Three months ended Nine months ended
September 30 September 30
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US$ millions, unaudited 2016 2015 2016 2015
------------------------------------------------------------------------------------------------
Net income (loss) attributable to
unitholders1 $ 20 $ 20 $ (18) $ 206
Company FFO1,2 $ 50 $ 58 $ 145 $ 141
Brookfield Business Partners reported net income attributable to unitholders for the three months ended September 30, 2016 of
The additional contribution from our
"We made significant progress on a number of operating initiatives during the quarter and our primary focus is to execute on the strategic and operational steps necessary to create long-term value across our business. We believe great opportunities lie ahead, as our business is well-positioned with permanent capital, a global footprint and diversified operations," said Cyrus Madon, CEO of Brookfield Business Partners.
Subsequent to the end of the quarter, Brookfield Business Partners, together with institutional clients of Brookfield Asset Management (or "the Consortium"), entered into a definitive agreement to acquire a 70% controlling stake in Odebrecht Ambiental,
"The acquisition of Odebrecht Ambiental should add meaningfully to our value per unit over the longer term and is an exciting first major transaction after our launch as a public company," added Mr. Madon.
Operational Update
The following table presents Company FFO by segment:
Three months ended Nine months ended
September 30 September 30
--------------------------------------------
US$ millions, unaudited 2016 2015 2016 2015
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Company FFO by segment
Construction Services $ 16 $ 20 $ 63 $ 64
Other Business Services 18 17 35 31
Energy 12 16 47 28
Other Industrial Operations 11 5 8 18
Corporate and Other (7) - (8) -
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Company FFO1,2 $ 50 $ 58 $ 145 $ 141
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Our construction services segment generated Company FFO of
Our other business services segment generated Company FFO of
Our energy segment generated Company FFO of
Our other industrial segment delivered Company FFO for the quarter of
New
During the third quarter, Brookfield Business Partners entered into revolving unsecured credit facilities for an aggregate of
Distributions
The Board of Directors has declared a quarterly distribution in the amount of
Beginning with this quarterly distribution and going forward, it is Brookfield Business Partner's distribution policy that registered unitholders who are resident in
Additional Information
Brookfield Business Partners' Letter to Unitholders and the Supplemental Information are available at https://bbu.brookfield.com/reports-and-filings/financial-reports.
Brookfield Business Partners is a business services and industrial company focused on owning and operating high-quality businesses that benefit from barriers to entry and/or low production costs. Brookfield Business Partners is listed on the
Brookfield Business Partners is the flagship listed business services and industrials company of Brookfield Asset Management, a global alternative asset manager with approximately
For more information, please visit our website at www.brookfieldbusinesspartners.com.
Conference Call and Quarterly Earnings Details
Investors, analysts and other interested parties can access Brookfield Business Partners' third quarter 2016 results as well as the Letter to Unitholders and Supplemental Information on our website at www.brookfieldbusinesspartners.com
The conference call can be accessed via webcast on November 7, 2016 at 11:00 a.m. Eastern Time at www.brookfieldbusinesspartners.com or via teleconference at 1-800-319-4610 toll free in
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 Brookfield Business Partners to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.
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, Brookfield Business Partners undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.
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 Brookfield Business Partners and its subsidiaries. Company FFO should not be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, analysis of our financial statements prepared in accordance with IFRS.
References to Brookfield Business Partners are to Brookfield Business Partners L.P. together with its subsidiaries, controlled affiliates and operating entities. Brookfield Business Partners' results include limited partnership units held by public unitholders, redeemable partnership units and general partnership units.
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.
- 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 pages 6 and 7 of this release.
Brookfield Business Partners L.P.
Consolidated Statements of Financial Position
As of
----------------------------------
September 30, December 31,
US$ millions, unaudited 2016 2015
----------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 728 $ 354
Financial assets 507 409
Accounts receivable, net 1,859 1,635
Inventory and other assets 704 748
Property, plant and equipment 2,221 2,364
Deferred income tax assets 105 64
Intangible assets 420 445
Equity accounted investments 386 492
Goodwill 1,184 1,124
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Total assets $ 8,114 $ 7,635
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Liabilities and equity
Liabilities
Accounts payable and other $ 2,484 $ 2,375
Borrowings 1,841 2,074
Deferred income tax liabilities 92 102
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Total liabilities 4,417 4,551
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Equity
Equity attributable to unitholders1 2,125 1,787
Non-controlling interests 1,572 1,297
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Total equity 3,697 3,084
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Total liabilities and equity $ 8,114 $ 7,635
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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.
Brookfield Business Partners L.P.
Consolidated Statements of Operating Results
Three months ended Nine months ended
US$ millions, unaudited September 30 September 30
----------------------------------------
2016 2015 2016 2015
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Revenues $ 2,043 $ 1,891 $ 5,728 $ 4,667
Direct operating costs (1,889) (1,716) (5,322) (4,223)
General and administrative expenses (70) (67) (197) (156)
Depreciation and amortization
expense (71) (73) (219) (187)
Interest expense (24) (16) (71) (36)
Equity accounted income, net 28 30 75 39
Impairment expense, net - (88) (106) (88)
Gain on acquisitions/dispositions 29 - 57 269
Other income (expenses), net 11 66 (20) 48
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Income before income tax 57 27 (75) 333
Income tax (expense) recovery
Current (8) (11) (18) (32)
Deferred 3 (1) 25 9
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Net income (loss) $ 52 $ 15 $ (68) $ 310
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Attributable to:
Unitholders1 $ 20 $ 20 $ (18) $ 206
Non-controlling interests $ 32 $ (5)$ (50) $ 104
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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.
Brookfield Business Partners L.P.
Statements of Company Funds from Operations
For the three months ended Other September 30, 2016 Construction Business US$ millions, unaudited Services Services Energy ---------------------------------------------------------------------------- Revenues$ 1,120 $ 509 $ 68 Direct operating costs (1,089) (457) (43) General and administrative expenses (12) (26) (4) Equity accounted income 1 8 30 Realized disposition gain, net - - 5 Interest expense - (4) (9) Current income taxes (4) (3) - Company FFO attributable to non- controlling interests - (9) (35) ---------------------------------------------------------------------------- Company FFO1,2 16 18 12 Depreciation and amortization Impairment expense, net Deferred income taxes Other income, net Non-cash items attributable to equity accounted investments Non-cash items attributable to non-controlling interests ---------------------------------------------------------------------------- Net income attributable to unitholders2 ---------------------------------------------------------------------------- For the three months ended Other September 30, 2016 Industrial Corporate and As per IFRS US$ millions, unaudited Operations Other Financials ---------------------------------------------------------------------------- Revenues $ 346 $ -$ 2,043 Direct operating costs (300) - (1,889) General and administrative expenses (21) (7) (70) Equity accounted income - - 39 Realized disposition gain, net 24 - 29 Interest expense (11) - (24) Current income taxes (1) - (8) Company FFO attributable to non- controlling interests (26) - (70) ---------------------------------------------------------------------------- Company FFO1,2 11 (7) 50 Depreciation and amortization (71) Impairment expense, net - Deferred income taxes 3 Other income, net 11 Non-cash items attributable to equity accounted investments (11) Non-cash items attributable to non-controlling interests 38 ---------------------------------------------------------------------------- Net income attributable to unitholders2 $ 20 ---------------------------------------------------------------------------- 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 5 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 limited partnership unitholders, general partnership unitholders, and redemption-exchange unitholders.
Brookfield Business Partners L.P.
Statements of Company Funds from Operations
For the nine months ended Other September 30, 2016 Construction Business US$ millions, unaudited Services Services Energy ---------------------------------------------------------------------------- Revenues$ 3,127 $ 1,442 $ 197 Direct operating costs (3,027) (1,304) (130) General and administrative expenses (32) (76) (12) Equity accounted income 1 18 117 Realized disposition gain, net - - 24 Interest expense (1) (11) (24) Current income taxes (5) (9) (1) Company FFO attributable to non- controlling interests - (25) (124) ---------------------------------------------------------------------------- Company FFO1,2 63 35 47 Depreciation and amortization Impairment expense, net Deferred income taxes Other expense, net Non-cash items attributable to equity accounted investments Non-cash items attributable to non- controlling interests ---------------------------------------------------------------------------- Net loss attributable to unitholders2 ---------------------------------------------------------------------------- For the nine months ended Other September 30, 2016 Industrial Corporate As per IFRS US$ millions, unaudited Operations and Other Financials ---------------------------------------------------------------------------- Revenues$ 962 $ -$ 5,728 Direct operating costs (861) - (5,322) General and administrative expenses (69) (8) (197) Equity accounted income - - 136 Realized disposition gain, net 33 - 57 Interest expense (35) - (71) Current income taxes (3) - (18) Company FFO attributable to non- controlling interests (19) - (168) ---------------------------------------------------------------------------- Company FFO1,2 8 (8) 145 Depreciation and amortization (219) Impairment expense, net (106) Deferred income taxes 25 Other expense, net (20) Non-cash items attributable to equity accounted investments (61) Non-cash items attributable to non- controlling interests 218 ---------------------------------------------------------------------------- Net loss attributable to unitholders2$ (18) ---------------------------------------------------------------------------- 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 5 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.
Contacts: Media: Claire Holland (416) 369-8236 [email protected] Investors: Jennifer Ritchie (416) 956-5230 [email protected]
Source: Brookfield Business Partners
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