Brookfield Business Corporation
08/08/2025 | Press release | Distributed by Public on 08/08/2025 04:01
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF BROOKFIELD BUSINESS CORPORATION (Form 6-K)
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF
BROOKFIELD BUSINESS CORPORATION
As at June 30, 2025 and December 31, 2024 and for the
three and six months ended June 30, 2025 and 2024
1
INDEX TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS OF BROOKFIELD BUSINESS CORPORATION
| Unaudited Interim Condensed Consolidated Statements of Financial Position |
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| Unaudited Interim Condensed Consolidated Statements of Operating Results |
4
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| Unaudited Interim Condensed Consolidated Statements of Comprehensive Income (Loss) |
5
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| Unaudited Interim Condensed Consolidated Statements of Changes in Equity |
6
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| Unaudited Interim Condensed Consolidated Statements of Cash Flow |
7
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| Notes to Unaudited Interim Condensed Consolidated Financial Statements |
8
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2
BROOKFIELD BUSINESS CORPORATION
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION
| (US$ MILLIONS) | Notes | June 30, 2025 | December 31, 2024 | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Current Assets | ||||||||||||||||||||
| Cash and cash equivalents | 3 | $ | 613 | $ | 1,008 | |||||||||||||||
| Financial assets | 4 | 138 | 167 | |||||||||||||||||
| Accounts and other receivable, net | 6 | 1,254 | 1,337 | |||||||||||||||||
| Inventory, net | 26 | 52 | ||||||||||||||||||
| Other assets | 7 | 252 | 371 | |||||||||||||||||
| 2,283 | 2,935 | |||||||||||||||||||
| Non-Current Assets | ||||||||||||||||||||
| Financial assets | 4 | 152 | 186 | |||||||||||||||||
| Accounts and other receivable, net | 6 | 1,980 | 1,892 | |||||||||||||||||
| Other assets | 7 | 265 | 256 | |||||||||||||||||
| Property, plant and equipment | 8 | 181 | 2,480 | |||||||||||||||||
| Deferred income tax assets | 236 | 197 | ||||||||||||||||||
| Intangible assets | 9 | 5,980 | 5,966 | |||||||||||||||||
| Equity accounted investments | 11 | 187 | 198 | |||||||||||||||||
| Goodwill | 10 | 5,018 | 4,988 | |||||||||||||||||
| $ | 16,282 | $ | 19,098 | |||||||||||||||||
| Liabilities and Equity | ||||||||||||||||||||
| Current Liabilities | ||||||||||||||||||||
| Accounts payable and other | 12 | $ | 2,133 | $ | 2,990 | |||||||||||||||
| Non-recourse borrowings in subsidiaries of the company | 14 | 114 | 111 | |||||||||||||||||
| Exchangeable and class B shares | 5 | 1,815 | 1,709 | |||||||||||||||||
| 4,062 | 4,810 | |||||||||||||||||||
| Non-Current Liabilities | ||||||||||||||||||||
| Accounts payable and other | 12 | 848 | 2,286 | |||||||||||||||||
| Non-recourse borrowings in subsidiaries of the company | 14 | 7,826 | 8,379 | |||||||||||||||||
| Deferred income tax liabilities | 967 | 988 | ||||||||||||||||||
| $ | 13,703 | $ | 16,463 | |||||||||||||||||
| Equity | ||||||||||||||||||||
| Brookfield Business Partners | 18 | $ | (159) | $ | (59) | |||||||||||||||
| Non-controlling interests | 2,738 | 2,694 | ||||||||||||||||||
| 2,579 | 2,635 | |||||||||||||||||||
| $ | 16,282 | $ | 19,098 | |||||||||||||||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
3
BROOKFIELD BUSINESS CORPORATION
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF OPERATING RESULTS
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| (US$ MILLIONS) | Notes | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||
| Revenues | 17 | $ | 1,860 | $ | 1,929 | $ | 3,826 | $ | 3,794 | |||||||||||||||||||||||
| Direct operating costs | 16 | (1,695) | (1,860) | (3,484) | (3,512) | |||||||||||||||||||||||||||
| General and administrative expenses | (69) | (77) | (144) | (141) | ||||||||||||||||||||||||||||
| Interest income (expense), net | (212) | (203) | (431) | (413) | ||||||||||||||||||||||||||||
| Equity accounted income (loss) | 11 | 2 | 2 | 5 | 3 | |||||||||||||||||||||||||||
| Impairment reversal (expense), net | - | - | - | (2) | ||||||||||||||||||||||||||||
| Remeasurement of exchangeable and class B shares | 5 | (176) | 237 | (183) | 126 | |||||||||||||||||||||||||||
| Other income (expense), net | 236 | (59) | 202 | (70) | ||||||||||||||||||||||||||||
| Income (loss) before income tax | (54) | (31) | (209) | (215) | ||||||||||||||||||||||||||||
| Income tax (expense) recovery | ||||||||||||||||||||||||||||||||
| Current | 14 | 16 | (9) | (28) | ||||||||||||||||||||||||||||
| Deferred | 17 | 55 | 60 | 109 | ||||||||||||||||||||||||||||
| Net income (loss) | $ | (23) | $ | 40 | $ | (158) | $ | (134) | ||||||||||||||||||||||||
| Attributable to: | ||||||||||||||||||||||||||||||||
|
Brookfield Business Partners (1)
|
$ | (120) | $ | 124 | $ | (178) | $ | (26) | ||||||||||||||||||||||||
| Non-controlling interests | 97 | (84) | 20 | (108) | ||||||||||||||||||||||||||||
| $ | (23) | $ | 40 | $ | (158) | $ | (134) | |||||||||||||||||||||||||
____________________________________
(1)Earnings per share have not been presented in the financial statements, as the underlying shares do not constitute "ordinary shares" under IAS 33, Earnings per Share("IAS 33"). See Note 2(c) for further details.
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
4
BROOKFIELD BUSINESS CORPORATION
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME (LOSS)
|
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| (US$ MILLIONS) | Notes | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||
| Net income (loss) | $ | (23) | $ | 40 | $ | (158) | $ | (134) | ||||||||||||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||||||||||||||||||||||||
| Foreign currency translation | 55 | (82) | 116 | (163) | ||||||||||||||||||||||||||||
| Net investment and cash flow hedges | 3 | (29) | 87 | (71) | 146 | |||||||||||||||||||||||||||
| Taxes on the above items | 4 | (7) | 11 | (15) | ||||||||||||||||||||||||||||
| Reclassification to profit or loss | (41) | (25) | (41) | (42) | ||||||||||||||||||||||||||||
| Total other comprehensive income (loss) | (11) | (27) | 15 | (74) | ||||||||||||||||||||||||||||
| Comprehensive income (loss) | $ | (34) | $ | 13 | $ | (143) | $ | (208) | ||||||||||||||||||||||||
| Attributable to: | ||||||||||||||||||||||||||||||||
| Brookfield Business Partners | $ | (125) | $ | 127 | $ | (177) | $ | (45) | ||||||||||||||||||||||||
| Non-controlling interests | 91 | (114) | 34 | (163) | ||||||||||||||||||||||||||||
| $ | (34) | $ | 13 | $ | (143) | $ | (208) | |||||||||||||||||||||||||
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
5
BROOKFIELD BUSINESS CORPORATION
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| (US$ MILLIONS) | Capital | Retained earnings | Ownership changes |
Accumulated other
comprehensive income (loss) (1)
|
Brookfield Business Partners | Non-controlling interests |
Total equity |
||||||||||||||||||||||
| Balance as at January 1, 2025 | $ | 737 | $ | (247) | $ | (127) | $ | (422) | $ | (59) | $ | 2,694 | $ | 2,635 | |||||||||||||||
| Net income (loss) | - | (178) | - | - | (178) | 20 | (158) | ||||||||||||||||||||||
| Other comprehensive income (loss) | - | - | - | 1 | 1 | 14 | 15 | ||||||||||||||||||||||
| Total comprehensive income (loss) | - | (178) | - | 1 | (177) | 34 | (143) | ||||||||||||||||||||||
| Contributions | 77 | - | - | - | 77 | 22 | 99 | ||||||||||||||||||||||
| Distributions and capital paid | - | - | - | - | - | (12) | (12) | ||||||||||||||||||||||
| Balance as at June 30, 2025 | $ | 814 | $ | (425) | $ | (127) | $ | (421) | $ | (159) | $ | 2,738 | $ | 2,579 | |||||||||||||||
| Balance as at January 1, 2024 | $ | 737 | $ | 637 | $ | (129) | $ | (365) | $ | 880 | $ | 3,880 | $ | 4,760 | |||||||||||||||
| Net income (loss) | - | (26) | - | - | (26) | (108) | (134) | ||||||||||||||||||||||
| Other comprehensive income (loss) | - | - | - | (19) | (19) | (55) | (74) | ||||||||||||||||||||||
| Total comprehensive income (loss) | - | (26) | - | (19) | (45) | (163) | (208) | ||||||||||||||||||||||
| Contributions | - | - | - | - | - | 28 | 28 | ||||||||||||||||||||||
| Distributions and capital paid | - | - | - | - | - | (23) | (23) | ||||||||||||||||||||||
| Ownership changes and other | - | 11 | 3 | - | 14 | 11 | 25 | ||||||||||||||||||||||
| Balance as at June 30, 2024 | $ | 737 | $ | 622 | $ | (126) | $ | (384) | $ | 849 | $ | 3,733 | $ | 4,582 | |||||||||||||||
____________________________________
(1)See Note 15 for additional information.
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
6
BROOKFIELD BUSINESS CORPORATION
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
|
Six Months Ended June 30, |
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| (US$ MILLIONS) | Notes | 2025 | 2024 | |||||||||||||||||
| Operating Activities | ||||||||||||||||||||
| Net income (loss) | $ | (158) | $ | (134) | ||||||||||||||||
| Adjusted for the following items: | ||||||||||||||||||||
| Equity accounted earnings, net of distributions | 11 | 4 | 7 | |||||||||||||||||
| Impairment expense (reversal), net | - | 2 | ||||||||||||||||||
| Depreciation and amortization expense | 16 | 382 | 390 | |||||||||||||||||
| Provisions and other items | (642) | 48 | ||||||||||||||||||
| Deferred income tax expense (recovery) | (60) | (109) | ||||||||||||||||||
| Remeasurement of exchangeable and class B shares | 5 | 183 | (126) | |||||||||||||||||
| Changes in non-cash working capital, net | 21 | (20) | (97) | |||||||||||||||||
| Cash from (used in) operating activities | (311) | (19) | ||||||||||||||||||
| Financing Activities | ||||||||||||||||||||
| Proceeds from non-recourse borrowings in subsidiaries of the company | 175 | 702 | ||||||||||||||||||
| Repayment of non-recourse borrowings in subsidiaries of the company | (106) | (817) | ||||||||||||||||||
| Proceeds from other financing | 11 | 52 | ||||||||||||||||||
| Repayment of other financing | (55) | (56) | ||||||||||||||||||
| Lease liability repayment | (35) | (35) | ||||||||||||||||||
| Capital provided by others who have interests in operating subsidiaries | 102 | 15 | ||||||||||||||||||
| Repurchases of exchangeable shares | 18 | (77) | - | |||||||||||||||||
| Distributions to exchangeable shareholders | 5 | (9) | (9) | |||||||||||||||||
| Proceeds received from loan with Brookfield Business Partners | 79 | 401 | ||||||||||||||||||
| Repayment and issuance of loan with Brookfield Business Partners | (26) | (2) | ||||||||||||||||||
| Distributions and capital paid to others who have interests in operating subsidiaries | (1) | (17) | ||||||||||||||||||
| Cash from (used in) financing activities | 58 | 234 | ||||||||||||||||||
| Investing Activities | ||||||||||||||||||||
| Acquisitions | ||||||||||||||||||||
| Subsidiaries, net of cash acquired | - | (35) | ||||||||||||||||||
| Property, plant and equipment and intangible assets | (131) | (154) | ||||||||||||||||||
| Equity accounted investments | (12) | - | ||||||||||||||||||
| Financial assets and other | (1) | - | ||||||||||||||||||
| Dispositions | ||||||||||||||||||||
| Subsidiaries, net of cash disposed | 8 | (53) | - | |||||||||||||||||
| Property, plant and equipment and intangible assets | 6 | 1 | ||||||||||||||||||
| Financial assets and other | - | 2 | ||||||||||||||||||
| Net settlement of derivative assets and liabilities | (10) | (3) | ||||||||||||||||||
| Restricted cash and deposits | - | 18 | ||||||||||||||||||
| Cash from (used in) investing activities | (201) | (171) | ||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||
| Change during the period | (454) | 44 | ||||||||||||||||||
| Impact of foreign exchange | 59 | (62) | ||||||||||||||||||
| Balance, beginning of year | 1,008 | 772 | ||||||||||||||||||
| Balance, end of period | $ | 613 | $ | 754 | ||||||||||||||||
Supplemental cash flow information is presented in Note 21.
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
7
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 1. ORGANIZATION AND DESCRIPTION OF THE COMPANY
(a)Brookfield Business Corporation
Brookfield Business Corporation together with its subsidiaries (the "company") is an owner and operator of services and industrials operations on a global basis (the "businesses"). The company was formed as a corporation established under the Business Corporations Act (British Columbia) on June 21, 2021 and is a subsidiary of Brookfield Business Partners L.P. (NYSE: BBU; TSX: BBU.UN) (the "partnership", or collectively with its subsidiaries, excluding the company, "Brookfield Business Partners"). Brookfield Business Partners, the company and respective subsidiaries are referred to collectively as the "group". Brookfield Corporation ("Brookfield Corporation" or together with its controlled subsidiaries, excluding the group, "Brookfield") is the ultimate parent of the company and the group. "Brookfield Holders" refers to Brookfield, Brookfield Wealth Solutions Ltd. and their related parties. Brookfield Business Partners holds all the issued and outstanding class B shares and class C shares of the company as at June 30, 2025. The registered head office of the company is 250 Vesey Street, New York, NY 10281, United States. The class A exchangeable subordinate voting shares (each, an "exchangeable share") of the company are listed on the New York Stock Exchange ("NYSE") and the Toronto Stock Exchange ("TSX") under the symbol "BBUC". The exchangeable shares are structured with the intention of being economically equivalent to the non-voting limited partnership units ("LP Units") of the partnership. Given the economic equivalence, the market price of the exchangeable shares will be significantly impacted by the market price of the LP Units and the combined business performance of the company and Brookfield Business Partners as a whole.
NOTE 2. MATERIAL ACCOUNTING POLICY INFORMATION
(a)Basis of presentation
The unaudited interim condensed consolidated financial statements of the company have been prepared in accordance with IAS 34, Interim Financial Reporting("IAS 34"), as issued by the International Accounting Standards Board ("IASB") and using the accounting policies the company applied in its annual consolidated financial statements as at and for the year ended December 31, 2024. The accounting policies the company applied in its annual consolidated financial statements as at and for the year ended December 31, 2024are disclosed in Note 2 of such consolidated financial statements, with which reference should be made in reading these unaudited interim condensed consolidated financial statements. All defined terms are also described in the annual consolidated financial statements. The unaudited interim condensed consolidated financial statements are prepared on a going concern basis and have been presented in U.S. dollars rounded to the nearest million unless otherwise indicated.
The unaudited interim condensed consolidated financial statements were approved by the Board of Directors and authorized for issue on August 7, 2025.
(b)Critical accounting judgments and measurement uncertainty
The preparation of financial statements in accordance with IAS 34 requires management to make critical judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period that are not readily apparent from other sources. The critical accounting estimates and judgments have been set out in Note 2 to the company's annual consolidated financial statements as at and for the year ended December 31, 2024.These estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. There have been no significant changes to the method of determining critical accounting estimates and judgments relative to those described in the annual consolidated financial statements as at and for the year ended December 31, 2024.
(i)Global minimum top-up tax
The company operates in countries, including Canada, which have enacted legislation to implement the global minimum top-up tax, effective from January 1, 2024. The company has applied a temporary mandatory relief from recognizing and disclosing deferred taxes in connection with the global minimum top-up tax and will account for it as a current tax when it is incurred. There are no material current tax impacts for the three and six months ended June 30, 2025. The global minimum top-up tax is not anticipated to have a material impact on the financial position of the company.
8
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
(ii)Going concern
In assessing whether the going concern assumption is appropriate and whether there are material uncertainties that cast significant doubt on the company's ability to continue as a going concern, management has made certain estimates and assumptions about future cash flows. These judgments considered various forward-looking factors, such as forecasted cash flows, access to financing and liquidity reserves, planned capital expenditures and debt repayment obligations. The assumptions underlying this assessment are based on actual operating results and the most relevant available information about the future, including the company's strategic initiatives and business plans and may be affected by market conditions, regulatory developments and macroeconomic risks.
(c)Earnings per Share
The company's basic and diluted earnings per share have not been presented in the unaudited interim condensed consolidated financial statements. As outlined in Note 5, exchangeable shares and class B shares are classified as financial liabilities, while class C shares are classified as financial liabilities but presented as equity instruments given the narrow scope presentation exceptions existing in IAS 32, Financial Instruments: Presentation("IAS 32"). As each share classification represents a financial liability, they do not constitute ordinary shares. Refer to the aforementioned note for further details.
(d)Future changes in accounting policies
(i)Amendments to IFRS 9, Financial Instruments ("IFRS 9") and IFRS 7, Financial Instruments: Disclosures ("IFRS 7") - Classification and Measurement of Financial Instruments
In May 2024, the IASB issued amendments which clarify the requirements for the timing of recognition and derecognition of financial liabilities settled through an electronic cash transfer system, add further guidance for assessing the contractual cash flow characteristics of financial assets with contingent feature, and add new or amended disclosures relating to investments in equity instruments designated at FVOCI and financial instruments with contingent features. The amendments to IFRS 9 and IFRS 7 are effective for periods beginning on or after January 1, 2026, with early adoption permitted. The company is currently assessing the impact of these amendments.
(ii)IFRS 18, Presentation and Disclosure of Financial Statements ("IFRS 18")
In April 2024, the IASB issued IFRS 18 to replace IAS 1 Presentation of Financial Statements("IAS 1"). IFRS 18 is effective for periods beginning on or after January 1, 2027, with early adoption permitted. IFRS 18 aims to improve financial reporting by requiring additional defined subtotals in the statement of profit or loss, requiring disclosures about management-defined performance measures, and adding new principles for the aggregation and disaggregation of items. The company is currently assessing the impact of these amendments.
There are currently no other future changes to IFRS® Accounting Standards with expected material impacts on the company.
9
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 3. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table provides the details of financial instruments and their associated financial instrument classifications as at June 30, 2025:
| (US$ MILLIONS) | ||||||||||||||||||||||||||
| MEASUREMENT BASIS | FVTPL | FVOCI | Amortized cost | Total | ||||||||||||||||||||||
| Financial assets | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | - | $ | - | $ | 613 | $ | 613 | ||||||||||||||||||
| Accounts and other receivable, net (current and non-current) | - | - | 3,234 | 3,234 | ||||||||||||||||||||||
|
Financial assets (current and non-current) (1)
|
12 | 98 | 180 | 290 | ||||||||||||||||||||||
| Total | $ | 12 | $ | 98 | $ | 4,027 | $ | 4,137 | ||||||||||||||||||
| Financial liabilities | ||||||||||||||||||||||||||
|
Accounts payable and other (current and non-current) (1) (2)
|
$ | 11 | $ | 31 | $ | 2,169 | $ | 2,211 | ||||||||||||||||||
| Non-recourse borrowings in subsidiaries of the company (current and non-current) | - | - | 7,940 | 7,940 | ||||||||||||||||||||||
|
Exchangeable and class B shares (3)
|
- | - | 1,815 | 1,815 | ||||||||||||||||||||||
| Total | $ | 11 | $ | 31 | $ | 11,924 | $ | 11,966 | ||||||||||||||||||
____________________________________
(1)FVOCI includes derivative assets and liabilities designated in hedge accounting relationships. Refer to Hedging activities in Note 3(a) below.
(2)Includes derivative liabilities and excludes liabilities associated with assets held for sale, provisions, deferred revenue, work in progress, post-employment benefits and other liabilities of $770 million.
(3)Class C shares are also classified as financial liabilities due to their cash redemption feature, however, these shares meet certain qualifying criteria and are therefore presented as equity instruments in accordance with IAS 32. See Note 18 for additional information.
Included in cash and cash equivalents as at June 30, 2025 is $234 million of cash (December 31, 2024: $340 million) and $379 millionof cash equivalents (December 31, 2024: $668 million).
The following table provides the details of financial instruments and their associated financial instrument classifications as at December 31, 2024:
| (US$ MILLIONS) | ||||||||||||||||||||||||||
| MEASUREMENT BASIS | FVTPL | FVOCI | Amortized cost | Total | ||||||||||||||||||||||
| Financial assets | ||||||||||||||||||||||||||
| Cash and cash equivalents | $ | - | $ | - | $ | 1,008 | $ | 1,008 | ||||||||||||||||||
| Accounts and other receivable, net (current and non-current) | - | - | 3,229 | 3,229 | ||||||||||||||||||||||
|
Financial assets (current and non-current) (1)
|
11 | 184 | 158 | 353 | ||||||||||||||||||||||
| Total | $ | 11 | $ | 184 | $ | 4,395 | $ | 4,590 | ||||||||||||||||||
| Financial liabilities | ||||||||||||||||||||||||||
|
Accounts payable and other (current and non-current)(1) (2)
|
$ | - | $ | 55 | $ | 3,641 | $ | 3,696 | ||||||||||||||||||
| Non-recourse borrowings in subsidiaries of the company (current and non-current) | - | - | 8,490 | 8,490 | ||||||||||||||||||||||
|
Exchangeable and class B shares(3)
|
- | - | 1,709 | 1,709 | ||||||||||||||||||||||
| Total | $ | - | $ | 55 | $ | 13,840 | $ | 13,895 | ||||||||||||||||||
____________________________________
(1)FVOCI includes derivative assets and liabilities designated in hedge accounting relationships. Refer to Hedging activities in Note 3(a) below.
(2)Includes derivative liabilities and excludes liabilities associated with assets held for sale, provisions, decommissioning liabilities, deferred revenue, work in progress, post-employment benefits and other liabilities of $1,580 million.
(3)Class C shares are also classified as financial liabilities due to their cash redemption feature, however, these shares meet certain qualifying criteria and are therefore presented as equity instruments in accordance with IAS 32. See Note 18 for additional information.
10
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
(a)Hedging activities
Derivative instruments not designated in a hedging relationship are classified as FVTPL, with changes in fair value recognized in the unaudited interim condensed consolidated statements of operating results.
Net investment hedges
The company uses foreign exchange derivative contracts to manage foreign currency exposures arising from net investments in foreign operations. For the three and six month period ended June 30, 2025, a pre-tax net loss of $18 million and $40 million (June 30, 2024: pre-tax net gain of $56 million and $65 million, respectively), was recorded in other comprehensive income for the effective portion of hedges of net investments in foreign operations. As at June 30, 2025, there was a derivative asset balance of $63 million (December 31, 2024: $104 million) and derivative liability balance of $13 million (December 31, 2024: $36 million) relating to derivative contracts designated as net investment hedges.
Cash flow hedges
The company uses foreign exchange contracts and option contracts to hedge highly probable future transactions and interest rate contracts to hedge the cash flows on its floating rate borrowings. For the three and six month period ended June 30, 2025, a pre-tax net loss of $11 million and $31 million (June 30, 2024: pre-tax net gain of $31 million and $81 million, respectively) was recorded in other comprehensive income for the effective portion of cash flow hedges. As at June 30, 2025, there was an unrealized derivative asset balance of $35 million(December 31, 2024: $80 million) and a derivative liability balance of $18 million(December 31, 2024: $19 million) relating to the derivative contracts designated as cash flow hedges.
(b)Fair value hierarchical levels - financial instruments
The following table categorizes financial assets and liabilities, which are carried at fair value, based upon the level of input as at June 30, 2025 and December 31, 2024:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| (US$ MILLIONS) | Level 1 | Level 2 | Level 1 | Level 2 | ||||||||||||||||||||||
| Financial assets | ||||||||||||||||||||||||||
| Derivative assets | $ | - | $ | 98 | $ | - | $ | 184 | ||||||||||||||||||
| Other financial assets | 12 | - | 11 | - | ||||||||||||||||||||||
| $ | 12 | $ | 98 | $ | 11 | $ | 184 | |||||||||||||||||||
| Financial liabilities | ||||||||||||||||||||||||||
| Derivative liabilities | $ | - | $ | 42 | $ | - | $ | 55 | ||||||||||||||||||
| $ | - | $ | 42 | $ | - | $ | 55 | |||||||||||||||||||
There were no financial instruments with significant level 3 inputs as at June 30, 2025 and December 31, 2024.
There were no transfers between levels during the six months ended June 30, 2025.
11
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 4. FINANCIAL ASSETS
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Current | ||||||||||||||
| Restricted cash | $ | 72 | $ | 61 | ||||||||||
| Derivative assets | 66 | 106 | ||||||||||||
| Total current | $ | 138 | $ | 167 | ||||||||||
| Non-current | ||||||||||||||
| Restricted cash | $ | 29 | $ | 22 | ||||||||||
| Derivative assets | 32 | 78 | ||||||||||||
| Loans and notes receivable | 79 | 75 | ||||||||||||
| Other financial assets | 12 | 11 | ||||||||||||
| Total non-current | $ | 152 | $ | 186 | ||||||||||
NOTE 5. EXCHANGEABLE SHARES, CLASS B SHARES AND CLASS C SHARES
The exchangeable shares and the class B shares are classified as liabilities due to their exchangeable and cash redemption features. Upon issuance, the exchangeable shares and the class B shares were recognized at their fair values. Subsequent to initial recognition, the exchangeable shares and the class B shares are recognized at amortized cost and remeasured to reflect changes in the contractual cash flows associated with the shares. These contractual cash flows are based on the price of one LP Unit.
As at June 30, 2025, Brookfield Holders owned approximately 67% of the issued and outstanding exchangeable shares. The Brookfield Holders have agreed that all decisions to be made with respect to the exchangeable shares will be made jointly among the Brookfield Holders.
During the six months ended June 30, 2025, 184 exchangeable shares were exchanged into LP Units (June 30, 2024: 3). During the six months ended June 30, 2025, the company repurchased 2,957,523 exchangeable shares (June 30, 2024: nil). As at June 30, 2025, the exchangeable shares and the class B shares were remeasured to reflect the closing price of one LP Unit, which was valued at $25.93 per unit. Remeasurement gains or losses associated with the exchangeable shares and class B shares are recorded in remeasurement of exchangeable and class B shares in the unaudited interim condensed consolidated statements of operating results. During the three and six months ended June 30, 2025, $5 million and $9 million of dividends, respectively (June 30, 2024: $4 million and $9 million of dividends, respectively) were declared on the outstanding exchangeable shares of the company and included in interest income (expense), net in the unaudited interim condensed consolidated statements of operating results.
The following table provides a continuity schedule of outstanding exchangeable shares, and the class B shares, along with the carrying value of the corresponding liability and remeasurement gains and losses:
|
Exchangeable shares outstanding (Shares) |
Class B shares outstanding (Shares) |
Exchangeable shares and class B shares (US$ Millions) |
||||||||||||||||||
| Balance as at January 1, 2025 | 72,954,446 | 1 | $ | 1,709 | ||||||||||||||||
| Repurchased and canceled | (2,957,523) | - | (77) | |||||||||||||||||
| Shares exchanged to LP Units | (184) | - | - | |||||||||||||||||
| Remeasurement (gains) losses | - | - | 183 | |||||||||||||||||
| Balance as at June 30, 2025 | 69,996,739 | 1 | $ | 1,815 | ||||||||||||||||
Similar to the exchangeable shares and class B shares, the class C shares are classified as liabilities due to their cash redemption feature. However, the class C shares, the most subordinated class of all the company's classes of common shares, meet certain qualifying criteria and are presented as equity instruments given the narrow scope presentation exceptions existing in IAS 32. Refer to Note 18 for further details related to class C shares.
12
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 6. ACCOUNTS AND OTHER RECEIVABLE, NET
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Current, net | $ | 1,254 | $ | 1,337 | ||||||||||
| Non-current, net | ||||||||||||||
| Accounts receivable | 87 | 100 | ||||||||||||
| Retainer on customer contract | 69 | 55 | ||||||||||||
| Billing rights | 697 | 597 | ||||||||||||
|
Loan receivable from Brookfield Business Partners (1)
|
1,127 | 1,140 | ||||||||||||
| Total non-current, net | $ | 1,980 | $ | 1,892 | ||||||||||
| Total | $ | 3,234 | $ | 3,229 | ||||||||||
____________________________________
(1)See Note 19 for additional information.
Non-current billing rights primarily represent unbilled rights from the company's water and wastewater operation in Brazil from revenues earned from the construction of public concession contracts classified as financial assets, which are recognized when there is an unconditional right to receive cash or other financial assets from the concession authority for the construction services.
The company's construction operation has a retention balance, which comprises amounts that have been earned but held back until the satisfaction of certain conditions specified in the contract. The retention balance included in the current accounts and other receivable, net as at June 30, 2025 was $36 million (December 31, 2024: $120 million).
NOTE 7. OTHER ASSETS
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Current | ||||||||||||||
|
Work in progress (1)
|
$ | 41 | $ | 138 | ||||||||||
| Prepayments and other assets | 205 | 222 | ||||||||||||
| Assets held for sale | 6 | 11 | ||||||||||||
| Total current | $ | 252 | $ | 371 | ||||||||||
| Non-current | ||||||||||||||
| Prepayments and other assets | $ | 265 | $ | 256 | ||||||||||
| Total non-current | $ | 265 | $ | 256 | ||||||||||
____________________________________
(1)See Note 13 for additional information.
13
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 8. PROPERTY, PLANT AND EQUIPMENT
The following table presents the change in the balance of property, plant and equipment for the six-month period ended June 30, 2025 and the twelve-month period ended December 31, 2024:
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Gross carrying amount | ||||||||||||||
| Balance at beginning of period | $ | 3,225 | $ | 3,398 | ||||||||||
| Additions (cash and non-cash) | 95 | 182 | ||||||||||||
|
Dispositions (1)
|
(2,996) | (39) | ||||||||||||
| Assets reclassified as held for sale | (32) | (2) | ||||||||||||
| Foreign currency translation and other | 107 | (314) | ||||||||||||
| Balance at end of period | $ | 399 | $ | 3,225 | ||||||||||
| Accumulated depreciation and impairment | ||||||||||||||
| Balance at beginning of period | $ | (745) | $ | (655) | ||||||||||
| Depreciation and impairment expense | (91) | (189) | ||||||||||||
|
Dispositions (1)
|
622 | 31 | ||||||||||||
| Assets reclassified as held for sale | 22 | 1 | ||||||||||||
| Foreign currency translation and other | (26) | 67 | ||||||||||||
| Balance at end of period | $ | (218) | $ | (745) | ||||||||||
|
Net book value(2)
|
$ | 181 | $ | 2,480 | ||||||||||
____________________________________
(1)Reflects the deconsolidation of the company's healthcare services operation. See Note 14(i) for additional information.
(2)Includes right-of-use assets of $99 million as at June 30, 2025 (December 31, 2024: $221 million).
NOTE 9. INTANGIBLE ASSETS
The following table presents the change in the balance of intangible assets for the six-month period ended June 30, 2025 and the twelve-month period ended December 31, 2024:
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Gross carrying amount | ||||||||||||||
| Balance at beginning of period | $ | 7,650 | $ | 8,163 | ||||||||||
| Additions | 100 | 239 | ||||||||||||
|
Dispositions (1)
|
(189) | (13) | ||||||||||||
| Acquisitions through business combinations | - | 11 | ||||||||||||
| Foreign currency translation | 370 | (750) | ||||||||||||
| Balance at end of period | $ | 7,931 | $ | 7,650 | ||||||||||
| Accumulated amortization | ||||||||||||||
| Balance at beginning of period | $ | (1,684) | $ | (1,232) | ||||||||||
| Amortization and impairment expense | (291) | (614) | ||||||||||||
|
Dispositions (1)
|
104 | 12 | ||||||||||||
| Foreign currency translation | (80) | 150 | ||||||||||||
| Balance at end of period | $ | (1,951) | $ | (1,684) | ||||||||||
| Net book value | $ | 5,980 | $ | 5,966 | ||||||||||
____________________________________
(1)Reflects the deconsolidation of the company's healthcare services operation. See Note 14(i) for additional information.
14
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
Included within intangible assets are customer relationship intangible assets pertaining to continuing relationships with many of the company's customers that contribute to the revenues and cash flows generated by the company's respective operations. The company has recognized customer relationships from the acquisition of its dealer software and technology services operation in 2022. These customer relationships were valued at the date of acquisition using a multi-period excess earnings approach and have a carrying value of $2.6 billion as at June 30, 2025 (December 31, 2024: $2.7 billion) with a remaining useful life of 12 years.
NOTE 10. GOODWILL
The following table presents the change in the balance of goodwill for the six-month period ended June 30, 2025 and the twelve-month period ended December 31, 2024:
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Balance at beginning of period | $ | 4,988 | $ | 5,702 | ||||||||||
| Acquisitions through business combinations | - | 24 | ||||||||||||
| Impairment losses | - | (661) | ||||||||||||
| Foreign currency translation | 30 | (77) | ||||||||||||
| Balance at end of period | $ | 5,018 | $ | 4,988 | ||||||||||
NOTE 11. EQUITY ACCOUNTED INVESTMENTS
The following table presents the change in the balance of equity accounted investments for the six-month period ended June 30, 2025 and the twelve-month period ended December 31, 2024:
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Balance at beginning of period | $ | 198 | $ | 222 | ||||||||||
| Additions | 11 | - | ||||||||||||
| Dispositions | (12) | - | ||||||||||||
| Share of net income (loss) | 5 | 8 | ||||||||||||
| Distributions received | (9) | (18) | ||||||||||||
| Foreign currency translation and other | (6) | (14) | ||||||||||||
| Balance at end of period | $ | 187 | $ | 198 | ||||||||||
15
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 12. ACCOUNTS PAYABLE AND OTHER
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Current | ||||||||||||||
| Accounts payable | $ | 755 | $ | 829 | ||||||||||
| Accrued and other liabilities | 872 | 919 | ||||||||||||
| Lease liabilities | 42 | 44 | ||||||||||||
| Financial liabilities | 65 | 122 | ||||||||||||
|
Work in progress (1)
|
354 | 382 | ||||||||||||
| Provisions and decommissioning liabilities | 45 | 689 | ||||||||||||
| Liabilities associated with assets held for sale | - | 5 | ||||||||||||
|
Total current (2)
|
$ | 2,133 | $ | 2,990 | ||||||||||
| Non-current | ||||||||||||||
| Accounts payable | $ | 104 | $ | 81 | ||||||||||
| Accrued and other liabilities | 343 | 323 | ||||||||||||
| Lease liabilities | 70 | 236 | ||||||||||||
| Financial liabilities | 56 | 1,266 | ||||||||||||
|
Work in progress (1)
|
42 | 36 | ||||||||||||
| Provisions and decommissioning liabilities | 233 | 344 | ||||||||||||
|
Total non-current (2)
|
$ | 848 | $ | 2,286 | ||||||||||
____________________________________
(1)See Note 13 for additional information.
(2)Reflects the deconsolidation of the company's healthcare services operation. See Note 14(i) for additional information.
NOTE 13. CONTRACTS IN PROGRESS
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Contract costs incurred to date | $ | 11,709 | $ | 11,015 | ||||||||||
| Profit recognized to date | 109 | 155 | ||||||||||||
| $ | 11,818 | $ | 11,170 | |||||||||||
| Less: progress billings | (12,173) | (11,450) | ||||||||||||
| Contract work in progress (liability) | $ | (355) | $ | (280) | ||||||||||
| Comprising: | ||||||||||||||
| Amounts due from customers - work in progress | $ | 41 | $ | 138 | ||||||||||
| Amounts due to customers - creditors | (396) | (418) | ||||||||||||
| Net work in progress | $ | (355) | $ | (280) | ||||||||||
16
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 14. BORROWINGS
Current and non-current non-recourse borrowings in subsidiaries of the company as at June 30, 2025, net of deferred financing costs and other accounting adjustments were $114 million and $7,826 million (December 31, 2024: $111 million and $8,379 million). Non-recourse borrowings in subsidiaries of the company include borrowings made under subscription facilities of Brookfield-sponsored private equity funds.
The company has financing arrangements within its operating businesses that trade in public markets or are held at major financial institutions. The financing arrangements are primarily composed of term loans, credit facilities, and notes and debentures which are subject to fixed or floating rates. Most of these borrowings are not subject to financial maintenance covenants, however, some are subject to fixed charge coverage, leverage ratios and minimum equity or liquidity covenants.
As at June 30, 2025, the company's operations were in compliance with or had obtained waivers related to all material covenant requirements, and the company continues to work with its subsidiaries to monitor performance against such covenant requirements.
(i)Healthcare services
On May 26, 2025, the company's healthcare services operation entered receivership due to an event of default under their credit agreement after unsuccessful efforts to negotiate with key stakeholders on a sustainable long-term solution for the business. Following the appointment of a receiver and transition of oversight of the operations, the company ceased to have control of the business and therefore, deconsolidated the net liabilities of the business, and recorded a pre-tax net gain of $236 million in the unaudited interim condensed consolidated statements of operating results, included in other income (expense). Upon deconsolidation, the company derecognized property, plant and equipment of $2,361 million, accounts payable and other liabilities of $2,008 million, non-recourse borrowings of $950 million, accounts receivable of $171 million and other net assets of $237 million related to its healthcare services operation. The results of the healthcare services operation are included in the company's unaudited interim condensed consolidated statement of operating results up until the company lost control of the business on May 26, 2025.
NOTE 15. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Attributable to Brookfield Business Partners
The following tables present the changes in accumulated other comprehensive income (loss) reserves attributable to Brookfield Business Partners for the six-month period ended June 30, 2025 and 2024:
| (US$ MILLIONS) |
Foreign currency translation |
Other (1)
|
Accumulated other comprehensive income (loss) |
|||||||||||||||||
| Balance as at January 1, 2025 | $ | (547) | $ | 125 | $ | (422) | ||||||||||||||
| Other comprehensive income (loss) | 81 | (80) | 1 | |||||||||||||||||
| Balance as at June 30, 2025 | $ | (466) | $ | 45 | $ | (421) | ||||||||||||||
____________________________________
(1)Represents net investment hedges, cash flow hedges and other reserves.
| (US$ MILLIONS) |
Foreign currency translation |
Other (1)
|
Accumulated other comprehensive income (loss) |
|||||||||||||||||
| Balance as at January 1, 2024 | $ | (427) | $ | 62 | $ | (365) | ||||||||||||||
| Other comprehensive income (loss) | (63) | 44 | (19) | |||||||||||||||||
| Balance as at June 30, 2024 | $ | (490) | $ | 106 | $ | (384) | ||||||||||||||
____________________________________
(1)Represents net investment hedges, cash flow hedges and other reserves.
17
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 16. DIRECT OPERATING COSTS
The company has no key employees or directors and does not remunerate key management personnel. Key decision makers of the company are all employees of Brookfield or its subsidiaries, which provide management services under the Master Services Agreement with Brookfield ("Master Services Agreement"). Details of the allocations of costs incurred by Brookfield on behalf of the company are disclosed inNote 19.
Direct operating costs are costs incurred to earn revenues and include all attributable expenses. The following table presents direct operating costs by nature for the three and six monthsended June 30, 2025 and 2024:
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||||||
| (US$ MILLIONS) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Inventory costs | $ | 84 | $ | 123 | $ | 191 | $ | 245 | ||||||||||||||||||
| Subcontractor and consultant costs | 670 | 782 | 1,350 | 1,379 | ||||||||||||||||||||||
| Concession construction materials and labor costs | 43 | 38 | 79 | 78 | ||||||||||||||||||||||
| Depreciation and amortization expense | 186 | 194 | 382 | 390 | ||||||||||||||||||||||
| Compensation | 412 | 463 | 882 | 902 | ||||||||||||||||||||||
| Other direct costs | 300 | 260 | 600 | 518 | ||||||||||||||||||||||
| Total | $ | 1,695 | $ | 1,860 | $ | 3,484 | $ | 3,512 | ||||||||||||||||||
Other direct costs include freight, cost of construction expensed and expected credit loss provisions on financial assets.
NOTE 17. REVENUES
(a)Timing of recognition of revenues from contracts with customers
The following table summarizes the company's revenues by timing of revenue recognition for the total revenues from contracts with customers for the three and six months ended June 30, 2025 and 2024.
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||||||
| (US$ MILLIONS) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Timing of revenue recognition | ||||||||||||||||||||||||||
| Goods and services provided at a point in time | $ | 550 | $ | 714 | $ | 1,222 | $ | 1,428 | ||||||||||||||||||
| Services transferred over a period of time | 1,310 | 1,215 | 2,604 | 2,366 | ||||||||||||||||||||||
| Total revenues from contracts with customers | $ | 1,860 | $ | 1,929 | $ | 3,826 | $ | 3,794 | ||||||||||||||||||
(b)Revenues by geography
The following table summarizes the company's totalrevenues by geography for the three and six months ended June 30, 2025 and June 30, 2024:
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||||||
| (US$ MILLIONS) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Australia | $ | 885 | $ | 1,118 | $ | 1,868 | $ | 2,037 | ||||||||||||||||||
| United States | 398 | 299 | 809 | 753 | ||||||||||||||||||||||
| United Kingdom | 299 | 250 | 611 | 463 | ||||||||||||||||||||||
| Brazil | 199 | 197 | 379 | 403 | ||||||||||||||||||||||
| Canada | 74 | 60 | 144 | 130 | ||||||||||||||||||||||
| Other | 5 | 5 | 15 | 8 | ||||||||||||||||||||||
| Total revenues from contracts with customers | $ | 1,860 | $ | 1,929 | $ | 3,826 | $ | 3,794 | ||||||||||||||||||
18
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 18. EQUITY
The following table provides a continuity of the company's outstanding equity for the six-month period ended June 30, 2025:
| Class C shares | ||||||||||||||
| Shares outstanding (Shares) |
Share capital (US$ Millions) |
|||||||||||||
| Balance as at January 1, 2025 | 25,934,120 | $ | 737 | |||||||||||
| Contributions | - | 77 | ||||||||||||
| Balance as at June 30, 2025 | 25,934,120 | $ | 814 | |||||||||||
The company's share capital is comprised of exchangeable shares, class B shares and class C shares. Due to the exchange feature of the exchangeable shares and the cash redemption feature of the class B and class C shares, the exchangeable shares, the class B shares, and the class C shares are classified as financial liabilities. However, the class C shares, the most subordinated of all of the company's classes of common shares, meet certain qualifying criteria and are presented as equity instruments given the narrow scope presentation exceptions existing in IAS 32. Refer to Note 5 for further details related to the exchangeable shares and the class B shares.
NOTE 19. RELATED PARTY TRANSACTIONS
In the normal course of operations, the company entered into the transactions below with related parties. The ultimate parent of the company is Brookfield Corporation. Other related parties of the company represent Brookfield Corporation's subsidiaries, affiliates, and operating entities.
Pursuant to the Master Services Agreement, on a quarterly basis, the Service Recipients pay a base management fee, referred to as the Base Management Fee, to Service Providers, equal to 0.3125% per quarter (1.25% annually) of the total capitalization of Brookfield Business Partners. For purposes of calculating the Base Management Fee, the total capitalization of Brookfield Business Partners is equal to the quarterly volume-weighted average trading price of an LP Unit on the principal stock exchange for the LP Units (based on trading volumes) multiplied by the number of LP Units outstanding at the end of the quarter (assuming full conversion of the Redemption-Exchange Units into LP Units of Brookfield Business Partners L.P.), plus the value of securities of the other service recipients (including the exchangeable shares) that are not held by Brookfield Business Partners, plus all outstanding debt with recourse to a service recipient, less all cash held by such entities.
The company is responsible for paying its proportionate share of the total Base Management Fee in connection with the Master Services Agreement. The Base Management Fee attributable to the company for the three and six month period ended June 30, 2025 were $8 million and $15 million, respectively (June 30, 2024: $6 million and $12 million, respectively). The expense related to the services received under the Master Services Agreement has been recorded as part of general and administrative expenses in the unaudited interim condensed consolidated statements of operating results.
An integral part of the company's strategy is to participate with institutional investors in Brookfield-sponsored private equity funds that target acquisitions that suit the company's investment mandate. In the normal course of business, the group and institutional investors have made commitments to Brookfield-sponsored private equity funds, and in connection therewith, the group, together with institutional investors, has access to short-term financing using the private equity funds' credit facilities to facilitate investments that Brookfield has determined to be in the group's best interests.
In addition, Brookfield has entered into indemnity agreements with the company related to certain construction projects in the Middle East region that were in place prior to the creation of Brookfield Business Partners. Under these indemnity agreements, Brookfield has agreed to indemnify or refund the company, as appropriate, for the receipt of payments relating to such projects.
19
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
Brookfield entered into a commitment agreement with the partnership in 2022 to subscribe for up to $1.5 billion of perpetual preferred equity securities of subsidiaries of the partnership (including subsidiaries of the company). Brookfield will have the right to cause the company or Brookfield Business Partners to redeem the preferred securities at par plus accrued and unpaid dividends to the extent of any net proceeds received by the company or Brookfield Business Partners from the issuance of equity, incurrence of indebtedness or sale of assets. Brookfield has the right to waive its redemption option. As at June 30, 2025, the amount subscribed from the company was $nil (December 31, 2024: $nil) and the amount subscribed from Brookfield Business Partners was $725 million (December 31, 2024: $725 million) with an annual dividend of 7%. The remaining capacity available on the commitment agreement with Brookfield is $25 million.
The company has entered into two credit agreements with Brookfield Business Partners, one as borrower and one as lender, each providing for a ten-year revolving $1 billion credit facility, maturing on March 15, 2032 (unless terminated by the lender in accordance with the agreement after the fifth anniversary), to facilitate the movement of cash within the group. The credit agreement under which the company is the borrower permits it to borrow up to $1 billion from Brookfield Business Partners, and the other permits Brookfield Business Partners to borrow up to $1 billion from the company. Each credit facility contemplates a deposit arrangement pursuant to which the lender thereunder would, with the consent of the borrower, deposit funds on a demand basis to such borrower's account at a reduced rate of interest. As at June 30, 2025, the net amount outstanding on deposit is $524 million payable to Brookfield Business Partners included in accounts payable and other (December 31, 2024: $470 million payable to Brookfield Business Partners).
Brookfield Business Partners provided the company an equity commitment in the amount of $2 billion. The equity commitment may be called by the company in exchange for the issuance of a number of class C shares or preferred shares, as the case may be, to Brookfield Business Partners, corresponding to the amount of the equity commitment called divided (i) in the case of a subscription for class C shares, by the volume-weighted average of the trading price for one exchangeable share on the principal stock exchange on which the exchangeable shares are listed for the five (5) days immediately preceding the date of the call, and (ii) in the case of a subscription for preferred shares, by $25.00 per share. The equity commitment will be available in minimum amounts of $10 million and the amount available under the equity commitment will be reduced permanently by the amount so called. Before funds may be called on the equity commitment, a number of conditions precedent must be met, including that Brookfield Business Partners continues to control the company and has the ability to elect a majority of the Board of Directors.
From time to time, Brookfield may place funds on deposit with Brookfield Business Partners and the company, on terms approved by the independent directors of the company. Interest earned or incurred on such deposits is at market terms. As at June 30, 2025, the deposit from Brookfield was $nil (December 31, 2024: $nil) and the company incurred interest expense of $nil for the three and six months ended June 30, 2025 on these deposits (June 30, 2024: $nil).
A wholly-owned subsidiary of the company fully and unconditionally guaranteed the obligations of Brookfield Business Partners under Brookfield Business Partners' $2.35 billion bilateral credit facilities with global banks and its $1 billion revolving acquisition credit facility with Brookfield.
As at June 30, 2025, the company had a loan receivable of $1.1 billion from Brookfield Business Partners in connection with the proceeds received from the disposition of the company's nuclear technology services operation in 2023. The loan receivable is non-interest bearing and is due on demand and included in accounts and other receivable, net.
The following table summarizes revenues the company has earned from transactions with related parties for the three and six month periods ended June 30, 2025 and 2024:
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||||||
| (US$ MILLIONS) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
|
Revenues (1)
|
$ | 47 | $ | 54 | $ | 91 | $ | 81 | ||||||||||||||||||
____________________________________
(1)The company provides construction services to affiliates of Brookfield.
The following table summarizes balances with related parties as at June 30, 2025 and December 31, 2024:
20
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
| (US$ MILLIONS) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Accounts and other receivable, net | $ | 1,419 | $ | 1,431 | ||||||||||
| Accounts payable and other | 545 | 473 | ||||||||||||
| Non-recourse borrowings in subsidiaries of the company | 39 | 44 | ||||||||||||
NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS
The company's activities expose it to a variety of financial risks, including market risk (currency risk and interest rate risk) and liquidity risk. The company and its subsidiaries selectively use derivative financial instruments principally to manage these risks.
The aggregate fair values of the company's derivative financial instruments are as follows:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| (US$ MILLIONS) | Financial Assets | Financial Liabilities | Financial Assets | Financial Liabilities | ||||||||||||||||||||||
| Foreign exchange contracts | $ | 63 | $ | (24) | $ | 104 | $ | (36) | ||||||||||||||||||
| Cross currency swaps | 18 | (13) | 30 | (14) | ||||||||||||||||||||||
| Interest rate derivatives | 17 | (5) | 50 | (5) | ||||||||||||||||||||||
| Total | $ | 98 | $ | (42) | $ | 184 | $ | (55) | ||||||||||||||||||
| Total current | $ | 66 | $ | (35) | $ | 106 | $ | (46) | ||||||||||||||||||
| Total non-current | $ | 32 | $ | (7) | $ | 78 | $ | (9) | ||||||||||||||||||
NOTE 21. SUPPLEMENTAL CASH FLOW INFORMATION
|
Six Months Ended June 30, |
||||||||||||||
| (US$ MILLIONS) | 2025 | 2024 | ||||||||||||
| Net interest paid (received) | $ | 266 | $ | 353 | ||||||||||
| Net income taxes paid (received) | 14 | 50 | ||||||||||||
Amounts paid and received for interest were reflected as operating cash flows in theunaudited interim condensed consolidated statements of cash flow.
Details of "Changes in non-cash working capital, net"on the unaudited interimcondensed consolidated statements of cash flow are as follows:
|
Six Months Ended June 30, |
||||||||||||||
| (US$ MILLIONS) | 2025 | 2024 | ||||||||||||
| Accounts and other receivable | $ | 70 | $ | (101) | ||||||||||
| Inventory | (7) | (5) | ||||||||||||
| Other assets | (53) | (111) | ||||||||||||
| Accounts payable and other | (30) | 120 | ||||||||||||
| Changes in non-cash working capital, net | $ | (20) | $ | (97) | ||||||||||
21
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
As at June 30, 2025 and December 31, 2024 and
for the three and six months ended June 30, 2025 and 2024
NOTE 22. SUBSEQUENT EVENTS
(a)Sale of an interest into new evergreen private equity fund
On July 4, 2025, the company completed the previously announced sale of an approximate 7% interest in its dealer software and technology services operation to a new evergreen private equity fund, managed by Brookfield Asset Management.
In exchange, the company will receive units of the new evergreen fund which are expected to be redeemed for cash during the 18-month period following the initial closing of the fund, expected later this year.
(b) Dividend
On July 31, 2025, the Board of Directors declared a quarterly dividend in the amount of $0.0625 per exchangeable share, payable on September 29, 2025 to shareholders of record as at the close of business on August 29, 2025.
22
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The following Management's Discussion and Analysis ("MD&A") is the responsibility of management of Brookfield Business Corporation (our "company"). This MD&A is dated August 7, 2025 and has been approved by the Board of Directors of our company (the "Board of Directors") for issuance as of that date. The Board of Directors carries out its responsibility for review of this document principally through its audit committee, comprised exclusively of independent directors. The audit committee reviews and, prior to its publication, approves this MD&A, pursuant to the authority delegated to it by the Board of Directors. The terms "we", "us" and "our" refer to Brookfield Business Corporation, and our company's direct and indirect operating entities as a group. This MD&A should be read in conjunction with our company's most recently issued annual financial statements. Additional information is available on our website at https://bbu.brookfield.com/bbuc/overview, on SEDAR+ at www.sedarplus.ca and on EDGAR's website at www.sec.gov.
The class A exchangeable subordinate voting shares (each, an "exchangeable share") of our company are structured with the intention of being economically equivalent to the non-voting limited partnership units ("LP Units") of Brookfield Business Partners L.P. (NYSE: BBU; TSX: BBU.UN) (the "partnership", the "parent company" or, collectively with its subsidiaries, but excluding our company, "Brookfield Business Partners"). Brookfield Business Partners, our company and respective subsidiaries are referred to collectively as our "group". Brookfield Corporation ("Brookfield Corporation" or together with its controlled subsidiaries, excluding the group, "Brookfield"), is the ultimate parent of the company and the group. "Brookfield Holders" refers to Brookfield, Brookfield Wealth Solutions Ltd. and their related parties. We believe economic equivalence is achieved through targeting identical dividends and distributions on the exchangeable shares and the LP Units and each exchangeable share being exchangeable at the option of the holder for one LP Unit of the partnership at any time. Given the economic equivalence, we expect that the market price of the exchangeable shares will be significantly impacted by the market price of the LP Units and the combined business performance of our company and Brookfield Business Partners as a whole. In addition to carefully considering the disclosures made in this document, shareholders are strongly encouraged to carefully review the partnership's periodic reporting, including the partnership's unaudited interim condensed consolidated financial statements and MD&A for the three and six months ended June 30, 2025. The partnership is required to file reports, including annual reports on Form 20-F and interim reports on Form 6-K, respectively, and other information with the United States Securities and Exchange Commission (the "SEC"). The partnership's SEC filings are available to the public from the SEC's website at http://www.sec.gov. Copies of documents that have been filed with the Canadian securities authorities can be obtained at www.sedarplus.ca. Information about the partnership, including its SEC filings, is also available on its website at https://bbu.brookfield.com. The information found on, or accessible through, https://bbu.brookfield.com is not incorporated into and does not form a part of this MD&A.
In addition to historical information, this MD&A contains forward-looking statements. Readers are cautioned that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. See "Cautionary Statements Regarding Forward-Looking Statements" for further information.
Brookfield Business Corporation published this content on August 08, 2025, and is solely responsible for the information contained herein. Distributed via EDGAR on August 08, 2025 at 10:01 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]