Brookfield Business Partners LP Q1 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : My first question is, I know it's a BAM issue, but is there any color you can give on the fundraising at BCP V. But also, if you can comment on BBU's commitment to that funded dollars or percentage, however you look at it?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. And just my other question was I think you've got a preference of returning to being debt free at the corporate level. But is it also fair to characterize it that you would likely prioritize deploying capital in the current environment given this would seem to be an attractive time to be making acquisitions, but also if monetization markets don't materially improve, this could see your corporate debt and our preferred share kind of total levels increase from where they are today?

Question: Geoffrey Kwan - RBC Capital Markets, Research Division - Analyst : Okay. Actually, maybe if I can ask one last question. You talked about doing debt refinancing at a number of your companies. When you take a look at the portfolio, they like would there be other -- how much more do you think you might either have to do or where you think there's the winter to opportunistically extend term at a reasonable cost?

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Mark, thanks for sharing some time with us. Maybe just carry on last question there just on pricing actions that you've put through. And I want to hone in on a little bit on the labor side given that's still a pretty tight labor market out there, particularly in the U.S. Just wondering if you can provide a bit more color in terms of expectations on further price increases to maintain those margins and what you're seeing on the labor side? And you touched on automation a little bit. Wondering if you can elaborate on that as well.

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Okay. Perfect. And then second question, maybe for Cyrus or Jaspreet. We're hopefully a few months away from closing the Westinghouse transaction. Of the $1.5 billion in proceeds, have you had discussions with Brookfield in terms of their intentions and how much of the proceeds will be used to repay their press? And maybe can you just quickly remind me the financing cost difference between the press and the corporate perforins.

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Okay. And then just last question maybe for Cyrus. I just want to talk about the refi angle a little bit. There's probably a bunch of assets out there in the market that might be challenged somewhat given the higher refi costs, whether that's higher amounts of leverage that you have on the books or the refi costs have jumped dramatically versus a few years ago. Are you seeing more opportunities as a result? And how is that playing into valuations? And more generally, on your deployment pipeline, do you see more opportunities on new investments or bolt-ons to existing assets like the Unidas investment that you've done. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 05, 2023 / 2:30PM, BBU_u.TO - Q1 2023 Brookfield Business Partners LP Earnings Call

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Yes. Thanks. A question for Clarios. Just maybe a little bit of a clarification question. The target date to exceed the $2 billion in EBITDA, what year would that be in or time frame? And then linked with that, given the $500 million of free cash flow each year, what would you expect leverage to be once you hit that sort of $2 billion target?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. And you would expect to use the bulk of that $500 million to repay debt? Or would it be more like 50% that, 50% organic growth opportunities, other CapEx stuff like that? How are you thinking about that?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. Perfect. On Unidas, obviously, it was broken out in this quarter's disclosures, is there something in that business that you can give us a little bit more color in terms of your growth expectations on the Brazilian fleet market, where you're seeing that business trajectory over the next several quarters to a couple of years?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. And then last one for me. With some of the term out of debt and refinancing, are you able to update some of the data points from the Investor Day around the weighted average cost of borrowing, how much is fixed or hedged and the sensitivity to changes in interest rates at this point?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. And I may have misheard the weighted average interest rate. Did you -- could you just repeat that? Because I feel like I heard 7.9%.

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : And it was 4.9% at the Investor Day. Did I...

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Yes. Okay. And now it's almost 8%. Did I -- am I getting that apples to apples? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 05, 2023 / 2:30PM, BBU_u.TO - Q1 2023 Brookfield Business Partners LP Earnings Call