“We reported strong results for the third quarter, benefitting from increased scale and diversification of our business as a result of acquisitions, organic growth and improvements we have made to our operations,” said
| Three months ended September 30 |
Nine months ended September 30 |
||||||||
| US$ millions (except per unit amount), unaudited | 2018 | 2017 | 2018 | 2017 | |||||
| Net income attributable to unitholders1 | $ | 93 | $ | 9 | $ | 286 | $ | 69 | |
| Net income per limited partnership unit2,3 | $ | ─ | $ | (0.15) | $ | 0.06 | $ | 0.40 | |
Company FFO1,4 |
$ | 170 | $ | 46 | $ | 485 | $ | 184 | |
| Company FFO per limited partnership unit2 | $ | 1.31 | $ | 0.42 | $ | 3.75 | $ | 1.70 | |
Operational Update
The following table presents Company FFO by segment:
| Three months ended September 30 |
Nine months ended September 30 |
|||||||||||
| US$ millions, unaudited | 2018 | 20175 | 2018 | 20175 | ||||||||
| Business Services | $ | 26 | $ | 40 | $ | 109 | $ | 70 | ||||
| Infrastructure Services | 49 | ─ | 49 | ─ | ||||||||
| Energy | 35 | (5) | 104 | 26 | ||||||||
| Industrials | 76 | 22 | 268 | 109 | ||||||||
| Corporate and Other | (16) | (11) | (45) | (21) | ||||||||
| Company FFO1,4 | $ | 170 | $ | 46 | $ | 485 | $ | 184 | ||||
Our business services segment generated Company FFO of
Our infrastructure services segment generated Company FFO of
Our energy segment generated Company FFO of
Our industrials segment generated Company FFO of
Strategic Initiatives Update
- Quadrant Energy
In August we signed an agreement to sell Quadrant, our Australian oil and gas company, for$2 .15 billion. Brookfield Business Partners’ net share of the proceeds is expected to be~$125 million . In addition to the sale consideration, the agreement includes future upside on select exploration interests.
Imagine Communications
In October, together with institutional partners, we acquired a 50.1% controlling interest inImagine Communications , a provider of high speed fixed wireless broadband. The company is an established business using a proven technology to roll out a national high-speed broadband solution in rural areas ofIreland .Brookfield Business Partners will own 30% of the business.
Cardone Industries
In October we originated a$240 million senior secured term loan toCardone Industries , a leading remanufacturer of automotive parts inNorth America . Brookfield Business Partners’ share of the loan was$50 million , with the balance taken by institutional partners. The financing was used to partially refinance existing indebtedness and provide liquidity to fund further growth.
Distribution
The Board has declared a quarterly distribution in the amount of
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 at https://bbu.brookfield.com/reports-and-filings.
Notes:
1 Attributable to limited partnership unitholders, general partnership unitholders, redemption-exchange unitholders and special limited partnership unitholders.
2 Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redemption exchange units held by
3 Income (loss) attributed to limited partnership unit on a fully diluted basis is reduced by incentive distributions paid to special limited partnership unitholders during the period. A reconciliation of net income per unit is available on page 11 of this release.
4 Company FFO is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, non-cash gains or losses and other items. When determining Company FFO, we include our proportionate share of Company FFO of equity accounted investment. A reconciliation of net income to Company FFO is available on pages 7 to 10 of this release.
5 The comparative figures have been updated to conform with the new segment presentation.
For more information, please visit our website at https://bbu.brookfield.com or contact:
| Media: Claire Holland Tel: (416) 369-8236 Email: [email protected] |
Investors: Gwyn Hemme Tel: (416) 359-8632 Email: [email protected] |
Conference Call and 2018 Third Quarter Earnings Details
Investors, analysts and other interested parties can access Brookfield Business Partners’ 2018 third quarter results as well as the Letter to Unitholders and Supplemental Information on our website under the Reports & Filings section at https://bbu.brookfield.com
The conference call can be accessed via webcast on
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 Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. 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
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, the reader 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
Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: the impact or unanticipated impact of general economic, political and market factors in the countries in which we do business; the behavior of financial markets, including fluctuations in interest and foreign exchange rates; global equity and capital markets and the availability of equity and debt financing and refinancing within these markets; strategic actions including dispositions; 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 and hurricanes; the possible impact of international conflicts and other developments including terrorist acts and cyber terrorism; and other risks and factors detailed from time to time in our documents filed with the securities regulators in
We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law,
Cautionary Statement Regarding the Use of Non-IFRS Measures
This news release contains references to Company FFO. When determining Company FFO, we include our unitholders’ proportionate share of Company FFO for equity accounted investments. Company FFO is not a generally accepted accounting measure under IFRS and therefore may differ from definitions of Company FFO or Funds from Operations used by other entities. We believe that this is a useful supplemental measure that may assist investors in assessing the financial performance of
References to
Consolidated Statements of Financial Position
| As of | ||||
| US$ millions, unaudited | Sep. 30, 2018 | Dec. 31, 2017 | ||
| Assets | ||||
| Cash and cash equivalents | $ | 1,770 | $ | 1,106 |
| Financial assets | 1,252 | 784 | ||
| Accounts receivable, net | 5,430 | 4,362 | ||
| Inventory and other assets | 3,362 | 1,577 | ||
| Assets held for sale | 145 | 14 | ||
| Property, plant and equipment | 7,067 | 2,530 | ||
| Deferred income tax assets | 217 | 174 | ||
| Intangible assets | 5,427 | 3,094 | ||
| Equity accounted investments | 536 | 609 | ||
| Goodwill | 2,420 | 1,554 | ||
| Total assets | $ | 27,626 | $ | 15,804 |
| Liabilities | ||||
| Accounts payable and other | $ | 9,386 | $ | 5,638 |
| Liabilities associated with assets held for sale | 12 | ─ | ||
| Borrowings | 10,865 | 3,265 | ||
| Deferred income tax liabilities | 887 | 837 | ||
| Total liabilities | 21,150 | 9,740 | ||
| Equity1 | ||||
| Limited partners | 1,519 | 1,585 | ||
| General partner | ─ | ─ | ||
| Non-controlling interests attributable to: | ||||
| Redemption-Exchange Units, Preferred Shares and Special Limited Partnership Units held by Brookfield Asset Management Inc. | 1,386 | 1,453 | ||
| Interest of others in operating subsidiaries | 3,571 | 3,026 | ||
| Total equity | 6,476 | 6,064 | ||
| Total liabilities and equity | $ | 27,526 | $ | 15,804 |
Note:
1 Attributable to limited partnership unitholders, general partnership unitholders, redemption-exchange unitholders, special limited partnership unitholders and preferred shareholders.
Consolidated Statements of Operating Results
| US$ millions, unaudited | Three months endedSeptember 30 | Nine months endedSeptember 30 | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||
| Revenues | $ | 9,990 | $ | 7,640 | $ | 26,959 | $ | 14,444 | ||||||
| Direct operating costs | (9,080) | (7,295) | (24,929) | (13,842) | ||||||||||
| General and administrative expenses | (174) | (95) | (434) | (233) | ||||||||||
| Depreciation and amortization expense | (251) | (109) | (462) | (262) | ||||||||||
| Interest income (expense), net | (148) | (66) | (317) | (135) | ||||||||||
| Equity accounted income (loss), net | (9) | 37 | 1 | 61 | ||||||||||
| Impairment expense, net | (180) | ─ | (180) | (30) | ||||||||||
| Gain (loss) on acquisitions/dispositions, net | 247 | (14) | 353 | 267 | ||||||||||
| Other income (expenses), net | (42) | (41) | (63) | (36) | ||||||||||
| Income (loss) before income tax | 353 | 57 | 928 | 234 | ||||||||||
| Income tax (expense) recovery | ||||||||||||||
| Current | (43) | (19) | (123) | (19) | ||||||||||
| Deferred | (25) | 6 | 4 | 6 | ||||||||||
| Net income (loss) | $ | 285 | $ | 44 | $ | 809 | $ | 221 | ||||||
| Attributable to1: | ||||||||||||||
| Limited partners | $ | (1) | $ | (8) | $ | 4 | $ | 21 | ||||||
| General partner | ─ | ─ | ─ | ─ | ||||||||||
| Non-controlling interests attributable to: | ||||||||||||||
| Redemption-exchange units held by Brookfield Asset Management Inc. | ─ | (8) | 4 | 23 | ||||||||||
| Special Limited Partners | 94 | 25 | 278 | 25 | ||||||||||
| Interest of others in operating subsidiaries | 192 | 35 | 523 | 152 | ||||||||||
Note:
1 Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
Statements of Company Funds from Operations
| For the 3 months ended September 30, 2018 US$ millions, unaudited |
Business Services | Infrastructure Services | Energy | Industrials | Corporate and Other | Total | ||||||||||
| Revenues | $ | 7,923 | $ | 740 | $ | 390 | $ | 937 | $ | ─ | $ | 9,990 | ||||
| Direct operating costs | (7,784) | (574) | (216) | (504) | (2) | (9,080) | ||||||||||
| General and administrative expenses | (64) | (16) | (11) | (65) | (18) | (174) | ||||||||||
| Interest income (expense), net | (9) | (35) | (48) | (60) | 4 | (148) | ||||||||||
| Equity accounted Company FFO | 7 | ─ | 17 | 2 | ─ | 26 | ||||||||||
| Current income taxes | (8) | (4) | (5) | (26) | ─ | (43) | ||||||||||
| Realized disposition gains (loss), net | ─ | ─ | ─ | (3) | ─ | (3) | ||||||||||
| Other income (expense), net | (11) | (11) | ||||||||||||||
| Company FFO attributable to others | (39) | (62) | (81) | (205) | ─ | (387) | ||||||||||
| Company FFO1,2 | 26 | 49 | 35 | 76 | (16) | 170 | ||||||||||
| Depreciation and amortization expense | (251) | |||||||||||||||
| Impairment expense, net | (180) | |||||||||||||||
| Realized disposition gain (loss), net | 250 | |||||||||||||||
| Deferred income taxes | (25) | |||||||||||||||
| Other income (expense), net | (31) | |||||||||||||||
| Non-cash items attributable to equity accounted investments | (35) | |||||||||||||||
| Non-cash items attributable to others | 195 | |||||||||||||||
| Net income (loss) attributable to unitholders2 | $ | 93 | ||||||||||||||
Notes:
1 The Statements of Company Funds from Operations above are prepared on a basis that is consistent with Brookfield Business Partners’ Supplemental Information and differs from net income as presented in Brookfield Business Partners’ Consolidated Statements of Operating Results on page 6 of this release, which is prepared in accordance with IFRS. Management uses company funds from operations (Company FFO) as a key measure to evaluate operating performance. Readers are encouraged to consider both measures in assessing Brookfield Business Partners’ results. Company FFO is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, non-cash gains or losses and other items. When determining Company FFO, we include our proportionate share of Company FFO for equity accounted investments.
2 Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
Statements of Company Funds from Operations
| For the 9 months ended September 30, 2018 US$ millions, unaudited |
Business Services | Infrastructure Services | Energy | Industrials | Corporate and Other | Total | |||||||||||
| Revenues | $ | 23,129 | $ | 740 | $ | 544 | $ | 2,539 | $ | 7 | $ | 26,959 | |||||
| Direct operating costs | (22,729) | (574) | (325) | (1,295) | (6) | (24,929) | |||||||||||
| General and administrative expenses | (203) | (16) | (21) | (144) | (50) | (434) | |||||||||||
| Interest income (expense), net | (50) | (35) | (62) | (174) | 4 | (317) | |||||||||||
| Equity accounted Company FFO | 21 | ─ | 79 | 9 | ─ | 109 | |||||||||||
| Current income taxes | (38) | (4) | (6) | (75) | ─ | (123) | |||||||||||
| Realized disposition gains (loss), net | 55 | ─ | ─ | 48 | ─ | 103 | |||||||||||
| Other income (expense), net | (11) | (11) | |||||||||||||||
| Company FFO attributable to others | (76) | (62) | (94) | (640) | ─ | (872) | |||||||||||
| Company FFO1,2 | 109 | 49 | 104 | 268 | (45) | 485 | |||||||||||
| Depreciation and amortization expense | (462) | ||||||||||||||||
| Impairment expense, net | (180) | ||||||||||||||||
| Realized disposition gain (loss), net | 250 | ||||||||||||||||
| Deferred income taxes | 4 | ||||||||||||||||
| Other income (expense), net | (52) | ||||||||||||||||
| Non-cash items attributable to equity accounted investments | (108) | ||||||||||||||||
| Non-cash items attributable to others | 349 | ||||||||||||||||
| Net income (loss) attributable to unitholders2 | $ | 286 | |||||||||||||||
Notes:
1 The Statements of Company Funds from Operations above are prepared on a basis that is consistent with Brookfield Business Partners’ Supplemental Information and differs from net income as presented in Brookfield Business Partners’ Consolidated Statements of Operating Results on page 6 of this release, which is prepared in accordance with IFRS. Management uses company funds from operations (Company FFO) as a key measure to evaluate operating performance. Readers are encouraged to consider both measures in assessing Brookfield Business Partners’ results. Company FFO is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, non-cash gains or losses and other items. When determining Company FFO, we include our proportionate share of Company FFO for equity accounted investments.
2 Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
Statements of Company Funds from Operations
| For the 3 months ended September 30, 20173 US$ millions, unaudited |
Business Services | Infrastructure Services | Energy | Industrials | Corporate and Other | Total | |||||||
| Revenues | $ | 7,070 | $ | ─ | $ | 66 | $ | 503 | $ | 1 | $ | 7,640 | |
| Direct operating costs | (6,909) | ─ | (50) | (335) | (1) | (7,295) | |||||||
| General and administrative expenses | (50) | ─ | (4) | (29) | (12) | (95) | |||||||
| Interest income (expense), net | (15) | ─ | (7) | (44) | ─ | (66) | |||||||
| Equity accounted Company FFO | 8 | ─ | 12 | ─ | ─ | 20 | |||||||
| Current income taxes | (15) | ─ | 2 | (7) | 1 | (19) | |||||||
| Realized disposition gains (loss), net | 11 | ─ | (48) | ─ | ─ | (37) | |||||||
| Other income (expense), net | ─ | ||||||||||||
| Company FFO attributable to others | (60) | ─ | 24 | (66) | ─ | (102) | |||||||
| Company FFO1,2 | 40 | ─ | (5) | 22 | (11) | 46 | |||||||
| Depreciation and amortization expense | (109) | ||||||||||||
| Realized disposition gain (loss) reported in prior periods | 23 | ||||||||||||
| Impairment expense, net | ─ | ||||||||||||
| Realized disposition gain (loss), net | |||||||||||||
| Deferred income taxes | 6 | ||||||||||||
| Other income (expense), net | (41) | ||||||||||||
| Non-cash items attributable to equity accounted investments | 17 | ||||||||||||
| Non-cash items attributable to others | 67 | ||||||||||||
| Net income (loss) attributable to unitholders2 | $ | 9 | |||||||||||
Notes:
1 The Statements of Company Funds from Operations above are prepared on a basis that is consistent with Brookfield Business Partners’ Supplemental Information and differs from net income as presented in Brookfield Business Partners’ Consolidated Statements of Operating Results on page 6 of this release, which is prepared in accordance with IFRS. Management uses company funds from operations (Company FFO) as a key measure to evaluate operating performance. Readers are encouraged to consider both measures in assessing Brookfield Business Partners’ results. Company FFO is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, non-cash gains or losses and other items. When determining Company FFO, we include our proportionate share of Company FFO for equity accounted investments.
2 Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
3 The figures have been updated to conform with the new segment presentation.
Statements of Company Funds from Operations
| For the 9 months ended September 30, 20173 US$ millions, unaudited |
Business Services | Infrastructure Services | Energy | Industrials | Corporate and Other | Total | ||||||||||
| Revenues | $ | 13,100 | $ | ─ | $ | 199 | $ | 1,140 | $ | 5 | $ | 14,444 | ||||
| Direct operating costs | (12,823) | ─ | (146) | (870) | (3) | (13,842) | ||||||||||
| General and administrative expenses | (125) | ─ | (12) | (66) | (30) | (233) | ||||||||||
| Interest income (expense), net | (28) | ─ | (20) | (87) | ─ | (135) | ||||||||||
| Equity accounted Company FFO | 23 | ─ | 36 | 1 | ─ | 60 | ||||||||||
| Current income taxes | (7) | ─ | 1 | (20) | 7 | (19) | ||||||||||
| Realized disposition gains (loss), net | 19 | ─ | (12) | 237 | ─ | 244 | ||||||||||
| Other income (expense), net | ─ | |||||||||||||||
| Company FFO attributable to others | (89) | ─ | (20) | (226) | ─ | (335) | ||||||||||
| Company FFO1,2 | 70 | ─ | 26 | 109 | (21) | 184 | ||||||||||
| Depreciation and amortization expense | (262) | |||||||||||||||
| Realized disposition gain (loss) reported in prior periods | 23 | |||||||||||||||
| Impairment expense, net | (30) | |||||||||||||||
| Realized disposition gain (loss), net | ─ | |||||||||||||||
| Deferred income taxes | 6 | |||||||||||||||
| Other income (expense), net | (36) | |||||||||||||||
| Non-cash items attributable to equity accounted investments | 1 | |||||||||||||||
| Non-cash items attributable to others | 183 | |||||||||||||||
| Net income (loss) attributable to unitholders2 | $ | 69 | ||||||||||||||
Notes:
1 The Statements of Company Funds from Operations above are prepared on a basis that is consistent with Brookfield Business Partners’ Supplemental Information and differs from net income as presented in Brookfield Business Partners’ Consolidated Statements of Operating Results on page 6 of this release, which is prepared in accordance with IFRS. Management uses company funds from operations (Company FFO) as a key measure to evaluate operating performance. Readers are encouraged to consider both measures in assessing Brookfield Business Partners’ results. Company FFO is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as net income excluding the impact of depreciation and amortization, deferred income taxes, breakage and transaction costs, non-cash gains or losses and other items. When determining Company FFO, we include our proportionate share of Company FFO for equity accounted investments.
2 Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
3 The figures have been updated to conform with the new segment presentation.
Reconciliation of Net Income per Unit
| Three months ended September 30 |
Nine months ended September 30 |
|||||||
| US$, unaudited | 2018 | 2017 | 2018 | 2017 | ||||
| Net income (loss) per unitholder, excluding incentive distribution1 | $ | 0.72 | $ | 0.08 | $ | 2.21 | $ | 0.63 |
| Incentive distribution per unit2 | (0.72) | (0.23) | (2.15) | (0.23) | ||||
| Net income (loss) attributable to limited partnership unit1,2 | $ | ─ | $ | (0.15) | $ | 0.06 | $ | 0.40 |
Notes:
1 Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redemption exchange units held by
2 Income (loss) attributed to limited partnership unit on a fully diluted basis is reduced by incentive distributions paid to special limited partnership unitholders during the period.
Source:
| Title | Document |
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English |