3.A [RESERVED] 3.B CAPITALIZATION AND INDEBTEDNESS Not applicable. 3.C REASONS FOR THE OFFER AND USE OF PROCEEDS Not applicable. 3.D RISK FACTORS Your holding of Class A Shares of our company involves substantial risks. The following summarizes some, but not all of the risks provided below. You should carefully consider the following risk factors in addition to the other information set forth in this Form 20-F. If any of the following risks were actually to occur, our business, financial condition and results of operations and the value of your Class A Shares would likely suffer. Risks Relating to Our Operations Generally •Risks relating to the cyclical nature of our operations and general economic conditions. •Risks relating to completion of new acquisitions and changes to the scale and scope of our operations. •Risks relating to identifying acquisition opportunities and acquiring distressed companies. •Risks relating to the accuracy of our management’s assumptions and estimates. •Risks related to our indebtedness and our ability to distribute equity. •Risks relating to our access to the credit and capital markets and our ability to raise capital. •Risks relating to changes or developments in U.S. laws or policies, including U.S. domestic and economic policies and trade policies and tariffs. •Risks relating to the structure of our operations and our level of control over our operations. •Risks relating to our technology and information systems. •Risks relating to maintain effective internal controls. •Risks relating to the market price of Class A Shares. •Risks relating to our company’s status as a “foreign private issuer”. •Risks relating to unfamiliar cultural factors, political instability or changes in government policy or legislation. •Risks relating to foreign anti-corruption and trade sanctions laws and restrictions on foreign direct investment. 12 Brookfield Business Corporation Risks Relating to our Business Services Operations •Risks relating to our Canadian residential and multi-family mortgage lender. •Risks relating to insurance and competition in our residential mortgage insurer. •Risks relating to government policies and regulations of our residential mortgage insurer. •Risks relating to development of products, government funding and regulations for our specialty consumables and equipment manufacturer. •Risks relating to the unpredictable award of new contracts in the construction market. •Risks relating to reduced profits or losses under contracts if costs increase above estimates. •Risks relating to performance guarantees and operating under various types of construction-related contracts. •Risks relating to macroeconomic factors and climate change affecting our construction operation. •Risks relating to the real estate industry in Canada. •Risks relating to our dealer software and technology services operation. •Risks relating to regulations and laws governing our entertainment operation. •Risks relating to our construction operation, including our work access services. •Risks relating to our convertible preferred security investment in Nielsen. •Risks relating to our Australian asset manager and lender. •Risks relating to our payment processing services operation. Risks Relating to our Infrastructure Services Operations •Risks relating to our lottery services operation. •Risks relating to the demand for and growth of our offshore oil services. •Risks relating to the significant loss of product, environmental contamination, and physical damage to marine transportation and oil production equipment due to extreme conditions in which our offshore oil services operate. •Risks relating to equipment failure on our business, reputation, financial position and results of operation. •Risks relating to our modular building leasing services. Risks Relating to our Industrials Operations •Risks relating to decreased demand and an inability to successfully respond to competition and pricing pressures in our advanced energy storage operation. •Risks relating to our water and wastewater operation in Brazil. •Risks relating to oil and gas exploration, development and production. •Risks relating to the dependence on supplies of raw materials and the volatility of commodity prices. •Risks relating to the Brazilian government’s control over the Brazilian economy and Brazilian corporations. •Risks relating to our engineered components manufacturing operation. •Risks relating to our electric heat tracing systems manufacturing operation. Brookfield Business Corporation 13 Risks Relating to our Relationship with Brookfield •Risks relating to our dependence on Brookfield and the Service Providers. •Risks relating to Brookfield’s ownership position of our company. •Risks relating to Brookfield’s lack of fiduciary duty to our shareholders. •Risks relating to senior executives of Brookfield exercising influence over our company. Risks Relating to Taxation •Risks related to United States and Canadian taxation, and the effects thereof on our business and operations. Risks Relating to our Operations Generally Our operating businesses are highly cyclical and subject to general economic conditions and risks relating to the economy. Many industries, including the industries in which we operate, are impacted by adverse events in the broader economy and/or financial markets. A slowdown in the financial markets and/or the global economy or the local economies of the regions in which we operate, including, but not limited to, the acceleration or reversal of key global trends such as deglobalization, decarbonization and digitization, new home construction, employment rates, business conditions, inflation, fuel and energy costs, commodity prices, lack of available credit, the state of the financial markets, imposition of tariffs and retaliatory actions, government policies in the jurisdictions in which our company operates, interest rates and tax rates may adversely affect our growth and profitability. For example, a worldwide recession, reduction in available skilled labor, a period of below-trend growth in developed countries, a slowdown in emerging markets or significant declines in commodity factors could have a material adverse effect on our business, financial condition and results of operations, if such increased levels of volatility and market turmoil were to persist for an extended duration. These and other unforeseen adverse events in the global economy could negatively impact our operations and the trading price of our Class A Shares could be further adversely impacted. The demand for products and services provided by our operating businesses is, in part, dependent upon and correlated to general economic conditions and economic growth of the regions applicable to the relevant asset. Poor economic conditions or lower economic growth in a region or regions may, either directly or indirectly, reduce demand for the products and/or services provided by our operating businesses. In particular, the sectors in which we operate are highly cyclical, and we are subject to cyclical fluctuations in global economic conditions and end-use markets. We are unable to predict the future course of industry variables or the strength, pace or sustainability of the global economic recovery and the effects of government intervention. Negative economic conditions, such as an economic downturn, a prolonged global inflationary period, a prolonged period of higher interest rates or a prolonged recovery period or disruptions in the financial markets, could have a material adverse effect on our businesses, financial condition or results or operations. A significant portion of the upward pressure on prices has been attributed to the rising costs of labor, energy, food, motor vehicles and housing, and continuing global supply-chain disruptions. While inflationary pressures eased in 2025 across many jurisdictions, volatile or rising inflation may drive tightening in monetary policies by major central banks, posing risks to economic growth. Inflation increases may or may not be transitory and future inflation may be impacted by labor market constraints reducing, supply-chain disruptions easing and commodity prices moderating. While regulated and contractual arrangements in our portfolio companies can provide significant protection against inflationary pressures, any sustained upward trajectory in the inflation rate may still have an impact on our operating businesses and our investors, and could impact our ability to source suitable investment opportunities, match or exceed prior investment strategy performance and secure attractive debt financing, all of which could adversely impact our operating businesses and our growth and capital initiatives. The completion of new acquisitions can have the effect of significantly increasing the scale and scope of our operations, including operations in new geographic areas and industry sectors, and the Service Providers may have difficulty managing these additional operations. In addition, acquisitions involve risks to our business. A key part of our company’s strategy involves seeking acquisition opportunities. For example, a number of our current operations have only recently been acquired. Acquisitions may increase the scale, scope and diversity of our operating businesses. We depend on the diligence and skill of Brookfield’s and our professionals to effectively manage us and integrate acquired businesses with our existing operations. These individuals may have difficulty managing additional acquired businesses and may have other responsibilities within Brookfield’s asset management business. If any such acquired businesses are not effectively integrated and managed, our existing business, financial condition and results of operations may be adversely affected. 14 Brookfield Business Corporation Future acquisitions will likely involve some or all of the following risks, which could materially and adversely affect our business, financial condition or results of operations: the difficulty of integrating the acquired operations and personnel into our current operations; potential disruption of our current operations; diversion of resources, including Brookfield’s time and attention; the difficulty of managing the growth of a larger organization; the risk of entering markets and regulatory regimes in which we have little experience; the risk of becoming involved in labor, commercial or regulatory disputes or litigation related to the new enterprise; risk of environmental or other liabilities associated with the acquired business; and the risk of a change of control resulting from an acquisition triggering rights of third parties or government agencies under contracts with, or authorizations held by the operating business being acquired. While it is our practice to conduct extensive due diligence investigations into businesses being acquired, it is possible that due diligence may fail to uncover all material risks in the business being acquired, or to identify a change of control trigger in a material contract or authorization, or that a contractual counterparty or government agency may take a different view on the interpretation of such a provision to that taken by us, thereby resulting in a dispute. We may acquire distressed companies and these acquisitions may subject us to increased risks, including the incurrence of additional legal or other expenses. As part of our acquisition strategy, we may acquire distressed companies. This could involve acquisitions of securities of companies in event-driven special situations, such as acquisitions, tender offers, bankruptcies, recapitalizations, spin-offs, corporate and financial restructurings, litigation or other liability impairments, turnarounds, management changes, consolidating industries and other catalyst-oriented situations. Acquisitions of this type involve substantial financial and business risks that can result in substantial or total losses. Among the problems involved in assessing and making acquisitions in troubled issuers is the fact that it frequently may be difficult to obtain information as to the condition of such issuer. If, during the diligence process, we fail to identify issues specific to a company or the environment in which we operate, we may be forced to later write down or write off assets, restructure our operations or incur impairment or other charges that may result in other reporting losses. As a consequence of our company’s role as an acquirer of distressed companies, we may be subject to increased risk of incurring additional legal, indemnification or other expenses, even if we are not named in any action. In distressed situations, litigation often follows when disgruntled shareholders, creditors and other parties seek to recover losses from poorly performing investments. The enhanced litigation risk for distressed companies is further elevated by the potential that Brookfield or our company may have controlling or influential positions in these companies. We operate in a highly competitive market for acquisition opportunities. Our acquisition strategy is dependent to a significant extent on Brookfield’s ability to identify acquisition opportunities that are suitable for us. We face competition for acquisitions primarily from investment funds, operating companies acting as strategic buyers, commercial and investment banks and commercial finance companies. Many of these competitors are substantially larger and have considerably greater financial, technical and marketing resources than are available to us. Some of these competitors may also have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of acquisitions and to offer terms that we are unable or unwilling to match. To finance our acquisitions, we compete for equity capital from institutional partners and other equity providers, including Brookfield, and our ability to consummate acquisitions will be dependent on such capital continuing to be available. Increases in interest rates could also make it more difficult to consummate acquisitions because our competitors may have a lower cost of capital, which may enable them to bid higher prices for assets. In addition, because of our affiliation with Brookfield, there is a higher risk that when we participate with Brookfield and others in joint ventures, partnerships and consortiums on acquisitions, we may become subject to antitrust or competition laws that we would not be subject to if we were acting alone. These factors may create competitive disadvantages for us with respect to acquisition opportunities. We cannot provide any assurance that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations or that Brookfield will be able to identify and make acquisitions on our behalf that are consistent with our objectives or that generate attractive returns for our shareholders. We may lose acquisition opportunities in the future if we do not match prices, structures and terms offered by competitors, if we are unable to access sources of equity or obtain indebtedness at attractive rates or if we become subject to antitrust or competition laws. Alternatively, we may experience decreased rates of return and increased risks of loss if we match prices, structures and terms offered by competitors. Brookfield Business Corporation 15 Our business and results of operations depend on the accuracy of our management’s assumptions and estimates, and we could experience significant gains or losses if these assumptions and estimates differ significantly from actual results. We make and rely on certain assumptions and estimates regarding many matters related to our businesses, including valuations, interest rates, investment returns, expenses and operating costs, tax assets and liabilities, tax rates, business mix, surrender activity, mortality and contingent liabilities. We also use these assumptions and estimates to make decisions crucial to our business operations. Similarly, our management teams make similar assumptions and estimates in planning and measuring the performance of our asset management business. In addition, certain investments and other assets and liabilities of our asset management business and our business operations must be, or at our election are, measured at fair value, the determination of which involves the use of various assumptions and estimates and considerable judgment. The factors influencing these various assumptions and estimates cannot be calculated or predicted with certainty, and if our assumptions and estimates differ significantly from actual outcomes and results, our business, financial condition, results of operations, liquidity and cash flows may be materially and adversely affected. We may be unable to complete acquisitions, dispositions and other transactions as planned. Our acquisitions, dispositions and other transactions typically are subject to a number of closing conditions, including, as applicable, securing the requisite financing to complete the transaction and obtaining any required security holder approval, regulatory approval (including competition authorities) and other third-party consents and approvals that are beyond our control and may not be satisfied. In particular, many jurisdictions in which we seek to invest (or divest) impose government consent requirements on investments by foreign persons. Consents and approvals may not be obtained, may be obtained subject to conditions which adversely affect anticipated returns, and/or may be delayed and delay or ultimately preclude the completion of acquisitions, dispositions and other transactions. Government policies and attitudes in relation to foreign investment may change, making it more difficult to complete acquisitions, dispositions and other transactions in such jurisdictions. Furthermore, interested stakeholders could take legal steps to prevent transactions from being completed. We may also be unable to secure financing on acceptable terms (or at all) for our proposed acquisitions. If all or some of our acquisitions, dispositions and other transactions are unable to be completed on the terms agreed, we may need to modify or delay or, in some cases, terminate these transactions altogether (which may result in the payment of significant break-up fees), the market value of our respective securities may significantly decline, and we may not be able to achieve the expected benefits of the transactions. We use leverage and such indebtedness may result in our company, the Holding LP or our operating businesses being subject to certain covenants that restrict our ability to engage in certain types of activities or to make distributions to equity. Many of our Holding Entities and operating businesses have entered into or will enter into credit facilities or have incurred or will incur other forms of debt, including for acquisitions. The total quantum of exposure to debt within our company is significant, and we may become more leveraged in the future. Leveraged assets are more sensitive to declines in revenues, increases in expenses and interest rates and adverse economic, market and industry developments. A leveraged company’s income and net assets also tend to increase or decrease at a greater rate than would otherwise be the case if money had not been borrowed. As a result, the risk of loss associated with a leveraged company, all other things being equal, is generally greater than for companies with comparatively less debt. In addition, the use of indebtedness in connection with an acquisition may give rise to negative tax consequences to certain investors. Leverage may also result in a requirement for short-term liquidity, which may force the sale of assets at times of low demand and/or prices for such assets. This may mean that we are unable to realize fair value for the assets in a sale. An increase in either the general levels of interest rates or in the risk spread demanded by sources of indebtedness would make it more expensive to finance our investments. Increases in interest rates could also make it more difficult to locate and consummate private equity and other investments because other potential buyers, including operating companies acting as strategic buyers, may be able to bid for an asset at a higher price due to a lower overall cost of capital or their ability to benefit from a higher amount of cost savings following the acquisition of the asset. In addition, certain of our financings are, and future financings may be, exposed to floating interest rate risks, and if interest rates increase, an increased proportion of our cash flow may be required to service indebtedness. In addition, a portion of the indebtedness used to finance private equity investments often includes high-yield debt securities issued in the capital markets. Disruptions and volatility in capital markets, including those caused by rising interest rates, could increase our cost of capital and adversely affect our ability to fund our liquidity and capital needs and the growth of the business. If we are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at high interest rates or on other unfavorable terms, we may have difficulty completing acquisitions or may generate profits that are lower than would otherwise be the case. 16 Brookfield Business Corporation Our credit facilities also contain, and will contain in the future, covenants applicable to the relevant borrower and events of default. Covenants can relate to matters including limitations on financial indebtedness, dividends, acquisitions or minimum amounts for interest coverage, Adjusted EBITDA, cash flow or net worth. If an event of default occurs, or minimum covenant requirements are not satisfied, this can result in a requirement to immediately repay any drawn amounts or the imposition of other restrictions including a prohibition on the payment of distributions to equity. We may not be able to access the credit and capital markets at the times and in the amounts needed to satisfy capital expenditure requirements, to fund new acquisitions or otherwise. General economic and business conditions that impact the debt or equity markets could impact the availability and cost of credit for us. Actions to reduce or stabilize inflation, including raising interest rates, increase our cost of borrowing, which in turn could make it more difficult to obtain financing for our operations or investments on favorable terms. We have revolving credit facilities and other short-term borrowings and the amount of interest charged on these will fluctuate based on changes in short-term interest rates. Any economic event that affects interest rates or the ability to refinance borrowings could materially adversely impact our financial condition. Continued movements in interest rates could also affect the discount rates used to value our assets, which in turn could cause their valuations calculated under IFRS to be reduced resulting in a material reduction in our equity value. Some of our operations require significant capital expenditures, and proposed acquisitions often require significant financing. If we are unable to generate enough cash to finance necessary capital expenditures and to fund acquisitions through existing liquidity and/or operating cash flow, then we may be required to issue additional equity or incur additional indebtedness. Our ability to obtain debt or equity financing to fund our growth, and our ability to refinance existing corporate and non-recourse indebtedness on favorable terms, if at all, is dependent on, among other factors, the level of future interest rates, the overall state of capital markets (as well as local market conditions, particularly in the case of non-recourse financings), continued operating performance of our assets, lenders’ and investors’ assessment of our credit risk and investor appetite for investments in infrastructure, industrials and business services in general and in our partnership’s securities in particular. If we are unable to refinance our indebtedness on favorable terms or at all, we would be required to repay our indebtedness with cash on hand or with cash flows from our operations. The issuance of additional equity would be dilutive to existing shareholders at the time. Any additional indebtedness would increase our leverage and debt payment obligations, and may negatively impact our business, financial condition and results of operations. Our businesses rely on continued access to capital to fund new acquisitions and capital projects. While we aim to prudently manage our capital requirements and ensure access to capital is always available, it is possible we may overcommit ourselves or misjudge the requirement for capital or the availability of capital. Such a misjudgment could result in negative financial consequences or, in extreme cases, bankruptcy. Changes in our credit ratings may have an adverse effect on our financial position and ability to raise capital. We cannot assure you that any credit rating assigned to us or any of our operating subsidiaries or their debt securities will remain in effect for any given period of time or that any rating will not be lowered or withdrawn entirely by the relevant rating agency. A lowering or withdrawal of such ratings may have an adverse effect on our financial position and ability to raise capital. Changes or developments in U.S. laws or policies, including changes in U.S. domestic economic policies and foreign trade policies and tariffs and the reaction of other countries thereto, may have a material adverse effect on our business and financial condition. The announcement and imposition of tariffs by the U.S., together with potential, announced or implemented retaliatory tariffs imposed by other governments on imports from the U.S., and other potential measures, including duties, fees, economic sanctions or other trade measures, as well as the potential impacts of these tariffs and trade measures, present risks to our business operations and financial results. The eventuality, timing and rates of potential tariffs are difficult to predict at this time. Changes or developments in U.S. laws and policies, such as laws and policies surrounding U.S. economic policies, including the United States-Mexico-Canada Agreement (“USMCA”), as well as international trade, foreign affairs, manufacturing and development and investment in the territories and countries where we operate, can materially adversely affect our business and financial condition. Changes in U.S. administrative policy may result in significant increases in tariffs for imported goods, among other possible changes. The U.S. has also stated its interest in renegotiating and altering the USMCA in 2026, which could further impact our business and financial condition. There also are risks associated with retaliatory tariffs and resulting trade wars. The imposition of such tariffs or other similar trade restrictions may strain international trade relations and increase the risk that foreign governments implement retaliatory tariffs on goods imported from the United States. The imposition of such tariffs or other similar trade restrictions may Brookfield Business Corporation 17 also be inflationary, which could cause the cost of inputs to increase and interest rates to rise and create further uncertainty and volatility in the market, which may have a material adverse effect on our business and financial statements. Alternative and emerging technologies, including artificial intelligence, could impact the demand for, or use of, the businesses and assets that we own and operate and could impair or eliminate the competitive advantage of such businesses and assets. There are alternative and emerging technologies, including artificial intelligence, that may impact the demand for, or use of, the businesses and assets that we own and operate. While some such technologies are in earlier stages of development, ongoing research and development activities may improve such technologies, including artificial intelligence. For example, further development of electric vehicles may reduce the need and demand for road fuel distribution. If new technologies emerge that are able to deliver goods and services more efficiently than our current businesses, such technologies could adversely impact our ability to compete. Moreover, the use of artificial intelligence, including our use of third-party products incorporating artificial intelligence, and the overall adoption of artificial intelligence throughout society, may exacerbate or create new and unpredictable competitive, operational, legal and regulatory risks to our businesses. There is substantial uncertainty about the extent to which artificial intelligence will result in dramatic changes throughout the world, and we may not be able to anticipate, prevent, mitigate, or remediate all of the potential risks, challenges, or impacts of such changes. Such changes could potentially disrupt and impair, among other things, our business models, investment strategies, operational processes and the competitive advantage of our businesses and assets, and as a result, our businesses, financial condition, results of operations and cash flow could be materially and adversely affected. A business disruption may adversely affect our financial condition and results of operations. Our businesses are vulnerable to damages from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, pandemics, terrorism, war and telecommunication failures. Any of these events that cause interruptions in our operations, or the operations at any of our portfolio companies, could result in a material disruption to our businesses. If we are unable to recover from a business disruption effectively or on a timely basis, our financial condition and results of operations would be adversely affected. We may also incur additional costs to remedy damages caused by such disruptions, which could adversely affect our financial condition and results of operations. We are subject to foreign currency risk and our use of or failure to use derivatives to hedge certain financial positions may adversely affect the performance of our operations. A significant portion of our current operations are in countries where the U.S. dollar is not the functional currency. These operating businesses pay distributions in currencies other than the U.S. dollar, which we must convert to U.S. dollars prior to making distributions, and certain of our operating businesses have revenues denominated in currencies different from U.S. dollars, which is utilized in our financial reporting, thus exposing us to currency risk. Fluctuations in currency exchange rates or a significant depreciation in the value of certain foreign currencies (for example, the Brazilian real) could reduce the value of cash flows generated by our operating businesses or could make it more expensive for our customers to purchase our services, and could have a material adverse effect on our business, financial condition and results of operations. When managing our exposure to such market risks, we may use forward contracts, options, swaps, caps, collars and floors or pursue other strategies or use other forms of derivative instruments. However, a significant portion of this risk may remain unhedged. We may also choose to establish unhedged positions in the ordinary course of business. The success of any hedging or other derivative transactions that we enter into generally will depend on our ability to structure contracts that appropriately offset our risk position. As a result, while we may enter into such transactions in order to reduce our exposure to market risks, unanticipated market changes may result in poorer overall investment performance than if the derivative transaction had not been executed. Such transactions may also limit the opportunity for gain if the value of a hedged position increases. The Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and similar laws in other jurisdictions impose rules and regulations governing federal and other governmental oversight of the over-the-counter derivatives market and its participants. These regulations may impose additional costs and regulatory scrutiny on our company. We cannot predict the effect of changing derivatives legislation on our hedging costs, our hedging strategy or its implementation or the composition of the risks we hedge. 18 Brookfield Business Corporation It can be very difficult or expensive to obtain the insurance we need for our business operations. We maintain insurance both as a corporate risk management strategy and in some cases to satisfy the requirements of contracts entered into in the course of our operations. Although in the past we have generally been able to cover our insurance needs, there can be no assurances that we can secure all necessary or appropriate insurance in the future, or that such insurance can be economically secured. We monitor the financial health of the insurance companies from which we procure insurance, but if any of our third party insurers fail, abruptly cancel our coverage or otherwise cannot satisfy their insurance requirements to us, then our overall risk exposure and operational expenses could be increased and some of our business operations could be interrupted. Performance of our operating businesses may be harmed by future labor disruptions and economically unfavorable collective bargaining agreements. Several of our current operations have workforces that are unionized or that in the future may become unionized and, as a result, are or will be required to negotiate the wages, benefits and other terms with many of their employees collectively. If an operating business were unable to negotiate acceptable contracts with any of its unions as existing agreements expire, it could experience a significant disruption of its operations, higher ongoing labor costs and restrictions on its ability to maximize the efficiency of its operations, which could have the potential to adversely impact our financial condition. In addition, in some jurisdictions where we operate, labor forces have a legal right to strike which may have an impact on our operations, either directly or indirectly, for example if a critical upstream or downstream counterparty was itself subject to a labor disruption which impacted our business. Our operations are exposed to occupational health and safety and accident risks. Our operations are highly exposed to the risk of accidents that may give rise to personal injury, loss of life, disruption to service and economic loss, including, for example, resulting from related litigation. Some of the tasks undertaken by employees and contractors are inherently dangerous and have the potential to result in serious injury or death. We are subject to increasingly stringent laws and regulations governing health and safety matters. Occupational health and safety legislation and regulations differ in each jurisdiction. Any breach of these obligations, or serious accidents involving our employees, contractors or members of the public, could expose us or our operating businesses to adverse regulatory consequences, including the forfeit or suspension of operating licenses, potential litigation, claims for material financial compensation, reputational damage, fines or other legislative sanction, which have the potential to adversely impact our financial condition. Furthermore, where we do not control a business, we have a limited ability to influence their health and safety practices and outcomes. We are subject to litigation risks that could result in significant liabilities that could adversely affect our operations. We are, from time to time, involved in disputes and possible litigation, the extent of which cannot be ascertained. Any material or costly dispute or litigation could adversely affect the value of our assets or our future financial performance. We could be subject to various legal proceedings concerning disputes of a commercial nature, or to claims in the event of bodily injury or material damage. The final outcome of any proceeding could have a negative impact on the business, financial condition or results of operations of our company. In addition, under certain circumstances, we may ourselves commence litigation. There can be no assurance that litigation, once begun, would be resolved in our favor. We will also be exposed to risk of litigation by third parties or government regulators if our management is alleged to have committed an act or acts of gross negligence, willful misconduct or dishonesty or breach of contract or organizational documents or to violate applicable law. In such actions, we would likely be obligated to bear legal, settlement and other costs (which may exceed our available insurance coverage). We may have operations in jurisdictions with less developed legal systems, which could create potential difficulties in obtaining effective legal redress. Some of our operations are located in jurisdictions with less developed legal systems than those in more established economies. In these jurisdictions, our company could be faced with potential difficulties in obtaining effective legal redress; a higher degree of discretion on the part of governmental authorities; a lack of judicial or administrative guidance on interpreting applicable rules and regulations; inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; and relative inexperience of the judiciary and courts in such matters. Brookfield Business Corporation 19 In addition, in some jurisdictions, the commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements could be uncertain, creating particular concerns with respect to permits, approvals and licenses required or desirable for, or agreements entered into in connection with, businesses in any such jurisdiction. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that joint ventures, licenses, permits or approvals (or applications for licenses, permits or approvals) or other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness of and enforcement of such arrangements in these jurisdictions cannot be assured. We do not control all of the businesses in which we own interests and therefore we may not be able to realize some or all of the benefits that we expect to realize from those interests. We do not have control of certain of the businesses in which we own interests and we may take non-controlling positions in other businesses in the future. Such businesses may make financial or other decisions that we do not agree with. Because we do not have the ability to exercise control over such businesses, we may not be able to realize some or all of the benefits that we expect to realize from our ownership interests in them, including, for example, expected distributions. In addition, we must rely on the internal controls and financial reporting controls of such businesses and their failure to maintain effective controls or comply with applicable standards may adversely affect us. From time to time, we may have significant interests in public companies, and changes in the market prices of the stock of such public companies, particularly during times of increased market volatility, could have a negative impact on our financial condition and results of operations. From time to time, we may hold significant interests in public companies, and changes in the market prices of the stock of such public companies could have a material impact on our financial condition and results of operations. Global securities markets have been highly volatile, and continued volatility may have a material negative impact on our consolidated financial position and results of operations. We are exposed to the risk of environmental damage and costs associated with compliance with environmental laws. Certain of our operating businesses are involved in using, handling or transporting substances that are toxic, radioactive, combustible or otherwise hazardous to the environment and may be in close proximity to environmentally sensitive areas or densely populated communities. If a leak, spill or other environmental incident occurred, it could pose a health risk to humans or wildlife, cause property damage or result in substantial fines or penalties being imposed by regulatory authorities, revocation of licenses or permits required to operate the business or the imposition of more stringent conditions in those licenses or permits, or legal claims for compensation (including punitive damages) by affected stakeholders. For example, such risks are present in our water and wastewater operation, which includes the largest private water and sewage treatment operation in Brazil. In addition, some of our operating businesses may be subject to regulations or rulings made by environmental agencies that conflict with existing obligations we have under concession or other permitting agreements. Resolution of such conflicts may lead to uncertainty and increased risk of delays or cost overruns on projects. In addition to fines, these laws and regulations sometimes require evaluation and registration or the installation of costly pollution control or safety equipment or costly changes in operations to limit pollution or decrease the likelihood of injuries. Certain of our current industrial manufacturing operations are also subject to increasingly stringent environmental laws and regulations relating to our current and former properties, neighboring properties and our current raw materials, products and operations, such as our advanced energy storage operation, which is subject to laws and regulations governing hazardous waste storage, treatment and disposal. Governmental requirements relating to the protection of the environment, including solid waste management, air quality and water quality, could have an impact on our operations. All of these risks could require us to incur costs or become the basis of new or increased liabilities that could be material and could have the potential to significantly impact our value or financial performance. We are exposed to the risk of increasingly onerous environmental legislation and the broader impacts of climate change. With an increasing global focus and public sensitivity to environmental sustainability and environmental regulation becoming more stringent, we could be subject to further environmental related responsibilities and associated liability. For example, many jurisdictions in which our company operates and invests are considering implementing, or have implemented, schemes relating to the regulation of carbon emissions. As a result, there is a risk that demand for some of the commodities supplied by certain of our operations will be reduced. The nature and extent of future regulation in the various jurisdictions in which our operations are situated is uncertain but is expected to become more complex and stringent. Environmental legislation and permitting requirements are likely to evolve in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their directors and employees. 20 Brookfield Business Corporation It is difficult to assess the impact of any such changes on our company. These changes may result in increased costs to our operations that may not be able to be passed onto customers and may have an adverse impact on prospects for growth of some of our businesses. To the extent such regimes (such as carbon emissions schemes or other carbon emissions regulations) are or become applicable to our operations (and the costs of such regulations are not able to be fully passed on to consumers), our financial performance may be impacted due to costs applied to carbon emissions and increased compliance costs. We are also subject to a wide range of laws and regulations relating to the protection of the environment and pollution. Standards are set by these laws and regulations regarding certain aspects of environmental quality and reporting, provide for penalties and other liabilities for the violation of such standards, and establish, in certain circumstances, obligations to remediate and rehabilitate current and former facilities and locations where our operations are, or were, conducted. These laws and regulations may have a detrimental impact on our company’s financial performance through increased compliance costs or otherwise. Any breach of these obligations, or even incidents relating to the environment that do not amount to a breach, could adversely affect the results of our operating businesses and their reputations and expose them to claims for financial compensation or adverse regulatory consequences. Our operations may also be exposed directly or indirectly to the broader impacts of climate change, including extreme weather events, export constraints on commodities, increased resource prices and restrictions on energy and water usage. In addition to the physical risks associated with climate change, we are also subject to transition risks, which include those risks related to the impact of climate- and sustainability-related legislation and regulation, as well as risks arising from climate-related business trends. New climate change-related regulations or interpretations of existing laws may result in enhanced disclosure obligations that could negatively affect us and also materially increase our regulatory compliance burden. We also face business trend-related climate risks. Certain investors are taking into account sustainability factors, including climate risks, in determining whether to invest in our company. Moreover, certain investors have demonstrated activism with respect to public companies, including by urging them to take certain actions that could adversely impact the value of a business, or refrain from taking certain actions that could improve the value of a business. Investor focus and activism related to sustainability and similar matters may constrain capital raising opportunities. Our reputation and investor relationships could be damaged as a result of our involvement in certain industries, operating businesses or transactions associated with activities perceived to be causing or exacerbating climate change, as well as any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change. Some of our current operations are structured as joint ventures, partnerships, consortiums or structured arrangements, and we intend to continue to operate in this manner in the future, which will reduce Brookfield’s and our control over our operations and may subject us to additional obligations. An integral part of our strategy is to participate with institutional partners in Brookfield-sponsored or co-sponsored consortiums for single asset acquisitions and as a partner in or alongside Brookfield-sponsored or co-sponsored partnerships that target acquisitions that suit our profile. Such arrangements involve risks not present where a third party is not involved, including the possibility that partners or co-venturers might become bankrupt or otherwise fail to fund their share of required capital contributions. Additionally, partners or co-venturers might at any time have economic or other business interests or goals different from us and Brookfield. We generally owe fiduciary duties to our partners in our joint venture and partnership arrangements. We may also, together with institutional partners, make structured preferred equity or debt investments (“structured investments”) in businesses that Brookfield considers attractive but which have certain downside risks, usually because the applicable business, asset class or technology is at an early stage of development. Examples of structured investments in our portfolio include our convertible preferred security investment in Nielsen. While these structured investments provide a secure, downside protected entry point into new assets classes and businesses, they do not give operational control to Brookfield or to our partnership. Brookfield Business Corporation 21 Joint ventures, partnerships, consortiums and structured investments generally provide for a reduced level of control over an acquired company because governance rights are shared with others. Accordingly, decisions relating to the underlying operations, including decisions relating to the management and operation and the timing and nature of any exit, are often made by a majority vote of the investors or by separate agreements that are reached with respect to individual decisions or, in the case of a structured investment, by agreement with the target’s management team. For example, when we participate with institutional partners in Brookfield-sponsored or co-sponsored consortiums for asset acquisitions and as a partner in or alongside Brookfield-sponsored or co-sponsored partnerships, there is often a finite term to the investment, which could lead to the business being sold prior to the date we would otherwise choose. In addition, such operations may be subject to the risk that business, financial or management decisions are made with which we do not agree or the management of the operating business at issue may take risks or otherwise act in a manner that does not serve our interests. Because we may not have the ability to exercise sole control over such operations, we may not be able to realize some or all of the benefits that we believe will be created from our and Brookfield’s involvement. If any of the foregoing were to occur, our business, financial condition and results of operations could suffer as a result. In addition, because some of our current operations are structured as joint ventures, partnerships or consortium arrangements, the sale or transfer of interests in some of our operations are subject to rights of first refusal or first offer, tag along rights or drag along rights and some agreements provide for buy-sell or similar arrangements, any of which could be exercised outside of our control and accordingly could have an adverse impact on us. We rely on the use of technology and information systems, many of which are controlled by third-party vendors, which may not be able to accommodate our growth or may increase in cost and may become subject to cyber-terrorism or other compromises and shut-downs, and any failures or interruptions of these systems could adversely affect our businesses and results of operations. We operate in businesses that are dependent on information systems and other technology, such as computer systems used for information storage, processing, administrative and commercial functions as well as the machinery and other equipment used in certain parts of our operations. In addition, our businesses rely on telecommunication services to interface with their business networks and customers. The information and embedded systems of key business partners and regulatory agencies are also important to our operations. We rely on this technology functioning as intended. Our information systems and technology may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase from its current level. Such a failure to accommodate growth, or an increase in costs related to such information systems, could have a material adverse effect on us. We rely heavily on our financial, accounting, communications and other data processing systems. Our businesses collect, store and use large amounts of sensitive information through our information technology systems, such as our residential mortgage insurer and our Canadian residential and multi-family mortgage lender, which receive personal and private information from borrowers and lenders. Our information technology systems face ongoing cybersecurity threats and attacks, which could result in the failure of such infrastructure. We may in the future be subject to cyber-terrorism or other compromises and shut-downs, noting the increasing frequency, sophistication and severity of these kinds of incidents. Our dealer software and technology services operation has been subject to such an attack in June 2024 – see Item 16K. – Cybersecurity. Threat actors and hackers have previously been, and may in the future be, able to negatively affect our operations by penetrating our security controls and causing system and operational disruptions or shutdowns, accessing, misappropriating or otherwise compromising protected personal information or proprietary or confidential information or that of third parties, and developing and deploying viruses, ransomware and other malware that can attack our systems, exploit any security vulnerabilities, and disrupt or shutdown our systems and operations. Such attacks could originate from a wide variety of sources, including internal actors or unknown third parties. While we believe that prior cyber-related attacks and incidents (including the cybersecurity incident at our dealer software and technology services operation in June 2024) have not materially affected our business strategy, results of operations or financial condition, there is no guarantee that a future cyber-related attack or incident would not result in significant operational, regulatory, or financial impacts that could materially affect our business strategy, results of operations or financial condition. Cybersecurity incidents may remain undetected for an extended period, which could exacerbate these consequences. The costs to eliminate or address the foregoing security threats and vulnerabilities before or after a cyber-incident could be material. In addition, a significant actual or potential theft, loss, corruption, exposure, fraudulent, unauthorized or accidental use or misuse of investor, policyholder, employee or other personally identifiable or proprietary business data, whether by third parties or as a result of employee malfeasance or otherwise, non-compliance with our contractual or other legal obligations regarding such data or intellectual property or a violation of our privacy and security policies with respect to such data could result in significant remediation and other costs, fines, litigation and regulatory actions against us by governments, various regulatory organizations or exchanges, or affected individuals, in addition to significant reputational harm and/or financial loss, and it may not be possible to recover losses suffered from such incidents under our insurance policies. 22 Brookfield Business Corporation If our information systems and other technology are compromised, do not operate or are disabled, such incidents could have a material adverse effect on our business prospects, financial condition, results of operations and cash flow. We have become increasingly reliant on third party service providers for certain aspects of our business, including for the administration of certain funds we manage, as well as for certain information systems and technology platforms. A disaster, disruption or compromise in technology or infrastructure that supports our businesses, including a disruption involving electronic communications or other services used by us, our vendors or third parties with whom we conduct business, may have an adverse impact on our ability to continue to operate our businesses without interruption which could have a material adverse effect on us. These risks could increase as vendors increasingly offer cloud-based software services rather than software services that can be operated within our own data centers. These risks also increase to the extent we engage with vendors and third parties in jurisdictions with which we are not familiar. In addition to the fact that these third-party service providers could also face ongoing cyber security threats and compromises of their systems, we generally have less control over the delivery of such third-party services, and as a result, we may face disruptions to our ability to operate a business as a result of interruptions of such services. A prolonged global failure of cloud services provided by a variety of cloud services providers that we engage could result in cascading systems failures for us. Although we are continuing to develop measures to ensure the integrity of our systems, we can provide no assurance that our efforts or those of third parties with whom we conduct business will be successful in protecting our systems and preventing or ameliorating damage from a cyber incident. Rapidly developing and changing global privacy laws and regulations could increase compliance costs and subject us to enforcement risks and reputational damage. We are subject to various risks and costs associated with the collection, processing, storage and transmission of personally identifiable information and other sensitive and confidential information. This data is wide ranging and relates to our investors, employees, contractors and other counterparties and third parties. Our compliance obligations include those in laws and regulations in jurisdictions globally, including those relating to foreign data collection and privacy laws, including, for example, the General Data Protection Regulation in the European Union. Other countries where we operate are enacting or amending data protection, artificial intelligence and other technology laws to empower regulators to impose financial penalties and injunctions on certain data processing activities, which could have an adverse effect on our business. Global laws in this area are rapidly increasing in the scale and depth of their requirements, and are also often extra-territorial in nature. In addition, a wide range of regulators and private actors are seeking to enforce these laws across regions and borders. Furthermore, we frequently have privacy compliance requirements as a result of our contractual obligations with counterparties. These legal, regulatory and contractual obligations heighten our privacy obligations in the ordinary course of conducting our business in the U.S., Canada and internationally. While we have taken various measures and made significant efforts and investment to ensure that our policies, processes and systems are both robust and compliant with these obligations, our potential liability remains, particularly given the continued and rapid development of privacy laws and regulations around the world, and increased criminal and civil enforcement actions and private litigation. Any inability, or perceived inability, by us to adequately address privacy concerns, or comply with applicable laws, regulations, policies, industry standards and guidance, contractual obligations or other legal obligations, even if unfounded, could result in significant regulatory and third party liability, increased costs, disruption of our business and operations, a loss of client (including investor) confidence and other reputational damage. Furthermore, as new privacy-related laws and regulations are implemented, the time and resources needed for us to comply with such laws and regulations continues to increase and become a significant compliance workstream. Our failure to maintain effective internal controls could have a material adverse effect on our business in the future and the price of our Class A Shares. As a public company in the United States and Canada, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and stock exchange rules promulgated in response to the Sarbanes-Oxley Act, as well as corresponding laws in Canada. A number of our current operating subsidiaries are, and potential future acquisitions will be private companies and their systems of internal controls over financial reporting may be less developed as compared to public company requirements. In addition, we routinely exclude recently acquired companies from our evaluation of internal controls. Any failure to maintain adequate internal controls over financial reporting or to implement required, new or improved controls, or difficulties encountered in their implementation, could cause material weaknesses or significant deficiencies in our internal controls over financial reporting and could result in errors or misstatements in our consolidated financial statements that could be material. If we or our independent registered public accounting firm were to conclude that our internal controls over financial reporting were not effective, investors could lose confidence in our reported financial information and the price of our Class A Shares could decline. Our failure to achieve and maintain effective internal controls could have a material adverse effect on our business, our ability to access capital markets and investors’ perception of us. In addition, material weaknesses in our internal controls could require significant expense and management time to remediate. Brookfield Business Corporation 23 The market price of our Class A Shares may be volatile. The market price of our Class A Shares may be highly volatile and could be subject to wide fluctuations. Some of the factors that could negatively affect the price of our Class A Shares include: general market and economic conditions, including disruptions, downgrades, credit events and perceived problems in the credit markets; actual or anticipated variations in our quarterly operating results or dividends on our Class A Shares; actual or anticipated variations or trends in market interest rates; changes in our operating businesses or asset composition; write-downs or perceived credit or liquidity issues affecting our assets; market perception of our company, our business and our assets, including investor sentiment regarding diversified holding companies such as our company; our level of indebtedness and/or adverse market reaction to any indebtedness we incur in the future; our ability to raise capital on favorable terms or at all; loss of any major funding source; the termination of our Master Services Agreement or additions or departures of our or Brookfield’s key personnel; changes in market valuations of similar companies and partnerships; and speculation in the press or investment community regarding us or Brookfield. Securities markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies or partnerships. Any broad market fluctuations may adversely affect the trading price of our Class A Shares. We do not control when the units we hold in the new evergreen fund managed by Brookfield Asset Management will be redeemed or what the value of the units will be at the time of redemption. In connection with our recent disposition of a portion of our interest in our engineered components manufacturing operation, our dealer software and technology services operation and our work access services operation, we received units of a new evergreen fund managed by Brookfield Asset Management with an initial redemption value of approximately $690 million. In the 18 month period following the initial closing of this new fund, these units are expected to be redeemed for cash at an 8.6% discount to NAV at the time of redemption, and any remaining units still outstanding after this 18-month period will be redeemable at NAV. As of December 31, 2025, approximately 13.0% of the units we hold of the new evergreen fund had been redeemed for aggregate proceeds of approximately $87 million. The timeline for redemption of the remainder of our units is not yet known and will depend on factors beyond the control of our company. There can be no assurance regarding the timing of redemption, the NAV of these units at the time of redemption or the proceeds to be received by our company. Our company is a “foreign private issuer” under U.S. securities law. Therefore, we are exempt from certain requirements applicable to U.S. domestic registrants listed on the NYSE. Although we are subject to the periodic reporting requirements of the U.S. Exchange Act, the periodic disclosure required of foreign private issuers under the U.S. Exchange Act is different from periodic disclosure required of U.S. domestic registrants. Therefore, there may be less publicly available information about our company than is regularly published by or about other companies in the United States. Our company is exempt from certain other sections of the U.S. Exchange Act to which U.S. domestic issuers are subject, including the requirement to provide our shareholders with information statements or proxy statements that comply with the U.S. Exchange Act. In addition, large shareholders of our company are not obligated to file reports under Section 16 of the U.S. Exchange Act, and we will be permitted to follow certain home country corporate governance practices (being the corporate governance practices of British Columbia companies) instead of those otherwise required under the NYSE Listed Company Manual for domestic issuers. We currently intend to follow the same corporate practices as would be applicable to U.S. domestic companies under the U.S. federal securities laws and NYSE corporate governance standards; however, as we are externally managed by the Service Providers pursuant to the Master Services Agreement and are a foreign private issuer, we do not have a compensation committee. We may elect in the future to follow our home country law for certain of our other corporate governance practices as permitted by the rules of the NYSE, in which case our shareholders would not be afforded the same protection as provided under NYSE corporate governance standards to U.S. domestic registrants. Following our home country governance practices as opposed to the requirements that would otherwise apply to a U.S. domestic company listed on the NYSE may provide less protection than is accorded to investors of U.S. domestic issuers. 24 Brookfield Business Corporation Political instability and unfamiliar cultural factors could adversely impact the value of our investments. We are subject to geographical uncertainties in all jurisdictions in which we operate, including North America. We also make investments in businesses that are based outside of North America and we may pursue investments in unfamiliar markets, which may expose us to additional risks not typically associated with investing in North America. We may not properly adjust to the local culture and business practices in such markets, and there is the prospect that we may hire personnel or partner with local persons who might not comply with our culture and ethical business practices; either scenario could result in the failure of our initiatives in new markets and lead to financial losses for us and our managed entities. There are risks of political instability in several of our major markets and in other parts of the world in which we conduct business, including, for example, Brazil, from factors such as political conflict, protests, income inequality, refugee migration, terrorism, the potential break-up of political or economic unions and political corruption; the materialization of one or more of these risks could negatively affect our financial performance. For example, changes in U.S. policy have resulted in significant new or increased tariffs, export controls and other trade measures, resulting in strained international trade relations and the implementation of retaliatory tariffs on goods imported from the U.S. by foreign governments. Unforeseen political events in markets where our operating businesses own and operate assets and may look to for further growth of our businesses, such as the U.S., Brazilian, Australian, European, Middle East, Canadian, and Asian markets, may create economic uncertainty that has a negative impact on our financial performance. Such uncertainty could cause disruptions to our businesses, including affecting the business of and/or our relationships with our customers and suppliers, as well as altering the relationship among tariffs and currencies, including the value of the Brazilian real, the British pound and the Euro relative to the U.S. and Canadian dollar. Disruptions and uncertainties could adversely affect our financial condition, operating results and cash flows. In addition, political outcomes in the markets in which we operate may also result in legal uncertainty and potentially divergent national laws and regulations, which can contribute to general economic uncertainty. Economic uncertainty impacting us and our managed entities could be exacerbated by political events, including those in the U.S., Brazil, Australia, Europe, Asia, Middle East, Canada, and elsewhere. All of our operating businesses are subject to changes in government policy and legislation. Our operations are located in many different jurisdictions, each with its own government and legal system. Our financial condition and results of operations could also be affected by changes in economic or other government policies, changes in monetary policy, as well as by regulatory changes or administrative practices, or other political or economic developments in the jurisdiction in which we operate, such as: the regulatory environment related to our business operations, concession agreements and periodic regulatory resets; interest rates; benchmark interest rate reforms; currency fluctuations; exchange controls and restrictions; inflation; tariffs; liquidity of domestic financial and capital markets; policies relating to climate change or policies relating to tax; and other political, social, economic, and environmental and occupational health and safety developments that may occur in or affect the countries in which our operating businesses are located or conduct business or the countries in which the customers of our operating businesses are located or conduct business or both. In the case of our industrial operations, we cannot predict the impact of future economic conditions, energy conservation measures, alternative energy requirements or governmental regulation, all of which could reduce the demand for the products and services provided by such businesses or the availability of commodities we rely upon to conduct our operations. It is difficult to predict government policies and what form of laws and regulations will be adopted or how they will be construed by the relevant courts, or the extent to which any changes may adversely affect us. Federal, state and foreign anti-corruption and trade sanctions laws and restrictions on foreign direct investment applicable to us and our operating businesses create the potential for significant liabilities and penalties, the inability to complete transactions, imposition of significant costs and burdens, and reputational harm and we may also be subject to various governmental investigations. We are subject to various governmental investigations, audits and inquiries, both formal and informal. These investigations, regardless of their outcome, can be costly, divert management attention and damage our reputation. The unfavorable resolution of such investigations could result in criminal liability, fines, penalties or other monetary or non-monetary sanctions and could materially affect our business or results of operations. Brookfield, our company and our operating businesses are subject to a number of laws and regulations governing payments and contributions to public officials or other third parties both domestically and in respect of operations abroad, including the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), various federal and state corruption laws, and similar laws in non-U.S. jurisdictions, such as the United Kingdom Bribery Act 2010, the Canadian Corruption of Foreign Public Officials Act (“CFPOA”), Part IV of the Canadian Criminal Code and the Brazilian Clean Company Act. This global focus on anti-bribery and corruption enforcement may also lead to more investigations, both formal and informal, in this area, the results of which cannot be predicted. Brookfield Business Corporation 25 The FCPA prohibits bribery of non-U.S. officials, candidates for office and political parties, and requires U.S. companies to keep books and records that accurately and fairly reflect those companies' transactions. Similar laws in non-U.S. jurisdictions, such as the United Kingdom Bribery Act 2010 and the CFPOA, as well as other applicable anti-bribery, anti-corruption or related laws in the United States and abroad, may also impose stricter or more onerous requirements than the FCPA, and implementing them may disrupt our business or cause us to incur significantly more costs to comply with those laws. The policies and procedures we have implemented to comply with anti-bribery and corruption legislation may be inadequate. If we fail to comply with such laws and regulations, we could be exposed to claims for damages, financial penalties, incarceration of our employees, reputational harm, restrictions on our operations and other liabilities, which could negatively affect our operating results and financial condition. In addition, we may be subject to successor liability for violations under these laws and regulations or other acts of bribery committed by us or our operating businesses. Instances of bribery, fraud, accounting irregularities and other improper, illegal or corrupt practices can be difficult to detect, in particular when conducting due diligence in connection with acquisitions, and fraud and other deceptive practices can be widespread in certain jurisdictions. We invest in emerging market countries that may not have established stringent anti-bribery and corruption laws and regulations, where existing laws and regulations may not be consistently enforced, or that are perceived to have materially higher levels of corruption according to international rating standards. Due diligence on investment opportunities in these jurisdictions is frequently more challenging because consistent and uniform commercial practices in such locations may not have developed or do not meet international standards. Bribery, fraud, accounting irregularities and corrupt practices can be especially difficult to detect in such locations. When acquiring assets in distress, the quality of financial information of the target may also make it difficult to identify irregularities. Brookfield, our company and our operating businesses are also subject to laws and regulations governing trade and economic sanctions. The Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), the U.S. Department of Commerce and the U.S. Department of State administer and enforce various trade control laws and regulations, including economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations and individuals. These laws and regulations implicate a number of aspects of our business, including servicing existing investors, finding new investors, and sourcing new investments, as well as activities by the portfolio companies in our investment portfolio or other controlled investments. Some of these regulations provide that penalties can be imposed on us for the conduct of a portfolio company, even if we have not ourselves violated any regulation. Similar laws in non-U.S. jurisdictions, such as the Special Economic Measures Act (Canada), the United Nations Act (Canada) and the Justice for Victims of Corrupt Foreign Officials Act (Canada), and E.U. sanctions, may also impose restrictions or requirements on us or our operating businesses. Applicable laws of various jurisdictions may contain conflicting provisions, making our compliance more difficult. For example, Canada has adopted measures, such as the Canadian Foreign Extraterritorial Measures Act, that could restrict certain persons and entities subject to Canadian jurisdiction from complying with sanctions imposed by other jurisdictions, such as the U.S. Beginning in February 2022, the United States and other countries began imposing sanctions targeting Russia as a result of actions taken by Russia in Ukraine. We and our portfolio companies are required to comply with these and potentially additional sanctions imposed by the United States and by other countries, for which the full costs, burdens, and limitations on our and our operating businesses and prospects are currently unknown and may become significant. In addition, the U.S. and many non-U.S. countries have laws designed to protect national security or to restrict foreign direct investment. For example, under the United States Foreign Investment Risk Review Modernization Act (“FIRRMA”), the Committee on Foreign Investment in the United States (“CFIUS”) has the authority to review, block or impose conditions on investments by non-U.S. persons in U.S. companies or real estate assets deemed critical or sensitive to the United States. Many non-U.S. jurisdictions have similar laws. For example, the E.U. has adopted an E.U.-wide mechanism to screen foreign investment on national security grounds and most E.U. member states now have a foreign investment screening mechanism in place or has initiated a consultative or legislative process expected to result in the adoption of a new mechanism or amendments to an existing mechanism, adopted a regulation aimed at regulation of foreign subsidies that could distort the internal E.U. market. We are also subject to anti-money laundering (“AML”), counter-terrorist financing and beneficial ownership transparency laws and regulations in the jurisdictions in which we operate, including the U.S. Bank Secrecy Act, the USA PATRIOT Act, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the U.K. Proceeds of Crime Act and applicable European Union AML directives. Failure to comply with applicable AML requirements, including through the actions of employees, joint venture partners, intermediaries or other third parties, could result in significant fines and penalties, restrictions on our ability to transact business, reputational harm and increased regulatory scrutiny. Enhanced AML enforcement trends, evolving beneficial ownership reporting requirements and expanding regulatory expectations may increase compliance costs and operational complexity. Under these laws, governments have the authority to impose a variety of actions, including requirements for the advance screening or notification of certain transactions, blocking or imposing conditions on certain transactions, limiting the size of foreign equity investments or control by foreign investors, and restricting the employment of foreigners as key personnel. These 26 Brookfield Business Corporation actions could limit our ability to find suitable investments, cause delays in consummating transactions, result in the abandonment of transactions, and impose burdensome operational requirements on our portfolio companies. These laws could also negatively impact our fundraising and syndication activities by causing us to exclude or limit certain investors or co-investors for our transactions. Moreover, these laws may make it difficult for us to identify suitable buyers for our investments that we want to exit and could constrain the universe of exit opportunities generally. Complying with these laws imposes potentially significant costs and complex additional burdens, and any failure by us or our portfolio companies to comply with them could expose us significant penalties, sanctions, loss of future investment opportunities, additional regulatory scrutiny, and reputational harm. Our businesses are subject to intellectual property challenges. Patents, non-compete agreements, proprietary technologies, customer relationships, trademarks, trade names and brand names are important to our business. Intellectual property protection, however, may not preclude competitors from developing products similar to ours or from challenging our names or products. Our pending patent applications, and our pending copyright and trademark registration applications, may not be allowed or competitors may challenge the validity or scope of our patents, copyrights or trademarks. In addition, our patents, copyrights, trademarks and other intellectual property rights may not provide us a significant competitive advantage. Furthermore, participants in our markets may use challenges to intellectual property as a means to compete. Patent and trademark challenges increase our costs to develop, engineer and market our products. We may need to spend significant resources monitoring our intellectual property rights and we may or may not be able to detect infringement by third parties. If we fail to successfully enforce our intellectual property rights or register new patents, our competitive position could suffer, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Possible failure to realize the anticipated benefits of the Arrangement. A variety of factors, including those risk factors set forth in this Form 20-F, may adversely affect our ability to achieve the anticipated benefits of the Arrangement, including broader access to global investors, improved consolidated trading liquidity, increased demand from expected index inclusion and other anticipated tax benefits, amongst other benefits. A failure to realize the anticipated benefits of the Arrangement could have a material adverse effect on our business and operations. Risks Relating to our Business Services Operations Our residential mortgage insurer is subject to the inherent insurance risk within its portfolio. Our residential mortgage insurer is influenced by macroeconomic conditions. Specifically, the level of premiums written is influenced by economic growth, interest rates, unemployment, housing activity, home prices and government policy, among other factors. Losses on claims are primarily impacted by unemployment rates, home prices and housing activity. A significant downturn in global, Canadian or any provincial economies could have an adverse effect on our residential mortgage insurer and its results of operations. Further, as our residential mortgage insurer provides mortgage insurance primarily for high loan-to-value mortgages, material changes in factors that impact the volume of such mortgages could lead to a decrease in the volume of transactional insurance originations, which would reduce the demand for mortgage insurance and, therefore, could have an adverse effect on its financial condition and results of operations. Material changes in factors that impact the volume of such mortgages include changes in the level of mortgage interest rates, housing prices, government housing policies and other government action to reduce consumer debt levels and changes to the capital treatment of privately insured mortgages that could disproportionately increase the regulatory capital held on privately insured mortgages relative to non-privately insured mortgages. We can provide no assurance that our residential mortgage insurer will not be negatively affected by these factors in the future, whether or not there is an improving interest rate environment; accordingly, our residential mortgage insurer may be adversely affected. Our residential mortgage insurer is heavily regulated and may be affected by changes in government policy. Failure of our residential mortgage insurer to meet its regulatory requirements or changes in regulation and governance requirements may impact the housing and mortgage markets, reduce its profitability, impact regulatory capital requirements, affect its ability to pay dividends or distribute capital to shareholders, expose it to claims, fines or penalties and could limit its growth. Action or inaction by the federal government of Canada in respect of its policy of supporting home ownership in Canada through mortgage insurance, could significantly reduce the demand for, or availability of, private sector mortgage insurance or mortgage insurance in general. For example, all financial institutions that are federally regulated by the OSFI are required to purchase mortgage insurance whenever the amount of a mortgage loan exceeds 80% of the value of the collateral property at the time the loan is made. A change to this requirement or any change to the threshold loan-to-value ratio could adversely affect the operations of our residential mortgage insurer and could reduce the demand for mortgage insurance. Brookfield Business Corporation 27 In addition, our residential mortgage insurer is subject to capital requirements imposed under Canadian law, including the Insurance Companies Act and the Protection of Residential Mortgage or Hypothecary Insurance Act. A decline in the regulatory capital of our residential mortgage insurer in relation to the size of risk it is insuring or an increase in its regulatory capital requirements could result in a decline in its ratings, increased scrutiny by OSFI, restrictions on our residential mortgage insurer from writing new business, distributing capital, utilizing capital for business needs, and could have an adverse impact on its financial condition, results of operations and prospects. Our residential mortgage insurer primarily competes with CMHC. CMHC, a Crown Corporation, may establish pricing terms and business practices that may be influenced by Canadian government policy initiatives such as advancing social housing policy or stabilizing the mortgage lending industry, initiatives which may not be consistent with maximizing return on capital or other profitability measures. In the event that CMHC determines to reduce prices or alter the terms and conditions of its mortgage insurance or other credit enhancement products in furtherance of social or other goals rather than a profit motive, our residential mortgage insurer may be unable to compete effectively, which could have an adverse effect on its financial condition and results of operations. The Canadian mortgage origination market is highly concentrated, with the five largest mortgage originators providing the majority of the residential mortgage financing in Canada. High market concentration may expose our residential mortgage insurer to reduced sales or adverse loan selection in the future should a significant lender change the type of loans or level of business that they underwrite with us or terminate or reduce its relationship with us. Additionally, much of our residential mortgage insurer in Canada is concentrated in only four provinces (Ontario, British Columbia, Alberta and Quebec), which increases the vulnerability of our residential mortgage insurer to economic or market downturns, catastrophic events or acts of terrorism in those provinces. We may not be able to accurately forecast the risks associated with our residential mortgage insurer. Our residential mortgage insurer is subject to model risk, particularly the risk of error in the design, development, implementation or subsequent use of models. A failure in our modelling could adversely impact our ability to properly evaluate, reserve, price and mitigate risks and the associated losses. If the pricing of our residential mortgage insurer is inadequate, its loss and unearned premiums reserves do not adequately reflect the financial condition of the business, or there are inadequate loss reserves for unexpected market events, results of operations and regulatory capital may be adversely affected. In addition, our residential mortgage insurer may experience increasing loss as the policies continue to age. Sustained material shifts in the emergence of losses on claims could affect timing of revenue recognition, which may adversely affect our residential mortgage insurer’s operations and financial condition. There are risks associated with our Canadian residential and multi-family mortgage lender. Our Canadian residential and multi-family mortgage lender uses primarily institutional placements and securitization vehicles and, to a lesser extent, its own equity and available secured and unsecured debt as sources of capital for financing mortgages. Our Canadian residential and multi-family mortgage lender’s securitization programs access the capital markets for the issuance of National Housing Act – mortgage backed securities, Canada mortgage bonds, asset backed commercial paper and commercial mortgage backed securities. Our Canadian residential and multi-family mortgage lender’s ability to continue to fund and securitize mortgages, to honor its mortgage commitments to borrowers and to ultimately collect on its retained interests is dependent upon the performance of existing securitization structures, on market conditions for these types of instruments and on commitments of institutional investors. Changes in market conditions, rating agency ratings or requirements, accounting standards, the commitments of institutional investors, the performance of the mortgage portfolio or regulatory requirements could result in an increase in the costs within the securitization structures, temporary periods in which the structures or institutional placements are not available or permanent unavailability of the structures or institutional placements. Our Canadian residential and multi-family mortgage lender’s retained interest in securitization structures may be adversely affected by these changes or the underlying performance of the assets in the structure. Any such adverse changes may require our Canadian residential and multi-family mortgage lender to recognize a write down of the retained interest in future periods due to our Canadian residential and multi-family mortgage lender’s gain on sale accounting. We cannot predict the duration of our Canadian residential and multi-family mortgage lender’s funding sources, nor can we predict the extent to which a future credit market disruption could affect our Canadian residential and multi-family mortgage lender’s ability to raise capital for financing mortgages. Since we are unable to predict if the capital markets will continue to function at levels experienced in the previous year, we are also unable to predict whether funding spreads and liquidity will continue to provide our Canadian residential and multi-family mortgage lender with cost efficient funding for its mortgages. Our Canadian residential and multi-family mortgage lender’s mortgage operations are dependent on a network of mortgage brokers. The mortgage brokers with whom our Canadian residential and multi-family mortgage lender does business are 28 Brookfield Business Corporation not contractually obligated to do business with our Canadian residential and multi-family mortgage lender. Further, our Canadian residential and multi-family mortgage lender’s competitors also have relationships with the same brokers and actively compete with our Canadian residential and multi-family mortgage lender in its efforts to expand its broker network and originate mortgage loans. Our Canadian residential and multi-family mortgage lender may find it difficult to attract new mortgage business from this network of brokers, or sustain current levels, to meet its needs. The failure by our Canadian residential and multi-family mortgage lender to sustain or increase its current level of mortgage origination from these sources could have a material adverse effect on our Canadian residential and multi-family mortgage lender’s business, financial condition and results of operations and on the amount of cash available for dividends to shareholders. When our Canadian residential and multi-family mortgage lender funds mortgages, it relies heavily upon information supplied by third parties including the information contained in mortgage applications, property appraisals, title information and employment and income documentation. If any of this information is misrepresented and the misrepresentation is not detected before mortgage funding, the value of the mortgage may be significantly lower than expected. Whether the mortgage applicant, the mortgage broker, another third party or one of our Canadian residential and multi-family mortgage lender’s employees makes a misrepresentation, our Canadian residential and multi-family mortgage lender generally bears the risk of loss associated with the misrepresentation. A mortgage subject to a misrepresentation may be unsaleable in the ordinary course of business or may be subject to repurchase or substitution if it is sold before detection of the misrepresentation or may require our Canadian residential and multi-family mortgage lender to indemnify the mortgage purchaser. The persons and entities that made a misrepresentation are often difficult to locate and it may be difficult to collect from them any monetary losses our Canadian residential and multi-family mortgage lender may have suffered. While our Canadian residential and multi-family mortgage lender has controls and processes designed to help it identify misrepresented information in its mortgage origination operations, there can be no assurance these controls and processes have detected or will detect all misrepresented information. There are risks associated with our dealer software and technology services operation. Our dealer software and technology services operation faces intense competition. If we do not continue to respond quickly to technological developments or customers’ shifting technological requirements or to compete effectively against other providers of technology solutions to automotive retailers, OEMs, and other participants in the automotive retail industry, it could have a material adverse effect on our business, results of operations, and financial condition. The industry is highly fragmented and subject to rapidly evolving technology, shifting customer needs, and frequent introductions of new solutions. Although the automotive retail industry is fragmented, a relatively small number of OEMs, consolidated retailer groups and retailer associations exert significant influence over the market acceptance of automotive retail products and services due to their concentrated purchasing activity, their endorsement or recommendation of specific products and services and/or their ability to define technical standards and certifications. If we are unable to establish, maintain or grow relationships with these key industry participants, our dealer software and technology services operation may not perform as well as anticipated, which may adversely affect our results of operations. There are risks associated with the real estate industry in Canada. The performance of our real estate services operation is dependent upon receipt of royalties, which in turn is dependent on the level of residential real estate transactions. The real estate industry has been affected by an increase in the general levels of interest rates, and is affected by all of the factors that affect the economy in general, and in addition may be affected by the aging network of real estate agents and brokers across Canada. This adverse interest rate environment has had a negative impact on our real estate services operation over the past couple of years, and this may continue in the near term. In addition, there is pressure on the rate of commissions charged to the consumer and internet use by real estate consumers has led to a questioning of the value of traditional residential real estate services. Finally, changes to mortgage and lending rules in Canada that are implemented or contemplated from time to time have the potential to negatively impact residential housing prices and/or the number of residential real estate transactions in Canada, either or both of which could in turn reduce commissions and therefore royalties. Brookfield Business Corporation 29 There are risks associated with our entertainment operation. Our entertainment operation is conducted pursuant to operational services agreements with Ontario Lottery and Gaming Corporation and gaming corporations. Although the agreements are renewable, there is no guarantee that we will continue to satisfy the conditions required for renewal. Additionally, when the renewal term expires, we may not be able to enter into new agreements that are the same as those historically, which may result in decreased revenues, increased operating costs or closure of an operation. Under the operational services agreements, the lottery and gaming corporations have the ability to suspend or terminate our right to provide services under the agreements for certain specified reasons. If we operate our entertainment operation in a manner inconsistent with the Criminal Code of Canada or applicable anti-money laundering legislation, violate provincial gaming laws or prejudice the integrity of gaming, the provincial lottery corporations may terminate one or more of our operational services agreements. If one or more of the operational services agreements are terminated, this will seriously impact the business. Furthermore, our entertainment operation is contingent upon obtaining and maintaining all necessary licenses, permits, approvals, registrations, findings of suitability, orders and authorizations. The laws, regulations and ordinances requiring these licenses, permits and other approvals generally relate to the responsibility, financial stability and character of the owners and managers of our entertainment operation, as well as persons financially interested or involved in our entertainment operation. Regulatory authorities have broad powers to request detailed financial and other information, to limit, condition, suspend or revoke a registration, gaming license or related approvals to approve changes in our operations, and to levy fines or require forfeiture of assets for violations of gaming laws or regulations. Complying with gaming laws, regulations and license requirements is costly. Any change in the laws, regulations or licenses applicable to our business or a violation of any current or future laws or regulations applicable to our business or gaming licenses could require us to make substantial expenditures or forfeit assets, and would negatively affect our entertainment operation. Our construction operation is vulnerable to the cyclical nature of the construction market. Accordingly, in recent years, we have experienced slowdowns in our construction operation, impacted by inflationary pressures and reduced demand for new buildings. The demand for our construction operation, including work access services, is dependent upon the existence of projects with engineering, procurement, construction and management needs. For example, a substantial portion of the revenues from our construction operation derives from residential, commercial and office projects in Australia and the United Kingdom. Capital expenditures by our clients may be influenced by factors such as prevailing economic conditions and expectations about economic trends, technological advances, consumer confidence, domestic and international political, military, regulatory and economic conditions and other similar factors. Our construction operation profitability is closely tied to the general state of the economy in those geographic areas in which we operate including North America, Europe, Australia and the Middle East, all of which have experienced and continue to experience varying degrees of adverse impacts due to general economic conditions and by rising inflationary pressures. More specifically, the demand for construction and infrastructure development services, which is the principal component of our construction operation, would typically be the largest single driver of our construction operation growth and profitability. In periods of strong economic growth, there is generally an increase in the number of opportunities available in the construction and infrastructure development industry as capital spending increases. In recessionary periods or periods of weak economic growth, the demand for our construction operation services from private sector and public authority clients may be adversely affected. We can provide no assurance that our construction operation will realize significant improvement in the near term, or at all, which may have a material adverse effect on our results of operations. Our revenues and earnings from our construction operation is largely dependent on the award of new contracts which we do not directly control. A substantial portion of the revenues and earnings of our construction operation, including work access services, is generated from large-scale project awards. The timing of project awards is unpredictable and outside of our control. Awards often involve complex and lengthy negotiations and competitive bidding processes. These processes can be impacted by a wide variety of factors including a client’s decision to not proceed with the development of a project, governmental approvals, financing contingencies and overall market and economic conditions. We may not win contracts that we have bid upon due to price, a client’s perception of our ability to perform and/or perceived technology advantages held by others. Many of our competitors may be inclined to take greater or unusual risks or agree to terms and conditions in a contract that we might not deem acceptable. Because a significant portion of our construction operation revenues are generated from large projects, the results of our construction operation can fluctuate quarterly and annually depending on whether and when large project awards occur and the commencement and progress of work under large contracts already awarded. As a result, we are subject to the risk of losing new awards to competitors or the risk that revenues may not be derived from awarded projects as quickly as anticipated. 30 Brookfield Business Corporation Our construction operation and work access services may experience reduced profits or losses under contracts if costs increase above estimates. Generally, our construction operation and work access services, is performed under contracts that include cost and schedule estimates in relation to our services. Inaccuracies in these estimates may lead to cost overruns that may not be paid by our clients, thereby resulting in reduced profits or in losses. If a contract is significant or there are one or more events that impact a contract or multiple contracts, cost overruns could have a material impact on our reputation or our financial results, negatively impacting the financial condition, results of operations or cash flow of our construction operation. A portion of our ongoing construction projects are in fixed-price contracts, where we bear a significant portion of the risk for cost overruns. Reimbursable contract types, such as those that include negotiated hourly billing rates, may restrict the kinds or amounts of costs that are reimbursable, therefore exposing us to risk that we may incur certain costs in executing these contracts that are above our estimates and not recoverable from our clients. If our construction operation fail to accurately estimate the resources and time necessary for these types of contracts, or fails to complete these contracts within the timeframes and costs we have agreed upon, there could be a material impact on the financial results as well as reputation of our construction operation. Risks under our construction contracts which could result in cost overruns, project delays or other problems can also include: •difficulties related to the performance of our clients, partners, subcontractors, suppliers or other third parties; •changes in local laws or difficulties or delays in obtaining permits, rights of way or approvals; •unanticipated technical problems, including design or engineering issues; •insufficient or inadequate project execution tools and systems needed to record, track, forecast and control cost and schedule; •unforeseen increases in, or failures to, properly estimate the cost of raw materials, components, equipment, labor or the inability to timely obtain them; •delays or productivity issues caused by weather conditions; •incorrect assumptions related to productivity, scheduling estimates or future economic conditions; and •project modifications creating unanticipated costs or delays. These risks tend to be exacerbated for longer-term contracts because there is an increased risk that the circumstances under which we based our original cost estimates or project schedules will change with a resulting increase in costs. In many of these contracts, we may not be able to obtain compensation for additional work performed or expenses incurred, and if a project is not executed on schedule, we may be required to pay liquidated damages. In addition, these losses may be material and can, in some circumstances, equal or exceed the full value of the contract. In such circumstances, the financial condition, results of operations and cash flow of our construction operation could be negatively impacted. We enter into performance guarantees which may result in future payments. In the ordinary course of our construction operation and work access services, we enter into various agreements providing performance assurances and guarantees to clients on behalf of certain unconsolidated and consolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support the project execution commitments of these entities. The performance guarantees have various expiration dates ranging from mechanical completion of the project being constructed to a period extending beyond contract completion in certain circumstances. Any future payments under a performance guarantee could negatively impact the financial condition, results of operations and cash flow of our construction operation. Our construction operation operates under various types of contracts. Our construction operation performs under a variety of contract types, including lump sum, guaranteed maximum price, cost reimbursable, schedule of rates, managing contractor, construction management and design-build. Some forms of construction contracts carry more risk than others. We attempt to maintain a diverse mix of contracts to prevent overexposure to the risk profile of any particular contractual structure; however, conditions influencing both private sector and public authority clients may alter the mix of available projects and contractual structures that our construction operation undertakes. Brookfield Business Corporation 31 In most instances, our construction operation guarantees to its clients that they will complete a project by a scheduled date. If the project subsequently fails to meet the scheduled date, we could incur additional costs or penalties commonly referred to as liquidated damages, which are usually capped. Although we attempt to negotiate waivers of consequential loss, on some contracts there is some liability, which is also usually capped. In addition, although we have indemnity agreements with Brookfield that relate to certain construction projects, there can be no assurance that such indemnity agreements will sufficiently cover the payments we may be required to make in the future. In our construction operation, this may include litigation and claims from clients or subcontractors, in addition to our associated counterclaims. There can also be a liability where certain performance standards are not met. Such penalties may be significant and could impact our construction operation’s financial position or results of future operations. Furthermore, schedule delays may also reduce profitability because staff may be prevented from pursuing and working on new projects. Project delays may also reduce customer satisfaction, which could impact future awards. Climate change and transitioning to a lower carbon economy may impact our construction operation. Many of our construction operation’s activities are performed outdoors. The probability and unpredictability of extreme weather events and other associated incidents may continue to increase due to climate change and we may continue to see longer-term shifts in climate patterns. Increases in the severity and/or frequency of weather conditions due to climate change such as earthquakes, hurricanes, tornadoes, fires, floods, droughts and similar events, may cause more regular and severe interruptions in our construction operation. Severe weather events may also impact the availability and cost of raw materials and may impact the raw materials supply chain and disrupt key manufacturing facilities. In addition, the transition to a lower-carbon economy has the potential to be disruptive to traditional business models and investment strategies. Our construction operation’s private and/or public-sector clients may shift their infrastructure priorities due to changes in project funding, regulatory requirements or public perception. This risk can be mitigated to an extent by identifying changing market demands to offset lower demand in some sectors with opportunities in others, forming strategic partnerships and pursuing sustainable innovations. Government action to address climate change may involve economic instruments such as carbon and energy consumption taxes, restrictions on economic sectors, such as cap-and-trade, increasing efficiency standards and more stringent regulation and reporting of greenhouse gas emissions that could also impact our construction operation’s current or potential clients operating in industries that extract, distribute and transport fossil fuels. There are risks associated with our convertible preferred security investment in Nielsen. We hold a convertible preferred security investment in Nielsen and accordingly, our financial results may be impacted by the performance of this business. The underlying audience measurement operation requires sophisticated data collection, processing systems, software and other technology. Some of the technologies supporting the industries the business serves are changing rapidly. The business has been and will be required to adapt to changing technologies and industry standards, either by developing and marketing new services, investing in new services or enhancing its existing services to meet client demand. Moreover, the accelerating technology turn-over in audience measurement businesses, the introduction of new services embodying new technologies and the emergence of new regulatory and industry standards could render existing services technologically or commercially obsolete. Continued success will depend on the ability of the business to adapt to changing technologies, manage and process ever-increasing amounts of data and information, build and apply the appropriate processes to comply with requirements imposed by third parties regarding licensed or collected data, and improve the performance, features and reliability of its existing services in response to changing client, regulatory and industry demands. The business may experience difficulties that could delay or prevent the successful design, development, testing, introduction or marketing of Nielsen. Criticism from various industry groups and market segments could also adversely affect the business. Due to the high-profile nature of Nielsen data in the media, internet and entertainment information industries, Nielsen has been, and could continue to be, the target of criticism in the media and in other venues by various industry groups and market segments. The business strives to be fair, transparent and impartial in the production of audience measurement services. The quality of Nielsen’s U.S. ratings services is voluntarily subject to review and accreditation by the Media Ratings Council. Criticism of this business by special interests, and by clients with competing and often conflicting demands on Nielsen’s measurement service, could result in government regulation and/or a decrease in the demand for its services and put additional pressure on the pricing of its services, thereby leading to decreased earnings and cash flows. While we believe that government regulation of Nielsen is unnecessary, no assurance can be given that legislation will not be enacted in the future that would subject this business to regulation, which could adversely affect the performance of Nielsen and may in turn have an adverse effect on our convertible preferred security investment. 32 Brookfield Business Corporation In addition, design defects, errors, failures or delays associated with the products or services of the business could negatively impact Nielsen. Despite testing, the software, products and services that Nielsen develops, licenses or distributes may contain errors or defects when first released or when major new updates or enhancements are released that cause the product or service to operate incorrectly or less effectively. Many of these products and services also rely on data, equipment and services provided by third-party providers over which the business has no control and may be provided to us with defects, errors or failures. These third-party providers may be unable to meet the quality, safety or timeline requirements of the business in a way that may have an adverse impact on its products, services or users. In addition, the data integrity and quality of Nielsen relies on human-led, manual data collection and management processes that may be vulnerable due to human error and complexity of systems, resulting in the need for increased field support to ensure sample representation and prevent unauthorized or excessive access. A deterioration of the data integrity and quality of Nielsen could have an adverse effect on the performance of this business, which may in turn have an adverse effect on our convertible preferred security investment. There are risks associated with our Australian asset manager and lender. As a non-bank lender, our Australian residential mortgage lending business is impacted by changes in interest rates. Central banks, including the Reserve Bank of Australia, have implemented corrective measures to address inflation through a series of interest rate increases since 2022. These increases in interest rates have and may continue to impact our clients’ creditworthiness and therefore impact our operations as well, which resulted in a negative effect on our earnings through higher provisions for credit losses and higher operating costs. As a provider of residential property-backed loans and one of Australia’s leading mortgage originators, our Australian residential mortgage lender is significantly influenced by changes in the Australian housing market and housing industry. The recent economic slowdown, increases in the general level of interest rates and increases in the rate of inflation have contributed to elevated Australian household indebtedness and could also lead to changes in the demand for housing in the future. Any reduction in home sales activity would impact mortgage origination volumes and persistent inflation would put additional pressure on household budgets, which could contribute to a greater risk of default and credit losses. The Australian housing industry is also highly regulated and any changes to regulatory requirements could increase compliance costs, impact fees and adversely affect the performance of our Australian residential mortgage lending business. There are risks associated with our non-bank financial services operation. The primary factors that could adversely affect our non-bank financial services operation and reduce its ability to provide financing services at competitive rates include the sufficiency, availability and cost of sources of financing, including credit facilities, securitization programs and secured and unsecured debt issuances; the performance of loans and leases in our non-bank financial services operation portfolio, which could be materially affected by charge-offs, delinquencies and prepayments; fluctuations in interest rates and currencies; competition for customers from commercial banks, credit unions, vehicle manufacturers and other financing and leasing companies; and changes to financial sector regulation, supervision, enforcement and licensing, in particular as it relates to non-bank financial companies. There are risks associated with our payment processing services operation. Our payment processing services operation is impacted by cyber-security risks to our systems or data and other technological risks including software defects, disruptive technologies, undetected errors and development delays that could negatively affect our reputation with cardholders and customers and expose us to penalties, fines, liabilities and legal claims. In addition, the potential failure of our systems or our third-party providers’ systems, which could interrupt service, cause us to lose business, increase our costs and expose us to liability. The performance of our payment processing operation carries fraud and credit risk, including the risks of intentional unauthorized payment transactions, financial or non-financial losses from misrepresentations, and the inability of merchants or clients to meet financial obligations, which could result in a higher level of losses causing a material impact on reported results and reputation. Further, the highly competitive and innovative nature of the payment processing technology industry, as some of our competitors have greater financial and operational resources than we do, which may give them an advantage with respect to the pricing of services and the ability to develop new and disruptive technologies. Our payment processing services operation operates in target markets, including the Middle East and Africa, which are impacted by political, social, and economic instability risks, including the risk of a geopolitical event that impacts our ability to do business or to meet our strategic objectives. In particular, on-going conflict in the Middle East presents risks to the regional economy. Our operations in the Middle East and Africa are also impacted by the risk of failing to maintain our strategic position as the best payments partner in the region, which could cause a loss of market share, stalled growth, and an inability to meet profit targets. Brookfield Business Corporation 33 Our payment processing services operation is subject to minimum capital funding requirements and is impacted by liquidity, foreign exchange, and interest rate risks that could affect our ability to meet our financial obligations, profitability targets, or working capital needs. Risks Relating to Our Infrastructure Services Operations There are risks associated with our lottery services operation. Our lottery services operation depends heavily on our ability to win, maintain and renew our long-term lottery contracts, and we could lose substantial revenue if we are unable to renew such contracts on substantially similar terms or at all. As some jurisdictions seek to privatize or outsource lottery services operation, we face competition from both traditional and new competitors with respect to these opportunities. In some cases, we may find it necessary or desirable to enter into strategic relationships with third parties, including competitors, and may be required to commit significant sums of money in order to pursue these opportunities. The success of our lottery services operation depends on our ability to produce new and innovative products and services that respond to customer demand and create strong and sustained player appeal. The process of developing new products and services is inherently complex and uncertain. If we fail to do so, we could lose business to our competitors. Our lottery business depends on suppliers and contract manufacturers, and any failure of these parties to meet our performance and quality standards or requirements could cause us to incur additional costs or lost customers. Our production of instant lottery products are dependent upon a continuous supply of raw materials, supplies, power and natural resources and the manufacture and maintenance of our lottery systems are dependent upon a regular and continued supply of raw materials and components, many of which are manufactured or produced outside the jurisdiction in which they are used. Our operating results could be adversely affected by an interruption or cessation in the supply of these items or services or by a serious quality assurance lapse with respect thereto. As a result of our acquisition of Scientific Games Lottery in 2022, we are subject to additional laws and regulations relating to the lottery business in various countries in which Scientific Games Lottery operates. Our lottery services operation often requires entering into joint ventures or other business relationships in foreign jurisdictions with locally based entities, which presents additional risks, including our lack of sole decision-making authority, our reliance on a partner’s financial condition, inconsistency between our business interests or goals and those of our partners, disputes with our partners, and not realizing the operating efficiencies, competitive advantages or financial results that we anticipate. Our offshore oil services depend on continued growth in global and regional demands for such services. Our offshore oil services depend on continued growth in global and regional demands for such services, which could be negatively affected by a number of factors, including: •decreases in the actual or projected price of oil, which could lead to a reduction in or termination of production of oil at certain fields we service or a reduction in exploration for or development of new offshore oil fields; •increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, the conversion of existing non-oil pipelines to oil pipelines in those markets, or the termination of production or abandonment of an oil field; •decreases in the consumption of oil due to increases in its price relative to other energy sources, other factors making consumption of oil less attractive, or energy conservation measures; •significant installment payments for acquisitions of newbuilding vessels or for the conversion of existing vessels prior to their delivery and generation of revenues; •reliance on a limited number of customers for a substantial majority of our revenues and on joint venture partners to assist us in operating our businesses and competing in our markets; •availability of new, alternative energy sources; and •negative global or regional economic or political conditions, particularly in oil consuming regions, which could reduce energy consumption and/or growth in such regions. 34 Brookfield Business Corporation Reduced demand for offshore marine transportation, processing, storage services, offshore accommodation and offshore installation services would have a material adverse effect on future growth of our marine transportation and offshore oil production-related services business, and could adversely affect our business, results of operations and financial condition. Marine transportation and oil production is inherently risky, particularly in the extreme conditions in which many of our vessels operate. An incident involving significant loss of product or environmental contamination by any of our vessels could harm our reputation and business. Vessels and their cargoes and oil production facilities we service are at risk of being damaged or lost because of events such as: •marine disasters; •bad weather; •mechanical failures; •grounding, capsizing, fire, explosions and collisions; •piracy; •human error; and •war and terrorism. A portion of our fleet, the Voyageur Spirit and Petrojarl Knarr FPSO units operate in the North Sea. Harsh weather conditions in this region and other regions in which our vessels operate may increase the risk of collisions, oil spills or mechanical failures. An accident involving any of our vessels could result in any of the following: •death or injury to persons, loss of property or damage to the environment and natural resources; •delays in the delivery of cargo; •loss of revenues from charters or contracts of affreightment; •liabilities or costs to recover any spilled oil or other petroleum products and to restore the eco-system affected by the spill; •governmental fines, penalties or restrictions on conducting business; •higher insurance rates; and •damage to our reputation and customer relationships generally. Any of these results could have a material adverse effect on our business, financial condition and operating results. In addition, any damage to, or environmental contamination involving, oil production facilities serviced could suspend that service and result in loss of revenues. Our recontracting of existing vessels and our future growth depends on our ability to expand relationships with existing customers and obtain new customers, for which we expect to face substantial competition. One of our principal objectives is to enter into additional long-term, fixed-rate time charters and contracts of affreightment, including the redeployment of our assets as their current charter contracts expire. The process of obtaining new long-term time charters and contracts of affreightment is highly competitive and generally involves an intensive screening process and competitive bids, and often extends for several months. FSO, FPSO, and offshore installation vessel and Unit for Maintenance Safety contracts are awarded based upon a variety of factors relating to the vessel operator, including: •industry relationships and reputation for customer service and safety; •experience and quality of ship operations; •quality, experience and technical capability of the crew; •relationships with shipyards and the ability to get suitable berths; Brookfield Business Corporation 35 •construction management experience, including the ability to obtain on-time delivery of new vessels or conversions according to customer specifications; •willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events; and •competitiveness of the bid in terms of overall price. We expect competition for providing services for potential offshore projects from other experienced companies, including state-sponsored entities. Our competitors may have greater financial resources than us. This increased competition may cause greater price competition for charters. As a result of these factors, we may be unable to expand our relationships with existing customers or to obtain new customers on a profitable basis, if at all, which would have a material adverse effect on our business, results of operations and financial condition. There are risks related to our work access services. Our work access services are subject to the risks inherent to our construction operation, including risks relating to seasonal fluctuations in the demand for our services, the timing of large-scale project awards which we do not directly control, fixed price contracts and reduced profits or losses if costs increase above estimates, performance assurances and guarantees which may result in future payments, a dependence on labor and performance being materially impacted by a lack of availability of labor force or increases in the cost of labor available, and operational hazards that could result in personal injury or death, work stoppage or serious damage to our equipment on the property of our customers. These delays and any similar delays we may experience in the future may have a negative impact on our future results. There are risks associated with our modular building leasing services in Europe and Asia. Our modular building leasing services principally generate revenues through the rental or sale of modular units. Our modular building leasing services results of operations could be adversely affected by declines in demand for its rental units. Demand for its rental units has been affected by a number of factors, including geopolitical uncertainty, competition and saturation in the European and Asian markets. Prevailing general and local economic conditions have also negatively affected the demand for rental units, particularly from current and potential customers that are small- and mid-sized businesses and may be disproportionately affected by adverse economic conditions. Risks Relating to Our Industrials Operations Decreased demand from our customers in the automotive industry may adversely affect the results of operations for our advanced energy storage operation. The financial performance of our advanced energy storage operation depends, in part, on conditions in the automotive industry. Declines in the North American, European and Asian automotive production levels, if not offset by aftermarket demand, could reduce our sales and adversely affect our results of operations. In addition, if any OEMs reach a point where they cannot fund their operations, we may incur write-offs of accounts receivable, incur impairment charges or require additional restructuring actions beyond our current restructuring plans, which, if significant, would have a material adverse effect on our advanced energy storage operation and results of operations. An inability to successfully respond to competition and pricing pressures from other companies in the same industry may adversely impact our advanced energy storage operation. Our advanced energy storage operation competes with a number of major manufacturers and distributors of automotive batteries, as well as a large number of smaller, regional competitors. The North American, European and Asian automotive battery markets are highly competitive. The manufacturers in these markets compete on price, quality, technical innovation, service and warranty. Additionally, our advanced energy storage operation faces significant pricing pressures from customers, which results in other market participants looking to compete on price and other contractual terms. If we are unable to remain competitive and maintain market share in the regions and markets we serve, the financial condition and results of operations of our advanced energy storage operation may be adversely affected. 36 Brookfield Business Corporation Volatility in commodity prices may adversely affect the results of operations of our advanced energy storage operation. Lead is a major component of automotive batteries, and the price of lead may be highly volatile. We attempt to manage the impact of changing lead prices through the recycling of used batteries returned to us by our aftermarket customers, commercial terms and commodity hedging programs. Our ability to mitigate the impact of lead price changes is subject to many factors, including customer negotiations, inventory level fluctuations and sales volume/mix changes, any of which could have an adverse effect on the results of operations of our advanced energy storage operation. A variety of other factors could adversely affect the results of operations of our advanced energy storage operation. Any of the following could materially and adversely impact the results of operations of our advanced energy storage operation: (i) volatility in the price of lead; (ii) loss of, or changes in, automobile battery supply contracts with our large original equipment and aftermarket customers; (iii) the increasing quality and useful life of batteries or use of alternative battery technologies, both of which may adversely impact the automotive battery market, including replacement cycle; (iv) delays or cancellations of new vehicle programs; (v) market and financial consequences of any recalls that may be required on our products; (vi) delays or difficulties in new product development, including lithium-ion technology; (vii) impact of potential increases in lithium-ion battery volumes on established battery volumes as lithium-ion battery technology improves and costs become more competitive; (viii) financial instability or market declines of our customers or suppliers; (ix) slower than projected market development in emerging markets; (x) interruption of supply of certain single-source components; (xi) changing nature of our joint ventures and relationships with our strategic business partners; (xii) unseasonable weather conditions in various parts of the world; (xiii) our ability to secure sufficient tolling capacity to recycle batteries; (xiv) price and availability of battery cores used in recycling; and (xv) the pace of the development of the market for hybrid and electric vehicles. There are risks associated with our water and wastewater operation in Brazil. Our water and wastewater operation subjects us to the risks incidental to the ownership and operation of such businesses in Brazil, any of which may adversely affect our financial condition, results of operations and cash flows, including the following risks: •The government may impose restrictions on water usage as a response to regional or seasonal drought, which may result in decreased use of water services, even if our water supplies are sufficient to serve our customers. Moreover, reductions in water consumption, including changed consumer behavior, may persist even after drought restrictions are repealed and the drought has ended. •Our water and wastewater operation will require significant capital expenditures and may suffer if we fail to secure appropriate funding to make investments, or if we experience delays in completing major capital expenditure projects. •In the event that water contamination occurs, there may be injury, damage or loss of life to our customers, employees or others, in addition to government enforcement actions, litigation, adverse publicity and reputational damage. •Water and wastewater businesses may be subject to organized efforts to convert their assets to public ownership and operation through exercise of the governmental power of eminent domain, or another similar authorized process. Moreover, there is a risk that any efforts to resist may be costly, distracting or unsuccessful. •Water related businesses are subject to extensive governmental economic regulation including with respect to the approval of rates. •The Brazilian government has historically exercised, and continues to exercise, significant influence over the Brazilian economy. Brazilian political and economic conditions may adversely affect our water and wastewater operation in Brazil. •Political and economic conditions directly affect our water and wastewater operation and can result in a material adverse effect on our water and wastewater operation’s business, financial condition and results of operations. Macroeconomic policies imposed by the Brazilian government can have a significant impact on Brazilian companies or companies with significant operations in Brazil. •We cannot control or predict whether the current Brazilian government will implement changes to existing policies or the impact any such changes may have on our water and wastewater operation in Brazil. Our water and wastewater operation’s operating results, financial condition and prospects may all be affected by any change in the macroeconomic conditions in Brazil. Brookfield Business Corporation 37 There are risks associated with our solar power solutions in Brazil. The solar energy industry is highly competitive and also competes with large utilities. Decreases in the retail prices of electricity from utilities or other renewable energy sources could harm our ability to distribute solar power generators. In addition, there may be certain governmental rebates, tax credits and other financial incentives that are made available with respect to solar energy products. However, these incentives may expire, end when the allocated funding is exhausted or be reduced or terminated as solar energy adoption rates increase. Our solar power solutions is affected by conditions in the solar power market and industry. The solar power market and industry may from time to time experience oversupply. When this occurs, many solar power product distributors that purchase solar power products, including solar modules from manufacturers, may be adversely affected. If the supply of solar modules grows faster than demand, and if governments reduce financial support for the solar industry and impose trade barriers for solar power products, demand and the average selling price for our products could be materially and adversely affected. The solar power market is still at a relatively early stage of development and future demand for solar power products and services is uncertain. In addition, demand for solar power generators in Brazil may not develop or may develop to a lesser extent than we anticipate. Many factors may affect the viability of solar power technology and the demand for solar power generators. If solar power technology is not suitable for widespread adoption or if sufficient demand for solar power products and services does not develop or takes longer to develop than we anticipate, our revenues may suffer and we may be unable to sustain our profitability. Our natural gas production is subject to all the risks normally incidental to oil and gas exploration, development and production. Our natural gas production is subject to all the risks normally incidental to oil and gas development and production, including but not limited to: •blowouts, cratering, explosions and fires; •adverse weather effects; •environmental hazards such as gas leaks, oil spills, pipeline and vessel ruptures and unauthorized discharges of gasses, brine, well stimulation and completion fluids or other pollutants into the surface and subsurface environment; •high costs, shortages or delivery delays of equipment, labor or other services or water and sand for hydraulic fracturing; •facility or equipment malfunctions, failures or accidents; •title problems; •pipe or cement failures or casing collapses; •compliance with environmental and other governmental requirements; •lost or damaged oilfield workover and service tools; •unusual or unexpected geological formations or pressure or irregularities in formations; •natural disasters; and •the availability of critical materials, equipment and skilled labor. The marketability of our oil and gas production is dependent upon compressors, gathering lines, pipelines and other facilities, certain of which we do not control. When these facilities are unavailable, our operations can be interrupted and our revenues reduced. The marketability of our oil and gas production depends in part upon the availability, proximity and capacity of oil and gas pipelines owned by third parties. In general, we do not control these transportation facilities and our access to them may be limited or denied. A significant disruption in the availability of these transportation facilities or compression and other production facilities could adversely impact our ability to deliver to market or produce our oil and gas and thereby result in our inability to realize the full economic potential of our production. 38 Brookfield Business Corporation If any of the third-party pipelines and other facilities and service providers upon which we depend to move production to market become partially or fully unavailable to transport or process our production, or if quality specifications or physical requirements such as compression are altered by such third parties so as to restrict our ability to transport our production on those pipelines or facilities, our revenues could be adversely affected. Exploration and development may not result in commercially productive assets. Exploration and development involve numerous risks, including the risk that no commercially productive asset will result from such activities. The exploration and development activities of our industrial operations may not be successful and, if unsuccessful, such failure could have an adverse effect on our future results of operations and financial condition. Our derivative risk management activities could result in financial losses. In the past, commodity prices have been extremely volatile, and we expect this volatility to continue. To mitigate the effect of commodity price volatility on the results of our industrial operations, our strategy is to enter into derivative arrangements covering a portion of our resource production. These derivative arrangements are subject to mark-to-market accounting treatment, and the changes in fair value of the contracts will be reported in our statements of operations each quarter, which may result in significant non-cash gains or losses. These derivative contracts may also expose us to risk of financial loss in certain circumstances, including when production is less than the contracted derivative volumes, the counterparty to the derivative contract defaults on its contract obligations or the derivative contracts limit the benefit our industrial operations would otherwise receive from increases in commodity prices. There are risks associated with our engineered components manufacturing operation. Our engineered components manufacturing operation is subject to risks related to global manufacturing of engineered components. The RV, marine and other markets where we sell many of our engineered components manufacturing products or where the products are used, have been characterized by seasonality and cycles of growth and contraction in consumer demand, often because the purchase of such products is viewed as a consumer discretionary purchase. Additionally, the costs of raw materials are volatile, and inadequate or interrupted supply of raw materials or components used to make our engineered components could adversely impact financial condition, results of operations and cash flows. Our engineered components manufacturing operation imports a significant portion of raw materials and components, and the effect of foreign exchange rates could adversely affect its financial condition, results of operations and cash flows. Our engineered components manufacturing operation has entered into new markets, and uncertainties with respect to these new markets could impact its financial condition, results of operations and cash flows. Retail dealers of RVs and other products also generally finance their purchases of inventory. Reduction in the availability of financing, or an increase in the cost of such financing, particularly as a result of recent rising interest rates, have in the past caused, and would in the future again likely cause, many dealers to reduce inventories, which has resulted in reduced demand for our engineered components manufacturing products and may continue to do so in the future. The conditions in the credit market could limit the ability of consumers to obtain retail financing for RVs, trailers and other products, resulting in reduced demand for our engineered components manufacturing products. In addition, fuel shortages, and substantial increases in the price of fuel, have had an adverse effect on the RV, trailer and other industries we serve, and could again in the future. There are risks associated with our electric heat tracing systems manufacturing operation. Our electric heat tracing systems manufacturer is subject to risks from operating in a geographically diverse and highly competitive market. If we are unable to continue to differentiate our products, services, and solutions, or if our pricing is adversely impacted or we incur additional costs to remain competitive, or if we fail to effectively adapt our products or services to the demands of local markets, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, our future revenue depends partly on our ability to bid and win new contracts which may be impacted by the risk of a reduction in major project capital expenditure and, in particular, a reduction in large greenfield projects in our principal end markets, including energy, chemical processing and power generation. The risk of fluctuations to our backlog from material amounts of cancellations or reductions in purchase orders or a failure to deliver our backlog on time could also have a material adverse effect on our future sales. There are risks associated with our specialty consumables and equipment manufacturer. To remain competitive, our specialty consumables and equipment manufacturer must continue to launch new products and new indications and/or brand extensions for existing products. Such launches must generate revenue sufficient both to cover its substantial research and development costs and to replace revenues of profitable products that are lost to or displaced by competing products. Accordingly, our specialty consumables and equipment manufacturer commits substantial effort, funds and other resources to research and development and must make ongoing substantial expenditures without any assurance that its Brookfield Business Corporation 39 efforts will be commercially successful. A high rate of failure is inherent in the research and development of new products, and failure can occur at any point in the research and development process, including after significant resources have been invested. Products that appear promising in development may fail to reach the market for numerous reasons, including failure to demonstrate effectiveness, safety concerns, inability to obtain necessary regulatory approvals or delays in the approval of new products, excessive costs to manufacture or the failure to obtain or maintain intellectual property rights, or infringement of the intellectual property rights of others. Any failure to launch new products could impact the overall competitiveness and demand for our specialty and consumables and equipment manufacturer’s products. Our specialty consumables and equipment manufacturer’s products are subject to regulation by government authorities. These requirements include, among other things, regulations regarding manufacturing practices, product labeling and advertising and post-marketing reporting, including adverse event reports and field alerts due to manufacturing quality concerns. Our specialty consumables and equipment manufacturer must incur expense and spend time and effort to ensure compliance with these complex regulations. We cannot guarantee that our specialty consumables and equipment manufacturer’s products will remain compliant with applicable regulatory requests once approved for a product. Possible regulatory actions could result in substantial modifications to our specialty consumables and equipment manufacturer’s business practices and operations; refunds, recalls or seizures of products; a total or partial shutdown of production in one or more of our specialty consumables and equipment manufacturer’s or its suppliers' facilities while our specialty consumables and equipment manufacturer or its supplier remedies the alleged violation; the inability to obtain future approvals; and withdrawals or suspensions of current products from the market. Any of these events could disrupt our specialty consumables and equipment manufacturer’s business and have a material adverse effect on its business and results of operations. Risks Relating to our Relationship with Brookfield Brookfield exercises substantial influence over us and we are highly dependent on the Service Providers. As of the date of this Form 20-F, Brookfield holds 100% of the Class B Shares and 100% of the Special Shares and Brookfield Holders hold approximately 69% of our Class A Shares. In accordance with our articles, the Class A Shares have one vote per share and the Class B Shares hold an aggregate number of votes equal to three (3) times the total votes of the Class A Shares. As a result, the Class A Shares and Class B Shares control 25% and 75%, respectively, of the aggregate voting rights of our company, thereby giving the Brookfield Holders an approximate 92% aggregate voting interest in our company, as of the date of this Form 20-F. As a result, the Brookfield Holders are able to control the election and removal of our directors and, accordingly, exercise substantial influence over our company. In addition, the Service Providers, being subsidiaries of Brookfield Asset Management, provide management and administration services to our group pursuant to our Master Services Agreement. Our group generally does not have any employees and depends on the management and administration services provided by the Service Providers. Other subsidiaries of Brookfield also provide management services to certain of our operating subsidiaries. The partners, members, shareholders, directors, officers and employees of Brookfield and support staff that provide services to us are not required to have as their primary responsibility the management and administration of our group, or to act exclusively for us. Any failure to effectively manage our operations or to implement our strategy could have a material adverse effect on our business, financial condition and results of operations. Brookfield has no obligation to source acquisition opportunities for us and we may not have access to all acquisitions that Brookfield identifies. Our ability to grow depends on Brookfield’s ability to identify and present us with acquisition opportunities. Brookfield established our company to be Brookfield’s flagship public company for its services and industrial operations. However, Brookfield has no obligation to source acquisition opportunities for us. In addition, Brookfield has not agreed to commit to any minimum level of dedicated resources for the pursuit of acquisitions. There are a number of factors which could materially and adversely impact the extent to which suitable acquisition opportunities are made available from Brookfield, including: It is an integral part of Brookfield’s (and our) strategy to pursue acquisitions through consortium arrangements with institutional partners, strategic partners and/or financial sponsors and to form partnerships (including private funds, joint ventures and similar arrangements) to pursue such acquisitions on a specialized or global basis. Although Brookfield has agreed with us that it will not enter any such arrangements that are suitable for us without giving us an opportunity to participate in them, there is no minimum level of participation to which we will be entitled; The same professionals within Brookfield’s organization that are involved in sourcing acquisitions that are suitable for us are responsible for sourcing opportunities for the vehicles, consortiums and partnerships referred to above, as well as having other responsibilities within Brookfield’s broader asset management business. Limits on the availability of such individuals could result in a limitation on the number of acquisition opportunities sourced for us; 40 Brookfield Business Corporation Brookfield will only recommend acquisition opportunities that it believes are suitable and appropriate for us. Our focus is on assets where we believe that our operations-oriented strategy can be deployed to create value in our services and industrial operations. Accordingly, opportunities where Brookfield cannot play an active role in influencing the underlying business or managing the underlying assets may not be consistent with our acquisition strategy and, therefore may not be suitable for us, even though they may be attractive from a purely financial perspective. Legal, regulatory, tax and other commercial considerations will likewise be an important consideration in determining whether an opportunity is suitable and/or appropriate for us and will limit our ability to participate in certain acquisitions; and In addition to structural limitations, the question of whether a particular acquisition is suitable and/or appropriate is highly subjective and is dependent on a number of portfolio construction and management factors including our liquidity position at the relevant time, the expected risk-return profile of the opportunity, its fit with the balance of our investments and related operations, other opportunities that we may be pursuing or otherwise considering at the relevant time, our interest in preserving capital in order to secure other opportunities and/or to meet other obligations, and other factors. If Brookfield determines that an opportunity is not suitable or appropriate for us, it may still pursue such opportunity on its own behalf, or on behalf of a Brookfield-sponsored vehicle, consortium or partnership such as Brookfield Property Partners, Brookfield Infrastructure Partners, Brookfield Renewable Partners and one or more Brookfield-sponsored private funds or other investment vehicles or programs. In making determinations about acquisition opportunities and investments, consortium arrangements or partnerships, Brookfield may be influenced by factors that result in a misalignment or conflict of interest. See Item 7.B, “Related Party Transactions - Conflicts of Interest and Fiduciary Duties”. Among others, we may pursue acquisition opportunities indirectly through investments in Brookfield-sponsored vehicles, consortiums and partnerships or directly (including by investing alongside such vehicles, consortiums and partnerships). Any references in this Item 3.D, “Risk Factors” to our acquisitions, investments, assets, expenses, portfolio companies or other terms should be understood to mean such items held, incurred or undertaken directly by us or indirectly by us through our investment in such Brookfield-sponsored vehicles, consortiums and partnerships. We rely on related parties for a portion of our revenues. We may enter into contracts for services or other engagements with related parties, including Brookfield. We are subject to risks as a result of our reliance on these related parties, including the risk that the business terms of our arrangements with them are not as fair to us and that our management is subject to potential conflicts of interest that may not be resolved in our favor. In addition, if our transactions with these related parties cease, it could have a material adverse effect on our business, financial condition and results of operations. The departure of some or all of Brookfield’s professionals could prevent us from achieving our objectives. We depend on the diligence, skill and business contacts of Brookfield’s professionals and the information and opportunities they generate during the normal course of their activities. Our future success will depend on the continued service of these individuals, who are not obligated to remain employed with Brookfield. Brookfield has experienced departures of key professionals in the past and may do so in the future, and we cannot predict the impact that any such departures will have on our ability to achieve our objectives. The departure of a significant number of Brookfield’s professionals for any reason, or the failure to appoint qualified or effective successors in the event of such departures, could have a material adverse effect on our ability to achieve our objectives. The Master Services Agreement does not require Brookfield to maintain the employment of any of its professionals or to cause any particular professionals to provide services to us or on our behalf. The role and ownership of Brookfield Holders may change, and control of our company may change, without shareholder consent. Our arrangements with Brookfield Holders do not require Brookfield Holders to maintain any ownership level in our company. Brookfield Holders may sell the shares that they hold in our company or transfer their shares in our company to a third party in a merger or consolidation or in a transfer of all or substantially all of their assets. Brookfield Holders may also sell or transfer all or part of their interests in the Service Providers without the approval of our group or holders of shares, which could result in changes to the management of our group and its current growth strategy. Shareholder consent would not be sought in either case. If a new owner were to acquire voting control of the company and elect new directors of its own choosing, it would be able to exercise substantial influence over our policies and procedures and exercise substantial influence over our management and the types of acquisitions that we make. Such changes could result in our capital being used to make acquisitions in which Brookfield Holders have no involvement or in making acquisitions that are substantially different from our targeted acquisitions. Additionally, we cannot predict with any certainty the effect that any transfer in the control of our company would have on the trading price of our Class A Shares or our ability to raise capital or make acquisitions in the future, because such matters Brookfield Business Corporation 41 would depend to a large extent on the identity of the new owner and the new owner’s intentions. As a result, our future would be uncertain and our business, financial condition and results of operations may suffer. Brookfield may increase its ownership in our company relative to other shareholders. As of the date of this Form 20-F, Brookfield holds 100% of the Class B Shares and 100% of the Special Shares and Brookfield Holders hold approximately 69% of our Class A Shares. Brookfield Asset Management may reinvest the Incentive Dividends received on its Special Shares in exchange for Class A Shares. The Brookfield Holders may also purchase additional Class A Shares in the market. Any of these events may result in the Brookfield Holders increasing their respective ownership of our company. None of British Columbia corporate law, our Master Services Agreement or our other arrangements with Brookfield impose on Brookfield any fiduciary duties to act in the best interests of our shareholders. None of British Columbia corporate law, the Master Services Agreement or our other arrangements with Brookfield impose on Brookfield any duty (statutory or otherwise) to act in the best interests of the Service Recipients, nor do they impose other duties that are fiduciary in nature. As a result, our company has sole authority to enforce the terms of such agreements and to consent to any waiver, modification or amendment of their provisions, subject to approval by a majority of our independent directors in accordance with our conflicts protocol. See Item 7.B, “Related Party Transactions - Conflicts of Interest and Fiduciary Duties”. Our organizational and ownership structure may create significant conflicts of interest that may be resolved in a manner that is not in our best interests or the best interests of our shareholders. Our organizational and ownership structure involves a number of relationships that may give rise to conflicts of interest between our company and our shareholders, on the one hand, and Brookfield, on the other hand. In certain instances, the interests of Brookfield may differ from the interests of our company and our shareholders, including with respect to the types of acquisitions made, the timing and amount of distributions by our company, the redeployment of returns generated by our operations, the use of leverage when making acquisitions and the appointment of outside advisors and service providers, including as a result of the reasons described under Item 7.B, “Related Party Transactions - Conflicts of Interest and Fiduciary Duties”. In addition, the Service Providers, affiliates of Brookfield, provide management services to us pursuant to our Master Services Agreement. Pursuant to the Master Services Agreement, the Holding LP pays a quarterly base management fee to the Service Providers equal to 0.3125% (1.25% annually) of the total capitalization of our group. For purposes of calculating the base management fee, the total capitalization of our group is equal to the quarterly volume-weighted average trading price of a Class A Share on the principal stock exchange for the Class A Shares (based on trading volumes), multiplied by the number of Class A Shares outstanding at the end of the quarter (and assuming the full conversion of any securities then outstanding that are convertible, redeemable or exchangeable for, Class A Shares), plus, without duplication, the value of securities of the other Service Recipients, if any, that are not held by our company, plus all outstanding third party debt with recourse to a Service Recipient, less all cash held by such entities. This relationship may give rise to conflicts of interest between our company and our shareholders, on the one hand, and Brookfield, on the other, as Brookfield’s interests may differ from the interests of our company and our shareholders. The arrangements we have with Brookfield may create an incentive for Brookfield to take actions which would have the effect of increasing distributions and fees payable to it, which may be to the detriment of our company and our shareholders. For example, because the base management fee is calculated based on our group’s market value, it may create an incentive for Brookfield to increase or maintain our group’s market value over the near-term when other actions may be more favorable to our company and our shareholders. Similarly, Brookfield may take actions to decrease distributions on the Class A Shares or defer acquisitions in order to increase our market value in the near-term when making such distributions or acquisitions may be more favorable to us or our shareholders. BPEG Manager Holdings LP, a subsidiary of Brookfield, also receives incentive dividends from our company in connection with its ownership of the Special Shares based on the growth in the market value of the Class A Shares quarter-over-quarter (but only after the market value exceeds the incentive dividend threshold, and adjusted at the beginning of each quarter to be equal to the greater of (i) the market value of Class A Shares for the previous quarter and (ii) the incentive dividend threshold at the end of the previous quarter) multiplied by the number of Class A Shares outstanding at the end of the quarter. For a further explanation of incentive dividends, see Item 10.B, “Memorandum and Articles of Association - Description of Special Shares”. This relationship may give rise to conflicts of interest between our company and our shareholders, on the one hand, and Brookfield, on the other, as Brookfield’s interests may differ from the interests of our company or our shareholders. 42 Brookfield Business Corporation Our arrangements with Brookfield were negotiated in the context of an affiliated relationship and may contain terms that are less favorable than those which otherwise might have been obtained from unrelated parties. The terms of our arrangements with Brookfield were effectively determined by Brookfield in the context of the spin off and more recent Arrangement. While our company’s independent directors are aware of the terms of these arrangements and have approved the arrangements on our behalf, they did not negotiate the terms. These terms, including terms relating to compensation, contractual and fiduciary duties, conflicts of interest and Brookfield’s ability to engage in outside activities, including activities that compete with us, our activities and limitations on liability and indemnification, may be less favorable than otherwise might have resulted if the negotiations had involved unrelated parties. Our company may be unable or unwilling to terminate our Master Services Agreement. Our Master Services Agreement provides that the Service Recipients may terminate the agreement only if: (i) the Service Providers default in the performance or observance of any material term, condition or covenant contained in the agreement in a manner that results in material harm to the Service Recipients and the default continues unremedied for a period of thirty (30) days after written notice of the breach is given to the Service Providers; (ii) the Service Providers engage in any act of fraud, misappropriation of funds or embezzlement against any Service Recipient that results in material harm to the Service Recipients; (iii) the Service Providers are grossly negligent in the performance of their duties under the agreement and such negligence results in material harm to the Service Recipients; or (iv) upon the happening of certain events relating to the bankruptcy or insolvency of the Service Providers. Our company cannot terminate the agreement for any other reason, including if the Service Providers or Brookfield experience a change of control, and there is no fixed term to the agreement. In addition, because we are an affiliate of Brookfield, we may be unwilling to terminate our Master Services Agreement, even in the case of a default. If the Service Providers’ performance does not meet the expectations of investors, and we are unable or unwilling to terminate our Master Services Agreement, the market price of Class A Shares could suffer. Furthermore, the termination of our Master Services Agreement would terminate our company’s rights under the Relationship Agreement and our Licensing Agreement. See Item 7.B, “Related Party Transactions - Relationship Agreement” and “Related Party Transactions - Licensing Agreement”. The liability of the Service Providers is limited under our arrangements with them and we have agreed to indemnify the Service Providers against claims that they may face in connection with such arrangements, which may lead them to assume greater risks when making decisions relating to us than they otherwise would if acting solely for their own account. Under our Master Services Agreement, the Service Providers have not assumed any responsibility other than to provide or arrange for the provision of the services described in our Master Services Agreement in good faith and will not be responsible for any action that we take in following or declining to follow their advice or recommendations. In addition, under our Master Services Agreement, the liability of the Service Providers is limited to the fullest extent permitted by law to conduct involving bad faith, fraud, willful misconduct, gross negligence or, in the case of a criminal matter, action that was known to have been unlawful. In addition, we have agreed to indemnify the Service Providers to the fullest extent permitted by law from and against any claims, liabilities, losses, damages, costs or expenses incurred by them or threatened in connection with our business, investments and activities or in respect of or arising from our Master Services Agreement or the services provided by the Service Providers, except to the extent that such claims, liabilities, losses, damages, costs or expenses are determined to have resulted from the conduct in respect of which such persons have liability as described above. These protections may result in the Service Providers tolerating greater risks when making decisions than otherwise would be the case, including when determining whether to use and the extent of leverage in connection with acquisitions. The indemnification arrangements to which the Service Providers are a party may also give rise to legal claims for indemnification that are adverse to us and our shareholders. Brookfield Business Corporation 43 Brookfield and the Walled-Off Businesses operate their respective investment businesses largely independently, and do not expect to coordinate or consult on investment decisions, which may give rise to conflicts of interest and make it more difficult to mitigate certain conflicts of interest. Brookfield and each Walled-Off Business operate their respective investment businesses largely independently pursuant to an information barrier, and Brookfield does not expect to coordinate or consult with Walled-Off Businesses with respect to investment activities and/or decisions. In addition, neither Brookfield nor any Walled-off Business is expected to be subject to any internal approvals over its investment activities and decisions by any person who would have knowledge and/or decision-making control of the investment decisions of the other. As a result, it is expected that we and our subsidiaries, as well as Brookfield, Brookfield Accounts that we are invested in and their portfolio companies, will engage in activities and have business relationships that give rise to conflicts (and potential conflicts) of interests between them, on the one hand, and Walled-Off Businesses, Walled-Off Business Accounts and their portfolio companies, on the other hand. These conflicts (and potential conflicts) of interests may include: (i) competing from time to time for the same investment opportunities, (ii) the pursuit by Walled-off Business Accounts of investment opportunities suitable for us and Brookfield Accounts that we are invested in, without making such opportunities available to us or those Brookfield Accounts and (iii) the formation or establishment of new Walled-Off Business Accounts that could compete or otherwise conduct their affairs without regard as to whether or not they adversely impact our company and/or Brookfield Accounts that we are invested in. Investment teams managing our activities and/or Brookfield Accounts that we are invested in are not expected to be aware of, and will not have the ability to manage, such conflicts. We and/or Brookfield Accounts that we are invested in could be adversely impacted by a Walled-Off Business’s activities. Competition from a Walled-Off Business Accounts for investment opportunities could also, under certain circumstances, adversely impact the purchase price of our (direct and/or indirect) investments. As a result of different investment objectives, views and/or interests in investments, Walled-Off Businesses will manage certain Walled-Off Business Accounts in a way that is different than from our interests and/or Brookfield Accounts that we are invested in, which could adversely impact our (direct and/or direct) investments. For more information, see Item 7.B “Related Party Transactions - Conflicts of Interest and Fiduciary Duties - Businesses Subject to Information Walls”. Brookfield and Walled-Off Businesses are likely to be deemed to be affiliates for purposes of certain laws and regulations, which may result in, among other things, earlier public disclosure of investments by us and/or Brookfield Accounts that we are invested in. Brookfield and a Walled-Off Business are likely to be deemed to be affiliates for purposes of certain laws and regulations, notwithstanding their operational independence and/or information barrier, and it is anticipated that, from time to time, we and/or Brookfield Accounts that we are invested in and a Walled-Off Business Account may each have significant positions in one or more of the same issuers. As such, Brookfield and a Walled-Off Business will likely need to aggregate certain investment holdings, including our holdings, Brookfield Accounts that we are invested in and Walled-Off Business Accounts for certain securities law purposes and other regulatory purposes. Consequently, a Walled-off Business’s activities could result in earlier public disclosure of investments by our company and/or Brookfield Accounts that we are invested in restrictions on transactions by us and/or Brookfield Accounts that we are invested in (including the ability to make or dispose of certain investments at certain times), adverse effects on the prices of investments made by our company and/or Brookfield Accounts that we are invested in, potential short-swing profit disgorgement, penalties and/or regulatory remedies, among others. For more information, see Item 7.B. “Related Party Transactions - Conflicts of Interest and Fiduciary Duties - Businesses Subject to Information Walls”. Breaches of the information barrier and related internal controls by Brookfield and/or a Walled-Off Business could result in significant adverse consequences to Brookfield and such Walled-Off Business and/or Brookfield Accounts that we are invested in, amongst others. Although information barriers were implemented to address the potential conflicts of interests and regulatory, legal and contractual requirements of our company, Brookfield and a Walled-Off Business may decide, at any time and without notice to us or our shareholders, to remove or modify the information barrier between Brookfield and such Walled-Off Business. In addition, there may be breaches (including inadvertent breaches) of the information barriers and related internal controls by Brookfield and/or a Walled-Off Business. 44 Brookfield Business Corporation To the extent that the information barrier is removed or is otherwise ineffective and Brookfield has the ability to access analysis, model and/or information developed by a Walled-Off Business and its personnel, Brookfield will not be under any obligation or other duty to access such information or effect transactions for us and/or Brookfield Accounts that we are invested in in accordance with such analysis and models, and in fact may be restricted by securities laws from doing so. In such circumstances, Brookfield may make investment decisions for us and/or Brookfield Accounts that we are invested in that differ from those it would have made if Brookfield had pursued such information, which may be disadvantageous to us and/or Brookfield Accounts that we are invested in. The breach or failure of information barriers could result in our company obtaining material non-public information, which may restrict our company from acquiring or disposing investments and ultimately impact the returns generated for our business. In addition, any such breach or failure could also result in potential regulatory investigations and claims for securities laws violations in connection with our direct and/or indirect investment activities. Any inadvertent trading on material non-public information, or perception of trading on material non-public information by one of our businesses or our personnel, could have a significant adverse effect on Brookfield’s reputation, result in the imposition of regulatory or financial sanctions, and negatively impact Brookfield’s ability to provide investment management services to its clients, all of which could result in negative financial impact to the investment activities of our company and/or Brookfield Accounts that we are invested in. For more information, see Item 7.B, “Related Party Transactions - Conflicts of Interest and Fiduciary Duties - Businesses Subject to Information Walls”. Risks Relating to Our Structure Our company is a holding entity and currently we rely on BBU and Holding LP and, indirectly, the Holding Entities and our operating businesses, to provide us with the funds necessary to pay dividends and meet our financial obligations. Our company is a holding entity, and its sole material assets are its direct and indirect interests in BBU and Holding LP, through which we hold all of our interests in our operating businesses. We also hold Special LP Units in Holding LP which entitle the holder to receive incentive distributions. Our company has no independent means of generating revenues. As a result, we rely on distributions and other payments from BBU and Holding LP (which in turn rely on distributions and other payments from the Holding Entities and our operating businesses) to provide us with the funds necessary to pay dividends and to meet our financial obligations. Holding LP, the Holding Entities and our operating businesses are legally distinct from us and some of them are or may become restricted in their ability to pay dividends and distributions or otherwise make funds available to us pursuant to local law, regulatory requirements and their contractual agreements, including agreements governing their financing arrangements. Any other entities through which we may conduct operations in the future will also be legally distinct from us and may be similarly restricted in their ability to pay dividends and distributions or otherwise make funds available to us under certain conditions. Holding LP, the Holding Entities and our operating businesses will generally be required to service their debt obligations before making distributions to us or their parent entities, as applicable, thereby reducing the amount of our cash flow available to our company to meet our financial obligations. We anticipate that the only distributions that we will receive in respect of our direct and indirect interests in BBU and Holding LP and Special LP Units in Holding LP will consist of amounts that are intended to assist our company to pay expenses as they become due and to pay dividends to our shareholders in accordance with our company’s articles and its dividend policy. We may be subject to the risks commonly associated with a separation of economic interest from control or the incurrence of debt at multiple levels within an organizational structure. Our ownership and organizational structure is similar to structures whereby one company controls another company which in turn holds controlling interests in other companies; thereby, the company at the top of the chain may control the company at the bottom of the chain even if its effective equity position in the bottom company is less than a controlling interest. As of the date of this Form 20-F, the Brookfield Holders hold approximately 92% of the votes to elect the directors of our company. As a result, Brookfield is able to control the appointment and removal of our company’s directors and, accordingly, exercise substantial influence over us. In turn, we often have a majority controlling interest or a significant influence in our operating businesses. Although Brookfield Holders, as of the date of this Form 20-F, have an effective equity interest in our company of approximately 69% as a result of ownership of Class A Shares, over time Brookfield Holders may reduce this interest while still maintaining voting control, and, therefore, Brookfield may use its control rights in a manner that conflicts with the interests of our other shareholders. For example, despite the fact that we have conflicts protocols in place, which address the requirement for independent approval and other requirements for transactions in which there is greater potential for a conflict of interest to arise, including transactions with affiliates of Brookfield, because Brookfield will be able to exert substantial influence over us, there is a greater risk of transfer of the assets at non-arm’s length values to Brookfield and its affiliates. In addition, debt incurred at multiple levels Brookfield Business Corporation 45 within the chain of control could exacerbate the separation of economic interest from controlling interest at such levels, thereby creating an incentive to increase our leverage. Any such increase in debt would also make us more sensitive to declines in revenues, increases in expenses and interest rates and adverse market conditions. The servicing of any such debt would also reduce the amount of funds available to pay distributions to us and could reduce the total returns to our shareholders. Our company is not, and does not intend to become, regulated as an investment company under the Investment Company Act (and similar legislation in other jurisdictions), and, if our company were deemed an “investment company” under the Investment Company Act, applicable restrictions could make it impractical for us to operate as contemplated. The Investment Company Act (and similar legislation in other jurisdictions) provides certain protections to investors and imposes certain restrictions on companies that are registered or required to be registered as investment companies. Among other things, such restrictions limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities and impose certain governance requirements. Our company has not been and does not intend to become registered as an investment company, and our company intends to conduct its activities so it will not be deemed to be an investment company under the Investment Company Act (and similar legislation in other jurisdictions). In order to ensure that we are not deemed to be an investment company, we may be required to materially restrict or limit the scope of our operations or plans. We will be limited in the types of acquisitions that we may make, and we may need to modify our organizational structure or dispose of assets which we would not otherwise dispose of. Moreover, if anything were to happen which would cause our company to be deemed an investment company under the Investment Company Act, it would be impractical for us to operate as contemplated. Agreements and arrangements between and among us, Brookfield, and other counterparties would be impaired, the type and number of acquisitions that we would be able to make as a principal would be limited and our business, financial condition and results of operations would be materially adversely affected. Accordingly, we would be required to take extraordinary steps to address the situation, such as the amendment or termination of our Master Services Agreement, the restructuring of our group and the Holding Entities or the dissolution of our company, any of which could materially adversely affect the value of our Class A Shares. Risks Relating to the Class A Shares We may issue additional shares, preferred shares and securities exchangeable into shares of our company in the future, including in lieu of incurring indebtedness, which may dilute existing shareholders. We may also issue securities that have rights and privileges that are more favorable than the rights and privileges accorded to the holders of Class A Shares. Subject to the terms of any of our securities then outstanding, our group may issue additional Class A Shares, Class B Shares, Special Shares, Corporation Class A Preferred Shares, securities exchangeable into shares of our company and options, rights, warrants and appreciation rights relating to shares of our company for any purpose and for such consideration and on such terms and conditions as our board may determine. Subject to the terms of any of our securities then outstanding, our board will be able to determine the designation, rights, privileges, restrictions and conditions to be attached to the Corporation Class A Preferred Shares, including any rights to share in our profits, losses and distributions, any rights to receive assets upon dissolution or liquidation and any redemption, conversion and exchange rights. Subject to the terms of any of our securities then outstanding, our board may use such authority to issue such additional securities. The sale or issuance of a substantial number of our Class A Shares or other equity related securities of our group in the public markets, or the perception that such sales or issuances could occur, could depress the market price of the Class A Shares and impair our ability to raise capital through the sale of additional securities. We cannot predict the effect that future sales or issuances of our Class A Shares or other equity related securities of our group would have on the market price of the Class A Shares. Subject to the terms of any of our securities then outstanding and applicable law, holders of Class A Shares will not have any pre-emptive right or any right to consent to or otherwise approve the issuance of any securities or the terms on which any such securities may be issued. Accordingly, any such additional securities may be dilutive to our shareholders and may have terms that are more favorable than those for our equity holders. Non-U.S. shareholders will be subject to foreign currency risk associated with our company’s dividends. A significant number of our shareholders will reside in countries where the U.S. dollar is not the functional currency. Our company’s dividends will be denominated in U.S. dollars but will generally be settled in the local currency of the shareholder receiving the dividend. The value received in the local currency from the dividend will be generally determined based on the exchange rate between the U.S. dollar and the applicable local currency at the time of payment. As such, if the U.S. dollar depreciates significantly against the local currency of the non-U.S. shareholder, the value received by such shareholder in its local currency will be adversely affected. Our articles provide that the federal district courts of the United States of America are the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the U.S. Securities Act. This choice of forum provision could limit the ability of our shareholders to obtain a favorable judicial forum for disputes with directors, officers or employees. 46 Brookfield Business Corporation Our articles provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the U.S. Securities Act. In the absence of these provisions, under the U.S. Securities Act, U.S. federal and state courts have been found to have concurrent jurisdiction over suits brought to enforce duties or liabilities created by the U.S. Securities Act. This choice of forum provision does not apply to suits brought to enforce duties or liabilities created by the U.S. Exchange Act, which already provides that such federal district courts have exclusive jurisdictions over such suits. Additionally, investors cannot waive the company’s compliance with federal securities laws of the United States and the rules and regulations thereunder. The choice of forum provision contained in our articles may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company or its directors, officers or other employees, which may discourage such lawsuits against our company and its directors, officers and other employees. However, the enforceability of similar choice of forum provisions in other companies’ governing documents has been challenged in recent legal proceedings, and it is possible that a court in the relevant jurisdiction with respect to our company could find the choice of forum provision contained in our articles to be inapplicable or unenforceable. While the Delaware Supreme Court ruled in March 2020 that U.S. federal forum selection provisions purporting to require claims under the U.S. Securities Act be brought in a U.S. federal court are “facially valid” under Delaware law, there can be no assurance that the courts in Canada (including in the Province of British Columbia) and other courts within the United States, will reach a similar determination regarding the choice of forum provision contained in our articles. If the relevant court were to find the choice of forum provision contained in our articles to be inapplicable or unenforceable in an action, our company may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect its business, financial condition and operating results. U.S. investors may find it difficult or impossible to enforce service of process and enforcement of judgments against us, our board of directors and officers and the Service Providers We were established under the laws of the Province of British Columbia, and most of our subsidiaries are organized in jurisdictions outside of the United States. In addition, certain of our executive officers are located outside of the United States. Certain of the directors and officers of our company and of the Service Providers reside outside of the United States. A substantial portion of our assets are, and the assets of the directors and officers of our company and of the Service Providers may be located outside of the United States. It may not be possible for investors to effect service of process within the United States upon the directors and officers of our company and of the Service Providers. It may also not be possible to enforce against us or the directors and officers of our company or of the Service Providers, judgments obtained in U.S. courts predicated upon the civil liability provisions of applicable securities law in the United States. Risks Relating to Taxation If the Corporation is classified as a passive foreign investment company for U.S. federal income tax purposes, U.S. persons who own Class A Shares could be subject to adverse tax consequences. If the Corporation is classified as a PFIC for U.S. federal income tax purposes, a U.S. Holder that owns Class A Shares could be subject to adverse tax consequences, including a greater tax liability than might otherwise apply, an interest charge on certain taxes deemed deferred as a result of the Corporation’s non-U.S. status, and additional U.S. tax reporting obligations. In general, a non-U.S. corporation will be a PFIC during a taxable year if, taking into account the income and assets of certain of its affiliates, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of its assets during such year produce or are held for the production of passive income. Passive income generally includes interest, dividends, and other investment income. Based on its current and expected income, assets, and activities, the Corporation does not expect to be classified as a PFIC for the current taxable year. However, the determination of whether the Corporation is or will be a PFIC for any taxable year is based on the application of complex U.S. federal income tax rules that are subject to differing interpretations. Because the PFIC determination depends upon the composition of the Corporation’s income and assets and the nature of its activities from time to time and must be made annually as of the close of each taxable year, there can be no assurance that the Corporation will not be classified as a PFIC for any taxable year, or that the Internal Revenue Service (“IRS”) or a court will agree with the Corporation’s determination as to its PFIC status. U.S. Holders are urged to consult their tax advisers regarding the application of the PFIC rules, including the related reporting requirements and the advisability of making any available election under the PFIC rules, with respect to their ownership and disposition of Class A Shares. See “Certain Material United States Federal Income Tax Considerations—Tax Consequences of the Ownership and Disposition of Class A Shares—Passive Foreign Investment Company Considerations”. Tax laws and regulations may change in the jurisdictions in which we operate, which may affect the effective tax rate on all or a portion of our income. Brookfield Business Corporation 47 We operate in countries with differing tax laws and tax rates. Our tax reporting is consistent with the tax laws in the countries in which we operate and the application of tax treaties between the various countries in which we operate. Our income tax reporting is subject to audit by tax authorities in the countries in which we operate. Our effective tax rate may change from year to year, based on (i) changes in the mix of activities and income earned among the different jurisdictions in which we operate, (ii) changes in tax laws in these jurisdictions, (iii) changes in the tax treaties between the countries in which we operate, (iv) changes in our eligibility for benefits under those tax treaties, and (v) changes in the estimated values of deferred tax assets and liabilities. Tax laws, regulations and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Such changes could result in a substantial increase in the effective tax rate on all or a portion of our income. We may be exposed to transfer pricing risks. To the extent that we enter into transactions or arrangements with other Brookfield entities, the relevant tax authorities may seek to adjust the quantum or nature of the amounts included or deducted from our taxable income if they consider that the terms and conditions of such transactions or arrangements differ from those that would have been made between persons dealing at arm’s length. This could result in more tax (and penalties and interest) being paid by us, and therefore the return to holders of Class A Shares could be reduced. We believe that the base management fee and any other amount that is paid to the Service Providers will be commensurate with the value of the services being provided by the Service Providers and comparable to the fees or other amounts that would be agreed to in an arm’s-length arrangement. However, no assurance can be given in this regard. 48 Brookfield Business Corporation