EX-99.1 2 bbuq32020ex991.htm EX-99.1 Document



UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF

BROOKFIELD BUSINESS PARTNERS L.P.

As at September 30, 2020 and December 31, 2019 and for the
three and nine months ended September 30, 2020 and 2019




1

INDEX TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS OF BROOKFIELD BUSINESS PARTNERS L.P.

Unaudited Interim Condensed Consolidated Statements of Financial Position3 
Unaudited Interim Condensed Consolidated Statements of Operating Results4 
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income (Loss)5 
Unaudited Interim Condensed Consolidated Statements of Changes in Equity6 
Unaudited Interim Condensed Consolidated Statements of Cash Flow7 
Notes to Unaudited Interim Condensed Consolidated Financial Statements8 

2

BROOKFIELD BUSINESS PARTNERS L.P.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION


(US$ MILLIONS)NotesSeptember 30, 2020December 31, 2019
Current Assets   
Cash and cash equivalents4$2,815 $1,986 
Financial assets51,941 1,148 
Accounts and other receivable, net64,373 4,808 
Inventory, net73,471 3,490 
Other assets91,526 1,363 
 14,126 12,795 
Financial assets55,853 5,095 
Accounts and other receivable, net6710 823 
Other assets9391 429 
Property, plant and equipment1013,864 13,892 
Deferred income tax assets 717 667 
Intangible assets1110,681 11,559 
Equity accounted investments131,671 1,273 
Goodwill124,961 5,218 
$52,974 $51,751 
Liabilities and Equity   
Current Liabilities   
Accounts payable and other14$10,049 $9,881 
Corporate borrowings17150 — 
Non-recourse borrowings in subsidiaries of the partnership161,389 1,143 
 11,588 11,024 
Accounts payable and other147,066 6,615 
Non-recourse borrowings in subsidiaries of the partnership1621,852 21,256 
Corporate borrowings16538 — 
Deferred income tax liabilities 1,597 1,803 
 $42,641 $40,698 
Equity   
Limited partners19$1,725 $2,116 
Non-controlling interests attributable to:   
Redemption-Exchange Units, Preferred Shares and Special Limited Partnership Units held by Brookfield Asset Management Inc.191,361 1,676 
Interest of others in operating subsidiaries7,247 7,261 
 10,333 11,053 
 $52,974 $51,751 



The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
3

BROOKFIELD BUSINESS PARTNERS L.P.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF OPERATING RESULTS


  Three Months Ended
September 30,		Nine Months Ended
September 30,
(US$ MILLIONS, except per unit amounts)Notes2020201920202019
Revenues22, 23$10,070 $11,794 $27,586 $31,712 
Direct operating costs21(8,722)(10,389)(23,908)(28,358)
General and administrative expenses23(236)(215)(708)(604)
Depreciation and amortization expense23(547)(534)(1,618)(1,286)
Interest income (expense), net23(371)(389)(1,088)(886)
Equity accounted income (loss), net1317 32 26 62 
Impairment expense, net10(7)— (149)(324)
Gain (loss) on acquisitions/dispositions, net8— 16 179 536 
Other income (expenses), net(9)(83)(77)(354)
Income (loss) before income tax 195 232 243 498 
Income tax (expense) recovery  
Current (102)(108)(200)(231)
Deferred (8)58 157 80 
Net income (loss) $85 $182 $200 $347 
Attributable to:  
Limited partners $(10)$13 $(136)$100 
Non-controlling interests attributable to: 
Redemption-Exchange Units held by Brookfield Asset Management Inc. (9)11 (118)93 
Special Limited Partners19— — — — 
Interest of others in operating subsidiaries 104 158 454 154 
 $85 $182 $200 $347 
Basic and diluted earnings per limited partner unit19$(0.12)$0.16 $(1.69)$1.41 




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

4

BROOKFIELD BUSINESS PARTNERS L.P.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME (LOSS)


  Three Months Ended
September 30,		Nine Months Ended
September 30,
(US$ MILLIONS)Notes2020201920202019
Net income (loss) $85 $182 $200 $347 
Other comprehensive income (loss):   
Items that may be reclassified subsequently to profit or loss:   
Fair value through other comprehensive income$7 $— $149 $— 
Foreign currency translation 225 (408)(574)(308)
Net investment and cash flow hedges4(127)72 (120)(52)
Equity accounted investment135 — (4)— 
Taxes on the above items — 5 (55)11 
Reclassification to profit or loss28 (2)66 6 
 138 (333)(538)(343)
Items that will not be reclassified subsequently to profit or loss:
Revaluation of pension obligations— 12 — 27 
Fair value through other comprehensive income63 44 (19)54 
Taxes on the above item(9)(1)9 (2)
Total other comprehensive income (loss)192 (278)(548)(264)
Comprehensive income (loss) $277 $(96)$(348)$83 
Attributable to:   
Limited partners $24 $(29)$(201)$59 
Non-controlling interests attributable to: 
Redemption-Exchange Units held by Brookfield Asset Management Inc. 20 (26)(174)57 
Special Limited Partners— — — — 
Interest of others in operating subsidiaries 233 (41)27 (33)
 $277 $(96)$(348)$83 




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


5

BROOKFIELD BUSINESS PARTNERS L.P.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
     Non-Controlling Interests 
 Limited PartnersRedemption-Exchange Units held by
Brookfield Asset Management Inc.		Preferred
Shares		  
(US$ MILLIONS)CapitalRetained
earnings		Ownership
change
Accumulated
other
comprehensive
income (loss) (1)
Limited
partners		CapitalRetained
earnings		Ownership
change
Accumulated
other
comprehensive
income (loss) (1)
Redemption-
exchange
units		CapitalInterest of
others in
operating
subsidiaries		Total
equity
Balance as at January 1, 2020$2,331 $(217)$220 $(218)$2,116 $1,924 $(209)$210 $(264)$1,661 $15 $7,261 $11,053 
Net income (loss)— (136)— — (136)— (118)— — (118)— 454 200 
Other comprehensive income (loss)— — — (65)(65)— — — (56)(56)— (427)(548)
Total comprehensive income (loss)— (136)— (65)(201)— (118)— (56)(174)— 27 (348)
Contributions— — — — — — — — — — — 651 651 
Distributions (2)
— (15)— — (15)— (12)— — (12)— (1,051)(1,078)
Unit repurchases (2)
(26)— — — (26)— — — — — — — (26)
Ownership change (3)
— 1 (152)2 (149)— 1 (132)2 (129)— 129 (149)
Acquisition of interest (4)
— — — — — — — — — — — 230 230 
Balance as at September 30, 2020$2,305 $(367)$68 $(281)$1,725 $1,924 $(338)$78 $(318)$1,346 $15 $7,247 $10,333 
Balance as at January 1, 2019$1,766 $(237)$205 $(186)$1,548 $1,674 $(234)$195 $(235)$1,400 $15 $3,531 $6,494 
Net income (loss)— 100 — — 100 — 93 — — 93 — 154 347 
Other comprehensive income (loss)— — — (41)(41)— — — (36)(36)— (187)(264)
Total comprehensive income (loss)— 100 — (41)59 — 93 — (36)57 — (33)83 
Contributions— — — — — — — — — — — 132 132 
Distributions (2)
— (13)— — (13)— (12)— — (12)— (828)(853)
Unit repurchases (2)
(7)— — — (7)— — — — — — — (7)
Ownership change (3)
— — (8)— (8)— — (7)— (7)— (41)(56)
Acquisition of interest (4)
— — — — — — — — — — — 2,809 2,809 
Unit issuance (2)
572 — — — 572 250 — — — 250 — — 822 
Balance as at September 30, 2019$2,331 $(150)$197 $(227)$2,151 $1,924 $(153)$188 $(271)$1,688 $15 $5,570 $9,424 
____________________________________

(1)See Note 20 for additional information.
(2)See Note 19 for additional information on distributions and for additional information on unit repurchases.
(3)Includes gains or losses on changes in ownership interests of consolidated subsidiaries.
(4)See Note 3 for additional information.








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


BROOKFIELD BUSINESS PARTNERS L.P.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
  Nine Months Ended September 30,
(US$ MILLIONS)Notes20202019
Operating Activities   
Net income (loss) $200 $347 
Adjusted for the following items: 
Equity accounted earnings, net of distributions8 (22)
Impairment expense, net10149 324 
Depreciation and amortization expense 1,618 1,286 
Gain on acquisitions/dispositions, net8(179)(536)
Provisions and other items 230 174 
Deferred income tax expense (recovery) (157)(80)
Changes in non-cash working capital, net241,205 624 
Cash from operating activities 3,074 2,117 
Financing Activities   
Proceeds from non-recourse subsidiary borrowings 3,026 13,748 
Repayment of non-recourse subsidiary borrowings (3,169)(2,311)
Proceeds from corporate borrowings750 — 
Repayment of corporate borrowings(62)— 
Proceeds from other financing87 1,733 
Repayment of other financing(76)(21)
Proceeds from (repayment of) other credit facilities, net(482)315 
Lease liability repayment(172)(143)
Capital provided by limited partners and Redemption-Exchange Unitholders19— 822 
Capital provided by others who have interests in operating subsidiaries 629 2,475 
Capital paid to others who have interests in operating subsidiaries(36)(10)
Partnership units repurchased(26)(7)
Distributions to limited partners and Redemption-Exchange Unitholders(27)(25)
Distributions to others who have interests in operating subsidiaries19(800)(872)
Cash from (used in) financing activities (358)15,704 
Investing Activities   
Acquisitions   
Subsidiaries, net of cash acquired3149 (17,076)
Property, plant and equipment and intangible assets (1,066)(837)
Equity accounted investments13(446)(24)
Financial assets and other (1,584)(42)
Dispositions 
Subsidiaries, net of cash disposed 165 918 
Property, plant and equipment 33 58 
Equity accounted investments — 42 
Financial assets and other 1,141 223 
Net settlement of hedges 134 41 
Restricted cash and deposits (293)86 
Cash from (used in) investing activities (1,767)(16,611)
Cash   
Change during the period 949 1,210 
Impact of foreign exchange on cash (120)(40)
Net change in cash classified within assets held for sale— (101)
Balance, beginning of year 1,986 1,949 
Balance, end of period $2,815 $3,018 

Supplemental cash flow information is presented in Note 24
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
7
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 1.    NATURE AND DESCRIPTION OF THE PARTNERSHIP
Brookfield Business Partners L.P. and its subsidiaries, (collectively, “the partnership”) own and operate business services and industrial operations (“the Business”) on a global basis. Brookfield Business Partners L.P. was registered as a limited partnership established under the laws of Bermuda, and organized pursuant to a limited partnership agreement as amended on May 31, 2016, and as further amended on June 17, 2016. Brookfield Business Partners L.P. is a subsidiary of Brookfield Asset Management Inc. (“Brookfield Asset Management” or “Brookfield” or the “parent company”). Brookfield Business Partners L.P.’s limited partnership units are listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbols “BBU” and “BBU.UN”, respectively. The registered head office of Brookfield Business Partners L.P. is 73 Front Street, 5th Floor, Hamilton HM 12, Bermuda.
NOTE 2.    SIGNIFICANT ACCOUNTING POLICIES
(a)Basis of presentation
These unaudited interim condensed consolidated financial statements of the partnership have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, or IAS 34, as issued by the International Accounting Standards Board, or the IASB, and using the accounting policies the partnership applied in its annual consolidated financial statements as at and for the year ended December 31, 2019, except for the impact of the adoption of the new accounting policies and standards described below. The accounting policies the partnership applied in its annual consolidated financial statements as at and for the year ended December 31, 2019 are disclosed in Note 2 of such consolidated financial statements, with which reference should be made in reading these unaudited interim condensed consolidated financial statements. All defined terms are also described in the annual consolidated financial statements. The unaudited interim condensed consolidated financial statements are prepared on a going concern basis and have been presented in U.S. dollars rounded to the nearest million unless otherwise indicated.
The preparation of financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the accounting policies. The critical accounting estimates and judgments have been set out in Note 2 to the partnership’s consolidated financial statements as at and for the year ended December 31, 2019. There have been no significant changes to the method of determining significant estimates and judgments since December 31, 2019, other than changes as discussed below.
These unaudited interim condensed consolidated financial statements were approved by the partnership’s Board of Directors and authorized for issue on November 5, 2020.
(i)Critical accounting judgments and measurement 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.
In March 2020, the World Health Organization declared a global pandemic related to COVID-19. To date, there has been significant volatility in capital markets, commodity prices and foreign currencies, restrictions on the conduct of business in many jurisdictions, and the global movement of people and some goods has become restricted. The partnership considered the impacts of these circumstances on the key critical judgments, estimates and assumptions that affect the reported and contingent amount of assets, liabilities, revenues and expenses, including whether goodwill, intangible assets and property, plant and equipment needed to be reevaluated for impairment as of September 30, 2020. The partnership has a diversified portfolio of operating businesses, many of which provide essential products and services to their customers. Based on its assessments, no additional impairments were required as at September 30, 2020. The partnership will continue to monitor the situation and review its critical estimates and judgments as circumstances evolve.
8
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
(b)Government assistance
The partnership applied IAS 20, Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”) to account for government grants and other government assistance received by its subsidiaries. Government grants are recognized when there is reasonable assurance that the assistance will be received and the partnership will comply with all relevant conditions. The partnership recognizes government grants in the consolidated statements of operating results on a systematic basis over the periods in which the partnership recognizes expenses for which the grants were provided.
(c)Extinguishment of financial liabilities with equity instruments
The partnership applied IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments (“IFRIC 19”) to account for financial liabilities that are extinguished either fully, or partially by issuing equity instruments. This interpretation provides guidance on how to account for the extinguishment of a financial liability by the issue of equity instruments. IFRIC 19 clarifies that the entity’s equity instruments issued to a creditor, which are part of the consideration paid to extinguish the financial liability, are measured at their fair value. Differences between the carrying amount of the financial liability extinguished and the initial measurement amount of the equity instruments issued are included in the partnership’s consolidated statements of operating results.
(d)Impairment of financial assets
The partnership recognizes an allowance for expected credit losses (“ECL”) on financial assets including loans receivable and debt securities measured at amortized cost, debt securities measured at fair value through OCI and loan commitments. ECLs are also determined for trade receivables and contract assets. The ECL model consists of three stages: Stage 1 – twelve-month ECLs for performing financial assets, Stage 2 – Lifetime ECLs for financial assets that have experienced a significant increase in credit risk since initial recognition, and Stage 3 – Lifetime ECLs for financial assets that are impaired.
The partnership calculates ECLs based on the probability weighted expected cash collected shortfall against the carrying value of the loan or investment and considers reasonable and supportable information about past events, current conditions and forecasts of future events and economic conditions that may impact the credit profile of the loans. Forward-looking information is considered when determining significant increase in credit risk and measuring expected credit losses. Forward-looking macroeconomic factors are incorporated in the risk parameters as relevant.
The partnership utilizes a simplified approach for measuring the loss allowance at an amount equal to the lifetime ECL for trade receivables and contract assets. The ECL on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
(e)Interest income
Interest from interest-bearing assets and liabilities not measured at fair value through profit or loss is recognized as interest income using the effective interest method. The effective interest rate (EIR) is the rate that discounts expected future cash flows for the expected life of the financial instrument to its carrying value. The calculation takes into account the contractual interest rate, along with any fees or incremental costs that are directly attributable to the instrument and all other premiums or discounts.
(f)New accounting policies adopted
(i)Definition of material
In October 2018, the IASB issued amendments to IAS 1, Presentation of Financial Statements and IAS 8, Accounting policies, changes in accounting estimates and errors. These amendments clarify and align the definition of material and provide guidance to help improve consistency in the application of materiality when used in other IFRS standards. The partnership adopted these amendments on January 1, 2020 and the adoption did not have an impact on the partnership’s unaudited interim condensed consolidated financial statements.
9
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
(ii)Rent concessions
In May 2020, the IASB issued an amendment to IFRS 16, Leases (“IFRS 16”), effective for annual and interim reporting periods beginning on or after June 1, 2020. The amendment provides lessees with a practical expedient that relieves a lessee from assessing whether a COVID-19-related rent concession is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying IFRS 16 if the change were not a lease modification. The application of the practical expedient did not have a significant impact on the partnership’s financial results.
(g)Future changes in accounting policies
(i)Insurance contracts
In May 2017, the IASB published IFRS 17, Insurance contracts (“IFRS 17”) a comprehensive standard that establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts. In June 2019, the IASB published an exposure draft that proposes targeted amendments to IFRS 17 and will replace IFRS 4, Insurance contracts (“IFRS 4”). In March 2020, the IASB decided on a further deferral of the effective date of IFRS 17 from annual periods beginning on or after January 1, 2021 to annual periods beginning on or after January 1, 2023.
The measurement approach under IFRS 17 is based on the following:
•a current, unbiased probability-weighted estimate of future cash flows expected to arise as the insurer fulfills the contract;
•the effect of the time value of money;
•a risk adjustment that measures the effects of uncertainty about the amount and timing of future cash flows; and
•a contractual service margin which represents the unearned profit in a contract and that is recognized in profit or loss over time as the insurance coverage is provided.
There will also be a new financial statement presentation for insurance contracts and additional disclosure requirements.
IFRS 17 requires the partnership to distinguish between groups of contracts expected to be profit-making and groups of contracts expected to be onerous. IFRS 17 is to be applied retrospectively to each group of insurance contracts. If full retrospective application to a group of contracts is impracticable, the modified retrospective or fair value method may be used. The partnership is currently assessing the impact of IFRS 17 on its financial statements.
(ii)IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 amendments for IBOR reform
On August 27, 2020, the IASB published Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (“Phase II Amendments”), effective January 1, 2021, with early adoption permitted. The Phase II Amendments provide additional guidance to address issues that will arise during the transition of benchmark interest rates. The Phase II Amendments primarily relate to the modification of financial assets, financial liabilities and lease liabilities where the basis for determining the contractual cash flows changes as a result of IBOR reform, allowing for prospective application of the applicable benchmark interest rate and to the application of hedge accounting, providing an exception such that changes in the formal designation and documentation of hedge accounting relationships that are needed to reflect the changes required by IBOR reform do not result in the discontinuation of hedge accounting or the designation of new hedging relationships.
The partnership is currently assessing the impact as a result of the amendments to the contractual terms of IBOR referenced floating-rate borrowings, interest rate swaps, interest rate caps, and updating hedge designations. The partnership expects to have completed its assessment in advance of January 1, 2021. The adoption is not expected to have a significant impact on the partnership’s consolidated financial statements.
10
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 3.    ACQUISITION OF BUSINESSES
When determining the basis of accounting for the partnership’s investees, the partnership evaluates the degree of influence that the partnership exerts directly or through an arrangement over the investees’ relevant activities. Control is obtained when the partnership has power over the acquired entities and an ability to use its power to affect the returns of these entities.
The partnership accounts for business combinations using the acquisition method of accounting, pursuant to which the cost of acquiring a business is allocated to its identifiable tangible and intangible assets and liabilities on the basis of the estimated fair values at the date of acquisition.
(a)Acquisitions completed in the nine months ended September 30, 2020
Business services
IndoStar Capital Finance Limited (“IndoStar”)
On May 27, 2020, the partnership, together with institutional partners, acquired a 31% ownership interest in IndoStar, an Indian financing company focused on commercial vehicle lending and affordable home finance, for consideration of $162 million. The partnership did not receive voting rights with its initial investment and on June 30, 2020 classified the investment as a financial asset measured at fair value through profit and loss.
On July 8 and 9, 2020, the partnership, together with institutional partners, acquired an additional 26% interest in IndoStar through a Mandatory Tender Offer and a secondary offering, for $114 million and $19 million, respectively, for a total ownership interest of 57%. Upon completion of the additional investment, the partnership received 57% of the voting rights which provided the partnership with control over the business on July 9, 2020. Accordingly, the partnership has consolidated the business for financial reporting purposes. Total consideration for the acquisition, inclusive of the May 27, 2020 transaction was $105 million attributable to the partnership, representing a 20% economic interest. Total acquisition costs of $4 million were recorded as other expenses in the unaudited interim condensed consolidated statement of operating results.
The transaction was accounted for as a business combination achieved in stages. The partnership’s previously held investment in IndoStar was remeasured to fair value prior to the acquisition and no cumulative gain or loss arising from changes in the fair value of the investment was recognized.
The acquisition contributed $1,064 million of loans receivable, $78 million of cash and cash equivalents, $227 million of financial assets, intangibles of $20 million, net other assets of $37 million and non-recourse borrowings of $939 million. Goodwill of $24 million was recognized and represents the benefits the partnership expects to receive from the integration of the operations. Non-controlling interests of $406 million were recognized on business combination were measured at the proportionate share of the fair value of assets acquired and liabilities assumed. The initial fair values of acquired assets, liabilities and goodwill for the acquisitions have been determined on a preliminary basis at the end of the reporting period.
The partnership’s results from operations for the period ended September 30, 2020 includes revenues of $42 million and $1 million of net income attributable to the partnership from the acquisition. If the acquisition had been effective January 1, 2020, the partnership would have recorded revenues of $131 million for the period ended September 30, 2020 and a net loss of $9 million attributable to the partnership for the period ended September 30, 2020.
11
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
(b)Acquisitions completed in 2019
The following summarizes the consideration transferred, assets acquired and liabilities assumed at the applicable acquisition dates for significant acquisitions:
(US$ MILLIONS)
Business services (1)
Infrastructure servicesIndustrialsTotal
Cash$2,024 $7 $3,732 $5,763 
Non-cash consideration 15 1 — 16 
Total consideration (2)
$2,039 $8 $3,732 $5,779 
(US$ MILLIONS)
Cash and cash equivalents$319 $— $11 $330 
Accounts and other receivable, net289 2 1,129 1,420 
Inventory, net41 — 1,765 1,806 
Assets held for sale6 — — 6 
Equity accounted investments9 — 833 842 
Property, plant and equipment3,030 3 3,578 6,611 
Intangible assets542 7 6,550 7,099 
Goodwill (3)
1,575 7 1,750 3,332 
Deferred income tax assets138 — 14 152 
Financial assets4,735 — 27 4,762 
Other assets48 — 339 387 
Acquisition gain(4)— — (4)
Accounts payable and other(2,734)(1)(2,003)(4,738)
Borrowings(709)— — (709)
Deferred income tax liabilities(152)(2)(867)(1,021)
Net assets acquired before non-controlling interests7,133 16 13,126 20,275 
Non-controlling interests (4) (5)
(5,094)(8)(9,394)(14,496)
Net assets acquired$2,039 $8 $3,732 $5,779 
____________________________________
(1)The initial fair values of acquired assets, liabilities and goodwill for the acquisitions have been determined on a preliminary basis at the end of the reporting period. 
(2)Excludes consideration attributable to non-controlling interests, which represents the interest of others in operating subsidiaries.
(3)The finalization of purchase price allocations within the business services and industrials segments resulted in adjustments to the preliminary fair values, including intangible assets, deferred income tax assets, deferred income tax liabilities, equity accounted investments and consideration paid. The offsetting adjustment to goodwill resulted in an increase of $3 million within the business services segment and a decrease of $144 million within the industrials segment. Adjustments to a purchase price allocation within the infrastructure services segment resulted in a decrease to goodwill of $5 million.
(4)Non-controlling interests recognized on business combination were measured at fair value for business services, industrials and infrastructure services.
(5)Non-controlling interests recognized on business combination were measured at the proportionate share of fair value of the assets acquired and liabilities assumed for mortgage insurance services in the business services segment.
12
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
Business services
Sagen MI Canada Inc. (“Sagen”)
On December 12, 2019, together with institutional partners, the partnership acquired Sagen, a Canadian based mortgage insurance company, formerly known as Genworth. The partnership’s economic interest prior to syndication to institutional partners was 31% and was acquired for consideration of $854 million. The partnership has a 57% voting interest in this business, which provides the partnership with control. Accordingly, the partnership consolidates this business for financial reporting purposes.
On acquisition, a bargain purchase gain of $4 million was recognized. Intangible assets of $243 million were acquired, primarily comprised of the value of insurance contracts in force as at the date of acquisition.
The partnership’s results from operations for the year ended December 31, 2019 includes $10 million of revenue and $9 million of net income attributable to the partnership from the acquisition. If this acquisition had been effective January 1, 2019, the partnership would have recorded revenue of $207 million and net income of $98 million attributable to the partnership for the year ended December 31, 2019.
Healthscope Limited (“Healthscope”)
On June 6, 2019, together with institutional partners, the partnership acquired Healthscope, an Australian based healthcare provider that operates private hospitals and provides pathology services. The partnership’s economic interest prior to syndication to institutional partners was 28% and was acquired for consideration of $1,156 million. The partnership has a 100% voting interest in this business, which provides the partnership with control. Accordingly, the partnership consolidates this business for financial reporting purposes.
Acquisition costs of approximately $22 million were recorded as other expense on the consolidated statements of operating results. Goodwill of $1,551 million was acquired, which represents the growth the partnership expects to experience from the integration of the operations. The goodwill recognized is not deductible for income tax purposes. Intangible assets of $286 million were acquired, primarily comprised of customer contracts.
The partnership’s results from operations for the year ended December 31, 2019 includes $297 million of revenue and $7 million of net loss attributable to the partnership from the acquisition. If this acquisition had been effective January 1, 2019, the partnership would have recorded revenue of $453 million and net loss of $23 million attributable to the partnership for the year ended December 31, 2019.
Ouro Verde Locação e Seviços S.A. (“Ouro Verde”)
On July 8, 2019, the partnership, together with institutional partners, acquired Ouro Verde, a Brazilian heavy equipment and light fleet vehicle management company. The partnership’s economic interest prior to syndication to institutional partners was 38% and was acquired for total consideration of $16 million. The partnership has a 100% voting interest in this business, which provides the partnership with control. Accordingly, the partnership consolidates this business for financial reporting purposes.
Others
On August 20, 2019, the partnership, through its road fuel storage and distribution business, completed an acquisition for consideration of $12 million, acquiring the remaining ownership interests in a terminal storage operator in which it previously had an equity interest. The partnership has a 100% voting interest in this business, which provides the partnership with control. Accordingly, the partnership consolidates this business for financial reporting purposes.
Industrials
Clarios Global LP (“Clarios”)
On April 30, 2019, together with institutional partners, the partnership acquired Clarios (formerly known as the “Power Solutions Business of Johnson Controls International plc”), a global producer and distributor of automotive batteries. The partnership’s economic interest prior to syndication to institutional partners was 29% and was acquired for consideration of $3,732 million. The partnership has a 100% voting interest in this business, which provides the partnership with control. Accordingly, the partnership consolidates this business for financial reporting purposes.
13
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
Acquisition costs of approximately $41 million were recorded as other expense on the consolidated statements of operating results. Goodwill of $1,750 million was acquired, which is largely reflective of the potential to innovate and grow the business. $20 million of the goodwill recognized is deductible for income tax purposes. Intangible assets of $6,550 million were acquired, primarily comprised of customer relationships, patented technology, and trademarks.
The partnership’s results from operations for the year ended December 31, 2019 includes $1,668 million of revenue and $89 million of net loss attributable to the partnership from the acquisition. If this acquisition had been effective January 1, 2019, the partnership would have recorded revenue of $2,414 million and net loss of $21 million attributable to the partnership for the year ended December 31, 2019.
NOTE 4.    FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair values are determined by reference to quoted bid or ask prices, as appropriate. Where bid and ask prices are unavailable, the closing price of the most recent transaction of that instrument is used. In the absence of an active market, fair values are determined based on prevailing market rates such as bid and ask prices, as appropriate for instruments with similar characteristics and risk profiles, or internal or external valuation models, such as option pricing models and discounted cash flow analysis, using observable market inputs.
Fair values determined using valuation models require the use of assumptions concerning the amount and timing of estimated future cash flows and discount rates. In determining those assumptions, the partnership looks primarily to external readily observable market inputs such as interest rate yield curves, currency rates, price and rate volatility as applicable. Financial instruments classified as fair value through profit or loss (FVTPL) or fair value through other comprehensive income (FVOCI) are measured at fair value in the unaudited interim condensed consolidated statements of financial position, and changes in fair values are recognized in profit or loss or other comprehensive income, respectively.
The following table provides the details of financial instruments and their associated classifications as at September 30, 2020:
(US$ MILLIONS)
MEASUREMENT BASISFVTPLFVOCIAmortized CostTotal
Financial assets    
Cash and cash equivalents$— $— $2,815 $2,815 
Accounts and other receivable, net (current and non-current)— — 5,083 5,083 
Other assets (current and non-current) (1)
— — 516 516 
Financial assets (current and non-current) (2)
678 5,133 1,983 7,794 
Total$678 $5,133 $10,397 $16,208 
Financial liabilities    
Accounts payable and other (current and non-current) (3)
$417 $350 $8,807 $9,574 
Borrowings (current and non-current)— — 23,929 23,929 
Total$417 $350 $32,736 $33,503 
____________________________________
(1)Excludes prepayments, subrogation recoverable and other assets of $1,401 million.
(2)Refer to Hedging Activities in Note 4(a) below.
(3)Excludes provisions, decommissioning liabilities, deferred revenue, unearned premium reserve, work in progress, post-employment benefits, liabilities held for sale and various taxes and duties of $7,541 million.
Included in cash and cash equivalents as at September 30, 2020 is $2,283 million of cash (December 31, 2019: $1,570 million) and $532 million of cash equivalents (December 31, 2019: $416 million).
14
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
The fair value of all financial assets and liabilities as at September 30, 2020 were consistent with carrying value, with the exception of the borrowings at Altera Infrastructure L.P. (“Altera”) measured at amortized cost, where fair value determined using Level 1 and Level 2 inputs resulted in a fair value of $2,830 million (December 31, 2019: $2,787 million) versus a carrying value of $2,839 million (December 31, 2019: $2,767 million).
Included in financial assets as at September 30, 2020 is $705 million (December 31, 2019: $264 million) of equity instruments designated as measured at fair value through other comprehensive income. The remaining balance of instruments designated as measured at fair value through other comprehensive income relates primarily to corporate and government bonds.
The following table provides the allocation of financial instruments and their associated classifications as at December 31, 2019:
(US$ MILLIONS)
MEASUREMENT BASISFVTPLFVOCIAmortized CostTotal
Financial assets    
Cash and cash equivalents$— $— $1,986 $1,986 
Accounts and other receivable, net (current and non-current)— — 5,631 5,631 
Other assets (current and non-current) (1)
— — 577 577 
Financial assets (current and non-current) (2)
883 4,612 748 6,243 
Total$883 $4,612 $8,942 $14,437 
Financial liabilities    
Accounts payable and other (3) (4)
$385 $159 $9,039 $9,583 
Borrowings (current and non-current)— — 22,399 22,399 
Total$385 $159 $31,438 $31,982 
____________________________________
(1)Excludes prepayments, subrogation recoverable and other assets of $1,215 million.
(2)Refer to Hedging Activities in Note 4(a) below.
(3)Total financial assets include $3,832 million of assets pledged as collateral.
(4)Excludes provisions, decommissioning liabilities, deferred revenue, unearned premium reserve, work in progress, post-employment benefits, liabilities held for sale and various taxes and duties of $6,913 million.
(a)Hedging activities

Net investment hedges
The partnership uses foreign exchange contracts and foreign currency denominated debt instruments to manage foreign currency exposures arising from net investments in foreign operations. For the three and nine months ended September 30, 2020, pre-tax net loss of $110 million and net gain $159 million (September 30, 2019: pre-tax net loss of $152 million and $77 million) was recorded in other comprehensive income for the effective portion of hedges of net investments in foreign operations. As at September 30, 2020, there was a derivative asset balance of $81 million (December 31, 2019: $13 million) and derivative liability balance of $6 million (December 31, 2019: $35 million) relating to derivative contracts designated as net investment hedges.
Cash flow hedges
The partnership uses commodity swap contracts to hedge the sale price of its gas contracts, purchase price of decant oil, lead, polypropylene, tin, foreign exchange contracts and option contracts to hedge highly probable future transactions, and interest rate contracts to hedge the cash flows on its floating rate borrowings. A number of these contracts are designated as cash flow hedges. For the three and nine months ended September 30, 2020, pre-tax net loss of $17 million and $279 million (September 30, 2019: pre-tax net loss of $80 million and $129 million) was recorded in other comprehensive income for the effective portion of cash flow hedges. As at September 30, 2020, there was a derivative asset balance of $29 million (December 31, 2019: $22 million) and derivative liability balance of $344 million (December 31, 2019: $123 million) relating to the derivative contracts designated as cash flow hedges.
15
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
Other derivative instruments are measured at fair value, with changes in fair value recognized in the consolidated statements of operating results.
Fair value hierarchical levels - financial instruments
Level 3 assets and liabilities measured at fair value on a recurring basis include $206 million (December 31, 2019: $287 million) of financial assets and $15 million (December 31, 2019: $36 million) of financial liabilities, which are measured at fair value using valuation inputs based on management’s best estimates of what market participants would use in pricing the asset or liability at the measurement date.
There were no transfers between levels during the three and nine months ended September 30, 2020. The following table categorizes financial assets and liabilities, which are carried at fair value, based upon the level of input as at September 30, 2020 and December 31, 2019:
 September 30, 2020December 31, 2019
(US$ MILLIONS)Level 1Level 2Level 3Level 1Level 2Level 3
Financial assets      
Common shares$385 $— $— $255 $— $— 
Corporate and government bonds— 3,891 — — 3,914 — 
Derivative assets16 221 — 4 234 — 
Other financial assets (1)
613 479 206 401 400 287 
Total$1,014 $4,591 $206 $660 $4,548 $287 
Financial liabilities      
Derivative liabilities$6 $747 $— $18 $489 $— 
Other financial liabilities— — 15 — — 36 
Total$6 $747 $15 $18 $489 $36 
____________________________________
(1)Other financial assets include secured debentures to homebuilding companies, asset-backed securities and preferred shares in our business services segment. Level 1 other financial assets are primarily preferred shares. Level 2 other financial assets are primarily asset-backed securities and Level 3 financial assets are primarily secured debentures to homebuilding companies.
The following table presents the change in the balance of financial assets and financial liabilities classified as Level 3 as at September 30, 2020 and December 31, 2019:
(US$ MILLIONS)September 30, 2020December 31, 2019
Balance at beginning of year$251 $230 
Fair value change recorded in net income(64)8 
Fair value change recorded in other comprehensive income(12)— 
Net additions (disposals)16 13 
Balance at end of period$191 $251 

(b)Offsetting of financial assets and liabilities
Financial assets and liabilities are offset with the net amount reported in the unaudited interim condensed consolidated statements of financial position where the partnership currently has a legally enforceable right to offset and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. As at September 30, 2020, $30 million, of financial assets (December 31, 2019: $1 million) and $46 million, of financial liabilities (December 31, 2019: $3 million) were offset in the unaudited interim condensed consolidated statements of financial position.
16
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 5.    FINANCIAL ASSETS
(US$ MILLIONS)September 30, 2020December 31, 2019
Current  
Marketable securities$876 $734 
Restricted cash438 172 
Derivative contracts139 176 
Loans and notes receivable, net209 66 
Other financial assets (1)
279 — 
Total current$1,941 $1,148 
Non-current  
Marketable securities$3,400 $3,435 
Restricted cash265 201 
Derivative contracts98 62 
Loans and notes receivable991 309 
Other financial assets (1)
1,099 1,088 
Total non-current$5,853 $5,095 
____________________________________
(1)Other financial assets include secured debentures to homebuilding companies, asset-backed securities and preferred shares in our business services segment.    
NOTE 6.    ACCOUNTS AND OTHER RECEIVABLES, NET
(US$ MILLIONS)September 30, 2020December 31, 2019
Current, net$4,373 $4,808 
Non-current, net
Accounts receivable80 40 
Retainer on customer contract132 102 
Billing rights498 681 
Total non-current, net$710 $823 
Total$5,083 $5,631 
Billing rights, which represent unbilled rights arising at BRK Ambiental from revenue earned from the construction of public concession contracts, are classified as financial assets and are recognized when there is an unconditional right to receive cash or other financial assets from the concession authority for the construction services.
The partnership’s construction services business has a retention balance which comprises amounts that have been earned but held back until certain conditions specified in the contract are satisfied.
17
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 7.    INVENTORY, NET
(US$ MILLIONS)September 30, 2020December 31, 2019
Raw materials and consumables (1)
$1,430 $941 
Fuel products (2)
527 688 
Work in progress653 674 
RTFO certificates (3)
287 342 
Finished goods and other (4)
574 845 
Carrying amount of inventories$3,471 $3,490 
____________________________________
(1)Raw materials and consumables are mainly composed of raw materials in the industrials segment.
(2)Fuel products are traded in active markets and are purchased with a view to resell in the near future. As a result, stocks of fuel products are recorded at fair value based on quoted market prices.
(3)Renewable Transport Fuel Obligations (“RTFO”) certificates held for trading as at September 30, 2020 have a fair value of $23 million (December 31, 2019: $66 million). There is no externally quoted marketplace for the valuation of RTFO certificates. In order to value these contracts, the partnership has adopted a pricing methodology combining both observable inputs based on market data and assumptions developed internally based on observable market activity.
(4)Finished goods and other are mainly composed of finished goods inventory in the infrastructure services and industrials segments.
NOTE 8.    DISPOSITIONS
For the three month period ended September 30, 2020, the partnership recognized a net gain on dispositions of $nil (September 30, 2019: gain of $16 million). For the nine month period ended September 30, 2020, the partnership recognized a net gain on dispositions of $179 million (September 30, 2019: gain of $536 million).
The gain recognized in the nine month period ended September 30, 2020 is primarily related to the partnership’s sale of its cold storage logistics business for gross proceeds of approximately $255 million, resulting in a $186 million pre-tax gain recognized by the partnership.
The gain recognized in the nine month period ended September 30, 2019 is primarily related to the partnership’s sale of its facilities management business and executive relocation business resulting in pre-tax gains of $341 million and $180 million, respectively.
NOTE 9.    OTHER ASSETS
(US$ MILLIONS)September 30, 2020December 31, 2019
Current
Work in progress (1)
$453 $505 
Prepayments and other assets667 719 
Assets held for sale406 139 
Total current$1,526 $1,363 
Non-current
Work in progress (1)
$63 $72 
Prepayments and other assets328 357 
Total non-current$391 $429 
____________________________________
(1)See Note 15 for additional information.
On August 4, 2020, Healthscope entered into an agreement to sell its New Zealand pathology business for approximately $360 million. The sale is subject to customary closing approvals and protocols. As at September 30, 2020 the pathology business has been classified as held for sale.
18
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 10.    PROPERTY, PLANT AND EQUIPMENT
(US$ MILLIONS)September 30, 2020December 31, 2019
Gross carrying amount  
Beginning balance$16,502 $8,415 
Additions (1)
1,445 1,529 
Dispositions(313)(772)
Acquisitions through business combinations (2)
23 6,577 
Assets reclassified as held for sale (3)
(87)(332)
Changes in accounting policy— 978 
Foreign currency translation(116)107 
Ending balance$17,454 $16,502 
Accumulated depreciation and impairment  
Beginning balance$(2,610)$(1,468)
Depreciation/depletion/impairment expense (4)
(1,211)(1,407)
Dispositions169 263 
Assets reclassified as held for sale (3)
22 62 
Foreign currency translation40 (60)
Ending balance$(3,590)$(2,610)
Net book value (5)
$13,864 $13,892 
____________________________________
(1)Includes assets acquired in a common control transaction. See Note 17 for additional information.
(2)See Note 3 for additional information.
(3)Includes assets that were reclassified as held for sale and subsequently disposed.
(4)Includes an impairment expense of $144 million for the nine months ended September 30, 2020 resulting from write-downs of certain vessels within Altera due to changes in underlying assumptions such as the impact of contract modifications, changes in lay-up cost estimates, expected values on the sale of vessels, revenue forecasts, and vessel re-contracting.
(5)Includes right-of-use assets of $1,285 million as at September 30, 2020 and $1,266 million as at December 31, 2019.
19
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 11.    INTANGIBLE ASSETS
(US$ MILLIONS)September 30, 2020December 31, 2019
Gross carrying amount  
Beginning balance$12,504 $6,001 
Additions (1)
166 231 
Dispositions(71)(32)
Acquisitions through business combinations (2)
164 6,816 
Assets reclassified as held for sale (3)
(97)(436)
Foreign currency translation(601)(76)
Ending balance$12,065 $12,504 
Accumulated amortization and impairment  
Beginning balance$(945)$(478)
Amortization/impairment expense(582)(582)
Dispositions69 22 
Assets reclassified as held for sale (3)
17 97 
Foreign currency translation57 (4)
Ending balance$(1,384)$(945)
Net book value$10,681 $11,559 
____________________________________
(1)Includes assets acquired in a common control transaction. See Note 17 for additional information.
(2)See Note 3 for additional information.
(3)Includes assets that were reclassified as held for sale and subsequently disposed.
NOTE 12.    GOODWILL
(US$ MILLIONS)September 30, 2020December 31, 2019
Balance at beginning of period$5,218 $2,411 
Acquisitions through business combinations (1)
(113)3,444 
Impairment losses— (418)
Dispositions— (21)
Assets reclassified as held for sale (2)
(215)(212)
Foreign currency translation71 14 
Balance at end of period$4,961 $5,218 
____________________________________
(1)See Note 3 for additional information.
(2)Includes assets that were reclassified as held for sale and subsequently disposed.
20
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 13.    EQUITY ACCOUNTED INVESTMENTS
(US$ MILLIONS)September 30, 2020December 31, 2019
Balance at beginning of year$1,273 $541 
Acquisitions through business combinations (1)
(5)847 
Additions446 25 
Dispositions (2)
— (162)
Share of net income26 114 
Share of other comprehensive income (loss)(4)— 
Distributions received(34)(62)
Foreign currency translation(31)(30)
Balance at end of period$1,671 $1,273 
____________________________________
(1)See Note 3 for additional information.
(2)Includes derecognition of an equity accounted investment within Greenergy that was consolidated in 2019.
On January 31, 2020, the partnership completed the acquisition of a 17% economic interest in Brand Industrial Holdings Inc. (“BrandSafway”) for consideration of $445 million. The partnership has joint control over BrandSafway and has accounted for its investment as an equity accounted investment.
21
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 14.    ACCOUNTS PAYABLE AND OTHER
(US$ MILLIONS)September 30, 2020December 31, 2019
Current  
Accounts payable$2,958 $2,919 
Accrued and other liabilities (1) (2)
3,951 3,978 
Lease liability214 224 
Financial liabilities416 327 
Unearned premiums reserve (3)
483 482 
Work in progress (4)
1,441 1,415 
Provisions and decommissioning liabilities510 442 
Liabilities held for sale76 94 
Total current$10,049 $9,881 
Non-current  
Accounts payable$126 $116 
Accrued and other liabilities (2)
1,128 1,110 
Lease liability1,171 1,109 
Financial liabilities2,287 2,048 
Unearned premiums reserve (3)
1,194 1,143 
Work in progress (4)
33 60 
Provisions and decommissioning liabilities1,127 1,029 
Total non-current$7,066 $6,615 
____________________________________
(1)Includes bank overdrafts of $402 million as at September 30, 2020 (December 31, 2019: $921 million).
(2)Includes post-employment benefits of $881 million ($11 million current and $870 million non-current) as at September 30, 2020 and $835 million ($18 million current and $817 million non-current) as at December 31, 2019.
(3)See Note 25 for additional information.
(4)See Note 15 for additional information.
As part of the acquisition of Healthscope in 2019, the partnership received approximately $1.7 billion as proceeds for the sale and leaseback of 22 wholly owned freehold hospital properties. The partnership did not relinquish control of these hospital properties and the hospital properties were not derecognized from property, plant, and equipment. The proceeds received were recognized as a financial liability. The liability is drawn down as payments are made to the lender.
NOTE 15.    CONTRACTS IN PROGRESS
(US$ MILLIONS)September 30, 2020December 31, 2019
Contract costs incurred to date$25,170 $23,041 
Profit recognized to date (less recognized losses)1,605 1,843 
26,775 24,884 
Less: progress billings(27,733)(25,782)
Contract work in progress (liability)$(958)$(898)
Comprising:  
Amounts due from customers - work in progress$516 $577 
Amounts due to customers - creditors (1,474)(1,475)
Net work in progress$(958)$(898)
22
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 16.    BORROWINGS
(a)Corporate borrowings
The partnership has bilateral credit facilities of $1,575 million backed by large global banks. The credit facilities are available in Euros, Sterling, Australian, U.S. and Canadian dollars. Advances under the credit facilities bear interest at the specified LIBOR, EURIBOR, CDOR, BBSY or bankers’ acceptance rate plus 2.50%, or the specified base rate or prime rate plus 1.50%. The credit facilities require the partnership to maintain a minimum tangible net worth and deconsolidated debt to capitalization ratio at the corporate level.
During the third quarter of 2020, the partnership increased the total available amount on the credit facilities by $500 million to $2,075 million. The additional $500 million has been guaranteed by Brookfield and provides the partnership with additional liquidity to take advantage of acquisitive opportunities.
As at September 30, 2020, $538 million was drawn on the bilateral credit facilities and the additional $500 million facility guaranteed by Brookfield remains undrawn.
The partnership has a revolving acquisition credit facility with Brookfield that permits borrowings of up to $500 million. The credit facility is guaranteed by the partnership, and each direct wholly-owned (in terms of outstanding common equity) subsidiary of the partnership or the Holding LP, that is not otherwise a borrower. The credit facility is available in U.S. or Canadian dollars, and advances are made by way of LIBOR, base rate, bankers’ acceptance rate or prime rate loans. The credit facility bears interest at the specified LIBOR or bankers’ acceptance rate plus 3.45%, or the specified base rate or prime rate plus 2.45%. The credit facility requires the partnership to maintain a minimum deconsolidated net worth and contains restrictions on the ability of the borrowers and the guarantors to, among other things, incur liens, engage in certain mergers and consolidations or enter into speculative hedging arrangements. Net proceeds above a specified threshold that are received by the borrowers from asset dispositions, debt incurrences or equity issuances by the borrowers or their subsidiaries must be used to pay down the credit facility (which can then be redrawn to fund future investments). As at September 30, 2020, the credit facility remains undrawn.
The partnership is currently in compliance with or has obtained waivers related to all material covenant requirements, and the partnership continues to monitor performance against such covenant requirements.
(b)Non-recourse subsidiary borrowings of the partnership
Total non-recourse subsidiary borrowings of the partnership as at September 30, 2020 were $23,241 million (December 31, 2019: $22,399 million).
Some of the partnership’s businesses have credit facilities in which they borrow and repay on a monthly basis. This movement has been shown on a net basis in the partnership’s unaudited interim condensed consolidated statements of cash flow.
The partnership has credit facilities within its operating businesses with major financial institutions. The credit facilities are primarily composed of revolving term credit facilities and revolving operating facilities with variable interest rates. In certain cases, the facilities may have financial covenants which are generally in the form of interest coverage ratios and leverage ratios.
The partnership’s operations are currently in compliance with or have obtained waivers related to all material covenant requirements, and the partnership continues to work with its businesses to monitor performance against such covenant requirements.
NOTE 17.    RELATED PARTY TRANSACTIONS
In the normal course of operations, the partnership entered into the transactions below with related parties at exchange value. These transactions have been measured at fair value and are recognized in the unaudited interim condensed consolidated financial statements.
23
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
(a)Transactions with the parent company
As at September 30, 2020, $nil was drawn on the revolving acquisition credit facility with Brookfield (December 31, 2019: $nil). The partnership has in place a Deposit Agreement with Brookfield whereby it may place funds on deposit with Brookfield and whereby Brookfield may place funds on deposit with the partnership. The deposit balance is due on demand and bears interest at LIBOR plus 1.50%. As at September 30, 2020, the amount of the deposit from Brookfield was $150 million (December 31, 2019: $4 million on deposit with Brookfield). For the three and nine months ended September 30, 2020, the partnership paid interest expense of $1 million and $2 million (September 30, 2019: the partnership earned interest income of $4 million and $8 million) on these deposits.
The partnership pays Brookfield a quarterly base management fee. For purposes of calculating the base management fee, the total capitalization of Brookfield Business Partners L.P. is equal to the quarterly volume-weighted average trading price of a unit on the principal stock exchange for the partnership units (based on trading volumes) multiplied by the number of units outstanding at the end of the quarter (assuming full conversion of the redemption-exchange units into units of Brookfield Business Partners L.P.), plus the value of securities of the other service recipients that are not held by the partnership, plus all outstanding third party debt with recourse to a service recipient, less all cash held by such entities. The base management fee for the three and nine months ended September 30, 2020 was $15 million and $47 million (September 30, 2019: $16 million and $40 million).
In its capacity as the holder of the special limited partnership units (“Special LP units”) of Holding LP, Brookfield is entitled to incentive distribution rights. The incentive distribution for the three and nine months ended September 30, 2020 was $nil and $nil (September 30, 2019: $nil and $nil).
In addition, at the time of spin-off, the partnership entered into indemnity agreements with Brookfield related to certain contracts that were in place prior to the spin-off. Under these indemnity agreements, Brookfield has agreed to indemnify the partnership for the receipt of payments relating to such contracts.
On February 5, 2020, the partnership entered into a voting agreement with a Brookfield subsidiary who had the power to direct the relevant activities of Cardone. The partnership consolidated Cardone commencing February 5, 2020. This transaction was accounted for as a common control transaction where the partnership recognized Cardone’s assets and liabilities at their carrying values. The assets, liabilities, and deficit in shareholder’s equity recognized on February 5, 2020 were $609 million, $957 million, and $348 million, respectively. The liabilities included $224 million of loans between Cardone and the partnership which eliminated upon consolidation. The partnership did not pay any consideration nor incur any expenses related to this transaction.
(b)Subsidiary recapitalization
On May 13, 2020, as part of a debt restructuring agreement, former debtholders of Cardone agreed to participate in an equity rights offering, in exchange for extinguishment of their existing debt to Cardone. As part of this debt restructuring agreement Cardone received capital commitments of up to $180 million from some of its former debtholders. To date, the partnership has funded a portion of the $95 million it expects to contribute upon completion of the restructuring, subject to certain covenants and liquidity requirements. As a result of the recapitalization transaction, the partnership recorded a net gain of $244 million within other income (expense) in the consolidated statements of operating results.
(c)Other
The following tables summarize other transactions and balances the partnership has entered into with related parties:
 Three Months EndedNine Months Ended
(US$ MILLIONS)September 30, 2020September 30, 2019September 30, 2020September 30, 2019
Transactions during the period  
Business services revenues (1)
$168 $145 $432 $339 
____________________________________
(1) Within our business services segment, the partnership provides construction services to affiliates of Brookfield.
24
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
(US$ MILLIONS)September 30, 2020December 31, 2019
Balances at end of period  
Financial assets$— $174 
Accounts and other receivable, net$97 $36 
Accounts payable and other$247 $210 
NOTE 18.    DERIVATIVE FINANCIAL INSTRUMENTS
The partnership’s activities expose it to a variety of financial risks, including market risk, currency risk, interest rate risk, commodity risk and other price risks. The partnership and its subsidiaries selectively use derivative financial instruments principally to manage these risks.
The aggregate fair values of the partnership’s derivative financial instruments positions are as follows:
September 30, 2020December 31, 2019
(US$ MILLIONS)Financial AssetFinancial LiabilityFinancial AssetFinancial Liability
Foreign exchange contracts$144 $69 $59 $96 
Cross currency swaps— 9 1 7 
Interest rate derivatives71 593 52 274 
Equity derivatives — 37 2 — 
Commodities contracts22 45 124 130 
Total$237 $753 $238 $507 
Total current$139 $292 $176 $213 
Total non-current$98 $461 $62 $294 
NOTE 19.    EQUITY
For the three and nine months ended September 30, 2020, the partnership distributed dividends to limited partner, general partner and redemption-exchange unitholders of $9 million and $27 million, respectively, or approximately $0.0625 per partnership unit (September 30, 2019: $9 million and $25 million, respectively). For the three and nine months ended September 30, 2020, the partnership distributed to others who have interests in the operating subsidiaries $312 million and $1,051 million, respectively, (September 30, 2019: $45 million and $828 million, respectively) primarily resulting from the distributions of proceeds on the sale of our cold storage logistics business, a GrafTech distribution in kind and distributions received from Sagen and Westinghouse Electric Company (“Westinghouse”).
During the nine month period ended September 30, 2020, the partnership repurchased and canceled 977,426 limited partnership units (September 30, 2019: 202,143).
(a)Earnings per limited partner unit
Net loss attributable to limited partnership unitholders for the three and nine months ended September 30, 2020 was $10 million and $136 million (September 30, 2019: net income of $13 million and $100 million). The weighted average number of limited partnership units was 80.3 million and 80.5 million for the three and nine months ended September 30, 2020 (September 30, 2019: 80.7 million and 70.9 million).
(b)Incentive distribution to Special LP units
In its capacity as the holder of the Special LP units of Holding LP, Brookfield is entitled to incentive distribution rights which are based on a 20% increase in the unit price of the partnership over an initial threshold based on the volume-weighted average price of the units, subject to a high water mark. During the three months ended September 30, 2020, the volume weighted average price per unit was $29.89, which was below the previous incentive distribution threshold of $41.96 per unit, resulting in an incentive distribution of $nil and $nil for the three and nine months ended September 30, 2020 (September 30, 2019: $nil and $nil).
25
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
(c)General and limited partnership units
UNITSGeneral Partner UnitsLimited Partnership UnitsTotal
Balance as at January 1, 2020480,890,65580,890,659
Repurchased and canceled— (977,426)(977,426)
Balance as at September 30, 2020479,913,22979,913,233

(d)Redemption-exchange units held by Brookfield
UNITSRedemption-Exchange Units held by Brookfield
Balance as at January 1, 202069,705,497
Repurchased and canceled— 
Balance as at September 30, 202069,705,497
NOTE 20.    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(a)Attributable to Limited Partners
(US$ MILLIONS)Foreign currency
translation		FVOCI
Other (1)
Accumulated other
comprehensive
income (loss)
Balance as at January 1, 2020$(169)$11 $(60)$(218)
Other comprehensive income (loss)(93)19 9 (65)
Ownership change— 2 — 2 
Balance as at September 30, 2020$(262)$32 $(51)$(281)
____________________________________
(1)Represents net investment hedges, cash flow hedges and other reserves.
(US$ MILLIONS)Foreign currency
translation		FVOCI
Other (1)
Accumulated other
comprehensive
income (loss)
Balance as at January 1, 2019$(182)$9 $(13)$(186)
Other comprehensive income (loss)(47)7 (1)(41)
Balance as at September 30, 2019$(229)$16 $(14)$(227)
____________________________________
(1)Represents net investment hedges, cash flow hedges and other reserves.
26
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
(b)Attributable to non-controlling interests — Redemption-Exchange Units held by Brookfield Asset Management Inc.
(US$ MILLIONS)Foreign currency
translation		FVOCI
Other (1)
Accumulated other
comprehensive
income (loss)
Balance as at January 1, 2020$(221)$9 $(52)$(264)
Other comprehensive income (loss)(81)16 9 (56)
Ownership changes— 2 — 2 
Balance as at September 30, 2020$(302)$27 $(43)$(318)
____________________________________
(1)Represents net investment hedges, cash flow hedges and other reserves.
(US$ MILLIONS)Foreign currency
translation		FVOCI
Other (1)
Accumulated other
comprehensive
income (loss)
Balance as at January 1, 2019$(232)$7 $(10)$(235)
Other comprehensive income (loss)(41)6 (1)(36)
Balance as at September 30, 2019$(273)$13 $(11)$(271)
____________________________________
(1)Represents net investment hedges, cash flow hedges and other reserves.
NOTE 21.    DIRECT OPERATING COSTS
The partnership has no key employees or directors and does not remunerate key management personnel. Key decision makers of the partnership are all employees of the ultimate parent company or its subsidiaries, which provides management services under the master services agreement with Brookfield.
Direct operating costs include all attributable expenses except interest, depreciation and amortization, impairment expense, other expenses, and taxes and primarily relate to cost of sales and compensation at the subsidiary level. The following table lists direct operating costs for the three and nine months ended September 30, 2020, and September 30, 2019 by nature:
Three Months EndedNine Months Ended
(US$ MILLIONS)September 30, 2020September 30, 2019September 30, 2020September 30, 2019
Cost of sales$7,497 $9,169 $20,417 $25,205 
Compensation1,217 1,199 3,464 3,091 
Property taxes, sales taxes and other8 21 27 62 
Total$8,722 $10,389 $23,908 $28,358 
Inventories recognized as cost of sales during the three and nine month period ended September 30, 2020 amounted to $5,575 million and $15,215 million (September 30, 2019: $6,469 million and $17,221 million).
27
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS 

As at September 30, 2020 and December 31, 2019 and for the three and nine months ended
September 30, 2020 and 2019
NOTE 22.    REVENUES
(a)Revenue by type
The table below summarizes the partnership’s segment revenue by type of revenue for the three and nine months ended September 30, 2020:
Three Months Ended September 30, 2020
(US$ MILLIONS)Business servicesInfrastructure servicesIndustrialsCorporate
and other		Total
Revenue by type
Revenue from contracts with customers$5,864 $924 $2,887 $— $9,675 
Other revenue260 134 1 — 395 
Total revenue$6,124 $1,058 $2,888 $— $10,070 
Nine Months Ended September 30, 2020
(US$ MILLIONS)Business servicesInfrastructure servicesIndustrialsCorporate
and other		Total
Revenue by type
Revenue from contracts with customers$16,040 $2,894 $7,528 $— $26,462 
Other revenue666 454 4 — 1,124 
Total revenue$16,706 $3,348 $7,532 $— $27,586 
The table below summarizes the partnership’s segment revenue by type of revenue for the three and nine months ended September 30, 2019:
Three Months Ended September 30, 2019
(US$ MILLIONS)Business servicesInfrastructure servicesIndustrialsCorporate
and other		Total
Revenue by type
Revenue from contracts with customers$7,399 $984