Financial Data and Key Metrics Changes - Third quarter adjusted EBITDA was $575 million compared to $844 million in the prior period, reflecting lower ownership in three businesses following the partial sale of Anktrus and including $77 million of tax benefits [16] - Adjusted EFO for the quarter was $284 million, benefiting from lower current tax expense and reduced interest expense due to decreased corporate borrowings [16][20] - The company's market cap increased by nearly $1 billion following the announcement of a corporate structure simplification [5] Business Line Data and Key Metrics Changes - The industrial segment generated adjusted EBITDA of $316 million compared to $500 million in the prior period, with a 17% increase in underlying performance driven by higher volumes and demand for advanced batteries [16][17] - The business services segment's adjusted EBITDA was $188 million compared to $228 million last year, impacted by the sale of a partial interest in dealer software and technology services [18] - The infrastructure services segment's adjusted EBITDA was $104 million compared to $146 million in the same quarter last year, reflecting the sale of offshore oil services and a partial interest in work access services [19] Market Data and Key Metrics Changes - The broader global economy has remained resilient, with public markets at record highs and transaction activity increasing due to declining global interest rates [8] - The company noted that the capital markets environment in Brazil is challenging but showing signs of improvement, with interest rates having peaked [24] Company Strategy and Development Direction - The company is focused on capital recycling, having generated over $2 billion in proceeds and repaying $1 billion of borrowings [4] - Plans to simplify corporate structure aim to improve trading liquidity and increase demand for shares from index investors [5] - The company is leveraging AI to enhance operational capabilities and drive value creation across its businesses [7][50] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism heading into the fourth quarter, noting strong performance in public markets and transaction activity [8] - The company is confident in its growth prospects, particularly in sectors like water treatment and sewage, where significant opportunities exist [26] Other Important Information - The company has repurchased just over $160 million of its units and shares as part of its buyback program [4][20] - The company is actively pursuing strategic growth acquisitions, having invested $525 million in three acquisitions [4] Q&A Session Summary Question: Regarding BRK and potential IPO - Management indicated that an IPO is one option for monetizing BRK, but the capital markets environment in Brazil remains challenging [24] Question: On Latrobe and regulatory actions - Management clarified that the issues with Latrobe are primarily disclosure-related and have not impacted the underlying fundamentals of the business [27] Question: On Dexco's performance - Management expressed confidence in Dexco's performance, noting an improving market and signs of recovery [46] Question: On AI benefits across investments - Management highlighted the operational improvements and data opportunities being realized through AI across various businesses [48][50] Question: On capital allocation and liquidity - Management confirmed that while they are comfortable with current leverage, they remain opportunistic regarding new investments and buybacks [51]

Financial Performance Highlights - Net loss attributable to Unitholders for the three months ended September 30, 2025, was $59 million, a decrease compared to a net income of $301 million in the prior period[18] - Adjusted EBITDA for Q3 2025 was $575 million, down from $844 million in the prior year; excluding tax benefits and contributions from acquired/disposed operations, Adjusted EBITDA was $512 million compared to $501 million[18] - Adjusted EBITDA margin decreased to 21% from 28%; excluding tax benefits, the margin was 19% compared to 18%[18] - Adjusted EFO for Q3 2025 was $284 million ($1.36 per unit), compared to $582 million ($2.68 per unit) in the prior period; excluding the impact of gain (loss) on dispositions, Adjusted EFO was $268 million ($1.27 per unit) compared to $451 million ($2.08 per unit)[18] Liquidity and Capital Structure - Corporate liquidity as of September 30, 2025, was $2,299 million, including $2,190 million of availability on credit facilities; pro forma for announced transactions, liquidity is approximately $2,900 million[18] - Total assets were $75,403 million as of September 30, 2025[22] - Total equity was $15,540 million as of September 30, 2025[22] Strategic Initiatives - Completed the privatization of First National Financial Corporation for $2.6 billion, with BBU investing $146 million for an 11% economic interest[21] - Entered into an agreement to simplify the corporate structure, exchanging LP units, exchangeable shares, and redemption-exchange units for class A shares of a Canadian corporation on a one-for-one basis, expected to be completed in Q1 2026[21] Segment Performance (Adjusted EBITDA) - Business Services: $188 million in Q3 2025, compared to $228 million in Q3 2024[13] - Infrastructure Services: $104 million in Q3 2025, compared to $146 million in Q3 2024[13] - Industrials: $316 million in Q3 2025, compared to $500 million in Q3 2024[13]

Group 1 - The Value Lab focuses on long-only value investment ideas, aiming for a portfolio yield of approximately 4% and has performed well over the last five years by engaging in international markets [1][2] - Brookfield Business Partners L.P. will undergo a conversion of its units into shares of a new entity, which includes shares in Brookfield Business Corporation and other redemption exchange units [2] - The Valkyrie Trading Society consists of analysts who share high conviction investment ideas that are expected to yield non-correlated and outsized returns in the current economic environment, emphasizing a long-only investment strategy [3]

Summary of Brookfield Business Partners (NYSE: BBU) 2025 Investor Day Company Overview - Brookfield Business Partners (BBU) aims to provide public investors access to Brookfield's global private equity strategy, focusing on operational improvements and value creation initiatives [3][4] - The company has achieved a gross internal rate of return (IRR) of 26% and a net IRR of 20% over 25 years [3] Financial Performance - BBU reported record EBITDA of $2.7 billion, reflecting a 16% compounded annual growth rate over the last five years [64] - EBITDA margins have doubled from 12% to 24% [64] - Adjusted earnings from operations (EFO) per unit increased from $3.65 to $6.90 [64] - The company exceeded its target of generating $2 billion in proceeds from capital recycling initiatives within 12 months [66] - The net asset value (NAV) has doubled from $28 in 2020 to $54 today, indicating strong operational quality and value creation [72][73] Investment Strategy - BBU focuses on margin expansion and operational improvements to enhance NAV [4][5] - The company has initiated a buyback program, utilizing $250 million to repurchase shares at accretive levels [7] - BBU has invested in three market-leading businesses, including Chemelex, Antilia Scientific, and First National Financial Corporation, totaling $525 million [66][67] Market Opportunities - The company sees a $7 trillion opportunity for investment in AI infrastructure and anticipates $2 to $4 trillion in annual productivity improvements across industries due to AI [11][12] - BBU is actively creating an AI value creation office with over 30 dedicated personnel to implement AI use cases across its portfolio [13] Financial Infrastructure Sector - The financial services and technology sector is identified as needing significant capital, with a $4 trillion market opportunity [20] - BBU aims to invest in asset-light financial services and technology, focusing on software and services rather than traditional banking [23] - The company has invested over $7 billion in the financial services and technology space, targeting market leaders in need of operational change [24] Corporate Structure Simplification - BBU plans to simplify its corporate structure by combining BBULP units and BBUC exchangeable shares into one publicly traded Canadian corporation, enhancing trading liquidity and passive index participation [9][10] Key Takeaways - BBU is committed to increasing NAV and narrowing the discount to NAV in its stock price through operational improvements and strategic investments [76] - The company is leveraging AI and digitalization to transform its businesses and improve margins [76] - BBU's operational expertise positions it well to capitalize on the evolving financial infrastructure landscape, which is transitioning from analog to digital and AI-driven systems [18][32]

Performance & Valuation - Brookfield Business Partners (BBU) has demonstrated exceptional returns with a gross IRR of 26% and a net IRR of 20%[6] - BBUC's total return is +95%, BBU's is +84%, and the S&P 500 is +59%[10] - The company believes it is trading at a significant discount, with a current trading price of $28 per unit compared to a net asset value of $54 per unit, representing a +90% difference[12] - The company has exceeded its capital recycling targets, achieving $2.1 billion in the last 12 months against a $2 billion target over 24 months[66] - Net Asset Value per Unit has doubled from $28 in 2020 to $54 today[108] Strategic Initiatives - BBU plans to convert into one publicly traded corporation in Q1 2026, with a 1:1 conversion of BBU LP units and BBUC exchangeable shares[20] - The conversion into a single corporation is expected to improve consolidated trading liquidity by +50% and increase index demand by 2x[23, 24] - The company has invested $4 billion from 2021 to today, $1 billion from 2010-15, $7 billion from 2016-20, and $1 billion in the early 2000s[28] Financial Highlights - Adjusted EBITDA has increased from $1.3 billion in 2020 to $2.7 billion today, representing a 16% CAGR[63] - Adjusted EFO per Unit has increased from $3.65 in 2020 to $6.90 today, representing a 14% CAGR[63] - The company has $2.9 billion in corporate liquidity[76]

Core Insights - Brookfield Business Partners L.P. serves as the public operating vehicle for Brookfield Corporation's private equity activities, focusing on business services and industrial operations with a diversified earnings model [2][3][29] Company Overview - Established in June 2016 through a spin-off from Brookfield Asset Management, the partnership aggregates and operates assets across business services, industrials, and infrastructure services [2][3] - The partnership emphasizes long-duration contracts and essential services, aiming for operational improvements and scale to deliver compounded returns [2][3] - Key assets include Westinghouse Electric Company, automotive battery assets linked to Clarios, and significant stakes in CDK Global and Scientific Games' lottery operations [2][3][5] Financial Information - Market capitalization is influenced by realized disposals, acquisitions, and the valuation of operating platforms, with units trading on the Toronto Stock Exchange (TSX: BBU.UN) and New York Stock Exchange (NYSE: BBU) [7][34] - Revenue streams are consolidated from various operating businesses, including environmental services, industrial manufacturing, and software services, with annual revenue influenced by acquisition timing [8][11] - The partnership distributes cash to unit holders through quarterly distributions, balancing reinvestment for growth with returning capital to unitholders [10][12] Operational Strategy - The partnership focuses on acquiring controlling or significant minority positions in essential service providers and industrial platforms, leveraging Brookfield's broader platform and capital resources [3][5] - Operational synergies are achieved through centralized procurement, shared services, and cross-selling among portfolio companies [4][15] - The strategy includes prioritizing assets with long-term contracts or regulated characteristics, such as municipal water concessions and software subscriptions [16][19] Industry Positioning - Brookfield Business Partners operates across several industry verticals, including utilities, manufacturing, technical services, and software/technology services for regulated sectors [14][19] - The partnership's competitive positioning benefits from integration with affiliated capital pools and collaboration with external partners like Oaktree Capital Management [15][19] - It occupies a distinct niche among Canadian-listed investment vehicles, providing direct exposure to operating platforms rather than solely acting as a fund manager [27][31] Leadership and Governance - The leadership team combines long-tenured Brookfield operating partners with external management recruits, emphasizing operational experience and continuity [22][26] - Key milestones include significant acquisitions such as Odebrecht Ambiental (BRK Ambiental), Westinghouse Electric Company, and CDK Global, demonstrating an acquisition-led growth model [23][24] - Governance focuses on integration, technology resilience, and long-term value creation, with a disciplined approach to capital allocation [24][26]

Core Viewpoint - Brookfield Business Partners intends to renew its normal course issuer bid for its limited partnership units and class A exchangeable subordinate voting shares, believing that their current trading prices do not fully reflect their value, making repurchase an attractive use of funds [1][2]. Summary by Sections Issuer Bid Details - The Toronto Stock Exchange has accepted Brookfield Business Partners' notice to renew its normal course issuer bid for its Units and Exchangeable Shares [1]. - As of August 8, 2025, there are 88,828,512 Units and 69,996,738 Exchangeable Shares outstanding [2]. - Brookfield Business Partners is authorized to purchase up to 4,441,425 Units and 3,499,836 Exchangeable Shares, which is 5% of the outstanding shares [2]. Purchase Limits and History - Under the current issuer bid, Brookfield may purchase up to 10,076 Units and 11,100 Exchangeable Shares daily, representing 25% of the average daily trading volume over the past six months [2]. - The previous issuer bid, which expires on August 18, 2025, allowed for the purchase of up to 3,714,088 Units, with 3,611,689 Units purchased at a weighted average price of US$22.54 as of August 8, 2025 [4]. - For the Exchangeable Shares, 2,957,523 were purchased under the previous bid at a weighted average price of US$25.93 [5]. Purchase Execution and Compliance - Purchases will be conducted through the TSX, NYSE, and alternative trading systems, with all acquired Units and Exchangeable Shares being cancelled [6]. - The company has established automatic repurchase plans to facilitate purchases during internal trading black-out periods, with the actual number and timing of purchases dependent on market conditions [7]. Company Overview - Brookfield Business Partners is a global business services and industrials company focused on owning and operating high-quality businesses that provide essential products and services [8]. - It is the flagship listed vehicle of Brookfield Asset Management's Private Equity Group, which manages over $1 trillion in assets [9].

Group 1 - Investors in Brookfield Business Partners L.P. (BBU) should monitor the stock due to significant implied volatility in the options market, particularly the Sept. 19, 2025 $30.00 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that a major event may be anticipated that could lead to a significant price change [2] - Currently, Brookfield Business Partners holds a Zacks Rank 4 (Sell) in the Business - Services industry, which is in the bottom 39% of the Zacks Industry Rank, with no analysts increasing earnings estimates and two revising them downward, resulting in a consensus estimate drop from $1.17 to $1.00 per share [3] Group 2 - The high implied volatility may indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility, hoping the underlying stock does not move as much as expected by expiration [4]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the second quarter increased to $591 million from $524 million in the prior period, reflecting improved underlying operating performance and tax benefits [18][19] - Adjusted EFO for the quarter was $234 million, benefiting from lower interest expenses due to reduced corporate borrowings compared to the prior period [18] Business Line Data and Key Metrics Changes - The Industrial segment generated adjusted EBITDA of $307 million, an increase from $213 million in the previous year, supported by tax benefits and contributions from recent acquisitions [19] - The Business Services segment's adjusted EBITDA rose to $205 million from $182 million last year, aided by increased volumes of new insurance premiums and stable performance in technology services [20] - The Infrastructure Services segment's adjusted EBITDA decreased to CAD 109 million from CAD 157 million, primarily due to the sale of the offshore oil services shuttle tanker operation [21] Market Data and Key Metrics Changes - The U.S. economy showed resilience with stabilized GDP expectations and low unemployment, while Europe is seeing increased stimulus spending [11][13] - The GCC markets in the Middle East remain strong, and India continues to be a growth economy [13] Company Strategy and Development Direction - The company is focused on acquiring high-quality, market-leading businesses with strong competitive advantages, which allows for pricing power and resilience against economic fluctuations [14] - The strategy includes leveraging secondary market opportunities to surface value and enhance shareholder returns through buybacks and reinvestments [6][9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the operating environment, noting that while there are challenges, the principles of acquiring high-quality businesses are serving the company well [14][15] - The company is confident in its ability to maintain or increase margins despite economic slowdowns, with a focus on optimizing operations and integrating recent acquisitions [15][16] Other Important Information - The company has realized over $800 million from asset sales and distributions while investing $300 million in acquiring two market-leading businesses [6] - The company ended the quarter with approximately $2.9 billion in corporate liquidity, providing options for capital allocation [21][22] Q&A Session Summary Question: Performance of Scientific Games - Management acknowledged that while hardware deliveries were lower, the overall EBITDA performance was flat, and they remain positive about the business's future growth potential [26][29] Question: Repositioning of Brand Safeway - Management noted that they are repositioning the business towards higher growth markets, although they expect volume softness to continue through the second half of the year [30][32] Question: Leveraging AI for Productivity - Management highlighted numerous AI initiatives across the portfolio that have led to significant operational improvements and cost savings [35][41] Question: Impact of the Big Beautiful Bill - Management expects the provisions in the bill, including accelerated depreciation, to be net positive for the business, enhancing flexibility and reducing tax burdens [42][44] Question: Secondary Transaction Insights - Management explained the decision-making process behind the secondary transaction, emphasizing the strategic choice of assets and the favorable terms achieved [52][55]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 increased to $591 million from $524 million in the prior period, reflecting improved underlying operating performance and contributions from recent acquisitions [19][20] - Adjusted EFO for the quarter was $234 million, benefiting from lower interest expenses due to reduced corporate borrowings compared to the prior period [19] Business Line Data and Key Metrics Changes - The Industrial segment generated adjusted EBITDA of $307 million, an increase from $213 million in 2024, supported by tax benefits and strong performance in advanced energy storage operations [20] - The Business Services segment's adjusted EBITDA rose to $205 million from $182 million last year, driven by increased volumes of new insurance premiums and stable performance in technology services [21] - The Infrastructure Services segment's adjusted EBITDA decreased to CAD 109 million from CAD 157 million, impacted by the sale of the offshore oil services shuttle tanker operation [22] Market Data and Key Metrics Changes - The U.S. economy showed resilience with stabilized GDP expectations and low unemployment, while Europe is experiencing increased stimulus spending [11][13] - The GCC markets in the Middle East remain strong, and India continues to be a growth economy [13] Company Strategy and Development Direction - The company is focused on acquiring high-quality, market-leading businesses with strong competitive advantages, which provide mission-critical products and services [14] - The strategy includes leveraging secondary market opportunities to surface value and enhance shareholder returns through buybacks and reinvestments [5][9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the operating environment, noting that while there are challenges, the principles of buying high-quality businesses are serving well [14] - The company is confident in its ability to maintain and increase margins despite economic slowdowns, with a focus on optimizing operations and enhancing productivity [15][16] Other Important Information - The company has approximately $2.9 billion in corporate liquidity, allowing for flexibility in capital allocation [22] - A buyback program has returned nearly $160 million to owners, with plans to renew the normal course issuer bid to repurchase an additional 8 million units and shares [23][75] Q&A Session Summary Question: Performance of Scientific Games - Management acknowledged that while hardware deliveries were lower, the overall EBITDA performance was flat, and they remain positive about the business's growth potential [26][30] Question: Brand Safeway's Repositioning - Management discussed the ongoing transformation plan to pivot towards higher growth markets, despite current volume softness [31][33] Question: Leveraging AI for Productivity - Management highlighted numerous AI initiatives across the portfolio that have led to significant operational improvements and cost savings [36][41] Question: Impact of the Big Beautiful Bill - Management indicated that the provisions in the bill are expected to be net positive, particularly regarding accelerated depreciation and interest deductibility [44][46] Question: Capital Allocation and Buybacks - Management confirmed commitment to the $250 million buyback program and discussed the ongoing dialogue regarding preferred shares with Brookfield Corporation [72][76] Question: Secondary Transaction Insights - Management explained the rationale behind the selection of assets for the secondary transaction, emphasizing the favorable terms achieved [54][56]