Brookfield Business Corp Class A Aktie

Welcome to Brookfield Business Corporation's Third Quarter 2026 Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions]

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, and thank you, everyone, on the line for joining us today. 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 all to review our filings with the securities regulators in Canada and the U.S., which are available on our website.

We'll begin today's call with Anuj Ranjan, our Chief Executive Officer, who will provide an update on the progress we're making in executing against our strategic priorities. Anuj will then turn the call over to Mark Wallace, Chief Executive Officer of Clarios, who will discuss the business performance and the growth opportunities we see ahead. We'll conclude our prepared remarks with Jaspreet Dehl, our Chief Financial Officer, who will review our financial results. We'll then open the line to your questions.

With that, I'd like to pass the call over to Anuj.

Thanks, Alan. Good morning, everyone, and thank you for joining us on the call today. We've had a busy few months. We're making great progress across our business. We agreed to sell an additional 20% interest in La Trobe Financial, our Australian asset manager and lender. We've now realized a 2x cash multiple and a 35% IRR on our investment, and we still own more than half our original ownership in the business. In addition, last week, we closed the sale of Multiplex for over $600 million.

These realizations tell us something about the market. Buyers are increasingly willing to pay for more critical cash-generative industrial and services businesses. In total, we've generated $1.4 billion from capital recycling since the start of the year, which puts us well on our way to exceeding the $2 billion target we set at our Investor Day last year. But these 2 sales are just the latest examples of our strategy in action. We acquire high-quality businesses at attractive values, making them stronger through operational improvements and recycling capital when the time is right to redeploy into new opportunities.

And we've been doing just that. We closed new investments in World Freight Company and Gregg Distributors and reached an agreement to acquire Reliance Worldwide Corporation, a global leader in plumbing products with category-defining brands, resilient demand and significant opportunities for operational improvement. Together, these 3 investments represent more than $500 million of capital from BBUC. These investments are great examples of the opportunities we're seeing in today's market. They are high-quality businesses with strong competitive positions and durable cash flows.

But what really excites us is the opportunity to make them even better. Around the world, companies are rethinking how they operate in response to changing supply chains, cost pressures and advances in technology. These shifts are creating significant opportunities to improve productivity, reduce costs and make businesses more competitive. We've spent decades making businesses better, and we believe that experience gives us a distinct advantage. Over the past 2 years, we've committed more than $1.2 billion to acquire 7 market-leading industrial and services businesses.

We see significant opportunities in manufacturing efficiency, procurement, commercial execution and technology to grow earnings and cash flow at these businesses. We're still in the early stages of executing our value creation plans. So much of the opportunity is still ahead of us. And remember, we have a long track record of turning these operational improvements into real cash for our shareholders. Since creating BBUC, we've sold about 30 businesses, generating roughly $9 billion in proceeds and a 19% realized IRR. In aggregate, these monetizations were done at about a 12% premium to our NAV.

Looking ahead, we have a strong pipeline of new investments, a lot of upside in what we already own and significant capital coming back to us from monetizations. This puts us in an excellent position to continue compounding value for our shareholders. One of the best examples of our approach in action is Clarios. Since acquiring the business, we've significantly grown its earnings, strengthened its operations and positioned it for the next phase of growth. Today, Clarios is our largest investment. And honestly, we believe the best is yet to come.

I'm very pleased to have Mark, Clarios' CEO, joining us today to share more about the business, the progress we're making and the opportunities ahead.

Mark, over to you.

Thank you, Anuj, and good morning, everyone. It's great to be back with you. I'd like to spend a few minutes providing an update on Clarios, including the strength of our core business and the opportunities we are pursuing that will accelerate our growth and expand our addressable markets from supercapacitors that help stabilize power demand in artificial intelligence data centers to connected services that help commercial fleets reduce downtime while creating new recurring revenue streams. I'll also touch on how our recent portfolio actions support our long-term strategy.

Let me start with our performance. We finished fiscal 2026 with our fourth consecutive year of record financial results. That performance underscores the strength and earnings power of our core business and provides a strong foundation for long-term growth. At the center of the foundation is our highly resilient business model. Clarios is a global leader in low-voltage energy storage, approximately 4x the size of our nearest competitor. We power roughly 1 in 3 vehicles on the road, and we sell more than 150 million batteries annually.

Approximately 80% of our sales are in the stable aftermarket where battery replacement is essential and recurring. This scale is supported by a well-established circular model that recovers and reuses critical minerals across the battery life cycle. That aftermarket exposure provides significant stability while also creating meaningful long-term growth potential. One of the most important drivers is the continued shift towards higher-value advanced batteries, which we expect to be a multi-decade tailwind. Advanced batteries now represent 35% of our units sold, up from just 10% in fiscal 2015.

More than 70% of the batteries we sell into the original equipment channel today are advanced batteries. While the aftermarket penetration remains significantly lower, over time, we expect the aftermarket to naturally follow as those vehicles move through the replacement cycle. And because advanced batteries generate greater revenue and profit per unit than conventional batteries, that mix shift creates an attractive long-term growth opportunity. At the same time, the role of the low-voltage power in vehicles is becoming more important.

Vehicles are becoming more electrified, connected, software-defined and automated. That evolution requires more sophisticated low-voltage power systems to support electronics, critical vehicle functions and safety redundancy. Importantly, that trend is largely powertrain agnostic. Internal combustion, hybrid and fully electric vehicles all require reliable low-voltage power. With more than 620 xEV platform wins to date, we have established a strong position as these architectures continue to evolve.

For Clarios, that creates an opportunity to provide greater value to our customers and increase our dollar content per vehicle. This is the strategy behind the Clarios Power Management System, or CPMS. By bringing together advanced batteries, supercapacitors, electronics, software and monitoring capabilities, we can address a broader portion of the vehicle's low-voltage architecture and solve more of our customers' power management needs.

More broadly, our $6 billion U.S. investment plan supports advanced battery production, critical mineral processing and recovery, next-generation technology and state-of-the-art manufacturing. These investments strengthen our core while building the capabilities needed to support future growth. Alongside these investments, we remain intensely focused on driving operational efficiency across the business. We're utilizing AI and machine learning, advanced automation and robotics to improve productivity, optimize our supply chain and enhance our customer service.

Continuous operational improvement is an important lever to support margin expansion and long-term value creation. Beyond driving growth and efficiency in our automotive business, we also see opportunities to extend power management technology into new attractive markets. A great example is supercapacitors. Our acquisition of Maxwell Technologies added a complementary fast-response power technology to our portfolio. Within automotive, supercapacitors support peak power requirements, stabilization and redundancy.

Beyond automotive, we see applications in data centers, grid infrastructure, industrial applications and renewable energy. Data centers are particularly interesting. AI workloads are creating increasingly volatile power demands that constrain existing infrastructures. Supercapacitors can respond almost instantly, helping smooth power spikes and bridge short duration gaps between primary and backup power. We see an attractive opportunity as AI computing drives demand for fast, reliable power.

We are pursuing a similar opportunity through our connected services. By combining battery data, analytics and our deep expertise, we can help fleet customers identify potential battery issues before they result in vehicle downtime. Today, our connected services solutions support approximately 20 commercial fleets across North America. These deployments validate the need for actionable battery intelligence that can improve uptime and maintenance planning.

Over time, connected services can create reoccurring revenue opportunities, deepen customer relationships and generate valuable insight to inform future innovation. As we pursue these opportunities, we remain focused on allocating capital to strengthen our competitive position and create shareholder value. Our recent portfolio actions are good examples. Our planned acquisition of Ecobat U.S. operations include 3 critical mineral recovery and processing facilities that together process more than 40 million batteries annually.

Bringing these capabilities in-house advances our vertical integration, reduces reliance on third-party suppliers and strengthens access to critical minerals, reinforcing both our closed-loop model and the security of domestic battery supply chains. It also allows us to benefit from greater vertical integration, creating an opportunity to improve margins over time. At the same time, we monetized our noncontrolling economic interest in an equity stake in a large battery distributor while preserving our long-standing commercial relationship.

Taken together, these actions reflect a disciplined approach to managing the portfolio, investing in strategic assets and capabilities while maintaining financial flexibility for future growth and long-term shareholder value creation. So as we look ahead, I'm excited about where Clarios is positioned. We have a resilient cash-generative core business. We are strengthening our automotive leadership as vehicle architectures become more complex while extending our capabilities into attractive new markets and recurring revenue opportunities.

Together, we believe these growth platforms expand the markets we can address by approximately $32 billion today to an estimated $52 billion by 2040, supported in part by the growing demand for advanced power management solutions in data centers. This strategy gives us multiple avenues to grow while continuing to drive operational efficiency, deploy capital, and with a discipline and create long-term value.

Thank you, and I'll turn it over now to Jaspreet.

Thanks, Mark, and good morning, everyone. We generated third quarter adjusted EBITDA of $594 million compared to $575 million in the prior period. Adjusted EFO for the quarter was $337 million compared to $284 million in the prior period. Current period adjusted EFO includes $44 million of net gains, primarily related to the partial sale of La Trobe Financial.

Turning to segment performance. Our Industrials segment generated third quarter adjusted EBITDA of $348 million compared to $316 million last year. On a same-store basis, adjusted EBITDA increased approximately 8% over the prior period. At Clarios, strong commercial execution, the continued favorable shift towards higher-margin advanced batteries and higher U.S. production tax credits supported earnings, offsetting some softness in volumes and inflation-related cost pressures.

BRK Ambiental delivered double-digit growth in adjusted EBITDA, benefiting from contractual tariff increases and higher volumes. Performance at DexKo was broadly in line with last year despite continued weakness in North American trailer markets. Improved margin within the business benefited from the team's continued efforts to align its cost base with current demand, advance its commercial initiatives to offset inflation and tariff pressures as well as accelerate automation.

Moving to our Business Services segment, we generated third quarter adjusted EBITDA of $204 million compared to $188 million last year. On a same-store basis, adjusted EBITDA increased by approximately 3% over the prior period. Sagen continued to benefit from resilient demand among first-time homebuyers even as broader housing activity in Canada remains slow. Losses and claims were higher during the quarter, reflecting increased claim severity and reserve strengthening, consistent with our expectations for normalization.

The business is very well capitalized with a minimum capital adequacy ratio of 176% and continues to generate significant cash flow, which allowed it to pay us a $90 million distribution in the quarter. CDK delivered double-digit adjusted EBITDA growth over the prior year, supported by cost-saving initiatives as well as continued cross-sell and upsell activity. The business appointed a new CEO in August as the team continues to focus on initiatives to strengthen commercial execution and accelerate customer adoption of this modernized workflow.

Finally, our Infrastructure Services segment generated third quarter adjusted EBITDA of $76 million compared to $104 million last year. Prior year results also included contribution from Altera's FPSO operations, which were sold earlier this year. At Modulaire, results were impacted by softer demand and competitive pricing pressure alongside operational challenges in the U.K. A new CEO joined in September and is focused on strengthening operational execution, improving customer retention and driving better commercial performance across the business with the U.K. as the immediate priority.

At Scientific Games, weaker industry volumes and higher costs associated with new contract implementation weighed on results. This included higher-than-anticipated cost to deliver select international contracts. The business continues to execute on delivering a record number of implementations. These impacts were partially offset by performance improvement at BrandSafway. The business is benefiting from strong growth in white space markets, including semiconductors, power and data centers as well as higher fleet utilization and commercial initiatives.

Turning to our balance sheet and capital allocation priorities. We ended the quarter with approximately $2.7 billion of pro forma liquidity at the corporate level. Our strong financial position provides significant flexibility to fund new investments and continue to buy back our shares. Since launching our share repurchase program early last year, we bought back more than $335 million of shares. We continue to view repurchases as an attractive use of capital at current trading prices and will remain disciplined as we pursue new investment opportunities. As always, our priority is to deploy capital where we believe it will generate the greatest long-term value per share.

With that, I'll turn the call back to the operator for questions.

[Operator Instructions] And our first question comes from the line of Gary Ho with Desjardins Capital Markets.

Maybe the first question is for Mark here. Thanks for joining the call very timely. I believe you mentioned a little bit of this in your prepared remarks, but I did see that Clarios agreed to redeem its Interstate stake for roughly $1 billion and then also signed the supply agreement at the same time. Just wondering why was now the right time to monetize the stake? And also maybe just tie that into your investment in Ecobat as well kind of moving upstream in the recycling process. Just wondering if those 2 are kind of linked together?

First and foremost, they're not linked together. I think just timing-wise, they end up hitting at the same time. Number one, our relationship with Interstate Batteries has been long-standing. However, I think it's important to note that we had a noncontrolling stake in Interstate. So really for us, there was not a lot of value creation from the asset from that perspective. And to be quite honest, we're able to monetize it at a significant multiple, as you can imagine, with that.

So we were quite thankful. We were able to negotiate with the family and get the multiple we received from the asset.

Plus more importantly, we also secured a long-term 7-year agreement with Interstate Batteries because we have been their long-standing partner from a supply chain perspective, we want to maintain that.

When it relates to Ecobat, as we mentioned in our $6 billion investment plan in the United States, part of that was our critical minerals recovery. And so that was a great way for us to be able to basically add critical mineral recovery at a much faster pace than we would have done if we had -- vertically, or if we've done a greenfield as an example. So we're quite pleased with both of these transactions, one in the amount of proceeds we received from Interstate and more importantly, that we're able, hopefully, once it gets through the Justice Department and antitrust, we'll have the Ecobat assets, which will be definitely accretive to our core business.

Okay. Great. And while I have you, maybe just a quick update on the 45X tax refund as it relates to the 2024 tax year. Just any update on that? I think in your last call, you mentioned interest is accruing and you're having regular contact with the IRS. Just any update on the last few months?

Yes. Gary, nothing's changed. We continue our regular updates with the IRS. Yes, you are right. There's still accruing interest penalties as we go forward. But at this stage, we see no reason that would prevent us from being paid the 2024 refund.

Okay. Great. If I can just sneak one more in, maybe for Anuj or Jaspreet. We know it's early days just in the -- following the midterm results in the U.S. Do you have any early read on kind of which portfolio companies could benefit or could be affected by the outcome there?

Gary, I'd say -- it's Anuj here. Look, the businesses we own and the kinds of things that we buy and have continued to invest in, these are all businesses that are purposefully resilient, can stand various different cycles. We've gone through a relatively inflationary period and with a lot of uncertainty many times before in these companies, and they've been just fine. It kind of comes back to our strategy of essential products and services, critical components in value chains and things that customers need where we can make operational improvements. And none of that has changed in our thesis for new investments or for -- with our existing portfolio. So nothing today. It's again, very early, but I'd say so far, what we're really focused on is the fundamental operations of our businesses, which are all going generally quite well.

And our next question comes from the line of Bart Dziarski with RBC Capital Markets.

I just wanted to see if we can get an update on the BPE managed evergreen fund. The fair value last quarter was $490 million. What was the fair value this quarter? And just maybe talk about the momentum you're seeing there?

Yes, Jaspreet can talk about the fair value, and I'll tell you a little bit about how we're doing on fundraising.

Bart, it's Jaspreet. So I'd say the fair value hasn't changed materially quarter-over-quarter. So it's pretty consistent. We've vended in the assets that we sold, the fair value is about $690 million, and we've gotten back close to $200 million on that. And we're continuing to speak with the fund. And as they're raising subscriptions, they have the ability to kind of allocate their capital. So they've been raising capital and allocating some of the capital to pay us back.

Yes, in terms of fundraising and the activity, I'd say the interesting thing about the wealth channel is often, you get onboarded on the platforms and then you start to work that platforms channel directly with the RIAs or the brokers or the end customers. And then you see the results of inflows trickle in after. That whole process is usually about a year, to be honest, before you see the cash come in. And I'd just say that we continue to be at it. We're seeing quite a bit of momentum. Our story around industrials and essential services is really resonating in this kind of an environment, and we're seeing that happen -- that sort of pick up in the wealth channels as well. So while we kind of -- through our -- what we can see in terms of leading indicators, I feel very good about the continued fundraising momentum through 2027.

Okay. Great. That's helpful. And then on the -- on the buyback, so Jaspreet, you talked about the pacing there and just your priority for the buyback. I'm curious, where does buyback rank in the pecking order of capital deployment? And what should we expect in terms of kind of the pacing of buybacks from here?

Look, we always take a balanced approach, as you know, and both, obviously, deleveraging, returning capital to shareholders and making new investments and acquisitions. And we've done quite a bit of buyback in recent times because of, obviously, the stock price was a very attractive opportunity. And I'd say we just continue to have that balanced approach. And going forward, we do see opportunities to put capital to work, and we continue to. And you've seen us kind of make these modest-sized investments. In addition, we're doing a lot of monetizations and recycling that capital. And we did a lot of deleveraging. And today, I mean, buybacks and new investments are probably going to continue to be of interest.

Yes. And maybe the only thing I'd add is that our balance sheet is as strong as it's ever been like pro forma for the monetizations Anuj referenced. We've got liquidity of $2.7 billion. So it gives us a lot of flexibility.

And our next question comes from the line of Bill Katz with TD Cowen.

I just want to start off with -- there's a lot of -- it's good to see all the activity of the portfolio, both buying and selling. If we were to use the third quarter as a base level for the adjusted EBITDA, how do we think about maybe the pro forma impact of maybe what's foregone from sale versus what might be able to come on in terms of redeployment?

I just want to make sure I got your question. So you're looking for just an understanding of where -- if we look at the current quarter EBITDA and we run rate that, like what does that look like?

No. Well, let me rephrase. So I think you put up $594 million of adjusted EBITDA in the quarter. And I'm just trying to understand you've had some -- you've sold some things subsequent to quarter end, and I think even buying things. Just trying to get to a -- or maybe I'll rephrase, how do I think about the incremental accretion or dilution relative to the recent monetizations? And then maybe with DeployCo, how do you think about incremental synergies to maybe make up for anything that may have been sold off?

Right. Okay. So maybe if I just kind of think about that on an annual basis, it's a bit easier and then we can get into a quarter. But our annual kind of run rate EBITDA round numbers right now is about $2.5 billion. So I think about that number, Multiplex is probably our largest sale. We've been generating circa $60 million of EBITDA from Multiplex. And then I'd say the lost contribution from La Trobe and some of the other monetizations that we've done over the last 12 months. I'd say estimated about $20 million to $25 million. So again, if we said round numbers, circa $100 million from asset sales. So that gets us to about $2.4 billion.

And then if we think about kind of the acquisitions, that we've already made and you run rate those plus some of the things in the pipeline that will close end of year, early next year. I'd say maybe quite not $100 million because a lot of the acquisitions that we've been making have been kind of smaller size and scale. But I'd say we probably get back close to that $2.5 billion run rate number. I know that gives a bit of a high-level overview, but happy to kind of take it offline and give a bit more detail.

Super helpful. And just as a follow-up, a little bit more of a nit question, so I apologize for the narrowness of it. On your P&L, it looks like you had a pretty high level of other income and then the tax rate looked a little bit on the low side. I was wondering if you could just provide some guidance on how we should think about both those line items going forward.

Sure. So in other income and expenses, we generally have a lot of our kind of noncash movements, derivatives items like that. So there are some movements there. There's also kind of LTIP accruals just around payments -- share-based payments and compensation on eventual monetization. That's again, just movements in those types of things. Nothing very specific that I would call out there. On taxes, we had some tax recoveries. I actually call out Clarios, we had a deferred tax recovery at Clarios this quarter, which drove kind of the overall tax cost lower.

Our next question comes from the line of Scott Fletcher with CIBC.

Thinking about the strength of the balance sheet that you mentioned, Jaspreet, and sort of the size of the recent deals you mentioned as being smaller. Given that strength, is there an appetite to maybe increase the size of the deals or the participation in the deals going forward? Or are you comfortable with this sort of smaller -- spreading it out across the smaller deals here?

Yes. Look, we tend to be very opportunistic just in terms of the investments that we make. And in the pipeline today and some of the recent acquisitions that we have done, kind of that mid- to slightly larger size industrial businesses is kind of where we've been very focused. And our proportionate share of investments is typically about 1/3 when we invest alongside the funds. So for now, we foresee kind of making similar sized investments.

And -- but as you said, we've got a lot of pro forma liquidity, and we've got a lot of flexibility. So if we see something that's really compelling, we could do something larger. But for now, the plan is to kind of continue to invest alongside the fund. And based on the current pipeline, the size of investments that you've been seeing, that's probably kind of reasonable.

Okay. That's helpful. And then maybe one for Mark. On the Clarios side of things, I just -- could you share your priorities or plans for capital allocation? Is there sort of a -- now that you've sold, monetized an asset, done some M&A, is there more of a focus on investing in the build-out? Or is there other opportunities for maybe M&A along in your pipeline?

Yes. Scott, nothing has changed in our strategy. So first and foremost, is a continued investment in the underlying business itself and strengthening the balance sheet. And as you can imagine, I talked about some of the new growth areas for the company. And so we're always active in the inorganic markets as well. And so we continue to be quite inquisitive of things that could be accretive to the business longer term. So those would be priorities. And then lastly, as you can imagine, with our free cash flow generation ongoing, we definitely can support more shareholder-friendly activities in the future.

And our next question comes from the line of Devin Dodge with BMO Capital Markets.

All right. I'm going to start with a question for Mark. Mark, you highlighted a few new offerings to augment the core low-voltage auto battery business. I'm assuming these aren't overly material today, but just wondering if you could frame how much revenue comes through these other products now. And if we dream the dream, what the potential contributions could be over the next, call it, 3 to 5 years?

Yes. So in the case in the automotive technology business that I kind of referenced, which is a combination of energy storage devices, supercapacitors, embedded software and electronics, that's kind of what I call our advanced auto technology business. And most of that is going to be launching starting in 2028, but the ramp-up will happen around -- full ramp-up will happen around 2030. So when you look at it more from a revenue perspective, we have over $2 billion of backlog just in that space itself. So -- and that's all contractual. We have 2 factories that are being retrofitted as we speak, and those will start, like I said, production in 2028.

When it comes to the, let's call it, the nonautomotive space, especially data centers with the acquisition of Maxwell, there's quite a high demand for our supercapacitor systems for data center utilization. So we're going to be bringing on 2 new factories over the next 18 months just to support what I call the near-term demand that we're seeing in data centers. And so those 2 businesses combined, we're expecting our addressable market to grow by 50%. So we definitely see those having a more larger impact in our earnings profile and our revenue growth closer to the end of this decade.

Okay. That's interesting. Okay. I'm not sure who wants to take this, but it's another one on Clarios. But we've seen financial leverage, I think it's down to the low 4s if you back out the credits and you should decline further once more credits are received. It just seems that you're likely nearing another decision for how to monetize this business. I was just wondering if you could talk about your exit options that you're considering. You've also owned this business for nearly 8 years. I'm not sure if there is -- if the need to return capital to Brookfield's private fund investors plays into the exit options being considered.

Yes, I'll take that. I think, look, Clarios is an amazing business. It's highly, highly cash generative. And in the future, when we look forward, the potential -- the power of that cash flow for BBU is incredible. So I'd say just starting with, we're very, very pleased and really excited about what Mark and the team have done and what's -- actually, frankly, what's ahead as in my earlier comments is probably better than what we've seen in the past. That being said, obviously, we're always open to opportunities to crystallize value. And there's a lot of ways that we can look to crystallize value, which could include, of course, selling the business, but it could also include ways to capture some sort of value at the parent with maybe partial sales or other kinds of opportunities without necessarily needing to sell the entire business.

So all of these various, we want to retain optionality. The nice thing is when you got this highly cash-generative business that will pay a very stable and growing dividend over a long time. We have all kinds of alternatives at our disposal. So it frankly will come down to in coming time as to what is the best value that we can achieve compared to the cash yield that we're getting. But again, with that sort of a cash yield, we're not in any hurry.

Okay. Makes sense. Okay. And just one last one. I was going to ask about Nielsen. It's a business we don't talk very much about. Just wanted to know if you could give an update -- a high-level update how the business is performing? And just any color on why Brookfield elected not to participate in the recent acquisition there and what that pro forma ownership will look like?

Yes. I can answer maybe the last part and then hand it over to Adrian to maybe just talk about what we're seeing in the business. So I think you're referencing the DoubleVerify transaction that Nielsen recently announced. So that transaction is primarily debt funded and with a little bit of equity. And as you know, we've got a pref investment in Nielsen, a convertible pref.

The -- we're quite excited about the transaction, and we think it will be very accretive to the business and continue to kind of set it up for growth. And it will add value to our kind of converted share of the business. And the business was able to do that without requiring additional equity from us. I mean, really doesn't kind of impact our overall return profile. So that's kind of the approach that we took on.

And to comment on the performance of the business, we're getting through all the large renewals now, and we're seeing upticks in the value of those renewals as we start to include other products and services, particularly around streaming. The Gracenote business is improving. And then if you look into the new products and services that we're launching, we're starting to see strong momentum on that. So look, overall, we remain very optimistic in terms of the opportunity of the business. I think to Jaspreet's point, the DoubleVerify acquisition really adds to the portfolio of products and services that we can offer to our customers on either side of the marketplace, and it's a business that is performing well.

[Operator Instructions] Your next question comes from the line of Jaeme Gloyn with National Bank.

Just a few questions on some of the company performance. First, Sagen, just wanted to get a sense as to the breakdown of what's driving the reserve build this quarter. Is it entirely macro driven? Or is there something you're seeing with either loss curves or just the underlying performance?

Yes. It's Jaspreet. I'll take that. So I'd say the overall, what you're seeing in the losses is really a normalization towards the long-term, long range. And I think we've said this before, but the long-term loss expectations are in that 15% to 25% range, and we're seeing a normalization. Now since we bought the business kind of late 2019, going through COVID and the home price appreciation, we've seen abnormally low loss ratios over a large period of time that we've held this business, but our expectation has always been that losses will increase and hit more in that 15% to 25% range. So that's what we're seeing now.

And in the quarter, in particular and kind of this year, we've seen continued downward pressure on home prices in Canada. And I'd say, as you'd expect, the Ontario, GTA, those markets where we saw a substantial increase in home prices, that's where we've seen the largest correction and I'd say the largest pressure. So the loss ratios that we're seeing come through, part of it is the actual kind of experience and then part of it is just shoring up reserves as we look forward and we're looking at economic uncertainty, rates went up. So just making sure that we've got that resilience in our reserves given kind of the broader macro.

Yes. Okay. Understood, mostly severity from house price decline. The next one would be CDK and showing in growth in EBITDA. Anything to draw out from that quarter's performance? And again, the debt markets are obviously one thing, but the operating performance, the cash flow of the business continues to be positive and to grow on a year-over-year basis. So maybe just sort of talk through some of the initiatives that are still rolling through there at CDK.

Yes. Maybe I'll just make an opening comment and then hand it over to Adrian to talk about operating performance. I'd say the business had a good quarter this year. We have annual price increases, there's cross-sell and the overall performance has been better. Churn in the business is still elevated, and we are kind of managing through that. So what I would say is while the business is on the right path, and I'll let Adrian talk to everything that we're doing in the business, one quarter, we shouldn't extrapolate that as the trend. And we are kind of proactively working on debt. The business does generate positive free cash flow. It continues to invest in its modernization efforts. So the cash flow profile of the business is still good. But we are in active dialogue and looking at the debt maturity.

And just to build on operational performance. So Jaspreet commented on this quarter's EBITDA. But look, continued cross-selling and upselling initiatives, coupled with the appointment of a new CEO who brings deep operational experience in building and scaling large-scale technology and new products. The business is continuing to focus on executing its technology modernization program. That will also underpin CDK's product capabilities. It also improves customer support, improved retention, which gives us a really strong basis to drive cross-selling.

And it's important to remember, look, CDK's platform is deeply embedded into customer workflows. It's one of the largest -- it remains the largest dealer management software provider in North America and has a really strong market position and draws on 40 years of proprietary data, which we think as you go through the ongoing modernization efforts, the business is really well positioned to leverage AI as an opportunity to deliver much more value to customers.

Okay. And then last one, maybe similar to an earlier question. Elections in Brazil, a couple of Brazilian assets. Obviously, the markets maybe not as well received, but anything to draw out from an impact or affected that might affect those businesses on a go-forward basis?

Yes. Look, I'd say our 2 largest assets in Brazil, BRK Ambiental, our wastewater business and Unidas, which is our fleet management and car rental business. Both of those businesses, operating performance has been very good. I think we called out that BRK Ambiental had like double-digit EBITDA growth. We continue to kind of optimize the operating costs in that business. We recently bid on and acquired a new concession. So we're in the process of kind of rolling that out. So business and operating performance has been excellent.

But for both businesses, as with any business, like extended periods of very high interest rates aren't really constructive. So we have seen high rates in Brazil for a long period of time, which has curtailed kind of capital market activity. The rates have been coming down. I think the punchline from the elections is that the expectation is still that rates will come down, maybe a little bit of moderation on how quickly they come down. So I'd say our focus continues to be on operating these businesses well, compounding value and being ready to monetize them when we get the appropriate window.

I'm showing no further questions. So with that, I'll hand the call back over to CEO, Anuj Ranjan, for any closing remarks.

Thank you all for being here this quarter and look forward to speaking with you again next quarter.

Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.

Welcome to the Brookfield Business Corporation's First Quarter 2026 Results Conference Call and webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions].

Now I'd like to turn the conference over to Alan Fleming, Head of Investor Relations.

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 Anuj Ranjan, our Chief Executive Officer, who will provide an update on our strategic initiatives. Anuj will then turn the call over to Stuart Levings, Chief Executive Officer of Sagen, our Canadian Residential Mortgage Insurer to talk about the positioning and performance of the business in the current environment. Jaspreet Dehl, Chief Financial Officer, will then discuss our financial results for the quarter. After we finish our prepared remarks, the team will be available to take your questions.

With that, I'd like to now pass the call over to Anuj.

Thanks, John, and good morning, everyone. Thank you for joining us on the call today. We had a great quarter, which was defined by 3 things: First, Clarios received $1 billion of cash tax credits. The first of similar amounts, we expect annually through the end of the decade. Second, we sold a 27% interest of the La Trobe to Australian asset manager and lender and an implied 3x multiple of our capital in just under 4 years. And third, we committed to lead a $500 million investment alongside OpenAI, the newly created OpenAI deployment company, platform built to deploy enterprise AI inside real operating companies.

We also completed our corporate simplification at the end of March. And since closing, our daily trading volumes were up 40% compared to average levels last year, and we're anticipating about 5 million shares of incremental demand from index rebalancing over the next few months, both very important steps towards improving the trading liquidity and index demand of our shares.

Let me touch on a few of the defining highlights of the quarter in more detail. Starting with Clarios, which received its fiscal 2025 cash tax refund of $1 billion in March tied to its U.S. production incritical minerals asset. This is equivalent to about $1.50 per share of BBUC, and we expect these credits will continue annually through 2030. Today, Clarios is our largest and most valuable business. And with the investments it's making to expand production capacity and scale its critical minerals capabilities, we see a path to the value of our investment in Clarios doubling over the next 5 years.

In addition, during the quarter, we reached an agreement to sell a minority interest in La Trobe Financial at a $2 billion valuation. Since we bought the business, we transformed it from a mortgage lender to a leading asset manager in Australia and increased its AUM from $10 billion to $16 billion. This sale realizes $1 per share in cash and results in a 35% IRR at 3x multiple of our capital. In a market that is increasingly appreciating critical, cash-generative, industrial and services businesses, we expect our monetization activity to continue.

Sale of La Trobe is the latest example of our strong track record of value creation built on a simple approach of buying, building and operating vital industrial and services businesses. When the right moment arrives, we monetize to realize value and redeploy that capital into new opportunities to fuel our engine and continue compounding value at scale. We recently did just that committing to lead a $500 million Brookfield investment in DeployCo alongside OpenAI in a group of global investors. Our share of the investment is expected to be about $150 million.

Stepping back, AI adoption is moving quickly, and the returns will not only accrue to those who build the models, but to those who can deploy them at scale inside real operating businesses against real P&L. This requires operating capabilities, proprietary data, technical talent and experience running and transforming industrial and services businesses. DeployCo is focused on enabling large organizations from pilot use cases to full enterprise-wide implementation, addressing one of the primary bottlenecks in realizing AI-driven productivity. The platform will combine entering talent strong commercial relationship with OpenAI, early access to models and the capabilities of best-in-class operators like ourselves to deploy AI at scale with more than 300 operating companies across the Brookfield ecosystem.

We have a direct line into where AI creates value, and importantly, where it does not. We've already been using AI in our own businesses as the latest tool to accelerate transformation, enhance growth and drive efficiencies. We expect to draw and deploy code capabilities to drive even harder in these areas to automate workflows, improve decision-making and capture meaningful productivity gains in our own operations.

As we look forward, the market for what we do is as attractive as it has been in years. Demand for essential services and industrial businesses has really been stronger, and we have the capital capabilities and the expertise to execute. We're in excellent position to build on a strong start to the year and continued compounding capital for our shareholders.

With that, I'll turn it over to Stuart.

Thank you, Anuj, and good morning, everyone. I'll start with some comments on our resilient business model and then provide an update on the overall Canadian housing market and how Sagen is performing in the current environment. As a reminder, Sagen is the leading private mortgage insurer in Canada operating in a highly concentrated regulated market with only 3 providers and significant barriers to entry.

Mortgage insurance is mandatory for homes purchased in Canada with a down payment of less than 20%. Making this an essential service for our customers. The business model generates strong margins and returns on equity that have proven to be resilient through prior housing and economic cycles. During Brookfield's ownership, we've grown our market share repositioned the investment portfolio, reduced our expense ratio and optimize the capital efficiency of the business. As a result, our return on equity has expanded from low double digits at acquisition to over 20%. Allowing the business to provide meaningful distributions to shareholders, including BBUC. That resilience is particularly important given the backdrop of the current Canadian housing market.

To put that in context, the average house price in Canada has declined by 20% since early 2022 due to weaker sales activity driven by higher interest rates, constrained affordability and lower consumer confidence. While this has continued into the start of the year, we believe several factors, including continued undersupply of housing and modest improvements in affordability, coupled with stable interest rates and a renewed focus on housing support from the federal government should provide a floor to home prices over time. Any improvement in the trade and geopolitical outlook should also worldwide for a housing market recovery.

Against that backdrop, Sagen continues to perform well. Our borrowers are typically first-time homebuyers. And this cohort has been more resilient and active over the past 12 to 18 months relative to the overall market. This is due in large part to the additional support provided by the change in mortgage insurance eligibility rules introduced in late 2024. Specifically, the increase from 25- to 30-year amortizations and from $1 million to $1.5 million price cap. These changes drove a significant increase in the volume of insured mortgages during 2025. And while the pace has slowed, this segment of homebuyers were still more active than the general market during the first quarter of this year.

We've also maintained a consistent focus on high-quality loans and a well-diversified portfolio, facilitated by our rigorous underwriting process. The average credit score of newly originated loans remains high with a significant portion greater than 760. Approximately 80% of the insurance portfolio is backed by fixed rate mortgages, providing borrowers with payment stability. The majority of the remaining variable rate mortgages have constant payments, where only the mix between principal and interest is impacted by fluctuations in rates, thereby providing a similar degree of payment stability.

In addition to the quality of our insurance portfolio, strong oversight and regulation, including mandatory loan amortization, full borrower recalls and debt service stress test for all insured borrowers served to mitigate the risk of borrower default. For example, all insured borrowers in Canada are subject to stress test that builds in a cushion for affordability in a rising rate environment. An insured borrower facing financial hardship can extend the amortizations under our loan modification program. As a result, the losses in our business are primarily driven by 2 factors. The first is unemployment, which drives the frequency of delinquencies and the second is the change in home prices, which influences the degree of loss given default.

We see both of these factors as manageable in the current environment. For one, overall unemployment has remained relatively stable. And importantly, unemployment in Sagen's core home-buying cohort which are typically dual income households between 25 to 54 years of age has been quite resilient. Second, after a period of exceptional home price depreciation, where borrowers have built significant embedded equity in their homes, the loan-to-value profile and loss ratio performance of our portfolio is now returning to more normalized levels in line with our long-term expectations.

The business continues to be very well capitalized. And importantly, our regulatory capital model is designed to perform through the cycle. As we look forward, we expect losses to remain within our long-term expectations reflecting the strength of our high-quality, regionally diversified portfolio, loss mitigation strategies and disciplined risk management framework. As a result, we are confident in the continued resiliency of Sagen's performance to support strong returns on equity and consistent cash generation, providing for approximately $400 million of annual distributions on our full cycle run rate basis.

With that, I will hand it over to Jaspreet.

Thanks, Stuart, and good morning, everyone. We generated first quarter adjusted EBITDA of $582 million compared to $591 million in the prior period. Current year results reflect the impact of lower ownership in 3 businesses and includes $27 million of contributions from new acquisitions. Excluding tax benefits and the impact of acquisitions and dispositions, adjusted EBITDA was up approximately 5% compared to the prior year. Adjusted EFO for the quarter was $279 million compared to $345 million in the prior period. Prior period adjusted EFO included $114 million net gain from the disposition of our offshore oil services shuttle tanker operation.

Turning to segment performance. Our industrial segment generated first quarter adjusted EBITDA of $320 million compared to $304 million last year. Excluding the impact of acquisitions, dispositions and tax benefits, segment performance increased by 7% compared to prior year. Performance and our advanced energy storage operations was supported by the ongoing mix shift towards higher-margin advanced batteries, partially offset by the impact of slightly lower overall volume. Results at our engineered component manufacturing increased more than 10% on a same-store basis compared to the prior period benefiting from the recent commercial actions and increased margins despite end market itself.

Moving to our Business Services segment. We generated 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 year. Results reflect solid performance and realized gains at our residential mortgage insurer, which continues to generate strong returns. Performance at our dealer software and technology service operation is supported by contractual annual price increases as the business continues to make strategic investments towards strengthening customer service and product offerings.

Finally, our Infrastructure Services segment generated first quarter adjusted EBITDA of $90 million compared to $104 million last year. Prior results included contributions from our offshore oil services shuttle tanker operations, which was sold in January 2025 as well as the impact of the partial sale of our work access services operation completed in July 2025. Results at our lottery service operations were supported by the ramp-up of recently secured contracts and growing share with existing customers. Performance at our modular building leasing services operation benefited from increased sales of value-added products and services.

Turning to our balance sheet and capital allocation priorities. We ended the year with $2.4 billion of pro forma liquidity at the corporate level, including the fair value units we received in exchange for the partial sale of interest in some of our businesses. During the quarter, $43 million of units we received were redeemed. Our strong liquidity position gives us significant flexibility to support our growth and balance capital allocation priorities.

During the quarter, we completed the $250 million buyback program launched in February last year. Since that time, we've deployed approximately $285 million towards repurchases including $65 million of repurchases during and subsequent to quarter end. Going forward, we expect to remain opportunistic under our NCIB program balancing buybacks with our other capital deployment opportunities. With that, I'd like to close our prepared remarks and turn the call back to the operator for questions.

[Operator Instructions] Our first question comes from the line of Bart Gorski from RBC Capital Markets.

I wanted to ask around Sagen. So Stuart, thanks for joining the call this morning. We saw the loss ratio increasing to 12% last few years has been running kind of 5%. So could you maybe give us a bit more detail as to what drove the reserve strengthening that was described in the MD&A? And then I heard you mentioned the normalizing into the long-term target. Could you just remind us what those long-term target loss ratios are?

Yes, certainly. Thanks for the question. So principally, what's driving the loss ratio higher is the loss given default has increased a little bit more on recent delinquencies. And that's obviously because house prices have been declining, as I noted in my comments. So the frequency hasn't really materially picked up. I mean unemployment, as you know, is the biggest driver of that, and that's been relatively stable certainly in the book that we're seeing some pressure, which would be the 2022 and 2023 but to just there isn't as much equity.

And so that loss given default there is larger. And that's the primary driver of that uptick in the loss ratio. That said, we really don't see the loss ratio migrating a lot higher this year. Our long-run pricing loss ratio is in the 15% to 20% range, and I think we'll be comfortably below that still this year. But over the longer term, it will trend back towards that 15% to 20% only because we're coming out of abnormally lower loss environments. Obviously, we saw incredibly strong house price appreciation, very strong employment. So we can't look at the prior years of single-digit loss ratio as being normal.

So longer term, yes, trend back towards that 15% to 20%. All that said, keep in mind that there's tremendous capital buffers in the business, and we don't anticipate that having any impact on our ability to maintain our annual distributions and the business is certainly built to handle these kinds of economic volatility that we see right now.

Great. Very helpful. And then a follow-up on -- or I guess, a question around Clarios. So now you expressed confidence around the value doubling over the next 5 years. Maybe help us understand what you see as the key value levers to drive that increase? And then you've held this asset or you invested in it, I guess, since 2019. So how should we think about where that value accrues to in terms of do you expect to hold it for another 5 years? Or would you be looking to kind of surface that value via exit?

Sure. Thanks. So I'll start, and then I'll let Jaspreet to also chime in a little bit on just that bridge to value creation. I'd say this is an incredible business. it generates a lot of cash flow. It's a real market leader. And the shift that we're seeing to advance or the absorbent last map batteries is something in which Clarios is getting more market share and getting higher margins as well. And so this business is -- everything is kind of going the right way and it's on the right trend. You layer into that some of the tax credits that we're now receiving the more certainty we have on them going forward.

This is an incredible business to continue to hold. I think it will continue to, I think, generate significant cash flow in the business, which the business can invest in, the business can delever and also more time pay dividend. So this is, in our opinion, one of our real great cash compounders, the kind that we sort of aspire for all of our businesses to eventually become. And therefore, we're no, I'd say, hurry to do anything in terms of exiting because of the cash profile we see coming in the next near term and coming years.

However, of course, we're always opportunistic. We're always thinking about value. And if the market recognizes the value in the company that we see in the cash that it generates in our hands, we will always keep our option open. I think I'll turn it over now to Jaspreet on the -- on some of the -- how we see the value double it over the next couple of years.

Look, I'd say just keeping at high level and simple, we talked about it at Investor Day, based on our view of NAV today Clarios is about 30% of our NAV value, which implies about $15 per share. And on an LTM basis, the business is generating about $2.3 billion of EBITDA. And if you take a fairly conservative view on annual growth of EBITDA in the mid-single digits, and the business is comfortably been delivering on EBITDA could exceed $3 billion in 5 years. And we've talked about the fact that we view this as a 9 to 10x multiple business on $3 billion of EBITDA. That's about $30 billion of enterprise value.

And I'd say with the cash flow generation, just organically in the business, plus obviously the impact of the tax credit. Over the next 5 years, the business can generate circa $8 billion of cash. And when you take that cash against kind of where debt is today, which is $11 billion, and you take $8 billion of cash generation over the next 5 years, that kind of net debt number is significantly lower, like $4 billion. So on $30 billion of enterprise value, $4 billion of net debt, and you've got equity value look like $26 billion, $27 billion. And that really, if you take that at BBU's share that basically double stack $15 per share contribution for Clarios.

There's a lot of numbers we gave a full year.

Our next question comes from the line of Devin Dodge from BMO Capital Markets.

I wanted to start with some questions on DeployCo, that AI deployment platform, you talked about Anuj. So this is a bit of a different investment for BBUC here is it doesn't come with a control position. So I'm going to start with a 2-part question. So first, can you speak to the role or influence that Brookfield will have in that business? And then secondly, is to DeployCo primarily an advisory type business? Or is some of that capital being invested is going to be used to acquire technology and equipment.

Yes, sure. Devin, happy to take that. So first is, as we've been talking for many years now about AI's role in transforming industrial and more traditional operational businesses. The real bedrock of the global economy. And the real bottleneck, as I think we've outlined in past Investor Days and past quarters, the real bottleneck is not even the technology, it's not capital. It's actually change management or the ability to deploy AI at scale. OpenAI has also recognized this. The demand for their enterprise solutions far exceeds the ability to actually deploy it in enterprise. And so they saw an opportunity to create a vehicle and an advisory business, a services business to actually go out and implement AI and some of these solutions in enterprise businesses at scale.

So for us, first, as an investor, we thought that, that opportunity was very, very exciting. We believe it. We've seen it firsthand for operating companies. We know the opportunity is there. We know the opportunity is real. I would think this is a business that can scale pretty dramatically. So that was our first interest in the business to begin with. Second is we have managed to structure our investment as a preferred instrument, which gave us a lot of confidence that we are quite well covered on a downside perspective. We will earn returns in excess of our 15% target. We're very comfortable with that, but that we are retaining meaningful upside in this business with our partners, OpenAI and others, we're able to scale it, we can actually have some pretty dramatic upside, which is also very interesting from a financial investment perspective.

Third, I'd just say the third part that was really interesting to us was that we as an owner of operating businesses, we see this as an opportunity to benefit from what this company the OpenAI deployment company will do, meaning we will now have access to leading technology. We'll have access to it at very early stages. We'll also have access to the talent that's required in the OpenAI deployment company to implement these latest technologies in AI across our portfolio companies in BBUC.

So this, for us, is a huge advantage that we think will pay dividends across the portfolio. So all of that is why we were very excited about the investment. And again, we've signed an agreement to invest $500 million, which is $150 million at BBUC's share. In terms of -- sorry, go ahead. I think you also asked about governance. And I'd just say that, look, we're a minority investor with a preferred instrument that helps protect us that investment has a minimum return in the high teens. That's above the 15% that we will target. So we're quite comfortable there. We have, I'd say, standard minority governance that you would have in a business like us.

Okay. Great color there, Anuj. I appreciate that. Maybe just 1 quick follow-up there. Just wondering, does that agreement of this JV, does it limit Brookfield's ability to invest in the deployment of other AI models.

No, it does not. And so our -- we will always use whatever is the best tooler technology for our portfolio companies or they will decide to see it. This just gives us an additional, I'd say, beneficial access to not only technology early, but also the talent and the change in management capability to implement it in our businesses.

Okay. Got it. Okay. So next question is going to be on BRK. I believe it was awarded to a concession earlier this week. Just wondering how meaningful that could be for the business. And then just as it relates to BRK, is there any update on the monetization front, we've seen a couple of interest rate cuts down in Brazil, which I'm assuming should be helpful for buyer interest down there.

I'll take time. So you're right, towards the end of April, BRK won a new construction in the northeastern part of Brazil. And it's they're fairly strong. So as you are aware, it takes time to ramp up these concessions. It does represent a meaningful win for the business. And we do think, over time, it will grow substantially and add to the overall portfolio and the earnings power of the business. Again, it's small today, but once this kind of full year ramps up, we expect that it will be very significant part of the overall business.

Okay. And then on the monetization front, any update there?

Yes. So we're still continuing to be kind of focused on monetizing the business. I think we've talked about it before, that are in a base case we are still doing an IPO. We think this is an incredible business that would make a really great public company. And the capital market environment in Brazil has been choppy, but it is stabilizing. Interest rates were at record high at 15%. We've seen a few interest rate cuts and we're sitting at about 13.5% now. So that seems to be going in the right direction. So our view would be we still do an IPO of this business and we got market window in 2 months.

[Operator Instructions] Our next question comes from the line of Scott Fletcher from CIBC.

I wanted to ask a question on CDK, certainly some headlines around the creditors there. But from maybe a bigger picture perspective, I'm just curious with the price where the bonds are would imply the equity is under some pressure here. In a situation like this, like what is your general approach to or getting as much value as you can out of a situation like this?

It's Jaspreet. Maybe I could get started, and then I can see if once driving into it. I'd say our general approach on just our business, we obviously look to make investments that generate our 15% to 20% targeted returns we've got an incredible operating team that works with all of our businesses to create value. And we've built an incredible past record, not only over 25 years doing this, but even over the last 10-plus years as a public company, I have executed in long run. Having said that, every once in a while, there are situations that don't go away and they go inline with our expectation and underwriting and we've dealt with them from time to time. And our approach is always value preservation. When we underwrite a business, we are underwriting to a base case and upside but also a downside piece. And in every situation, we want to protect our capital. We want to preserve our capital and we want to be able to make a decent return on the investment even when things don't go according to plan.

And when we do get into those situations, I'd say we put our shoulder behind it. we put additional focus we swarm businesses but our best people on it to work us through the situation. And you've seen kind of that journey in one of our businesses, Altera, which were hopefully to work fix the end of side and where we work with a very difficult situation just given what's going on broadly in the market, and we worked very hard to kind of turn that around and return the majority of our capital. So I'd say all of my comments are kind of just generally our approach to difficult situations and not kind of specific to CDK or any other situation or any other kind of business today.

I appreciate the comments, I understand. Situation is hard to comment on specifically. And then just a clarification question. Just on the tax credits, they were -- they were both with the 2025 year that was received. Is there any additional clarity on the 2024 credits, which I think are still pending?

Yes. So the -- what we received was $1 billion for the 2025. And the 2024 is still under processing at the IRS. And we haven't received any feedback to indicate that refund should not be coming as it is just a process. So that's really all the information that we have, but the basis of that credit is no different from the 2025. So as I need said in opening remarks, we feel very confident about our eligibility all of the credits to the end of the decade.

No, it's good news for sure.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Anuj for any further remarks.

Thank you all for joining us this quarter, and we look forward to seeing you next quarter.

Thank you. And thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.