Q4 2024 Brookfield Business Partners L.P. Earnings Call

The

An opportunity to ask questions.

To join the question queue simply press Star one one on your Touchstone phone.

Now I'd like to turn the conference over to Alan Fleming head of Investor Relations. Please go ahead Mr. Fleming.

Alan Fleming: Thank you operator, and good morning, before we begin I would like to remind you that in responding to questions and talking to them about our growth.

And our financial and operating performance, we may make forward looking statements.

Savings are subject to known and unknown risks and future events and 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 are available on our website.

Thank you for watching!

Alan Fleming: We will begin the call today with an update on business performance and strategic initiatives from a news Ranjan, our Chief Executive Officer unusual then turn the call over to Mark Wallace, The Chief Executive Officer at <unk>, who will provide an update on the business well.

Thank you. Thank you.

The End

Speaker Change: Well end the call with Jeff Friedel, our Chief Financial Officer for a discussion of our financial results. After we finish our prepared remarks, the team will be available to take your questions with that I would like to now pass the call over to a news.

Speaker Change: Thanks, Alan and good morning, everyone.

Speaker Change: Thank you all for joining us on the call today.

Speaker Change: We made excellent progress over the past year, continuing to build value in our business and strengthening our capital position our.

Speaker Change: Our operations are performing well margins increasing to over 20% to deliver a record full year adjusted EBITDA of $2 6 billion.

Speaker Change: We've always described our business as a compounding engine, where we buy great businesses for value increasing their underlying cash flows to operational improvements and then recycling capital at the time is right. Our objective is to do this again and again compounding shareholder value over the long term.

Speaker Change: Over the last 12 months, we've generated more than $2 billion from these capital recycling initiatives, including about $1 billion for monetization of distributions funded by ongoing cash flows in our operations.

Speaker Change: As many of you are aware, we also recently completed up financing at <unk>.

Speaker Change: The debt raise was significantly oversubscribed, and we were able to fund a $4 $5 billion distribution.

Speaker Change: <unk> share of this was about $1 2 billion, which equates to a one five times multiple of our investment and we continue to hold our full interest in Claire yes.

Speaker Change: This is a phenomenal outcome for btu.

Speaker Change: Simply put businesses like <unk> don't come around all that often and as Youll hear from Mark Shortly close has been incredibly strong trajectory of increasing earnings and cash flows the opportunity to crystallize a strong return while continuing to remain fully invested in <unk> will be a meaningful driver of value for btu.

Speaker Change: Proceeds we recently generated put us in a very strong position with significant financial flexibility consistent with our capital deployment priorities. This morning, we announced a new $250 million share buyback program given our trading price. Today. This is an extremely efficient use of our capital, which will be meaningfully accretive to the per unit value of BD.

Speaker Change: We plan to be active with our buyback activity, including regular buybacks in the market and the repurchase of blocks if they come up for sale.

Speaker Change: We're also putting capital to work in new investments, where we believe we can create additional value and generate market leading cash flows returns just yesterday, we completed the acquisition of <unk>, a leading manufacturer of electric heat tracing systems, which we carved out from a larger industrial company.

Speaker Change: <unk> share of the equity investment was approximately $210 million.

Speaker Change: <unk> is a specialized products are used to regulate the temperature of pipes and industrial and commercial applications generates durable cash flows supported by a resilient aftermarket replacement demand across a very large installed base. It is exactly the type of market, leading industrial business and we've been investing in for years and we've seen lots of.

Speaker Change: Proceeds we've recently generated put us in a very strong position with significant financial flexibility consistent with our capital deployment priorities. This morning, we announced a new $250 million share buyback program given our trading price today is an extremely efficient use of our capital, which will be meaningfully accretive to the per unit value of beef.

Speaker Change: The opportunity of the situation to optimize operations and leverage the strength of the overall Brookfield platform to support the business growth.

As we look to the year ahead, the resilience of our larger businesses underpinned by market leadership pricing power and stable demand will continue to serve us well amid a potential backdrop of geopolitical and economic uncertainty. Our confidence also comes from how we invest generating most of our returns through buying good businesses at reasonable prices.

Thank you.

Speaker Change: Plan to be active with our buyback activity, including regular buybacks in the market and the repurchase of blocks.

Speaker Change: A sale.

Speaker Change: We're also putting capital to work in new investments, where we believe we can create additional value and generate market leading cash flows returns just yesterday, we completed the acquisition of <unk>, a leading manufacturer of electric heat tracing systems, which we carved out from a larger industrial companies.

Speaker Change: Executing our improvement plans to increase cash flows and recycling the capital to optimize returns.

Speaker Change: This takes time, but allows us to compound value and generate strong returns across economic cycles.

Speaker Change: The proof is really in our track record.

Speaker Change: Since going public we've generated over $6 billion of proceeds from the sale of over 20 businesses. Realizing a three times multiple of our invested capital and a 30% IRR.

Speaker Change: BB BB huge share of the equity investment was approximately $210 million.

Speaker Change: <unk> is a specialized products are used to regulate the temperature of types of industrial and commercial applications generates durable cash flows supported by a resilient aftermarket replacement demand across a very large installed base. It is exactly the type of market, leading industrial business and we've been investing in for years, and we see lots of opportunity in the <unk>.

Speaker Change: We're committed to continuing to generate strong returns for our shareholders and we're pleased with the progress we've made over the past year to strengthen our balance sheet, which is enabling us to seize growth growth.

Speaker Change: <unk> and accelerate buybacks all of which is accretive to the intrinsic value of our business.

Speaker Change: I'll now pass the call over to Mark Wallace, Mark as the Chief Executive Officer at <unk> and he has joined US today to spend time talking about the opportunities ahead for this business and the drivers which are underpinning its excellent performance.

Speaker Change: <unk> to optimize operations and leverage the strength of the overall Brookfield platform to support the business growth.

Speaker Change: As we look to the year ahead, the resilience of our larger businesses underpinned by market leadership pricing power and stable demand.

Speaker Change: Continue to service well amid a potential backdrop of geopolitical and economic uncertainty.

Mark Wallace: Thank you and good morning, everyone.

Mark Wallace: As a reminder, <unk> is a world leader in energy storage solutions for transportation.

Speaker Change: Confidence also comes from how we invest generating most of our returns through buying good businesses at reasonable prices executing our improvement plans to increase cash flows and recycling the capital to optimize returns.

Mark Wallace: And the only global player in the market.

Mark Wallace: Approximately four times larger than our nearest competitor and we have the number one market position in the Americas, Europe and number three in Asia.

Speaker Change: This takes time, but it allows us to compound value and generate strong returns across economic cycles.

Mark Wallace: We saw over 150 million batteries per year to over 100 countries supporting virtually every automaker and large aftermarket retailer around the world often with majority share.

Speaker Change: The proof is really in our track record.

Speaker Change: Since going public we've generated over $6 billion of proceeds from the sale of over 20 businesses. Realizing a three times multiple of our invested capital and a 30% IRR.

Mark Wallace: Our strategic and value driven sustainability leadership is important to our customers and is essential for the future of transportation and the security of our most of the central resources.

Speaker Change: We're committed to continuing to generate strong returns for our shareholders and we're pleased with the progress we've made over the past year to strengthen our balance sheet, which is enabling us to seize growth growth.

Mark Wallace: Our circularity leadership enables critical mineral recovery and reuse by making new batteries out of used ones.

Speaker Change: <unk> and accelerate buybacks all of which is accretive to the intrinsic value of our business.

Mark Wallace: I can use batteries, a nearly renewable resource.

Speaker Change: I'll now pass the call over to Mark Wallace, Mark as the Chief Executive Officer at <unk> and he has joined US today to spend time talking about the opportunities ahead for this business and the drivers which are underpinning its excellent performance.

We embraced critical minerals circularity to better protect our supply chain with 100% of our products designed to be recycled.

Mark Wallace: Our low voltage auto batteries are the most recycled consumer product in the United States with recycling rates greater than 99%.

Mark Wallace: Thank you and good morning, everyone.

Speaker Change: Popping aluminum paper tires and glass.

Mark Wallace: As a reminder, <unk> is a world leader in energy storage solutions for transportation.

Speaker Change: With our strong global position and capabilities. We believe this is and will continue to be a differentiating strength for cargos.

Mark Wallace: And the only global player in the market.

Mark Wallace: Approximately four times larger than our nearest competitor and we have the number one market position in the Americas, Europe and number three in Asia.

Speaker Change: Approximately 80% of our volume is driven by the high margin resilient aftermarket channel.

Mark Wallace: We saw over 150 million batteries per year to over 100 countries supporting virtually every automaker and large aftermarket retailer around the world.

Speaker Change: We are involved in the first fit with global automakers.

Speaker Change: Two to four replacements over a typical vehicles what.

Speaker Change: This gives us more than 30 years of visibility into the global battery demand and provides an incredibly durable and sustainable business model.

Mark Wallace: And with the majority share.

Mark Wallace: Our strategic and value driven sustainability leadership is important to our customers and is essential to the future of transportation and the security of our most central resources.

Speaker Change: The automotive industry is rapidly changing with a continued evolution toward more electrified and connected and automated driving vehicles.

Mark Wallace: Our circularity leadership enables critical mineral recovery and reuse by making new batteries out of used ones.

Speaker Change: This shift in technology represents a significant tailwind for our business today and long into the future as we see these new energy vehicles enter the aftermarket for multiple battery replacements.

Mark Wallace: Making use batteries a nearly renewable resource.

Mark Wallace: We embrace critical minerals circularity to better protect our supply chain with 100% of our products designed to be recycled.

Speaker Change: With our powertrain and chemistry agnostic approach, we are well prepared to create the most value for our customers.

Mark Wallace: Our low voltage auto batteries are the most recycled consumer product in the United States with recycling rates greater than 99%.

Speaker Change: Regardless of the vehicle type architecture or technology advanced low voltage battery solutions are a key component in every vehicle architecture now and into the future.

Mark Wallace: Aluminum paper tires and glass.

Mark Wallace: With our strong global position and capabilities. We believe this is and will continue to be a differentiating strength for cargos.

Speaker Change: With the increased electrification and.

Speaker Change: And digitalization of vehicles low voltage battery power and safety demands are growing in line with vehicle power demands at an estimated 15% CAGR.

Mark Wallace: Approximately 80% of our volume is driven by the high margin resilient aftermarket channel.

Mark Wallace: We are involved in the first fit with global automakers.

Speaker Change: This is driving increased demand for more advanced battery solutions.

Mark Wallace: Two to four replacements over a typical vehicles what.

Carlos is uniquely positioned to capitalize on the growing demand as we hold approximately 50% of the world's AGM capacity, which when combined with our strong customer relationships and broad chemistry agnostic portfolio.

Mark Wallace: This gives us more than 30 years of visibility into the global battery demand and provides an incredibly durable and sustainable business model.

Mark Wallace: The automotive industry is rapidly changing with a continued evolution towards more electrified and connected and automated driving vehicles.

Speaker Change: Tables us to lead this industry transition.

Speaker Change: We have the broadest technology portfolio and capabilities in the industry.

Mark Wallace: This shift in technology represents a significant tailwind for our business today and long into the future as we see these new energy vehicles and the aftermarket.

Speaker Change: With total systems expertise that enables us to optimize solutions for customers across safety performance and cost.

Speaker Change: Multiple battery replacements.

Speaker Change: We're making excellent progress on advancing our technology portfolio, which is driving strong interest from our customers.

Speaker Change: With our powertrain and chemistry agnostic approach, we are well prepared to create the most value for our customers.

Speaker Change: For example, we recently launched a new high performance AGM battery, which has a significantly improve recharge rate and enables our customers to increase C. O. Two savings in start stop vehicles up to 80% versus a traditional AGM battery.

Speaker Change: Regardless of the vehicle type architecture or technology advanced low voltage battery solutions are a key component in every vehicle architecture now and into the future.

Speaker Change: With the increased electrification.

Speaker Change: And digitalization of vehicles low voltage battery power and safety demands are growing in line with vehicle power demands at an estimated 15% CAGR.

Speaker Change: We've also brought our E AGM technology to the market, which addresses the higher surge power load requirements and hybrid plug in hybrid and battery electric vehicles.

Speaker Change: This is driving increased demand for more advanced battery solutions.

Speaker Change: Carlos is uniquely positioned to capitalize on the growing demand as we hold approximately 50% of the world's AGM capacity, which when combined with our strong customer relationships and broad chemistry agnostic portfolio.

Speaker Change: In battery electric vehicles. These batteries work in tandem with our high voltage traction battery to provide the right levels of power and functional safety.

Speaker Change: In addition, we're seeing some very positive developments in our connected services business, combining artificial intelligence machine learning and connectivity for a new level of battery intelligence to increased monitoring and communications.

Speaker Change: Tables us to lead this industry transition.

Speaker Change: We have the broadest technology portfolio and capabilities in the industry.

Speaker Change: With total systems expertise that enables us to optimize solutions for customers across safety performance and cost.

Speaker Change: We recently secured our first connected services contract with a European heavy duty fleet, operator, providing a solution that can reduce unnecessary engine idling, creating a significant fuel savings and a meaningful reduction in cotwo <unk>.

Speaker Change: We're making excellent progress on advancing our technology portfolio, which is driving strong interest from our customers.

Speaker Change: For example, we recently launched a new high performance AGM battery, which has a significantly improve recharge rate and enables our customers to increase C. O. Two savings in start stop vehicles up to 80% versus a traditional AGM battery.

Speaker Change: As a reminder, <unk> is one of the largest suppliers of low voltage lithium ion solutions and we're continuing to make great progress on our expansion into other chemistries and products, such as sodium ion and Super capacitors as well as software and system solutions.

Speaker Change: Super capacitors will play a complementary role and our low voltage portfolio to support peak power demands.

Speaker Change: We've also brought our E AGM technology to the market, which addresses the higher surge power load requirements and hybrid plug in hybrid and battery electric vehicles.

Speaker Change: Recently secured a significant platform wins for both our 12 and 48 volt supercut passengers.

Speaker Change: In battery electric vehicles. These batteries work in tandem with our high voltage traction batteries to provide the right levels of power and functional safety.

Speaker Change: With a global automotive manufacturer each.

Speaker Change: Each of the platform also includes an AGM battery and extends into the 20 <unk> and beyond into the aftermarket.

Speaker Change: In addition, we are seeing some very positive developments in our connected services business, combining artificial intelligence machine learning and connectivity for a new level of battery intelligence to increase monitoring and communications.

Speaker Change: Our significant technological advancements and customer wins serve as proof points to the execution of our strategy and strong value proposition, we provide to our customers.

Speaker Change: Under Brookfield ownership Carlos has solidified its position as the global leader in low voltage battery solution is ideally positioned to capitalize on being at the forefront of automotive electrification trends and growth runway ahead.

Speaker Change: We recently secured our first connected services contract with a European heavy duty fleet, operator, providing a solution that can reduce unnecessary engine idling, creating a significant fuel savings and a meaningful reduction in cotwo <unk>.

Speaker Change: We will continue to invest in high return projects focused in the U S to support our future growth and profitability improvement targets we.

Speaker Change: As a reminder, <unk> is one of the largest suppliers of low voltage lithium ion solutions and we're continuing to make great progress on our expansion into other chemistries and products, such as sodium ion and Super capacitors as well as software and system solutions.

Speaker Change: We are accelerating our investments to capture profitable AGM growth, Rob plant productivity and continue our battery innovation and development roadmap.

Speaker Change: We are excited about the opportunity to build on our leadership position by making strategic investments in the U S to expand critical minerals processing and recovery.

Speaker Change: Super capacitors will play a complementary role and our low voltage portfolio to support peak power demands.

Speaker Change: We secured a significant platform wins for both our 12 and 48 volt supercut passengers.

Speaker Change: Creasing advanced manufacturing capacity and implementing the latest manufacturing technologies and our U S facilities.

Speaker Change: With a global automotive manufacturer each.

Speaker Change: We are coming off two years of record financial results supported by our focus on commercial excellence operational efficiency and R&D leadership.

Speaker Change: Each of the platform also includes an AGM battery and extends into the 20 <unk> and beyond into the aftermarket.

Speaker Change: In the coming years, we expect to continue to execute on this strategy.

Speaker Change: Our significant technological advancements and customer wins serve as proof points to the execution of our strategy and strong value proposition, we provide direct customers.

Speaker Change: <unk> from a mix shift to advanced batteries by delivering ongoing cost savings each year from our global operations value creation plans.

Speaker Change: Under Brookfield ownership Carlos has solidified its position as the global leader in low voltage battery solution is ideally positioned to capitalize on being at the forefront of automotive electrification trends and growth runway ahead.

Speaker Change: Overall, it's an exciting time at <unk>.

Speaker Change: <unk> transformation to new energy vehicles create a significant tailwind for our business as we invest for the future our earnings and cash flow will continue to grow.

Speaker Change: We will continue to invest in high return projects focused in the U S to support our future growth and profitability improvement targets.

Speaker Change: We are proud for sustained and profitable growth through our leading global market position evolving advanced technology portfolio, and our durable and sustainable business model.

Speaker Change: Accelerating our investments to capture profitable AGM growth.

Speaker Change: With that I'll hand, it back to jazz pre and will be available for questions and answers.

Speaker Change: Rob plant productivity and continue our battery innovation and development roadmap.

Speaker Change: Thanks, Mark and good morning, everyone.

Speaker Change: We are excited about the opportunity to build on our leadership position by making strategic investments in the U S to expand critical minerals processing and recovery, increasing advanced manufacturing capacity and implementing the latest manufacturing technologies and our U S facilities.

Speaker Change: We generated a net loss of $109 million in 2024, primarily driven by impairments taken in our health care services and natural gas produced there.

Speaker Change: Our results during the quarter also included the impact of the settlement of a legacy pre acquisition class action lawsuit and our dealer offering technology services operation.

Speaker Change: We are coming off two years of record financial results supported by our focus on commercial excellence operational efficiency and R&D leadership and.

Speaker Change: The settlement will be funded with liquidity within the operation and does not require any additional equity funding.

Speaker Change: And the coming years, we expect to continue to execute on this strategy benefiting from a mix shift to advanced batteries by delivering ongoing cost savings each year from our global operations value creation plans.

Speaker Change: During the year, we recognized $370 million of tax benefits at our advanced energy storage operation.

Speaker Change: Overall, it's an exciting time at <unk> rapid transformation to new energy vehicles create a significant tailwind for our business.

Speaker Change: Adjusted EBITDA increased to two 6 billion from $2 5 billion in 2023 supported by stable underlying performance.

Speaker Change: As we invest for the future our earnings and cash flow will continue to grow.

Speaker Change: Adjusted <unk> was one 5 billion, which included $306 million of net gains during the year.

Speaker Change: We are proud for sustained and profitable growth through our leading global market position evolving advanced technology portfolio, and our durable and sustainable business model.

Speaker Change: Turning to segment performance our <unk>.

Jazz: With that I'll hand, it back to jazz and will be available for questions and answers.

Speaker Change: <unk> segment generated full year, adjusted EBITDA of $1 2 billion compared to $855 million in 2023.

Speaker Change: Thanks, Mark and good morning, everyone.

Speaker Change: We generated a net loss of $109 million in 2024, primarily driven by impairments taken in our healthcare services and natural gas produced there.

Speaker Change: Results benefited from strong performance at our brands energy storage operation driven by the growing demand for high margin advanced battery commercial actions and continued progress on business optimization plan.

Speaker Change: Results during the quarter also included the impact of the settlement of a legacy pre acquisition class action lawsuit and our dealer software and technology services operation.

Speaker Change: Growing contribution from our Brazilian water and wastewater services operation Ultra as reported results.

Speaker Change: The settlement will be funded with liquidity within the operation and does not require any additional equity funding.

Speaker Change: Prior year included contribution from disposed operations, including our Canadian aggregates production operations, which was sold in June last year.

Speaker Change: During the year, we recognized $370 million of tax benefits at our advanced energy storage operation.

Speaker Change: Moving to our business services segment, we generated full year, adjusted EBITDA of $832 million compared to $900 million in 2023.

Speaker Change: Adjusted EBITDA increased to two 6 billion from $2 5 billion in 2023 supported by stable underlying performance.

Speaker Change: Prior year included contribution from dispositions, including our road field operation, which was sold in July.

Speaker Change: Adjusted <unk> was one 5 billion, which included $306 million of net gains during the year.

Speaker Change: Adjusted <unk> was 641 million, representing an increase from $636 million in 2023.

Speaker Change: Turning to segment performance.

Speaker Change: Our residential mortgage insurer continues to perform very well.

Speaker Change: Our industrial segment generated full year, adjusted EBITDA of $1 2 billion compared to $855 million in 2023.

Speaker Change: Losses on claims remain below long term historical levels and insurance revenues benefiting from normalizing mortgage rates and increased housing market activity.

Speaker Change: Results benefited from strong performance at our brands energy storage operation driven by the growing demand for high margin advanced battery commercial actions and continued progress on business optimization plan.

Speaker Change: Results at our dealer software and technology services operation reflected higher costs associated with the planned modernisation and technology upgrades to enhance the user experience and service levels.

Speaker Change: Growing contribution from our Brazilian water and wastewater services operation Ultra Mr per deadweight ton.

Speaker Change: Finally, our infrastructure services segment generated full year, adjusted EBITDA $606 million compared to $853 million in 2023, which included $236 million of contribution from our nuclear technology service operations, which was sold in November two.

Speaker Change: Prior year included contribution from disposed operations, including our Canadian aggregates production operation, which was sold in June last year.

Speaker Change: Moving to our business services segment, we generated full year, adjusted EBITDA of 832 million compared to $900 million in 2023.

Speaker Change: 2023.

Speaker Change: Results benefited from increased contribution from our offshore oil services operation offset by reduced market activity at work access services.

Speaker Change: Prior year included contribution from dispositions, including our road fuels operation, which was sold in July.

Speaker Change: And yesterday, it was 641 million, representing an increase from $636 million in 2023.

Speaker Change: Turning to our balance sheet.

Speaker Change: I think rich mentioned, we're in a great financial position today.

Speaker Change: We ended the year with two.

Speaker Change: Our residential mortgage insurer continues to perform very well.

Speaker Change: $2 7 billion of pro forma liquidity at the corporate level, which includes recently announced acquisitions and realization.

Speaker Change: Claims remain below long term historical levels and insurance revenues benefiting from normalizing mortgage rates and increased housing market activity.

Speaker Change: This liquidity provides us significant optionality to support our capital allocation priorities, including the reduction of borrowing at the corporate level Opportunistically repurchasing our unit and investing in strategic acquisitions to support our growth.

Speaker Change: Results at our dealer software and technology services operation reflected higher costs associated with the planned modernisation and technology upgrades to enhance the user experience and service levels.

Speaker Change: More specifically.

Speaker Change: Typically we expect about $1 5 billion of proceeds from the recently closed sale of Altera shuttle tanker operations combined with our share of the distribution from <unk>.

Speaker Change: Finally, our infrastructure services segment generated full year, adjusted EBITDA $606 million compared to 853 million in 2023, which included $236 million of contribution from our nuclear technology service operations, which was sold in November.

Speaker Change: We are launching a $250 million repurchase program, which at our current trading level will increase the per unit share value of our business.

Speaker Change: Our 2023.

Speaker Change: Results benefited from increased contribution from our offshore oil services operation offset by reduced market activity at work access services.

Speaker Change: With that I'd like to close our comments and turn the call back over to the operator for questions.

Thank you as a reminder to ask a question. Please press star one one of your telephone and wait for your name to be announced.

Speaker Change: Turning to our balance sheet.

Speaker Change: As you mentioned, we're in a great financial position today.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: We ended the year with.

Speaker Change: $2 7 billion of pro forma liquidity at the corporate level, which includes the recently announced acquisitions and realization.

Speaker Change: Our first question comes from the line of Devin Dodge with BMO capital markets. Your line is now open.

Devin Dodge: Yes. Thanks, good morning, everybody. So let me start with a question for Mark.

Speaker Change: This liquidity provides us significant optionality to support our capital allocation priorities, including the reduction of borrowing at the corporate network.

Devin Dodge: But there has been really good momentum in the shift towards more advanced batteries in your sales mix.

Devin Dodge: But I think there's also a potential shift towards more <unk> content per vehicle. So I was wondering if you could frame that opportunity where you are at now and where you think this could get to over time.

Speaker Change: Opportunistically repurchasing our units.

Speaker Change: Investing in strategic acquisitions to support our growth.

Speaker Change: More specifically, we expect about one 5 billion of proceeds from the recently closed sale of Alterra shuttle tanker operations combined with our share of the distribution from carriers.

Speaker Change: Yes, good morning first of all.

Speaker Change: As I mentioned in my prepared comments with a very large win by adding super capacitors to our portfolio. We've actually increased our content per vehicle for that entire platform significantly we expect that to be an ongoing trend because as vehicles continue.

Speaker Change: We're launching a $250 million repurchase program, which at our current trading level will increase the per unit share value of our business.

Speaker Change: With that I'd like to close our comments and turn the call back over to the operator for questions.

Speaker Change: Two increased electrical demand on the low voltage network.

Speaker Change: But also provide more autonomous features which means you need higher levels of functional safety you can see multiple energy storage devices used on vehicles into the future. So I expect that not only will our OEM. So our new auto production business continued to grow in content per vehicle, but that will also directly translate.

Speaker Change: Thank you as a reminder to ask a question. Please press star one of your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: Our first question comes from the line of Devin Dodge with BMO capital markets. Your line is now open.

Speaker Change: Yes. Thanks, good morning, everybody. So could you start with a question for Mark.

Speaker Change: And to an increase in our aftermarket content as well.

Speaker Change: But there has been really good momentum in the shift towards more advanced batteries in your sales mix, but.

Speaker Change: Okay. Okay, and then maybe just another one for you Mark an honest look at.

Speaker Change: But I think there's also a potential shift towards more <unk> content per vehicle. So I was wondering if you could frame that opportunity where you are at now and where you think this could get to over time.

Speaker Change: For the two plus billion our planned investments in the U S. Over the next decade could you just provide some context for where you see those dollars getting allocated and if it's more tied to support the ongoing shift of better technologies or a broader increase in domestic capacity.

Speaker Change: Yes, good morning first of all.

Speaker Change: As I mentioned in my prepared comments with a very large win by adding super capacitors to our portfolio. We've actually increased our content per vehicle for that entire platform significantly we expect that to be an ongoing trend because as vehicles continue.

Speaker Change: Yes, so a couple you've kind of hit on a lot of those but number one we have 16 facilities in the U S. Today. So number one we want to modernize a continue modernizing our footprint, which includes higher levels of automation, but also the use of artificial intelligence and machine learned.

Speaker Change: Two increased electrical demand on the low voltage network.

Speaker Change: And as we do that we also have to spend opex as well. So one we've got to modernize our workforce to be able to manage in those facilities of the future.

Speaker Change: But also provide more autonomous features which means you need higher levels of functional safety, you're going to see multiple energy storage devices used on vehicles into the future. So I expect that not only will our OEM. So our new auto production business continued to grow in content per vehicle, but that will also directly translate.

Speaker Change: Second we have to increase capacities as the demand for advanced batteries is growing at the fastest rate in the United States. So we will continue deploying capital there to support the growth and to be able to take care of our customers.

Speaker Change: And to an increase in our aftermarket content as well.

Speaker Change: Next as you can imagine with that increase we also as a role as leader when it comes to circularity, we want to increase our ability to recycle domestically here in the U S.

Speaker Change: Okay. Okay, and then maybe just another one for you Mark an honest look at.

Speaker Change: For the two plus billion our planned investments in the U S. Over the next decade could you just provide some context for where you see those dollars getting allocated and if it's more tied to support the ongoing shipping better technologies or a broader increase in domestic capacity.

Speaker Change: A few things about recycling number one it's the right thing to do for the environment right. Because our batteries are designed in such a way that we can recover up to 99% of the materials and those batteries.

Speaker Change: Second it provides us a better cost structure.

Speaker Change: From a profitability perspective, and lastly, when you think about critical minerals it allows us to.

Speaker Change: Yes, so a couple you've kind of hit on a lot of those but number one we have 16 facilities in the U S. Today. So number one we want to modernize or continue modernizing our footprint, which includes higher levels of automation, but also the use of artificial intelligence and machine learning.

Speaker Change: Capture those critical minerals and keep those in our domestic supply chain for benefit.

Speaker Change: For our U S economy.

Speaker Change: And lastly, thinking about leapfrog technologies, there's lots of discussions about various lithium.

Speaker Change: And as we do that we also have to spend opex as well. So one we've got to modernize our workforce to be able to manage in those facilities of the future.

Speaker Change: Chemistries in the world, but as you know most all of those are somehow connected to <unk>.

Speaker Change: Fly changed we would consider to be very difficult to deal with geopolitically.

Speaker Change: Second we have to increase capacities as the demand for advanced batteries is growing at the fastest rate in the United States. So we will continue deploying capital there to support the growth and to be able to take care of our customers.

Speaker Change: Think about leapfrog technologies, such as sodium ion from an R&D and production.

Investment levels, because that can really help the U S and other western economies.

Speaker Change: On new ways to have energy storage is not connected to Chinese supply chain in the future.

Speaker Change: Next as you can imagine with that increase we also as a role as leader when it comes to circularity, we want to increase our ability to recycle domestically here in the U S.

Speaker Change: Okay excellent excellent color. Thanks for that and then just one last one.

Speaker Change: I just wanted to ask about scientific games.

Speaker Change: A few things about recycling number one it's the right thing to do for the environment right. Because our batteries are designed in such a way that we can recover up to 99% of the materials and those batteries.

Speaker Change: Financial leverage.

Speaker Change: To be at the higher end of the range for this business.

I think I think it was mentioned that there were some commercial wins, but I believe there may be some larger potential growth opportunities on the horizon that may require some relative.

Speaker Change: Second it provides us a better cost structure.

Speaker Change: From a profitability perspective, and lastly, when you think about critical minerals it allows us to.

Speaker Change: Relatively sizable upfront investments. So the question is does the financial leverage of the business impact the ability to pursue those growth opportunities and can the business self fund those contracts. So we're a btu and others need to contribute more capital.

Speaker Change: Capture those critical minerals and keep those in our domestic supply chain for benefit.

Speaker Change: For our U S economy.

Speaker Change: Lastly, thinking about leapfrog technologies, there's lots of discussions about various lithium.

Devin Dodge: Hi, Devin that stress create.

Adrian: Maybe start and then ask Adrian to add if I Miss anything.

Speaker Change: Chemistries in the world, but as you know most all of those are somehow connected to.

Speaker Change: Fly changed we would consider to be very difficult to deal with geopolitically.

Speaker Change: So scientific games as you know is an incredible business in the sky.

Speaker Change: Think about leapfrog technologies, such as Saudi my on from an R&D and production.

Speaker Change: Contracts with their customers the majority of their customers are long term high retention rates.

Speaker Change: Investment levels, because that can really help the U S and other western economies.

Speaker Change: The business generates very kind of stable.

Speaker Change: And new ways to have energy storage is not connected to Chinese supply chains in the future.

Speaker Change: EBITDA and cash flow, while we saw kind of early in our investment couple of years ago. Some spike in cost and as the business has been able to implement a number of operational improvements, which now puts the business I mean, even better position as we're going forward to kind of manage the cost side.

Speaker Change: Okay excellent excellent color. Thanks for that and then just one last one.

Speaker Change: I just wanted to ask about scientific games.

Speaker Change: Financial leverage.

To be at the higher end of the range for this business.

Speaker Change: I think I think it was mentioned that there were some commercial wins, but I believe there may be some larger potential growth opportunities on the horizon that may require some relative.

Speaker Change: And.

Speaker Change: So.

Speaker Change: The underlying performance and cash flow profile of the business are strong.

Speaker Change: Relatively sizable upfront investments. So the question is does the financial leverage of the business impact the ability to pursue those growth opportunities and can the business self fund those contracts. So we're a btu and others need to contribute more capital.

It has the ability they've been very active and a new commercial opportunities across the globe, including in the U S.

Speaker Change: One of the more sizable widens.

Speaker Change: Has been the UK lottery operations, which we've talked about in the past more recently.

Speaker Change: Hi, Devin Express create.

Speaker Change: Maybe start and then ask Adrian to add if I Miss anything.

Speaker Change: No contract in Ohio and.

Speaker Change: These contracts take a little bit of time and capital investments to onboard and get started but all of those are.

Speaker Change: So scientific.

Speaker Change: Scientific games as you know is an incredible business.

Speaker Change: Got it.

Speaker Change: Contracts with their customers the majority of their customers are long term high retention rates.

Speaker Change: Our to be funded within the business and the businesses kind of accounts for that when the bid on the contract and they went on the contracts. So the business is very much self sustaining and quite frankly setup in an excellent position to continue to kind of pro rata.

Speaker Change: The business generates very kind of stable.

Speaker Change: EBITDA and cash flow, while we saw kind of early in our investment couple of years ago, Some spike in cost.

Speaker Change: Yes.

Speaker Change: Okay excellent. Thank you for that I'll turn it over.

Speaker Change: <unk> has been able to implement a number of operational improvements, which now puts the business I mean, even better position as we're going forward to kind of manage the cost side.

Speaker Change: Yeah.

Speaker Change: Our next question comes from the line of Gary Ho with Desjardins Capital markets. Your line is now open.

Gary Ho: Hey, Thanks. Good morning, maybe first question is for Mark as well, it's just great to have you on the call. So just listening to your presentation at the CES event recently.

Speaker Change: And.

Speaker Change: So the underlying performance and cash flow profile of the business is strong.

Speaker Change: And it has the ability they've been very active bidding new commercial opportunities across the globe, including in the U S.

Gary Ho: By what Youre doing on the connected service solution side for fleet operators.

Gary Ho: Good to hear you have signed on.

Speaker Change: The more sizable widens.

Gary Ho: European fleet client so what's the opportunity here do you see any of your.

Speaker Change: <unk> has been the UK lottery operations, which we've talked about in the past more recently.

Gary Ho: Competitors, introducing similar technology as well and what's the pipeline looks like today.

Speaker Change: Contract in Ohio and.

Speaker Change: These contracts take a little bit of time and capital investments to onboard and get started but all of those.

Speaker Change: So first of all good morning.

Gary Ho: As we noted that.

Gary Ho: CES and obviously on our prepared remarks. This morning that we do have a contractual agreement now with the European heavy duty truck.

Speaker Change: Or to be funded within the business and the businesses kind of accounts for that when the bid on the contracts and the win on the contracts. So the business is very much self sustaining and quite frankly set up in an excellent position to continue to kind of a ramp.

Gary Ho: Fleet.

Gary Ho: So first and foremost the services, providing that fleet customer come via our unique ability to leverage our battery algorithms and be able to look at the vehicle. The the charge rate of the battery itself and be able to tell the driver of the vehicle or the fleet owner when is the right time to start.

Speaker Change: Okay excellent. Thank you for that I'll turn it over.

Speaker Change: Our next question comes from the line of Gary Ho with de Jordan <unk> capital markets. Your line is now open.

Gary Ho: A vehicle and when is the right time to turn the vehicle back off.

Gary Ho: By doing that and having unique software in the cloud we can actually reduce for that particular fleet customer 40% of their auditing and so as you can imagine that translates into well more than 1000.

Gary Ho: Okay. Thanks. Good morning, maybe first question for Mark as well, it's just great to have you on the call.

Gary Ho: Listening to your presentation at the CES event recently.

Speaker Change: <unk> Creek by what Youre doing on the connected service solution side for fleet operators.

Gary Ho: Euros per year of fuel savings, but also a significant reduction in greenhouse gas emissions. So when we think about connected services going forward from a <unk> perspective, we want to make sure we're bringing true value to our customers. So in this particular case more than 1000 euros fuel savings per year per truck, but also now.

Speaker Change: Can you hear you signed on.

Speaker Change: P and fleet client so what's the opportunity here do you see any of your.

Speaker Change: Competitors, introducing similar technology as well and what's the pipeline looks like today.

Speaker Change: So first of all good morning.

Speaker Change: As we noted that.

Gary Ho: Carrying that into other applications, such as being able to predictably tell a fleet owner, but they may have a defective battery that could cause a what we call a roadside that their avoids a significant.

Speaker Change: CES and obviously in our prepared remarks. This morning that we do have a contractual agreement now with a European heavy duty truck.

Speaker Change: Fleet.

Speaker Change: So first and foremost the services, providing that fleet customer come.

Gary Ho: Charge that would be no.

Gary Ho: Obviously.

Speaker Change: For the fleet owner to have the truck service on the side of the road and more important blayne freight. So we see this as a continued evolution, we're working with others in Europe now and more importantly, also we're expanding and working now with U S fleet owners as well so so more to come on the connected services. We were quite pleased with the progress we've made but more importantly, we're bringing true value to.

Speaker Change: Our unique ability to leverage our battery algorithms and be able to look at the vehicle the <unk>.

Charge rate of the battery itself and be able to tell the driver of the vehicle or the fleet owner when is the right time to start to vehicle and when is the right time to turn the vehicle back off and.

Speaker Change: And by doing that and having unique software in the cloud we can actually reduce for that particular fleet customer 40% of their idling and so as you can imagine that translates into well more than 1000 euro.

Our customers.

Speaker Change: Great. Thanks for that and then maybe too.

Speaker Change: A few questions on the buyback capital allocation can.

Speaker Change: Can you remind me whats Brookfield Corp's ownership of BB U is today I think last number I saw was around 66% do they intend to be part of that $250 million buyback or is that just all <unk> there'll be buying back stock and canceling the shares and then just for you just posted a dividend recap from Claire.

Speaker Change: Euros per year of fuel savings, but also a significant reduction in greenhouse gas emissions. So when we think about connected services going forward from a <unk> perspective, we want to make sure we're bringing true value to our customers. So in this particular case more than 1000 euros fuel savings per year per truck, but also now.

Speaker Change: Are you at a level that youre comfortable with at the corporate <unk>.

Speaker Change: Carrying that into other applications, such as being able to predictably tell a fleet owner, but they may have a detective battery that could cause a what we call a roadside that their avoids a significant.

Speaker Change: Side or will you intend to reduce that further.

Speaker Change: Okay.

Speaker Change: Hi, Thanks for your question so yes.

Speaker Change: You are right.

Brookfield ownership is circa 65, 66%.

Speaker Change: Charge that would be all.

Speaker Change: Yeah.

Speaker Change: For the fleet owner to have the truck service on the side of the road and more important blayne freight. So we see this as a continued evolution, we're working with others in Europe now and more importantly, also we're expanding working now with U S fleet owners as well so more to come on the connected services. We were quite pleased with the progress we've made but more importantly, we're bringing true value to our.

Speaker Change: The buyback program is specifically focused on buying back in the open market any bulk sales that come on.

Speaker Change: We will be buying those.

Canceling them in treasuries.

Speaker Change: The PV you buy back focused on the Nielsen markets.

Speaker Change: And our customers.

Speaker Change: From a liquidity perspective.

Speaker Change: Great. Thanks for that and then maybe too.

Speaker Change: We are in an excellent position now.

Speaker Change: A few questions on the buyback capital allocation can.

Speaker Change: Leif.

Speaker Change: Talked about this before from a capital allocation perspective.

Speaker Change: Can you remind me whats Brookfield Corp's ownership of BB U is today I think last number I saw was around 66% do they intend to be part of that $250 million buyback or is that just all <unk> there'll be buying back stock and canceling the shares and then just for you just posted a dividend recap.

Speaker Change: Wanted to.

Speaker Change: The pay down some of our working capital facility.

Speaker Change: Facilities like these were always meant to be bridge lines that before too.

Speaker Change: The bridge monetization than acquisition activity, so with the proceeds that are coming in from <unk> care.

Speaker Change: Are you at a level that youre comfortable with at the corporate <unk>.

Speaker Change: <unk>.

Speaker Change: It would be using part of these proceeds to pay down the line and I think it puts us in an excellent position.

Speaker Change: That site or will you intend to reduce that further.

Speaker Change: Yes.

Speaker Change: Hi, Thanks for your question so yes.

Speaker Change: Pro forma liquidity will be at $2 7 billion and I think that.

Speaker Change: You are right.

Speaker Change: Brookfield ownership is circa 65, 66%.

Speaker Change: That's a good place for us to be.

Speaker Change: Okay, Great and then if I can sneak one more in just on health scope that business continues to be a bit challenged can you can you share what's the path to protect your invested capital there and what are the events that we should keep an eye on.

Speaker Change: The buyback program is specifically focused on buying back in the open market.

Block sales that come on.

Speaker Change: And we will be buying those.

Speaker Change: Sure. So again I'll start and then.

Speaker Change: Canceling them in treasuries.

Speaker Change: The PV you buy back focused on the Nielsen markets.

Speaker Change: What state you're in.

Speaker Change: If there is anything to add.

Speaker Change: From a liquidity perspective.

As you know it's been a challenging situation.

Speaker Change: We are in an excellent position now.

Speaker Change: Coming on to Covid for Ehealth scope business.

Speaker Change: It will be.

Speaker Change: Talked about this before from a capital allocation perspective.

Speaker Change: And really the issue there is just a mismatch between kind of revenue growth versus cost escalation, primarily driven by.

Speaker Change: Wanted to.

Speaker Change: The pay down some of our working capital.

Speaker Change: Facilities like these were always meant to be bridge lines that before too.

Speaker Change: Can it reach.

Speaker Change: Bridge monetization than acquisition activity.

Speaker Change: Escalation within the hospitals.

Speaker Change: With the proceeds that are coming in from <unk> care.

Speaker Change: And it's just not a sustainable model.

Speaker Change: Activity levels are still below pre COVID-19 levels, but there.

Speaker Change: Evil.

Speaker Change: Using part of these proceeds to pay down the line and I think it puts us in an excellent position.

Speaker Change: There has been some uplift in activity, but it's not been sufficient to offset kind of the imbalance between revenue and costs.

Speaker Change: Pro forma liquidity of $2 7 billion and I think that.

So that's kind of the position that the business is in and and it's been in that position for a period of time and it's just not sustainable long term.

Speaker Change: That's a good place for us to be.

Speaker Change: Okay, Great and then if I can sneak one more in just on health scope that business continues to be a bit challenged can you can you share what's the path to protect your invested capital there and what are the events that we should keep an eye on.

Speaker Change: We've been very actively we have a lot of people kind of hands on working.

Speaker Change: Sure So again I'll start and I'll.

Speaker Change: With the management teams within the business.

Speaker Change: Landscape Youre in.

Speaker Change: These funds.

Speaker Change: If there is anything to add.

Kind of continuing to do whatever we can to improve the operational performance take cost out but.

Speaker Change: As you know it's been a challenging situation.

Speaker Change: But also proactively negotiating with the private health insurers.

Speaker Change: Coming out to Covid for the help scope business.

Speaker Change: And really the issue there is just a mismatch between kind of revenue growth versus cost escalation, primarily driven by.

Speaker Change: To get in.

Speaker Change: Increases in the funding for it.

Speaker Change: The activity that we perform.

Speaker Change: And then we're also actively talking.

Speaker Change: Kind of reach.

Speaker Change: Escalation within the hospitals.

Speaker Change: Compliments and.

Speaker Change: Industry associations.

Speaker Change: And it's just not a sustainable model.

Speaker Change: Because this isn't just help scope issue.

Speaker Change: Tiffany levels are still below pre COVID-19 levels, but there has been some uplift in activity.

Speaker Change: It's a broader issue for <unk>.

Private health care industry in Australia, So Gary I would say look we're working on all fronts as you know.

Speaker Change: It has not been sufficient to offset kind of the imbalance between revenue and costs.

Speaker Change: We do everything we can to win when they're sick.

Speaker Change: Situation is challenging.

Speaker Change: So thats kind of the position that the business is in and.

Speaker Change: To protect our capital and get as much of our capital back and that's where the focus is that helpful. Today.

Speaker Change: It's been in that position for a period of time and it's just not sustainable long term.

Speaker Change: Okay, great. Thanks for the color those are my questions. Thank you.

Speaker Change: So we've been very actively we have a lot of people kind of hands on working.

Speaker Change: Thank you. Our next question comes from the line of Nick <unk> with CIBC capital markets. Your line is now open.

Speaker Change: With the management teams within the business.

Speaker Change: All fronts.

Speaker Change: Kind of continuing to do whatever we can to improve the operational performance take cost out but.

Nick: Okay. Thanks, I'll direct a few questions about claris towards Mark as well since we have benefit of having you on the call.

Speaker Change: But also proactively negotiating with the private health insurers.

Nick: My understanding my understanding is that there's always been some chatter about Oems making attempts.

Speaker Change: To get in.

Nick: Unsuccessfully so far to transition away from 12 volts.

Speaker Change: Increases in the funding for the.

Speaker Change: The activity that we perform.

Speaker Change: Electronic architecture of electric vehicle design, just be interested to hear your perspective on how that might evolve in the future and whether there are any steps that can be taken to better position <unk> for that world.

Speaker Change: And then we're also actively talking.

Speaker Change: Right.

Speaker Change: Governments and industry associations.

Speaker Change: Because this isn't just help scope issue.

Speaker Change: Yes, good morning first of all.

Speaker Change: It's a broader issue for the <unk>.

Speaker Change: So one thing to note when we talk about low voltage for so that means less than 60 volts. So.

Speaker Change: Private health care industry in Australia, So Gary I would say look we're working on all fronts as usual.

Speaker Change: We are capable of providing solutions from 12 24, even at $40 48, volt et cetera, so well position as vehicles continue to evolve and architectures, because I mentioned a few minutes ago that in the prepared remarks that one of the awards that we have it's a 48 volt super capacitors.

Speaker Change: We do everything we can to win when the situation is challenging.

Speaker Change: To protect our capital and get as much of our capital back and that's where the focus is that helpful. Today.

Okay, great. Thanks for the color those are my questions. Thank you.

Speaker Change: So as you think about vehicle architectures.

Speaker Change: Thank you. Our next question comes from the line of Nik Priebe with CIBC capital markets. Your line is now open.

Speaker Change: Yes, there will not be a vehicle that just runs off.

Speaker Change: 480 volts, only you have a lot of sub systems.

Speaker Change: Okay. Thanks, I'll direct a few questions about claris towards Mark as well since we have benefit of having you on the call.

Speaker Change: Infotainment et cetera that will need a much lower voltage range.

Nik Priebe: My understanding my understanding is that there's always been some chatter about Oems, making attempts, albeit unsuccessfully so far to transition away from 12 volts in the electronic architecture of electric vehicle design just be interested to hear your perspective on how that might evolve in the future and whether there any steps that can be taken.

Speaker Change: So you'll never switch over to just one high voltage network and you'll still need the low voltage side for a lot of the sub systems.

Speaker Change: Importantly, Nick I think the key takeaway is much like we see in aerospace when you have more autonomous features and dropout wire brake by wire et cetera.

Speaker Change: To better position <unk> for that world.

Speaker Change: You need the redundancies and this all bolt on what's called Asos level. So basically it's like failure mode levels in automobile that you need to provide redundant power and systems to these very critical functional safety systems and so.

Speaker Change: Yes, good morning first of all.

Speaker Change: So one thing to note when we talk about low voltage for that means less than 60 volts. So.

Speaker Change: We are capable of providing solutions from 12 24, even at $40 48 volts et cetera, so well position as vehicles continue to evolve and architectures, because I mentioned a few minutes ago.

Speaker Change: Are we not seeing an evolution toward just one single voltage we're actually seeing.

And evolution that we have multiple energy storage devices on imported vehicles to ensure you get not only the power demand you need for the vehicle, but also the functional safety requirements going forward. So we're quite pleased with the latest one we just mentioned.

Speaker Change: Prepared remarks that one of the awards that we have and say 48 volt Super capacitors.

So as you think about vehicle architectures.

Speaker Change: We will actually provided 12, and 48 volt Super capacitors as well as our AGM battery technology.

Speaker Change: Yes, there will not be a vehicle that just runs off.

Speaker Change: 480 volts only you have a lot of sub systems be it infotainment et cetera that will need a much lower voltage range.

Speaker Change: Okay. That's great color I appreciate that and then I just want to shift gears and.

Speaker Change: Talk a little bit about the the benefits stemming from the inflation reduction Act and.

Speaker Change: So you'll never switch over to just one high voltage network and you'll still need the low voltage side for a lot of the sub systems, but more importantly, Nick I think the key takeaway is much like we see in aerospace when you have more autonomous features and dropout wire brake by wire et cetera.

Speaker Change: Setting aside the discussion around the probability of collecting on future benefits.

Speaker Change: How likely is it that youll be able to collect on the $370 million of tax credits that have been recognized to date.

Speaker Change: What I'm trying to understand is how quickly can you actually convert that to cash on balance sheet before any actions taken too.

Speaker Change: Dismantle the repeal elements of the inflation reduction.

Speaker Change: You need the redundancies and this all.

Speaker Change: Bolt on what's called ACO level, so basically it's like failure mode levels in automobile that you need to provide redundant power systems to these very critical functional safety systems and so nor are we not seeing an evolution toward just one single voltage we're actually seeing.

Speaker Change: Yeah.

Mark Wallace: Maybe mark if I could just to clarify the $370 million that's been references at <unk> share.

Speaker Change: The.

Speaker Change: Total.

Speaker Change: And kind of intelligibility for clarity I was on the tax benefit.

Speaker Change: Is slightly over $1 billion not within the business.

Speaker Change: And evolution that we have multiple energy storage devices on board a vehicle to ensure you get not only the power demand you need for the vehicle, but also the functional safety requirements going forward. So we're quite pleased with the latest when we just mentioned.

Speaker Change: And.

Speaker Change: Maybe maybe just to add one part and then I'll hand, it over to Mark to comment.

Mark Wallace: We are.

Mark Wallace: In the process of it.

Speaker Change: We will actually provided 12, and 48 volt Super capacitors as well as our AGM battery technology.

Mark Wallace: The businesses in the process of filing its tax return for 2024 year.

Speaker Change: Okay. That's great color I appreciate that and then I just want to shift gears.

Mark Wallace: And.

Mark Wallace: That is based on kind of the regulation that was finalized in place in October last year.

Speaker Change: Talk a little bit about the the benefits stemming from the inflation reduction Act and.

Speaker Change: Setting aside the discussion around the probability of collecting on future benefits.

Mark Wallace: And I'd say, we feel good about kind of the businesses, let your ability for that.

Speaker Change: Likely that youll be able to collect on the $370 million of tax credits that have been recognized to date.

Mark Wallace: We expect to file it in Q1 and.

Speaker Change: What I'm trying to understand is how quickly can you actually convert that to cash on balance sheet before any actions taken too.

Mark Wallace: It would be the cash should be received shortly thereafter, so mark anything you want to add to that.

Speaker Change: Dismantle a repeal elements of the inflation reduction Act.

Speaker Change: No I think you've covered that category.

Speaker Change: Okay.

Speaker Change: Okay, that's great.

Mark Wallace: Maybe mark if I could just clarify the $370 million that's been references that EV is sure.

Speaker Change: That's all from me I'll turn it over thank you.

Speaker Change: Thank you. Our next question comes from the line of Nelson <unk> with RBC capital markets. Your line is now open.

Speaker Change: The.

Speaker Change: Total.

Speaker Change: Kind of intelligibility for clarity on the tax benefit.

Nelson: Great. Thanks, I just have a few high level questions. So for your letter to shareholders highlight the re industrial revolution trend and obviously <unk>.

Speaker Change: Is slightly over $1 billion not within the business.

Speaker Change: And.

Mark Wallace: Maybe maybe just to add one part and then I'll hand, it over to Mark to comment.

Nelson: <unk> and <unk> are some of the clear beneficiaries.

Speaker Change: We are.

Nelson: Can you just talk about some of your other businesses that seem to that that could stand to benefit.

Speaker Change: In the process of.

Speaker Change: The business is in the process of filing its.

Speaker Change: Tax return for 2024 year.

Nelson: From this trend and then also.

Nelson: Does the re industrial revolutions theme drive their focus on where you look for M&A opportunities.

Speaker Change: <unk>.

Speaker Change: That is based on kind of deregulation that was finalized in place.

Speaker Change: In October last year.

Speaker Change: And so we feel good about kind of the businesses.

Nelson: Yes, hi, good morning, and happy to take that just to start.

Speaker Change: <unk> for that.

Nelson: I'll start with your last question first it's definitely part of our theme when we look to invest in businesses.

Speaker Change: We expect to file it in Q1 and.

Nelson: You have always wanted to own businesses that we understand really well, where we have a value creation opportunity that we can feel very confident about what we've been able to do in the past with <unk>.

Speaker Change: It would be the cash should be received shortly thereafter.

Mark Wallace: Mark anything you want to add to that.

Mark Wallace: No I think you've covered that.

Nelson: Westinghouse and graph tech as examples and so our pipeline whether it includes.

Mark Wallace: Okay, that's great.

Mark Wallace: That's all from me I'll turn it over thank you.

Nelson: <unk>, which we just closed other businesses we have in the pipeline.

Speaker Change: Thank you. Our next question comes from the line of Nelson <unk> with RBC capital markets. Your line is now open.

Nelson: We feel very confident about.

Nelson: The technology aspects of the Reindustrialization of these businesses.

Nelson: Great. Thanks, I just have a few high level questions. So for your letter to shareholders highlight the Reindustrialize Revolution trend and obviously <unk>.

Nelson: As part of our business plan when we acquired them. So our pipeline is definitely I would say.

Nelson: Is.

Nelson: Is made up of businesses that fit that theme.

Speaker Change: <unk> <unk> are some of the clear beneficiaries.

The businesses, we already own in the portfolio, where we see some opportunities.

Speaker Change: Can you just talk about some of your other businesses that seem to that I could stand to benefit.

Nelson: Beyond of course, <unk> talked quite a bit about today I'd say <unk> is another good example of a business, where we're seeing a lot of the same trends and we think that were coming.

Speaker Change: From this trend and then also.

Speaker Change: Does the re industrial Revolution.

Speaker Change: Drive their focus on where you look for M&A opportunities.

Into a period, where we should see some benefits of the businesses underlying performance as a result.

Speaker Change: Yes, hi, good morning, and happy to take that.

Nelson: And while it's not the industrial business or have a services business for businesses like <unk>. We're also seeing an opportunity to I'd say advance their business plan through some of these technology initiatives.

Speaker Change: To start.

Speaker Change: I'll start with your last question first definitely part of our theme when we look to invest in businesses. We have always wanted to own businesses that we understand really well, where we have a value creation opportunity that we can feel very confident about what we've been able to do in the past with <unk>.

Nelson: Got it that's great and then just on the M&A environment.

Nelson: Can you just talk about whether you are seeing this as well.

Nelson: The buyer a sellers market or both so just that a color I just came off the Brookfield renewable call and they highlighted a.

Speaker Change: Westinghouse and <unk> as examples and so our pipeline whether it includes.

Speaker Change: And vent, which we just closed other businesses we have in the pipeline.

Speaker Change: We feel very confident about.

Nelson: Bifurcated market in terms of them seeing strong bids for operating de risked assets.

Speaker Change: The technology aspects of the Reindustrialization of these businesses.

Nelson: We see high returns for development opportunities.

Speaker Change: As part of our business plan when we acquired them. So our pipeline is definitely I would say.

Nelson: When you look at your.

Nelson: Your opportunity set.

Nelson: Are you seeing kind of similar dynamics in specific asset classes.

Speaker Change: <unk>.

Speaker Change: It's made up of businesses that fit that theme.

Terms of the businesses, we already own in the portfolio, where we see some opportunities.

Nelson: We will see definitely the transaction activity in the market is back.

Speaker Change: Beyond of course, <unk> talked quite a bit about today I'd say <unk> is another good example of a business, where we're seeing a lot of the same trends.

Nelson: It's become quite enabling market for transactions one is I'd say generally there's more confidence.

Speaker Change: We think that were coming.

Nelson: In certain economies in particular, the U S and other.

Speaker Change: Into a period, where we should see some benefits of the businesses underlying performance as a result.

Nelson: Markets like India, where people are happy to to invest and they feel pretty confident about the next few years as the future of those markets, whereas in the last few years I think there was still some question around the room.

And while it's not the industrial business to more of a services business businesses like <unk>. We're also seeing an opportunity to I'd say advance their business plan through some of these technology initiatives.

Nelson: <unk> of certain economies I think people feel better about it today the credit markets are clearly back we've seen it for businesses that generate a lot of cash flow that are real market leaders like <unk>.

Speaker Change: Got it that's great and then just on the M&A environment.

Speaker Change: Can you just talk about whether you are seeing this as well.

Speaker Change: The buyer a sellers market or both so just color I just came off the Brookfield renewable call and they highlighted a.

Nelson: The amount of debt.

Nelson: That we had for the financing we just did clearly showed that the credit markets are able to support businesses of the type that we'd like to own.

Speaker Change: Bifurcated market in terms of them seeing strong bids for operating de risked assets.

Nelson: And then I would say given some time that's passed some of the bid ask spread we saw in the past between buyers and sellers starting to reduce and so.

Speaker Change: I'd say high returns for development opportunities.

Speaker Change: When you look at your.

Nelson: So I do anticipate there'll be more transaction activity. This year generally in the overall private equity market.

Speaker Change: Your opportunity set.

Speaker Change: Are you seeing kind of similar dynamics in specific asset classes.

Nelson: <unk> I think it will be a participant both on the investment side as you're seeing with that vets and our pipeline is quite strong.

Speaker Change: Yeah.

Speaker Change: See definitely the transaction activity in the market is back.

Speaker Change: It's become quite enabling market for transactions one is I'd say generally there's more confidence.

Nelson: And so but also in terms of monetization activity, we had a pretty good year last year and we'll continue to continuously look for opportunities I wouldn't say, it's necessarily one or the other of a buyer or sellers market and the types of businesses we buy.

In certain economies in particular the U S.

Speaker Change: Other markets like India, where people are happy to to invest and they feel pretty confident about the next few years as the future of those markets, whereas in the last few years I think there was still some question around the <unk>.

Nelson: A quite specialized the things that we think that we can add a lot of value and often our large businesses, where there isn't as much competition, we feel pretty good about our pipeline and our ability to transact at the values that we want.

Speaker Change: Resilience of certain economies I think people feel better about it today the credit markets are clearly back we've seen it for businesses that generate a lot of cash flow that are real market leaders like <unk>.

Nelson: That's great color there. Thank you.

Nelson: Thank you.

Speaker Change: The amount of debt.

Speaker Change: That we had for the financing we just did clearly showed that the credit markets are able to support businesses of the type that we'd like to own.

Our next question comes from the line of Jamie <unk> with National Bank. Your line is now open.

Nelson: Okay.

Speaker Change: Yes. Thanks.

Speaker Change: And then I would say given some time thats passed some of the bid ask spread we saw in the past between buyers and sellers starting to reduce.

Speaker Change: Wanted to get a little bit more color on the on the Mexico operations.

Speaker Change: So I guess.

Speaker Change: So I do anticipate there'll be more transaction activity. This year generally in the overall private equity market.

Speaker Change: Challenging market backdrop is it primarily demand driven.

Speaker Change: What are you looking for from our conditions.

Speaker Change: <unk> I think it will be a participant both on the investment side as you're seeing with that vets and our pipeline is quite strong.

Speaker Change: Perspective to see a turnaround or a re acceleration in the <unk> business.

Speaker Change: Thank you for the questions Adrian I'll answer that so look overall volumes remain challenging due to general softness in the market, but also some inventory levels and destocking.

Speaker Change: And so but also in terms of monetization activity, we had a pretty good year last year.

Speaker Change: We will continue to continuously look for opportunities I wouldn't say, it's necessarily one or the other of a buyer or sellers market and the types of businesses we buy.

Speaker Change: It's still too early to predict where volumes will come back we're planning for weakness to persist through 2025.

Speaker Change: But the management team has done an excellent job continuing to offset some of the margin pressure were strong cost management focus heavily on managing capex and working capital position as the business is well positioned.

Speaker Change: A quite specialized the things that we think that we can add a lot of value and often our large businesses, where there isn't as much competition. So we feel pretty good about our pipeline and our ability to transact at the values that we want.

That's great color there. Thank you.

Speaker Change: When the economic cycle starts to turn.

Speaker Change: Thank you.

Speaker Change: As I said, it's a bit difficult to see that and we're expecting it to persist through 'twenty five.

Speaker Change: Our next question comes from the line of Jamie <unk> with National Bank. Your line is now open.

Speaker Change: Okay and in another business I, just wanted to get a bit more color was with CDK.

Speaker Change: Yes, thanks just.

Speaker Change: Wanted to get a little bit more color on the <unk>.

Speaker Change: Operations.

Speaker Change: And.

Speaker Change: So I guess.

Speaker Change: A little bit of color in the in the sub pack, but just wanted to get some.

Speaker Change: Challenging market backdrop is it primarily demand driven.

Speaker Change: More clarity I guess in terms of the higher cost.

Speaker Change: What are you looking for from our conditions.

Speaker Change: With our investments in the technology upgrade that customer service and then and then whats whats the timeframe, what's the magnitude what exactly is being done on that front and then the second part of that is the customer churn and just wanted to get a sense as to.

Speaker Change: Perspective to see a turnaround or a re acceleration in the <unk> business.

Speaker Change: Thank you for the questions Adrian I'll answer that so look overall volumes remain challenging due to general softness in the market, but also some inventory levels and destocking.

How does that compare.

Speaker Change: It's still too early to predict where volumes will come back we're planning for weakness to persist through 2025.

Speaker Change: Historically, obviously higher levels, but just is it have you gone through other periods of high churn and how does it compare to that and what are.

Speaker Change: But the management team has done an excellent job continuing to offset some of the margin pressure were strong cost management focus heavily on managing capex and working capital position as well the business is well positioned.

Is it.

Speaker Change: Is it entirely due to the cyber attack issue or what is the exit interviews suggest saying on lives on that churn.

Yeah, Hi, It's Josh Street.

Speaker Change: When the economic cycle starts to turn.

Speaker Change: I'll I'll answer the CDK questions and then in New Jersey, Adrian can add to it.

Speaker Change: As I said, it's a bit difficult to see that and we're expecting it to persist through 'twenty five.

Speaker Change: Phil.

Speaker Change: As part of our investment thesis when we invested in CDK.

Speaker Change: Okay and in another business I, just wanted to get a bit more color was with CDK.

Speaker Change: We planned to upgrade and modernize the technology stack and kind of the user experience and service.

And.

Speaker Change: A little bit of color in the in the sub pack, but just wanted to get some.

Speaker Change: More clarity I guess in terms of the higher cost.

Speaker Change: That the software offering its customers. So that was always part of our plan.

Speaker Change: With investments in the technology upgrade that customer service and then and then whats whats the timeframe, what's the magnitude what exactly is being done on that front and then the second part of that is the customer churn and just wanted to get a sense as to.

Speaker Change: What we've done now is.

Speaker Change: <unk> accelerated a lot of that work and what we're seeing kind of slow too is just a pull forward. Thank you would've seen these costs come through the business over a longer period of time.

Speaker Change: How does that compare.

Speaker Change: Historically, obviously higher levels, but just is it have you gone through other periods of high churn and how does it compare to that and what are.

Speaker Change: And what we're.

Speaker Change: Aiming to do it and do it.

Speaker Change: Performance.

Speaker Change: This activity in a shorter period of time, so thats why youre seeing kind of that spike in cost.

Speaker Change: Is that.

Speaker Change: Is it entirely due to the cyber attack issue or what is the exit interviews suggest saying on that churn.

Speaker Change: Yes modernization program is going to take some time at Nike.

Speaker Change: 12, 18 to 24 months.

Josh Street: Yes, Hi, it's Josh Street.

Speaker Change: Is.

Speaker Change: I'll I'll answer the CDK questions and then in New Jersey, Adrian can add to it.

Speaker Change: A reasonable timeframe.

Speaker Change: And so we do expect that costs are going to continue to be elevated.

Josh Street: So.

Speaker Change: As part of our investment thesis when we invested in CDK.

Speaker Change: Right.

Speaker Change: Just kind of fundamentally it's a great business, it's got a very good market share.

Speaker Change: We planned to upgrade and modernize the technology stack and kind of the user experience and service.

Speaker Change: Overall pretty sticky customer base and the team has done an incredible job on the.

Speaker Change: Operational front the streamlining.

Speaker Change: That the software I'll forget the customers. So that was always part of our plan.

Speaker Change: The business is run and the cost structure.

Speaker Change: And we continue to be very supportive and we think this is an incredible business Scott.

Speaker Change: What we've done now is.

Speaker Change: <unk> accelerated a lot of that work and what we're seeing kind of slow too is just a pull forward.

Speaker Change: With regards to customer churn.

Speaker Change: Yes churn is slightly elevated.

Speaker Change: I've seen these costs come through the business over a longer period of time.

Speaker Change: At the last quarter.

Speaker Change: And what we're.

Speaker Change: And.

Speaker Change: Aiming to do it and do it.

Speaker Change: Our gross retention rate and the business is still 90%.

Speaker Change: <unk> performance.

Speaker Change: This activity in a shorter period of time, so thats why youre seeing kind of that spike.

Speaker Change: And.

Speaker Change: While we are seeing.

Speaker Change: A little bit more churn, we're also seeing new customers kind of signing on the <unk>.

Speaker Change: Yeah.

Speaker Change: Modernization program is going to take some time at night.

Speaker Change: 18 to 24 months.

Speaker Change: Business signed two significant <unk>.

Speaker Change: <unk>.

Speaker Change: Dealer ships last point, there which was.

Speaker Change: We assemble timeframe.

Speaker Change: Kind of a great outcome.

Speaker Change: And so we do expect that costs are going to continue to be elevated.

Speaker Change: So I would say no and.

Speaker Change: Nothing while turns a bit higher it's not something that we don't think over time, it's been a normal lives.

Speaker Change: Right.

Speaker Change: Just kind of fundamentally it's a great business, it's got a very good market share overall.

Speaker Change: Thank you I would now like to turn the conference back over to unleash Ranjan for closing remarks.

Speaker Change: Overall pretty sticky customer base and the team has done an incredible job on the.

Speaker Change: Operational fronts to streamlining.

Speaker Change: Thank you everyone I look forward to seeing you next quarter.

Speaker Change: The business is run and the cost structure.

Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: And we continue to be very supportive and we think this is an incredible business Scott.

Speaker Change: With regards to customer churn.

Speaker Change: No, yes churn is slightly elevated.

Speaker Change: At the last quarter.

Speaker Change: <unk>.

Speaker Change: Our gross retention rate and the business is still 90%.

Speaker Change: And.

Speaker Change: While we are seeing.

Speaker Change: A little bit more churn, we're also seeing new customers kind of signing on to the.

Speaker Change: The business signed two significant.

Speaker Change: Dealerships last point, there which was.

Speaker Change: Kind of a great outcome.

Speaker Change: So I'd say nothing.

Nothing while turns a bit higher it's not something that we don't think over time, it's going to normalize.

Nik Priebe: Thank you I would now like to turn the conference back over to unleash Ranjan for closing remarks.

Speaker Change: Thank you everyone. We look forward to seeing you next quarter.

Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Okay.

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Speaker Change: Yes.

Speaker Change: Okay.

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Speaker Change: Welcome to the Brookfield business Partners' fourth quarter 2024 results conference call and webcast. As a reminder, all participants are in a listen only mode and the conference is being recorded after the presentation, there will be an opportunity to ask questions.

Speaker Change: To join the question queue simply press Star one one when you touched on phone.

Speaker Change: Now I'd like to turn the conference over to Alan Fleming head of Investor Relations. Please go ahead Mr. Fleming.

Alan Fleming: Thank you operator and good morning.

Alan Fleming: 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 events and results may differ materially for further information on known risk factors I encourage you to review our filings with the securities.

<unk> in Canada, and the U S, which are available on our website.

Alan Fleming: We will begin the call today with an update on business performance and strategic initiatives from a news Ranjan, our chief Executive Officer.

Mark Wallace: Unusual then turn the call over to Mark Wallace, the Chief Executive Officer at <unk>.

Speaker Change: We'll provide an update on the business.

Jeff: And the call, Jeff <unk>, our Chief Financial Officer for a discussion of our financial results. 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 <unk>.

Thanks, Alan and good morning, everyone.

Jeff: You all for joining us on the call today.

Jeff: We had excellent progress over the past year, continuing to build value in our business and strengthening our capital position.

Jeff: Our operations are performing well margins increasing to over 20% to deliver a record full year adjusted EBITDA of $2 6 billion.

Jeff: We've always described our business as a compounding engine, where we buy great businesses for value increasing their underlying cash flows to operational improvements and then recycling capital. When the time is right. Our objective is to do this again and again compounding shareholder value over the long term over.

Over the last 12 months, we've generated more than $2 billion from these capital recycling initiatives, including about $1 billion from monetization to distributions funded by ongoing cash flows in our operations.

Jeff: As many of you are aware, we also recently completed up financing at <unk>.

Jeff: The debt raise was significantly oversubscribed, and we were able to fund a $4 $5 billion distribution.

Jeff: <unk> share of this was about $1 2 billion, which equates to a one five times multiple of our investment and we continue to hold our full interest inquiries.

Jeff: This is a phenomenal outcome for btu.

Jeff: Simply put businesses like <unk> don't come around all that often and as Youll hear from Mark Shortly close has been incredibly strong trajectory of increasing earnings and cash flows and the opportunity to crystallize a strong return while continuing to remain fully invested and clarity will be a meaningful driver of value for btu.

Speaker Change: Proceeds we recently generated put us in a very strong position with significant financial flexibility consistent with our capital deployment priorities. This morning, we announced a new $250 million share buyback program given our trading price. Today. This is an extremely efficient use of our capital, which will be meaningfully accretive to the per unit value of <unk>.

Jeff: Thank you.

Jeff: Plan to be active with our buyback activity, including regular buybacks in the market and the repurchase of blocks if they come up for sale.

Jeff: We're also putting capital to work in new investments, where we believe we can create additional value and generate market leading cash flows returns just yesterday, we completed the acquisition of <unk>, a leading manufacturer of electric heat tracing systems, which we carved out from a larger industrial companies.

Jeff: PV BV huge share of the equity investment was approximately $210 million.

Jeff: <unk> is a specialized products are used to regulate the temperature of types of industrial and commercial applications generates durable cash flows supported by a resilient aftermarket replacement demand across a very large installed base. It is exactly the type of market, leading industrial business and we've been investing in for years and we see lots of.

Jeff: The situation to optimize operations and leverage the strength of the overall Brookfield platform to support the business growth.

Jeff: As we look to the year ahead, the resilience of our larger businesses underpinned by market leadership pricing power and stable Tibet.

Continue to serve us well amid a potential backdrop of geopolitical and economic uncertainty.

Jeff: <unk> also comes from how we invest generating most of our returns through buying good businesses at reasonable prices executing our improvement plans to increase cash flows and recycling the capital to optimize returns.

Jeff: This takes time, but allows us to compound value and generate strong returns across economic cycles.

Jeff: The proof is really in our track record.

Jeff: Since going public we've generated over $6 billion of proceeds from the sale of over 20 businesses. Realizing a three times multiple of our invested capital and a 30% IRR.

Jeff: We're committed to continuing to generate strong returns for our shareholders and we're pleased with the progress we've made over the past year to strengthen our balance sheet, which is enabling us to seize growth.

Jeff: With opportunities and accelerate buybacks all of which is accretive to the intrinsic value of our business.

Speaker Change: I'll now pass the call over to Mark Wallace, Mark as the Chief Executive Officer at <unk> and he has joined US today to spend time talking about the opportunities ahead for this business and the drivers which are underpinning its excellent performance.

Speaker Change: Thank you our news good morning, everyone.

Speaker Change: As a reminder, <unk> is a world leader in energy storage solutions for transportation and.

Speaker Change: And the only global player in the market.

Speaker Change: We have approximately four times larger than our nearest competitor and we have the number one market position in the Americas, Europe and number three in Asia.

Speaker Change: We sell over 150 million batteries per year to over 100 countries supporting virtually every automaker and large aftermarket retailer around the world.

Speaker Change: Often with majority share.

Speaker Change: Our strategic and value driven sustainability leadership is important to our customers and is essential for the future of transportation and the security of our most central resources.

Speaker Change: Our circularity leadership enables critical mineral recovery and reuse by making new batteries out of used ones.

Speaker Change: Making use batteries a nearly renewable resource.

Speaker Change: We embrace critical minerals circularity to better protect our supply chain with 100% of our products designed to be recycled.

Speaker Change: Our low voltage auto batteries are the most recycled consumer product in the United States with recycling rates greater than 99%.

Speaker Change: Popping aluminum paper tires and glass.

Speaker Change: With our strong global position and capabilities. We believe this is and will continue to be a differentiating strength for cargos.

Speaker Change: Approximately 80% of our volume is driven by the high margin resilient aftermarket channel.

Speaker Change: We are involved in the first fit with global automakers.

Speaker Change: Two to four replacements over a typical vehicles what.

Speaker Change: This gives us more than 30 years of visibility into the global battery demand and provides an incredibly durable and sustainable business model.

Speaker Change: The automotive industry is rapidly changing with a continued evolution towards more electrified and connected and automated driving vehicles.

Speaker Change: This shift in technology represents a significant tailwind for our business today and long into the future as we see these new energy vehicles and the aftermarket for multiple battery replacements.

With our powertrain and chemistry agnostic approach, we are well prepared to create the most value for our customers.

Speaker Change: Regardless of the vehicle type architecture or technology advanced low voltage battery solutions are a key component in every vehicle architecture now and into the future.

Speaker Change: With the increased electrification.

Speaker Change: And digitalization of vehicles low voltage battery power and safety demands are growing in line with vehicle power demands at an estimated 15% CAGR.

Speaker Change: This is driving increased demand for more advanced battery solutions.

Speaker Change: Carlos is uniquely positioned to capitalize on the growing demand as we hold approximately 50% of the world's AGM capacity, which when combined with our strong customer relationships and broad chemistry agnostic portfolio and the <unk>.

Speaker Change: <unk> us to lead this industry transition.

Speaker Change: We have the broadest technology portfolio and capabilities in the industry.

Speaker Change: Okay.

Speaker Change: With total systems expertise that enables us to optimize solutions for customers across safety performance and cost.

Speaker Change: We're making excellent progress on advancing our technology portfolio, which is driving strong interest from our customers.

Speaker Change: For example, we recently launched a new high performance AGM battery, which has a significantly improve recharge rate and enables our customers to increase C. O. Two savings in start stop vehicles up to 80% versus a traditional AGM battery.

Speaker Change: We've also brought our E AGM technology to the market, which addresses the higher surge power load requirements and hybrid plug in hybrid and battery electric vehicles.

Speaker Change: In battery electric vehicles. These batteries work in tandem with our high voltage traction batteries to provide the right levels of power and functional safety.

Speaker Change: In addition, we are seeing some very positive developments in our connected services business, combining artificial intelligence machine learning and connectivity for a new level of battery intelligence to increase monitoring and communications.

Speaker Change: We recently secured our first connected services contract with a European heavy duty fleet, operator, providing a solution that can reduce unnecessary engine idling, creating a significant fuel savings and a meaningful reduction in cotwo <unk>.

Speaker Change: As a reminder, <unk> is one of the largest suppliers of low voltage lithium ion solutions and we're continuing to make great progress on our expansion into other chemistries and products, such as sodium ion and Super capacitors as well as software and system solutions.

Speaker Change: Super capacitors will play a complementary role and our low voltage portfolio to support peak power demands.

Speaker Change: Recently secured a significant platform wins for both our 12 and 48 volt supercut passengers.

Speaker Change: With a global automotive manufacturer each.

Speaker Change: Each of the platform also includes an AGM battery and extends into the 20 <unk> and beyond into the aftermarket.

Speaker Change: Our significant technological advancements and customer wins serve as proof points to the execution of our strategy and strong value proposition, we provide direct customers.

Speaker Change: Under Brookfield ownership quarry also solidified its position as the global leader in low voltage battery solution is ideally positioned to capitalize on being at the forefront of automotive electrification trends and growth runway ahead.

Speaker Change: We will continue to invest in high return projects focused in the U S to support our future growth and profitability improvement targets.

Speaker Change: We are accelerating our investments to capture profitable AGM growth, Rob plant productivity and continue our battery innovation and development roadmap.

Speaker Change: We are excited about the opportunity to build on our leadership position by making strategic investments in the U S to expand critical minerals processing and recovery, increasing advanced manufacturing capacity and then maybe the latest manufacturing technologies and our U S facilities.

Speaker Change: We are coming off two years of record financial results supported by our focus on commercial excellence operational efficiency and R&D leadership.

Speaker Change: In the coming years, we expect to continue to execute on this strategy.

Speaker Change: Fitting from a mix shift to advanced batteries, while delivering ongoing cost savings each year from our global operations value creation plans.

Speaker Change: Overall, it's an exciting time at <unk>.

Speaker Change: Rapid transformation to new energy vehicles create a significant tailwind for our business as we invest for the future our earnings and cash flow will continue to grow.

Speaker Change: We are proud for sustained and profitable growth through our leading global market position evolving advanced technology portfolio, and our durable and sustainable business model.

Speaker Change: With that I'll hand, it back to jazz Pete will be available for questions and answers.

Jazz Pete: Thanks, Mark and good morning, everyone.

We generated a net loss of $109 million in 2024, primarily driven by impairments taken in our health care services and natural gas produced there.

Jazz Pete: Results during the quarter also included the impact of the settlement of a legacy pre acquisition class action lawsuit and our dealer software and technology services operation.

Jazz Pete: The settlement will be funded with liquidity within the operation and does not require any additional equity funding.

Jazz Pete: During the year, we recognized $370 million of tax benefits at our advanced energy storage operation.

Jazz Pete: Adjusted EBITDA increased to two 6 billion from $2 5 billion in 2023 supported by stable underlying performance.

Jazz Pete: Adjusted <unk> was one 5 billion, which included $306 million of net gains during the year.

Speaker Change: Turning to segment performance.

Speaker Change: Industrial segment generated full year, adjusted EBITDA of $1 2 billion compared to $855 million in 2023.

Speaker Change: Results benefited from strong performance at our brands energy storage operation driven by the growing demand for high margin advance batteries.

Speaker Change: Actual actions and continued progress on business optimization plan.

Speaker Change: Growing contribution from our Brazilian water and wastewater services operation Ultra system per deadweight ton.

Speaker Change: Prior year included contribution from disposed operations, including our Canadian aggregates production operation, which was sold in June last year.

Speaker Change: Moving to our business services segment, we generated full year, adjusted EBITDA of 832 million compared to $900 million in 2023.

Speaker Change: Prior year included contribution from dispositions, including our field operation, which was sold in July.

Speaker Change: And yesterday, it was 641 million, representing an increase from $636 million in 2023.

Speaker Change: Our residential mortgage insurer continues to perform very well.

Speaker Change: Losses on claims remain below long term historical levels and insurance revenue, it's benefiting from normalizing mortgage rates and increased housing market activity.

Speaker Change: Results at our dealer software and technology services operation reflected higher costs associated with the planned modernisation and technology upgrades to enhance the user experience and service levels.

Speaker Change: Finally, our infrastructure services segment generated full year, adjusted EBITDA of $606 million compared to $853 million in 2023, which included $236 million of contribution from our nuclear technology service operations, which was sold in November two.

Speaker Change: 2023.

Speaker Change: Results benefited from increased contribution from our offshore oil services operation offset by reduced market activity at work access services.

Speaker Change: Turning to our balance sheet.

Speaker Change: I think rich mentioned, we're in a great financial position today.

Speaker Change: We ended the year with.

Speaker Change: $2 7 billion pro forma liquidity at the corporate level, which includes the recently announced acquisitions and realization.

Speaker Change: This liquidity provides us significant optionality to support our capital allocation priorities, including the reduction of borrowing at the corporate level.

Speaker Change: Opportunistically repurchasing our unit.

Speaker Change: Investing in strategic acquisitions to support our growth.

Speaker Change: More specifically, we expect about one 5 billion of proceeds from the recently closed sale of Alterra shuttle tanker operations combined with our share of the distribution from <unk>.

Speaker Change: We're launching a 250 million repurchase program, which at our current trading level will increase the per unit share value of our business.

Speaker Change: With that I'd like to close our comments and turn the call back over to the operator for questions.

Thank you as a reminder to ask a question. Please press star one one of your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: Our first question comes from the line of Devin Dodge with BMO capital markets. Your line is now open.

Speaker Change: Yes. Thanks, good morning, everybody. So let me start with a question for Mark.

Speaker Change: But there has been really good momentum in the shift towards more advanced batteries in your sales mix, but.

Speaker Change: But I think there's also a potential shift towards more <unk> content per vehicle. So I was wondering if you could frame that opportunity where you're at now and where you think this could get to over time.

Speaker Change: Yes, good morning first of all.

Speaker Change: As I mentioned in my prepared comments with a very large win by adding super capacitors to our portfolio. We've actually increased our content per vehicle for that entire platform significantly we expect that to be an ongoing trend because as vehicles continue.

Speaker Change: Two increased electrical demand on the low voltage network.

Speaker Change: But also provide more autonomous features which means you need higher levels of functional safety, you're going to see multiple energy storage devices used on vehicles into the future. So I expect that not only will our OEM. So our new auto production business continued to grow in content per vehicle, but that will also directly translated.

Speaker Change: And to an increase in our aftermarket content as well.

Mark Wallace: Okay. Okay, and then maybe just another one for you Mark an honest look at.

For the two plus billion our planned investments in the U S. Over the next decade could you just provide some context for where you see those dollars getting allocated and if it's more tied to support the ongoing shift of better technologies or a broader increase in domestic capacity.

Mark Wallace: Yes, so a couple you've kind of hit on a lot of those but number one we have 16 facilities in the U S. Today. So number one we want to modernize or continue modernizing our footprint, which includes higher levels of automation, but also the use of artificial intelligence and machine learning.

Mark Wallace: And as we do that we also have to spin opex as well. So one we've got to modernize our workforce to be able to manage in those facilities of the future.

Mark Wallace: Second we have to increase capacities as the demand for advanced batteries is growing at the fastest rate in the United States. So we will continue deploying capital there to support the growth and to be able to take care of our customers.

Mark Wallace: Next as you can imagine with that increase we also as a role as leader when it comes to circularity, we want to increase our ability to recycle domestically here in the U S.

Mark Wallace: A few things about recycling number one it's the right thing to do for the environment right. Because our batteries are designed in such a way that we can recover up to 99% of the materials and those batteries.

Mark Wallace: Second it provides us a better cost structure.

Mark Wallace: From a profitability perspective, and lastly, when you think about critical minerals it allows us to.

Mark Wallace: Capture those critical minerals and keep those in our domestic supply chain for benefit.

Mark Wallace: For our U S economy.

Mark Wallace: Lastly, thinking about leapfrog technologies, there's lots of discussions about various lithium.

Mark Wallace: Chemistries in the world, but as you know most all of those are somehow connected to.

Mark Wallace: Fly changed we would consider to be very difficult to deal with geopolitically.

Mark Wallace: Think about leapfrog technologies, such as Saudi my on from an R&D and production.

Mark Wallace: Investment levels, because that can really help the U S and other western economies.

Mark Wallace: And new ways to have energy storage is not connected to Chinese supply chains in the future.

Speaker Change: Okay excellent excellent color there thanks for that and then just one last one.

Speaker Change: I just wanted to ask about scientific games.

Speaker Change: Financial leverage.

Speaker Change: To be at the higher end of the range for this business.

Speaker Change: I think I think it was mentioned that there were some commercial wins, but I believe there may be some larger potential growth opportunities on the horizon that may require some relative.

Speaker Change: Relatively sizable upfront investments. So the question is does the financial leverage of the business impact the ability to pursue those growth opportunities and can the business self fund those contracts. So we're a btu and others need to contribute more capital.

Speaker Change: Hi, Devin that stress create.

Adrian: Maybe start and then ask Adrian to add right.

Speaker Change: Miss anything.

Speaker Change: So scientific games as you know is an incredible business and as Scott.

Speaker Change: Contracts with their customers.

Charity of their customers are long term high retention rates.

Speaker Change: The business generates very kind of stable.

EBITDA and cash flow, while we saw kind of early in our investment a couple of years ago. Some spike in costs as the business has been able to implement a number of operational improvements, which now puts the business I mean, even better position us going forward to kind of manage the cost side.

Speaker Change: And.

Speaker Change: So the underlying performance and cash flow profile of the business is strong.

Speaker Change: And it has the ability they've been very active bidding new commercial opportunities across the globe, including in the U S.

Speaker Change: The more sizable widens.

Speaker Change: <unk> has been the UK lottery operations, which we've talked about in the past more recently.

Speaker Change: Contract in Ohio and.

Speaker Change: These contracts take a little bit of time and capital investment to onboard and get started but all of those.

Speaker Change: Or to be funded within the business and the businesses kind of accounts for that when the bid on the contract and they went on the contracts. So the business is very much self sustaining and quite frankly setup in an excellent position to continue to kind of program.

Speaker Change: Okay excellent. Thank you for that I'll turn it over.

Gary Ho: Our next question comes from the line of Gary Ho de Jordan <unk> capital markets. Your line is now open.

Gary Ho: Okay. Thanks. Good morning, maybe first question for Mark as well, it's just great to have you on the call.

Gary Ho: Listening to your presentation at the CES event recently.

Speaker Change: Increased by what Youre doing on the connected service solution side for fleet operators.

Speaker Change: Here you have signed on the European fleet client so what's the opportunity here do you see any of your.

Speaker Change: Competitors, introducing similar technology as well and what's the pipeline look like today.

Speaker Change: First of all good morning.

Speaker Change: As we noted that.

Speaker Change: CES and obviously on our prepared remarks. This morning that we do have contractual agreement now with the European heavy duty truck.

Speaker Change: Fleet.

Speaker Change: So first and foremost the services, providing that fleet customer come.

Speaker Change: Via our unique ability to leverage our battery algorithms and be able to look at the vehicle the <unk>.

Speaker Change: Charge rate of the battery itself and be able to tell the drive of the vehicle or the fleet owner when is the right time to start to vehicle and when is the right time to turn the vehicle back off.

Speaker Change: By doing that and having unique software in the cloud we can actually reduce for that particular fleet customer 40% of their idling and so as you can imagine that translates into well more than 1000.

Speaker Change: Euros per year of fuel savings, but also a significant reduction in greenhouse gas emissions. So when we think about connected services going forward from <unk> perspective, we want to make sure we're bringing true value to our customers. So in this particular case more than 1000 euros fuel savings per year per truck, but also now.

Speaker Change: Carrying that into other applications, such as being able to predictably tell a fleet owner, but they may have a defective battery that could cause a what we call a roadside that their avoids a significant.

Speaker Change: Charge that would be.

Speaker Change: Obviously.

Speaker Change: The fleet owner to have the truck service on the side of the road and more important blayne freight. So we see this as a continued evolution, we're working with others in Europe now and more importantly, also we're expanding working now with U S fleet owners as well so so more to come on the connected services. We are quite pleased with the progress we've made but more importantly, we're bringing true value to.

Speaker Change: Our customers.

Speaker Change: Great. Thanks for that and then maybe two.

Speaker Change: Few questions on the buyback capital allocation can.

Speaker Change: Can you remind me whats Brookfield Corp's ownership of BB U is today I think last number I saw was around 66% do they intend to be part of that $250 million buyback or is that just all <unk> that will be buying back stock and canceling the shares and then just for you just posted a dividend recap Clare.

Speaker Change: Are you at a level that youre comfortable with at the corporate.

Speaker Change: Side or will you intend to reduce that further.

Speaker Change: Okay.

Speaker Change: Hi, Thanks for your question so yes.

Speaker Change: You are right.

Speaker Change: Brookfield ownership is circa 65, 66%.

Speaker Change: The buyback program is specifically focused on buying back in the open market any bulk sales that come on.

Speaker Change: And we will be buying those.

Speaker Change: Canceling them in treasuries.

Speaker Change: For PV, you buy back focused on the Nielsen markets.

Speaker Change: Yeah.

Speaker Change: From a liquidity perspective.

Speaker Change: We are in an excellent position now.

Speaker Change: At least we've talked about this before from a capital allocation perspective.

Speaker Change: Wanted it to.

Speaker Change: The pay down some of our working capital facility.

Speaker Change: Facilities like these were always meant to be bridge lines that before too.

Speaker Change: The bridge monetization than acquisition activity.

Speaker Change: With the proceeds that are coming in from <unk> care.

Speaker Change: Hello.

Speaker Change: Using part of these proceeds to pay down the line and I think it puts us in an excellent position.

Speaker Change: Pro forma liquidity of $2 7 billion and I think that.