Brookfield Business Partners L.P.(US:BBU)2024-11-13 00:12Financial Performance - Total assets as of September 30, 2024, amounted to $80.3 billion, with revenues of $33.2 billion for the nine months ended September 30, 2024[185]. - For the three months ended September 30, 2024, net income was $1,735 million, compared to $49 million for the same period in 2023, representing a significant increase[248]. - Revenues for the three months ended September 30, 2024, decreased by $5,167 million to $9,232 million, primarily due to the sale of the road fuels operation[250]. - Net income for the three months ended September 30, 2024, was $1,735 million, compared to a loss of $69 million in the Corporate and Other segment[320]. - Net income for the nine months ended September 30, 2024, was $2,003 million, compared to $293 million in the same period of 2023[321]. - Adjusted EBITDA for the three months ended September 30, 2024, was $844 million, an increase of $189 million from $655 million in the same period of 2023[297]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $1,912 million, with Business Services contributing $615 million and Infrastructure Services contributing $446 million[321]. Revenue Segmentation - The business services segment generated revenues of $19.7 billion, while the infrastructure services segment contributed $2.8 billion, and the industrials segment accounted for $10.8 billion[186]. - The partnership operates through four segments: business services, infrastructure services, industrials, and corporate and other[181]. - The partnership's revenues are primarily derived from insurance revenues and net investment income from its residential mortgage insurer[190]. - The advanced energy storage operation contributed $443 million to Adjusted EBITDA for Q3 2024, compared to $150 million in Q3 2023[313]. Geographic Revenue Distribution - The United States represented $6.2 billion in revenues, followed by Europe at $5.0 billion and Australia at $4.2 billion for the nine months ended September 30, 2024[186]. Operational Highlights - The dealer software and technology services operation provides cloud-based software solutions, generating revenues through subscription-based services tailored for automotive retailers[192]. - The healthcare services operation in Australia operates 38 hospitals, primarily generating revenue from private health insurance funds and government-related bodies[194][195]. - The construction operation recognizes revenues based on the stage of completion, with significant exposure to economic conditions in Australia and the UK[196][197]. - The fleet management and car rental services maintain a fleet of over 116,000 vehicles, sustaining high contract renewal rates with corporate clients in Brazil[198]. - The Indian non-bank financial services operation serves over 163,000 customers with a distribution network of more than 567 branches[199]. Acquisitions and Dispositions - The partnership completed the sale of its road fuels operation for total consideration of $250 million, resulting in a pre-tax net gain of $483 million[233]. - On September 17, 2024, the partnership acquired Network, a leading payment processor in the Middle East and Africa, for $2.7 billion, with an equity share of approximately $156 million[234]. - The offshore oil services operation agreed to sell its shuttle tanker segment for approximately $1.9 billion, with expected proceeds of about $265 million after debt repayment[236]. Financial Condition and Risks - The partnership's financial condition and results of operations are subject to various risks, including economic conditions, competition, and regulatory changes[174]. - The cybersecurity incident in June 2024 caused disruptions but is not expected to materially impact the financial condition of the partnership[193]. Tax and Regulatory Matters - Current income tax expense for Q3 2024 increased by $65 million to $276 million, primarily due to a tax settlement in the advanced energy storage operation[262]. - Deferred income tax recovery for Q3 2024 increased by $286 million to $580 million, attributed to the recognition of IRA Credits[262]. - The global minimum top-up tax, effective January 1, 2024, is not anticipated to have a material impact on the financial position of the partnership[365]. Assets and Liabilities - Total liabilities decreased by $2,958 million to $60,895 million as of September 30, 2024, compared to $63,853 million as of December 31, 2023[266]. - Financial assets increased by $208 million to $13,384 million as of September 30, 2024, driven by higher mortgage and loans receivable[267]. - Accounts receivable decreased by $83 million to $6,480 million as of September 30, 2024, mainly due to the disposition of the road fuels operation[269]. - Inventory and other assets decreased by $606 million to $4,715 million as of September 30, 2024, primarily due to the disposition of the road fuels operation[270]. Cash Flow and Capital Expenditures - Cash flows provided by operating activities for the nine months ended September 30, 2024, were $2,333 million, an increase from $1,704 million for the same period in 2023[350]. - Total cash flow used in investing activities was $1,975 million for the nine months ended September 30, 2024, compared to $883 million for the same period in 2023, driven by capital expenditures[352]. - Capital expenditures for the nine months ended September 30, 2024, included $633 million in maintenance and $1,418 million in growth capital expenditures, compared to $498 million and $1,894 million in the same period of 2023[273]. Equity and Debt - The weighted average interest rate on outstanding debt was 7.6% as of September 30, 2024, with approximately 75% of non-recourse borrowings being fixed or hedged[339]. - The partnership has a revolving acquisition credit facility with Brookfield allowing borrowings of up to $1 billion, which remains undrawn as of September 30, 2024[342]. - The partnership's total capacity on bilateral credit facilities is $2.35 billion, with $365 million available as of September 30, 2024[341]. Segment Performance - Adjusted EFO in the business services segment for Q3 2024 was $245 million, an increase of 99% from $123 million in Q3 2023[300]. - Adjusted EFO in the infrastructure services segment for Q3 2024 was $61 million, a decrease of 42% from $106 million in Q3 2023[305]. - Adjusted EFO in the industrials segment for Q3 2024 was $356 million, an increase of 134% from $152 million in Q3 2023[311]. - Adjusted EFO in the corporate and other segment for Q3 2024 was $(80) million, an improvement from $(93) million in Q3 2023[315].