Brookfield Business Partners Reports First Quarter 2017 Results

May 08, 2017

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			Three months ended March 31
US$ millions (except per unit amount), unaudited			2017		2016
Net income (loss) attributable to unitholders¹		$	66	$	(5	)
	per unit²	$	0.61		n/a

Company FFO^1,3		$	95	$	37
	per unit²	$	0.88		n/a

Notes:
1	Attributable to parent company prior to the Spin-off on June 20, 2016 and to limited partnership unitholders, general partnership unitholders, and redemption-exchange unitholders post Spin-off.
2	Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redemption exchange units held by Brookfield for limited partnership units, for the three months ended March 31, 2017 was 108 million. Per unit figures not included for the three months ended March 31, 2016 as no units were issued pre Spin-off.
3	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 page 7 and 8 of this release.

		As of
US$ millions, unaudited		Mar. 31, 2017		Dec. 31, 2016

Assets
Cash and cash equivalents		$	1,205	$	1,050
Financial assets			375		539
Accounts receivable, net			1,890		1,797
Inventory and other assets			658		647
Assets held for sale			76		264
Property, plant and equipment			2,095		2,096
Deferred income tax assets			121		111
Intangible assets			361		371
Equity accounted investments			147		166
Goodwill			1,191		1,152
Total assets		$	8,119	$	8,193

Liabilities and equity
Liabilities
Accounts payable and other		$	2,566	$	2,457
Liabilities associated with assets held for sale			21		66
Borrowings			1,417		1,551
Deferred income tax liabilities			94		81
Total liabilities			4,098		4,155

Equity¹
Limited partners			1,240		1,206
General partner			-		-
Non-controlling interests attributable to:
	Redemption-Exchange Units, Preferred Shares and Special Limited Partnership Units held by Brookfield Asset Management Inc.		1,331		1,295
	Interest of others in operating subsidiaries		1,450		1,537
Total equity			4,021		4,038
Total liabilities and equity		$	8,119	$	8,193

US$ millions, unaudited			Three months ended March 31
US$ millions, unaudited				2017			2016

Revenues			$	1,934		$	1,677
Direct operating costs				(1,874	)		(1,569	)
General and administrative expenses				(62	)		(62	)
Depreciation and amortization expense				(65	)		(72	)
Interest expense				(19	)		(24	)
Equity accounted income, net				10			27
Impairment expense				(7	)		-
Gain on acquisitions/dispositions, net				272			-
Other (expenses) income, net				14			(10	)
Income (loss) before income tax				203			(33	)
Income tax (expense) recovery
	Current			4			(3	)
	Deferred			(4	)		7
Net (loss) income			$	203		$	(29	)
Attributable to¹:
	Limited partners			32			-
	General partner			-			-
	Brookfield Asset Management Inc.			-			(5	)
	Non-controlling interests attributable to:
		Redemption-Exchange Units held by Brookfield Asset Management Inc.		34			-
		Interest of others	$	137		$	(24	)

Note:
1	Attributable to parent company prior to the Spin-off on June 20, 2016 and to limited partnership unitholders, general partnership unitholders, and redemption-exchange unitholders post Spin-off. Post Spin-off, equity is also attributable to preferred shareholders and Special LP unitholders.

For the 3 months ended March 31, 2017 US$ millions, unaudited	Construction Services			Business Services			Energy			Industrial Operations			Corporate and Other			As per IFRS Financials
Revenues	$	1,016		$	616		$	69		$	231		$	2		$	1,934
Direct operating costs		(1,020	)		(583	)		(51	)		(219	)		(1	)		(1,874	)
General and administrative expenses		(11	)		(23	)		(4	)		(15	)		(9	)		(62	)
Interest expense		-			(4	)		(6	)		(9	)		-			(19	)
Equity accounted Company FFO		-			4			13			-			-			17
Current income taxes		10			-			(1	)		(8	)		3			4
Realized disposition gains, net		2			5			36			229			-			272
Company FFO attributable to others		-			(11	)		(36	)		(130	)		-			(177	)
Company FFO^1,2		(3	)		4			20			79			(5	)		95
Depreciation and amortization																	(65	)
Impairment expense																	(7	)
Deferred income taxes																	(4	)
Other expense, net																	14
Non-cash items attributable to equity accounted investments																	(7	)
Non-cash items attributable to others																	40
Net loss attributable to unitholders²																$	66

Notes:
1	The Statements of Company Funds from Operations above are prepared on a basis that is consistent with Brookfield Business Partner's 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 parent company prior to the Spin-off on June 20, 2016 and to limited partnership unitholders, general partnership unitholders, and redemption-exchange unitholders post Spin-off.

For the 3 months ended March 31, 2016 US$ millions, unaudited	Construction Services			Business Services			Energy			Industrial Operations			Corporate and Other		As per IFRS Financials
Revenues	$	888		$	451		$	66		$	272		$	-	$	1,677
Direct operating costs		(856	)		(418	)		(43	)		(252	)		-		(1,569	)
General and administrative expenses		(10	)		(24	)		(4	)		(24	)		-		(62	)
Interest expense		-			(4	)		(8	)		(12	)		-		(24	)
Equity accounted Company FFO		-			3			53			-			-		56
Current income taxes		-			(2	)		(1	)		-			-		(3	)
Realized disposition gain, net		-			-			-			-			-		-
Company FFO attributable to others		-			(4	)		(45	)		11			-		(38	)
Company FFO^1,2		22			2			18			(5	)		-		37
Depreciation and amortization																(72	)
Impairment expense																-
Deferred income taxes																7
Other income, net																(10	)
Non-cash items attributable to equity accounted investments																(29	)
Non-cash items attributable to others																62
Net income attributable to parent company															$	(5	)

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 parent company.