Company: BBU
Filing Date: 2025-04-10
Form Type: 20-F
Source: 0001628280-25-017216
Chunk: 152

Company: Brookfield Business Partners L.P.
Filing Date: 2025-04-10
Form: 20-F
Item: Item 5
Chunk 152
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 foreign currency exchange rates, equity prices and commodity prices.

Financial instruments held by the partnership that are subject to market risk include loans and notes receivable, other financial assets, borrowings, derivative contracts, such as interest rate and foreign currency contracts, and marketable securities.

Price risk

As at December 31, 2024, the partnership is exposed to price risk arising from marketable securities and other financial assets, with a balance of $5,492 million (2023: $5,578 million). A 10% change in the fair value of these assets would impact the consolidated statements of comprehensive income by $549 million (2023: $558 million).

Interest rate risk

Interest rate risk is defined for these purposes as the risk that the fair value or future cash flows of a financial instrument held by the partnership will fluctuate because of changes in interest rates. The partnership monitors interest rate fluctuations and may enter into interest rate derivative contracts to mitigate the impact from interest rate movements. A 50 basis point increase in interest rates is expected to decrease pre-tax net income by $35 million, and a 50 basis point decrease in interest rates is expected to increase pre-tax net income by $35 million. A 50 basis point increase in interest rates is expected to increase other comprehensive income by $30 million, and a 50 basis point decrease in interest rates is expected to decrease other comprehensive income by $30 million.

Foreign currency risk

We have operations in international markets denominated in currencies other than the U. S. dollar, primarily the Australian dollar, the Canadian dollar, the Brazilian real and Euros. As a result, we are subject to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U. S. dollar. We structure our operations such that foreign operations are primarily conducted by entities with a functional currency which is the same as the economic environment in which the operations take place. As a result, the net income impact to the partnership of currency risk associated with financial instruments is limited as its financial assets and liabilities are generally denominated in the same currency as the functional currency of the subsidiary that holds the financial instrument. However, we are exposed to foreign currency risk on the net assets of the partnership’s foreign currency denominated operations and foreign currency denominated debt. We manage foreign currency risk through hedging contracts, typically foreign exchange forward contracts. There is no assurance that hedging strategies, to the extent used, will fully mitigate the risk.

  100      Brookfield Business Partners  

The table below outlines the