Brookfield Business Partners Reports Second Quarter 2021 Results

Aug 06, 2021

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	Three Months Ended June 30,						Six Months Ended June 30,
US$ millions (except per unit amounts), unaudited	2021			2020			2021		2020
Net income (loss) attributable to unitholders¹	$	(15	)	$	(109	)	$	515	$	(235	)
Net income (loss) per limited partnership unit^2,3	$	*(0.63*	)	$	(0.73	)	$	*2.94*	$	(1.57	)

Company EBITDA^1,5	$	381		$	286		$	768	$	580

Company FFO^1,4	$	356		$	173		$	901	$	367
Company FFO per unit²	$	*2.40*		$	1.15		$	*6.07*	$	2.44
Company FFO, excluding gain (loss), net of acquisitions/dispositions^1,4	$	207		$	173		$	424	$	325
Company FFO, excluding gain (loss), net of acquisitions/dispositions per unit²	$	*1.40*		$	1.15		$	*2.86*	$	2.16

	Three Months Ended June 30,						Six Months Ended June 30,
US$ millions, unaudited	2021			2020			2021			2020
Business Services	$	145		$	64		$	249		$	83
Infrastructure Services	125			148			261			304
Industrials	145			98			317			243
Corporate and Other	(34		)	(24		)	(59		)	(50		)
Company EBITDA^1,5	$	381		$	286		$	768		$	580

	Three Months Ended June 30,						Six Months Ended June 30,
US$ millions (except per unit amounts), unaudited	2021			2020			2021			2020
Business Services	$	93		$	39		$	163		$	81
Infrastructure Services	72			87			145			191
Industrials	216			62			637			119
Corporate and Other	(25		)	(15		)	(44		)	(24		)
Company FFO^1,4	$	356		$	173		$	901		$	367
Gain (loss) on acquisitions/dispositions, net	149			—			477			42
Company FFO, excluding gain (loss), net of acquisitions/dispositions^1,4	207			173			424			325
Company FFO, excluding gain (loss), net of acquisitions/dispositions per unit²	$	*1.40*		$	1.15		$	*2.86*		$	2.16

Notes:
1	Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange 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 Brookfield Asset Management for limited partnership units, for the three and six months ended June 30, 2021 was 148.3 million and 148.4 million (2020: 150.1 million and 150.3 million).
3	Net income (loss) per limited partnership unit is equal to net income (loss) per unitholder less the incentive distribution declared to special limited partnership unitholders during the three and six months ended June 30, 2021.
4	Company FFO is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as our share of net income and equity accounted income excluding the impact of depreciation and amortization, deferred income taxes, transaction costs, non-cash valuation gains or losses, impairment expense and other items. In order to provide additional insight regarding performance on a cumulative realized basis, Company FFO includes realized disposition gains or losses, along with associated tax impacts, recorded in net income, other comprehensive income, or directly in equity, such as ownership changes. These include gains or losses arising from transactions during the reported period together with fair value changes recorded in prior periods. A reconciliation of net income to Company FFO is available on pages 8-12 of this release.
5	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 our share of realized disposition gains and losses, interest income and expense, and current income taxes. A reconciliation of net income to Company EBITDA is available on pages 8-12 of this release.

	As at
US$ millions, unaudited	June 30, 2021				December 31, 2020

Assets
Cash and cash equivalents			$	2,076			$	2,743
Financial assets			8,763				8,796
Accounts and other receivable, net			5,239				4,989
Inventory and other assets			5,696				5,280
Property, plant and equipment			13,119				13,982
Deferred income tax assets			736				761
Intangible assets			11,026				11,261
Equity accounted investments			1,586				1,690
Goodwill			5,284				5,244
Total Assets			$	53,525			$	54,746

Liabilities and Equity
Liabilities
Corporate borrowings			$	427			$	610
Accounts payable and other			18,458				17,932
Non-recourse borrowings in subsidiaries of Brookfield Business Partners			21,858				23,166
Deferred income tax liabilities			1,586				1,701
			$	42,329			$	43,409
Equity
Limited partners	$	2,230			$	1,928
Non-Controlling interests attributable to:
Redemption-Exchange Units, Preferred Shares and Special Limited Partnership Units held by Brookfield Asset Management Inc.	1,993				1,564
Interest of others in operating subsidiaries	6,973				7,845
			11,196				11,337
Total Liabilities and Equity			$	53,525			$	54,746

For the three months ended June 30, 2021 US$ millions, unaudited	Business Services			Infrastructure Services			Industrials			Corporate and Other			Total			Attributable to Non- controlling Interests			As per IFRS Financials
Revenues	$	2,401		$	436		$	716		$	—		$	3,553		$	7,682		$	11,235
Direct operating costs	(2,220		)	(325		)	(574		)	(4		)	(3,123		)	(6,873		)	(9,996		)
General and administrative expenses	(41		)	(18		)	(17		)	(30		)	(106		)	(147		)	(253		)
Equity accounted Company EBITDA⁵	5			32			20			—			57			22			79
Company EBITDA^1,3,4	$	145		$	125		$	145		$	(34	)	$	381
Gain (loss) on acquisitions/dispositions, net⁶	—			—			170			—			170			8			178
Other income (expense), net⁷	(1		)	1			—			—			—			(4		)	(4		)
Interest income (expense), net	(19		)	(38		)	(57		)	(3		)	(117		)	(234		)	(351		)
Current income tax (expense) recovery	(30		)	(1		)	(32		)	12			(51		)	(67		)	(118		)
Realized disposition gain, current income taxes and interest expense related to equity accounted investments⁵	(2		)	(15		)	(10		)	—			(27		)	(5		)	(32		)
Company FFO^1,2,4	$	93		$	72		$	216		$	(25	)	$	356
Depreciation and amortization expense													(191		)	(362		)	(553		)
Gain (loss) on acquisitions/dispositions, net⁶													(163		)	1			(162		)
Other income (expense), net⁷													(30		)	(63		)	(93		)
Deferred income tax (expense) recovery													41			40			81
Non-cash items attributable to equity accounted investments⁵													(28		)	(12		)	(40		)
Net income (loss)⁴													$	(15	)	$	(14	)	$	(29	)

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 7 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.
2	Company FFO is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as our share of net income and equity accounted income excluding the impact of depreciation and amortization, deferred income taxes, transaction costs, non-cash valuation gains or losses, impairment expense and other items. In order to provide additional insight regarding performance on a cumulative realized basis, Company FFO includes realized disposition gains or losses, along with associated tax impacts, recorded in net income, other comprehensive income, or directly in equity, such as ownership changes. These include gains or losses arising from transactions during the reporting period together with fair value changes recorded in prior periods.
3	Company EBITDA is presented as a net amount attributable to unitholders and is a non-IFRS measure and is calculated as Company FFO excluding our share of realized disposition gains and losses, interest income and expense, and current income taxes.
4	Attributable to limited partnership unitholders, general partnership unitholders, special limited partnership unitholders and redemption-exchange unitholders.
5	The sum of these amounts equates to equity accounted income (loss), net of $7 million as per the unaudited interim condensed consolidated statements of operating results.
6	The sum of these amounts equates to gain (loss) on acquisitions/dispositions, net of $16 million as per the unaudited interim condensed consolidated statements of operating results.
7	The sum of these amounts equates to other income (expense), net of $(97) million as per the unaudited interim condensed consolidated statements of operating results.

For the six months ended June 30, 2021 US$ millions, unaudited	Business Services			Infrastructure Services			Industrials			Corporate and Other			Total			Attributable to Non- controlling Interests			As per IFRS Financials
Revenues	$	4,323		$	916		$	1,487		$	—		$	6,726		$	14,338		$	21,064
Direct operating costs	(4,007		)	(680		)	(1,170		)	(7		)	(5,864		)	(12,568		)	(18,432		)
General and administrative expenses	(75		)	(35		)	(40		)	(52		)	(202		)	(302		)	(504		)
Equity accounted Company EBITDA⁵	8			60			40			—			108			67			175
Company EBITDA^1,3,4	$	249		$	261		$	317		$	(59	)	$	768
Gain (loss) on acquisitions/dispositions, net⁶	—			—			572			—			572			740			1,312
Other income (expense), net⁷	(3		)	—			—			—			(3		)	(14		)	(17		)
Interest income (expense), net	(31		)	(77		)	(115		)	(7		)	(230		)	(469		)	(699		)
Current income tax (expense) recovery⁸	(48		)	(8		)	(123		)	22			(157		)	(163		)	(320		)
Realized disposition gain, current income taxes and interest expense related to equity accounted investments⁵	(4		)	(31		)	(14		)	—			(49		)	(12		)	(61		)
Company FFO^1,2,4	$	163		$	145		$	637		$	(44	)	$	901
Depreciation and amortization expense													(373		)	(722		)	(1,095		)
Impairment expense, net													(58		)	(143		)	(201		)
Gain (loss) on acquisitions/dispositions, net⁶													60			451			511
Current income tax (expense) recovery⁸													9			—			9
Other income (expense), net⁷													(5		)	(36		)	(41		)
Deferred income tax (expense) recovery													35			80			115
Non-cash items attributable to equity accounted investments⁵													(54		)	(24		)	(78		)
Net income (loss)⁴													$	515		$	1,223		$	1,738

US$, unaudited	Three Months Ended June 30,						Six Months Ended June 30,
US$, unaudited	2021			2020			2021			2020

Net income (loss) per unitholder^1,2	$	(0.10	)	$	(0.73	)	$	3.47		$	(1.57	)
Less: incentive distribution to special limited partners²	(0.53		)	—			(0.53		)	—
Net income (loss) per limited partnership unit^2,3	$	(0.63	)	$	(0.73	)	$	2.94		$	(1.57	)