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FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2022
Financial Instruments [Abstract]  
FINANCIAL INSTRUMENTS FINANCIAL INSTRUMENTS
a)Derivatives and hedging activities
The partnership and its operating entities use derivative and non-derivative instruments to manage financial risks, including interest rate, commodity, equity price and foreign exchange risks. The use of derivative contracts is governed by documented risk management policies and approved limits. The partnership does not use derivatives for speculative purposes. The partnership and its operating entities use the following derivative instruments to manage these risks:
•foreign currency forward contracts to hedge exposures to Canadian Dollar, Australian Dollar, British Pound, Euro, Chinese Yuan, Brazilian Real, Indian Rupee and South Korean Won denominated net investments in foreign subsidiaries and foreign currency denominated financial assets;
•interest rate swaps to manage interest rate risk associated with planned refinancings and existing variable rate debt;
•interest rate caps to hedge interest rate risk on certain variable rate debt; and
•cross-currency swaps to manage interest rate and foreign currency exchange rates on existing variable rate debt.

There have been no material changes to the partnership’s financial risk exposure or risk management activities since December 31, 2021. Please refer to Note 32, Financial Instruments in the December 31, 2021 annual report on Form 20-F for a detailed description of the partnership’s financial risk exposure and risk management activities.

Interest Rate Hedging
The following table provides the partnership’s outstanding derivatives that are designated as cash flow hedges of variability in interest rates associated with forecasted fixed rate financings and existing variable rate debt as of June 30, 2022 and December 31, 2021:
(US$ Millions)Hedging itemNotionalRatesMaturity datesFair value
Jun. 30, 2022Interest rate caps of US$ LIBOR debt$6,764 
2.5% - 4.9%
Jul. 2022 - May. 2024$14 
Interest rate swaps of US$ LIBOR debt130 
1.4%
Dec. 20221 
Interest rate caps of US$ SOFR debt373 
 3.8%
Aug. 20222 
Interest rate caps of £ SONIA debt2,352 
1.0% - 2.5%
Jan. 2023 - Mar. 202513 
Interest rate caps of € EURIBOR debt94 
1.3%
Apr. 2023— 
Interest rate caps of C$ LIBOR debt186 
2.0%
Oct. 2022— 
Interest rate swaps of A$ BBSW/BBSY debt401 
0.8% - 1.6%
Apr. 2023 - Apr. 202414 
Dec. 31, 2021Interest rate caps of US$ LIBOR debt$9,590 
2.5% - 5.0%
Jan. 2022 - Jun. 2024$— 
Interest rate swaps of US$ LIBOR debt2,130 
1.0% -2.6%
Nov. 2022 - Feb. 2024(50)
Interest rate caps of £ LIBOR debt2,301 
1.0% - 2.5%
Jan. 2022 - Dec. 2023— 
Interest rate caps of £ SONIA debt974 
2.0%
Oct. 2022 - Mar. 20255 
Interest rate caps of € EURIBOR debt102 
1.3%
Apr. 2022— 
Interest rate caps of C$ LIBOR debt240 
 2.0%
Oct. 2022— 
Interest rate swaps of A$ BBSW/BBSY debt422 
0.8% - 1.6%
Apr. 2023 - Apr. 2024— 

For the three and six months ended June 30, 2022, the amount of hedge ineffectiveness recorded in earnings in connection with the partnership’s interest rate hedging activities was nil and nil (2021 - nil and nil).
Foreign Currency Hedging
The following table provides the partnership’s outstanding derivatives that are designated as net investments of foreign subsidiaries or foreign currency cash flow hedges as of June 30, 2022 and December 31, 2021:
(US$ Millions)Hedging itemNotionalRatesMaturity datesFair value
Jun. 30, 2022Net investment hedges€389 
€0.89/$ - €0.96/$
Jul. 2022 - Sep. 2024$(3)
Net investment hedges£3,604 
£0.71/$ - £0.89/$
Aug. 2022 - Jul. 2023(14)
Net investment hedgesA$349 
A$1.38/$ - A$1.46/$
Jul. 2022 - Mar. 2023(1)
Net investment hedgesC¥4,765 
C¥6.59/$ - C¥6.99/$
Sep. 2022 - Mar. 2025(7)
Net investment hedgesC$196 
C$1.26/$ - C$1.31/$
Mar. 2023 - Feb. 2025(1)
Net investment hedgesR$764 
R$5.29/$ - R$7.00/$
Sep. 2022 - Oct. 2022(67)
Net investment hedges₩911,637 
₩1,232.00/$ - ₩1,287.00/$
Sep. 2022 - Jun. 2023(1)
Net investment hedgesRs72,878 
Rs77.47/$ - Rs87.13/$
Jul. 2022 - Jul. 2024(2)
Net investment hedges£374 
£0.86/€
Jul. 2023— 
Cross currency swaps of C$ LIBOR debtC$2,500 
C$1.25/$ - C$1.38/$
Jul. 2023 - Jan. 202729 
Dec. 31, 2021Net investment hedges€389 
€0.81/$ - €0.88/$
Jul. 2022 - Sep. 2024$(2)
Net investment hedges£4,395 
£0.71/$ - £0.76/$
Jun. 2022 - Mar. 2023(89)
Net investment hedgesA$974 
A$1.35/$ - A$1.41/$
Mar. 2022 - Mar. 2023(14)
Net investment hedgesC¥1,596 
C¥6.68/$ - C¥6.99/$
Jun. 2022 - Jun. 2023(7)
Net investment hedgesC$185 C$1.26/$ - C$1.31/$Mar. 2023 - Mar. 2024(2)
Net investment hedgesR$2,546 
R$5.87/$ - R$6.54/$
Sep. 2022 - Oct. 2022(5)
Net investment hedges₩720,095 
₩1,165.75/$ ₩1,197.60/$
Jun. 2022 - Jun. 20234 
Net investment hedgesRs75,690 
Rs76.35/$ - Rs87.13/$
Jan. 2022 - Jul. 2024(27)
Net investment hedges£90 
£0.91/$
Apr. 2022 - Apr. 20229 
Cross currency swaps of C$ LIBOR debtC$2,500 
C$1.25/$ - C$1.38/$
Jul. 2023 - Jan. 202756 

For the three and six months ended June 30, 2022 and 2021, the amount of hedge ineffectiveness recorded in earnings in connection with the partnership’s foreign currency hedging activities was not significant.

Other Derivatives
The following table presents details of the partnership’s other derivatives, not designated as hedges for accounting purposes, that have been entered into to manage financial risks as of June 30, 2022 and December 31, 2021:
(US$ Millions)
Derivative type
Notional

Rates
Maturity
dates
Fair value
Jun. 30, 2022Interest rate caps$4,420 
2.0% - 7.9%
Aug. 2022 - Oct. 2023$4 
Interest rate swaps on forecasted fixed rate debt335 
3.6% - 5.3%
Jun. 2023 - Jun. 2033(38)
Dec. 31, 2021Interest rate caps$5,388 
2.0% - 7.9%
Jan. 2022 - Feb. 2027$— 
Interest rate swaps on forecasted fixed rate debt1,285 
3.2% - 6.4%
Jun. 2022 - Jun. 2033(253)
Interest rate swaps of US$ debt1,696 
0.8% - 5.1%
Nov. 2022 - Mar. 2024(8)

For the three and six months ended June 30, 2022, the partnership recognized fair value gains, net of nil and nil (2021 - losses of $3 million and $3 million), related to the settlement of certain forward starting interest rate swaps that have not been designated as hedges.
b)Measurement and classification of financial instruments

Classification and Measurement
The following table outlines the classification and measurement basis, and related fair value for disclosures, of the financial assets and liabilities in the interim condensed consolidated financial statements:
Jun. 30, 2022Dec. 31, 2021
(US$ Millions)Classification and measurement basisCarrying valueFair valueCarrying valueFair value
Financial assets
Loans and notes receivableAmortized cost$453 $453 $225 $225 
Other non-current assets
Securities - FVTPLFVTPL2,067 2,067 2,200 2,200 
Derivative assetsFVTPL81 81 111 111 
Securities - FVTOCIFVTOCI68 68 108 108 
Restricted cashAmortized cost327 327 356 356 
Current assets
Securities - FVTOCIFVTOCI43 43 — — 
Derivative assetsFVTPL143 143 33 33 
Accounts receivable(1)
Amortized cost1,007 1,007 1,128 1,128 
Restricted cashAmortized cost640 640 331 331 
Cash and cash equivalentsAmortized cost2,175 2,175 2,576 2,576 
Total financial assets$7,004 $7,004 $7,068 $7,068 
Financial liabilities
Debt obligations(2)
Amortized cost$50,534 $49,759 $55,327 $55,474 
Capital securitiesAmortized cost2,275 2,275 2,226 2,226 
Capital securities - fund subsidiariesFVTPL922 922 859 859 
Other non-current liabilities
Loan payableFVTPL3 3 — — 
Accounts payableAmortized cost522 522 500 500 
Derivative liabilitiesFVTPL92 92 277 277 
Accounts payable and other liabilities
Accounts payable and other(3)
Amortized cost3,374 3,374 2,097 2,097 
Loans and notes payableAmortized cost333 333 899 899 
Derivative liabilitiesFVTPL173 173 221 221 
Total financial liabilities$58,228 $57,453 $62,406 $62,553 
(1)Includes other receivables associated with assets classified as held for sale on the condensed consolidated balance sheet in the amount of $489 million and $276 million as of June 30, 2022 and December 31, 2021, respectively.
(2)Includes debt obligations associated with assets classified as held for sale on the condensed consolidated balance sheet in the amount of $1 million and $3,006 million as of June 30, 2022 and December 31, 2021, respectively.
(3)Includes accounts payable and other liabilities associated with assets classified as held for sale on the condensed consolidated balance sheet in the amount of $956 million and $76 million as of June 30, 2022 and December 31, 2021, respectively.

Fair Value Hierarchy
Fair value is defined as 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 (i.e., an exit price). Fair value measurement establishes a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Quoted market prices (unadjusted) in active markets represent a Level 1 valuation. When quoted market prices in active markets are not available, the partnership maximizes the use of observable inputs within valuation models. When all significant inputs are observable, either directly or indirectly, the valuation is classified as Level 2. Valuations that require the significant use of unobservable inputs are considered Level 3, which reflect the partnership’s market assumptions and are noted below. This hierarchy requires the use of observable market data when available.
The following table outlines financial assets and liabilities measured at fair value in the consolidated financial statements and the level of the inputs used to determine those fair values in the context of the hierarchy as defined above:
Jun. 30, 2022Dec. 31, 2021
 (US$ Millions)  Level 1Level 2Level 3 Total  Level 1Level 2Level 3 Total
Financial assets
Securities - FVTPL$10 $218 $1,882 $2,110 $17 $218 $1,965 $2,200 
Securities - FVTOCI43 — 25 68 13 — 95 108 
Derivative assets— 213 11 224 — 144 — 144 
Total financial assets$53 $431 $1,918 $2,402 $30 $362 $2,060 $2,452 
Financial liabilities
Capital securities - fund subsidiaries$— $— $922 $922 $— $— $859 $859 
Derivative liabilities— 265 — 265 — 498 — 498 
Total financial liabilities$— $265 $922 $1,187 $— $498 $859 $1,357 

For the year ended December 31, 2021, the partnership transferred its preferred shares in an operating company from Level 3 to Level 1, as the operating company underwent an initial public offering. The carrying value of the investment at June 30, 2022 is $10 million (December 31, 2021 - $17 million).

The following table presents the change in the balance of financial assets and financial liabilities accounted for at fair value categorized as Level 3 as of June 30, 2022 and December 31, 2021:
Jun. 30, 2022Dec. 31, 2021

(US$ Millions)
Financial
assets
Financial
liabilities
Financial
assets
Financial
liabilities
Balance, beginning of period$2,060 $859 $1,682 $863 
Acquisitions61 — 553 — 
Dispositions(178)— (88)— 
Fair value gains, net and OCI(25)74 366 2 
Other— (11)(453)(6)
Balance, end of period$1,918 $922 $2,060 $859