Brookfield Business Corporation

Welcome to the Brookfield Business Partners second quarter 2024 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 11 on your touchtone phone. Now I'd like to turn the conference over to Alan Fleming, head of investor relations. Please go ahead, Mr. Fleming.

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 and 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 will be available on our website. We'll begin the call today with a business update from Anuj Ranjan, our Chief Executive Officer. Anuj will then turn the call over to Paul Lepage, a managing director on our business operations team, who will discuss our approach to managing cybersecurity risk and the incident response at CDK Global, our dealer software and technology services operation. We'll end the call with Jaspreet Del, our chief financial officer, discussing our financial results for the quarter. Adrian Letts, a managing partner and senior leader on our business operations team, is also joining us on the call this morning. And after we finish our prepared remarks, the team will be available to take your questions. I'd now like to pass the call over to Anuj.

Thanks, Alan, and good morning, everyone. Thank you all for joining us on the call today. Through the first half of the year, we've made great progress on a number of fronts to build value in our business. Our financial results were strong, but we're impacted by a couple of one-time events in our operations. This includes a cybersecurity incident at CDK Global, our dealer software and technology services operation, and increased costs on a project nearing completion of our construction operation. That being said, we continue to progress our value creation initiatives across the business. We should be captured in earnings as these one-time events pass. Paul is going to speak a bit more about the incident response to CDK later in the call, but I would like to take this moment to commend the CDK team for their quick and successful handling of the situation and their ongoing commitment to supporting their customers. Stepping back, our business fundamentals are sound. While the global operating environment continues to be fluid, activity levels across our operations remain stable, and the progress we're making on our value creation plans is contributing to our underlying margin performance. Simply put, we think owning high-quality businesses that are mission-critical providers of essential products and services and having the deep operational capabilities to run them better is a real advantage in any environment. Another key differentiator for our franchise is our strong access to capital, which has enabled us to opportunistically manage our maturities. Over the past few months, we've refinanced more than $11 billion of debt in our operations and reduced the spread of these borrowings by an average of 50 basis points. Going forward, this will reduce our annual interest expense by approximately $15 million and will stand to benefit even further as rates decline. In addition, we've been focused on monetizing our more mature operations. While overall private market transaction activity has slowed down, we see the market increasingly as a tale of two cities. On one hand, it's much harder in today's environment to sell lower quality businesses, which have historically relied on low-cost capital to grow. On the other hand, great businesses with strong underlying fundamentals are generally sought after by investors in any environment. To that point, over the past year and a half, we have sold or reached agreements to sell 10 businesses for approximately $3 billion of total proceeds at our share. Most of the returns we've achieved have come from buying good businesses on a value basis, improving their operations, and recycling capital to support our growth. In some cases, we can do this in a relatively short period of time, and in other cases, holding a business for longer may be the best means to continue to compound value. Many of our businesses generate stable cash flows, and in some cases, we may also be able to prudently increase leverage as a viable option to fund distributions. No matter when we choose to monetize a business, our objective is to maximize value. We've built a great track record as a public company, realizing a three times MLC and a 30% IRR on the sale of 20 businesses. Today, we own great companies and we're continuing to build value as we advance our improvement plans, which should create opportunities for us to generate meaningful proceeds from our next phase of monetizations. I now want to pass the call over to Paul Lepage. Paul is a senior leader on our business operations team and spends a lot of his time working with our operations to help them build out their digital and technology capabilities. Paul, over to you.