gas transmission business has only one revenue stream and generates revenue from the transmission of natural gas. For our U.K. regulated distribution operations, costs are predominantly impacted by the number of connections in place while for our Brazilian regulated gas transmission business, costs are impacted by inflation.
Our company, our subsidiaries and Brookfield Infrastructure (collectively, our “group”), target 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 funds from operations (“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. For further details, see the “Performance Disclosures” section of this MD&A.
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 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, our board approved an equivalent quarterly dividend of $0.51 per exchangeable share (or $2.04 per exchangeable share annualized), starting with the dividend paid in March 2021.
RESULTS OF OPERATIONS
The following table summarizes the financial results of our company for the three and nine-month periods ended September 30, 2021 and 2020:
US$ MILLIONS For the three-month
period ended September 30
For the nine-month
period ended September 30
Summary Statements of Operating Results 2021 2020 2021 2020
Revenues $ 414  $ 349  $ 1,229  $ 1,055 
Direct operating costs (71) (60) (212) (176)
General and administrative expenses (12) (9) (32) (23)
Depreciation and amortization expense (65) (69) (210) (212)
Interest expense (77) (59) (208) (153)
Mark-to-market on hedging items and foreign currency revaluation
23  (14) (2) (36)
Remeasurement of exchangeable and class B shares 108  (292) (168) (432)
Other (expense) income (30) (7) 116  (32)
Income tax expense (77) (61) (321) (206)
Net income (loss) 213  (222) 192  (215)
Net income (loss) attributable to the partnership 122  (301) (99) (450)
Three-month periods ended September 30, 2021 and 2020
For the three-month period ended September 30, 2021, our company reported net income of $213 million, of which $122 million was attributable to the partnership. This compares to a net loss of $222 million for the three-month period ended September 30, 2020, of which $301 million was attributable to the partnership. Net income for the current quarter benefited from capital commissioned into rate base at our U.K. regulated distribution business, inflation-indexation at our Brazilian regulated gas transmission business and remeasurement gains on our exchangeable shares that are classified as liabilities under IFRS.
30 Brookfield Infrastructure Corporation


Total revenues increased by $65 million relative to the same period during the prior year. Underlying gas transmission revenues in Brazil increased by $42 million due to inflation-indexation while the appreciation of the Brazilian real further increased our revenues in U.S. dollars by $8 million relative to 2020. Revenues in the U.K. benefited from capital commissioned into rate base as well as a recovery to pre-pandemic levels of connections activity which contributed additional revenues of $11 million in comparison to the prior year. The appreciation of the British pound further increased our revenues in U.S. dollars by $8 million. These positive factors were partially offset by the sale of our smart meter business in May 2021.
Direct operating costs for the three-month period ended September 30, 2021 were $71 million, an increase of $11 million compared to the prior year. The increase was primarily due to inflation, organic growth and the impact of foreign exchange.
General and administrative expenses totaled $12 million for the three-month period ended September 30, 2021, an increase of $3 million compared to the same period in 2020. 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. The base management fee allocated to our company increased by $3 million primarily due to an increase in the combined market value of our company and the partnership compared to the same period in 2020.
Depreciation and amortization expense for the three-month period ended September 30, 2021 decreased by $4 million to $65 million as incremental depreciation on capital expenditures made over the last year and the impact of higher asset values as a result of our valuation process were more than offset by the sale of our smart meter portfolio at our U.K. regulated distribution business in May 2021.
Interest expense for the three-month period ended September 30, 2021 increased by $18 million to $77 million due to incremental charges associated with debt issued to finance the acquisition of an additional interest in our Brazilian regulated gas distribution business in April 2021 and an increase in the interest rates on our variable rate non-recourse borrowings. Current year results were further impacted by an increase in dividends paid on our exchangeable shares, classified as interest expense, due to additional exchangeable shares issued during the period. These increases were partially offset by a decrease in interest incurred on loans payable to Brookfield Infrastructure as a result of repayments during the period.
Mark-to-market on hedging items and foreign currency revaluation gains totaled $23 million for the three-month period ended September 30, 2021, compared to losses of $14 million in the prior year. This was predominantly due to foreign currency translation gains in the current quarter associated with our loans payable to the partnership denominated in Canadian dollars, which depreciated relative to the U.S. dollar during the current period. In contrast, the Canadian dollar appreciated relative to the U.S. dollar in the prior year, resulting in foreign currency translation losses.
Remeasurement gains for the three-month period ended September 30, 2021 were $108 million. Additional exchangeable shares issued during the period, classified as liabilities due to their exchangeable features, were initially recognized at fair value and subsequently remeasured to reflect the changes in contractual cash flows associated with their exchangeable features. These contractual cash flows are based on the price of one partnership unit. The corresponding decrease in value associated with the liability resulted in an unrealized gain of $140 million. This was partially offset by remeasurement losses on existing exchangeable shares as a result of the increase in the market price of a partnership unit during the three-month period ended September 30, 2021.
Other (expense) income for the three-month period ended September 30, 2021 includes a loss of $19 million on the forward subscription agreement with the partnership based on the difference between the market price of an exchangeable share on the date of each issuance and the subscription price, as well as accretion expense on deferred consideration at our Brazilian regulated gas transmission business.
Income tax expense for the three-month period ended September 30, 2021 was $77 million, $16 million higher than the prior year. This was predominantly due to higher taxable income at our Brazilian regulated gas transmission business which resulted in an increase in current income tax expense of $14 million.
Nine-month periods ended September 30, 2021 and 2020
For the nine-month period ended September 30, 2021, our company reported net income of $192 million, of which a loss of $99 million was attributable to the partnership. This compares to a net loss of $215 million for the nine-month period ended September 30, 2020, of which a loss of $450 million was attributable to the partnership. Net income in the current period benefited from capital commissioned into rate base, a gain recognized on the sale of our portfolio of smart meters in the U.K., and inflation-indexation at our Brazilian regulated gas transmission business. These positive factors were partially offset by remeasurement losses on our exchangeable shares that are classified as liabilities under IFRS and the impact of an increase in the future U.K. tax rate.
Q3 2021 Interim Report 31


Total revenues increased by $174 million relative to the same period during the prior year. Gas transmission revenues in Brazil increased by $148 million due to inflation-indexation. This increase was partially offset by the impact of foreign exchange as the depreciation of the Brazilian real reduced our revenues in U.S. dollars by $47 million relative to 2020. Connections revenue in the U.K. increased by $27 million following an increase in construction activity compared to the prior year which was impacted by government restrictions associated with the global pandemic. In addition, distribution revenues increased primarily due to higher volumes and inflation-indexation which contributed additional revenues of $8 million. The appreciation of the British pound further increased our revenues in U.S. dollars by $35 million.
Direct operating costs for the nine-month period ended September 30, 2021 were $212 million, an increase of $36 million compared to the prior year. The increase was primarily due to inflation, organic growth and the impact of foreign exchange.
General and administrative expenses totaled $32 million for the nine-month period ended September 30, 2021, an increase of $9 million compared to the same period in 2020. This line item primarily consists of the base management fee that is paid to Brookfield based on our company 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. The base management fee allocated to our company increased by $8 million primarily due to an increase in the combined market value of our company and the partnership compared to the same period in 2020.
Depreciation and amortization expense for the nine-month period ended September 30, 2021 was $210 million, largely in line with prior year as incremental depreciation on capital expenditures made over the last year and the impact of higher asset values as a result of our revaluation process was offset by the sale of our smart meter portfolio at our U.K. regulated distribution business in May 2021.
Interest expense for the nine-month period ended September 30, 2021 was $208 million, an increase of $55 million compared to the same period in 2020. Interest expense increased as a result of dividends on our exchangeable shares, classified as interest expense, and interest incurred on loans payable to the partnership of $78 million and $32 million, respectively, accrued over the course of the nine-month period ended September 30, 2021. Our exchangeable shares and loans payable to the partnership were issued on March 30, 2020 and therefore the first quarter of 2020 did not include any interest expense related to these items. In addition, incremental charges associated with debt issued to finance the acquisition of an additional interest in our Brazilian regulated gas distribution business in April 2021 and an increase in the interest rates on our variable rate non-recourse borrowings also contributed to the increase in the current period.
Mark-to-market on hedging items and foreign currency revaluation losses totaled $2 million for the nine-month period ended September 30, 2021, compared to $36 million in the prior year. This was predominantly due to a decrease in foreign currency losses recognized on loans payable to the partnership denominated in Canadian dollars.
Remeasurement losses for the nine-month period ended September 30, 2021 were $168 million. These losses were a result of revaluation of the exchangeable shares classified as liabilities due to their exchangeable features. The remeasurement losses reflect the increase in the public price of partnership units based on the NYSE closing price partially offset by a remeasurement gain associated with the issuance of an additional 17.9 million exchangeable shares initially recognized at fair value. Subsequent to initial recognition, the shares were remeasured to reflect the contractual cash flows associated with their exchangeable features based on the price of one partnership unit. The corresponding decrease in value associated with the liability resulted in a gain of $140 million.
Other (expense) income for the nine-month period ended September 30, 2021 includes a gain recognized on the sale of the smart meter portfolio at our U.K. regulated distribution business of $175 million. This was partially offset by a loss of $19 million on the forward subscription agreement with the partnership based on the difference between the market price of an exchangeable share on the date of each issuance and the subscription price, as well as accretion expense on deferred consideration at our Brazilian regulated gas transmission business.
Income tax expense for the nine-month period ended September 30, 2021 was $321 million, $115 million higher than the prior year. This increase was primarily due to a non-recurring deferred tax expense that was recognized as a result of an increase in the U.K.’s future tax rate from 19% to 25% enacted in May 2021. In addition, higher taxable income at our Brazilian regulated gas transmission business resulted in an increase in income tax expense of $50 million, partially offset by the impact of foreign exchange.
32 Brookfield Infrastructure Corporation


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
The following table summarizes the statements of financial position of our company as at September 30, 2021 and December 31, 2020:
US$ MILLIONS As of
Summary Statements of Financial Position Key Metrics September 30, 2021 December 31, 2020
Cash and cash equivalents $ 406  $ 192 
Due from Brookfield Infrastructure 585  — 
Property, plant and equipment 4,581  5,111 
Intangible assets 2,733  2,948 
Total assets 9,437  9,344 
Loans payable to Brookfield Infrastructure 260  1,143 
Exchangeable and class B shares 3,539  2,221 
Non-recourse borrowings 3,577  3,477 
Total liabilities 10,627  9,916 
Equity in net assets attributable to the partnership (1,932) (1,722)
Total equity (1,190) (572)
Total assets were $9.4 billion at September 30, 2021, compared to $9.3 billion at December 31, 2020. In the year, our company added $0.3 billion to property, plant and equipment, however, these increases were more than offset by the sale of our smart meters business at our U.K. regulated distribution business and the impact of foreign exchange which decreased assets denominated in currencies other than the U.S. dollar by $0.2 billion. A demand deposit with Brookfield Infrastructure, established in connection with the issuance of additional exchangeable shares, increased total assets by $0.6 billion.
Our accounting policy is to carry property, plant and equipment at fair value and intangible assets at amortized cost. Our last revaluation date for the measurement of property, plant and equipment, as well as the testing of intangible assets and goodwill for impairment, was December 31, 2020. Our valuation of property, plant and equipment is underpinned by regulated cash flow. Our local revenues have been predominantly unimpacted 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. Given the stable cash flows generated by our business, we believe the long-term value of these assets has not changed significantly from our most recent valuation.
Our company issued 17.9 million exchangeable shares and 0.2 million exchangeable shares to the partnership in connection with the partnership’s acquisition of IPL and exchange requests received from unitholders of BIPC Exchange LP, respectively. As partial consideration for the exchangeable shares, Brookfield Infrastructure issued a demand deposit payable to our company of $585 million which accrues interest at 0.2% per annum.
Our exchangeable and class B shares are classified as liabilities due to their exchangeable and cash redemption features. Subsequent to initial recognition at fair value, 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 partnership unit. As at September 30, 2021, the shares were remeasured to reflect the NYSE closing price of one BIP unit, or $56.11 per share.
Non-recourse borrowings increased by $100 million to $3,577 million at September 30, 2021. Additional borrowings of $283 million used to finance the acquisition of an additional interest in our Brazilian regulated gas transmission business was partially offset by net repayments of $117 million at our U.K. regulated distribution business. Non-recourse borrowings further decreased due to the impact of foreign exchange as the Brazilian real and British pound weakened relative to the U.S. dollar during the nine-month period ended September 30, 2021.
As of September 30, 2021, our company had loans payable of $260 million to subsidiaries of Brookfield Infrastructure, a decrease of $883 million compared to December 31, 2020. This decrease was due to repayments of $887 million during the period, of which $547 million was settled in exchange for the issuance of additional exchangeable shares, partially offset by the impact of foreign exchange. Our company and Brookfield Infrastructure agreed to settle the existing loans payable balance as of September 30, 2021 of $260 million in exchange for an equivalent demand loan payable to Brookfield Infrastructure bearing interest at a rate of 0.2% per annum.
Total equity was negative $1,190 million at September 30, 2021, compared to negative $572 million at December 31, 2020. The decrease is mainly due to remeasurement losses as a result of the revaluation of our exchangeable shares classified as liabilities, and distributions paid and capital provided to non-controlling interests, including the acquisition of an additional 10% interest in our Brazilian regulated gas transmission business.
Q3 2021 Interim Report 33


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 For the three-month
period ended September 30
For the nine-month
period ended September 30
September 30, 2021 December 31, 2020 Change 2021 2020 Change 2021 2020 Change
Brazilian real 0.1838 0.1924 (4) % 0.1913 0.1860 % 0.1876 0.1969 (5) %
British pound 1.3474 1.3670 (1) % 1.3779 1.2919 % 1.3851 1.2712 %
The net assets of our U.K. regulated distribution business and our Brazilian regulated transmission business represent 74% and 26%, 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:
For the three-month
period ended September 30
For the nine-month
period ended September 30
US$ MILLIONS 2021 2020 2021 2020
Brazilian real $ (123) $ (57) $ (79) $ (706)
British pound (40) 63  12  (41)
(163) (67) (747)
Currency hedges 1  (2) 1 
$ (162) $ $ (66) $ (740)
Attributable to:
The partnership $ (69) $ 33  $ (8) $ (220)
Non-controlling interests (93) (29) (58) (520)
$ (162) $ $ (66) $ (740)
The impact of foreign currency translation on our company, including those attributable to non-controlling interests, for the three and nine-month periods ended September 30, 2021, was a decrease to equity of $162 million and $66 million, respectively (2020: increase of $4 million and decrease of $740 million, respectively). The decrease in equity during the three and nine-month periods was primarily due to the weakening of the Brazilian real relative to the U.S. dollar.
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 three and nine-month periods ended September 30, 2021, the average exchange rate of the Brazilian real, relative to the U.S. dollar, appreciated by 3% and depreciated by 5%, respectively, while the British pound appreciated relative to the U.S. dollar by 7% and 9%, respectively. The appreciation of foreign currencies relative to the U.S. dollar during the three-month period ended September 30, 2021, increased our revenues and net income in U.S. dollars. The benefit of the appreciation of the British pound was more than offset by the depreciation of the Brazilian Real during the nine-month period ended September 30, 2021 decreasing our revenues and net income in U.S. dollars.
34 Brookfield Infrastructure Corporation


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 three-month
period ended September 30
For the nine-month
period ended September 30
IFRS measures 2021 2020 2021 2020
Revenue $ 2,939  $ 2,209  $ 8,285  $ 6,351 
Net income 536  148  2,255  330 
US$ MILLIONS As of
IFRS measures September 30, 2021 December 31, 2020
Total assets $ 74,452  $ 61,331 
Total liabilities 49,091  39,658 
Total partnership capital 25,361  21,673 
US$ MILLIONS For the three-month
period ended September 30
For the nine-month
period ended September 30
Non-IFRS measures 2021 2020 2021 2020
Adjusted EBITDA(1)
$ 596  $ 485  $ 1,784  $ 1,429 
Funds from Operations (FFO)(1)
422  365  1,247  1,056 
Adjusted Funds from Operations (AFFO)(1)
323  285  1,012  851 
1.The partnership’s definitions of these non-IFRS financial measures are included within the partnership’s periodic reporting referenced in the introductory section of this MD&A.
PERFORMANCE DISCLOSURES
To measure performance, we focus on net income, an IFRS measure, as well as certain non-IFRS measures, including FFO, adjusted FFO (“AFFO”), Adjusted EBITDA and Adjusted Earnings. FFO, AFFO, Adjusted EBITDA and Adjusted Earnings 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, Adjusted EBITDA and Adjusted Earnings 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, Adjusted EBITDA and Adjusted Earnings also provide investors enhanced comparability of our ongoing performance across periods.
For further details regarding our use of FFO, AFFO, Adjusted EBITDA and Adjusted Earnings, 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 three-month
period ended September 30
For the nine-month
period ended September 30
Key Metrics 2021 2020 2021 2020
Adjusted EBITDA(1)
$ 149  $ 126  $ 438  $ 378 
Funds from Operations (FFO)(2)
112  99  334  296 
Adjusted Funds from Operations (AFFO)(3)
107  97  320  286 
Adjusted Earnings(4)
47  38  195  90 
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 Earnings is defined as net income attributable to the partnership, excluding the impact of dividends paid, remeasurement gains/losses and other non-cash gains/losses on the exchangeable shares, and interest and foreign currency translation adjustments on intercompany loans with the partnership.

Q3 2021 Interim Report 35


Three-month periods ended September 30, 2021 and 2020
For the three-month period ended September 30, 2021, FFO increased by $13 million while Adjusted EBITDA increased by $23 million compared to the same period in the prior year. During the current period, FFO and Adjusted EBITDA benefited from a 24% annual inflationary tariff adjustment and the acquisition of an additional 3% interest (NTS consortium total of 10%) in our Brazilian regulated gas transmission business completed in April 2021, and capital commissioned into rate base and higher connections activity at our U.K. regulated distribution business. These positive factors were partially offset by the loss of earnings associated with the sale of our portfolio of smart meters in the U.K. completed in May 2021 and higher management fees. FFO and Adjusted Earnings benefited from the aforementioned factors partially offset by an increase in interest expense associated with debt issued to finance the acquisition of an additional 3% interest in our Brazilian regulated gas transmission business and an increase in interest rates on our variable rate non-recourse borrowings.
The following table disaggregates our operating performance between our utilities operations and the corporate, general and administrative costs.
US$ MILLIONS For the three-month period ended
September 30, 2021
Key Metrics Utilities Corporate Total
Adjusted EBITDA(1)
$ 161  $ (12) $ 149 
Funds from Operations (FFO)(2)
124  (12) 112 
Adjusted Funds from Operations (AFFO)(3)
119  (12) 107 
Adjusted Earnings(4)
59  (12) 47 
US$ MILLIONS For the nine-month period
ended September 30, 2021
Key Metrics Utilities Corporate Total
Adjusted EBITDA(1)
$ 470  $ (32) $ 438 
Funds from Operations (FFO)(2)
366  (32) 334 
Adjusted Funds from Operations (AFFO)(3)
352  (32) 320 
Adjusted Earnings(4)