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DATE

Friday, May 8, 2026 at 11 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Anuj Ranjan
  • President — Stuart Levings
  • Chief Financial Officer — Jaspreet Dehl
  • Operator

TAKEAWAYS

  • Clarios Cash Tax Credits -- Clarios received $1 billion in cash tax credits for fiscal 2025, with management stating similar amounts are expected annually through the end of the decade.
  • La Trobe Financial Partial Sale -- Sold a 27% stake in La Trobe Financial at a $2 billion valuation, generating a 3x multiple of invested capital and a 35% IRR, with $1 per share in realized cash.
  • DeployCo Investment -- Committed to lead a $500 million venture with OpenAI for enterprise AI deployment; Brookfield Business Corporation’s share is approximately $150 million, structured as a preferred instrument with a stated minimum return "in the high teens—above the 15% that we target," according to Ranjan.
  • Trading Activity Post-Simplification -- Daily trading volumes increased by 40% following the corporate simplification completed in March, with management anticipating roughly 5 million shares of incremental index demand from rebalancing in coming months.
  • Adjusted EBITDA -- Adjusted EBITDA was $582 million compared to $591 million in the prior period; excluding tax credits and portfolio changes, adjusted EBITDA increased roughly 5% year over year.
  • Adjusted EFO -- Adjusted EFO totaled $279 million, down from $345 million in the prior period, with the prior figure including a $114 million gain from a prior asset disposition.
  • Industrial Segment EBITDA -- Industrial adjusted EBITDA reached $320 million, up from $304 million; on a same-store basis, the increase was 7% year over year, driven by advanced battery mix and margin expansion at the engineered components unit despite softer volumes.
  • Business Services Segment EBITDA -- Business Services generated adjusted EBITDA of $208 million, down from $213 million, yet delivered 7% same-store EBITDA growth year over year, bolstered by mortgage insurance and software operations.
  • Infrastructure Services Segment EBITDA -- Adjusted EBITDA for Infrastructure Services was $90 million versus $104 million; the decline reflects divestitures, with growth from new contracts and modular building sales within remaining operations.
  • Liquidity -- Pro forma corporate liquidity stood at $2.4 billion, including the fair value of units from asset sales; $43 million of units were reduced during the quarter.
  • Buyback Activity -- Completed a $250 million buyback program initiated in February, with total share repurchases since launch reaching $285 million, including $65 million post-quarter-end.
  • Sagen Return on Equity -- Sagen’s return on equity surpassed 20%, compared to low double digits at acquisition, fueling distributions to shareholders at "approximately $400 million of annual distributions on a full-cycle run-rate basis", according to Levings.
  • Sagen Loss Ratio -- Sagen’s loss ratio rose to 12% from recent levels near 5%, which Levings attributed primarily to "house prices have been declining" and greater loss given default in recent vintages; frequency of delinquencies has not meaningfully increased.
  • Long-term Sagen Loss Ratio Target -- Levings stated, "our long-run pricing loss ratio is in the 15% to 20% range," while asserting Sagen expects to remain "comfortably below that this year."
  • Portfolio Quality Metrics -- Sagen’s newly originated loans maintained a portfolio skewed toward high credit quality, with a "significant portion [with a credit score] greater than 760," and about 80% of insured mortgages backed by fixed rates, supporting payment stability.
  • BRK Brazilian Concession -- BRK secured a new concession in northeastern Brazil; Dehl noted initial financial contribution is modest, but management expects "it will be a pretty significant part of the overall business" once ramped.
  • BRK Monetization Plan -- Management reaffirmed the intent to pursue an IPO of BRK in Brazil when market conditions allow, citing recent stabilization and interest rate cuts from 15% to about 13.5%.
  • Clarios Value Bridge -- Dehl described Clarios as about 30% of NAV (roughly $15 per share), generating $2.3 billion in trailing twelve months’ EBITDA and targeting more than $3 billion EBITDA, $8 billion of cash, and $26 billion equity value over five years, implying a potential doubling of per-share contribution.
  • Pending IRS Refund -- The $1 billion 2024 Clarios cash tax credit remains uncollected but is anticipated "as part of this process," with no negative IRS feedback received.
  • NCIB Flexibility -- Management affirmed intent to remain opportunistic on share repurchases under the Normal Course Issuer Bid program, balancing other capital allocation priorities.
  • OpenAI Partnership Rights -- Brookfield’s agreement with DeployCo does not restrict investments in deployment of other AI models across its portfolio.
  • Sagen Mortgage Rules Impact -- Management cited that eligibility rule changes expanding amortizations to 30 years and price caps to $1.5 million produced "a significant increase" in insured mortgage volumes in 2025, with continued above-market activity among first-time buyers in 2026.

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RISKS

  • Sagen’s loss ratio increased to 12% from prior low levels due to home price declines and larger loss given default in 2022 and 2023 vintages; Levings indicated "That is the primary driver of the uptick in the loss ratio." and noted normalization toward the 15%-20% long-term target range may occur.

SUMMARY

Brookfield Business Corporation (BBUC 8.21%) delivered major monetization activity with the $2 billion partial sale of La Trobe Financial and a landmark $1 billion cash tax credit at Clarios, with management confirming that similar cash tax credits are expected annually through the end of the decade. Management completed a $250 million share buyback, reported elevated corporate liquidity of $2.4 billion, and disclosed significant advances in portfolio AI adoption through a $500 million commitment to the OpenAI partnership, positioning the company for ongoing operational transformation. Sagen’s loss ratio increased in response to home price declines, but a conservative capital profile and above-target return on equity bolster confidence in continued strong shareholder distributions. BRK’s new Brazilian concession and management’s reaffirmed IPO plan reflect continued portfolio investment and monetization themes.

  • Levings detailed that a "stress test that builds in a cushion for affordability in a rising rate environment" applies to all Sagen mortgage insurance borrowers, reducing systemic credit risk exposure.
  • Dehl reported asset turnover, with prior-period EFO of $345 million including a $114 million one-time gain from the sale of offshore oil services assets, clarifying comparability of underlying recurring profitability.
  • Ranjan emphasized that AI value creation is expected to benefit from "access to leading technology at very early stages" and the ability to "implement these latest AI technologies across our portfolio companies in BBUC."
  • The completed trading simplification and anticipated "5 million shares of incremental demand" are positioned to boost future trading liquidity and index inclusion demand.
  • The NCIB program remains active, with management taking an opportunistic approach to further buybacks beyond recent execution.

INDUSTRY GLOSSARY

  • Adjusted EFO: Economic net operating income, a non-GAAP measure of recurring cash earnings used by Brookfield Business Corporation to assess profitability after adjusting for major nonrecurring gains and portfolio changes.
  • NCIB: Normal Course Issuer Bid; a regulatory program that permits a public company to repurchase its own shares on the open market in line with regulatory limitations.
  • DeployCo: Joint venture platform formed with OpenAI and others to deploy enterprise AI technologies at scale within operating businesses, with Brookfield as a preferred investor.
  • Stress test (mortgage insurance): Mandatory assessment process in Canada to ensure borrowers can meet debt obligations under higher interest rate scenarios as required by regulators.
  • BRK: BRK Ambiental, Brookfield’s Brazilian water and wastewater services subsidiary, referenced as a key portfolio business with new concessions and IPO plans.

Full Conference Call Transcript

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

We also completed our corporate simplification in March and, since closing, our daily trading volumes are up 40% compared to average levels last year. We are anticipating about 5 million shares of incremental demand from index rebalancing over the next few months, both very important steps towards improving the trading liquidity and index demand of our shares. Let me touch on a few of the defining highlights of the quarter in more detail. Starting with Clarios, which received its fiscal 2025 cash tax refund of $1 billion in March tied to its U.S. production in the critical minerals sector.

This is equivalent to about $1.50 per share of Brookfield Business Corporation, and we expect these credits will continue annually through 203[inaudible]. Today, Clarios is our largest and most valuable business, and with the investments it is making to expand production capacity and scale its critical minerals capabilities, we see a path to the value of our investment in Clarios doubling over the next five years. In addition, during the quarter, we reached an agreement to sell a minority interest in La Trobe Financial at a $2 billion valuation. Since we bought the business, we transformed it from a mortgage lender to a leading asset manager in Australia and increased its AUM from $10 billion to $16 billion.

This sale realizes $1 per share in cash and results in a 35% IRR and a 3x multiple of our capital. In a market that is increasingly appreciating critical cash-generative industrial and services businesses, we expect our monetization activity to continue. The sale of La Trobe is the latest example of our strong track record of value creation built on a simple approach of buying, building, and operating vital industrial and services businesses. When the right moment arrives, we monetize to realize value and we redeploy that capital into new opportunities to fuel our engine and continue compounding value at scale.

We recently did just that, committing to lead a $500 million Brookfield investment in DeployCo alongside OpenAI and a group of global investors. Our share of the investment is expected to be about $150 million. Stepping back, AI adoption is moving quickly, and returns will not only accrue to those who build the models, but to those who can deploy them at scale inside real operating businesses against real P&L. This requires operating capabilities, proprietary data, technical talent, and experience running and transforming industrial and services businesses. DeployCo is focused on enabling large organizations to move pilot use cases to full enterprise-wide implementation, addressing one of the primary bottlenecks in realizing AI-driven productivity.

The platform will combine engineering talent, a strong commercial relationship with OpenAI, early access to models, and the capabilities of best-in-class operators like ourselves to deploy AI at scale. With more than 300 operating companies across the Brookfield ecosystem, we have a direct line into where AI creates value, and, importantly, where it does not. We have already been using AI in our own businesses as the latest tool to accelerate transformation, enhance growth, and drive efficiencies. We expect to draw on DeployCo’s capabilities to drive even harder in these areas to automate workflows, improve decision-making, and capture meaningful productivity gains in our own operations.

As we look forward, the market for what we do is as attractive as it has been in the industry. Demand for essential services and industrial businesses has rarely been stronger, and we have the capital, capabilities, and the expertise to execute. We are in an excellent position to build on a strong start to the year and continue compounding capital for our shareholders. With that, I will turn it over to Stuart.

Stuart Levings: Thank you, Anuj, and good morning, everyone. I will start with some comments on our resilient business model, and then provide an update on the overall Canadian housing market and how Sagen is performing in the current environment. As a reminder, Sagen is the leading private mortgage insurer in Canada operating in a highly concentrated, regulated market with only three providers and significant barriers to entry. Mortgage insurance is mandatory for homes purchased in Canada with a down payment of less than 20%, making this an essential service for our customers. The business model generates strong margins and returns on equity that have proven to be resilient through prior housing and economic cycles.

During Brookfield’s ownership, we have grown our market share, repositioned the investment portfolio, reduced our expense ratio, and optimized the capital efficiency of the business. As a result, our return on equity has expanded from low double digits at acquisition to over 20%, allowing the business to provide meaningful distributions to shareholders, including Brookfield Business Corporation. That resilience is particularly important given the backdrop of the current Canadian housing market. To put that in context, the average house price in Canada has declined by 20% since early 2022 due to weaker sales activity driven by higher interest rates, constrained affordability, and lower consumer confidence. This has continued into the start of the year.

We believe several factors, including continued undersupply of housing and modest improvements in affordability, coupled with stable interest rates and a renewed focus on housing support from the federal government, should provide a floor to home prices over time. Any improvement in the trade and geopolitical outlook should also bode well for a housing market recovery. Against that backdrop, Sagen continues to perform well. Our borrowers are typically first-time homebuyers, and this cohort has been more resilient and active over the past 12 to 18 months relative to the overall market. This is due in large part to the additional support provided by the change in mortgage insurance eligibility rules introduced in late 2024.

Specifically, the increase from 25- to 30-year amortizations and from $1 million to a $1.5 million price cap. These changes drove a significant increase in the volume of insured mortgages during 2025, and while their pace has slowed, this segment of homebuyers was still more active than the general market during the first quarter of this year. We have also maintained a consistent focus on high-quality loans and a well-diversified portfolio, facilitated by our rigorous underwriting process. The average credit score of newly originated loans remains high, with a significant portion greater than 760. Approximately 80% of the insurance portfolio is backed by fixed-rate mortgages, providing borrowers with payment stability.

The majority of the remaining variable-rate mortgages have constant payments where only the mix between principal and interest is impacted by fluctuations in rates, thereby providing a similar degree of payment stability. In addition to the quality of our insurance portfolio, strong oversight and regulation including mandatory loan amortization, full borrower recourse, and debt service stress tests for all insured borrowers serve to mitigate the risk of borrower default. For example, all insured borrowers in Canada are subject to a stress test that builds in a cushion for affordability in a rising rate environment, and insured borrowers facing financial hardship can extend their amortizations under our loan modification program.

As a result, losses in our business are primarily driven by two factors. The first is unemployment, which drives the frequency of delinquencies. The second is the change in home prices, which influences the degree of loss given default. We see both of these factors as manageable in the current environment. Overall unemployment has remained relatively stable and, importantly, unemployment in Sagen’s core homebuying cohort—typically dual-income households between 25 to 54 years of age—has been quite resilient. Second, after a period of exceptional home price appreciation where borrowers have built significant embedded equity in their homes, the loan-to-value profile and loss ratio performance of our portfolio is now returning to more normalized levels in line with our long-term expectations.

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

Jaspreet Dehl: Thanks, Stuart, and good morning, everyone. We generated first-quarter adjusted EBITDA of $582 million compared to $591 million in the prior period. Current-year results reflect the impact of lower ownership in three businesses and include $27 million of contributions from new acquisitions. Excluding tax benefits and the impact of acquisitions and dispositions, adjusted EBITDA was up approximately 5% compared to the prior year. Adjusted EFO for the quarter was $279 million compared to $345 million in the prior period. Prior-period adjusted EFO included a $114 million net gain from the disposition of our offshore oil services shuttle tanker operation. Turning to segment performance, our Industrial segment generated first-quarter adjusted EBITDA of $320 million compared to $304 million last year.

Excluding the impact of acquisitions, dispositions, and tax benefits, segment performance increased by 7% compared to the prior year. Performance at our advanced energy storage operations was supported by the ongoing mix shift toward higher-margin advanced batteries, partially offset by the impact of slightly lower overall volume. Results at our engineered component manufacturer increased more than 10% on a same-store basis compared to the prior period, benefiting from recent commercial actions and increased margins despite end-market softness. Moving to our Business Services segment, we generated first-quarter adjusted EBITDA of $208 million compared to $213 million last year. On a same-store basis, adjusted EBITDA increased by 7% over the prior year.

Results reflect solid performance and realized gains at our residential mortgage insurer, which continues to generate strong returns. Performance at our dealer software and technology services operation is supported by contractual annual price increases as the business continues to make strategic investments toward strengthening its customer service and product offering. Finally, our Infrastructure Services segment generated first-quarter adjusted EBITDA of $90 million compared to $104 million last year. Prior results included contributions from our offshore oil services shuttle tanker operation, which was sold in January 2025, as well as the impact of the partial sale of our work access services operations completed in July 2025.

Results at our lottery services operations are supported by the ramp-up of recently secured contracts and growing share with existing customers. Performance at our modular building leasing services operation benefited from increased sales of value-add products and services. Turning to our balance sheet and capital allocation priorities, we ended the quarter with $2.4 billion of pro forma liquidity at the corporate level, including the fair value of units we received in exchange for the partial sale of interests in some of our businesses. During the quarter, $43 million of the units we received were reduced. Our strong liquidity position gives us significant flexibility to support our growth and balance capital allocation priorities.

During the quarter, we completed the $250 million buyback program launched in February. Since that time, we have deployed approximately $285 million toward repurchases, including $65 million of repurchases during and subsequent to quarter-end. Going forward, we expect to remain opportunistic under our NCIB program, balancing buybacks with our other capital deployment opportunities. We will now open the call for questions. With that, I would like to turn the call back to the Operator.

Operator: Certainly. As a reminder, ladies and gentlemen, if you would like to ask a question, please press 1-1 on your telephone keypad. Our first question comes from the line of Bart Dziarski from RBC Capital Markets. Your question, please.

Bart Dziarski: I wanted to ask around Sagen. Stuart, thanks for joining the call this morning. We saw the loss ratio increasing to 12%. The last few years, it has been running around 5%. Could you give us a bit more detail as to what drove the reserve strengthening that was described in the MD&A? And then I heard you mention normalization to the long-term targets. Could you remind us what those long-term target loss ratios are? Thanks.

Stuart Levings: Yes, certainly. Thanks for the question. Principally, what is driving the loss ratio higher is that the loss given default has increased a little bit more on recent delinquencies, and that is because house prices have been declining, as I noted in my comments. Frequency has not materially picked up. Unemployment, as you know, is the biggest driver of that, and that has been relatively stable. But certainly, in the books where we are seeing some pressure—which would be the 2022 and 2023 vintages—there is not as much equity, and so the loss given default there is larger. That is the primary driver of the uptick in the loss ratio.

That said, we do not see the loss ratio migrating a lot higher this year. Our long-run pricing loss ratio is in the 15% to 20% range, and I think we will be comfortably below that this year. Over the longer term, it will trend back toward that 15% to 20% only because we are coming out of abnormally low loss environments. We saw incredibly strong house price appreciation and very strong employment, so we cannot look at the prior years of single-digit loss ratios as being normal. All that said, keep in mind there are tremendous capital buffers in the business, and we do not anticipate any impact on our ability to maintain our annual distributions.

The business is built to handle the kind of economic volatility that we see right now.

Bart Dziarski: Great. Very helpful. Thanks for the color. And then a follow-up on—or I guess a question around—Clarios. Anuj, you expressed confidence around the value doubling over the next five years. Could you help us understand the key value levers to drive that increase? And you have held this asset since 2019, so how should we think about where that value accrues to in terms of whether you expect to hold it for another five years or look to surface that value via exit? Thanks.

Anuj Ranjan: Sure, thanks. I will start, then I will get Jaspreet to chime in on the bridge to value creation. I would say this is an incredible business. It generates a lot of cash flow. It is a real market leader. The shift that we are seeing to advanced, or absorbent glass mat, batteries is an area in which Clarios is gaining more market share and achieving higher margins as well, and so everything is going the right way and on the right trend. Layer into that some of the tax credits that we are now receiving and the greater certainty we have around them going forward, this is an incredible business to continue to hold.

We think it will continue to generate significant cash flow that the business can invest in, use to delever, and, in time, use to pay dividends. This is one of our real cash compounders—the kind we aspire for all of our businesses to eventually become. Therefore, we are in no hurry to exit, given the cash profile we see in the near term and coming years. However, of course, we are always opportunistic and thinking about value, and if the market recognizes the value in the company that we see, and the cash it generates in our hands, we will keep our options open.

I will turn it over to Jaspreet on how we see the value doubling over the next few years.

Jaspreet Dehl: Thanks, Anuj. Hi, Bart. Keeping it high level and simple, as we discussed at investor day, based on our view of NAV today, Clarios is about 30% of our NAV value, which implies about $15 per share. On an LTM basis, the business is generating about $2.3 billion of EBITDA. If you take a conservative view on annual EBITDA growth—say, mid-single digits—the business, which has comfortably been delivering that, could exceed $3 billion in five years. We view this as a 9x to 10x multiple business. On $3 billion of EBITDA, that is about $30 billion of enterprise value.

With the cash flow generation organically in the business, plus the impact of the tax credits, over the next five years the business can generate circa $8 billion of cash. When you take that cash against where debt is today, which is about $11 billion, $8 billion of cash generation over the next five years brings net debt down to significantly lower than $4 billion. So on $30 billion of enterprise value and $4 billion of net debt, you have equity value of approximately $26 billion. That, when you take to BBUC’s share, basically doubles that $15 per share contribution from Clarios. There are a lot of numbers there, but that is the bridge.

Operator: Thank you. Our next question comes from the line of Devin Dodge from BMO Capital Markets. Your question, please.

Devin Dodge: Yes, thanks. Good morning. I wanted to start with some questions on DeployCo, the AI deployment platform you talked about, Anuj. This is a bit of a different investment for Brookfield Business Corporation, as it does not come with a control position. A two-part question: first, can you speak to the role or influence that Brookfield will have at that business? And second, is DeployCo primarily an advisory-type business, or will some of the invested capital be used to acquire technology and equipment?

Anuj Ranjan: Sure. Hi, Devin. Happy to take that. As you know, we have been talking for many years now about AI’s role in transforming more traditional operating businesses—the real bedrock of the global economy. The real bottleneck is not the technology or capital; it is change management—the ability to deploy AI at scale. OpenAI has also recognized this. The demand for their enterprise solutions far exceeds the ability to actually deploy them in enterprise, and so they saw an opportunity to create a vehicle—an advisory and services business—to implement AI and these solutions in enterprise businesses at scale. For us, first, as an investor, we thought that opportunity was very exciting.

We believe in it and have seen it firsthand while operating companies. We know the opportunity is real and that this is a business that can scale dramatically. Second, we have structured our investment as a preferred instrument, which gives us a lot of downside protection. We will earn returns in excess of our 15% target, and we are very comfortable with that, while retaining meaningful upside if, with our partners—OpenAI and others—we are able to scale it. Third, as an owner of operating businesses, we see this as an opportunity to benefit from what the OpenAI deployment company will do.

We will have access to leading technology at very early stages, and access to the talent required in the OpenAI deployment company to implement these latest AI technologies across our portfolio companies in BBUC. This is a huge advantage that we think will pay dividends across the portfolio. We signed an agreement to invest $500 million, of which about $150 million is BBUC’s share. In terms of governance, we are a minority investor with a preferred instrument that has a minimum return in the high teens—above the 15% that we target—so we are quite comfortable. We have standard minority governance that you would expect in a business like this.

Devin Dodge: Great color there, Anuj. Appreciate that. One quick follow-up: does the agreement for this JV limit Brookfield’s ability to invest in the deployment of other AI models?

Anuj Ranjan: No, it does not. We will always use whatever is the best tool or technology for our portfolio companies, or as they see fit. This just gives us an additional benefit to access technology early, as well as the talent and change management capability to implement it in our companies.

Operator: Thank you. Our next question comes from the line of Scott Fletcher from CIBC. Your question, please.

Scott Fletcher: Hi, good morning. I wanted to ask a question on BRK. I believe it was awarded a new concession earlier this week. How meaningful could that be for the business? And then, as it relates to BRK, is there any update on the monetization front? We have seen a couple of interest rate cuts in Brazil, which I am assuming should be helpful for buyer interest down there.

Jaspreet Dehl: I will take that. You are right—towards April, BRK won a new concession in the northeastern part of Brazil. As you are aware, it takes time to ramp up these concessions. It does represent a meaningful win for the business, and we think over time it will grow substantially and add to the overall portfolio and the earnings power of the business. It is small today, but once fully ramped up, we expect it will be a pretty significant part of the overall business.

Scott Fletcher: And on the monetization front, any update there?

Jaspreet Dehl: We are continuing to focus on monetizing the business. As we have talked about before, our base case is still an IPO. We think this is an incredible business that would make a great public company. The market environment in Brazil has been choppy, but it is stabilizing. Interest rates were at record highs around 15%. We have seen a few interest rate cuts and are sitting at about 13.5% now, which is going in the right direction. Our view would be to still do an IPO of this business when we have the right market window.

Scott Fletcher: Got it. Appreciate the color. I will turn it over.

Operator: Thank you. Our next question comes from the line of Scott Fletcher from CIBC. Your question, please.

Scott Fletcher: Hi again. I wanted to ask a question on CDK. There have been some headlines around the creditors there. From a bigger-picture perspective, with the price where the bonds are, it would imply the equity is under some pressure. In a situation like this, what is your general approach to getting as much value as you can out of a situation like this?

Jaspreet Dehl: Hi, it is Jaspreet. Maybe I can get started. Our general approach is that we look to make investments that generate our 15% to 20% targeted returns. We have an incredible operating team that works with all of our businesses to create value, and we have built an incredible track record not only over 25 years of doing this, but also over the last 10-plus years as a public company. Having said that, every once in a while there are situations that do not go our way or in line with our expectations and underwriting. We have dealt with them from time to time. Our approach is always value preservation.

When we underwrite a business, we are underwriting to a base case and upside, but also a downside case. In every situation, we want to protect and preserve our capital and be able to eke out a return on the investment even when things do not go according to plan. When we do get into those situations, we put our shoulder behind it, add focus, swarm the business, and put our best people on it to work through the situation.

You have seen that journey in one of our businesses, Altera, where we were in a very difficult situation given what was going on broadly in the market, and we worked hard to turn that around and return the majority of our capital. All of my comments are our general approach to difficult situations and not specific to CDK or any other business.

Scott Fletcher: Thanks, I appreciate the comments. I understand the situation is hard to comment on specifically. One clarification on the tax credits—both were for the 2025 year that was received. Is there any additional clarity on the 2024 credits, which I think are still pending?

Jaspreet Dehl: Yes. We received the $1 billion for 2025, and the 2024 credits are still under processing at the IRS. We have not received any feedback to indicate that the refund should not be coming as part of this process. The basis of that credit is no different from the 2025 credits. As Anuj said in his opening remarks, we feel very confident about our eligibility for the credits through the end of the decade.

Scott Fletcher: That is good news for sure. Thank you for the answers. I will pass the line.

Operator: Thank you. This does conclude the question-and-answer session of today’s program. I would like to hand the program back to Anuj for any further remarks.

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

Jaspreet Dehl: Thank you.

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