All amounts in
“We continued to execute on key strategic priorities in the third quarter including a number of new investments, improved operations, and generating liquidity to bolster our already strong balance sheet,” said Sachin Shah, CEO of Brookfield Renewable. “We are also pleased to announce our intention to create a Canadian corporation with publicly-traded shares that we expect will be economically-equivalent to the units of the partnership. This should position us well to continue attracting new investors to our globally-diversified renewable power portfolio.”
| Financial Results | |||||||||||||
| For the period ended September 30 | |||||||||||||
| Millions (except per unit or otherwise noted) | Three months ended September 30 | Nine months ended September 30 | |||||||||||
| Unaudited | 2019 | 2018 | 2019 | 2018 | |||||||||
| Total generation (GWh) | |||||||||||||
| – Long-term average generation | 12,332 | 12,113 | 40,077 | 38,486 | |||||||||
| – Actual generation | 11,089 | 11,609 | 40,095 | 37,611 | |||||||||
| Brookfield Renewable's share | |||||||||||||
| – Actual generation | 5,213 | 5,552 | 20,061 | 18,701 | |||||||||
| – Long-term average generation | 5,821 | 5,956 | 19,628 | 19,242 | |||||||||
| Funds From Operations (FFO)(1) | $ | 133 | $ | 105 | $ | 590 | $ | 470 | |||||
| Per Unit(1)(2) | 0.43 | 0.33 | 1.90 | 1.50 | |||||||||
| Net Income (Loss) Attributable to Unitholders | (53 | ) | (55 | ) | 7 | (49 | ) | ||||||
| Per Unit(2) | (0.17 | ) | (0.18 | ) | 0.02 | (0.16 | ) | ||||||
- Non-IFRS measures. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”.
- For the three and nine months ended September 30, 2019, weighted average LP Units, Redeemable/Exchangeable partnership units and GP interest totaled 311.2 million and 311.2 million, respectively (2018: 312.6 million and 312.7 million).
Brookfield Renewable reported FFO growth of 27% leading to
Highlights
- Invested
$100 million of BEP equity into TerraForm Power and the acquisition of a 200 megawatt wind farm inChina ; - Sold two mature European wind portfolios for total combined proceeds of
US$186 million ($74 million net to BEP), and crystallized an ~18% compounded annual return to BEP since acquisition; we have also now completed the sale of five of our six assets inSouth Africa for total proceeds of$135 million ($42 million net to BEP) returning almost two times our capital invested into the country; - Completed a
C$600 million green bond issuance - the largest corporate-level green bond ever issued inCanada - increasing the average term of our corporate debt by 5 years to 10 years and reducing the average cost of our debt; and - Maintain robust total available liquidity of
$2.5 billion
Unit Split and Creation of an Exchange Corporation
Today we announced our intention to create a Canadian corporation in order to provide investors with greater flexibility in how they invest in Brookfield Renewable’s globally diversified, multi-technology renewable power portfolio. This entity will be publicly listed on the same exchanges as the current partnership ("BEP"), giving investors the optionality to invest in Brookfield Renewable through either a partnership or Canadian corporation and could therefore lead to increased demand and enhanced liquidity for Brookfield Renewable.
Brookfield Renewable intends to distribute to existing unitholders, on a tax-free basis to the majority of unitholders, class A shares of the new corporation, Brookfield Renewable Corporation (“BEPC”). From an economic and accounting perspective, the transaction will be analogous to a unit split as it will not result in any underlying change to aggregate cash flows or net asset value except for the adjustment for the number of units/shares outstanding.
The class A shares will be structured with the intention of providing an economic return equivalent to BEP units, including identical distributions, and will be exchangeable, at the shareholder's option, for one BEP unit. The class A shares are also intended to provide investors with the ability to have economic exposure to BEP through a more traditional corporate structure.
Current unitholders are expected to receive one BEPC class A share for every four BEP units held (i.e. 0.25 BEPC class A shares for each unit held of BEP) in the form of a special distribution.
The benefits of the creation of BEPC will be:
- Potential increased demand from retail investors;
- Potential increased demand from certain institutional investors who are currently unable, or prefer not to, own partnership units;
- The ability to qualify for further index or ETF inclusion, which is not available today.
Following completion of the special distribution, the aggregate quarterly distributions and dividends from Brookfield Renewable and BEPC will correspond to the quarterly distributions made on Brookfield Renewable units as if the special distribution did not take place.
Holders of Brookfield Renewable’s preferred limited partnership units will not receive the class A shares.
The majority of the BEPC class A shares will be held by the holders of Brookfield Renewable’s units immediately after the effective split. Brookfield Renewable will own all of the BEPC class B and C shares. The class A and class B shares will control 25% and 75%, respectively, of the aggregate voting rights of the shares of BEPC. Brookfield Asset Management, as a unitholder of Brookfield Renewable, is expected to hold approximately 60% of the BEPC class A shares, which is equivalent to its effective ownership of Brookfield Renewable units. BEPC intends to apply to list its class A shares in
In connection with this transaction, a registration statement (including a prospectus) has been filed with the
RBC Capital Markets are acting as financial advisors and Torys LLP as legal advisors to Brookfield Renewable for this transaction.
Operations
During the third quarter, we generated FFO of
In the third quarter, our hydroelectric segment generated FFO of
Our wind and solar segments generated a combined
Our storage and other segments generated
Distribution Declaration
The next quarterly distribution in the amount of
The quarterly dividends on Brookfield Renewable’s preferred shares and preferred LP units have also been declared.
Distribution Currency Option
The quarterly distributions payable on the Partnership’s LP Units are declared in
Registered unitholders resident in
Distribution Reinvestment Plan
Brookfield Renewable maintains a Distribution Reinvestment Plan (“DRIP”) which allows holders of its LP Units who are resident in
Additional information on Brookfield Renewable’s distributions and preferred share dividends can be found on our website at https://bep.brookfield.com.
Brookfield Renewable Partners
Brookfield Renewable Partners 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: |
| Claire Holland | Divya Biyani |
| Vice President - Communications | Director – Investor Relations |
| (416) 369-8236 | (416) 369-2616 |
| [email protected] | [email protected] |
Quarterly Earnings Call Details
Investors, analysts and other interested parties can access Brookfield Renewable’s 2019 Third Quarter 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 November 11, 2019 at 9:00 a.m. Eastern Time at https://edge.media-server.com/mmc/p/dcdu7y7w or via teleconference at 1-866-688-9430 toll free in
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
| Three months ended September 30 | Nine months ended September 30 | ||||||||||||
| UNAUDITED (MILLIONS, EXCEPT AS NOTED) | 2019 | 2018 | 2019 | 2018 | |||||||||
| Revenues | $ | 642 | $ | 674 | $ | 2,254 | $ | 2,202 | |||||
| Other income | 25 | 7 | 50 | 26 | |||||||||
| Direct operating costs | (239 | ) | (257 | ) | (745 | ) | (760 | ) | |||||
| Management service costs | (29 | ) | (22 | ) | (73 | ) | (64 | ) | |||||
| Interest expense – borrowings | (164 | ) | (176 | ) | (515 | ) | (534 | ) | |||||
| Share of earnings from equity-accounted investments | 1 | 6 | 33 | 12 | |||||||||
| Foreign exchange and unrealized financial instrument loss | (10 | ) | (10 | ) | (40 | ) | (35 | ) | |||||
| Depreciation | (200 | ) | (192 | ) | (600 | ) | (611 | ) | |||||
| Other | (38 | ) | (18 | ) | (41 | ) | (72 | ) | |||||
| Income tax expense | |||||||||||||
| Current | (10 | ) | (6 | ) | (49 | ) | (20 | ) | |||||
| Deferred | 23 | 11 | (11 | ) | (2 | ) | |||||||
| 13 | 5 | (60 | ) | (22 | ) | ||||||||
| Net income | $ | 1 | $ | 17 | $ | 263 | $ | 142 | |||||
| Net income attributable to: | |||||||||||||
| Non-controlling interests | |||||||||||||
| Participating non-controlling interests - in operating subsidiaries | $ | 36 | $ | 55 | $ | 204 | $ | 142 | |||||
| General partnership interest in a holding subsidiary held by | (1 | ) | (1 | ) | — | (1 | ) | ||||||
| Participating non-controlling interests - in a holding subsidiary - Redeemable/Exchangeable units held by | (22 | ) | (22 | ) | 3 | (20 | ) | ||||||
| Preferred equity | 6 | 7 | 19 | 20 | |||||||||
| Preferred limited partners' equity | 12 | 10 | 33 | 29 | |||||||||
| Limited partners' equity | (30 | ) | (32 | ) | 4 | (28 | ) | ||||||
| $ | 1 | $ | 17 | $ | 263 | $ | 142 | ||||||
| Basic and diluted (loss) earnings per LP Unit | $ | (0.17 | ) | $ | (0.18 | ) | $ | 0.02 | $ | (0.16 | ) | ||
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||||
| UNAUDITED (MILLIONS) | September 30 | December 31 | ||||
| 2019 | 2018 | |||||
| Assets | ||||||
| Cash and cash equivalents | $ | 209 | $ | 173 | ||
| Trade receivables and other financial assets | 1,148 | 992 | ||||
| Equity-accounted investments | 1,536 | 1,569 | ||||
| Property, plant and equipment, at fair value | 28,350 | 29,025 | ||||
| Goodwill | 777 | 828 | ||||
| Deferred income tax and other assets | 1,415 | 1,516 | ||||
| Total Assets | $ | 33,435 | $ | 34,103 | ||
| Liabilities | ||||||
| Corporate borrowings | $ | 2,119 | $ | 2,328 | ||
| Non-recourse borrowings | 8,506 | 8,390 | ||||
| Accounts payable and other financial liabilities | 975 | 772 | ||||
| Deferred income tax liabilities | 4,096 | 4,140 | ||||
| Other liabilities | 1,341 | 1,267 | ||||
| Equity | ||||||
| Non-controlling interests | ||||||
| Participating non-controlling interests - in operating subsidiaries | 7,841 | 8,129 | ||||
| General partnership interest in a holding subsidiary held by | 61 | 66 | ||||
| Participating non-controlling interests - in a holding subsidiary – Redeemable/Exchangeable units held by | 2,974 | 3,252 | ||||
| Preferred equity | 585 | 568 | ||||
| Preferred limited partners' equity | 833 | 707 | ||||
| Limited partners' equity | 4,104 | 4,484 | ||||
| Total Equity | 16,398 | 17,206 | ||||
| Total Liabilities and Equity | $ | 33,435 | $ | 34,103 | ||
PROPORTIONATE RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30
The following chart reflects the generation and summary financial figures on a proportionate basis for the three months ended September 30:
| (GWh) | (MILLIONS) | |||||||||||||||||||||||||||||||||||||||||
| Actual Generation | LTA Generation | Revenues | Adjusted EBITDA | FFO | Net Income (Loss) | |||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||
| Hydroelectric | ||||||||||||||||||||||||||||||||||||||||||
| 2,277 | 2,526 | 2,443 | 2,654 | $ | 161 | $ | 166 | $ | 95 | $ | 99 | $ | 55 | $ | 53 | $ | — | $ | (3 | ) | ||||||||||||||||||||||
| 734 | 791 | 1,009 | 996 | 50 | 53 | 53 | 38 | 46 | 31 | 22 | 2 | |||||||||||||||||||||||||||||||
| 721 | 742 | 853 | 859 | 56 | 54 | 34 | 29 | 24 | 20 | 19 | 11 | |||||||||||||||||||||||||||||||
| 3,732 | 4,059 | 4,305 | 4,509 | 267 | 273 | 182 | 166 | 125 | 104 | 41 | 10 | |||||||||||||||||||||||||||||||
| Wind | ||||||||||||||||||||||||||||||||||||||||||
| 579 | 597 | 713 | 723 | 46 | 50 | 32 | 30 | 15 | 14 | (26 | ) | (27 | ) | |||||||||||||||||||||||||||||
| 185 | 141 | 198 | 208 | 21 | 17 | 15 | 9 | 9 | 2 | (7 | ) | (9 | ) | |||||||||||||||||||||||||||||
| 201 | 211 | 215 | 215 | 11 | 15 | 9 | 13 | 7 | 11 | (3 | ) | 5 | ||||||||||||||||||||||||||||||
| 93 | 48 | 97 | 41 | 8 | 4 | 7 | 3 | 5 | 2 | 1 | 1 | |||||||||||||||||||||||||||||||
| 1,058 | 997 | 1,223 | 1,187 | 86 | 86 | 63 | 55 | 36 | 29 | (35 | ) | (30 | ) | |||||||||||||||||||||||||||||
| Solar | 279 | 279 | 293 | 260 | 56 | 58 | 49 | 46 | 36 | 31 | 10 | 19 | ||||||||||||||||||||||||||||||
| Storage & Other | 144 | 217 | — | — | 21 | 25 | 9 | 14 | 6 | 11 | (1 | ) | 5 | |||||||||||||||||||||||||||||
| Corporate | — | — | — | — | — | — | (2 | ) | (4 | ) | (70 | ) | (70 | ) | (68 | ) | (59 | ) | ||||||||||||||||||||||||
| Total | 5,213 | 5,552 | 5,821 | 5,956 | $ | 430 | $ | 442 | $ | 301 | $ | 277 | $ | 133 | $ | 105 | $ | (53 | ) | $ | (55 | ) | ||||||||||||||||||||
The following table reconciles net income attributable to Unitholders and earnings per unit, the most directly comparable IFRS measures, to FFO, and FFO per unit, both non-IFRS financial metrics for the three months ended September 30:
| Per unit | ||||||||||||||
| (MILLIONS, EXCEPT AS NOTED) | 2019 | 2018 | 2019 | 2018 | ||||||||||
| Net income attributable to: | ||||||||||||||
| Limited partners' equity | $ | (30 | ) | $ | (32 | ) | $ | (0.17 | ) | $ | (0.18 | ) | ||
| General partnership interest in a holding subsidiary held by | (1 | ) | (1 | ) | — | — | ||||||||
| Participating non-controlling interests - in a holding subsidiary - Redeemable/Exchangeable units held by | (22 | ) | (22 | ) | — | — | ||||||||
| Net income attributable to Unitholders | $ | (53 | ) | $ | (55 | ) | $ | (0.17 | ) | $ | (0.18 | ) | ||
| Adjusted for proportionate share of: | ||||||||||||||
| Depreciation | 158 | 160 | 0.51 | 0.51 | ||||||||||
| Foreign exchange and unrealized financial instruments loss (gain) | 14 | 6 | 0.04 | 0.02 | ||||||||||
| Deferred income tax (recovery) expense | (26 | ) | (17 | ) | (0.08 | ) | (0.05 | ) | ||||||
| Other | 40 | 11 | 0.13 | 0.03 | ||||||||||
| FFO | $ | 133 | $ | 105 | $ | 0.43 | $ | 0.33 | ||||||
| Weighted average units outstanding(1) | 311.2 | 312.6 | ||||||||||||
- Includes GP interest, Redeemable/Exchangeable partnership units, and LP Units.
PROPORTIONATE RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30
The following chart reflects the generation and summary financial figures on a proportionate basis for the nine months ended September 30:
| (GWh) | (MILLIONS) | |||||||||||||||||||||||||||||||||||||||||
| Actual Generation | LTA Generation | Revenues | Adjusted EBITDA | FFO | Net Income (Loss) | |||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||||
| Hydroelectric | ||||||||||||||||||||||||||||||||||||||||||
| 10,260 | 9,704 | 9,326 | 9,915 | $ | 700 | $ | 655 | $ | 501 | $ | 455 | $ | 375 | $ | 322 | $ | 146 | $ | 130 | |||||||||||||||||||||||
| 2,890 | 2,731 | 2,987 | 2,931 | 173 | 185 | 144 | 133 | 119 | 109 | 55 | 5 | |||||||||||||||||||||||||||||||
| 2,347 | 2,382 | 2,520 | 2,547 | 174 | 160 | 107 | 91 | 75 | 62 | 56 | 41 | |||||||||||||||||||||||||||||||
| 15,497 | 14,817 | 14,833 | 15,393 | 1,047 | 1,000 | 752 | 679 | 569 | 493 | 257 | 176 | |||||||||||||||||||||||||||||||
| Wind | ||||||||||||||||||||||||||||||||||||||||||
| 2,190 | 1,905 | 2,622 | 2,215 | 167 | 158 | 120 | 109 | 67 | 64 | (44 | ) | (39 | ) | |||||||||||||||||||||||||||||
| 663 | 413 | 729 | 496 | 71 | 46 | 50 | 27 | 37 | 13 | (7 | ) | (12 | ) | |||||||||||||||||||||||||||||
| 454 | 473 | 475 | 475 | 27 | 33 | 20 | 26 | 13 | 20 | (2 | ) | (1 | ) | |||||||||||||||||||||||||||||
| 184 | 117 | 186 | 117 | 13 | 9 | 10 | 6 | 7 | 3 | 2 | (3 | ) | ||||||||||||||||||||||||||||||
| 3,491 | 2,908 | 4,012 | 3,303 | 278 | 246 | 200 | 168 | 124 | 100 | (51 | ) | (55 | ) | |||||||||||||||||||||||||||||
| Solar | 765 | 569 | 783 | 546 | 145 | 106 | 123 | 87 | 81 | 57 | 23 | 19 | ||||||||||||||||||||||||||||||
| Storage & Other | 308 | 407 | — | — | 66 | 62 | 30 | 33 | 20 | 23 | — | (6 | ) | |||||||||||||||||||||||||||||
| Corporate | — | — | — | — | — | — | (9 | ) | (15 | ) | (204 | ) | (203 | ) | (222 | ) | (183 | ) | ||||||||||||||||||||||||
| Total | 20,061 | 18,701 | 19,628 | 19,242 | $ | 1,536 | $ | 1,414 | $ | 1,096 | $ | 952 | $ | 590 | $ | 470 | $ | 7 | $ | (49 | ) | |||||||||||||||||||||
The following table reconciles net income attributable to Unitholders and earnings per unit, the most directly comparable IFRS measures, to FFO, and FFO per unit, both non-IFRS financial metrics for the nine months ended September 30:
| Per unit | ||||||||||||||
| (MILLIONS, EXCEPT AS NOTED) | 2019 | 2018 | 2019 | 2018 | ||||||||||
| Net income attributable to: | ||||||||||||||
| Limited partners' equity | $ | 4 | $ | (28 | ) | $ | 0.02 | $ | (0.16 | ) | ||||
| General partnership interest in a holding subsidiary held by | — | (1 | ) | — | — | |||||||||
| Participating non-controlling interests - in a holding subsidiary - Redeemable/Exchangeable units held by | 3 | (20 | ) | — | — | |||||||||
| Net income attributable to Unitholders | $ | 7 | $ | (49 | ) | $ | 0.02 | $ | (0.16 | ) | ||||
| Adjusted for proportionate share of: | ||||||||||||||
| Depreciation | 478 | 460 | 1.54 | 1.47 | ||||||||||
| Foreign exchange and unrealized financial instruments loss (gain) | 45 | (2 | ) | 0.14 | (0.01 | ) | ||||||||
| Deferred income tax (recovery) expense | (40 | ) | (14 | ) | (0.13 | ) | (0.04 | ) | ||||||
| Other | 100 | 75 | 0.33 | 0.24 | ||||||||||
| FFO | $ | 590 | $ | 470 | $ | 1.90 | $ | 1.50 | ||||||
| Weighted average units outstanding(1) | 311.2 | 312.7 | ||||||||||||
- Includes GP interest, Redeemable/Exchangeable partnership units, and LP Units.
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 news release 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 news release. This news release 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 Adjusted EBITDA, FFO and FFO per Unit which are not generally accepted accounting measures under IFRS and therefore may differ from definitions of Adjusted EBITDA, FFO and FFO per Unit used by other entities. We believe that Adjusted EBITDA, FFO and 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 Adjusted EBITDA, FFO or 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 Adjusted EBITDA, FFO and FFO per Unit to the most directly comparable IFRS measure, please see “- Reconciliation of non-IFRS measures” below and “PART 4 - Financial Performance Review on Proportionate Information - Reconciliation of non-IFRS measures” included in our Management’s Discussion and Analysis for the three and nine months ended September 30, 2019.
References to Brookfield Renewable are to Brookfield Renewable Partners L.P. together with its subsidiary and operating entities unless the context reflects otherwise.
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