"This quarter we continued to execute on our growth strategy with the closing of the
| Three months ended June 30 |
Six months ended June 30 |
|||||||||||
| US$ millions (except per unit amount), unaudited | 2017 | 2016 | 2017 | 2016 | ||||||||
| Net (loss) income attributable to unitholders1 | $ | (6 | ) | $ | (33 | ) | $ | 60 | $ | (38 | ) | |
| - per unit2,3 | $ | (0.06 | ) | n/a | $ | 0.55 | $ | n/a | ||||
| Company FFO1,4 | $ | 43 | $ | 58 | $ | 138 | $ | 95 | ||||
| - per unit2,3 | $ | 0.40 | n/a | $ | 1.28 | $ | n/a | |||||
Operational Update
The following table presents Company FFO by segment:
| Three months ended June 30 |
Six months ended June 30 |
|||||||||||
| US$ millions, unaudited | 2017 | 2016 | 2017 | 2016 | ||||||||
| Business Services | $ | 17 | $ | 15 | $ | 21 | $ | 17 | ||||
| Construction Services | 12 | 25 | 9 | 47 | ||||||||
| Energy | 11 | 17 | 31 | 35 | ||||||||
| Industrial Operations | 8 | 2 | 87 | (3 | ) | |||||||
| Corporate and Other | (5 | ) | (1 | ) | (10 | ) | (1 | ) | ||||
| Company FFO1,2 | $ | 43 | $ | 58 | $ | 138 | $ | 95 | ||||
Our business services segment generated Company FFO of
Our construction services segment contributed
Our energy segment generated Company FFO of
Our industrial operations segment generated Company FFO of
Strategic Initiatives Update
As noted above, we completed three acquisitions this year and are working on closing another. All these acquisitions fit within our strategy of acquiring businesses we believe will grow in value over the long term:
- Brazilian water and sewage treatment operations
In April, together with our institutional partners, we acquired a 70% interest in the largest private water company inBrazil , now renamed BRK Ambiental. Our equity investment was approximately$340 million . In addition, we acquired related assets in a joint venture of which our share of the investment was approximately$43 million . BRK Ambiental will invest significantly to improve and expand its network and is well positioned for future growth.
UK road fuels logistics
In May, together with institutional partners, we acquiredGreenergy , a supplier and distributor of road fuels.Brookfield Business Partners' share of the equity investment was$45 million . We intend to work with the company's management to grow it's footprint globally.
- Canadian gas station network
Together with our institutional partners, we closed our acquisition ofLoblaw's network of gas stations and convenience kiosks in July. Our share of the equity investment was approximately$43 million for a 25% share of the business. We plan to grow this business, which already benefits from significant scale and strong customer loyalty, by rebranding to the Mobil fuel brand and by further building out this network.
- Global provider of marine services
In July, together with our institutional partners, we entered into a definitive agreement to acquire 60% of Teekay Offshore for a total investment of approximately$750 million . This includes an equity investment of$610 million and acquisition of a$200 million loan fromTeekay Corporation . Teekay Offshore is an international provider of marine transportation, oil production, storage, long-distance towing and offshore installation, maintenance and safety services to the oil industry. As a fee-based business focused on critical services, Teekay Offshore has limited direct commodity exposure and the company has a substantial portfolio of medium to long-term, fixed-rate contracts with high quality, primarily investment grade counterparties. Our investment will strengthen Teekay Offshore's balance sheet thereby positioning Teekay Offshore to better service its customers and to take advantage of future growth opportunities, primarily several growth projects in late stages of completion.
Changes to the Board of Directors
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.
Notes:
- 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. - Comparative figures not representative of performance, as units were spun out on
June 20, 2016 . - 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 and six months endedJune 30, 2017 was 108 million and the ten days post spin-off endedJune 20, 2017 was 92 million. - 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 loss to Company FFO is available on page 8 and 9 of this release.
For more information, please visit our website at https://bbu.brookfield.com.
Conference Call and First Quarter 2017 Earnings Details
Investors, analysts and other interested parties can access
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 USE OF NON-IFRS MEASURES
This press 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
| Brookfield Business Partners L.P. | |||||
| Consolidated Statements of Financial Position | |||||
| As of | |||||
| US$ millions, unaudited | Jun. 30, 2017 | Dec. 31, 2016 | |||
| Assets | |||||
| Cash and cash equivalents | $ | 1,045 | $ | 1,050 | |
| Financial assets | 669 | 539 | |||
| Accounts receivable, net | 3,807 | 1,797 | |||
| Inventory and other assets | 1,568 | 647 | |||
| Assets held for sale | 94 | 264 | |||
| Property, plant and equipment | 2,388 | 2,096 | |||
| Deferred income tax assets | 176 | 111 | |||
| Intangible assets | 2,977 | 371 | |||
| Equity accounted investments | 379 | 166 | |||
| Goodwill | 1,289 | 1,152 | |||
| Total assets | $ | 14,392 | $ | 8,193 | |
| Liabilities and equity | |||||
| Liabilities | |||||
| Accounts payable and other | $ | 4,935 | $ | 2,457 | |
| Liabilities associated with assets held for sale | 39 | 66 | |||
| Borrowings | 3,209 | 1,551 | |||
| Deferred income tax liabilities | 895 | 81 | |||
| Total liabilities | 9,078 | 4,155 | |||
| Equity1 | |||||
| Limited partners | 1,234 | 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. | 1,326 | 1,295 | |||
| Interest of others in operating subsidiaries | 2,754 | 1,537 | |||
| Total equity | 5,314 | 4,038 | |||
| Total liabilities and equity | $ | 14,392 | $ | 8,193 | |
Note:
- 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 andSpecial LP unitholders.
| Brookfield Business Partners L.P. | ||||||||||||||
| Consolidated Statements of Operating Results | ||||||||||||||
| Three months ended June 30 |
Six months ended June 30 |
|||||||||||||
| US$ millions, unaudited | 2017 | 2016 | 2017 | 2016 | ||||||||||
| Revenues | $ | 4,870 | $ | 2,008 | $ | 6,804 | $ | 3,685 | ||||||
| Direct operating costs | (4,673 | ) | (1,865 | ) | (6,547 | ) | (3,434 | ) | ||||||
| General and administrative expenses | (76 | ) | (64 | ) | (138 | ) | (126 | ) | ||||||
| Depreciation and amortization expense | (88 | ) | (76 | ) | (153 | ) | (148 | ) | ||||||
| Interest expense | (50 | ) | (23 | ) | (69 | ) | (47 | ) | ||||||
| Equity accounted income, net | 14 | 20 | 24 | 47 | ||||||||||
| Impairment expense | (23 | ) | (106 | ) | (30 | ) | (106 | ) | ||||||
| Gain on acquisitions/dispositions | 9 | 28 | 281 | 28 | ||||||||||
| Other income (expenses), net | (9 | ) | (21 | ) | 5 | (31 | ) | |||||||
| Income (loss) before income tax | (26 | ) | (99 | ) | 177 | (132 | ) | |||||||
| Income tax (expense) recovery | ||||||||||||||
| Current | (4 | ) | (7 | ) | - | (10 | ) | |||||||
| Deferred | 4 | 15 | - | 22 | ||||||||||
| Net income (loss) | $ | (26 | ) | $ | (91 | ) | $ | 177 | $ | (120 | ) | |||
| Attributable to1: | ||||||||||||||
| Limited partners | $ | (3 | ) | $ | (1 | ) | $ | 29 | $ | (1 | ) | |||
| General partner | - | - | ||||||||||||
| Brookfield Asset Management Inc. | - | (30 | ) | - | (35 | ) | ||||||||
| Non-controlling interests attributable to: | ||||||||||||||
| Redemption-exchange units held be Brookfield Asset Management Inc. | (3 | ) | (2 | ) | 31 | (2 | ) | |||||||
| Interest of others | $ | (20 | ) | $ | (58 | ) | $ | 117 | $ | (82 | ) | |||
Note:
- 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.
| Brookfield Business Partners L.P. | ||||||||||||||||||
| Statements of Company Funds from Operations | ||||||||||||||||||
| For the 3 months ended June 30, 2017 US$ millions, unaudited |
Construction Services |
Business Services |
Energy | Industrial Operations |
Corporate and Other |
As per IFRS Financials |
||||||||||||
| Revenues | $ | 1,125 | $ | 3,273 | $ | 64 | $ | 406 | $ | 2 | $ | 4,870 | ||||||
| Direct operating costs | (1,104 | ) | (3,207 | ) | (45 | ) | (316 | ) | (1 | ) | (4,673 | ) | ||||||
| General and administrative expenses | (11 | ) | (30 | ) | (4 | ) | (22 | ) | (9 | ) | (76 | ) | ||||||
| Interest expense | - | (9 | ) | (7 | ) | (34 | ) | - | (50 | ) | ||||||||
| Equity accounted Company FFO | - | 11 | 11 | 1 | - | 23 | ||||||||||||
| Current income taxes | 2 | (4 | ) | - | (5 | ) | 3 | (4 | ) | |||||||||
| Realized disposition gains, net | - | 1 | - | 8 | - | 9 | ||||||||||||
| Company FFO attributable to others | - | (18 | ) | (8 | ) | (30 | ) | - | (56 | ) | ||||||||
| Company FFO1,2 | 12 | 17 | 11 | 8 | (5 | ) | 43 | |||||||||||
| Depreciation and amortization | (88 | ) | ||||||||||||||||
| Impairment expense | (23 | ) | ||||||||||||||||
| Deferred income taxes | 4 | |||||||||||||||||
| Other Income/(expense), net | (9 | ) | ||||||||||||||||
| Non-cash items attributable to equity accounted investments | (9 | ) | ||||||||||||||||
| Non-cash items attributable to others | 76 | |||||||||||||||||
| Net loss attributable to unitholders2 | $ | (6 | ) | |||||||||||||||
Notes:
- 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 assessingBrookfield 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. - 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.
| Brookfield Business Partners L.P. | ||||||||||||||||||
| Statements of Company Funds from Operations | ||||||||||||||||||
| For the 6 months ended June 30, 2017 US$ millions, unaudited |
Construction Services |
Business Services | Energy | Industrial Operations |
Corporate and Other |
As per IFRS Financials |
||||||||||||
| Revenues | $ | 2,141 | $ | 3,889 | $ | 133 | $ | 637 | $ | 4 | $ | 6,804 | ||||||
| Direct operating costs | (2,124 | ) | (3,790 | ) | (96 | ) | (535 | ) | (2 | ) | (6,547 | ) | ||||||
| General and administrative expenses | (22 | ) | (53 | ) | (8 | ) | (37 | ) | (18 | ) | (138 | ) | ||||||
| Interest expense | - | (13 | ) | (13 | ) | (43 | ) | - | (69 | ) | ||||||||
| Equity accounted Company FFO | - | 15 | 24 | 1 | - | 40 | ||||||||||||
| Current income taxes | 12 | (4 | ) | (1 | ) | (13 | ) | 6 | - | |||||||||
| Realized disposition gain, net | 2 | 6 | 36 | 237 | - | 281 | ||||||||||||
| Company FFO attributable to others | - | (29 | ) | (44 | ) | (160 | ) | - | (233 | ) | ||||||||
| Company FFO1,2 | 9 | 21 | 31 | 87 | (10 | ) | 138 | |||||||||||
| Depreciation and amortization | (153 | ) | ||||||||||||||||
| Impairment expense | (30 | ) | ||||||||||||||||
| Deferred income taxes | - | |||||||||||||||||
| Other income, net | 5 | |||||||||||||||||
| Non-cash items attributable to equity accounted investments | (16 | ) | ||||||||||||||||
| Non-cash items attributable to others | 116 | |||||||||||||||||
| Net income attributable to parent company | $ | 60 | ||||||||||||||||
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 inBrookfield 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 assessingBrookfield 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. - Attributable to parent company.
Media:
(416) 369-8236
[email protected]
Investors:
(416) 369-2629
[email protected]
Source:
| Title | Document |
|---|---|
English |