Brookfield Business Partners (NYSE: BBUC, BBU; TSX: BBUC, BBU.UN)
announced today financial results for the quarter ended
September 30, 2023.
“We had a strong third quarter and are pleased
with our results,” said Cyrus Madon, CEO of Brookfield Business
Partners. “We generated record quarterly Adjusted EBITDA and
reached an agreement to sell an interest in Everise, our technology
services operation, at a valuation of 3.5x our original investment.
Our focus is on progressing initiatives to support our growth,
including the sale of Westinghouse which we expect to close
imminently.”
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
US$ millions (except per unit
amounts), unaudited |
|
2023 |
|
|
20225 |
|
|
|
2023 |
|
|
20225 |
Net income (loss) attributable to unitholders1 |
$ |
(44 |
) |
$ |
(41 |
) |
|
$ |
(18 |
) |
$ |
112 |
Net income (loss) per limited
partnership unit2 |
$ |
(0.20 |
) |
$ |
(0.18 |
) |
|
$ |
(0.08 |
) |
$ |
0.54 |
|
|
|
|
|
|
Adjusted EBITDA3 |
$ |
655 |
|
$ |
611 |
|
|
$ |
1,883 |
|
$ |
1,627 |
Net loss attributable to unitholders for the
three months ended September 30, 2023 was $44 million ($0.20
loss per limited partnership unit) compared to net loss of $41
million ($0.18 loss per limited partnership unit) in the prior
period.
Adjusted EBITDA for the three months ended
September 30, 2023 was $655 million compared to $611 million
in the prior period, reflecting increased contribution from our
Business Services and Infrastructure Services segments.
Operational Update
The following table presents Adjusted EBITDA by
segment:
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
US$ millions, unaudited |
|
2023 |
|
|
20225 |
|
|
|
2023 |
|
|
20225 |
|
Business Services |
$ |
238 |
|
$ |
213 |
|
|
$ |
673 |
|
$ |
460 |
|
Infrastructure Services |
|
228 |
|
|
205 |
|
|
|
669 |
|
|
618 |
|
Industrials |
|
218 |
|
|
228 |
|
|
|
633 |
|
|
649 |
|
Corporate and Other |
|
(29 |
) |
|
(35 |
) |
|
|
(92 |
) |
|
(100 |
) |
Adjusted EBITDA |
$ |
655 |
|
$ |
611 |
|
|
$ |
1,883 |
|
$ |
1,627 |
|
Our Business Services segment
generated Adjusted EBITDA of $238 million for the three months
ended September 30, 2023, compared to $213 million for the
same period in 2022. Results benefited from increased contribution
from our residential mortgage insurer and our dealer software and
technology services operation. Current period results included
contribution from our rental car services operation which we
acquired in October 2022.
Our Infrastructure Services
segment generated Adjusted EBITDA of $228 million for the three
months ended September 30, 2023, compared to $205 million
during the same period in 2022. Increased contribution from modular
building leasing services and improved performance at work access
services was partially offset by the impact of reduced ownership at
our lottery services operation.
Our Industrials segment
generated Adjusted EBITDA of $218 million for the three months
ended September 30, 2023, compared to $228 million during the
same period in 2022. Strong performance at our advanced energy
storage operation was offset by reduced contribution from graphite
electrode operations and our Western Canadian energy related
operations.
The following table presents Adjusted EFO4 by
segment:
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
US$ millions, unaudited |
|
2023 |
|
|
20225 |
|
|
|
2023 |
|
|
20225 |
|
Adjusted EFO |
|
|
|
|
|
Business Services |
$ |
123 |
|
$ |
136 |
|
|
$ |
455 |
|
$ |
334 |
|
Infrastructure Services |
|
106 |
|
|
102 |
|
|
|
280 |
|
|
365 |
|
Industrials |
|
152 |
|
|
131 |
|
|
|
377 |
|
|
354 |
|
Corporate and Other |
|
(93 |
) |
|
(46 |
) |
|
|
(258 |
) |
|
(111 |
) |
Adjusted EFO for the three months ended
September 30, 2023 reflected increased contribution from our
Industrials and Infrastructure Services segments offset by the
impact of higher current tax in our Business Services segment and
higher interest expense. Adjusted EFO in the current period
included $70 million of net gains primarily related to the sale of
the majority of our automotive aftermarket parts remanufacturing
operation and public securities.
Strategic Initiatives
- Technology Services
OperationIn October 2023 we reached an agreement to sell a
portion of our interest in our technology services operation at a
valuation of approximately 3.5x what we paid for the business just
over two years ago. Our share of proceeds from the sale is expected
to be approximately $120 million, representing an approximate 2x
realized multiple on our investment and we will continue to hold a
17% ownership interest in the business. The transaction is expected
to close in the first quarter of 2024.
- Unit Repurchase ProgramFor the three months
ended September 30, 2023 we repurchased 54,264 of Brookfield
Business Partners L.P. units under our normal course issuer bid
(NCIB).
Liquidity
We ended the quarter with approximately $1.4
billion of liquidity at the corporate level including $133 million
of cash and liquid securities and $1.3 billion of availability on
our term credit facilities.
Distribution
The Board of Directors has declared a quarterly
distribution in the amount of $0.0625 per unit, payable on
December 29, 2023 to unitholders of record as at the close of
business on November 30, 2023.
Additional Information
The Board has reviewed and approved this news
release, including the summarized unaudited consolidated financial
statements contained herein.
Brookfield Business Partners’ Letter to
Unitholders and the Supplemental Information are available on our
website https://bbu.brookfield.com under Reports & Filings.
Notes:
- Attributable to
limited partnership unitholders, general partnership unitholders,
redemption-exchange unitholders, special limited partnership
unitholders and BBUC exchangeable shareholders.
- Net income (loss)
per limited partnership unit calculated as net income (loss)
attributable to limited partners divided by the average number of
limited partnership units outstanding for the three and nine months
ended September 30, 2023 which were 74.6 million and 74.6
million, respectively (September 30, 2022: 74.6 million and
75.5 million, respectively).
- Adjusted EBITDA is
a non-IFRS measure of operating performance presented as net income
and equity accounted income at the partnership’s economic ownership
interest in consolidated subsidiaries and equity accounted
investments, respectively, excluding the impact of interest income
(expense), net, income taxes, depreciation and amortization
expense, gains (losses) on acquisitions/dispositions, net,
transaction costs, restructuring charges, revaluation gains or
losses, impairment expenses or reversals, other income or expenses,
and preferred equity distributions. The partnership’s economic
ownership interest in consolidated subsidiaries and equity
accounted investments excludes amounts attributable to
non-controlling interests consistent with how the partnership
determines net income attributable to non-controlling interests in
its unaudited interim condensed consolidated statements of
operating results. The partnership believes that Adjusted EBITDA
provides a comprehensive understanding of the ability of its
businesses to generate recurring earnings which allows users to
better understand and evaluate the underlying financial performance
of the partnership’s operations and excludes items that the
partnership believes do not directly relate to revenue earning
activities and are not normal, recurring items necessary for
business operations. Please refer to the reconciliation of net
income (loss) to Adjusted EBITDA included elsewhere in this
release.
- Adjusted EFO is the
partnership’s segment measure of profit or loss and is presented as
net income and equity accounted income at the partnership’s
economic ownership interest in consolidated subsidiaries and equity
accounted investments, respectively, excluding the impact of
depreciation and amortization expense, deferred income taxes,
transaction costs, restructuring charges, unrealized revaluation
gains or losses, impairment expenses or reversals and other income
or expense items that are not directly related to revenue
generating activities. The partnership’s economic ownership
interest in consolidated subsidiaries excludes amounts attributable
to non-controlling interests consistent with how the partnership
determines net income attributable to non-controlling interests in
its unaudited interim condensed consolidated statements of
operating results. In order to provide additional insight regarding
the partnership’s operating performance over the lifecycle of an
investment, Adjusted EFO includes the impact of preferred equity
distributions and realized disposition gains or losses recorded in
net income, other comprehensive income, or directly in equity, such
as ownership changes. Adjusted EFO does not include legal and other
provisions that may occur from time to time in the partnership’s
operations and that are one-time or non-recurring and not directly
tied to the partnership’s operations, such as those for litigation
or contingencies. Adjusted EFO includes expected credit losses and
bad debt allowances recorded in the normal course of the
partnership’s operations. Adjusted EFO allows the partnership to
evaluate its segments on the basis of return on invested capital
generated by its operations and allows the partnership to evaluate
the performance of its segments on a levered basis.
- On January 1, 2023,
our residential mortgage insurer adopted a new accounting standard,
IFRS 17. Our comparative period information has been adjusted to
present the results of our residential mortgage insurer measured in
accordance with IFRS 17. The new IFRS 17 accounting standard has no
impact on the fundamental economics or cash flows of the business.
Total earnings recognized over the duration of an insurance
contract are unchanged, however the timing of revenues and earnings
is impacted by the new IFRS 17 measurement model. Compared to the
previous accounting standard, the recognition of revenue in
accordance with IFRS 17 has more sensitivity to changes in
macroeconomic variables and will generally be slower except in
periods of rapidly increasing home prices. Losses on claims will be
largely unchanged with the adoption of IFRS 17, but loss ratios
will be higher during periods of slower revenue recognition in
accordance with IFRS 17.
Brookfield Business Partners is
a global business services and industrials company focused on
owning and operating high-quality businesses that provide essential
products and services and benefit from a strong competitive
position. Investors have flexibility to invest in our company
either through Brookfield Business Corporation (NYSE, TSX: BBUC), a
corporation, or Brookfield Business Partners L.P. (NYSE: BBU; TSX:
BBU.UN), a limited partnership. For more information, please visit
https://bbu.brookfield.com.
Brookfield Business Partners is the flagship
listed vehicle of Brookfield Asset Management’s Private Equity
Group. Brookfield Asset Management is a leading global alternative
asset manager with over $850 billion of assets under
management.
Please note that Brookfield Business Partners’
previous audited annual and unaudited quarterly reports have been
filed on SEDAR and EDGAR, and are available at
https://bbu.brookfield.com under Reports & Filings. Hard copies
of the annual and quarterly reports can be obtained free of charge
upon request.
For more information, please contact:
Media:Marie FullerTel: +44 207 408 8375Email:
marie.fuller@brookfield.com |
Investors:Alan FlemingTel: +1 (416) 645-2736Email:
alan.fleming@brookfield.com |
Conference Call and Quarterly Earnings Webcast
Details
Investors, analysts and other interested parties
can access Brookfield Business Partners’ third quarter 2023 results
as well as the Letter to Unitholders and Supplemental Information
on our website https://bbu.brookfield.com under Reports &
Filings.
The results call can be accessed via webcast on
November 3, 2023 at 9:30 a.m. Eastern Time at BBU2023Q3Webcast or
participants can preregister at BBU2023Q3ConferenceCall. Upon
registering, participants will be emailed a dial-in number, direct
passcode, and unique PIN. A replay of the webcast will be available
at https://bbu.brookfield.com.
Brookfield Business Partners
L.P. Consolidated Statements of Financial
Position
|
As at |
US$
millions, unaudited |
September 30, 2023 |
|
December 31, 20221 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,963 |
|
|
$ |
2,870 |
Financial assets |
|
|
12,809 |
|
|
|
12,908 |
Accounts and other receivable,
net |
|
|
7,318 |
|
|
|
7,278 |
Inventory and other
assets |
|
|
7,330 |
|
|
|
7,559 |
Property, plant and
equipment |
|
|
16,266 |
|
|
|
15,893 |
Deferred income tax
assets |
|
|
1,420 |
|
|
|
1,245 |
Intangible assets |
|
|
22,846 |
|
|
|
23,953 |
Equity accounted
investments |
|
|
2,219 |
|
|
|
2,065 |
Goodwill |
|
|
15,151 |
|
|
|
15,479 |
Total Assets |
|
$ |
88,322 |
|
|
$ |
89,250 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
Liabilities |
|
|
|
|
|
Corporate borrowings |
|
$ |
2,020 |
|
|
$ |
2,100 |
Accounts payable and
other |
|
|
20,598 |
|
|
|
20,430 |
Non-recourse borrowings in
subsidiaries of Brookfield Business Partners |
|
|
43,893 |
|
|
|
44,593 |
Deferred income tax
liabilities |
|
|
3,356 |
|
|
|
3,698 |
|
|
|
|
|
|
Equity |
|
|
|
|
|
Limited partners |
|
|
$ |
1,397 |
|
|
|
$ |
1,408 |
Non-controlling interests
attributable to: |
|
|
|
|
|
Redemption-exchange units |
|
|
1,306 |
|
|
|
1,318 |
Special limited partner |
|
|
— |
|
|
|
— |
BBUC exchangeable shares |
|
|
1,367 |
|
|
|
1,378 |
Preferred securities |
|
|
1,490 |
|
|
|
1,490 |
Interest of others in operating subsidiaries |
|
|
12,895 |
|
|
|
12,835 |
|
|
|
18,455 |
|
|
|
18,429 |
Total Liabilities and Equity |
|
$ |
88,322 |
|
|
$ |
89,250 |
Notes:
- Comparative prior
period results have been adjusted in accordance with the new IFRS
17 accounting standard adopted at our residential mortgage insurer
on January 1, 2023.
Brookfield Business Partners
L.P.Consolidated Statements of Operating
Results
US$
millions, unaudited |
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2023 |
|
|
20221 |
|
|
|
2023 |
|
|
20221 |
|
|
|
|
|
|
|
Revenues |
$ |
14,399 |
|
$ |
14,711 |
|
|
$ |
41,663 |
|
$ |
42,745 |
|
Direct operating costs |
|
(13,016 |
) |
|
(13,549 |
) |
|
|
(37,812 |
) |
|
(39,818 |
) |
General and administrative
expenses |
|
(403 |
) |
|
(361 |
) |
|
|
(1,202 |
) |
|
(965 |
) |
Interest income (expense),
net |
|
(941 |
) |
|
(717 |
) |
|
|
(2,738 |
) |
|
(1,733 |
) |
Equity accounted income
(loss), net |
|
31 |
|
|
38 |
|
|
|
84 |
|
|
129 |
|
Impairment reversal (expense),
net |
|
(44 |
) |
|
(20 |
) |
|
|
(51 |
) |
|
58 |
|
Gain (loss) on
acquisitions/dispositions, net |
|
41 |
|
|
11 |
|
|
|
209 |
|
|
11 |
|
Other
income (expense), net |
|
(101 |
) |
|
(214 |
) |
|
|
166 |
|
|
(531 |
) |
Income (loss) before income tax |
|
(34 |
) |
|
(101 |
) |
|
|
319 |
|
|
(104 |
) |
Income tax (expense)
recovery |
|
|
|
|
|
Current |
|
(211 |
) |
|
(132 |
) |
|
|
(604 |
) |
|
(286 |
) |
Deferred |
|
294 |
|
|
168 |
|
|
|
578 |
|
|
595 |
|
Net income (loss) |
$ |
49 |
|
$ |
(65 |
) |
|
$ |
293 |
|
$ |
205 |
|
Attributable to: |
|
|
|
|
|
Limited partners |
$ |
(15 |
) |
$ |
(14 |
) |
|
$ |
(6 |
) |
$ |
41 |
|
Non-controlling interests attributable to: |
|
|
|
|
|
Redemption-exchange units |
|
(14 |
) |
|
(13 |
) |
|
|
(6 |
) |
|
38 |
|
Special limited partner |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
BBUC exchangeable shares |
|
(15 |
) |
|
(14 |
) |
|
|
(6 |
) |
|
33 |
|
Preferred securities |
|
22 |
|
|
5 |
|
|
|
66 |
|
|
5 |
|
Interest of others in operating subsidiaries |
|
71 |
|
|
(29 |
) |
|
|
245 |
|
|
88 |
|
Notes:
- Comparative prior
period results have been adjusted in accordance with the new IFRS
17 accounting standard adopted at our residential mortgage insurer
on January 1, 2023.
Brookfield Business Partners
L.P.Reconciliation of Non-IFRS
Measures
US$
millions, unaudited |
|
Three Months Ended September 30, 2023 |
|
Business Services |
|
Infrastructure Services |
|
Industrials |
|
Corporate and Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
121 |
|
|
$ |
(93 |
) |
|
$ |
76 |
|
|
$ |
(55 |
) |
|
$ |
49 |
|
|
|
|
|
|
|
|
|
|
|
|
Add or subtract the
following: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
253 |
|
|
|
313 |
|
|
|
328 |
|
|
|
— |
|
|
|
894 |
|
Impairment reversal (expense), net |
|
|
— |
|
|
|
(47 |
) |
|
|
91 |
|
|
|
— |
|
|
|
44 |
|
Gain (loss) on acquisitions/dispositions, net |
|
|
— |
|
|
|
— |
|
|
|
(41 |
) |
|
|
— |
|
|
|
(41 |
) |
Other income (expense), net1 |
|
|
71 |
|
|
|
40 |
|
|
|
(11 |
) |
|
|
1 |
|
|
|
101 |
|
Income tax (expense) recovery |
|
|
26 |
|
|
|
(10 |
) |
|
|
(82 |
) |
|
|
(17 |
) |
|
|
(83 |
) |
Equity accounted income (loss), net |
|
|
(7 |
) |
|
|
(9 |
) |
|
|
(15 |
) |
|
|
— |
|
|
|
(31 |
) |
Interest income (expense), net |
|
|
266 |
|
|
|
285 |
|
|
|
348 |
|
|
|
42 |
|
|
|
941 |
|
Equity accounted Adjusted EBITDA2 |
|
|
15 |
|
|
|
46 |
|
|
|
15 |
|
|
|
— |
|
|
|
76 |
|
Amounts attributable to non-controlling interests3 |
|
|
(507 |
) |
|
|
(297 |
) |
|
|
(491 |
) |
|
|
— |
|
|
|
(1,295 |
) |
Adjusted EBITDA |
|
$ |
238 |
|
|
$ |
228 |
|
|
$ |
218 |
|
|
$ |
(29 |
) |
|
$ |
655 |
|
Notes:
- Other income
(expense), net corresponds to amounts that are not directly related
to revenue earning activities and are not normal, recurring income
or expenses necessary for business operations. The components of
other income (expense), net include $42 million of net losses
on debt modification and extinguishment, $54 million of
business separation expenses, stand-up costs and restructuring
charges, $31 million of transaction costs, $33 million of
net revaluation gains, and $7 million of other expenses.
- Equity accounted
Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to
the partnership that is generated by its investments in associates
and joint ventures accounted for using the equity method.
- Adjusted EBITDA
that is attributable to non-controlling interests in consolidated
subsidiaries.
Brookfield Business Partners
L.P.Reconciliation of Non-IFRS
Measures
US$
millions, unaudited |
|
Nine Months Ended September 30, 2023 |
|
Business Services |
|
Infrastructure Services |
|
Industrials |
|
Corporate and Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
551 |
|
|
$ |
(128 |
) |
|
$ |
19 |
|
|
$ |
(149 |
) |
|
$ |
293 |
|
|
|
|
|
|
|
|
|
|
|
|
Add or subtract the
following: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
758 |
|
|
|
917 |
|
|
|
1,026 |
|
|
|
— |
|
|
|
2,701 |
|
Impairment reversal (expense), net |
|
|
6 |
|
|
|
(46 |
) |
|
|
91 |
|
|
|
— |
|
|
|
51 |
|
Gain (loss) on acquisitions/dispositions, net |
|
|
(154 |
) |
|
|
(14 |
) |
|
|
(41 |
) |
|
|
— |
|
|
|
(209 |
) |
Other income (expense), net1 |
|
|
(114 |
) |
|
|
(136 |
) |
|
|
79 |
|
|
|
5 |
|
|
|
(166 |
) |
Income tax (expense) recovery |
|
|
227 |
|
|
|
4 |
|
|
|
(150 |
) |
|
|
(55 |
) |
|
|
26 |
|
Equity accounted income (loss) |
|
|
(19 |
) |
|
|
(29 |
) |
|
|
(36 |
) |
|
|
— |
|
|
|
(84 |
) |
Interest income (expense), net |
|
|
772 |
|
|
|
826 |
|
|
|
1,033 |
|
|
|
107 |
|
|
|
2,738 |
|
Equity accounted Adjusted EBITDA2 |
|
|
44 |
|
|
|
132 |
|
|
|
46 |
|
|
|
— |
|
|
|
222 |
|
Amounts attributable to non-controlling interests3 |
|
|
(1,398 |
) |
|
|
(857 |
) |
|
|
(1,434 |
) |
|
|
— |
|
|
|
(3,689 |
) |
Adjusted EBITDA |
|
$ |
673 |
|
|
$ |
669 |
|
|
$ |
633 |
|
|
$ |
(92 |
) |
|
$ |
1,883 |
|
Notes:
- Other income
(expense), net corresponds to amounts that are not directly related
to revenue earning activities and are not normal, recurring income
or expenses necessary for business operations. The components of
other income (expense), net include $350 million of net gains
on debt modification and extinguishment, $166 million of
business separation expenses, stand-up costs and restructuring
charges, $79 million of transaction costs, $119 million
of net revaluation gains, and $58 million of other
expenses.
- Equity accounted
Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to
the partnership that is generated by our investments in associates
and joint ventures accounted for using the equity method.
- Adjusted EBITDA
that is attributable to non-controlling interests in consolidated
subsidiaries.
Brookfield Business Partners
L.P.Reconciliation of Non-IFRS
Measures
US$
millions, unaudited |
|
Three Months Ended September 30,
20224 |
|
Business Services |
|
Infrastructure Services |
|
Industrials |
|
Corporate and Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
147 |
|
|
$ |
(179 |
) |
|
$ |
12 |
|
|
$ |
(45 |
) |
|
$ |
(65 |
) |
|
|
|
|
|
|
|
|
|
|
|
Add back or deduct the
following: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
216 |
|
|
|
370 |
|
|
|
325 |
|
|
|
— |
|
|
|
911 |
|
Impairment reversal (expense), net |
|
|
20 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20 |
|
Gain (loss) on acquisitions/dispositions, net |
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
(11 |
) |
Other income (expense), net1 |
|
|
49 |
|
|
|
67 |
|
|
|
94 |
|
|
|
4 |
|
|
|
214 |
|
Income tax expense (recovery) |
|
|
37 |
|
|
|
(21 |
) |
|
|
(36 |
) |
|
|
(16 |
) |
|
|
(36 |
) |
Equity accounted income (loss), net |
|
|
(11 |
) |
|
|
(9 |
) |
|
|
(18 |
) |
|
|
— |
|
|
|
(38 |
) |
Interest income (expense), net |
|
|
185 |
|
|
|
220 |
|
|
|
290 |
|
|
|
22 |
|
|
|
717 |
|
Equity accounted Adjusted EBITDA2 |
|
|
13 |
|
|
|
37 |
|
|
|
23 |
|
|
|
— |
|
|
|
73 |
|
Amounts attributable to non-controlling interests3 |
|
|
(443 |
) |
|
|
(280 |
) |
|
|
(451 |
) |
|
|
— |
|
|
|
(1,174 |
) |
Adjusted EBITDA |
|
$ |
213 |
|
|
$ |
205 |
|
|
$ |
228 |
|
|
$ |
(35 |
) |
|
$ |
611 |
|
Notes:
- Other income
(expense), net corresponds to amounts that are not directly related
to revenue earning activities and are not normal, recurring income
or expenses necessary for business operations. The components of
other income (expense), net include $125 million of net
revaluation losses, $88 million of business separation
expenses, stand-up costs and restructuring charges,
$50 million of transaction costs, and $49 million of
other income.
- Equity accounted
Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to
the partnership that is generated by our investments in associates
and joint ventures accounted for using the equity method.
- Adjusted EBITDA
that is attributable to non-controlling interests in consolidated
subsidiaries.
- Comparative prior
period results have been adjusted in accordance with the new IFRS
17 accounting standard adopted at our residential mortgage insurer
on January 1, 2023.
Brookfield Business Partners
L.P.Reconciliation of Non-IFRS
Measures
US$
millions, unaudited |
|
Nine Months Ended September 30,
20224 |
|
Business Services |
|
Infrastructure Services |
|
Industrials |
|
Corporate and Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
249 |
|
|
$ |
10 |
|
|
$ |
63 |
|
|
$ |
(117 |
) |
|
$ |
205 |
|
|
|
|
|
|
|
|
|
|
|
|
Add back or deduct the
following: |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
430 |
|
|
|
961 |
|
|
|
990 |
|
|
|
— |
|
|
|
2,381 |
|
Impairment reversal (expense), net |
|
|
23 |
|
|
|
125 |
|
|
|
(206 |
) |
|
|
— |
|
|
|
(58 |
) |
Gain (loss) on acquisitions/dispositions, net |
|
|
— |
|
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
(11 |
) |
Other income (expense), net1 |
|
|
110 |
|
|
|
161 |
|
|
|
249 |
|
|
|
11 |
|
|
|
531 |
|
Income tax expense (recovery) |
|
|
72 |
|
|
|
(425 |
) |
|
|
89 |
|
|
|
(45 |
) |
|
|
(309 |
) |
Equity accounted income (loss), net |
|
|
(26 |
) |
|
|
(39 |
) |
|
|
(64 |
) |
|
|
— |
|
|
|
(129 |
) |
Interest income (expense), net |
|
|
326 |
|
|
|
541 |
|
|
|
815 |
|
|
|
51 |
|
|
|
1,733 |
|
Equity accounted Adjusted EBITDA2 |
|
|
37 |
|
|
|
102 |
|
|
|
69 |
|
|
|
— |
|
|
|
208 |
|
Amounts attributable to non-controlling interests3 |
|
|
(761 |
) |
|
|
(818 |
) |
|
|
(1,345 |
) |
|
|
— |
|
|
|
(2,924 |
) |
Adjusted EBITDA |
|
$ |
460 |
|
|
$ |
618 |
|
|
$ |
649 |
|
|
$ |
(100 |
) |
|
$ |
1,627 |
|
Notes:
- Other income
(expense), net corresponds to amounts that are not directly related
to revenue earning activities and are not normal, recurring income
or expenses necessary for business operations. The components of
other income (expense), net include $273 million of net
revaluation losses, $154 million of business separation
expenses, stand-up costs and restructuring charges,
$109 million of transaction costs, $26 million of net
gains on the sale of property, plant and equipment and
$21 million of other expenses.
- Equity accounted
Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to
the partnership that is generated by our investments in associates
and joint ventures accounted for using the equity method.
- Adjusted EBITDA
that is attributable to non-controlling interests in consolidated
subsidiaries.
- Comparative prior
period results have been adjusted in accordance with the new IFRS
17 accounting standard adopted at our residential mortgage insurer
on January 1, 2023.
Brookfield Business Corporation Reports
Third Quarter 2023 Results
Brookfield, News, November 3, 2023
– Brookfield Business Corporation (NYSE, TSX: BBUC)
announced today its net income (loss) for the quarter ended
September 30, 2023.
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
US$ millions, unaudited |
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
Net
income (loss) attributable to Brookfield Business Partners |
$ |
97 |
$ |
92 |
|
$ |
65 |
$ |
717 |
Net income attributable to Brookfield Business
Partners for the three months ended September 30, 2023 was $97
million compared to $92 million during the same period in 2022.
Current period results included a remeasurement gain on our
exchangeable and class B shares that are classified as liabilities
under IFRS. As at September 30, 2023, the exchangeable and
class B shares were remeasured to reflect the closing price of
$15.20 per unit.
Dividend
The Board of Directors has declared a quarterly
dividend in the amount of $0.0625 per share, payable on
December 29, 2023 to shareholders of record as at the close of
business on November 30, 2023. This dividend is identical in
amount per share and has identical record and payment dates to the
quarterly distribution declared today by the Board of Directors of
the general partner of Brookfield Business Partners on its
units.
Additional Information
Each exchangeable share of Brookfield Business
Corporation has been structured with the intention of providing an
economic return equivalent to one unit of Brookfield Business
Partners L.P. Each exchangeable share will be exchangeable at the
option of the holder for one unit. Brookfield Business Corporation
will target that dividends on its exchangeable shares will be
declared and paid at the same time as distributions are declared
and paid on the Brookfield Business Partners’ units and that
dividends on each exchangeable share will be declared and paid in
the same amount as distributions are declared and paid on each unit
to provide holders of exchangeable shares with an economic return
equivalent to holders of units.
In addition to carefully considering the
disclosures made in this news release in its entirety, shareholders
are strongly encouraged to carefully review the Letter to
Unitholders, Supplemental Information and other continuous
disclosure filings which are available at
https://bbu.brookfield.com.
Please note that Brookfield Business
Corporation’s previous audited annual and unaudited quarterly
reports have been filed on SEDAR and EDGAR and are available at
https://bbu.brookfield.com/bbuc under Reports & Filings. Hard
copies of the annual and quarterly reports can be obtained free of
charge upon request.
Brookfield Business
CorporationConsolidated Statements of Financial
Position
|
As at |
US$
millions, unaudited |
September 30, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
646 |
|
|
$ |
736 |
Financial assets |
|
|
684 |
|
|
|
497 |
Accounts and other receivable,
net |
|
|
2,986 |
|
|
|
3,191 |
Inventory, net |
|
|
704 |
|
|
|
635 |
Other assets |
|
|
1,350 |
|
|
|
1,466 |
Property, plant and
equipment |
|
|
3,607 |
|
|
|
3,765 |
Deferred income tax
assets |
|
|
569 |
|
|
|
626 |
Intangible assets |
|
|
8,907 |
|
|
|
9,295 |
Equity accounted
investments |
|
|
241 |
|
|
|
251 |
Goodwill |
|
|
6,651 |
|
|
|
6,914 |
Total Assets |
|
$ |
26,345 |
|
|
$ |
27,376 |
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
Liabilities |
|
|
|
|
|
Accounts payable and
other |
|
$ |
7,161 |
|
|
$ |
7,639 |
Non-recourse borrowings in subsidiaries of Brookfield Business
Corporation |
|
|
13,063 |
|
|
|
12,913 |
Exchangeable and class B
shares |
|
|
1,109 |
|
|
|
1,237 |
Deferred income tax
liabilities |
|
|
1,337 |
|
|
|
1,516 |
|
|
|
|
|
|
Equity |
|
|
|
|
|
Brookfield Business Partners |
|
|
$ |
404 |
|
|
|
$ |
359 |
Non-controlling interests |
|
|
3,271 |
|
|
|
3,712 |
|
|
|
3,675 |
|
|
|
4,071 |
Total Liabilities and Equity |
|
$ |
26,345 |
|
|
$ |
27,376 |
Brookfield Business
CorporationConsolidated Statements of Operating
Results
US$
millions, unaudited |
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
Revenues |
$ |
2,954 |
|
$ |
2,905 |
|
|
$ |
8,789 |
|
$ |
7,474 |
|
Direct operating costs |
|
(2,603 |
) |
|
(2,604 |
) |
|
|
(7,720 |
) |
|
(6,739 |
) |
General and administrative
expenses |
|
(124 |
) |
|
(129 |
) |
|
|
(348 |
) |
|
(269 |
) |
Interest income (expense),
net |
|
(302 |
) |
|
(248 |
) |
|
|
(888 |
) |
|
(488 |
) |
Equity accounted income
(loss), net |
|
2 |
|
|
3 |
|
|
|
2 |
|
|
6 |
|
Impairment expense, net |
|
— |
|
|
— |
|
|
|
(7 |
) |
|
— |
|
Gain (loss) on
acquisitions/dispositions, net |
|
— |
|
|
— |
|
|
|
101 |
|
|
— |
|
Remeasurement of exchangeable
and class B shares |
|
148 |
|
|
126 |
|
|
|
128 |
|
|
654 |
|
Other
income (expense), net |
|
(108 |
) |
|
(43 |
) |
|
|
(20 |
) |
|
(110 |
) |
Income (loss) before income tax |
|
(33 |
) |
|
10 |
|
|
|
37 |
|
|
528 |
|
Income tax (expense)
recovery |
|
|
|
|
|
Current |
|
(37 |
) |
|
(27 |
) |
|
|
(195 |
) |
|
(60 |
) |
Deferred |
|
77 |
|
|
48 |
|
|
|
138 |
|
|
450 |
|
Net income (loss) |
$ |
7 |
|
$ |
31 |
|
|
$ |
(20 |
) |
$ |
918 |
|
Attributable to: |
|
|
|
|
|
Brookfield Business Partners |
$ |
97 |
|
$ |
92 |
|
|
$ |
65 |
|
$ |
717 |
|
Non-controlling interests |
|
(90 |
) |
|
(61 |
) |
|
|
(85 |
) |
|
201 |
|
Cautionary Statement Regarding
Forward-looking Statements and Information
Note: This news release contains
“forward-looking information” within the meaning of Canadian
provincial securities laws and “forward-looking statements” within
the meaning of applicable Canadian and U.S. securities laws,
including the United States Private Securities Litigation Reform
Act of 1995. Forward-looking statements include statements that are
predictive in nature, depend upon or refer to future events or
conditions, include statements regarding the operations, business,
financial condition, expected financial results, performance,
prospects, opportunities, priorities, targets, goals, ongoing
objectives, strategies and outlook of Brookfield Business Partners,
as well as regarding recently completed and proposed acquisitions,
dispositions, and other transactions, and the outlook for North
American and international economies for the current fiscal year
and subsequent periods, and include words such as “expects”,
“anticipates”, “plans”, “believes”, “estimates”, “seeks”,
“intends”, “targets”, “projects”, “forecasts”, “views”,
“potential”, “likely” or negative versions thereof and other
similar expressions, or future or conditional verbs such as “may”,
“will”, “should”, “would” and “could”.
Although we believe that our anticipated future
results, performance or achievements expressed or implied by the
forward-looking statements and information are based upon
reasonable assumptions and expectations, investors and other
readers should not place undue reliance on forward-looking
statements and information because they involve known and unknown
risks, uncertainties and other factors, many of which are beyond
our control, which may cause the actual results, performance or
achievements of Brookfield Business Partners to differ materially
from anticipated future results, performance or achievements
expressed or implied by such forward-looking statements and
information.
Factors that could cause actual results to
differ materially from those contemplated or implied by
forward-looking statements include, but are not limited to: general
economic conditions and risks relating to the economy, including
unfavorable changes in interest rates, foreign exchange rates,
inflation and volatility in the financial markets; global equity
and capital markets and the availability of equity and debt
financing and refinancing within these markets; strategic actions
including our ability to complete dispositions and achieve the
anticipatedbenefits therefrom, including the anticipated sale of
Westinghouse; the ability to complete and effectively integrate
acquisitions into existing operations and the ability to attain
expected benefits; changes in accounting policies and methods used
to report financial condition (including uncertainties associated
with critical accounting assumptions and estimates); the ability to
appropriately manage human capital; the effect of applying future
accounting changes; business competition; operational and
reputational risks; technological change; changes in government
regulation and legislation within the countries in which we
operate; governmental investigations; litigation; changes in tax
laws; ability to collect amounts owed; catastrophic events, such as
earthquakes, hurricanes and pandemics/epidemics including COVID-19;
the possible impact of international conflicts, wars and related
developments including Russia’s invasion of Ukraine, terrorist acts
and cyber terrorism; and other risks and factors detailed from time
to time in our documents filed with the securities regulators in
Canada and the United States including those set forth in the “Risk
Factors” section in our 2022 Annual Report filed on Form 20-F.
Statements relating to “reserves” are deemed to
be forward-looking statements as they involve the implied
assessment, based on certain estimates and assumptions, that the
reserves described herein can be profitably produced in the future.
We qualify any and all of our forward-looking statements by these
cautionary factors.
We caution that the foregoing list of important
factors that may affect future results is not exhaustive. When
relying on our forward-looking statements and information,
investors and others should carefully consider the foregoing
factors and other uncertainties and potential events. Except as
required by law, we undertake no obligation to publicly update or
revise any forward-looking statements or information, whether
written or oral, that may be as a result of new information, future
events or otherwise.
Cautionary Statement Regarding the Use
of Non-IFRS Measures
This news release contains references to
Non-IFRS measures. Adjusted EBITDA is not a generally accepted
accounting measure under IFRS and therefore may differ from
definitions used by other entities. We believe this is a useful
supplemental measure that may assist investors in assessing the
financial performance of Brookfield Business Partners and its
subsidiaries. However, Adjusted EBITDA should not be considered in
isolation from, or as a substitute for, analysis of our financial
statements prepared in accordance with IFRS.
References to Brookfield Business Partners are
to Brookfield Business Partners L.P. together with its
subsidiaries, controlled affiliates and operating entities.
Unitholders’ results include limited partnership units,
redemption-exchange units, general partnership units, BBUC
exchangeable shares and special limited partnership units. More
detailed information on certain references made in this news
release will be available in our Management’s Discussion and
Analysis of Financial Condition and Results of Operations in our
interim report for the third quarter ended September 30, 2023
furnished on Form 6-K.
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