Brookfield Business Corporation

Welcome to the Brookfield Business Partners second quarter 2022 results conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, simply press star and one on your touchtone phone. Now I'd like to turn the conference over to Alan Fleming, Senior Vice President of Investor Relations. Please go ahead, Mr. Fleming. Please go ahead.

Thank you, operator, and good morning. Before we begin, I'd like to remind you that in responding to questions and talking about our growth initiatives and our financial operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially. For further information on known risk factors, I encourage you to review our filings with the securities regulators in Canada and the U.S., which are available on our website. On the call with me today is Cyrus Madden, Chief Executive Officer, Dennis Turcotte, Chief Operating Officer, and Jaspreet Dal, Chief Financial Officer. We're also joined today by Stuart Levings, Chief Executive Officer of Sajan, our Canadian residential mortgage insurer. I'll turn the call over first to Cyrus to provide an update on our business, and then Stuart will talk about recent developments at Sajan. Jaspreet will finish with a discussion on our financial results. We'll then all be available to take your questions. And with that, I'll pass the call over to Cyrus.

Thanks, Alan. Good morning, everyone. Thanks for joining us today. We had a great quarter. We generated over $540 million of adjusted EBITDA and continue to be very pleased with the resilience of our operations. We're well positioned, heading into the second half of the year, and we're progressing initiatives to crystallize significant value. I thought I'd start with a few comments on the operating environment before turning to an update on our initiatives. Like most, we're facing headwinds around inflation and supply chain challenges across our businesses, but the durability of our earnings has been a significant advantage for us. With a few exceptions, volumes are holding up well across our operations. We continue to make progress to either pass through higher costs or increase prices to support margins. In fact, on a same store basis, our EBITDA is up 10% over last year. It's too soon to predict when these inflation headwinds will ease, and some may not for a while, but we continue to work with our management teams to take appropriate action to support performance if the environment worsens. Since our last update, we've posted three of our recently announced acquisitions, including the $8.5 billion acquisition of CDK Global, our technology services and software solutions provider to the automotive dealer, This is a high-quality business with recurring contracted revenues, low ongoing capital requirements, and high margin potential. Even with the recent widening of credit spreads, we were able to finance the transaction at favorable rates. We're now implementing our value creation plans to grow margins and cash flows. We also completed the acquisition of an Australian residential mortgage lender and a slate roofing products provider. Apart from growth, we've turned our attention to initiatives that should generate significant proceeds and crystallize value for our business. In May, we launched a process to sell Westinghouse, our nuclear technology services operation, which generated good interest from prospective buyers. Diligence is ongoing and we're optimistic this will result in us reaching an agreement to sell the business. We were able to complete a dividend recapitalization from this business that generated about $800 million in proceeds, of which BBU's share was $315 million. We look forward to providing you an update as the sales process unfolds. There are other businesses we own today that could be candidates for monetization. The timing of any sale will depend on many factors, including market conditions. Our water and wastewater operation in Brazil is one example. Since our acquisition five years ago, we've made significant progress to build value in the business. We're now exploring options to monetize our investment. Like many of you, we're disappointed in the trading price of our units and shares. We're confident, though, that as we execute on our plans and continue to build long-term value in our business, the trading discount will close over time. We've continued to repurchase our units, given that they trade at levels materially below our view of intrinsic value. With that, I'm going to turn it over to Stuart. But I first wanted to just express our thanks to Stuart and his team at Sajan, who have done a wonderful job for us. And I hope you take this opportunity to ask Stuart any questions you might have about the business he's running. Thank you, Stuart.