ACQUISITIONS OF CONSOLIDATED ENTITIES

a) Completed During 2019

The following table summarizes the balance sheet impact as a result of business combinations that occurred in the year ended December 31, 2019. The valuations of the assets acquired are still under evaluation and as such the business combinations have been accounted for on a provisional basis:



(MILLIONS)	Private Equity			Infrastructure			Real Estate			Renewable Power and Other			Total
Cash and cash equivalents	$	344		$	94		$	31		$	6		$	475
Accounts receivable and other	6,706			553			114			110			7,483
Assets classified as held for sale	—			1,584			—			—			1,584
Inventory	2,230			74			46			13			2,363
Equity accounted investments	847			48			—			—			895
Investment properties	—			211			3,458			—			3,669
Property, plant and equipment	6,650			8,710			785			1,308			17,453
Intangible assets	7,057			3,248			28			—			10,333
Goodwill	3,479			2,644			2			—			6,125
Deferred income tax assets	363			46			—			—			409
Total assets	27,676			17,212			4,464			1,437			50,789
Less:
Accounts payable and other	(5,025		)	(2,425		)	(2,394		)	(101		)	(9,945		)
Non-recourse borrowings	(1,084		)	(1,980		)	(537		)	(319		)	(3,920		)
Deferred income tax liabilities	(1,142		)	(1,248		)	—			(36		)	(2,426		)
Non-controlling interests¹	(1,749		)	(828		)	(88		)	—			(2,665		)
	(9,000		)	(6,481		)	(3,019		)	(456		)	(18,956		)
Net assets acquired	$	18,676		$	10,731		$	1,445		$	981		$	31,833

Consideration²	$	18,672		$	10,731		$	1,445		$	981		$	31,829


1.	Includes non-controlling interests recognized on business combinations measured as the proportionate share of fair value of the identifiable assets and liabilities on the date of acquisition.


2.	Total consideration, including amounts paid by non-controlling interests that participated in the acquisition as investors in Brookfield-sponsored private funds or as co-investors.

Brookfield recorded $7.6 billion of revenue and $635 million of net losses in 2019 from the acquired operations as a result of the acquisitions made during the year. If the acquisitions had occurred at the beginning of the year, they would have contributed $14.7 billion and $189 million to total revenue and net income, respectively. The difference in our net losses since acquisition date compared to net income had we held our investments since January 1 primarily relate to the timing of acquisitions during the year as those with large contributors to net income were purchased in late 2019. In addition, our post-acquisition margins were reduced from the step-up in inventory costs resulting from purchase price allocations as well as restructuring costs in certain of our acquisitions.

The following table summarizes the balance sheet impact as a result of significant business combinations that occurred in 2019. The valuations of the assets acquired are still under evaluation and as such the business combinations have been accounted for on a provisional basis.



	Private Equity									Infrastructure									Real Estate			Renewable Power
(MILLIONS)	Clarios			Healthscope			Genworth			East-West Pipeline			Genesee & Wyoming			NorthRiver			Aveo Group			Arcadia
Cash and cash equivalents	$	11		$	25		$	253		$	—		$	67		$	2		$	27		$	3
Accounts receivable and other	1,503			196			4,796			66			461			—			92			31
Assets classified as held for sale	—			—			—			—			1,584			—			—			—
Inventory	1,775			41			—			28			43			3			43			7
Equity accounted investments	838			9			—			—			48			—			—			—
Investment properties	—			—			—			—			—			—			3,458			—
Property, plant and equipment	3,582			2,590			10			2,134			5,283			1,198			95			759
Intangible assets	6,420			280			243			295			1,992			74			2			—
Goodwill	1,894			1,548			—			—			2,042			218			—			—
Deferred income tax assets	181			136			—			—			5			41			—			—
Total assets	16,204			4,825			5,302			2,523			11,525			1,536			3,717			800
Less:
Accounts payable and other	(1,998		)	(691		)	(1,954		)	(66		)	(2,071		)	(218		)	(2,368		)	(65		)
Non-recourse borrowings	—			—			(342		)	—			(1,567		)	—			(537		)	—
Deferred income tax liabilities	(967		)	(79		)	(49		)	—			(1,111		)	—			—			—
Non-controlling interests¹	(469		)	—			(1,279		)	(578		)	(250		)	—			(88		)	—
	(3,434		)	(770		)	(3,624		)	(644		)	(4,999		)	(218		)	(2,993		)	(65		)
Net assets acquired	$	12,770		$	4,055		$	1,678		$	1,879		$	6,526		$	1,318		$	724		$	735

Consideration²	$	12,770		$	4,055		$	1,674		$	1,879		$	6,526		$	1,318		$	724		$	735


1.	Includes non-controlling interests recognized on business combinations measured as the proportionate share of fair value of the identifiable assets and liabilities on the date of acquisition.


2.	Total consideration, including amounts paid by non-controlling interests that participated in the acquisition as investors in Brookfield-sponsored private funds or as co-investors.

Private Equity

On April 30, 2019, a subsidiary of the company, along with institutional partners, acquired a 100% interest in Clarios, a global automotive battery business, for total consideration of $12.8 billion. Total consideration paid was funded with $2.9 billion of cash on hand, with $9.9 billion funded through non-recourse borrowings raised concurrently on closing. The acquisition resulted in recognition of $1.9 billion of goodwill, which is largely reflective of potential to innovate and grow the business. Approximately $20 million of the goodwill recognized is deductible for tax purposes. Total revenues and net loss that would have been recorded if the transaction had occurred at the beginning of the year are $8.3 billion and $74 million, respectively.

On June 6, 2019, a subsidiary of the company, along with institutional partners, acquired a 100% interest in Healthscope Limited, an Australian private healthcare provider, for a total consideration of $4.1 billion. Total consideration paid was funded with $1.2 billion of cash on hand, with $2.9 billion funded through non-recourse borrowings raised concurrently on closing. The acquisition resulted in recognition of $1.5 billion of goodwill, which is largely reflective of potential growth from integration of the operations. None of the goodwill recognized is deductible for tax purposes. Total revenues and net loss that would have been recorded if the transaction had occurred at the beginning of the year are $1.6 billion and $81 million, respectively.

On December 12, 2019, a subsidiary of the company, along with institutional partners, acquired a 57% interest in Genworth, a Canadian mortgage insurance services business, for total consideration of $1.7 billion, which was funded with cash on hand. The acquisition generated a bargain purchase gain of $4 million. Total revenues and net loss that would have been recorded if the transaction had occurred at the beginning of the year are $677 million and $321 million, respectively.

Infrastructure

On March 22, 2019, a subsidiary of the company, along with institutional partners, acquired a 100% interest in East-West Pipeline Limited, an Indian natural gas pipeline business, for total consideration of $1.9 billion. Consideration paid was funded with $959 million of cash on hand and the remainder funded through non-recourse borrowings raised concurrently on closing. Total revenues and net loss that would have been recorded if the transaction had occurred at the beginning of the year are $359 million and $65 million, respectively.

On December 30, 2019, a subsidiary of the company, along with institutional partners, acquired a 100% interest in Genesee & Wyoming Inc., a short-haul rail operator in North America, for a total consideration of $6.5 billion. Consideration paid funded with $5.4 billion of cash on hand and the remainder funded through non-recourse borrowings raised concurrently on closing. The acquisition resulted in recognition of $2.0 billion of goodwill, which is largely reflective of potential growth prospects and strong market position. None of the goodwill recognized is deductible for tax purposes. Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $2.3 billion and $235 million, respectively.

On December 31, 2019, a subsidiary of the company, along with institutional partners, acquired a 100% interest in NorthRiver Midstream Inc., the federally regulated portion of Enbridge Inc.’s Canadian natural gas midstream business to be operated alongside the provincial assets acquired in 2018, for a total consideration of $1.3 billion. Consideration paid funded with $861 million of cash on hand and the remainder funded through non-recourse borrowings raised concurrently on closing. The acquisition resulted in recognition of $218 million of goodwill, which is largely reflective of potential growth prospects and strong market position. The goodwill recognized is deductible for tax purposes. Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $271 million and $121 million, respectively.

Real Estate

On November 29, 2019, a subsidiary of the company, along with institutional partners, acquired an 84% interest in Aveo Group, a real estate company that develops, owns and operates a portfolio of retirement homes in Australia, for total consideration of $724 million. Consideration paid funded with $658 million of cash on hand and the remainder funded through non-recourse borrowings raised concurrently on closing. Total revenues and net loss that would have been recorded if the transaction had occurred at the beginning of the year are $174 million and $4 million, respectively.

Renewable Power

On September 26, 2019, a subsidiary of the company acquired a 100% interest in Arcadia, a distributed generation portfolio of renewable energy facilities in the United States, for total consideration of $735 million funded by non-recourse borrowings raised concurrently on closing. Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $67 million and $22 million, respectively.

b) Completed During 2018

The following table summarizes the balance sheet impact as a result of business combinations that occurred in 2018. No material changes were made to those allocations disclosed in the 2018 consolidated financial statements:



(MILLIONS)	Real Estate			Infrastructure			Private Equity			Renewable Power and Other			Total
Cash and cash equivalents	$	1,056		$	71		$	658		$	388		$	2,173
Accounts receivable and other	2,247			511			2,267			623			5,648
Inventory	150			23			686			5			864
Equity accounted investments	12,379			15			329			29			12,752
Investment properties	33,024			—			—			—			33,024
Property, plant and equipment	1,748			2,945			4,913			2,970			12,576
Intangible assets	54			3,208			2,942			386			6,590
Goodwill	96			2,905			971			186			4,158
Deferred income tax assets	220			—			38			582			840
Total assets	50,974			9,678			12,804			5,169			78,625
Less:
Accounts payable and other	(2,177		)	(591		)	(3,654		)	(715		)	(7,137		)
Non-recourse borrowings	(18,218		)	(1,484		)	(3,668		)	(2,023		)	(25,393		)
Deferred income tax liabilities	(58		)	(839		)	(157		)	(210		)	(1,264		)
Non-controlling interests¹	(2,603		)	(544		)	(515		)	(22		)	(3,684		)
	(23,056		)	(3,458		)	(7,994		)	(2,970		)	(37,478		)
Net assets acquired	$	27,918		$	6,220		$	4,810		$	2,199		$	41,147

Consideration²	$	26,759		$	6,220		$	4,810		$	1,807		$	39,596


1.	Includes non-controlling interests recognized on business combinations measured as the proportionate share of fair value of the identifiable assets and liabilities on the date of acquisition.


2.	Total consideration, including amounts paid by non-controlling interests that participated in the acquisition as investors in Brookfield-sponsored private funds or as co-investors.

Brookfield recorded $5.1 billion of revenue and $711 million of net income in 2018 from the acquired operations as a result of the acquisitions made during the year. If the acquisitions had occurred at the beginning of the year, they would have contributed $12.6 billion and $1.8 billion to total revenue and net income, respectively.

The following table summarizes the balance sheet impact as a result of significant business combinations that occurred in 2018. No material changes were made to those allocations disclosed in the 2018 consolidated financial statements.



	Real Estate									Private Equity			Infrastructure									Renewable Power
(MILLIONS)	666 Fifth			GGP			Forest City			Westinghouse			NorthRiver			Enercare			Evoque			Saeta Yield
Cash and cash equivalents	$	—		$	424		$	451		$	250		$	10		$	24		$	—		$	187
Accounts receivable and other	11			592			960			1,854			55			187			3			216
Inventory	—			—			89			626			—			—			—			—
Equity accounted investments	—			10,829			1,467			7			—			—			—			14
Investment properties	1,292			17,991			9,397			—			—			—			—			—
Property, plant and equipment	—			56			—			931			1,442			669			440			2,724
Intangible assets	—			—			—			2,683			157			1,863			221			258
Goodwill	—			—			—			213			524			1,260			463			115
Deferred income tax assets	—			—			—			7			—			23			—			—
Total assets	1,303			29,892			12,364			6,571			2,188			4,026			1,127			3,514
Less:
Accounts payable and other	(4		)	(691		)	(1,119		)	(2,645		)	(46		)	(235		)	(24		)	(320		)
Non-recourse borrowings	—			(13,147		)	(3,664		)	(3		)	—			(877		)	—			(1,906		)
Deferred income tax liabilities	—			(11		)	—			(81		)	(186		)	(472		)	—			(174		)
Non-controlling interests¹	—			(1,882		)	(633		)	(7		)	—			—			—			—
	(4		)	(15,731		)	(5,416		)	(2,736		)	(232		)	(1,584		)	(24		)	(2,400		)
Net assets acquired	$	1,299		$	14,161		$	6,948		$	3,835		$	1,956		$	2,442		$	1,103		$	1,114

Consideration²	$	1,299		$	13,240		$	6,948		$	3,835		$	1,956		$	2,442		$	1,103		$	1,114


1.	Includes non-controlling interests recognized on business combinations measured as the proportionate share of fair value of the identifiable assets and liabilities on the date of acquisition.


2.	Total consideration, including amounts paid by non-controlling interests that participated in the acquisition as investors in Brookfield-sponsored private funds or as co-investors.

On June 12, 2018, a subsidiary of the company, along with institutional investors, acquired a 95% interest in Saeta Yield, S.A. (“Saeta Yield”) for total cash consideration of $1.1 billion, funded through an equity issuance at the subsidiary, amounts drawn on a non-recourse credit facility and available cash on hand. The acquisition resulted in $115 million of goodwill due to the recognition of a deferred tax liability because the tax bases of the net assets are lower than their acquisition date fair value. None of the goodwill recognized is deductible for income tax purposes. Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $407 million and $63 million, respectively.

On August 1, 2018, a subsidiary of the company, together with institutional investors, acquired a 100% interest in Westinghouse Electric Company (“Westinghouse”). Total consideration paid was $3.8 billion in cash, with $886 million provided by the subsidiary and its partners and the balance funded through asset level debt raised concurrently on closing. On acquisition, goodwill of $213 million was recognized, which represents future growth the subsidiary expects to receive from the integration of Westinghouse’s operations; this goodwill is not deductible for income tax purposes. Total revenues and net losses that would have been recorded if the transaction had occurred at the beginning of the year are $3.9 billion and $239 million, respectively.

On August 3, 2018, a subsidiary of the company, together with institutional investors, acquired a 100% leasehold interest in 666 Fifth Avenue, a commercial office asset in New York, for total consideration of $1.3 billion. Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $84 million and $85 million, respectively.

On August 28, 2018, a subsidiary of the company acquired all outstanding shares of GGP other than those shares already held by the subsidiary for total consideration of $13.2 billion, plus the payment of a pre-closing dividend of $9.05 billion. The pre-closing dividend was funded by financing activity and proceeds from the sales of partial interests in certain properties within GGP.


•	A new entity, Brookfield Property REIT (“BPR”), was formed to hold the GGP assets; BPR issued 161 million shares to GGP shareholders as consideration. BPR shares, which are structured to provide an economic return equivalent to that of BPY units, are presented as non-controlling interests within equity.

•

The acquisition was accounted for as a business combination achieved in stages. Our existing equity interest in GGP was remeasured to its fair value of $7.8 billion immediately prior to the completion of the transaction based on our interest in the fair value of GGP’s identifiable net assets and liabilities. As a result of this remeasurement, a loss of approximately $502 million was recognized in fair value changes.

•

Total consideration of $13.2 billion is made up of our existing equity investment of $7.8 billion, new equity, in the form of 88 million BPY LP units and 161 million BPR Class A shares, issued to GGP’s shareholders totaling $5.2 billion, cash consideration of $200 million and share-based payment awards to GGP employees with a fair value of $28 million. On acquisition, we recognized a bargain purchase gain of $921 million in fair value changes as the agreed upon transaction price and the fair value of the consideration transferred was less than the aggregate fair value of the assets acquired net of the liabilities assumed.


•	Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $1.8 billion and $1.1 billion, respectively.

On October 1, 2018, a subsidiary of the company, together with institutional investors, acquired a 100% interest in NorthRiver Midstream Inc. (“NorthRiver”), a western Canadian natural gas gathering and processing business, for total cash consideration of $2.0 billion. The acquisition was funded through cash on hand and asset level debt raised concurrently on closing. On acquisition, goodwill of $524 million was recognized, which represents the potential for obtaining long-term contracts for the business’ unutilized capacity and production growth in certain locations. None of the goodwill acquired is deductible for tax purposes. Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $246 million and $16 million, respectively.

On October 16, 2018, a subsidiary of the company, together with institutional investors, acquired a 100% interest in Enercare Inc. (“Enercare”), a North American residential energy infrastructure business, for total consideration of $2.4 billion. The acquisition was funded through $2.2 billion of cash with the remainder through equity issued to certain Enercare shareholders. On acquisition, goodwill of $1.3 billion was recognized, which represents potential growth prospects and a strong market position as a key provider of residential energy infrastructure in North America. None of the goodwill recognized is deductible for tax purposes. Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $949 million and $5 million, respectively.

On December 7, 2018, a subsidiary of the company, together with institutional investors, acquired a 100% interest in Forest City Realty Trust, Inc. (“Forest City”) for total cash consideration of $6.9 billion. The acquisition was funded through cash on hand and asset level debt raised concurrently on closing. The non-controlling interest acquired represents equity in partially owned and consolidated operations which are not attributable to Forest City. Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $1.1 billion and $381 million, respectively.

On December 31, 2018, a subsidiary of the company, together with institutional investors, acquired a 100% interest in Evoque Data Center Solutions (“Evoque”), AT&T’s large-scale data center business, for total cash consideration of $1.1 billion. The acquisition was funded through cash on hand and asset level debt raised concurrently on closing. On acquisition, goodwill of $463 million was recognized, which is largely reflective of potential customer growth, arising from the business’ position as one of the largest colocation providers in the United States and the increasing rate of worldwide data consumption. All of the goodwill is deductible for income tax purposes. Total revenues and net income that would have been recorded if the transaction had occurred at the beginning of the year are $321 million and $6 million, respectively.