Brookfield Business Partners L.P. (NYSE:BBU) Q2 2022 Earnings Conference Call August 5, 2022 10:00 AM ET Company Participants Alan Fleming - Senior Vice President of Investor Relations Stuart Levings - Chief Executive Officer, Sagen Jaspreet Dehl - Chief Financial Officer Cyrus Madon - Chief Executive Officer Denis Turcotte - Chief Operating Officer Conference Call Participants Geoff Kwan - RBC Capital Markets Devin Dodge - BMO Capital Markets Nik Priebe - CIBC Capital Markets Jaeme Gloyn - National Bank. G ...

```markdown Unaudited Interim Condensed Consolidated Financial Statements [Unaudited Interim Condensed Consolidated Statements of Financial Position](index=3&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Financial%20Position) As of March 31, 2022, total assets were $66.16 billion, an increase from $64.22 billion at December 31, 2021, with total liabilities also increasing to $53.14 billion from $51.22 billion, while total equity remained relatively stable at $13.02 billion Consolidated Statement of Financial Position (US$ Millions) | | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $16,867 | $15,418 | | **Total Non-Current Assets** | $49,295 | $48,801 | | **Total Assets** | **$66,162** | **$64,219** | | **Total Current Liabilities** | $14,798 | $13,912 | | **Total Non-Current Liabilities** | $38,341 | $37,307 | | **Total Liabilities** | **$53,139** | **$51,219** | | **Total Equity** | **$13,023** | **$13,000** | | **Total Liabilities and Equity** | **$66,162** | **$64,219** | [Unaudited Interim Condensed Consolidated Statements of Operating Results](index=4&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Operating%20Results) For the three months ended March 31, 2022, the partnership reported revenues of $13.47 billion and a net income of $19 million, a significant decrease in net income from $1.77 billion in the same period of 2021, primarily due to a large gain on dispositions in the prior year, with basic and diluted earnings per limited partner unit at $0.18, down from $3.57 in Q1 2021 Statement of Operating Results (US$ Millions, except per unit amounts) | | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Revenues** | $13,472 | $9,829 | | Direct operating costs | ($12,595) | ($8,978) | | Gain (loss) on acquisitions/dispositions, net | $— | $1,807 | | **Income (loss) before income tax** | $68 | $1,926 | | **Net income (loss)** | **$19** | **$1,767** | | Net income (loss) attributable to Limited partners | $14 | $281 | | **Basic and diluted earnings (loss) per limited partner unit** | **$0.18** | **$3.57** | [Unaudited Interim Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) The partnership reported a comprehensive income of $173 million for Q1 2022, a significant decrease from $1.68 billion in Q1 2021, driven by a lower net income of $19 million (vs. $1.77 billion in Q1 2021) and a total other comprehensive income of $154 million (vs. a loss of $90 million in Q1 2021) Statement of Comprehensive Income (Loss) (US$ Millions) | | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Net income (loss)** | $19 | $1,767 | | **Other comprehensive income (loss)** | $154 | ($90) | | *Foreign currency translation* | *367* | *(330)* | | **Comprehensive income (loss)** | **$173** | **$1,677** | | Attributable to Limited partners | $27 | $271 | [Unaudited Interim Condensed Consolidated Statements of Changes in Equity](index=6&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased slightly from $13.00 billion at the beginning of 2022 to $13.02 billion at March 31, 2022, driven by comprehensive income of $173 million and contributions of $402 million, offset by distributions of $591 million and unit repurchases of $44 million, with a significant change being the issuance of BBUC exchangeable shares that reallocated equity from limited partners to this new class of non-controlling interest Changes in Equity for Q1 2022 (US$ Millions) | | Total Equity | | :--- | :--- | | **Balance as at January 1, 2022** | **$13,000** | | Net income (loss) | $19 | | Other comprehensive income (loss) | $154 | | Contributions | $402 | | Distributions | ($591) | | Unit repurchases | ($44) | | Issuance of BBUC exchangeable shares | $0 | | Other ownership changes | $83 | | **Balance as at March 31, 2022** | **$13,023** | [Unaudited Interim Condensed Consolidated Statements of Cash Flow](index=7&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) For Q1 2022, the partnership experienced a net cash outflow from operating activities of $267 million, a reversal from a $115 million inflow in Q1 2021, primarily due to changes in non-cash working capital, with cash used in investing activities at $926 million and cash from financing activities at $840 million, resulting in an overall decrease of $311 million in cash and cash equivalents to $2.28 billion Statement of Cash Flow (US$ Millions) | | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | **Cash from operating activities** | **($267)** | **$115** | | **Cash from (used in) financing activities** | **$840** | **$943** | | **Cash from (used in) investing activities** | **($926)** | **($1,131)** | | Impact of foreign exchange | $42 | ($33) | | **Change during the period** | **($353)** | **($73)** | | Balance, beginning of year | $2,588 | $2,743 | | **Balance, end of period** | **$2,277** | **$2,637** | [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the accounting policies and figures presented in the financial statements, covering the partnership's structure, significant transactions, financial instruments, and segment performance [Note 1. Nature and Description of the Partnership](index=9&type=section&id=Note%201.%20Nature%20and%20Description%20of%20the%20Partnership) Brookfield Business Partners L.P. is a global owner and operator of services and industrial operations, established as a Bermuda limited partnership and a subsidiary of Brookfield Asset Management, which completed a special distribution on March 15, 2022, issuing one BBUC exchangeable share for every two partnership units held, creating a new publicly traded entity (BBUC) that the partnership continues to control - The partnership is a global owner and operator of services and industrial businesses, listed on the NYSE and TSX under symbols **'BBU'** and **'BBU.UN'**[19](index=19&type=chunk) - On March 15, 2022, the partnership executed a special distribution, issuing one **BBUC** exchangeable share for every two units held. These new shares are listed on the NYSE and TSX under the symbol **'BBUC'**[21](index=21&type=chunk)[23](index=23&type=chunk) [Note 3. Acquisition of Businesses](index=12&type=section&id=Note%203.%20Acquisition%20of%20Businesses) The partnership reported no significant acquisitions in Q1 2022, but the note details significant acquisitions from 2021, which collectively involved $9.5 billion in consideration, including Everise (customer management), Aldo (solar distribution), DexKo (engineered components), and Modulaire (modular leasing), contributing significantly to the growth in assets and goodwill - There were no significant acquisitions completed in the three months ended March 31, 2022[39](index=39&type=chunk) Summary of 2021 Acquisitions (US$ Millions) | Business | Segment | Total Consideration | Partnership's Economic Interest | | :--- | :--- | :--- | :--- | | Everise | Business Services | $282 | 36% | | Aldo | Industrials | $623 | 35% | | DexKo | Industrials | $3.8 billion | 35% (reduced to 34%) | | Modulaire | Infrastructure Services | $4.8 billion | 36% (reduced to 32%) | [Note 8. Dispositions](index=18&type=section&id=Note%208.%20Dispositions) No net gains or losses on dispositions were recognized in Q1 2022, in contrast to Q1 2021, which saw a significant net gain of $1.807 billion, primarily from the deconsolidation and sale of shares in its graphite electrode operations, resulting in a pre-tax gain of $1.764 billion - The partnership did not recognize any net gains or losses on dispositions for the three-month period ended March 31, 2022[73](index=73&type=chunk) - In Q1 2021, the partnership recognized a net gain on dispositions of **$1,807 million**, mainly from the sale of its graphite electrode operations, which resulted in a pre-tax gain of **$1,764 million** upon deconsolidation[74](index=74&type=chunk)[75](index=75&type=chunk) [Note 16. Borrowings](index=22&type=section&id=Note%2016.%20Borrowings) As of March 31, 2022, corporate borrowings stood at $1.70 billion, with $374 million available on bilateral credit facilities, while non-recourse subsidiary borrowings totaled $28.66 billion, and the partnership also has an undrawn $1.0 billion revolving credit facility with its parent, Brookfield Borrowings Summary (US$ Millions) | Borrowing Type | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Corporate borrowings | $1,701 | $1,619 | | Non-recourse subsidiary borrowings | $28,656 | $27,457 | - The partnership has access to a **$1.0 billion** revolving credit facility with Brookfield, which remained undrawn as of March 31, 2022[94](index=94&type=chunk) [Note 19. Equity](index=24&type=section&id=Note%2019.%20Equity) The partnership's equity structure includes LP Units, GP Units, Redemption-Exchange Units, and newly issued BBUC exchangeable shares, with Q1 2022 seeing a distribution of $0.0625 per unit and the repurchase of 1,118,136 LP Units, and a special distribution on March 15, 2022, resulting in the issuance of 73 million BBUC exchangeable shares, which are economically equivalent to LP Units - As of March 31, 2022, Brookfield owns approximately **65%** of the partnership on a fully exchanged basis[109](index=109&type=chunk) - In Q1 2022, the partnership repurchased and canceled **1,118,136** LP Units[112](index=112&type=chunk) - On March 15, 2022, a special distribution resulted in the issuance of **73 million** BBUC exchangeable shares to unitholders[118](index=118&type=chunk) [Note 22. Revenues](index=28&type=section&id=Note%2022.%20Revenues) Total revenues for Q1 2022 were $13.47 billion, up from $9.83 billion in Q1 2021, with the Business Services segment being the largest contributor at $8.27 billion, and the United Kingdom ($5.20 billion), the United States ($2.06 billion), and Europe ($2.09 billion) being the top revenue-generating regions geographically Revenues by Segment (US$ Millions) | Segment | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Business services | $8,274 | $5,902 | | Infrastructure services | $1,528 | $1,111 | | Industrials | $3,670 | $2,816 | | **Total revenues** | **$13,472** | **$9,829** | Revenues by Geography for Q1 2022 (US$ Millions) | Geography | Revenue | | :--- | :--- | | United Kingdom | $5,204 | | United States of America | $2,058 | | Europe | $2,087 | | Australia | $1,125 | | Canada | $898 | | Other | $1,426 | | **Total revenues** | **$13,472** | [Note 23. Segment Information](index=30&type=section&id=Note%2023.%20Segment%20Information) The partnership assesses performance using Adjusted Earnings from Operations (Adjusted EFO), which for Q1 2022 totaled $310 million, down from $545 million in Q1 2021 due to significant realized disposition gains in the prior year, with the reconciliation showing adjustments for items like depreciation ($702 million) to arrive at the IFRS net income of $19 million Adjusted EFO by Segment (US$ Millions) | Segment | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Business services | $80 | $70 | | Infrastructure services | $139 | $73 | | Industrials | $122 | $421 | | Corporate and other | ($31) | ($19) | | **Total Adjusted EFO** | **$310** | **$545** | - Adjusted EFO is the primary measure used by the Chief Operating Decision Maker (CODM) to assess performance. It excludes items like depreciation, deferred taxes, and unrealized gains/losses but includes realized disposition gains[145](index=145&type=chunk) [Note 26. Subsequent Events](index=35&type=section&id=Note%2026.%20Subsequent%20Events) Subsequent to the quarter-end, the Board of Directors declared a quarterly distribution of $0.0625 per unit, and on April 4, 2022, the partnership completed the acquisition of Scientific Games Lottery for a total consideration of $5.7 billion, acquiring an approximate 35% economic interest - A quarterly distribution of **$0.0625** per unit was declared on May 5, 2022, payable on June 30, 2022[168](index=168&type=chunk) - On April 4, 2022, the partnership acquired Scientific Games Lottery for **$5.7 billion**. The acquisition contributed approximately **$4.0 billion** in intangible assets and **$1.2 billion** in goodwill based on a preliminary purchase price allocation[171](index=171&type=chunk)[173](index=173&type=chunk) Management's Discussion and Analysis of Financial Condition and Results of Operations [Overview of Our Business](index=39&type=section&id=Overview%20of%20Our%20Business) The partnership operates high-quality business services and industrial operations globally, focusing on businesses with strong competitive positions, structured into four segments: Business Services, Infrastructure Services, Industrials, and Corporate, with Q1 2022 total assets of $66.2 billion and revenues of $13.5 billion, primarily from operations in the U.K., U.S., Europe, and Australia - The partnership's goal is to generate returns primarily through capital appreciation with a modest distribution yield by enhancing cash flows, pursuing acquisitions, and recycling capital[190](index=190&type=chunk) Assets and Revenues by Segment (Q1 2022, US$ Billions) | Operating Segment | Total Assets (Mar 31, 2022) | Revenues (Q1 2022) | | :--- | :--- | :--- | | Business services | $21.8 | $8.3 | | Infrastructure services | $16.0 | $1.5 | | Industrials | $28.0 | $3.7 | | Corporate and other | $0.3 | $0.0 | [Developments in Our Business](index=43&type=section&id=Developments%20in%20Our%20Business) The partnership has been highly active in acquisitions since the end of 2021, closing the $5.7 billion acquisition of Scientific Games Lottery in April 2022 and signing agreements to acquire Cupa (roofing products), Magnati (payment processing), La Trobe (non-bank lender), Nielsen (media analytics), and CDK Global (automotive software), while Brookfield committed to subscribe for up to $1.5 billion in perpetual preferred equity to fund future growth - Closed the acquisition of Scientific Games Lottery for **$5.7 billion** on April 4, 2022[224](index=224&type=chunk) - Signed agreements to acquire several businesses, including Nielsen in a **$16 billion** transaction and CDK Global for **$8.3 billion**[223](index=223&type=chunk)[225](index=225&type=chunk) - Secured a commitment from Brookfield for up to **$1.5 billion** in **6%** perpetual preferred equity securities to support future growth opportunities[220](index=220&type=chunk) [Outlook](index=44&type=section&id=Outlook) The partnership anticipates continued growth through organic initiatives and strategic acquisitions, focusing on managing inflationary pressures and leveraging strong performance in key segments to expand its global footprint - **Business Services:** Expects normalization in the Canadian housing market for its mortgage insurer and recovery in elective surgeries for its Australian healthcare operations[227](index=227&type=chunk) - **Infrastructure Services:** Focus is on cost savings and new business to offset Ukraine-related disruptions in nuclear services, while leveraging profit-sharing agreements in offshore oil services[229](index=229&type=chunk) - **Industrials:** Managing inflationary impacts on its advanced energy storage operations through pricing actions and operational improvements. Recently acquired engineered components manufacturer is performing strongly[230](index=230&type=chunk) - **Growth Strategy:** Continues to pursue large-scale acquisitions, such as Scientific Games Lottery, Cupa, Magnati, La Trobe, Nielsen, and CDK, to expand its global footprint and enhance long-term cash flows[231](index=231&type=chunk)[232](index=232&type=chunk) [Unaudited Interim Condensed Consolidated Results of Operations Review](index=46&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Results%20of%20Operations%20Review) For Q1 2022, net income was $19 million, a sharp decrease from $1.77 billion in Q1 2021, primarily because the prior-year period included a large gain from the partial disposal of the graphite electrode operations, while revenues increased by 37% to $13.47 billion, driven by higher prices and volumes in road fuels and contributions from recent acquisitions, with direct operating costs rising in line with revenues - The decrease in net income from **$1,767 million** in Q1 2021 to **$19 million** in Q1 2022 was primarily due to a significant gain on the disposal of graphite electrode operations recognized in the prior year[236](index=236&type=chunk) - Revenues increased by **$3.6 billion (37%)** year-over-year, mainly from the business services segment (higher road fuel prices/volumes) and the industrials segment (contributions from new acquisitions)[238](index=238&type=chunk) [Segment Analysis](index=53&type=section&id=Segment%20Analysis) In Q1 2022, total Adjusted EBITDA increased to $506 million from $387 million in Q1 2021, driven by growth across all operating segments, though net income attributable to Unitholders fell to $28 million from $530 million due to a large disposition gain in the prior year, with Infrastructure Services showing the largest Adjusted EBITDA growth Adjusted EBITDA by Segment (US$ Millions) | Segment | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Business services | $114 | $104 | | Infrastructure services | $208 | $136 | | Industrials | $217 | $172 | | Corporate and other | ($33) | ($25) | | **Total Adjusted EBITDA** | **$506** | **$387** | - The partnership uses Adjusted EBITDA and Adjusted EFO as key performance measures. Adjusted EBITDA is a non-IFRS measure that excludes items like interest, taxes, D&A, and certain non-recurring gains/losses[268](index=268&type=chunk)[270](index=270&type=chunk) [Business Services Segment](index=54&type=section&id=Business%20Services%20Segment) Adjusted EBITDA for the Business Services segment increased by $10 million to $114 million in Q1 2022, primarily driven by a strong performance from the residential mortgage insurer, which benefited from a resilient Canadian housing market and increased ownership, partially offset by reduced activity in Australian healthcare services due to government restrictions on elective surgeries - The residential mortgage insurer's contribution to Adjusted EBITDA grew to **$71 million** from **$39 million** in the prior year, due to increased ownership (**41%** vs. **24%**) and strong market conditions[280](index=280&type=chunk) - Healthcare services performance was impacted by government-mandated restrictions on elective surgeries in Australia, with admissions recovering after restrictions were lifted in March[280](index=280&type=chunk) [Infrastructure Services Segment](index=55&type=section&id=Infrastructure%20Services%20Segment) The Infrastructure Services segment saw a significant increase in Adjusted EBITDA, rising $72 million to $208 million in Q1 2022, largely due to a $40 million contribution from the newly acquired modular building leasing operations and a $23 million increase from offshore oil services, which benefited from profit-sharing agreements tied to higher oil prices - The modular building leasing services operations, acquired in Q4 2021, contributed **$40 million** to Adjusted EBITDA[286](index=286&type=chunk) - Offshore oil services operations' Adjusted EBITDA increased to **$70 million** from **$47 million**, boosted by profit-sharing agreements linked to oil prices and production volumes[286](index=286&type=chunk) [Industrials Segment](index=56&type=section&id=Industrials%20Segment) Adjusted EBITDA for the Industrials segment increased by $45 million to $217 million in Q1 2022, driven by a $42 million contribution from the newly acquired engineered components manufacturer, though Adjusted EFO fell sharply to $122 million from $421 million, as the prior-year figure included large gains from the sale of the graphite electrode operations - The engineered components manufacturer, acquired in Q4 2021, contributed **$42 million** to Adjusted EBITDA[291](index=291&type=chunk) - Adjusted EFO decreased by **$299 million** year-over-year due to a large gain on the sale of common shares of the graphite electrode operations in Q1 2021[290](index=290&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) The partnership maintains a strong liquidity profile with principal sources including cash from operations, undrawn credit facilities, and access to capital markets, holding $30.4 billion in borrowings and an additional $6.1 billion in undrawn credit facilities as of March 31, 2022, with a consolidated net debt-to-capitalization ratio of 68%, and cash flow from operations being a negative $267 million for the quarter due to working capital changes - As of March 31, 2022, the partnership has **$30.4 billion** in borrowings with an additional capacity of **$6.1 billion** in undrawn credit facilities at corporate and subsidiary levels[316](index=316&type=chunk) Net Debt-to-Capitalization (US$ Millions) | | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Net debt | $28,080 | $26,488 | | Total equity | $13,023 | $13,000 | | **Net debt-to-capitalization ratio** | **68%** | **67%** | - Cash flow from operating activities was a use of **$267 million** in Q1 2022, compared to a source of **$115 million** in Q1 2021, mainly due to changes in non-cash working capital[326](index=326&type=chunk) [Reconciliation of Non-IFRS Measures](index=58&type=section&id=Reconciliation%20of%20Non-IFRS%20Measures) This section explains and reconciles the non-IFRS measure, Adjusted EBITDA, to the most comparable IFRS measure, net income, with Q1 2022 Adjusted EBITDA at $506 million, and the reconciliation adding back items such as depreciation and amortization ($702 million), net interest expense ($460 million), and income taxes ($49 million) to the net income of $19 million, while also adjusting for non-controlling interests and other items - Adjusted EBITDA is a key non-IFRS performance measure used by management, calculated by excluding items like interest, taxes, D&A, impairment, and certain non-recurring gains/losses from net income[297](index=297&type=chunk) Reconciliation of Net Income to Adjusted EBITDA for Q1 2022 (US$ Millions) | | Total | | :--- | :--- | | **Net income (loss)** | **$19** | | Depreciation and amortization expense | $702 | | Other income (expense), net | $99 | | Income tax (expense) recovery | $49 | | Equity accounted income (loss) | ($50) | | Interest income (expense), net | $460 | | Equity accounted Adjusted EBITDA | $58 | | Amounts attributable to non-controlling interests | ($831) | | **Adjusted EBITDA** | **$506** | ```

Brookfield Business Partners L.P. (NYSE:BBU) Q1 2022 Earnings Conference Call May 6, 2022 11:00 AM ET Company Participants Alan Fleming - Senior Vice President, Investor Relations Cyrus Madon - Chief Executive Officer Jaspreet Dehl - Chief Financial Officer Patrick Fragman - Chief Executive Officer, Westinghouse Electric Company Conference Call Participants Devin Dodge - BMO Capital Markets Geoff Kwan - RBC Capital Markets Gary Ho - Desjardins Capital Jaeme Gloyn - National Bank. Nik Priebe - CIBC Capital M ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 19 ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for 2021 increased to $1.8 billion, up from $1.4 billion in 2020, reflecting strong performance across all segments [21][23] - Annual adjusted EBITDA on a run rate basis has now increased to more than $2 billion, significantly up from $215 million when the company was created in 2016 [8][12] - The company ended the year with $2.2 billion of corporate liquidity, bolstered by a recent commitment from Brookfield Asset Management for $1 billion of long-term preferred equity capital [25][26] Business Line Data and Key Metrics Changes - Business services segment generated adjusted EBITDA of $561 million in 2021, more than double compared to 2020 [21] - The residential mortgage insurer contributed $265 million of adjusted EBITDA, benefiting from record underwriting activity [21] - Advanced energy storage operations reported adjusted EBITDA of $784 million, driven by strong aftermarket demand [23] - The water and wastewater operation in Brazil saw a 15% increase in performance compared to 2020 [24] Market Data and Key Metrics Changes - The Canadian housing market is expected to remain stable in 2022, supported by strong underlying fundamentals and moderate home price appreciation [21] - The healthcare services segment in Australia reported adjusted EBITDA of $69 million, showing improvement despite ongoing lockdown impacts [22] Company Strategy and Development Direction - The company plans to continue focusing on acquiring high-quality businesses with strong growth potential and high cash returns [8][12] - Recent acquisitions, including DexKo Global and Modulaire Group, are expected to enhance the company's global footprint and operational capabilities [9][10] - The company is also focused on integrating recent acquisitions and accelerating initiatives to surface value in existing operations [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting a pivot in investor interest from technology-oriented growth to value [33] - The company anticipates continued growth in adjusted EBITDA and cash flows, supported by strong operational performance and strategic acquisitions [12][21] - Management highlighted the importance of maintaining strong ESG practices and recently published an inaugural ESG report [26] Other Important Information - The company generated approximately $350 million in distributions to support growth activities, with significant dividends from its Canadian Residential Mortgage insurer and nuclear technology services operation [11][25] - The intrinsic value per unit of the business has increased at a compound annual rate of 18% over the past five years [12] Q&A Session Summary Question: Potential for upside in Altera due to oil prices - Management noted that the current oil price environment is favorable, encouraging customers to extract more, but cautioned against providing specific forecasts due to volatility [28] Question: Value generation thesis for Cupa acquisition - Management sees opportunities to improve processing yields and expand supply through incremental acquisitions, enhancing the company's market position [30] Question: Market conditions for monetizing assets - Management indicated that the current environment is better for monetization compared to previous periods, with a shift towards value-oriented investments [33] Question: Thoughts on financing approach with BAM - Management emphasized the flexibility of the financing arrangement, allowing for capital drawdown as needed without incurring costs when idle [36] Question: Growth opportunities in Westinghouse's environmental services division - Management highlighted significant growth potential in this area, supported by a strong leadership team and strategic acquisitions [38] Question: Impact of higher interest rates on financing costs - Management has been proactive in refinancing to lock in lower rates and has hedged a significant portion of floating rate exposure [42][44] Question: Inflationary pressures on costs - Management acknowledged cost pressures across various categories but noted that price increases have generally offset these costs [50][52] Question: Update on Sagen's underwriting activity - Management expects normalization in underwriting activity but believes strong housing market fundamentals will support ongoing demand [75] Question: Clarios' advanced battery sales as a percentage of revenue - Management noted strong aftermarket demand for advanced batteries but did not provide an exact percentage of revenue [80] Question: Altera's vessel redeployments - Management emphasized the need for certainty in contractual relationships moving forward, focusing on recovery and returns [83]

Unaudited Interim Condensed Consolidated Financial Statements [Consolidated Statements of Financial Position](index=3&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Financial%20Position) Total assets **$53.76 billion**, liabilities **$42.66 billion**, and equity **$11.10 billion** as of Sep 30, 2021, slightly decreased from year-end 2020 Consolidated Statement of Financial Position (US$ Millions) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $14,219 | $14,493 | | **Total Non-Current Assets** | $39,541 | $40,253 | | **Total Assets** | **$53,760** | **$54,746** | | **Total Current Liabilities** | $13,336 | $12,133 | | **Total Non-Current Liabilities** | $29,326 | $31,276 | | **Total Liabilities** | **$42,662** | **$43,409** | | **Total Equity** | **$11,098** | **$11,337** | | **Total Liabilities and Equity** | **$53,760** | **$54,746** | [Consolidated Statements of Operating Results](index=4&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Operating%20Results) Nine-month net income surged to **$2.04 billion** from **$200 million** in 2020, driven by a **$1.82 billion** disposition gain and **20% revenue growth** Operating Results Highlights (US$ Millions) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $12,043 | $10,070 | $33,107 | $27,586 | | **Direct operating costs** | ($11,155) | ($9,269) | ($30,682) | ($25,526) | | **Gain on acquisitions/dispositions, net** | $0 | $0 | $1,823 | $179 | | **Income before income tax** | $288 | $195 | $2,222 | $243 | | **Net income (loss)** | **$300** | **$85** | **$2,038** | **$200** | | **Net income (loss) attributable to Limited partners** | $46 | ($10) | $277 | ($136) | [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Nine-month comprehensive income was **$1.94 billion**, a reversal from a **$348 million** loss in 2020, driven by strong net income Comprehensive Income (Loss) (US$ Millions) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net income (loss)** | $300 | $85 | $2,038 | $200 | | **Other comprehensive income (loss)** | ($318) | $192 | ($102) | ($548) | | **Comprehensive income (loss)** | **($18)** | **$277** | **$1,936** | **($348)** | [Consolidated Statements of Changes in Equity](index=6&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity decreased by **$239 million** to **$11.10 billion** as of Sep 30, 2021, due to distributions and ownership changes offsetting comprehensive income - Total equity decreased by **$239 million** during the first nine months of 2021, from **$11,337 million** to **$11,098 million**[16](index=16&type=chunk) - Key drivers of the equity change included a total comprehensive income of **$1,936 million**, offset by distributions of **$1,766 million** and ownership changes resulting in a decrease of **$1,740 million**[16](index=16&type=chunk) [Consolidated Statements of Cash Flow](index=7&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Nine-month operating cash flow was **$1.45 billion**, down from **$3.07 billion** in 2020, resulting in a net **$352 million** decrease in cash and cash equivalents Cash Flow Summary (US$ Millions) | Activity | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | | **Cash from operating activities** | $1,450 | $3,074 | | **Cash from (used in) investing activities** | ($569) | ($1,767) | | **Cash from (used in) financing activities** | ($1,233) | ($358) | | **Change during the period** | ($352) | $949 | | **Balance, end of period** | $2,371 | $2,815 | [Notes to Unaudited Interim Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies and financial items, covering acquisitions, dispositions, segment reporting, borrowings, equity, and related party transactions [Note 3: Acquisition of Businesses](index=12&type=section&id=NOTE%203.%20ACQUISITION%20OF%20BUSINESSES) In 2021, the partnership acquired **Aldo** for **$104 million** cash and **Everise** for **$80 million** cash, resulting in significant goodwill - Acquired **Aldo** Componentes Eletrônicos LTDA ("**Aldo**"), a Brazilian solar power solutions distributor, on **August 31, 2021**. The partnership's economic interest is **35%**, with cash consideration of **$104 million** and contingent consideration of **$116 million**. The acquisition resulted in **$445 million** of goodwill[36](index=36&type=chunk)[37](index=37&type=chunk) - Acquired **Everise** Holdings Pte Ltd. ("**Everise**"), a business process outsourcing company, on **January 8, 2021**. The partnership's economic interest is **36%**, with cash consideration of **$80 million** and contingent consideration of **$23 million**. The acquisition resulted in **$290 million** of goodwill[41](index=41&type=chunk)[42](index=42&type=chunk) [Note 8: Dispositions](index=18&type=section&id=NOTE%208.%20DISPOSITIONS) A net gain on dispositions of **$1.82 billion** was recognized for the nine months ended Sep 30, 2021, primarily from a **$1.76 billion** pre-tax gain on graphite electrode operations - A net gain on dispositions of **$1,823 million** was recognized for the nine months ended Sep 30, 2021, primarily from the partial disposition of the investment in its graphite electrode operations[72](index=72&type=chunk) - On **March 1, 2021**, the sale of additional shares in its graphite electrode operations decreased the partnership's voting interest to **37%**, resulting in deconsolidation and a pre-tax gain of **$1,764 million**[74](index=74&type=chunk) [Note 16: Borrowings](index=23&type=section&id=NOTE%2016.%20BORROWINGS) As of Sep 30, 2021, **$751 million** was drawn on corporate credit facilities, with **$1.32 billion** available, and non-recourse subsidiary borrowings totaled **$21.34 billion** Borrowings Summary (US$ Millions) | Borrowing Type | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Corporate borrowings** | $751 | $310 | | **Non-recourse subsidiary borrowings** | $21,338 | $23,166 | - The partnership has a **$500 million** revolving acquisition credit facility with Brookfield, which remained undrawn as of September 30, 2021. This facility was subsequently increased to **$1.0 billion**[94](index=94&type=chunk) [Note 17: Related Party Transactions](index=24&type=section&id=NOTE%2017.%20RELATED%20PARTY%20TRANSACTIONS) For the nine months ended Sep 30, 2021, Brookfield received a **$65 million** base management fee and a **$79 million** incentive distribution - The base management fee paid to Brookfield was **$24 million** for Q3 2021 and **$65 million** for the first nine months of 2021[101](index=101&type=chunk) - An incentive distribution of **$79 million** was paid to Brookfield for the nine months ended September 30, 2021[102](index=102&type=chunk) [Note 22: Revenues](index=28&type=section&id=NOTE%2022.%20REVENUES) Nine-month revenues reached **$33.11 billion**, with Business Services contributing **$21.61 billion** and the United Kingdom being the largest market at **$13.46 billion** Revenues by Segment - 9 Months Ended Sep 30, 2021 (US$ Millions) | Segment | Revenue | | :--- | :--- | | Business services | $21,612 | | Infrastructure services | $3,185 | | Industrials | $8,310 | | **Total** | **$33,107** | Revenues by Geography - 9 Months Ended Sep 30, 2021 (US$ Millions) | Geography | Revenue | | :--- | :--- | | United Kingdom | $13,460 | | United States of America | $4,661 | | Europe | $4,890 | | Australia | $3,380 | | Canada | $2,845 | | Other | $3,871 | | **Total** | **$33,107** | [Note 23: Segment Information](index=31&type=section&id=NOTE%2023.%20SEGMENT%20INFORMATION) Segment reporting was realigned, renaming Company FFO to **Adjusted FFO**, which totaled **$1.18 billion** attributable to unitholders for the nine months, with Industrials as the largest contributor - The partnership realigned segment reporting, changing the name of its key performance measure from Company FFO to **Adjusted Funds From Operations ("Adjusted FFO")**. The calculation method remains unchanged[146](index=146&type=chunk) Adjusted FFO by Segment - 9 Months Ended Sep 30, 2021 (US$ Millions) | Segment | Adjusted FFO | | :--- | :--- | | Business services | $272 | | Infrastructure services | $236 | | Industrials | $738 | | Corporate and other | ($69) | | **Total attributable to Unitholders** | **$1,177** | [Note 26: Subsequent Events](index=37&type=section&id=NOTE%2026.%20SUBSEQUENT%20EVENTS) Post-quarter, the partnership acquired **DexKo Global Inc.** for **$3.4 billion** and declared a quarterly distribution of **$0.0625** per unit - On **October 4, 2021**, the partnership completed the acquisition of **DexKo Global Inc.** for **$3.4 billion**, funding approximately **$395 million** for a **35%** ownership interest[170](index=170&type=chunk) - A quarterly distribution of **$0.0625** per unit was declared on **November 4, 2021**, payable on **December 31, 2021**[171](index=171&type=chunk) Management's Discussion and Analysis of Financial Condition and Results of Operations [Overview of Our Business](index=41&type=section&id=Overview%20of%20Our%20Business) Brookfield Business Partners operates high-quality businesses across four segments, with Business Services being the largest by assets (**$21.0 billion**) and nine-month revenues (**$21.6 billion**) - The partnership's operations are organized into four segments: - **Business services**: Includes residential mortgage insurance, healthcare, road fuels, construction, and financial services - **Infrastructure services**: Includes nuclear technology, offshore oil, and work access services - **Industrials**: Includes advanced energy storage, graphite electrodes, water/wastewater operations, and natural gas production - **Corporate and other**: Includes corporate cash and liquidity management[190](index=190&type=chunk) Assets and Revenues by Segment (as of Sep 30, 2021, US$ Millions) | Operating Segment | Assets | 9-Month Revenues | | :--- | :--- | :--- | | Business services | $21,025 | $21,612 | | Infrastructure services | $10,353 | $3,185 | | Industrials | $22,274 | $8,310 | | Corporate and other | $108 | $0 | | **Total** | **$53,760** | **$33,107** | [Developments in Our Business](index=46&type=section&id=Developments%20in%20Our%20Business) Since June 30, 2021, the partnership acquired **Aldo** and **DexKo**, and signed an agreement to acquire **Scientific Games' lottery business** for approximately **$5.8 billion** - Completed the acquisition of **Aldo**, a Brazilian solar power distributor, on **August 31, 2021**[224](index=224&type=chunk) - Completed the acquisition of **DexKo**, a manufacturer of engineered components, for **$3.4 billion** on **October 4, 2021**[225](index=225&type=chunk) - Signed an agreement to acquire **Scientific Games Lottery business** for approximately **$5.8 billion**, with an expected closing in **Q2 2022**[226](index=226&type=chunk) [Consolidated Results of Operations](index=48&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Results%20of%20Operations) Q3 2021 net income increased to **$300 million** from **$85 million**, while nine-month net income surged to **$2.04 billion** from **$200 million**, largely due to a **$1.82 billion** disposition gain and **20% revenue growth** - Nine-month net income increased to **$2,038 million** in 2021 from **$200 million** in 2020, primarily due to gains recognized on the partial disposals of the graphite electrode operations[236](index=236&type=chunk) - Nine-month revenues increased by **$5.5 billion** (**20%**) to **$33.1 billion** in 2021, mainly from higher volumes and prices in road fuels operations and contributions from advanced energy storage operations[238](index=238&type=chunk)[239](index=239&type=chunk) - A net gain on acquisitions/dispositions of **$1,823 million** was recorded in the first nine months of 2021, compared to **$179 million** in the same period of 2020[247](index=247&type=chunk) [Review of Consolidated Financial Position](index=52&type=section&id=Review%20of%20Consolidated%20Financial%20Position) Total assets were **$53.8 billion** as of Sep 30, 2021, marked by a **$1.1 billion** decrease in PP&E and a **$355 million** increase in Goodwill from acquisitions - Property, plant & equipment (PP&E) decreased by **$1.1 billion**, primarily due to the deconsolidation of the graphite electrode operations[264](index=264&type=chunk) - Goodwill increased by **$355 million**, driven by the acquisitions of the solar power solutions and technology services operations[268](index=268&type=chunk) - During the nine months ended September 30, 2021, the partnership repurchased and canceled **1,186,919 LP Units** under its normal course issuer bid[272](index=272&type=chunk)[111](index=111&type=chunk) [Segment Analysis](index=55&type=section&id=Segment%20Analysis) Q3 2021 **Adjusted EBITDA** increased to **$443 million** from **$381 million**, and **Adjusted FFO** rose to **$276 million** from **$208 million**, with nine-month **Adjusted FFO** more than doubling to **$1.18 billion** Adjusted EBITDA and Adjusted FFO (US$ Millions) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Adjusted EBITDA** | $443 | $381 | $1,211 | $961 | | **Adjusted FFO** | $276 | $208 | $1,177 | $575 | [Business Services](index=58&type=section&id=Business%20services) **Adjusted EBITDA** for Business Services increased to **$163 million** in Q3 2021 from **$96 million**, driven by strong residential mortgage insurer performance and improved construction operations Business Services Performance (US$ Millions) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Adjusted EBITDA** | $163 | $96 | $412 | $179 | | **Adjusted FFO** | $109 | $62 | $272 | $143 | [Infrastructure Services](index=59&type=section&id=Infrastructure%20services) Infrastructure Services' **Adjusted EBITDA** was stable at **$140 million** for Q3 2021, while **Adjusted FFO** increased to **$91 million** from **$78 million** due to lower interest expenses Infrastructure Services Performance (US$ Millions) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Adjusted EBITDA** | $140 | $142 | $401 | $446 | | **Adjusted FFO** | $91 | $78 | $236 | $269 | [Industrials](index=60&type=section&id=Industrials) Industrials' **Adjusted EBITDA** increased to **$171 million** in Q3 2021 from **$166 million**, driven by advanced energy storage, while nine-month **Adjusted FFO** surged to **$738 million** from **$205 million** due to disposition gains Industrials Performance (US$ Millions) | Metric | Q3 2021 | Q3 2020 | 9 Months 2021 | 9 Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Adjusted EBITDA** | $171 | $166 | $488 | $409 | | **Adjusted FFO** | $101 | $86 | $738 | $205 | [Liquidity and Capital Resources](index=67&type=section&id=Liquidity%20and%20Capital%20Resources) The partnership maintains strong liquidity with **$27.6 billion** total borrowing capacity, **$22.1 billion** drawn, and a net debt-to-capitalization ratio of **64%** Net Debt-to-Capitalization | Metric (US$ Millions) | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Net debt** | $19,718 | $21,033 | | **Total equity** | $11,098 | $11,337 | | **Total capital and net debt** | $30,816 | $32,370 | | **Net debt-to-capitalization ratio** | 64% | 65% | - At September 30, 2021, the partnership had **$1,324 million** available on its bilateral credit facilities and an undrawn **$500 million** revolving acquisition credit facility with Brookfield[325](index=325&type=chunk)[326](index=326&type=chunk)

Brookfield Business Partners L.P. (NYSE:BBU) Q3 2021 Results Conference Call November 5, 2021 11:00 AM ET Company Participants Alan Fleming - SVP, IR Cyrus Madon - CEO Denis Turcotte - COO Jaspreet Dehl - CFO Conference Call Participants Geoff Kwan - RBC Capital Markets Devin Dodge - BMO Capital Markets Gary Ho - Desjardins Capital Jaeme Gloyn - National Bank Matthew Weekes - iA Capital Markets Operator Welcome to the Brookfield Business Partners Third Quarter 2021 Results Conference Call and Webcast. As a ...

Brookfield Business Partners L.P. (NYSE:BBU) Q2 2021 Earnings Conference Call August 6, 2021 11:00 AM ET Company Participants Alan Fleming – Senior Vice President of Investor Relations Cyrus Madon – Chief Executive Officer Denis Turcotte – Chief Operating Officer Jaspreet Dehl – Chief Financial Officer Conference Call Participants Geoff Kwan – RBC Capital Gary Ho – Desjardins Capital Markets Nik Priebe – CIBC Capital Markets Dimitry Khmelnitsky – Veritas Operator Welcome to the Brookfield Business Partners ...