Brookfield Business : Q3 2022 Press Release

Brookfield Business Partners Reports Third Quarter 2022 Results

Brookfield, News, November 4, 2022 - Brookfield Business Partners (NYSE: BBUC, BBU; TSX: BBUC, BBU.UN) announced today financial results for the quarter ended September 30, 2022.

"We are pleased with our strong third quarter results in a challenging environment and our excellent progress on capital recycling initiatives," said Cyrus Madon, CEO of Brookfield Business Partners. "The proceeds we expect to generate from the recently announced sale of our nuclear technology services operation will meaningfully enhance our corporate liquidity and position us well to continue building value in our business."

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
US$ millions (except per unit amounts), unaudited		2022		2021			2022		2021
Net income (loss) attributable to unitholders1	$	(33)	$	87	$	138	$	602
Net income (loss) per limited partnership unit2	$	(0.14)	$	0.59	$	0.69	$	3.53
Adjusted EBITDA3	$	627	$	443	$	1,676	$	1,211

Net loss attributable to unitholders for the three months ended September 30, 2022 was $33 million (loss of $0.14 per limited partnership unit) compared to net income of $87 million ($0.59 per limited partnership unit) in the prior period. Adjusted EBITDA for the three months ended September 30, 2022 was $627 million compared to $443 million in the prior period, reflecting increased contribution from businesses acquired during the past 12 months.

Operational Update

The following table presents Adjusted EBITDA by segment:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
US$ millions, unaudited		2022		2021			2022		2021
Business Services	$	229	$	163	$	509	$	412
Industrials		228		171			649		488
Infrastructure Services		205		140			618		401
Corporate and Other		(35)		(31)			(100)		(90)
Adjusted EBITDA3	$	627	$	443	$	1,676	$	1,211

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Our Business Services segment generated Adjusted EBITDA of $229 million for the three months ended September 30, 2022, compared to $163 million for the same period in 2021. Results benefited from the contributions of new acquisitions, partially offset by reduced contribution from our residential mortgage insurer. Current period results included contributions from our dealer software and technology services operation and our Australian residential mortgage lender which we acquired in July 2022 and May 2022, respectively.

Our Industrials segment generated Adjusted EBITDA of $228 million for the three months ended September 30, 2022, compared to $171 million during the same period in 2021. Results benefited from the contributions of new acquisitions, resilient performance of our advanced energy storage operation and increased contribution from other smaller operations. Current period results included contributions from our engineered components manufacturer and our solar power solutions provider which we acquired in October 2021 and August 2021, respectively.

Our Infrastructure Services segment generated Adjusted EBITDA of $205 million for the three months ended September 30, 2022, compared to $140 million during the same period in 2021. Results benefited from the contributions of new acquisitions, partially offset by decreased contribution from our offshore oil services operation. Current period results included contributions from our modular building leasing services operation and lottery services operation which we acquired in December 2021 and April 2022, respectively.

The following table presents Adjusted EFO4 by segment:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
US$ millions, unaudited		2022		2021			2022		2021
Business Services	$	152	$	109	$	383	$	272
Industrials		131		101			354		738
Infrastructure Services		102		91			365		236
Corporate and Other		(46)		(25)			(111)		(69)

Adjusted EFO for the three months ended September 30, 2022 reflected increased contributions from our Business Services, Industrials and Infrastructure Services operating segments. Adjusted EFO in the current period included an $11 million after-tax net gain on the partial sale of our investment in public securities.

Strategic Initiatives

• Nuclear Technology Services
  In October 2022 we agreed to sell Westinghouse, our nuclear technology services operation, to a strategic consortium led by Cameco Corporation and Brookfield Renewable Partners for a total enterprise value of approximately $8 billion including proceeds from the separate sale of a non-core asset expected to be received prior to closing the transaction. We expect to generate approximately $1.8 billion in net proceeds from the sale of our 44% interest in the business. The transaction is expected to close in the second half of 2023, subject to certain conditions, including Brookfield Business Partners unitholder approval, regulatory approvals and other customary conditions.
  Since reaching an agreement to sell Westinghouse, unitholders representing more than 50% of the votes eligible to be cast have provided us with written support to vote in favor of the transaction. With that support, we have applied to the Ontario Securities Commission ("OSC") for exemptive relief from the requirements to call a special unitholder meeting to approve the transaction and to send an information circular to unitholders, as previously described in our October 11, 2022 press release. If granted exemptive relief, we would obtain minority unitholder approval by written consent and provide additional disclosure describing the transaction to unitholders on SEDAR. In the absence of exemptive relief, a special meeting of unitholders will be held and an information circular will be mailed to unitholders as previously contemplated, the timing of which, if required, will be provided in due course. The exemptive

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relief has not yet been obtained and there can be no assurance that the OSC will grant the exemptive relief.

• Audience Measurement Services
  In October 2022 we completed the privatization of Nielsen alongside our partner in the business. Nielsen is the market leader in third-party audience measurement, data and analytics across all forms of media and content.
• Payment Processing Services
  In August 2022 we completed the acquisition of 60% of Magnati, a Middle East based payment processing services provider, for an equity investment of approximately $190 million, of which we funded approximately $70 million for a 22% ownership interest.

Liquidity

We ended the quarter with approximately $2.5 billion of liquidity at the corporate level including $538 million of cash and liquid securities, $1.2 billion of availability on our credit facilities and $750 million of remaining availability on Brookfield Asset Management's commitment to subscribe for up to $1.5 billion of perpetual preferred equity securities.

Distribution

The Board of Directors has declared a quarterly distribution in the amount of $0.0625 per unit, payable on December 30, 2022 to unitholders of record as at the close of business on November 30, 2022.

Additional Information

The Board has reviewed and approved this news release, including the summarized unaudited consolidated financial statements contained herein.

Brookfield Business Partners' Letter to Unitholders and the Supplemental Information are available on our website https://bbu.brookfield.comunder Reports & Filings.

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Notes:

• Attributable to limited partnership unitholders, general partnership unitholders, redemption-exchange unitholders, special limited partnership unitholders and BBUC exchangeable shareholders.

• Net income (loss) per limited partnership unit calculated as net income (loss) attributable to limited partners divided by the average number of limited partnership units outstanding for the three and nine months ended September 30, 2022 which was 74.6 million and 75.5 million, respectively (September 30, 2021: 78.3 million and 78.6 million, respectively).

• Adjusted EBITDA is a non-IFRS measure of operating performance presented as net income and equity accounted income at the Partnership's economic ownership interest in consolidated subsidiaries and equity accounted investments, respectively, excluding the impact of interest income (expense), net, income taxes, depreciation and amortization, gains (losses) on acquisition/disposition, net, transaction costs, restructuring charges, revaluation gains or losses, impairment expenses or reversals, other income (expense), net, and distributions to preferred equity holders. The Partnership's economic ownership interest in consolidated subsidiaries and equity accounted investments excludes amounts attributable to non- controlling interests consistent with how the Partnership determines net income attributable to non-controlling interests in its IFRS consolidated statement of operating results. The Partnership believes that Adjusted EBITDA provides a comprehensive understanding of the ability of its businesses to generate recurring earnings which allows users to better understand and evaluate the underlying financial performance of the Partnership's operations and excludes items that the Partnership believes do not directly relate to revenue earning activities and are not normal, recurring items necessary for business operations. Please refer to the reconciliation of net income to Adjusted EBITDA included elsewhere in this release.

• Adjusted EFO is the Partnership's segment measure of profit or loss and is presented as net income and equity accounted income at the Partnership's economic ownership interest in consolidated subsidiaries and equity accounted investments, respectively, excluding the impact of depreciation and amortization, deferred income taxes, transaction costs, restructuring charges, revaluation gains or losses, impairment expenses or reversals, and other income or expense items that are not directly related to revenue generating activities. The Partnership's economic ownership interest in consolidated subsidiaries excludes amounts attributable to non-controlling interests consistent with how the Partnership determines net income attributable to non- controlling interests in its IFRS consolidated statement of operating results. In order to provide additional insight regarding the Partnership's operating performance over the lifecycle of an investment, Adjusted EFO includes the impact of preferred equity distributions and realized disposition gains or losses, recorded in net income, other comprehensive income, or directly in equity, such as ownership changes. Adjusted EFO does not include legal and other provisions that may occur from time to time in the partnership's operations and that are one-time or non-recurring and not directly tied to the partnership's operations, such as those for litigation or contingencies. Adjusted EFO includes expected credit losses and bad debt allowances recorded in the normal course of the partnership's operations. Adjusted EFO allows the Partnership to evaluate its segments on the basis of return on invested capital generated by its operations and allows the Partnership to evaluate the performance of its segments on a levered basis.

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Brookfield Business Partners is a global business services and industrials company focused on owning and operating high-quality businesses that provide essential products and services and benefit from a strong competitive position. Investors have flexibility to invest in our company either through Brookfield Business Corporation (NYSE, TSX: BBUC), a corporation, or Brookfield Business Partners L.P. (NYSE: BBU; TSX: BBU.UN), a limited partnership. For more information, please visit https://bbu.brookfield.com.

Brookfield Business Partners is the flagship listed vehicle of Brookfield Asset Management's Private Equity Group. Brookfield Asset Management is a leading global alternative asset manager with over $750 billion of assets under management. More information is available at www.brookfield.com.

Please note that Brookfield Business Partners' previous audited annual and unaudited quarterly reports have been filed on SEDAR and EDGAR and are available at https://bbu.brookfield.comunder Reports & Filings. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.

For more information, please contact:
Media:	Investors:
Sebastien Bouchard	Alan Fleming
Tel: [phone]	Tel: [phone]
Email: [e-mail]	Email: [e-mail]

Conference Call and Quarterly Earnings Webcast Details

Investors, analysts and other interested parties can access Brookfield Business Partners' third quarter 2022 results as well as the Letter to Unitholders and Supplemental Information on our website https:// bbu.brookfield.comunder Reports & Filings.

The results call can be accessed via webcast on November 4, 2022 at 9:30 a.m. Eastern Time at BBU2022Q3Webcastor participants can preregister at BBU2022Q3ConferenceCall. Upon registering, participants will be emailed a dial-in number, direct passcode, and unique PIN. A replay of the webcast will be available at https://bbu.brookfield.com.

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Consolidated Statements of Financial Position

		As at
US$ millions, unaudited	September 30, 2022	December 31, 2021
Assets
Cash and cash equivalents	$	3,056	$	2,588
Financial assets		12,249		8,550
Accounts and other receivable, net		6,570		5,638
Inventory and other assets		7,469		6,359
Property, plant and equipment		14,525		15,325
Deferred income tax assets		1,233		888
Intangible assets		23,371		14,806
Equity accounted investments		2,052		1,480
Goodwill		14,431		8,585
Total Assets	$	84,956	$	64,219
Liabilities and Equity
Liabilities
Corporate borrowings	$	2,100	$	1,619
Accounts payable and other		20,554		19,636
Non-recourse borrowings in subsidiaries of Brookfield Business		42,558		27,457
Partners
Deferred income tax liabilities		3,612		2,507

Equity
Limited partners	$	1,334		$	2,252
Non-controlling interests attributable to:
Redemption-exchange units		1,249			2,011
Special limited partners		-			-
BBUC exchangeable shares		1,305			-
Preferred securities		765			15
Interest of others in operating subsidiaries		11,479			8,722
			16,132			13,000
Total Liabilities and Equity		$	84,956		$	64,219

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