Welcome to Brookfield Business Corporation's third quarter 2026 results conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, simply press star 11 on your touchtone phone. Now, I'd like to turn the conference over to Alan Fleming, Head of Investor Relations. Please go ahead Mr. Fleming.

Thank you operator and good morning 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 US, 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 Latrobe Financial, our Australian asset manager and lender. We've now realized a two times 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 a sale on 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. These two 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 the 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 three 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 two years, we've committed more than $1.2 billion to acquire seven 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 on what we already own, and significant capital coming back to us for 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 four times the size of our nearest competitor. We power roughly one in three 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 lifecycle. That aftermarket exposure provides significant stability while also creating meaningful long-term growth potential. One of the most important drivers is the continued shift toward higher value advanced batteries, which we expect to be a multi-decade tailwind. Advanced batteries now represents 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 mixed 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. Super capacitors 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're 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 innovations. 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 US operations include three 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 monetize our non-controlling 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 architecture has 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 and 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 ESO includes $44 million of net gains primarily related to the partial sale of La Trobe Financials. Turning to segment performance, our industrial segments 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. 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 volume and inflation-related cost pressures. BRK Ambient Health delivered double-digit growth in adjusted EBITDA, benefiting from contractual tariff increases and higher volumes. Performance at Desk Scope 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 effort 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, the generated third quarter adjusted EBITDA of $204 million and the rest. On a same-store basis, adjusted EBITDA increased by approximately 3% over the prior period. Saging continued to benefit from resilient demand among first-time homebuyers, even as broader housing activity in Canada remained slow. Losses on claims were higher during the quarter, reflecting increased claim severity and reserve strengthening, consistent with our 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 up-sell activities. 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 workforce. Finally, our infrastructure services segment generated third quarter adjusted EBITDA of $76 million compared to $104 million last year. Prior results also included contributions from Altera's FPSO operations which was sold earlier this year. At Majolere, results were impacted by softer demand and competitive pricing pressure alongside operational challenges in the UK. 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 UK as the immediate priority. At Scientific Games, weaker industry volumes and higher costs associated with new contract implementations weighed on results. This included higher than anticipated costs 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 Brand Safely. 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've 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.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment, please. And our first question comes from the line of Gary Ho with Desjardins Capital Markets.

Hi, good morning. 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 CLEROS agreed to redeem its interstate stake for roughly a billion and then also signed the supply agreement at the same time. Just wondering, you know, 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 two are kind of linked together.

Good morning, Gary. 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 longstanding. however I think it's important to know that we had a non-controlling stake in the interstate so really for us there was not a lot of value creation from the asset from that perspective and to be quite honest were able to monetize it as 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 seven-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'd done a greenfield as an example. So we're quite pleased with both of these transactions, one in the amount of proceeds we receive 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. Thanks for that. And while I have you, maybe just a quick update on the 45X tax refund as it relates to the 2024 tax year. 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?

Yeah, Gary, nothing's changed. We continue our regular updates with the IRS. Yes, you're 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 following the midterm results in the U.S. Do you have any early read on which portfolio companies could benefit or could be affected by the outcome there?

I'd say, Anuj here, 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. have 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 and 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 with our existing portfolio. 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.

Okay, great. Those are my questions. Thank you.

Thank you. And our next question comes from the line of Bart Jarski with RBC Capital Markets.

Great. Thanks for taking the questions. Good morning, everyone. 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. Thanks.

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

Hi, 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.

Okay, great, thanks.

Yeah, 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 platform's 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 just say that we continue to be at it we're seeing quite a bit of momentum our story around industrials and Essential Services. It's really resonating in this kind of an environment and we're seeing that sort of pick up in the wealth channels as well. So while we kind of, through 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 buyback, so Jaspreet 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? Thanks.

Look, we always take a balanced approach, as you know, 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 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, buybacks and new investments are probably going to continue to be of interest.

Yeah, and maybe the only thing I'd add is that our balance sheet is as strong as it's ever been. It pro forma for the monetization in its reference. We've got liquidity of $2.7 billion, so it gives us a lot of flexibility.

Great. That's it for me. Thanks for taking the questions.

Thank you. And our next question comes from the line of Bill Katz with TD Cal.

Great. Thank you very much for taking the question this morning. I just want to start off with, it's great 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?

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

No, well, let me rephrase. So, I think you put up $594 million of adjusted EBITDA in a quarter.

Yeah.

And I'm just trying to understand, you've sold some things subsequent to quarter end, and I think you've been 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 modernizations? And then maybe with DeployCo, how do you think about incremental synergies to maybe make up for anything that may have been sold off? Thank you.

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 quarter. But Our annual kind of run rate EBITDA around numbers right now is about two and a half billion. So I think about that number, you know, Multiplex is probably our largest sale. We've been generating circa 60 million of EBITDA from Multiplex. And then I'd say, you know, the last contribution from the Trove and some of the other monetizations that we've done over the last 12 months. I'd say estimated about 20 to 25 million. So again, if we said round numbers, circa a hundred million dollars 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, you know, that'll 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'd probably get pulled back close to that $2.5 billion run rate number. I don't know if that gives you a high-level overview, but I'm happy to kind of take it offline and give you 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 looked 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 non-cash movements, derivatives, items like that. So there are some movements there. There's also kind of LTIP accruals just around payments of share based payments and compensation on eventual monetization. So it's again, just movements and those types of things. Nothing very specific that I would call out there. On taxes, we had some tax recoveries and actually call out Clarios. We had a deferred tax recovery at Clarios this quarter which drove kind of the overall tax cost lower.

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

Hi, good morning. 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?

Yeah, look, we tend to be very opportunistic just in terms of the investments that we make. and you know in the pipeline today and some of the recent acquisitions that we've 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 a third when we invest alongside the funds so you know for now we foresee kind of making similar size 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 you know 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, thanks. That's helpful. And then maybe maybe one for Mark on the Clarios side of things. And just can you share your your priorities or plans for capital allocation? Is there sort of a now that you sold sold monetize an asset done done some M&A? Is there more of a focus on investing in the build out or is there you know, other opportunities for maybe M&A along in your pipeline? Thanks.

Yeah, Scott, nothing's 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 will 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.

Okay, great. That's helpful. Thank you.

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

Yeah, thanks. Good morning, everybody. All right. Let's 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 I'm 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, three to five years.

Yeah, so in the case in the automotive technology business that I kind of referenced, which is a combination of energy storage devices, super capacitors, 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. When you look at it more from a revenue perspective, we have over $2 billion of backlog just in that space itself. And that's all contractual. We have two factories that are being retrofitted as we speak, and those will start, like I said, production in 2028. When it comes to the, what's called the non-automotive 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 two 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 two businesses combined we're expecting our addressable market to grow by 50% so we definitely see those having you know more and more larger impact in our earnings profile and our revenue growth closer to the end of this decade.

Okay. That's interesting. Thanks for that. 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 fours if you back out the credits and you should decline further once more credits are received. It just seems like you're likely mirroring 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 eight years. I'm not sure if the need to return capital to Brookfield's private fund investors plays into the exit options being considered.

Yeah, I'll take that. I think Localeos 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've got this highly cash generative of a 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, it makes sense. Thanks for that, Anuj. Okay, and just one last one. I was going to ask about Nielsen. It's a business we don't talk very much about. I just wanted to know if you could give an update, a high level update, how the business is performing and 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, you know, what we're seeing in the business. So I think you're referencing the double verify transaction that Nielsen recently announced. So, you know, that transaction is primarily debt funded and with a little bit of equity. and as you know we've got a PREF investment in Houston, a convertible PREF. We're quite excited about the transaction and we think it'll 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 and it really doesn't kind of impact our overall return profile. So that's kind of the approach that we took on it.

And just 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 double verify acquisition really adds to the 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.

Okay, good color. I appreciate it. I'll turn it over.

Thank you. And as a reminder, to ask a question, please press star 11 on your telephone. And our next question comes from the line of Jane Coyne with National Bank.

Yeah, thanks. Good morning. Just a few questions on some of the company performance. First, say, Jen, just wanted to get a sense as to, you know, 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, you know, loss curves or just the underlying performance.

Yeah, it's Jaspreet, I'll take that. So I'd say, you know, 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. 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 head 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've seen 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.

Yeah, okay, I understood. Mostly severity from house price decline. The next one would be CDK and showing a 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.

Yeah, maybe I'll just make an opening comment and then hand it over to Adrian to talk about operating performances. So the business had a good quarter this year. We have annual price increases, this 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 just does generate a 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 an active dialogue and looking at the debt maturity and just to build on operational performance so Jaspreet commented on

that 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, improves retention, which gives us a really strong basis to drive cross-selling. And it's important to remember that CDK's platform is deeply embedded in the 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 AIs as an opportunity to deliver much more value to customers.

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?

Yeah, look, I'd say, you know, our two largest assets in Brazil, BRK Ambientel, our wastewater business, and Unidas, which is our fleet management and car rental business. Both of those businesses perform, operating performance has been very good. I think we called out the BRK Ambientel had had like double digit EBITDA growth. We continue to kind of optimize the operating costs in that business. we've recently bid on and acquired a new concession so we're in the process of kind of rolling that out so business and operating performances has been excellent but you know 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 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 while compounding value and being ready to monetize them when we get the appropriate window.

Thank you.

Thank you. I'm sure 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