Brookfield Business (BBUC) - 2025 Q4 - Annual Report

Financial Performance - Net income attributable to Unitholders for the year ended December 31, 2025 was $43 million, a significant improvement from a net loss of $109 million in 2024[2] - Adjusted EBITDA for the year ended December 31, 2025 was $2,409 million, down from $2,565 million in 2024, reflecting lower ownership in three businesses due to partial sales[3] - Total revenues for the year ended December 31, 2025, were $27,457 million, a decrease from $40,620 million in 2024, representing a decline of 32%[28] - Net income for the three months ended December 31, 2025, was $118 million, compared to a net loss of $1,108 million in the same period of 2024[28] - Adjusted EBITDA for the year ended December 31, 2025, was $2,409 million, down from $3,030 million in 2024, indicating a decrease of 20.5%[33] - For the year ended December 31, 2025, Brookfield Business Partners reported a net loss of $875 million, an improvement from a net loss of $888 million in 2024[48] - The total revenue for the year ended December 31, 2025, was $7.168 billion, down from $8.208 billion in 2024, representing a decrease of approximately 12.7%[58] Segment Performance - The Industrials segment Adjusted EBITDA increased by 10% to $1,281 million for the year ended December 31, 2025, excluding the impact of acquisitions and tax recoveries[4] - Business Services segment Adjusted EBITDA was $823 million for the year ended December 31, 2025, a slight decrease from $832 million in 2024, but a 5% increase when excluding acquisitions and dispositions[7] - Infrastructure Services segment Adjusted EBITDA decreased to $436 million for the year ended December 31, 2025, down from $606 million in 2024, impacted by the sale of operations[9] Corporate Actions and Investments - The company generated over $2 billion from capital recycling initiatives and invested $700 million in four growth acquisitions during the year[2] - A corporate reorganization is nearing completion, expected to enhance global demand for shares and support long-term growth[2] - The company plans to acquire Fosber for approximately $480 million, with BBU's share expected to be around $170 million for a 35% interest[11] Liquidity and Capital Structure - Liquidity at the corporate level was approximately $2,135 million at year-end, with pro forma liquidity estimated at $2,600 million after recent transactions[15] - Corporate borrowings decreased to $1,325 million from $2,142 million, reflecting a reduction of 38%[26] - Non-recourse borrowings in subsidiaries increased to $42,424 million from $36,720 million, an increase of 15.5%[26] Dividends and Shareholder Returns - A quarterly dividend of $0.0625 per share is expected to be declared following the corporate reorganization, with an annual dividend of $0.25 per share anticipated going forward[16] - The company expects to declare a quarterly dividend of $0.0625 per share, with an annual dividend target of $0.25 per share following its corporate reorganization[49] Asset Management - Total assets increased slightly to $75,761 million from $75,474 million, showing a growth of 0.38%[26] - As of December 31, 2025, total assets decreased to $16.428 billion from $19.098 billion in 2024, reflecting a decline of approximately 14%[53] - Cash and cash equivalents decreased to $710 million from $1.008 billion in 2024, a reduction of about 29.5%[53] Impairments and Expenses - Impairment expenses for the year ended December 31, 2025, totaled $88 million, a significant reduction from $981 million in 2024[28] - Direct operating costs for the year ended December 31, 2025, were $22,151 million, down from $34,883 million in 2024, a decrease of 36.5%[28] - Other income (expense), net included a $407 million provision for a litigation settlement and $116 million in net gains on the sale of assets[40] - The company recorded a remeasurement loss of $831 million on exchangeable and class B shares classified as liabilities under IFRS[48] Future Outlook and Risks - Brookfield Business Partners anticipates future financial results and performance, including expected distributions and dividends, as well as ongoing corporate reorganization efforts[60] - The company acknowledges that actual results may differ materially from forward-looking statements due to various risks and uncertainties, including economic conditions and market volatility[61] - Factors affecting future results include interest rate changes, foreign exchange rates, inflation, and the ability to complete acquisitions and dispositions effectively[62] - The company emphasizes that references to "reserves" are forward-looking statements based on estimates and assumptions regarding future profitability[63] Financial Metrics and Reporting - Brookfield Business Partners uses Adjusted EBITDA as a non-IFRS measure to assist investors in assessing financial performance, though it should not be considered in isolation from IFRS financial statements[65] - The company will provide more detailed information in its Management's Discussion and Analysis of Financial Condition and Results of Operations in the upcoming annual report[66]