Mr. Cyrus Madon reports

BROOKFIELD BUSINESS PARTNERS REPORTS SECOND QUARTER 2023 RESULTS

Brookfield Business Partners LP has released financial results for the quarter ended June 30, 2023.

"We are pleased with our second quarter results and the progress achieved on our growth initiatives," said Cyrus Madon, chief executive officer of Brookfield Business Partners. "Our business fundamentals are solid and we continue to surface value through our operational improvement initiatives."

Net loss attributable to unitholders for the three months ended June 30, 2023, was $48-million (loss of 22 cents per limited partnership unit), compared with net income of $137-million (62 cents per limited partnership unit) in the prior period.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the three months ended June 30, 2023, was $606-million, compared with $530-million in the prior period, reflecting increased contribution from Brookfield Business Partners' business services and infrastructure services segments.

Operational update

An attached table presents adjusted EBITDA by segment.

Brookfield Business Partners' business services segment generated adjusted EBITDA of $223-million for the three months ended June 30, 2023, compared with $153-million for the same period in 2022. Results benefited from the contribution of recent acquisitions, partially offset by reduced contribution from Brookfield Business Partners' residential mortgage insurer given a more balanced Canadian housing market. Current period results included contribution from Brookfield Business Partners' dealer software and technology services and rental car services operations, which Brookfield Business Partners acquired in July, 2022, and October, 2022, respectively.

Brookfield Business Partners' infrastructure services segment generated adjusted EBITDA of $216-million for the three months ended June 30, 2023, compared with $205-million during the same period in 2022. Higher contribution from lottery services and improved performance at work access services was partially offset by reduced contribution from offshore oil services.

Brookfield Business Partners' industrials segment generated adjusted EBITDA of $196-million for the three months ended June 30, 2023, compared with $204-million during the same period in 2022. Increased performance at Brookfield Business Partners' advanced energy storage operation, driven by higher advanced battery volumes, was offset by reduced contribution from smaller operations, including graphite electrode operations and Brookfield Business Partners' natural gas producer.

An attached table presents adjusted EFO (earnings from operations) by segment.

Adjusted EFO for the three months ended June 30, 2023, reflected the impact of higher interest expense and higher taxes. Interest expense increased compared with the prior period due to higher interest rates and higher borrowings associated with recent acquisitions. Current tax expense increased compared with the prior period primarily due to higher taxes within Brookfield Business Partners' business services segment. Adjusted EFO in the current period included an $8-million net gain recognized on a financial asset in Brookfield Business Partners' business services segment. Prior-period adjusted EFO included a $19-million net gain recognized on the sale of a financial asset in Brookfield Business Partners' business services segment.

Strategic initiatives

Payment processing services

In June, 2023, Brookfield Business Partners reached an agreement to acquire Network International for approximately $3-billion. Network is a leading enabler of digital commerce across the Middle East and Africa, providing a full suite of technology-enabled payment processing services to merchants and financial institutions. The transaction will be financed with approximately $1.9-billion of equity, of which Brookfield Business Partners expects its share to be approximately $150-million and the balance to be financed by institutional partners.

Road fuels operation

In June, 2023, Brookfield Business Partners' road fuels operation reached an agreement to sell its North American retail gas station assets for total consideration of approximately $460-million. The transaction is expected to close in the second half of 2023.

Automotive aftermarket parts remanufacturing

In July, 2023, Brookfield Business Partners sold a majority of its automotive aftermarket parts remanufacturing operation to a larger competitor and received a royalty interest on the performance of the newly merged business. Upfront cash proceeds from the sale were used to extinguish existing debt within the business.

Liquidity

Brookfield Business Partners ended the quarter with approximately $1.5-billion of liquidity at the corporate level, including $177-million of cash and liquid securities and $1.3-billion of availability on Brookfield Business Partners' term credit facilities.

Distribution

The board of directors has declared a quarterly distribution in the amount of 6.25 cents per unit, payable on Sept. 29, 2023, to unitholders of record as at the close of business on Aug. 31, 2023.

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 its website under Reports & Filings.

On Jan. 1, 2023, Brookfield Business Partners' residential mortgage insurer adopted a new accounting standard, IFRS 17. Brookfield Business Partners' comparative period information has been adjusted to present the results of Brookfield Business Partners' residential mortgage insurer measured in accordance with IFRS 17. The new IFRS 17 accounting standard has no impact on the fundamental economics or cash flow of the business. Total earnings recognized over the duration of an insurance contract are unchanged; however, the timing of revenues and earnings is impacted by the new IFRS 17 measurement model. Compared with the previous accounting standard, the recognition of revenue in accordance with IFRS 17 has more sensitivity to changes in macroeconomic variables and will generally be slower except in periods of rapidly increasing home prices. Losses on claims will be largely unchanged with the adoption of IFRS 17, but loss ratios will be higher during periods of slower revenue recognition in accordance with IFRS 17.

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 the company either through Brookfield Business Corp., a corporation, or Brookfield Business Partners, a limited partnership.

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 approximately $850-billion of assets under management.

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

Conference call and quarterly earnings webcast details

Investors, analysts and other interested parties can access Brookfield Business Partners' second quarter 2023 results as well as the letter to unitholders and supplemental information on its website under Reports & Filings.

The results call can be accessed by webcast on Aug. 4, 2023, at 9:30 a.m. Eastern Time, or participants can preregister on-line. Upon registering, participants will be e-mailed a dial-in number, direct passcode and unique PIN (personal identification number). A replay of the webcast will be available on Brookfield Business Partners' website.

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