“The unprecedented impact of the COVID-19 pandemic has dramatically altered the global economic landscape. In light of this our focus has been on protecting the health and safety of our people and partners around the world, while working closely with our management teams to support our operations and maximize liquidity. We are also cautiously considering new investment opportunities," said
| Three Months Ended |
||||||||
| US$ millions (except per unit amount), unaudited | 2020 | 2019 | ||||||
| Net income (loss) attributable to unitholders1 | $ | (126) | $ | 62 | ||||
| Net income (loss) per limited partnership unit2 | $ | (0.84) | $ | 0.48 | ||||
| Company EBITDA1,3 | $ | 294 | $ | 266 | ||||
| Company FFO1,4 | $ | 194 | $ | 205 | ||||
| Company FFO per unit2 | $ | 1.29 | $ | 1.59 | ||||
Operational Update
The following table presents Company EBITDA by segment:
| Three Months Ended |
||||||||
| US$ millions, unaudited | 2020 | 2019 | ||||||
| Business Services | $ | 19 | $ | 45 | ||||
| Infrastructure Services | 156 | 135 | ||||||
| Industrials | 145 | 107 | ||||||
| Corporate and Other | (26) | (21) | ||||||
| Company EBITDA1,3 | $ | 294 | $ | 266 | ||||
Our business services segment generated Company EBITDA of
Our infrastructure services segment generated Company EBITDA of
Our industrials segment generated Company EBITDA of
The following table presents Company FFO by segment:
| Three Months Ended |
||||||||
| US$ millions, unaudited | 2020 | 2019 | ||||||
| Business Services | $ | 42 | $ | 32 | ||||
| Infrastructure Services | 104 | 102 | ||||||
| Industrials | 57 | 81 | ||||||
| Corporate and Other | (9) | (10) | ||||||
| Company FFO1,4 | $ | 194 | $ | 205 | ||||
| Gain (loss) on acquisitions/dispositions, net | $ | 42 | $ | — | ||||
| Company FFO, excluding gain (loss) on acquisitions/dispositions1,4 | $ | 152 | $ | 205 | ||||
| Company FFO, excluding gain (loss) on acquisitions/dispositions per unit2 | $ | 1.01 | $ | 1.59 | ||||
Company FFO for the three months ended
Liquidity
We ended the quarter with approximately
Unit Repurchase Program
For the three months ended
Distribution
The Board of Directors 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:
- Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
- Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redemption exchange units held by Brookfield Asset Management for limited partnership units, for the three months ended
March 31, 2020 was 150.6 million, (2019: 129.2 million). - Company EBITDA is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as Company FFO excluding the impact of realized disposition gains (losses), interest income (expense), current income taxes, the impact of realized disposition gains (losses), current income taxes and interest income (expense) related to equity accounted investments, and other items. When determining Company EBITDA, we include our proportionate share of Company EBITDA of equity accounted investments. A reconciliation of net income to Company EBITDA is available on pages 7-8 of this release.
- 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 as appropriate and other items. When determining Company FFO, we include our proportionate share of Company FFO of equity accounted investments. A reconciliation of net income to Company FFO is available on pages 7-8 of this release.
Please note that
For more information, please contact:
| Media: Tel: +1 (416) 369-8236 Email: [email protected] |
Investors: Tel: +1 (416) 645-2736 Email: [email protected] |
Conference Call and 2020 First Quarter Earnings Conference Call and Webcast Details
Investors, analysts and other interested parties can access Brookfield Business Partners’ 2020 first 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
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; including as a result of the recent novel coronavirus outbreak (“COVID-19”); 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; hurricanes and pandemics/epidemics; 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
In addition, our future results may be impacted by COVID-19 and the related global reduction in commerce and travel and substantial volatility in stock markets worldwide, which may result in a decrease of cash flows and impairment losses and/or revaluations on our investments and assets, and we may be unable to achieve our expected returns. See “Risks Associated with the COVID-19 Pandemic” in the “Risks and Uncertainties” section included in our Management’s Discussion and Analysis of Financial Condition and Results of Operations for the first quarter ended
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 Non-IFRS Measures. When determining Company FFO and Company EBITDA, we include our unitholders’ proportionate share of Company FFO and Company EBITDA for equity accounted investments. Company FFO and Company EBITDA are not generally accepted accounting measures under IFRS and therefore may differ from definitions used by other entities. We believe these metrics are useful supplemental measures that may assist investors in assessing the financial performance of
References to
Brookfield Business Partners L.P.
Consolidated Statements of Financial Position
| As of | ||||||||||||||||
| US$ millions, unaudited | 2020 |
2019 |
||||||||||||||
| Assets | ||||||||||||||||
| Cash and cash equivalents | $ | 2,049 | $ | 1,986 | ||||||||||||
| Financial assets | 5,588 | 6,243 | ||||||||||||||
| Accounts and other receivable, net | 5,042 | 5,631 | ||||||||||||||
| Inventory and other assets | 5,279 | 5,282 | ||||||||||||||
| Property, plant and equipment | 13,429 | 13,892 | ||||||||||||||
| Deferred income tax assets | 757 | 667 | ||||||||||||||
| Intangible assets | 10,840 | 11,559 | ||||||||||||||
| Equity accounted investments | 1,635 | 1,273 | ||||||||||||||
| 4,800 | 5,218 | |||||||||||||||
| $ | 49,419 | $ | 51,751 | |||||||||||||
| Liabilities and equity | ||||||||||||||||
| Liabilities | ||||||||||||||||
| Corporate borrowings | $ | 283 | nil | |||||||||||||
| Accounts payable and other | 15,652 | 16,496 | ||||||||||||||
| Non-recourse borrowings in subsidiaries of |
22,780 | 22,399 | ||||||||||||||
| Deferred income tax liabilities | 1,650 | 1,803 | ||||||||||||||
| $ | 40,365 | $ | 40,698 | |||||||||||||
| Equity | ||||||||||||||||
| Limited partners | 1,718 | 2,116 | ||||||||||||||
| Non-Controlling interests attributable to: | ||||||||||||||||
| Redemption-Exchange Units, Preferred Shares and Special Limited Partnership Units held by Brookfield Asset Management Inc. | 1,343 | 1,676 | ||||||||||||||
| Interest of others in operating subsidiaries | 5,993 | 7,261 | ||||||||||||||
| 9,054 | 11,053 | |||||||||||||||
| $ | 49,419 | $ | 51,751 | |||||||||||||
Consolidated Statements of Operating Results
| Three Months Ended |
||||||||||||||||
| US$ millions, unaudited | 2020 | 2019 | ||||||||||||||
| Revenues | $ | 10,146 | $ | 9,201 | ||||||||||||
| Direct operating costs | (8,901) | (8,193) | ||||||||||||||
| General and administrative expenses | (244) | (178) | ||||||||||||||
| Depreciation and amortization expense | (538) | (311) | ||||||||||||||
| Interest income (expense), net | (364) | (184) | ||||||||||||||
| Equity accounted income (loss), net | (9) | 7 | ||||||||||||||
| Impairment expense, net | (113) | — | ||||||||||||||
| Gain (loss) on acquisitions/dispositions, net | 183 | (2) | ||||||||||||||
| Other income (expense), net | (217) | (90) | ||||||||||||||
| Income (loss) before income tax | (57) | 250 | ||||||||||||||
| Income tax (expense) recovery | ||||||||||||||||
| Current | (75) | (30) | ||||||||||||||
| Deferred | 98 | (19) | ||||||||||||||
| Net income (loss) | $ | (34) | $ | 201 | ||||||||||||
| Attributable to: | ||||||||||||||||
| Limited partners | $ | (67) | $ | 32 | ||||||||||||
| Non-controlling interests attributable to: | ||||||||||||||||
| Redemption-Exchange Units held by Brookfield Asset Management Inc. | (59) | 30 | ||||||||||||||
| — | — | |||||||||||||||
| Interest of others in operating subsidiaries | $ | 92 | $ | 139 | ||||||||||||
Statements of Company Funds from Operations
| For the three months ended US$ millions, unaudited |
Business Services |
Infrastructure Services |
Industrials | Corporate and Other |
Total | |||||||||||||||||||||||||
| Revenues | $ | 6,529 | $ | 1,170 | $ | 2,447 | $ | — | $ | 10,146 | ||||||||||||||||||||
| Direct operating costs | (6,258) | (808) | (1,833) | (2) | (8,901) | |||||||||||||||||||||||||
| General and administrative expenses | (91) | (38) | (91) | (24) | (244) | |||||||||||||||||||||||||
| Equity accounted Company EBITDA | 11 | 35 | 26 | — | 72 | |||||||||||||||||||||||||
| Company EBITDA attributable to others | (172) | (203) | (404) | — | (779) | |||||||||||||||||||||||||
| Company EBITDA1,2,4 | 19 | 156 | 145 | (26) | 294 | |||||||||||||||||||||||||
| Realized disposition gain, net | 186 | — | (3) | — | 183 | |||||||||||||||||||||||||
| Other income (expense), net | 6 | (6) | — | — | — | |||||||||||||||||||||||||
| Interest income (expense), net | (58) | (89) | (223) | 6 | (364) | |||||||||||||||||||||||||
| Equity accounted current taxes and interest | (2) | (8) | (4) | — | (14) | |||||||||||||||||||||||||
| Current income taxes | (19) | (2) | (65) | 11 | (75) | |||||||||||||||||||||||||
| Company FFO attributable to others (net of Company EBITDA attributable to others) | (90) | 53 | 207 | — | 170 | |||||||||||||||||||||||||
| Company FFO1,3,4 | 42 | 104 | 57 | (9) | 194 | |||||||||||||||||||||||||
| Depreciation and amortization expense | (538) | |||||||||||||||||||||||||||||
| Impairment expense, net | (113) | |||||||||||||||||||||||||||||
| Gain on acquisition and disposition | — | |||||||||||||||||||||||||||||
| Other income (expense), net | (217) | |||||||||||||||||||||||||||||
| Deferred income taxes | 98 | |||||||||||||||||||||||||||||
| Non-cash items attributable to equity accounted investments | (67) | |||||||||||||||||||||||||||||
| Non-cash items attributable to others | 517 | |||||||||||||||||||||||||||||
| Net income (loss) attributable to unitholders4 | $ | (126) | ||||||||||||||||||||||||||||
Notes:
- 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 FFO and Company EBITDA as key measures to evaluate operating performance. Readers are encouraged to consider all measures in assessing Brookfield Business Partners’ results.
- Company EBITDA is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as Company FFO excluding the impact of realized disposition gains (losses), interest income (expense), current income taxes, the impact of realized disposition gains (losses), current income taxes and interest income (expense) related to equity accounted investments, and other items. When determining Company EBITDA, we include our proportionate share of Company EBITDA of equity accounted investments.
- 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 as appropriate and other items. When determining Company FFO, we include our proportionate share of Company FFO of equity accounted investments.
- Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
Statements of Company Funds from Operations
| For the three months ended US$ millions, unaudited |
Business Services |
Infrastructure Services |
Industrials | Corporate and Other |
Total | |||||||||||||||||||||||
| Revenues | $ | 6,935 | $ | 1,289 | $ | 977 | $ | — | $ | 9,201 | ||||||||||||||||||
| Direct operating costs | (6,778) | (892) | (521) | (2) | (8,193) | |||||||||||||||||||||||
| General and administrative expenses | (67) | (34) | (58) | (19) | (178) | |||||||||||||||||||||||
| Equity accounted Company EBITDA | 8 | 21 | 4 | — | 33 | |||||||||||||||||||||||
| Company EBITDA attributable to others | (53) | (249) | (295) | — | (597) | |||||||||||||||||||||||
| Company EBITDA1,2,4 | 45 | 135 | 107 | (21) | 266 | |||||||||||||||||||||||
| Realized disposition gain, net | — | — | (2) | — | (2) | |||||||||||||||||||||||
| Other income (expense), net | — | (4) | 2 | — | (2) | |||||||||||||||||||||||
| Interest income (expense), net | (20) | (101) | (69) | 6 | (184) | |||||||||||||||||||||||
| Equity accounted current taxes and interest | (1) | (3) | (1) | — | (5) | |||||||||||||||||||||||
| Current income taxes | (10) | 9 | (34) | 5 | (30) | |||||||||||||||||||||||
| Company FFO attributable to others (net of Company EBITDA attributable to others) | 18 | 66 | 78 | — | 162 | |||||||||||||||||||||||
| Company FFO1,3,4 | 32 | 102 | 81 | (10) | 205 | |||||||||||||||||||||||
| Depreciation and amortization expense | (311) | |||||||||||||||||||||||||||
| Impairment expense, net | — | |||||||||||||||||||||||||||
| Gain on acquisition and disposition | — | |||||||||||||||||||||||||||
| Other income (expense), net | (88) | |||||||||||||||||||||||||||
| Deferred income taxes | (19) | |||||||||||||||||||||||||||
| Non-cash items attributable to equity accounted investments | (21) | |||||||||||||||||||||||||||
| Non-cash items attributable to others | 296 | |||||||||||||||||||||||||||
| Net income (loss) attributable to unitholders4 | $ | 62 | ||||||||||||||||||||||||||
Notes:
- 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 FFO and Company EBITDA as key measures to evaluate operating performance. Readers are encouraged to consider all measures in assessing Brookfield Business Partners’ results.
- Company EBITDA is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as Company FFO excluding the impact of realized disposition gains (losses), interest income (expense), current income taxes, the impact of realized disposition gains (losses), current income taxes and interest income (expense) related to equity accounted investments, and other items. When determining Company EBITDA, we include our proportionate share of Company EBITDA of equity accounted investments.
- 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 as appropriate and other items. When determining Company FFO, we include our proportionate share of Company FFO of equity accounted investments.
- Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
Reconciliation of Net Income per Unit
| Three Months Ended |
|||||||||||||||
| US$, unaudited | 2020 | 2019 | |||||||||||||
| Net income (loss) per unitholder, excluding incentive distribution1 | $ | (0.84) | $ | 0.48 | |||||||||||
| Incentive distribution per unit | — | — | |||||||||||||
| Net income (loss) attributable to limited partnership unit1 | $ | (0.84) | $ | 0.48 | |||||||||||
Notes:
- Average number of partnership units outstanding on a fully diluted time weighted average basis, assuming the exchange of redemption exchange units held by Brookfield Asset Management for limited partnership units, for the three months ended
March 31, 2020 was 150.6 million, (2019: 129.2 million).
Source:
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English |