Brookfield Business Partners LP Q3 2023 Earnings Call Transcript

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

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Congrats on getting the regulatory approvals on the Westinghouse transaction. Cyrus, you mentioned 50% going to repaying ban perhaps and then the other 50% on corporate debt. Just wondering if you've given any other capital allocation considerations, either greater or faster buybacks or an SIB just given the wide discount to NAV.

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Okay. And then Jaspreet while I have you here. If you take the $1.5 billion proceeds that reduces, I think your debt roughly by 40%, 45% on the corporate debt side. Has your views changed on not carrying any corporate debt? And should we continue to see that balance grind down over time from future monetizations or distributions?

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Okay. And then my next question, maybe for Denis. On the Claria side. I guess 2 questions there. One, wondering if you've seen any impact from the UAW strike over the past 1.5 months. And can you remind us maybe the percentage of workers that are unionized there? Any risk on that front?

Question: Gary Ho - Desjardins Securities Inc., Research Division - Analyst : Okay. And then as a follow-up, I guess, good deleveraging efforts on the Clarios front down to 4.5 turns. What do you think you'll need to get to before there's market appetite for an IPO there?

Question: Nikolaus Priebe - CIBC Capital Markets, Research Division - Analyst : Just a quick question on the Clarios EBITDA contribution in the quarter. It looks like it was up by healthy magnitude sequentially and year-over-year. Was there anything onetime in nature there? Any add-on acquisitions contributing? Or is that just purely a product of organic growth in that business? I just want to drill into that headline earnings figure a little bit.

Question: Nikolaus Priebe - CIBC Capital Markets, Research Division - Analyst : Got it. Okay. That's good. And then just a point of clarification on the Everis sale. Just wondering if you could provide a little bit of color on why in that situation you opted to sell a portion of the business as opposed to a full sale?

Question: Nikolaus Priebe - CIBC Capital Markets, Research Division - Analyst : Yes. Okay. And then one quick follow-on. Just the partial sale, I think you referenced a 3.5x MOC, but in the note, the letter to shareholders, I think there was a reference to proceeds equivalent to 2x the initial capital investment. Is the difference between the 3.5 and the 2x multiples just reflect the fact that it's a partial sale?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Just wanted to get a little bit more color on the use of the proceeds from the Westinghouse and half going to the BAM preferred Aquanacorporate. What's -- I guess, maybe what's the BAM perspective here on taking in half of that exposure? Are there changes in how they're thinking about financing the BBU investment here at the preferred level? Maybe a little bit more color as to how that decision came about?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : And is the view that on a potential attractive acquisition, they stand ready to readvance that amount? Or did the total capacity shrink with this repayment?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. Great. And then secondly, just going to the Clarios business, very, very strong results here. Is there -- was there anything more nuanced than just a little bit of favorable mix shift to the more profitable advanced batteries that would have driven such a large result. And is this a base for Q3 that we should be thinking about going forward? Yes, a little more on that, please.

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Yes, sure. It's just on the Clarios quarter, which was really strong. I was curious if there was anything more nuance than a favorable mix shift to the higher profit advanced battery and whether this level of profit is something we can use as a base going forward for Q3? Or was there some other factors may pull forward or something along those lines. Anything nuance in there we should be thinking about? Or is this a good base?

Question: Jaeme Gloyn - National Bank Financial, Inc., Research Division - Analyst : Okay. Good to hear. Last one, actually, just going back to asset sales. It seems like there's been a few smaller ones, I guess, maybe not big enough to mention or to disclose directly. Is this -- should we expect to see that kind of activity continue where you're generating a couple of smaller deals? Like how many are left to sell that can generate some additional gains. It looks like pretty substantial gains in this quarter from those small cells. But like how should we think about that going forward?