All amounts in
BROOKFIELD, News,
"The business performed well this quarter, as we delivered strong financial results, commissioned 1,000 megawatts of development, and deployed and committed
| Financial Results | ||||||||||||
Millions (except per unit or otherwise noted) |
For the three months ended |
For the six months ended |
||||||||||
| Unaudited | 2022 | 2021 | 2022 | 2021 | ||||||||
| Select Financial Information | ||||||||||||
| Net income (loss) attributable to Unitholders | $ | 1 | $ | (63 | ) | $ | (77 | ) | (196 | ) | ||
| Per LP unit(1) | (0.03 | ) | (0.13 | ) | (0.19 | ) | (0.37 | ) | ||||
| Funds From Operations (FFO)(2) | 294 | 268 | 537 | 510 | ||||||||
| Per Unit(2)(3) | 0.46 | 0.42 | 0.83 | 0.79 | ||||||||
Brookfield Renewable reported FFO of
Highlights
- We closed or agreed to invest
$3 billion ($650 million net to Brookfield Renewable) of capital across various transactions and regions. - We advanced key commercial priorities, securing contracts to deliver an incremental 3,000,000-megawatt hours of clean energy annually including 600,000 megawatt hours to corporate offtakers. This includes securing a contract to provide clean energy to one of BASF’s largest production facilities globally.
- We continued to accelerate our development activities, commissioning approximately 1,000 megawatts of new projects. These are expected to contribute approximately
$11 million of FFO annually to Brookfield Renewable. We also continue to execute on our 17,000-megawatt under-construction and advanced-stage pipeline and have expanded our development pipeline to 75,000 megawatts and approximately 8 million metric tons per annum of carbon capture and storage (“CCS”). - We are advancing approximately
$560 million ($90 million net to Brookfield Renewable) of asset recycling activities and continue to maintain robust financial capacity with $4 billion of available liquidity, no material near-term maturities, and limited floating interest rate exposure.
Growth Initiatives
So far this year, we have deployed or agreed to deploy
Our approach to investing in new transition opportunities is similar to how we look at renewable investments. We look for opportunities that are economic without government subsidy, technologically proven, and underpinned by strong macro tailwinds. We focus on situations where our key advantages of access to capital, knowledge of power markets, operating and development capabilities, extensive customer relationships, and global reach can differentiate us as investors and operators. Over time, as more decarbonization products and services scale, we expect transition investments to grow within our portfolio. However, investment in clean power generation remains the largest decarbonization investment opportunity today, and we therefore expect it to represent the majority of our deployment for the foreseeable future.
Our global distributed generation business continues to be a significant area of growth, as the trends of decentralized power generation and direct customer interaction accelerate. In the past twelve months, we have grown our
We recently agreed to acquire a leading integrated distributed generation developer in the
With this investment, we further enhanced our position as the global leader in distributed generation with 10,300 megawatts of operating and development assets. With capabilities and scale across all our core regions, we are well positioned to keep growing and provide our customers with innovative decarbonization solutions across multiple markets. This will help our partners meet their sustainability targets while reducing operating costs through onsite renewable energy and other decarbonization services.
We also expanded our North American CCS platform through a recently announced joint venture to establish a new carbon management business. Under an arrangement with
During the quarter, we invested in a leading private owner and operator of long-term,
In
In
Across the rest of
We are a Partner of Choice for Decarbonization
We are expanding and delivering on our 17,000-megawatt construction pipeline. So far this year, we have commissioned approximately 1,500 megawatts of capacity, which will contribute approximately
This includes progressing wind repowerings in the
In
While this level of new generation is significant, it is representative of the ongoing level of development activity in our business. Our cash flows have started to meaningfully benefit from the considerable “dollars in the ground” that we have invested into our development projects in the past. Our development investment has increased in recent years and will continue, meaning we have strong visibility into the future growth of our cash flows as more of our development projects come online.
We continue to be well positioned from a supply chain perspective, given our diversified pipeline and strong global relationships. While most major components for solar and wind development projects are experiencing upward pricing pressure, we lock in the cost of our major components when we sign revenue contracts. As a result, our under-construction pipeline is well protected from these risks, and while some costs have escalated, we have had no material issues in our broader business.
Looking ahead, given our ability to execute globally and at scale, we remain a top choice for corporates looking to procure green power. This is because we can be an attractive and flexible partner by offering a full suite of decarbonization solutions from our diverse fleet of renewable power and transition assets across the globe. We recently signed several agreements for 600,000 megawatt hours of wind and solar development with multinational corporations who are market leaders in their respective industries, including Amazon, BASF, Johnson & Johnson, and
For example, we are finalizing terms on one of the largest national account distributed generation portfolios ever awarded globally, and we signed a 25-year fixed-price renewable electricity supply agreement with BASF, a multinational chemical company, to power one of its largest production facilities globally that it is building in
Operating Results
We generated FFO of
In the current power price environment, we are executing on several initiatives to capture value across our business. At our hydro assets in the
During the quarter, our hydroelectric segment delivered FFO of
Our wind and solar segments generated a combined
Lastly, our distributed energy and sustainable solutions segment generated
Balance Sheet And Liquidity
Our balance sheet and liquidity remain strong. We have approximately $4 billion of available liquidity, allowing us to opportunistically fund our growth pipeline, and no material near-term maturities. Additionally, with the recent
During the first half of 2022, we accelerated many of our financing activities, extending the term of our debt and locking in attractive interest rates, before recent rate increases. During the quarter, we executed
As a result, our balance sheet is in excellent shape, with an average debt duration across our portfolio of 13 years and very limited floating rate debt, almost all of which is in
We also continued to advance our capital recycling initiatives which, when closed, will generate
Distribution Declaration
The next quarterly distribution in the amount of
The quarterly dividends on BEP's preferred shares and preferred LP units have also been declared.
Distribution Currency Option
The quarterly distributions payable on the BEP units and BEPC shares are declared in
Registered unitholders who are residents in
Distribution Reinvestment Plan
Additional information on Brookfield Renewable’s distributions and preferred share dividends can be found on our website at www.bep.brookfield.com.
Brookfield Renewable
Brookfield Renewable operates one of the world’s largest publicly traded, pure-play renewable power platforms. Our portfolio consists of hydroelectric, wind, solar and storage facilities in
Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with over
Please note that Brookfield Renewable’s previous audited annual and unaudited quarterly reports filed with the
| Contact information: | |
| Media: | Investors: |
| Managing Director – Communications | Director – Investor Relations |
| +44 (0)7398 909 278 | (416) 649-8172 |
| [email protected] | [email protected] |
Quarterly Earnings Call Details
Investors, analysts and other interested parties can access Brookfield Renewable’s Second Quarter 2022 Results as well as the Letter to Unitholders and Supplemental Information on Brookfield Renewable’s website at https://bep.brookfield.com.
The conference call can be accessed via webcast on
| Consolidated Statements of Financial Position | ||||||||
| As of | ||||||||
| UNAUDITED (MILLIONS) |
||||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 823 | $ | 764 | ||||
| Trade receivables and other financial assets(5) | 2,819 | 2,301 | ||||||
| Equity-accounted investments | 1,164 | 1,107 | ||||||
| Property, plant and equipment, at fair value | 49,594 | 49,432 | ||||||
| 2,630 | 2,263 | |||||||
| Total Assets | $ | 57,030 | $ | 55,867 | ||||
| Liabilities | ||||||||
| Corporate borrowings | $ | 2,550 | $ | 2,149 | ||||
| Borrowings which have recourse only to assets they finance(7) | 20,865 | 19,380 | ||||||
| Accounts payable and other liabilities(8) | 4,394 | 4,127 | ||||||
| Deferred income tax liabilities | 6,220 | 6,215 | ||||||
| Equity | ||||||||
| Non-controlling interests | ||||||||
| Participating non-controlling interests – in operating subsidiaries | $ | 11,845 | $ | 12,303 | ||||
| General partnership interest in a holding subsidiary held by Brookfield | 57 | 59 | ||||||
| Participating non-controlling interests – in a holding subsidiary – Redeemable/Exchangeable units held by Brookfield | 2,771 | 2,894 | ||||||
| BEPC exchangeable shares | 2,454 | 2,562 | ||||||
| Preferred equity | 601 | 613 | ||||||
| Perpetual subordinated notes | 592 | 592 | ||||||
| Preferred limited partners' equity | 760 | 881 | ||||||
| Limited partners' equity | 3,921 | 23,001 | 4,092 | 23,996 | ||||
| Total Liabilities and Equity | $ | 57,030 | $ | 55,867 | ||||
| Consolidated Statements of Operating Results | |||||||||||||
| UNAUDITED | For the three months ended |
For the six months ended |
|||||||||||
| (MILLIONS, EXCEPT AS NOTED) | 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenues | $ | 1,274 | $ | 1,019 | $ | 2,410 | $ | 2,039 | |||||
| Other income | 14 | 220 | 85 | 247 | |||||||||
| Direct operating costs(9) | (366 | ) | (307 | ) | (716 | ) | (698 | ) | |||||
| Management service costs | (65 | ) | (72 | ) | (141 | ) | (153 | ) | |||||
| Interest expense | (294 | ) | (246 | ) | (560 | ) | (479 | ) | |||||
| Share of earnings from equity-accounted investments | 29 | 2 | 48 | 7 | |||||||||
| Foreign exchange and financial instrument (loss) gain | (6 | ) | (47 | ) | (43 | ) | 1 | ||||||
| Depreciation | (389 | ) | (379 | ) | (790 | ) | (747 | ) | |||||
| Other | (13 | ) | (78 | ) | (60 | ) | (177 | ) | |||||
| Income tax recovery (expense) | |||||||||||||
| Current | (31 | ) | (22 | ) | (73 | ) | (38 | ) | |||||
| Deferred | (31 | ) | 20 | (5 | ) | 53 | |||||||
| Net income | $ | 122 | $ | 110 | $ | 155 | $ | 55 | |||||
| Net income attributable to preferred equity, preferred limited partners' equity, perpetual subordinated notes and non-controlling interests in operating subsidiaries | $ | (121 | ) | $ | (173 | ) | $ | (232 | ) | $ | (251 | ) | |
| Net income (loss) attributable to Unitholders | 1 | (63 | ) | (77 | ) | (196 | ) | ||||||
| Basic and diluted loss per LP unit | $ | (0.03 | ) | $ | (0.13 | ) | $ | (0.19 | ) | $ | (0.37 | ) | |
| Consolidated Statements of Cash Flows | |||||||||||||
| For the three months ended |
For the six months ended |
||||||||||||
| UNAUDITED (MILLIONS) |
2022 | 2021 | 2022 | 2021 | |||||||||
| Operating activities | |||||||||||||
| Net income | $ | 122 | $ | 110 | $ | 155 | $ | 55 | |||||
| Adjustments for the following non-cash items: | |||||||||||||
| Depreciation | 389 | 379 | 790 | 747 | |||||||||
| Unrealized foreign exchange and financial instrument loss (gain) | 50 | 58 | 100 | 31 | |||||||||
| Share of earnings from equity-accounted investments | (29 | ) | (2 | ) | (48 | ) | (7 | ) | |||||
| Deferred income tax recovery | 31 | (20 | ) | 5 | (53 | ) | |||||||
| Other non-cash items | 18 | (134 | ) | 18 | (120 | ) | |||||||
| 581 | 391 | 1,020 | 653 | ||||||||||
| Net change in working capital and other(10) | (143 | ) | (391 | ) | (279 | ) | (302 | ) | |||||
| 438 | — | 741 | 351 | ||||||||||
| Financing activities | |||||||||||||
| Non-recourse borrowings, commercial paper, and related party borrowings, net | 1,081 | 211 | 2,355 | 1,127 | |||||||||
| Capital contributions from participating non-controlling interests – in operating subsidiaries, net | 168 | (19 | ) | 274 | 795 | ||||||||
| Redemption of equity instruments, net and related costs | (88 | ) | 340 | (137 | ) | 340 | |||||||
| Distributions paid: | |||||||||||||
| To participating non-controlling interests - in operating subsidiaries | (666 | ) | (283 | ) | (857 | ) | (422 | ) | |||||
| To unitholders of Brookfield Renewable or BRELP | (228 | ) | (213 | ) | (458 | ) | (429 | ) | |||||
| 267 | 36 | 1,177 | 1,411 | ||||||||||
| Investing activities | |||||||||||||
| Acquisitions net of cash and cash equivalents in acquired entity | 1 | 2 | (779 | ) | (1,426 | ) | |||||||
| Investment in property, plant and equipment | (449 | ) | (244 | ) | (901 | ) | (533 | ) | |||||
| Disposal of associates and other securities, net | (98 | ) | 396 | (59 | ) | 398 | |||||||
| Restricted cash and other | (50 | ) | (28 | ) | (100 | ) | (78 | ) | |||||
| (596 | ) | 126 | (1,839 | ) | (1,639 | ) | |||||||
| Foreign exchange gain (loss) on cash | (19 | ) | 5 | (20 | ) | (6 | ) | ||||||
| Cash and cash equivalents | |||||||||||||
| Decrease (increase) | 90 | 167 | 59 | 117 | |||||||||
| Net change in cash classified within assets held for sale | (1 | ) | 5 | — | (18 | ) | |||||||
| Balance, beginning of period | 734 | 358 | 764 | 431 | |||||||||
| Balance, end of period | $ | 823 | $ | 530 | $ | 823 | $ | 530 | |||||
PROPORTIONATE RESULTS FOR THE THREE MONTHS ENDED
The following chart reflects the generation and summary financial figures on a proportionate basis for the three months ended
| (GWh) | (MILLIONS) | |||||||||||||||||||||||||
| Actual Generation | LTA Generation | Revenues | Adjusted EBITDA | FFO | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Hydroelectric | ||||||||||||||||||||||||||
| 3,478 | 2,450 | 3,569 | 3,580 | $ | 297 | $ | 203 | $ | 204 | $ | 138 | $ | 155 | $ | 97 | |||||||||||
| 938 | 1,112 | 1,017 | 998 | 45 | 45 | 34 | 33 | 24 | 31 | |||||||||||||||||
| 1,125 | 972 | 949 | 887 | 67 | 51 | 45 | 42 | 26 | 33 | |||||||||||||||||
| 5,541 | 4,534 | 5,535 | 5,465 | 409 | 299 | 283 | 213 | 205 | 161 | |||||||||||||||||
| Wind | ||||||||||||||||||||||||||
| 1,055 | 1,061 | 1,163 | 1,446 | 85 | 86 | 54 | 79 | 38 | 54 | |||||||||||||||||
| 210 | 228 | 215 | 272 | 32 | 29 | 33 | 67 | 28 | 63 | |||||||||||||||||
| 126 | 141 | 167 | 168 | 7 | 7 | 6 | 6 | 4 | 4 | |||||||||||||||||
| 154 | 129 | 139 | 117 | 10 | 9 | 9 | 6 | 6 | 4 | |||||||||||||||||
| 1,545 | 1,559 | 1,684 | 2,003 | 134 | 131 | 102 | 158 | 76 | 125 | |||||||||||||||||
| Solar | 541 | 538 | 663 | 620 | 112 | 102 | 104 | 81 | 74 | 53 | ||||||||||||||||
| Distributed energy & sustainable solutions(11) | 351 | 382 | 270 | 268 | 68 | 65 | 47 | 48 | 38 | 37 | ||||||||||||||||
| Corporate | — | — | — | — | — | — | 11 | 10 | (99 | ) | (108 | ) | ||||||||||||||
| Total | 7,978 | 7,013 | 8,152 | 8,356 | $ | 723 | $ | 597 | $ | 547 | $ | 510 | $ | 294 | $ | 268 | ||||||||||
PROPORTIONATE RESULTS FOR THE SIX MONTHS ENDED
The following chart reflects the generation and summary financial figures on a proportionate basis for the six months ended
| (GWh) | (MILLIONS) | |||||||||||||||||||||||||
| Actual Generation | LTA Generation | Revenues | Adjusted EBITDA | FFO | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Hydroelectric | ||||||||||||||||||||||||||
| 6,622 | 5,578 | 6,806 | 6,813 | $ | 533 | $ | 422 | $ | 345 | $ | 286 | $ | 249 | $ | 206 | |||||||||||
| 2,019 | 2,264 | 2,005 | 1,986 | 93 | 97 | 87 | 81 | 69 | 70 | |||||||||||||||||
| 2,097 | 1,805 | 1,814 | 1,693 | 140 | 106 | 98 | 77 | 61 | 60 | |||||||||||||||||
| 10,738 | 9,647 | 10,625 | 10,492 | 766 | 625 | 530 | 444 | 379 | 336 | |||||||||||||||||
| Wind | ||||||||||||||||||||||||||
| 2,202 | 2,168 | 2,356 | 2,881 | 171 | 208 | 114 | 160 | 82 | 116 | |||||||||||||||||
| 454 | 599 | 492 | 652 | 83 | 72 | 79 | 134 | 69 | 123 | |||||||||||||||||
| 227 | 267 | 293 | 294 | 13 | 14 | 10 | 10 | 7 | 6 | |||||||||||||||||
| 288 | 241 | 272 | 217 | 19 | 16 | 16 | 12 | 10 | 8 | |||||||||||||||||
| 3,171 | 3,275 | 3,413 | 4,044 | 286 | 310 | 219 | 316 | 168 | 253 | |||||||||||||||||
| Solar | 895 | 865 | 1,086 | 984 | 193 | 179 | 194 | 140 | 138 | 83 | ||||||||||||||||
| Distributed energy & sustainable solutions(12) | 599 | 601 | 442 | 438 | 127 | 121 | 95 | 87 | 75 | 65 | ||||||||||||||||
| Corporate | — | — | — | — | — | — | 8 | 12 | (223 | ) | (227 | ) | ||||||||||||||
| Total | 15,403 | 14,388 | 15,566 | 15,958 | $ | 1,372 | $ | 1,235 | $ | 1,046 | $ | 999 | $ | 537 | $ | 510 | ||||||||||
RECONCILIATION OF NON-IFRS MEASURES
The following table reflects Adjusted EBITDA and provides a reconciliation from Net income (loss) to Adjusted EBITDA for the three months ended
| Attributable to Unitholders | ||||||||||||||||||
| (MILLIONS) | Hydroelectric | Wind | Solar | Distributed energy & sustainable solutions |
Corporate | Total | ||||||||||||
| Net income (loss) | $ | 132 | $ | 13 | $ | 1 | $ | 25 | $ | (49 | ) | $ | 122 | |||||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 154 | 134 | 68 | 31 | 2 | 389 | ||||||||||||
| Deferred income tax expense (recovery) | 21 | 21 | 4 | 3 | (18 | ) | 31 | |||||||||||
| Foreign exchange and financial instrument loss (gain) | 25 | (20 | ) | 10 | (2 | ) | (7 | ) | 6 | |||||||||
| Other(13) | (3 | ) | 9 | 33 | — | 3 | 42 | |||||||||||
| Management service costs | — | — | — | — | 65 | 65 | ||||||||||||
| Interest expense | 144 | 60 | 46 | 19 | 25 | 294 | ||||||||||||
| Current income tax expense (recovery) | 27 | 2 | 2 | — | — | 31 | ||||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(14) | (217 | ) | (117 | ) | (60 | ) | (29 | ) | (10 | ) | (433 | ) | ||||||
| Adjusted EBITDA | $ | 283 | $ | 102 | $ | 104 | $ | 47 | $ | 11 | $ | 547 | ||||||
The following table reflects Adjusted EBITDA and provides a reconciliation from Net income (loss) to Adjusted EBITDA for the three months ended
| Attributable to Unitholders | ||||||||||||||||||
| (MILLIONS) | Hydroelectric | Wind | Solar | District energy & sustainable solutions |
Corporate | Total | ||||||||||||
| Net income (loss) | $ | 54 | $ | 79 | $ | 27 | $ | 27 | $ | (77 | ) | $ | 110 | |||||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 140 | 146 | 66 | 27 | — | 379 | ||||||||||||
| Deferred income tax expense (recovery) | (13 | ) | (2 | ) | (7 | ) | 2 | — | (20 | ) | ||||||||
| Foreign exchange and financial instrument loss (gain) | 22 | 19 | (4 | ) | 4 | 6 | 47 | |||||||||||
| Other(13) | 49 | 97 | 2 | — | (16 | ) | 132 | |||||||||||
| Management service costs | — | — | — | — | 72 | 72 | ||||||||||||
| Interest expense | 99 | 67 | 43 | 12 | 25 | 246 | ||||||||||||
| Current income tax expense (recovery) | 16 | 4 | 2 | — | — | 22 | ||||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(14) | (154 | ) | (252 | ) | (48 | ) | (24 | ) | — | (478 | ) | |||||||
| Adjusted EBITDA | $ | 213 | $ | 158 | $ | 81 | $ | 48 | $ | 10 | $ | 510 | ||||||
RECONCILIATION OF NON-IFRS MEASURES
The following table reflects Adjusted EBITDA and provides a reconciliation to net income (loss) to Adjusted EBITDA for the six months ended
| Attributable to Unitholders | ||||||||||||||||||
| (MILLIONS) | Hydroelectric | Wind | Solar | Distributed energy & sustainable solutions |
Corporate | Total | ||||||||||||
| Net income (loss) | $ | 218 | $ | (1 | ) | $ | 9 | $ | 62 | $ | (133 | ) | $ | 155 | ||||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 311 | 282 | 134 | 61 | 2 | 790 | ||||||||||||
| Deferred income tax expense (recovery) | 15 | 32 | (7 | ) | — | (35 | ) | 5 | ||||||||||
| Foreign exchange and financial instrument loss (gain) | 85 | (24 | ) | 17 | (9 | ) | (26 | ) | 43 | |||||||||
| Other(13) | 5 | 32 | 54 | 7 | 20 | 118 | ||||||||||||
| Management service costs | — | — | — | — | 141 | 141 | ||||||||||||
| Interest expense | 268 | 122 | 86 | 35 | 49 | 560 | ||||||||||||
| Current income tax expense (recovery) | 64 | 6 | 3 | — | — | 73 | ||||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(14) | (436 | ) | (230 | ) | (102 | ) | (61 | ) | (10 | ) | (839 | ) | ||||||
| Adjusted EBITDA | $ | 530 | $ | 219 | $ | 194 | $ | 95 | $ | 8 | $ | 1,046 | ||||||
The following table reflects Adjusted EBITDA and provides a reconciliation to net income (loss) to Adjusted EBITDA for the six months ended
| Attributable to Unitholders | ||||||||||||||||||
| (MILLIONS) | Hydroelectric | Wind | Solar | District energy & sustainable solutions |
Corporate | Total | ||||||||||||
| Net income (loss) | $ | 185 | $ | 20 | $ | 4 | $ | 44 | $ | (198 | ) | $ | 55 | |||||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 275 | 294 | 132 | 46 | — | 747 | ||||||||||||
| Deferred income tax expense (recovery) | (14 | ) | (6 | ) | (6 | ) | (1 | ) | (26 | ) | (53 | ) | ||||||
| Foreign exchange and financial instrument loss (gain) | 26 | 19 | (22 | ) | (3 | ) | (21 | ) | (1 | ) | ||||||||
| Other(13) | 61 | 168 | 30 | 8 | 57 | 324 | ||||||||||||
| Management service costs | — | — | — | — | 153 | 153 | ||||||||||||
| Interest expense | 196 | 125 | 88 | 23 | 47 | 479 | ||||||||||||
| Current income tax expense (recovery) | 27 | 8 | 2 | 1 | — | 38 | ||||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(14) | (312 | ) | (312 | ) | (88 | ) | (31 | ) | — | (743 | ) | |||||||
| Adjusted EBITDA | $ | 444 | $ | 316 | $ | 140 | $ | 87 | $ | 12 | $ | 999 | ||||||
The following table reconciles the non-IFRS financial metrics to the most directly comparable IFRS measures. Net income (loss) is reconciled to Funds From Operations:
| For the three months ended |
For the six months ended |
||||||||||||||
| UNAUDITED (MILLIONS) |
2022 | 2021 | 2022 | 2021 | |||||||||||
| Net income | $ | 122 | $ | 110 | $ | 155 | $ | 55 | |||||||
| Add back or deduct the following: | |||||||||||||||
| Depreciation | 389 | 379 | 790 | 747 | |||||||||||
| Deferred income tax recovery | 31 | (20 | ) | 5 | (53 | ) | |||||||||
| Foreign exchange and financial instruments gain (loss) | 6 | 47 | 43 | (1 | ) | ||||||||||
| Other(15) | 42 | 132 | 118 | 324 | |||||||||||
| Amount attributable to equity accounted investment and non-controlling interest(16) | (296 | ) | (380 | ) | (574 | ) | (562 | ) | |||||||
| Funds From Operations | $ | 294 | $ | 268 | $ | 537 | $ | 510 | |||||||
| Normalized long-term average generation adjustment | 11 | 73 | 52 | 76 | |||||||||||
| Normalized foreign currency adjustment | 2 | — | 10 | — | |||||||||||
| Normalized Funds From Operations | $ | 307 | $ | 341 | $ | 599 | $ | 586 | |||||||
The following table reconciles the per Unit non-IFRS financial metrics to the most directly comparable IFRS measures. Net income (loss) per LP unit is reconciled to Funds From Operations:
| For the three months ended |
For the six months ended |
||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| Net income (loss) per LP unit(1) | $ | (0.03 | ) | $ | (0.13 | ) | $ | (0.19 | ) | $ | (0.37 | ) | |
| Adjust for the proportionate share of | |||||||||||||
| Depreciation | 0.36 | 0.38 | 0.74 | 0.75 | |||||||||
| Deferred income tax recovery and other | 0.11 | 0.07 | 0.22 | 0.31 | |||||||||
| Foreign exchange and financial instruments loss (gain) | 0.02 | 0.10 | 0.06 | 0.10 | |||||||||
| Funds From Operations per Unit(3) | $ | 0.46 | $ | 0.42 | $ | 0.83 | $ | 0.79 | |||||
| Normalized long-term average generation adjustment | 0.02 | 0.11 | 0.09 | 0.12 | |||||||||
| Normalized foreign exchange adjustment | — | — | 0.01 | — | |||||||||
| Normalized Funds From Operations per Unit(3) | $ | 0.48 | $ | 0.53 | $ | 0.93 | $ | 0.91 | |||||
BROOKFIELD RENEWABLE CORPORATION REPORTS
SECOND QUARTER RESULTS
All amounts in
The Board of Directors of
The BEPC exchangeable shares are structured with the intention of being economically equivalent to the non-voting limited partnership units of
| Financial Results | |||||||||
Millions (except per unit or otherwise noted) |
For the three months ended |
For the six months ended |
|||||||
| Unaudited | 2022 | 2021 | 2022 | 2021 | |||||
| Select Financial Information | |||||||||
| Net income attributable to the partnership | $ | 1,046 | $ | 611 | $ | 70 | $ | 602 | |
| Funds From Operations (FFO)(2) | 181 | 139 | 334 | 265 | |||||
BEPC reported FFO of
| Consolidated Statements of Financial Position | ||||||||
| As of | ||||||||
| UNAUDITED (MILLIONS) |
||||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 571 | $ | 410 | ||||
| Trade receivables and other financial assets(5) | 2,220 | 1,956 | ||||||
| Equity-accounted investments | 454 | 455 | ||||||
| Property, plant and equipment, at fair value | 37,258 | 37,915 | ||||||
| 1,266 | 1,250 | |||||||
| Total Assets | $ | 41,769 | $ | 41,986 | ||||
| Liabilities | ||||||||
| Borrowings which have recourse only to assets they finance(7) | $ | 13,956 | $ | 13,512 | ||||
| Accounts payable and other liabilities(8) | 2,975 | 3,066 | ||||||
| Deferred income tax liabilities | 5,017 | 5,020 | ||||||
| BEPC exchangeable and class B shares | 5,993 | 6,163 | ||||||
| Equity | ||||||||
| Non-controlling interests: | ||||||||
| Participating non-controlling interests – in operating subsidiaries | $ | 9,755 | $ | 10,297 | ||||
| Participating non-controlling interests – in a holding subsidiary held by the partnership | 261 | 261 | ||||||
| The partnership | 3,812 | 13,828 | 3,667 | 14,225 | ||||
| Total Liabilities and Equity | $ | 41,769 | $ | 41,986 | ||||
| Consolidated Statements of Income (Loss) | ||||||||||||||
| UNAUDITED (MILLIONS) |
For the three months ended |
For the six months ended |
||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
| Revenues | $ | 997 | $ | 817 | $ | 1,926 | $ | 1,656 | ||||||
| Other income | 6 | 5 | 70 | 19 | ||||||||||
| Direct operating costs(9) | (296 | ) | (249 | ) | (587 | ) | (587 | ) | ||||||
| Management service costs | (43 | ) | (47 | ) | (95 | ) | (102 | ) | ||||||
| Interest expense | (255 | ) | (220 | ) | (483 | ) | (440 | ) | ||||||
| Share of (loss) earnings from equity-accounted investments | 1 | (1 | ) | (1 | ) | 1 | ||||||||
| Foreign exchange and financial instrument gain (loss) | 3 | (18 | ) | (30 | ) | 16 | ||||||||
| Depreciation | (286 | ) | (275 | ) | (582 | ) | (565 | ) | ||||||
| Other | — | (31 | ) | (26 | ) | (177 | ) | |||||||
| Remeasurement of BEPC exchangeable and class B shares | 1,080 | 694 | 171 | 788 | ||||||||||
| Income tax (expense) recovery | ||||||||||||||
| Current | (29 | ) | (18 | ) | (67 | ) | (31 | ) | ||||||
| Deferred | (41 | ) | 2 | (41 | ) | 19 | ||||||||
| Net income | $ | 1,137 | $ | 659 | $ | 255 | $ | 597 | ||||||
| Net income (loss) attributable to: | ||||||||||||||
| Non-controlling interests: | ||||||||||||||
| Participating non-controlling interests – in operating subsidiaries | $ | 90 | $ | 46 | $ | 180 | $ | (10 | ) | |||||
| Participating non-controlling interests – in a holding subsidiary held by the partnership | 1 | 2 | 5 | 5 | ||||||||||
| The partnership | 1,046 | 611 | 70 | 602 | ||||||||||
| $ | 1,137 | $ | 659 | $ | 255 | $ | 597 | |||||||
| Consolidated Statements of Cash Flows | |||||||||||||
| UNAUDITED (MILLIONS) |
For the three months ended |
For the six months ended |
|||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| Operating activities | |||||||||||||
| Net income | $ | 1,137 | $ | 659 | $ | 255 | $ | 597 | |||||
| Adjustments for the following non-cash items: | |||||||||||||
| Depreciation | 286 | 275 | 582 | 565 | |||||||||
| Unrealized foreign exchange and financial instruments loss (gain) | 29 | 20 | 84 | 3 | |||||||||
| Share of earnings from equity-accounted investments | (1 | ) | 1 | 1 | (1 | ) | |||||||
| Deferred income tax expense | 41 | (2 | ) | 41 | (19 | ) | |||||||
| Other non-cash items | 7 | 5 | (5 | ) | 55 | ||||||||
| Remeasurement of exchangeable and class B shares | (1,080 | ) | (694 | ) | (171 | ) | (788 | ) | |||||
| 419 | 264 | 787 | 412 | ||||||||||
| Net change in working capital and other(10) | (96 | ) | (369 | ) | (212 | ) | (225 | ) | |||||
| 323 | (105 | ) | 575 | 187 | |||||||||
| Financing activities | |||||||||||||
| Non-recourse borrowings and related party borrowings, net | 475 | 565 | 665 | 617 | |||||||||
| Capital contributions from participating non-controlling interests | 135 | 11 | 196 | 38 | |||||||||
| Distributions paid and return of capital: | |||||||||||||
| To participating non-controlling interests | (642 | ) | (154 | ) | (807 | ) | (290 | ) | |||||
| (32 | ) | 422 | 54 | 365 | |||||||||
| Investing activities | |||||||||||||
| Acquisitions net of cash and cash equivalents in acquired entity | — | (12 | ) | — | (12 | ) | |||||||
| Investment in property, plant and equipment | (246 | ) | (166 | ) | (414 | ) | (405 | ) | |||||
| Disposal of subsidiaries, associates and other securities, net | 88 | — | 88 | — | |||||||||
| Restricted cash and other | (102 | ) | (34 | ) | (125 | ) | (72 | ) | |||||
| (260 | ) | (212 | ) | (451 | ) | (489 | ) | ||||||
| Foreign exchange gain (loss) on cash | (18 | ) | 4 | (17 | ) | (6 | ) | ||||||
| Cash and cash equivalents | |||||||||||||
| Increase (decrease) | 13 | 109 | 161 | 57 | |||||||||
| Net change in cash classified within assets held for sale | — | (11 | ) | — | (16 | ) | |||||||
| Balance, beginning of period | 558 | 298 | 410 | 355 | |||||||||
| Balance, end of period | 571 | 396 | $ | 571 | $ | 396 | |||||||
RECONCILIATION OF NON-IFRS MEASURES
The following table reconciles Net income (loss) to Funds From Operations:
| For the three months ended |
For the six months ended |
||||||||||||
| UNAUDITED (MILLIONS) |
2022 | 2021 | 2022 | 2021 | |||||||||
| Net income | $ | 1,137 | $ | 659 | $ | 255 | $ | 597 | |||||
| Add back or deduct the following: | |||||||||||||
| Depreciation | 286 | 275 | 582 | 565 | |||||||||
| Foreign exchange and financial instruments loss (gain) | (3 | ) | 18 | 30 | (16 | ) | |||||||
| Deferred income tax expense (recovery) | 41 | (2 | ) | 41 | (19 | ) | |||||||
| Other(17) | 35 | 64 | 85 | 64 | |||||||||
| Dividends on BEPC exchangeable shares(18) | 55 | 52 | 110 | 104 | |||||||||
| Remeasurement of BEPC exchangeable and BEPC class B shares | (1,080 | ) | (694 | ) | (171 | ) | (788 | ) | |||||
| Amount attributable to equity accounted investments and non-controlling interests(19) | (290 | ) | (233 | ) | (598 | ) | (242 | ) | |||||
| Funds From Operations | $ | 181 | $ | 139 | $ | 334 | $ | 265 | |||||
Cautionary Statement Regarding Forward-looking Statements
This news release contains forward-looking statements and information within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of Section 27A of the
The foregoing list of important factors that may affect future results is not exhaustive. The forward-looking statements represent our views as of the date of this letter to unitholders and should not be relied upon as representing our views as of any subsequent date. While we anticipate that subsequent events and developments may cause our views to change, we disclaim any obligation to update the forward-looking statements, other than as required by applicable law.
No securities regulatory authority has either approved or disapproved of the contents of this letter to unitholders. This letter to unitholders is for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Cautionary Statement Regarding Use of Non-IFRS Measures
This news release contains references to to FFO, FFO per Unit, Normalized FFO and Normalized FFO per Unit, which are not generally accepted accounting measures under IFRS and therefore may differ from definitions of Adjusted EBITDA, FFO, FFO per Unit, Normalized FFO and Normalized FFO per Unit used by other entities. We believe that FFO, FFO per Unit, Normalized FFO and Normalized FFO per Unit are useful supplemental measures that may assist investors in assessing the financial performance and the cash anticipated to be generated by our operating portfolio. None of FFO, FFO per Unit, Normalized FFO and Normalized FFO per Unit should be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, analysis of our financial statements prepared in accordance with IFRS. For a reconciliation of FFO and FFO per Unit to the most directly comparable IFRS measure, please see “Reconciliation of Non-IFRS Measures - Three Months Ended June 30” included elsewhere herein and “Financial Performance Review on Proportionate Information - Reconciliation of Non-IFRS Measures” included in our unaudited Q2 2022 interim report. Normalized FFO assumes long-term average generation in all segments except the
References to Brookfield Renewable are to
Endnotes
| (1) | For the three and six months ended |
|
| (2) | Non-IFRS measures. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”. | |
| (3) | Average Units outstanding for the three and six months ended |
|
| (4) | Normalized FFO assumes long-term average generation in all segments and uses 2021 foreign currency rates. For the three and six months ended |
|
| (5) | Balance includes restricted cash, trades receivables and other current assets, financial instrument assets, and due from related parties. | |
| (6) | Balance includes goodwill, deferred income tax assets, assets held for sale, intangible assets, and other long-term assets. | |
| (7) | Balance includes current and non-current portion of non-recourse borrowings on the consolidated statement of financial position. | |
| (8) | Balance includes accounts payable and accrued liabilities, financial instrument liabilities, due to related parties, provisions, liabilities directly associated with assets held for sale and other long-term liabilities. | |
| (9) | Direct operating costs exclude depreciation expense disclosed below. | |
| (10) | Balance includes dividends received from equity accounted investments and changes due to or from related parties. | |
| (11) | Actual generation includes 98 GWh (2021:123 GWh) from facilities that do not have a corresponding LTA. | |
| (12) | Actual generation includes 203 GWh (2021:195 GWh) from facilities that do not have a corresponding LTA. | |
| (13) | Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other balance also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included within Adjusted EBITDA. | |
| (14) | Amount attributable to equity accounted investments corresponds to the Adjusted EBITDA to Brookfield Renewable that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries. By adjusting Adjusted EBITDA attributable to non-controlling interest, our partnership is able to remove the portion of Adjusted EBITDA earned at non-wholly owned subsidiaries that are not attributable to our partnership. | |
| (15) | Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other balance also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included in Funds From Operations. | |
| (16) | Amount attributable to equity accounted investments corresponds to the Funds From Operations that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries. By adjusting Funds From Operations attributable to non-controlling interest, our partnership is able to remove the portion of Funds From Operations earned at non-wholly owned subsidiaries that are not attributable to our partnership. | |
| (17) | Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other balance also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and the company’s economic share of foreign currency hedges and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included in Funds From Operations. | |
| (18) | Balance is included within interest expense on the consolidated statements of income (loss). | |
| (19) | Amount attributable to equity accounted investments corresponds to the Funds From Operations that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries. By adjusting Funds From Operations attributable to non-controlling interest, our company is able to remove the portion of Funds From Operations earned at non-wholly owned subsidiaries that are not attributable to our company. | |
| (20) | Any references to capital refer to Brookfield's cash deployed, excluding any debt financing. | |
| (21) | Available liquidity of $4 billion refers to "Part 5 - Liquidity and Capital Resources" in the Management Discussion and Analysis in the Q2 2022 Interim Report. | |
| (22) | 12-15% target returns are calculated as annualized cash return on investment. | |
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