Brookfield Business Partners L.P. Q1 FY2026 earnings call

• Anuj mentioned Clarios received $1 billion cash tax credits in March tied to U.S. production in critical minerals activity, expects these credits annually through 2030, sees path to value of investment in Clarios doubling in next five years; sold 27% interest in Latrobe at $2 billion valuation, realizing $1 per share in cash with 35% IRR; committed to lead $500 million investment in OpenAI Deployment Company; completed corporate simplification, daily trading volumes up 40% since closing, anticipating about 5 million shares of incremental demand from index rebalancing. - Stuart talked about Sajan's resilient business model in highly concentrated, regulated Canadian mortgage insurance market; Canadian housing market backdrop with average house price decline, but factors like undersupply, improved affordability, etc. expected to help; Sajan's borrowers, portfolio quality, risk mitigation strategies, and expected loss and distribution performance. - Jeffrey discussed first quarter adjusted EBITDA of $582 million, adjusted EFO of $279 million, and segment performance details including industrial, business services, and infrastructure services.

Industrial segment: First quarter adjusted EBITDA was $320 million compared to $304 million last year. Excluding acquisitions, dispositions, and tax benefits, segment performance increased by 7% compared to prior years. Advanced energy storage operation supported by mid - shift to higher margin advanced batteries, partially offset by slightly lower overall volume. Engineered component manufacturing increased more than 10% on a same - store basis. Business services segment: First quarter adjusted EBITDA was $208 million compared to $213 million last year. On a same - store basis, adjusted EBITDA increased by 7% over prior years. Solid performance and realized gains at residential market insurer, dealer software and technology service operation supported by contractual and annual price increases. Infrastructure services segment: First - quarter adjusted EBITDA was $90 million compared to $104 million last year. Results at lottery service operations supported by ramp - up of recently secured contracts and growing share with existing customers. Performance at modular building leasing services operation benefited from increased sales of value - added products and services.

• Anuj expects value of investment in Clarios to double over next five years based on cash flow generation, tax credits, etc. - Sajan expects losses to remain within long - term expectations, providing approximately $400 million of annual distributions on a full cycle run rate basis. - Anuj expects to draw on DeployCo's capabilities to drive transformation, growth, and efficiencies in Brookfield's own businesses.

• Market fluctuations that could impact business performance. - Changes in tax policies that might affect cash tax credits like those received by Clarios. - Risks related to the performance of portfolio companies, such as in CDK where difficult situations may arise and need to be managed.

Q: Around Sajan, asked about loss ratio increase to 12% and long - term target loss ratios.

A: Principally, loss given default increased due to declining house prices, frequency not materially picked up as unemployment stable; long run pricing loss ratio in 15 - 20% range.

Q: About Clario, asked about key value levers and holding period.

A: Clarios is a great cash - flow generating business, shift to absorbent glass mat batteries, tax credits, expected to continue generating cash flow, in no hurry to exit but always opportunistic; view on NAV, EBITDA growth, cash generation leading to value doubling.

Q: On DeployCo, asked about Brookfield's role and influence, and if it limits investment in other AI models.

A: Brookfield has influence as an investor, structured investment as preferred instrument with upside, and access to technology, talent; does not limit investment in other AI models.

Q: On BRK, asked about new concession and monetization.

A: BRCA won new concession in Brazil, will take time to ramp up; still focused on monetizing, IPO considered, capital markets in Brazil stabilizing.

Q: On CDK, asked about approach to creditors.

A: General approach is value preservation, protect and preserve capital, put best people on it to work through difficult situations.

Q: On tax credits, asked about 2024 credits.

A: $1 billion received for 2025, 2024 credits still under processing at IRS, no indication refund should not come.