Brookfield Renewable Reports Second Quarter Results

BROOKFIELD, News, Aug. 03, 2018 (GLOBE NEWSWIRE) -- Brookfield Renewable Partners L.P. (TSX: BEP.UN; NYSE: BEP) (“Brookfield Renewable”) today reported financial results for the three and six months ended June 30, 2018.

“We continue to grow our operating and investment capabilities across markets and technologies, recently adding a scale solar business in Europe and expanding our wind portfolio during the quarter,” said Sachin Shah, CEO of Brookfield Renewable. “Combined with our strong investment grade balance sheet and robust liquidity, we remain well positioned to deliver long-term total returns of 12% to 15% on a per unit basis.”

Financial Results
For the periods ended June 30
US$ millions (except per unit or otherwise noted)	Three Months Ended					Six Months Ended
Unaudited		2018			2017		2018		2017
Total generation (GWh)
- Actual generation		13,122			11,618		26,002		22,102
- Long-term average generation		13,521			10,674		26,373		21,038
Brookfield Renewable's share
- Actual generation		6,455			6,719		13,149		12,880
- Long-term average generation		6,935			6,277		13,286		12,166
Funds From Operations (FFO)(1)	$	172		$	181	$	365	$	347
Per Unit(1)(2)	$	0.55		$	0.61	$	1.17	$	1.16
Normalized FFO(1)(2)(3)	$	206		$	170	$	374	$	306
Per Unit(1)(2)(3)	$	0.66		$	0.57	$	1.20	$	1.02
Net (Loss) Income Attributable to Unitholders	$	(2	)	$	38	$	6	$	54
Per Unit(2)	$	(0.01	)	$	0.13	$	0.02	$	0.18

⁽¹⁾ Non-IFRS measure. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”.
⁽²⁾ For the three and six months ended June 30, 2018, the weighted average LP Units, Redeemable/Exchangeable partnership units and GP interest totaled 312.8 million and 312.7 million, respectively (2017: 299.2 million and 299.2 million).
⁽³⁾ Normalized FFO assumes long-term average generation in North America and Europe and uses constant foreign currency rates. For the three and six months ended June 30, 2018, the change related to long-term average generation totaled $34 million and $12 million (2017: ($10) million and ($31) million), respectively, and the change to foreign currency totaled $nil and ($3) million (2017: ($1) million and ($10) million), respectively.

Brookfield Renewable reported net loss for the three months ended June 30, 2018 of $2 million ($0.01 per Unit) compared to net income of $38 million ($0.13 per Unit) for the same period in 2017. Fund From Operations (FFO) totaled $172 million ($0.55 per Unit) compared to $181 million ($0.61 per Unit) for the same period in 2017. On a normalized basis, we would have achieved FFO of $206 million ($0.66 per Unit) compared to $170 million ($0.57 per Unit) for the same period in 2017, representing a 16% year-over-year per unit increase in normalized FFO. These results reflect the continued strength of our operating business as well as contributions from recent acquisitions.

Operating and Financial Results

Our hydroelectric assets contributed $181 million of FFO. While hydrology remains close to long-term average levels in South America, we experienced lower rainfall in Ontario and New York impacting generation levels. During the quarter, we continued to focus on extending our contract profile at premium pricing. At PJM’s recent capacity auction, we sold 964 megawatts into strong markets, securing $17 million of revenue (net to BEP) for the 2021/2022 delivery period – 70% higher than the prior year. In Colombia, we signed almost 20 new contracts with 5 to 10 year terms. In Brazil, we secured five new contracts at average pricing of approximately R$260 per megawatt-hour (~U.S.$70 per megawatt-hour). We also commissioned our 28 megawatt Brazilian Verde 4A hydroelectric facility.

Our wind segment delivered $34 million of FFO in the second quarter, $10 million ahead of prior year as we continue to benefit from new acquisitions and development projects coming online. At TerraForm Power, wind performance has been consistent with our expectations and we continued to progress outsourcing of the wind fleet’s operations and maintenance, which is expected to drive meaningful operating cost savings over the next few years. Our Brazilian wind business continues to deliver very strong results with capacity factors consistently around 40%.

Our solar business delivered $16 million of FFO this quarter, as our global fleet continues to perform well, with strong availability across the portfolio. Our storage facilities delivered $7 million of FFO in the second quarter as these facilities continue to provide essential grid-stabilizing ancillary services and large-scale back-up capacity. At our First Hydro business, we continue to work with our partner to optimize asset operation, dispatch and trading.

We continue to pursue development across all business lines. We are currently advancing two hydro facilities in Brazil totaling 49 megawatts, two wind farms in Europe totaling 47 megawatts and a 63 megawatt storage expansion project in the U.S. Our total equity investment in these projects is approximately $75 million, the majority of which has already been funded and all projects are advancing on scope, schedule and budget. Once completed, these assets should contribute an additional $20 million to our FFO.

Transaction Update

During the second quarter, we invested $450 million into growth and development initiatives. This includes our investment in additional shares of TerraForm Power bringing the total ownership between ourselves and our partners up to 65% (from 51%) and increasing BEP’s interest from 16% to 30%. The share issuance from TerraForm Power was used to fund its acquisition of Saeta Yield – a high quality, stable portfolio of 1,028 megawatt European solar and wind portfolio with a $1.2 billion equity valuation. Saeta’s revenues are underpinned primarily by a stable regulated rate base in Spain which supports over 80% of the company’s EBITDA and protects the business from production variability. The balance of the business’ revenues are subject to long term power purchase agreements which exceed 16 years in term. Looking forward, the portfolio provides a number of operational and balance sheet enhancement opportunities which should provide meaningful margin expansion over time, consistent with our operations-oriented approach to investing. 

Balance Sheet, Liquidity and Interest Rates

Factoring in recent investments, we ended the quarter with $1.7 billion of liquidity and continue to focus on strengthening our investment grade balance sheet. Our priorities remain the same; terming out our debt, extending maturities on a fixed rate basis, reducing borrowing costs and monetizing mature assets to redeploy capital into higher value opportunities.

During the quarter we extended the duration of our corporate credit facility to five years and executed $1.1 billion of refinancing initiatives across the portfolio. In the process, we extended the average duration of our asset level debt to over 10 years and lowered our interest costs by 25 basis points. We have minimal interest rate exposure having locked-in low, long-term rates over the last several years. As a result, today only 14% of our debt is floating rate, of which less than 8% is in North America and Europe.

We also advanced our capital recycling initiatives. Post quarter-end, we entered into an agreement to sell 100% of our 178 megawatt South African wind and solar portfolio for total proceeds of $166 million, with BEP’s share totaling approximately $50 million. These assets were acquired as part of broader TerraForm Global portfolio in late 2017 and the sale will allow us to focus our investments on our core markets where we see considerable opportunity.

Distribution Declaration

The next quarterly distribution in the amount of $0.49 per LP Unit, is payable on September 28, 2018 to unitholders of record as at the close of business on June 30, 2018. Brookfield Renewable targets a sustainable distribution with increases targeted on average at 5% to 9% annually.

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 U.S. dollars. Unitholders resident in the United States will receive payment in U.S. dollars and unitholders resident in Canada will receive the Canadian dollar equivalent unless they request otherwise. The Canadian dollar equivalent of the quarterly distribution will be based on the Bank of Canada daily average exchange rate on the record date or, if the record date falls on a weekend or holiday, on the Bank of Canada daily average exchange rate of the preceding business day.

Registered unitholders resident in Canada who wish to receive a U.S. dollar distribution and registered unitholders resident in the United States wishing to receive the Canadian dollar distribution equivalent should contact Brookfield Renewable’s transfer agent, Computershare Trust Company of Canada, in writing at 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1 or by phone at 1-800-564-6253. Beneficial unitholders (i.e., those holding their units in street name with their brokerage) should contact the broker with whom their units are held.

Distribution Reinvestment Plan

Brookfield Renewable maintains a Distribution Reinvestment Plan (“DRIP”) which allows holders of its LP Units who are resident in Canada to acquire additional LP Units by reinvesting all or a portion of their cash distributions without paying commissions. Information on the DRIP, including details on how to enroll, is available on our website at https://bep.brookfield.com/stock-and-distribution/distributions/drip.

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 North America, South America, Europe and Asia, and totals over 17,000 megawatts of installed capacity and an 8,000 megawatt development pipeline. Brookfield Renewable is listed on the New York and Toronto stock exchanges. Further information is available at https://bep.brookfield.com. Important information may be disseminated exclusively via the website; investors should consult the site to access this information.

Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with approximately $285 billion of assets under management.

Please note that Brookfield Renewable’s previous audited annual and unaudited quarterly reports filed with the U.S. Securities and Exchange Commission (“SEC”) and securities regulators in Canada, are available on our website at https://bep.brookfield.com, on SEC’s website at www.sec.gov and on SEDAR’s website at www.sedar.com. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.

For more information, please contact:
Media:
Claire Holland
(416) 369-8236
[email protected]

Investors:
Divya Biyani
(416) 369-2616
[email protected]

Quarterly Earnings Call Details

Investors, analysts and other interested parties can access Brookfield Renewable’s 2018 Second Quarter Results as well as the Letter to Shareholders and Supplemental Information on Brookfield Renewable’s website at https://bep.brookfield.com.

The conference call can be accessed via webcast on August 3, 2018 at 11:00 a.m. Eastern Time at https://event.on24.com/wcc/r/1792632/F051185B24D07EDB9D68B579DD6A37A2, or via teleconference at 1-866-521-4909 toll free in North America. If dialing from outside Canada or the U.S., please dial 1-647-427-2311, at approximately 10:50 a.m. Eastern Time. A recording of the teleconference can be accessed through September 3, 2018 at 1-800-585-8367, or from outside Canada and the U.S. please call 1-416-621-4642.

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 U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. The words “will”, “should”, “could”, “target” “future”, “growth”, “expect”, “believe”, “plan”, derivatives thereof and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify the above mentioned and other forward-looking statements. Forward-looking statements in this news release include statements regarding the quality of Brookfield Renewable’s and its subsidiaries’ businesses and our expectations regarding future cash flows and distribution growth. They include statements regarding our liquidity, the expected benefits to unitholders of re-financing debt at low, long-term interest rates in a rising rate environment, as well as acquisitions, and the availability of acquisition opportunities. They also include statements regarding the progress towards completion of development projects, including by way of joint ventures with institutional partners, and the expected contribution of development projects to future generation capacity and cash flows as well as statements regarding the prospects of future growth in core markets. Additionally, they include statements regarding the expected benefits to Brookfield Renewable of redeploying recycled capital from non-core assets into new, value-based opportunities. Although Brookfield Renewable believes that these forward-looking statements and information are based upon reasonable assumptions and expectations, you should not place undue reliance on them, or any other forward-looking statements or information in this news release. The future performance and prospects of Brookfield Renewable are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual results of Brookfield Renewable to differ materially from those contemplated or implied by the statements in this news release include economic conditions in the jurisdictions in which we operate; our ability to sell products and services under contract or into merchant energy markets; weather conditions and other factors which may impact generation levels at our facilities; our ability to grow within our current markets or expand into new markets; our ability to complete development and capital projects on time and on budget; our inability to finance our operations or fund future acquisitions due to the status of the capital markets; the ability to effectively source, complete and integrate new acquisitions and to realize the benefits of such acquisitions; health, safety, security or environmental incidents; changes to government regulations; regulatory risks relating to the power markets in which we operate, including relating to the regulation of our assets, licensing and litigation; risks relating to our internal control environment; our lack of control over all of our operations; contract counterparties not fulfilling their obligations; and other risks associated with the construction, development and operation of power generating facilities.

We caution that 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. For further information on these known and unknown risks, please see “Risk Factors” included in our Form 20-F.

Cautionary Statement Regarding Use of Non-IFRS Measures

This press release contains references to Adjusted EBITDA, Funds From Operations, Normalized Funds From Operations, Adjusted Funds From Operations, Funds From Operations per Unit and Normalized Funds From Operations per Unit which are not generally accepted accounting measures under IFRS and therefore may differ from definitions of Adjusted EBITDA, Funds From Operations, Normalized Funds From Operations, Adjusted Funds From Operations, Funds From Operations per Unit and Normalized Funds From Operations per Unit used by other entities. We believe that Adjusted EBITDA, Funds From Operations, Normalized Funds From Operations, Adjusted Funds From Operations, Funds From Operations per Unit and Normalized Funds From Operations 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. Neither Adjusted EBITDA, Funds From Operations, Normalized Funds From Operations, Adjusted Funds From Operations, Funds From Operations per Unit nor Normalized Funds From Operations 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.

References to Brookfield Renewable are to Brookfield Renewable Partners L.P. together with its subsidiary and operating entities unless the context reflects otherwise

BROOKFIELD RENEWABLE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED				Three months ended Jun 30						Six months ended Jun 30
(MILLIONS, EXCEPT AS NOTED)			2018			2017			2018			2017
Revenues			$	735		$	683		$	1,528		$	1,360
Other income				10			10			19			18
Direct operating costs				(247	)		(240	)		(503	)		(473	)
Management service costs				(21	)		(21	)		(42	)		(37	)
Interest expense – borrowings				(178	)		(156	)		(358	)		(319	)
Share of earnings (loss) from
	equity-accounted investments			6			2			6			(1	)
Foreign exchange and				(33	)		(6	)		(25	)		(26	)
	unrealized financial instruments loss
Depreciation				(206	)		(198	)		(419	)		(398	)
Other				(10	)		23			(54	)		21
Income tax expense
	Current			(7	)		4			(14	)		(12	)
	Deferred			(4	)		(16	)		(13	)		(21	)
				(11	)		(12	)		(27	)		(33	)
Net income			$	45		$	85		$	125		$	112
Net income attributable to:
Non-controlling interests
	Participating non-controlling interests - in
		operating subsidiaries	$	31		$	34		$	87		$	33
	General partnership interest in a holding
		subsidiary held by Brookfield		-			1			-			1
	Participating non-controlling interests - in a
		holding subsidiary - Redeemable/
		Exchangeable units held by Brookfield		(1	)		16			2			23
	Preferred equity			6			6			13			12
Preferred limited partners' equity				10			7			19			13
Limited partners' equity				(1	)		21			4			30
			$	45		$	85		$	125		$	112
Basic and diluted (loss) earnings per LP Unit			$	(0.01	)	$	0.13		$	0.02		$	0.18

 

BROOKFIELD RENEWABLE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
UNAUDITED				Jun 30		Dec 31
(MILLIONS)				2018		2017
Assets
Current assets
	Cash and cash equivalents		$	237	$	799
	Restricted cash			179		181
	Trade receivables and other current assets			503		554
	Financial instrument assets			64		72
	Due from related parties			51		60
	Assets held for sale			799		-
				1,833		1,666
Financial instrument assets				153		113
Equity-accounted investments				1,123		721
Property, plant and equipment, at fair value				25,774		27,096
Goodwill				918		901
Deferred income tax assets				178		177
Other long-term assets				111		230
			$	30,090	$	30,904
Liabilities
Current liabilities
	Accounts payable and accrued liabilities		$	454	$	542
	Financial instrument liabilities			106		184
	Due to related parties			307		112
	Current portion of long-term debt			929		1,676
	Liabilities directly associated with assets held for sale			563		-
				2,359		2,514
Financial instrument liabilities				52		86
Long-term debt and credit facilities				10,045		10,090
Deferred income tax liabilities				3,575		3,588
Other long-term liabilities				333		344
				16,364		16,622
Equity
Non-controlling interests
	Participating non-controlling interests - in operating			6,140		6,298
	General partnership interest in a holding subsidiary held by Brookfield			53		58
	Participating non-controlling interests - in a holding subsidiary
		- Redeemable/Exchangeable units held by Brookfield		2,609		2,843
	Preferred equity			589		616
Preferred limited partners' equity				707		511
Limited partners' equity				3,628		3,956
				13,726		14,282
			$	30,090	$	30,904

 

BROOKFIELD RENEWABLE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED				Three months ended Jun 30						Six months ended Jun 30
(MILLIONS)				2018			2017			2018			2017
Operating activities
Net income			$	45		$	85		$	125		$	112
Adjustments for the following non-cash items:
	Depreciation			206			198			419			398
	Unrealized financial instrument loss			33			6			25			26
	Share of (earnings) loss from
		equity-accounted investments		(6	)		(2	)		(6	)		1
	Deferred income tax expense			4			16			13			21
	Other non-cash items			9			(32	)		24			(31	)
Dividends received from equity-accounted investments				12			3			14			3
Changes in due to or from related parties				(9	)		(5	)		12			(10	)
Net change in working capital balances				(31	)		(27	)		(63	)		22
				263			242			563			542
Financing activities
Long-term debt - borrowings				472			152			1,963			299
Long-term debt - repayments				(298	)		(207	)		(2,233	)		(462	)
Capital contributions from participating non-controlling
	interests - in operating subsidiaries			-			11			4			49
Acquisition of Isagen from non-controlling interests				-			-			-			(5	)
Issuance of preferred limited partnership units				-			-			196			187
Repurchase of LP Units				(8	)		-			(8	)
Distributions paid:
	To participating non-controlling interests - in operating
		subsidiaries		(181	)		(161	)		(357	)		(296	)
	To preferred shareholders			(6	)		(6	)		(13	)		(12	)
	To preferred limited partners' unitholders			(10	)		(6	)		(18	)		(11	)
	To unitholders of Brookfield Renewable or BRELP			(161	)		(145	)		(321	)		(289	)
Borrowings from related party				200			-			200			-
				8			(362	)		(587	)		(540	)
Investing activities
Acquisitions				-			-			(12	)		-
Investment in:
	Sustaining capital expenditures			(29	)		(33	)		(56	)		(51	)
	Development and construction of renewable power
		generating assets		(13	)		(40	)		(38	)		(89	)
Proceeds from disposal of assets				-			-			-			150
Investment in securities				(13	)		-			25			-
Investment in equity accounted investments				(420	)		(27	)		(420	)		(39	)
Restricted cash and other				49			63			(29	)		(22	)
				(426	)		(37	)		(530	)		(51	)
Foreign exchange loss on cash				(12	)		(5	)		(8	)		-
Cash and cash equivalents
	Decrease			(167	)		(162	)		(562	)		(49	)
	Balance, beginning of period			404			336			799			223
	Balance, end of period		$	237		$	174		$	237		$	174
Supplemental cash flow information:
	Interest paid		$	185		$	188		$	315		$	305
	Interest received		$	5		$	9		$	12		$	17
	Income taxes paid		$	10		$	12		$	23		$	28

 

PROPORTIONATE RESULTS FOR THE THREE MONTHS ENDED June 30

The following chart reflects the generation and summary financial figures on a proportionate basis for the three months ended June 30:

			(GWh)				(MILLIONS)
			Actual Generation		LTA Generation		Revenues				Adjusted EBITDA(1)						Funds From Operations(1)						Net Income (Loss)
			2018	2017	2018	2017		2018		2017		2018			2017			2018			2017			2018			2017
Hydroelectric
	North America		3,413	4,186	3,822	3,822	$	228	$	270	$	165		$	199		$	123		$	158		$	56		$	82
	Brazil		902	886	978	968		63		66		44			51			37			45			2			6
	Colombia		872	998	844	846		53		46		31			24			21			15			18			11
			5,187	6,070	5,644	5,636		344		382		240			274			181			218			76			99
Wind
	North America		663	434	791	496		54		40		38			31			24			20			(6	)		7
	Europe		107	94	133	103		12		9		7			4			3			2			(2	)		(4	)
	Brazil		159	51	146	42		10		5		8			3			6			2			(5	)		1
	Other		37	-	42	-		3		-		2			-			1			-			(3	)		-
			966	579	1,112	641		79		54		55			38			34			24			(16	)		4
Solar			175	-	179	-		30		-		25			-			16			-			2			-
Storage & Other			127	70	-	-		20		11		10			4			7			(1	)		1			(3	)
Corporate			-	-	-	-		-		-		(6	)		(4	)		(66	)		(60	)		(65	)		(62	)
Total			6,455	6,719	6,935	6,277	$	473	$	447	$	324		$	312		$	172		$	181		$	(2	)	$	38

⁽¹⁾ Non-IFRS measures. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”.

The following table reflects Adjusted EBITDA, Funds From Operations and provides reconciliation to net income (loss) for the three months ended June 30, 2018:

																					Contribution
			Attributable to Unitholders																		from			Attributable
			Hydroelectric			Wind			Solar			Storage			Corporate				Total		equity			to non-			As per
												and									accounted			controlling			IFRS
($ MILLIONS)												Other									investments			interests			financials(1)
Revenues				344			79			30			20			-			473			(58	)		320			735
Other income				6			1			1			-			-			8			(2	)		4			10
Direct operating costs				(110	)		(25	)		(6	)		(10	)		(6	)		(157	)		19			(109	)		(247	)
Share of Adjusted EBITDA from
	equity accounted investments			-			-			-			-			-			-			41			4			45
Adjusted EBITDA				240			55			25			10			(6	)		324			-			219
Management service costs				-			-			-			-			(21	)		(21	)		-			-			(21	)
Interest expense - borrowings				(55	)		(20	)		(9	)		(3	)		(23	)		(110	)		16			(84	)		(178	)
Current income taxes				(4	)		(1	)		-			-			-			(5	)		1			(3	)		(7	)
Distributions attributable to
	Preferred limited partners equity			-			-			-			-			(10	)		(10	)		-			-			(10	)
	Preferred equity			-			-			-			-			(6	)		(6	)		-			-			(6	)
Share of interest and cash taxes from
	equity accounted investments			-			-			-			-			-			-			(17	)		(4	)		(21	)
Share of Funds From Operations
	attributable to non-controlling interests			-			-			-			-			-			-			-			(128	)		(128	)
Funds From Operations				181			34			16			7			(66	)		172			-			-
Adjusted sustaining capital expenditures(2)				(16	)		-			-			-			(2	)		(18	)		-			-
Adjusted Funds From Operations				165			34			16			7			(68	)		154			-			-
Adjusted sustaining capital expenditures(2)				16			-			-			-			2			18			-			-
Depreciation				(94	)		(42	)		(7	)		(6	)		-			(149	)		17			(74	)		(206	)
Foreign exchange and
	unrealized financial instrument loss			2			(2	)		(4	)		-			5			1			(6	)		(28	)		(33	)
Deferred income tax expense				(3	)		2			1			-			4			4			(3	)		(5	)		(4	)
Other				(10	)		(8	)		(4	)		-			(8	)		(30	)		10			10			(10	)
Share of earnings from
	equity accounted investments			-			-			-			-			-			-			(18	)		-			(18	)
Net loss attributable to
	non-controlling interests			-			-			-			-			-			-			-			97			97
Net income (loss) attributable to Unitholders(3)				76			(16	)		2			1			(65	)		(2	)		-			-			(2	)

⁽¹⁾ Share of earnings from equity-accounted investments of $6 million is comprised of amounts found on the share of Adjusted EBITDA, share of interest and cash taxes and share of earnings lines. Net income attributable to participating non-controlling interests – in operating subsidiaries of $31 million is comprised of amounts found on Share of Funds From Operations attributable to non-controlling interests and Net loss attributable to non-controlling interests.
⁽²⁾ Based on long-term sustaining capital expenditure plans.
⁽³⁾ Net income (loss) attributable to Unitholders includes net income (loss) attributable to GP interest, Redeemable/Exchangeable partnership units and LP Units. Total net income (loss) includes amounts attributable to Unitholders, non-controlling interests, preferred limited partners equity and preferred equity.

The following table reflects Adjusted EBITDA, Funds From Operations and provides reconciliation to net income (loss) for the three months ended June 30, 2017:

			Attributable to Unitholders															Contribution			Attributable
			Hydroelectric			Wind			Storage			Corporate				Total		from equity			to non-			As per
									and									accounted			controlling			IFRS
($ MILLIONS)									Other									investments			interests			financials(1)
Revenues				382			54			11			-			447			(11	)		247			683
Other income				4			-			-			1			5			-			5			10
Direct operating costs				(112	)		(16	)		(7	)		(5	)		(140	)		4			(104	)		(240	)
Share of Adjusted EBITDA from
	equity accounted investments			-			-			-			-			-			7			-			7
Adjusted EBITDA				274			38			4			(4	)		312			-			148
Management service costs				-			-			-			(21	)		(21	)		-			-			(21	)
Interest expense - borrowings				(57	)		(14	)		(5	)		(22	)		(98	)		3			(61	)		(156	)
Current income taxes				1			-			-			-			1			-			3			4
Distributions attributable to
	Preferred limited partners equity			-			-			-			(7	)		(7	)		-			-			(7	)
	Preferred equity			-			-			-			(6	)		(6	)		-			-			(6	)
Share of interest and cash taxes from
	equity accounted investments			-			-			-			-			-			(3	)		-			(3	)
Share of Funds From Operations
	attributable to non-controlling interests			-			-			-			-			-			-			(90	)		(90	)
Funds From Operations				218			24			(1	)		(60	)		181			-			-
Adjusted sustaining capital expenditures(2)				-			-			-			(2	)		(17	)		-			-
Adjusted Funds From Operations				218			24			(1	)		(62	)		164			-			-
Adjusted sustaining capital expenditures(2)				-			-			-			2			17			-			-
Depreciation				(98	)		(26	)		(6	)		-			(130	)		3			(71	)		(198	)
Foreign exchange and
	unrealized financial instrument loss			1			(6	)		-			(7	)		(12	)		-			6			(6	)
Deferred income tax expenses (recovery)				(15	)		7			-			5			(3	)		-			(13	)		(16	)
Other				(7	)		5			4			-			2			(1	)		22			23
Share of earnings from
	equity accounted investments			-			-			-			-			-			(2	)		-			(2	)
Net loss attributable to
	non-controlling interests			-			-			-			-			-			-			56			56
Net income (loss) attributable to Unitholders(3)				99			4			(3	)		(62	)		38			-			-			38

⁽¹⁾ Share of earnings from equity-accounted investments of $2 million is comprised of amounts found on the share of Adjusted EBITDA, share of interest and cash taxes and share of earnings lines. Net income attributable to participating non-controlling interests – in operating subsidiaries of $34 million is comprised of amounts found on Share of Funds From Operations attributable to non-controlling interests and Net loss attributable to non-controlling interests.
⁽²⁾ Based on long-term sustaining capital expenditure plans.
⁽³⁾ Net income (loss) attributable to Unitholders includes net income (loss) attributable to GP interest, Redeemable/Exchangeable partnership units and LP Units. Total net income (loss) includes amounts attributable to Unitholders, non-controlling interests, preferred limited partners equity and preferred equity.

The following table reconciles net (loss) income attributable to Unitholders and (loss) earnings per unit, the most directly comparable IFRS measures, to Funds From Operations, and Funds From Operations per unit, both non-IFRS financial metrics for the three months ended June 30:

										Per unit
(MILLIONS, EXCEPT AS NOTED)					2018			2017			2018			2017
Net (loss) income attributable to:
Limited partners' equity				$	(1	)	$	21		$	(0.01	)	$	0.13
General partnership interest in a holding
		subsidiary held by Brookfield			-			1			-			-
Participating non-controlling interests - in a holding
		subsidiary - Redeemable/Exchangeable units
		held by Brookfield			(1	)		16			-			-
Net (loss) income attributable to Unitholders				$	(2	)	$	38		$	(0.01	)	$	0.13
Adjusted for proportionate share of:
Depreciation					149			130			0.48			0.43
Foreign exchange and
		unrealized financial instruments (gain) loss			(1	)		12			-			0.04
Deferred income tax (recovery) expense					(4	)		3			(0.01	)		0.01
Other					30			(2	)		0.09			-
Funds From Operations				$	172		$	181		$	0.55		$	0.61
Weighted average units outstanding(1)											312.8			299.2

⁽¹⁾ Includes GP interest, Redeemable/Exchangeable partnership units, and LP Units.

PROPORTIONATE RESULTS FOR THE SIX MONTHS ENDED JUNE 30

The following chart reflects the generation and summary financial figures on a proportionate basis for the six months ended June 30:

	(GWh)					(MILLIONS)
	Actual Generation		LTA Generation			Revenues				Adjusted EBITDA(1)						Funds From Operations(1)						Net Income (Loss)
	2018	2017	2018	2017		2018		2017		2018			2017			2018			2017			2018			2017
Hydroelectric
North America	7,178	7,952	7,261	7,261	$	489	$	525	$	356		$	393		$	269		$	306		$	133		$	165
Brazil	1,940	1,757	1,935	1,918		132		118		95			93			78			78			3			2
Colombia	1,640	1,824	1,688	1,692		106		93		62			48			42			25			30			11
	10,758	11,533	10,884	10,871		727		736		513			534			389			409			166			178
Wind
North America	1,308	832	1,488	948		108		79		79			62			50			41			(12	)		8
Europe	272	266	288	272		29		24		18			15			11			9			(3	)		(5	)
Brazil	262	109	264	75		18		9		13			6			9			4			(6	)		2
Other	69	-	76	-		5		-		3			-			1			-			(4	)		-
	1,911	1,207	2,116	1,295		160		112		113			83			71			54			(25	)		5
Solar	290	-	286	-		48		-		41			-			26			-			-			-
Storage & Other	190	140	-	-		37		24		19			7			12			(1	)		(11	)		(9	)
Corporate	-	-	-	-		-		-		(11	)		(10	)		(133	)		(115	)		(124	)		(120	)
Total	13,149	12,880	13,286	12,166	$	972	$	872	$	675		$	614		$	365		$	347		$	6		$	54

⁽¹⁾ Non-IFRS measures. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”.

RECONCILIATION OF NON-IFRS MEASURES

The following table reflects Adjusted EBITDA, Funds From Operations, Adjusted Funds From Operations and provides a reconciliation to net income (loss) for the six months ended June 30, 2018:

																			Contribution
	Attributable to Unitholders																		from			Attributable
	Hydroelectric			Wind			Solar			Storage			Corporate				Total		equity			to non-			As per
										and									accounted			controlling			IFRS
($ MILLIONS)										Other									investments			interests			financials(1)
Revenues		727			160			48			37			-			972			(97	)		653			1,528
Other income		8			2			3			-			1			14			(4	)		9			19
Direct operating costs		(222	)		(49	)		(10	)		(18	)		(12	)		(311	)		32			(224	)		(503	)
Share of Adjusted EBITDA from
equity accounted investments		-			-			-			-			-			-			69			12			81
Adjusted EBITDA		513			113			41			19			(11	)		675			-			450
Management service costs		-			-			-			-			(42	)		(42	)		-			-			(42	)
Interest expense - borrowings		(116	)		(40	)		(15	)		(7	)		(48	)		(226	)		25			(157	)		(358	)
Current income taxes		(8	)		(2	)		-			-			-			(10	)		1			(5	)		(14	)
Distributions attributable to
Preferred limited partners equity		-			-			-			-			(19	)		(19	)		-			-			(19	)
Preferred equity		-			-			-			-			(13	)		(13	)		-			-			(13	)
Share of interest and cash taxes from
equity accounted investments		-			-			-			-			-			-			(26	)		(10	)		(36	)
Share of Funds From Operations
attributable to non-controlling interests		-			-			-			-			-			-			-			(278	)		(278	)
Funds From Operations		389			71			26			12			(133	)		365			-			-
Adjusted sustaining capital expenditures(2)		(32	)		-			-			-			(4	)		(36	)		-			-
Adjusted Funds From Operations		357			71			26			12			(137	)		329			-			-
Adjusted sustaining capital expenditures(2)		32			-			-			-			4			36			-			-
Depreciation		(194	)		(81	)		(13	)		(12	)		-			(300	)		29			(148	)		(419	)
Foreign exchange and
unrealized financial instrument loss		1			(1	)		(3	)		(2	)		13			8			(6	)		(27	)		(25	)
Deferred income tax expense		(8	)		(4	)		-			-			9			(3	)		(1	)		(9	)		(13	)
Other		(22	)		(10	)		(10	)		(9	)		(13	)		(64	)		17			(7	)		(54	)
Share of earnings from
equity accounted investments		-			-			-			-			-			-			(39	)		-			(39	)
Net income attributable to
non-controlling interests		-			-			-			-			-			-			-			191			191
Net income (loss) attributable to Unitholders(3)		166			(25	)		-			(11	)		(124	)		6			-			-			6

⁽¹⁾ Share of earnings from equity-accounted investments of $6 million is comprised of amounts found on the share of Adjusted EBITDA, share of interest and cash taxes and share of earnings lines. Net income attributable to participating non-controlling interests – in operating subsidiaries of $87 million is comprised of amounts found on Share of Funds From Operations attributable to non-controlling interests and Net Income attributable to non-controlling interests.
⁽²⁾ Based on long-term sustaining capital expenditure plans.
⁽³⁾ Net income (loss) attributable to Unitholders includes net income (loss) attributable to GP interest, Redeemable/Exchangeable partnership units and LP Units. Total net income (loss) includes amounts attributable to Unitholders, non-controlling interests, preferred limited partners equity and preferred equity.

The following table reflects Adjusted EBITDA, Funds From Operations, Adjusted Funds From Operations and provides a reconciliation to net income (loss) for the six months ended June 30, 2017:

	Attributable to Unitholders															Contribution			Attributable
	Hydroelectric			Wind			Storage			Corporate				Total		from equity			to non-			As per
							and									accounted			controlling			IFRS
($ MILLIONS)							Other									investments			interests			financials(1)
Revenues		736			112			24			-			872			(20	)		508			1,360
Other income		8			0			-			1			9			-			9			18
Direct operating costs		(210	)		(29	)		(17	)		(11	)		(267	)		9			(215	)		(473	)
Share of Adjusted EBITDA from
equity accounted investments		-			-			-			-			-			11			-			11
Adjusted EBITDA		534			83			7			(10	)		614			-			302
Management service costs		-			-			-			(37	)		(37	)		-			-			(37	)
Interest expense - borrowings		(120	)		(29	)		(8	)		(43	)		(200	)		6			(125	)		(319	)
Current income taxes		(5	)		-			-			-			(5	)		-			(7	)		(12	)
Distributions attributable to
Preferred limited partners equity		-			-			-			(13	)		(13	)		-			-			(13	)
Preferred equity		-			-			-			(12	)		(12	)		-			-			(12	)
Share of interest and cash taxes from
equity accounted investments		-			-			-			-			-			(6	)		-			(6	)
Share of Funds From Operations
attributable to non-controlling interests		-			-			-			-			-			-			(170	)		(170	)
Funds From Operations		409			54			(1	)		(115	)		347			-			-
Adjusted sustaining capital expenditures(2)		(30	)		-			-			(4	)		(34	)		-			-
Adjusted Funds From Operations		379			54			(1	)		(119	)		313			-			-
Adjusted sustaining capital expenditures(2)		30			-			-			4			34			-			-
Depreciation		(195	)		(56	)		(12	)		-			(263	)		6			(141	)		(398	)
Foreign exchange and
unrealized financial instrument loss		(6	)		(5	)		-			(16	)		(27	)		1			-			(26	)
Deferred income tax expense		(22	)		8			-			11			(3	)		-			(18	)		(21	)
Other		(8	)		4			4			-			-			(1	)		22			21
Share of earnings from
equity accounted investments		-			-			-			-			-			(6	)		-			(6	)
Net income attributable to
non-controlling interests		-			-			-			-			-			-			137			137
Net income (loss) attributable to Unitholders(3)		178			5			(9	)		(120	)		54			-			-			54

⁽¹⁾ Share of loss from equity-accounted investments of $1 million is comprised of amounts found on the share of Adjusted EBITDA, share of interest and cash taxes and share of earnings lines. Net income attributable to participating non-controlling interests – in operating subsidiaries of $33 million is comprised of amounts found on Share of Funds From Operations attributable to non-controlling interests and Net Income attributable to non-controlling interests.
⁽²⁾ Based on long-term sustaining capital expenditure plans.
⁽³⁾ Net income (loss) attributable to Unitholders includes net income (loss) attributable to GP interest, Redeemable/Exchangeable partnership units and LP Units. Total net income (loss) includes amounts attributable to Unitholders, non-controlling interests, preferred limited partners equity and preferred equity.

The following table reconciles net income attributable to Limited partners’ equity and earnings per LP Unit, the most directly comparable IFRS measures, to Funds From Operations, Funds From Operations per Unit and Adjusted EBITDA, all non-IFRS financial metrics for the six months ended June 30:

									Per unit
(MILLIONS, EXCEPT AS NOTED)					2018			2017		2018			2017
Net income attributable to:
	Limited partners' equity			$	4		$	30	$	0.02		$	0.18
	General partnership interest in a holding
		subsidiary held by Brookfield			-			1		-			-
	Participating non-controlling interests - in a holding
		subsidiary - Redeemable/Exchangeable units
		held by Brookfield			2			23		-			-
Net income attributable to Unitholders				$	6		$	54	$	0.02		$	0.18
	Depreciation				300			263		0.96			0.88
	Foreign exchange and
		unrealized financial instruments (gain) loss			(8	)		27		(0.02	)		0.09
	Deferred income tax expense				3			3		0.01			0.01
	Other				64			-		0.20			-
Funds From Operations				$	365		$	347	$	1.17		$	1.16
Weighted average Units outstanding(1)										312.7			299.2

⁽¹⁾ Includes GP interest, Redeemable/Exchangeable partnership units, and LP Units.

 

 

Source: Brookfield Renewable Partners L.P.