BROOKFIELD, NEWS,
“We had a successful start to the year, generating strong financial performance and committing approximately
| Three Months Ended |
||||
| US$ millions (except per unit amounts), unaudited | 2022 | 2021 | ||
| Net income (loss) attributable to unitholders1 | $ | 28 | $ | 530 |
| Net income (loss) per limited partnership unit2 | $ | 0.18 | $ | 3.57 |
| Adjusted EBITDA3 | $ | 506 | $ | 387 |
Net income attributable to unitholders for the three months ended
Adjusted EBITDA for the three months ended
Operational Update
The following table presents Adjusted EBITDA by segment:
| Three Months Ended |
||||||
| US$ millions, unaudited | 2022 | 2021 | ||||
| Industrials | $ | 217 | $ | 172 | ||
| Infrastructure Services | 208 | 136 | ||||
| Business Services | 114 | 104 | ||||
| Corporate and Other | (33 | ) | (25 | ) | ||
| Adjusted EBITDA3 | $ | 506 | $ | 387 | ||
Our Industrials segment generated Adjusted EBITDA of
Our Infrastructure Services segment generated Adjusted EBITDA of
Our Business Services segment generated Adjusted EBITDA of
The following table presents Adjusted EFO4 by segment:
| Three Months Ended |
||||||
| US$ millions, unaudited | 2022 | 2021 | ||||
| Industrials | $ | 122 | $ | 421 | ||
| Infrastructure Services | 139 | 73 | ||||
| Business Services | 80 | 70 | ||||
| Corporate and Other | (31 | ) | (19 | ) | ||
Adjusted EFO for the three months ended
Strategic Initiatives
- Lottery Services
InApril 2022 we completed the acquisition of Scientific Games, a global leading technology and services provider to government-sponsored lottery programs, for$5.7 billion . We funded approximately$820 million of the$2.4 billion equity investment for a 35% ownership interest, with the balance from institutional partners. A portion of our investment may be syndicated to other institutional partners.
Dealer Software and Technology Services
InApril 2022 we signed an agreement to acquire CDK Global Inc. ("CDK Global") for approximately$8.3 billion . CDK Global is a leading provider of mission-critical technology services and software solutions that help automotive dealers run their businesses more efficiently. The transaction will be funded with$3.5 billion of equity, of which we intend to fund approximately$500 million , with the balance funded from institutional partners.
- Audience Measurement Services
InMarch 2022 we entered into a partnership to acquire Nielsen Holdings plc ("Nielsen"), a global leader in third-party audience measurement, data and analytics across all forms of media and content. Together with institutional partners, we will invest approximately$2.65 billion by way of preferred equity, convertible into 45% of Nielsen’s common equity. Our share of the preferred equity investment is approximately$600 million . A portion of our investment may be syndicated to other institutional partners.
- Australian Residential Mortgage Lending Services
InMarch 2022 we signed an agreement to acquireLa Trobe Financial ("La Trobe") for approximately$1.1 billion including a contingent payment tied to the business achieving certain performance milestones. La Trobe is a leading Australian non-bank lender and asset manager, providing an essential service to the Australian residential real estate lending market. The transaction will be funded with$765 million of equity, of which we intend to fund approximately$250 million , with the balance funded from institutional partners. A portion of our investment may be syndicated to other institutional partners.
- Payment Processing Services
InFebruary 2022 we signed an agreement to acquire 60% of Magnati, a technology-enabled payment services provider in theMiddle East . The transaction will be funded with$190 million of initial equity, of which we intend to invest approximately$65 million for a 20% ownership interest, with the balance funded from institutional partners.
- Non-control Investments
InMarch 2022 we agreed to subscribe for$267 million of convertible preferred shares ofJPFL Films Private Limited , anIndia -based market-leading manufacturer of flexible plastic films. Our share of the investment is approximately$45 million , with the balance funded from institutional partners. We also provided$374 million of financing through non-convertible preferred shares, common shares and warrants to Chorus Aviation, a Canadian regional aviation and aircraft leasing services provider, to fund its growth initiatives. Our share of the investment was approximately$55 million , with the balance funded from institutional partners.
Brookfield Business Corporation
OnMarch 15, 2022 , we completed the previously announced creation ofBrookfield Business Corporation ("BBUC"), our paired corporate entity, through a special distribution of shares of the newly created corporation. Existing holders of Brookfield Business Partners’ limited partnership units received one class A exchangeable subordinate voting share of BBUC for every two units held. From an economic and accounting perspective, the special distribution was analogous to a unit split as it did not result in any underlying change to aggregate cash flows or net asset value except for the adjustment for the aggregate number of units/shares outstanding.
- Unit Repurchase Program
For the three months endedMarch 31, 2022 we repurchased 1,118,136 ofBrookfield Business Partners L.P. units under our normal course issuer bid (NCIB).
Liquidity
We ended the quarter with approximately
Subsequent to quarter end, Brookfield Asset Management agreed to subscribe for an additional
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 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 which was 76.7 million for the three months ended
March 31, 2022 (March 31, 2021 : 78.8 million). - 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, gains (losses) on acquisition/disposition, net, transaction costs, restructuring charges, revaluation gains or losses, impairment expense, and other income (expense), net. 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 IFRS consolidated statement 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 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, deferred income taxes, transaction costs, restructuring charges, revaluation gains or losses, impairment expense, and other income or expense items. 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 IFRS consolidated statement of operating results. In order to provide additional insight regarding the Partnership’s operating performance over the lifecycle of an investment, Adjusted EFO includes realized disposition gains or losses, recorded in net income, other comprehensive income, or directly in equity, such as ownership changes. 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.
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: Tel: +1 (416) 943-7937 Email: [email protected] |
Investors: Tel: +1 (416) 645-2736 Email: [email protected] |
Conference Call and Quarterly Earnings Webcast Details
Investors, analysts and other interested parties can access Brookfield Business Partners’ first quarter 2022 results as well as the Letter to Unitholders and Supplemental Information on our website https://bbu.brookfield.com under Reports & Filings.
The conference call can be accessed via webcast on
Consolidated Statements of Financial Position
| As at | |||||||||
| US$ millions, unaudited | 2022 |
2021 |
|||||||
| Assets | |||||||||
| Cash and cash equivalents | $ | 2,277 | $ | 2,588 | |||||
| Financial assets | 8,910 | 8,550 | |||||||
| Accounts and other receivable, net | 6,416 | 5,638 | |||||||
| Inventory and other assets | 6,994 | 6,359 | |||||||
| Property, plant and equipment | 15,399 | 15,325 | |||||||
| Deferred income tax assets | 940 | 888 | |||||||
| Intangible assets | 15,049 | 14,806 | |||||||
| Equity accounted investments | 1,532 | 1,480 | |||||||
| 8,645 | 8,585 | ||||||||
| Total Assets | $ | 66,162 | $ | 64,219 | |||||
| Liabilities and Equity | |||||||||
| Liabilities | |||||||||
| Corporate borrowings | $ | 1,701 | $ | 1,619 | |||||
| Accounts payable and other | 20,255 | 19,636 | |||||||
| Non-recourse borrowings in subsidiaries of |
28,656 | 27,457 | |||||||
| Deferred income tax liabilities | 2,527 | 2,507 | |||||||
| $ | 53,139 | $ | 51,219 | ||||||
| Equity | |||||||||
| Limited partners | $ | 1,477 | $ | 2,252 | |||||
| Non-controlling interests attributable to: | |||||||||
| Redemption-exchange units | 1,359 | 2,011 | |||||||
| Special limited partnership units | — | — | |||||||
| Preferred shares | 15 | 15 | |||||||
| BBUC exchangeable shares | 1,423 | — | |||||||
| Interest of others in operating subsidiaries | 8,749 | 8,722 | |||||||
| 13,023 | 13,000 | ||||||||
| Total Liabilities and Equity | $ | 66,162 | $ | 64,219 | |||||
Consolidated Statements of Operating Results
| Three Months Ended |
||||||
| US$ millions, unaudited | 2022 | 2021 | ||||
| Revenues | $ | 13,472 | $ | 9,829 | ||
| Direct operating costs | (12,595 | ) | (8,978 | ) | ||
| General and administrative expenses | (300 | ) | (251 | ) | ||
| Interest income (expense), net | (460 | ) | (348 | ) | ||
| Equity accounted income (loss), net | 50 | 29 | ||||
| Impairment expense, net | — | (201 | ) | |||
| Gain (loss) on acquisitions/dispositions, net | — | 1,807 | ||||
| Other income (expense), net | (99 | ) | 39 | |||
| Income (loss) before income tax | 68 | 1,926 | ||||
| Income tax (expense) recovery | ||||||
| Current | (79 | ) | (193 | ) | ||
| Deferred | 30 | 34 | ||||
| Net income (loss) | $ | 19 | $ | 1,767 | ||
| Attributable to: | ||||||
| Limited partners | $ | 14 | $ | 281 | ||
| Non-controlling interests attributable to: | ||||||
| Redemption-exchange units held by Brookfield Asset Management Inc. | 12 | 249 | ||||
| Special limited partners | — | — | ||||
| BBUC exchangeable shares | 2 | — | ||||
| Interest of others in operating subsidiaries | (9 | ) | 1,237 | |||
Reconciliation of Non-IFRS Measures
| Three Months Ended |
||||||||||||||||||||
| US$ millions, unaudited | Business Services |
Infrastructure Services |
Industrials | Corporate and Other |
Total | |||||||||||||||
| Net income (loss) | $ | 32 | $ | 52 | $ | (34 | ) | $ | (31 | ) | $ | 19 | ||||||||
| Add or subtract the following: | ||||||||||||||||||||
| Depreciation and amortization expense | 114 | 251 | 337 | — | 702 | |||||||||||||||
| Other income (expense), net1 | (4 | ) | 44 | 59 | — | 99 | ||||||||||||||
| Income tax (expense) recovery | 2 | (2 | ) | 62 | (13 | ) | 49 | |||||||||||||
| Equity accounted income (loss), net | (5 | ) | (19 | ) | (26 | ) | — | (50 | ) | |||||||||||
| Interest income (expense), net | 74 | 131 | 244 | 11 | 460 | |||||||||||||||
| Equity accounted Adjusted EBITDA2 | 9 | 26 | 23 | — | 58 | |||||||||||||||
| Amounts attributable to non-controlling interests3 | (108 | ) | (275 | ) | (448 | ) | — | (831 | ) | |||||||||||
| Adjusted EBITDA | $ | 114 | $ | 208 | $ | 217 | $ | (33 | ) | $ | 506 | |||||||||
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 includes $17 million of net revaluation losses, $29 million of business separation expenses, stand-up costs and restructuring charges, $19 million in transaction costs and $34 million of other expenses.
- Equity accounted Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to the Partnership that is generated by its investments in associates and joint ventures accounted for using the equity method.
- Adjusted EBITDA that is attributable to non-controlling interests in consolidated subsidiaries.
Reconciliation of Non-IFRS Measures
| Three Months Ended |
||||||||||||||||||||
| US$ millions, unaudited | Business Services |
Infrastructure Services |
Industrials | Corporate and Other |
Total | |||||||||||||||
| Net income (loss) | $ | 133 | $ | 24 | $ | 1,629 | $ | (19 | ) | $ | 1,767 | |||||||||
| Add or subtract the following: | ||||||||||||||||||||
| Depreciation and amortization expense | 103 | 172 | 267 | — | 542 | |||||||||||||||
| Impairment expense, net | (13 | ) | — | 214 | — | 201 | ||||||||||||||
| Gain (loss) on acquisitions/dispositions, net | — | — | (1,807 | ) | — | (1,807 | ) | |||||||||||||
| Other income (expense), net1 | 16 | (27 | ) | (28 | ) | — | (39 | ) | ||||||||||||
| Income tax (expense) recovery | 42 | 4 | 123 | (10 | ) | 159 | ||||||||||||||
| Equity accounted income (loss), net | 2 | (4 | ) | (27 | ) | — | (29 | ) | ||||||||||||
| Interest income (expense), net | 48 | 83 | 213 | 4 | 348 | |||||||||||||||
| Equity accounted Adjusted EBITDA2 | 3 | 28 | 20 | — | 51 | |||||||||||||||
| Amounts attributable to non-controlling interests3 | (230 | ) | (144 | ) | (432 | ) | — | (806 | ) | |||||||||||
| Adjusted EBITDA | $ | 104 | $ | 136 | $ | 172 | $ | (25 | ) | $ | 387 | |||||||||
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 $119 million of net revaluation gains, $24 million of business separation expenses, stand-up costs and restructuring charges, $10 million in transaction costs and $46 million of other expenses.
- Equity accounted Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to the Partnership that is generated by its investments in associates and joint ventures accounted for using the equity method.
- Adjusted EBITDA that is attributable to non-controlling interests in consolidated subsidiaries.
Brookfield Business Corporation Reports First Quarter 2022 Results
Brookfield, News,
| Three Months Ended |
|||||
| US$ millions, unaudited | 2022 | 2021 | |||
| Net income (loss) attributable to |
$ | (164 | ) | $ | 11 |
Net loss attributable to
Dividend
The Board of Directors has declared a quarterly dividend in the amount of
Additional Information
Each exchangeable share of
In addition to carefully considering the disclosures made in this news release in its entirety, shareholders are strongly encouraged to carefully review our 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 report has been filed on SEDAR and EDGAR, and is available at https://bbu.brookfield.com/bbuc under Reports & Filings. Hard copies of the annual report can be obtained free of charge upon request.
Consolidated Statements of Financial Position
| As at | |||||||||||
| US$ millions, unaudited | |||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 667 | $ | 894 | |||||||
| Financial assets | 408 | 349 | |||||||||
| Accounts and other receivable, net | 2,862 | 2,281 | |||||||||
| Inventory, net | 581 | 580 | |||||||||
| Other assets | 939 | 920 | |||||||||
| Property, plant and equipment | 4,077 | 4,036 | |||||||||
| Deferred income tax assets | 358 | 348 | |||||||||
| Intangible assets | 4,593 | 4,226 | |||||||||
| Equity accounted investments | 88 | 70 | |||||||||
| 2,275 | 2,216 | ||||||||||
| Total Assets | $ | 16,848 | $ | 15,920 | |||||||
| Liabilities and Equity | |||||||||||
| Liabilities | |||||||||||
| Accounts payable and other | $ | 7,345 | $ | 7,191 | |||||||
| Loan payable to |
— | 1,860 | |||||||||
| Non-recourse borrowings in subsidiaries of |
5,759 | 5,246 | |||||||||
| Exchangeable and class B shares | 2,243 | — | |||||||||
| Deferred income tax liabilities | 544 | 487 | |||||||||
| $ | 15,891 | $ | 14,784 | ||||||||
| Equity | |||||||||||
| $ | (673 | ) | $ | (516 | ) | ||||||
| Non-controlling interests | 1,630 | 1,652 | |||||||||
| 957 | 1,136 | ||||||||||
| Total Liabilities and Equity | $ | 16,848 | $ | 15,920 | |||||||
Consolidated Statements of Operating Results
| Three Months Ended |
||||||
| US$ millions, unaudited | 2022 | 2021 | ||||
| Revenues | $ | 2,251 | $ | 2,369 | ||
| Direct operating costs | (2,025 | ) | (2,175 | ) | ||
| General and administrative expenses | (68 | ) | (62 | ) | ||
| Interest income (expense), net | (107 | ) | (99 | ) | ||
| Equity accounted income (loss), net | 1 | 1 | ||||
| Remeasurement of exchangeable and class B shares | (168 | ) | — | |||
| Other income (expense), net | (43 | ) | 11 | |||
| Income (loss) before income tax | (159 | ) | 45 | |||
| Income tax (expense) recovery | ||||||
| Current | (16 | ) | (23 | ) | ||
| Deferred | 12 | 14 | ||||
| Net income (loss) | $ | (163 | ) | $ | 36 | |
| Attributable to: | ||||||
| $ | (164 | ) | $ | 11 | ||
| Non-controlling interests | 1 | 25 | ||||
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
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 ongoing novel coronavirus (SARS-CoV-2) pandemic, including any SARS-CoV-2 variants (collectively, “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, wars and related developments including Russia’s military operation in
In addition, our future results may be impacted by various government mandated economic restrictions resulting from the ongoing COVID-19 pandemic and the related global reduction in commerce and travel and substantial volatility in stock markets worldwide, which may negatively impact our revenues, affect our ability to identify and complete future transactions, impact our liquidity position and result in a decrease of cash flows and impairment losses and/or revaluations on our investments and assets, and therefore we may be unable to achieve our expected returns. See “Risks Associated with the COVID-19 Pandemic” in the “Risks Factors” section included in our 2021 Annual Report.
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,
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 measure is a useful supplemental measure that may assist investors in assessing the financial performance of
References to
Source:
| Title | Document |
|---|---|
English |