All amounts in
BROOKFIELD, News,
“We had another successful quarter, utilizing our disciplined approach to growth and execution to outperform our targets and deliver strong operating results. We recently closed our acquisitions of X-Elio and Deriva Energy (formerly
| For the three months ended | For the nine months ended | |||||||||||
| US$ millions (except per unit amounts), unaudited | 2023 | 2022 | 2023 | 2022 | ||||||||
| Net income (loss) attributable to Unitholders | $ | (64 | ) | $ | (136 | ) | $ | (135 | ) | $ | (213 | ) |
| – per LP unit(1) | (0.14 | ) | (0.25 | ) | (0.34 | ) | (0.44 | ) | ||||
| Funds From Operations (FFO)(2) | 253 | 243 | 840 | 780 | ||||||||
| – per Unit(2)(3) | 0.38 | 0.38 | 1.29 | 1.21 | ||||||||
Brookfield Renewable reported FFO of
Key highlights:
- We were successful in our growth activities this quarter, signing transactions for
$2.2 billion of equity investment ($450 million net to Brookfield Renewable) alongside our institutional partners, taking advantage of our access to scale capital and opportunities in the market; - Continued to advance development activities commissioning approximately 2,200 megawatts of capacity year-to-date and are on track to deliver ~5,000 megawatts this year adding approximately
$70 million of annual FFO; - We expect to execute just short of
$20 billion of non-recourse financing this year, generating over$800 million in upfinancing proceeds to Brookfield Renewable, while maintaining our strong investment grade credit rating and ended the quarter with$4.4 billion of available liquidity, providing significant flexibility to continue executing on our growth and development strategy; - Advanced key commercial priorities this quarter including signing contracts to deliver an incremental 5,700 gigawatt hours per year of generation, including 4,100 gigawatt hours to corporate offtakers where we continue to see accelerating demand; and
- Continued to execute our asset recycling activities where we are seeing strong demand for de-risked assets, generating
~$1.4 billion of proceeds (~$600 million net to Brookfield Renewable) over the past 18-months, which on average represents almost three times our invested capital.
Our returns remain robust
The renewables sector traded down in the public markets on the back of higher interest rates and a perceived tightening of industry margins. Even though we are well positioned to benefit in this environment, and insulated from the challenges that are seemingly impacting others in our sector, we have not been immune to the lower market prices. And while we are never pleased when our share price is down, we are long-term focused investors and we believe the outlook for our business is better than ever. As we continue to deliver on our growth targets and execute on our strategic priorities, our share price should respond and better reflect the intrinsic value of the business.
Most importantly, we are not seeing a reduction in the return we are able to generate on our capital. In fact, quite the opposite, we are seeing plentiful opportunities to deploy capital at or above our target returns, as demand for clean power from corporations continues to accelerate. This opportunity is more pronounced in the current market where access to capital is becoming increasingly scarce for some market participants – creating a favorable environment for those such as ourselves, with the capital, capabilities, and pipeline of projects to deliver for our clients. Notably, there are particularly attractive opportunities to acquire high quality businesses with strong pipelines but lack the access to capital or scale operating capabilities to build out the projects.
In this environment, our ongoing approach to M&A is particularly effective. We are leveraging our existing capabilities and development pipeline to capture the growing demand, while at the same time using our access to capital to add leading platforms in core markets around the world. These additions further enhance our capabilities and position us as the clean energy and decarbonization partner of choice for leading corporations. And by consistently enhancing our business, we expect to be even more well positioned to capture a greater portion of the market demand in the future. It is a powerful and virtuous cycle.
Over the last five years, the amount of clean energy procured annually by corporates has increased almost 10 times and, looking forward, we do not expect this trend to slow down. Access to energy is now the key constraint for a number of these businesses which acquire large amounts of power, including leading global technology companies, to execute their growth plans.
As one of the only scale multi-technology global clean energy businesses in the world with an almost 150,000 megawatt development pipeline, we are uniquely positioned to benefit. With our extensive energy marketing and operational capabilities, our ability to offer 24/7 clean power solutions from our technologically diversified fleet, and our ability to credibly deliver scale projects on time across all key global markets, we have become a go-to partner providing bespoke solutions to meet the needs of the largest procurers of clean energy globally.
As a result, we continue to see a very robust market to contract our capacity and have been successful in signing contracts at prices that appropriately compensate us for higher construction and financing costs. As an example, by leveraging our development pipeline, our existing hydro facilities, and our power marketing capabilities, we recently signed an agreement with one of the leading global tech companies to provide them with a total of 18 terawatt hours (equal to the annual electricity consumption of almost 2 million homes in the
Our approach to development continues to be focused on delivering appropriate risk-adjusted returns and focusing on investment opportunities that we can de-risk quickly. We do not build on spec and reduce risk in our investments by simultaneously securing power purchase agreements, construction contracts and financing before committing significant capital. We limit construction risk by using a localized approach to construction and development and manage our investment spend by leveraging our central procurement capabilities. Lastly, we leverage our commercial teams to source the highest quality offtakes and focus on the most mature and lowest cost renewable power technologies (solar and onshore wind) in the highest growth regions to ensure our projects produce the most de-risked high quality cash flows. This approach has served us well for decades and allows us to deliver consistent performance in all market conditions.
We are also crystalizing and proving out our returns through our asset recycling initiatives. In the current environment, we continue to see strong demand for de-risked assets with long-term contracts and fixed rate financing in place. As an example, we recently agreed to the sale of a 150-megawatt solar facility in
We are set to benefit from the closing of a number of highly accretive M&A transactions
We are making good progress closing our previously announced acquisitions. We recently closed the acquisition of 50% of X-Elio, our leading global solar developer, bringing our ownership interest in that business to 100%. We also closed the acquisition of Deriva Energy, one of the largest renewable platforms in the
We continued to advance the regulatory approval process for our acquisition of
We are also seeing an increasing number of opportunities to acquire scale portfolios and platforms, given the recent move in public market valuations, combined with the increasing need for capital across the sector. This environment plays to our strengths as we can invest at attractive risk-adjusted returns when others are pulling back.
Recently we agreed to acquire Banks Renewables for
In total, over the coming months we expect to have closed transactions totaling
In light of public market conditions and our strong conviction in the intrinsic value of our business and growth trajectory, we have also started to allocate capital to repurchase shares. Starting this quarter, we repurchased almost 1.5 million units under our normal course issuer bid. Looking forward, we will continue to allocate capital based on where we are seeing the best risk-adjusted returns and remain confident that we will continue to create meaningful value for our investors.
Operating Results
We generated FFO of
Our business is backed by high-quality cash flows, in large part from our perpetual hydro portfolio which generates dispatchable, clean, baseload power that has become increasingly valuable in today’s environment. We are also well positioned to benefit from the increased demand for reliable, carbon-free generation with significant capacity available for re-contracting over the next five years in a very positive environment for prices of electricity. We expect to be able to execute new contracts which will contribute additional FFO and allow us to up-finance many of the assets due to their low levels of debt.
Our hydroelectric segment delivered FFO of
Our wind and solar segments generated a combined
Our renewable power development pipeline stands at almost 150,000 megawatts, nearly one and half times larger than it was at this time last year. We also continue to be successful starting development on projects earlier than had been planned and scaling our development to meet growing demand for clean power. We have approximately 5,000 megawatts on track for commissioning this year, and ~7,000 and ~8,000 megawatts on track for delivery in 2024 and 2025, respectively. Much of the capital for these projects is already invested, and we will see the returns on that capital when the projects begin producing cash upon commissioning. We expect newly commissioned capacity this year to contribute approximately
Balance Sheet & Liquidity
Our financial position remains excellent, and our available liquidity is robust, providing significant flexibility to fund our growth. We are resilient to rising global interest rates, with ~90% of our borrowings being project level non-recourse debt, with an average remaining term of over 10 years, no material near-term maturities in the next five years, and only 3% exposure to floating rate debt.
Despite market volatility, we continue to have access to deep and varied pools of capital, differentiating our business. We finished the quarter with
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, utility-scale 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 approximately
Please note that Brookfield Renewable’s previous audited annual and unaudited quarterly reports filed with the
| Contact information: | |
| Media: | Investors: |
| Managing Director – Communications | Vice President – Investor Relations |
| +44 (0)7398 909 278 | (416)-649-8196 |
| [email protected] | [email protected] |
Quarterly Earnings Call Details
Investors, analysts and other interested parties can access Brookfield Renewable’s Third Quarter 2023 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) | ||||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 1,034 | $ | 998 | ||||
| Trade receivables and other financial assets(5) | 3,805 | 3,747 | ||||||
| Equity-accounted investments | 1,707 | 1,392 | ||||||
| Property, plant and equipment, at fair value | 56,437 | 54,283 | ||||||
| 2,580 | 3,691 | |||||||
| Total Assets | $ | 65,563 | $ | 64,111 | ||||
| Liabilities | ||||||||
| Corporate borrowings(7) | $ | 2,712 | $ | 2,548 | ||||
| Borrowings which have recourse only to assets they finance(8) | 21,659 | 22,302 | ||||||
| Accounts payable and other liabilities(9) | 5,942 | 6,468 | ||||||
| Deferred income tax liabilities | 6,931 | 6,507 | ||||||
| Equity | ||||||||
| Non-controlling interests | ||||||||
| Participating non-controlling interests – in operating subsidiaries | $ | 16,770 | $ | 14,755 | ||||
| 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 | 2,809 | 2,892 | ||||||
| BEPC exchangeable shares | 2,595 | 2,561 | ||||||
| Preferred equity | 570 | 571 | ||||||
| Perpetual subordinated notes | 592 | 592 | ||||||
| Preferred limited partners' equity | 760 | 760 | ||||||
| Limited partners' equity | 4,166 | 28,319 | 4,096 | 26,286 | ||||
| Total Liabilities and Equity | $ | 65,563 | $ | 64,111 | ||||
.
| Consolidated Statements of Operating Results | |||||||||||||
| UNAUDITED | For the three months ended | For the nine months ended | |||||||||||
| (MILLIONS, EXCEPT AS NOTED) | 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenues | $ | 1,179 | $ | 1,105 | $ | 3,715 | $ | 3,515 | |||||
| Other income | 116 | 22 | 203 | 107 | |||||||||
| Direct operating costs(10) | (496 | ) | (344 | ) | (1,322 | ) | (1,060 | ) | |||||
| Management service costs | (43 | ) | (58 | ) | (155 | ) | (199 | ) | |||||
| Interest expense | (370 | ) | (313 | ) | (1,166 | ) | (873 | ) | |||||
| Share of earnings from equity-accounted investments | — | 12 | 46 | 60 | |||||||||
| Foreign exchange and financial instrument (loss) gain | 113 | (70 | ) | 432 | (119 | ) | |||||||
| Depreciation | (448 | ) | (385 | ) | (1,335 | ) | (1,175 | ) | |||||
| Other | (6 | ) | (54 | ) | (2 | ) | (108 | ) | |||||
| Income tax recovery (expense) | |||||||||||||
| Current | (9 | ) | (33 | ) | (89 | ) | (106 | ) | |||||
| Deferred | (12 | ) | 41 | 25 | 36 | ||||||||
| Net income (loss) | $ | 24 | $ | (77 | ) | $ | 352 | $ | 78 | ||||
| Net income attributable to preferred equity, preferred limited partners' equity, perpetual subordinated notes and non-controlling interests in operating subsidiaries | $ | (88 | ) | $ | (59 | ) | $ | (487 | ) | $ | (291 | ) | |
| Net (loss) income attributable to Unitholders | (64 | ) | (136 | ) | (135 | ) | (213 | ) | |||||
| Basic and diluted loss per LP unit | $ | (0.14 | ) | $ | (0.25 | ) | $ | (0.34 | ) | $ | (0.44 | ) | |
| Consolidated Statements of Cash Flows | |||||||||||||
| For the three months ended | For the nine months ended | ||||||||||||
| UNAUDITED (MILLIONS) | 2023 | 2022 | 2023 | 2022 | |||||||||
| Operating activities | |||||||||||||
| Net income | $ | 24 | $ | (77 | ) | $ | 352 | $ | 78 | ||||
| Adjustments for the following non-cash items: | |||||||||||||
| Depreciation | 448 | 385 | 1,335 | 1,175 | |||||||||
| Unrealized foreign exchange and financial instrument loss (gain) | (144 | ) | 116 | (410 | ) | 222 | |||||||
| Share of earnings from equity-accounted investments | — | (12 | ) | (46 | ) | (60 | ) | ||||||
| Deferred income tax (expense) recovery | 12 | (41 | ) | (25 | ) | (36 | ) | ||||||
| Other non-cash items | (62 | ) | 56 | (48 | ) | 68 | |||||||
| 278 | 427 | 1,158 | 1,447 | ||||||||||
| Net change in working capital and other(11) | 85 | (33 | ) | 250 | (312 | ) | |||||||
| 363 | 394 | 1,408 | 1,135 | ||||||||||
| Financing activities | |||||||||||||
| Net corporate borrowings | — | — | 293 | — | |||||||||
| Corporate credit facilities, net | — | 200 | — | 200 | |||||||||
| Non-recourse borrowings, commercial paper, and related party borrowings, net | 166 | 1,108 | (890 | ) | 3,463 | ||||||||
| Capital contributions from participating non-controlling interests – in operating subsidiaries, net | 371 | 64 | 1,952 | 338 | |||||||||
| Issuance (redemption) of equity instruments, net and related costs | (12 | ) | — | 618 | (137 | ) | |||||||
| Distributions paid: | |||||||||||||
| To participating non-controlling interests - in operating subsidiaries | (265 | ) | (252 | ) | (714 | ) | (1,109 | ) | |||||
| To unitholders of Brookfield Renewable or BRELP | (250 | ) | (228 | ) | (739 | ) | (686 | ) | |||||
| 10 | 892 | 520 | 2,069 | ||||||||||
| Investing activities | |||||||||||||
| Acquisitions net of cash and cash equivalents in acquired entity | — | (602 | ) | (87 | ) | (1,381 | ) | ||||||
| Investment in property, plant and equipment | (604 | ) | (577 | ) | (1,660 | ) | (1,478 | ) | |||||
| Disposal (purchase) of associates and other assets | 87 | (43 | ) | (131 | ) | (102 | ) | ||||||
| Restricted cash and other | (13 | ) | 38 | (28 | ) | 38 | |||||||
| (530 | ) | (1,184 | ) | (1,906 | ) | (2,923 | ) | ||||||
| Foreign exchange gain (loss) on cash | (16 | ) | (30 | ) | 14 | (50 | ) | ||||||
| Cash and cash equivalents | |||||||||||||
| Decrease (increase) | (173 | ) | 72 | 36 | 231 | ||||||||
| Net change in cash classified within assets held for sale | 5 | — | — | — | |||||||||
| Balance, beginning of period | 1,202 | 1,059 | 998 | 900 | |||||||||
| Balance, end of period | $ | 1,034 | $ | 1,131 | $ | 1,034 | $ | 1,131 | |||||
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 | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| Hydroelectric | ||||||||||||||||||||||||||
| 2,543 | 2,236 | 2,445 | 2,445 | $ | 221 | $ | 212 | $ | 138 | $ | 127 | $ | 75 | $ | 76 | |||||||||||
| 813 | 849 | 1,035 | 1,035 | 62 | 49 | 45 | 40 | 38 | 31 | |||||||||||||||||
| 705 | 1,092 | 892 | 924 | 74 | 65 | 39 | 45 | 16 | 23 | |||||||||||||||||
| 4,061 | 4,177 | 4,372 | 4,404 | 357 | 326 | 222 | 212 | 129 | 130 | |||||||||||||||||
| Wind | ||||||||||||||||||||||||||
| 742 | 725 | 941 | 908 | 64 | 70 | 93 | 46 | 74 | 28 | |||||||||||||||||
| 161 | 179 | 162 | 190 | 14 | 19 | 9 | 23 | 4 | 20 | |||||||||||||||||
| 190 | 197 | 247 | 210 | 12 | 10 | 11 | 9 | 9 | 7 | |||||||||||||||||
| 189 | 148 | 225 | 154 | 13 | 10 | 10 | 9 | 7 | 6 | |||||||||||||||||
| 1,282 | 1,249 | 1,575 | 1,462 | 103 | 109 | 123 | 87 | 94 | 61 | |||||||||||||||||
| Utility-scale solar | 689 | 569 | 882 | 773 | 83 | 104 | 75 | 114 | 51 | 86 | ||||||||||||||||
| Distributed energy & sustainable solutions(12) | 501 | 445 | 283 | 266 | 80 | 80 | 50 | 52 | 39 | 43 | ||||||||||||||||
| Corporate | — | — | — | — | — | — | 37 | 30 | (60 | ) | (77 | ) | ||||||||||||||
| Total | 6,533 | 6,440 | 7,112 | 6,905 | $ | 623 | $ | 619 | $ | 507 | $ | 495 | $ | 253 | $ | 243 | ||||||||||
PROPORTIONATE RESULTS FOR THE NINE MONTHS ENDED
The following chart reflects the generation and summary financial figures on a proportionate basis for the nine months ended
| (GWh) | (MILLIONS) | |||||||||||||||||||||||||
| Actual Generation | LTA Generation | Revenues | Adjusted EBITDA | FFO | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||
| Hydroelectric | ||||||||||||||||||||||||||
| 9,147 | 8,858 | 9,247 | 9,251 | $ | 830 | $ | 745 | $ | 549 | $ | 472 | $ | 347 | $ | 325 | |||||||||||
| 3,082 | 2,868 | 3,063 | 3,040 | 181 | 142 | 132 | 127 | 112 | 100 | |||||||||||||||||
| 2,619 | 3,189 | 2,652 | 2,738 | 206 | 205 | 134 | 143 | 60 | 84 | |||||||||||||||||
| 14,848 | 14,915 | 14,962 | 15,029 | 1,217 | 1,092 | 815 | 742 | 519 | 509 | |||||||||||||||||
| Wind | ||||||||||||||||||||||||||
| 2,793 | 2,927 | 3,468 | 3,264 | 222 | 241 | 238 | 160 | 185 | 110 | |||||||||||||||||
| 587 | 633 | 643 | 682 | 89 | 102 | 73 | 102 | 57 | 89 | |||||||||||||||||
| 472 | 424 | 561 | 503 | 29 | 23 | 24 | 19 | 19 | 14 | |||||||||||||||||
| 562 | 436 | 688 | 426 | 36 | 29 | 29 | 25 | 19 | 16 | |||||||||||||||||
| 4,414 | 4,420 | 5,360 | 4,875 | 376 | 395 | 364 | 306 | 280 | 229 | |||||||||||||||||
| Utility-scale solar | 1,836 | 1,464 | 2,296 | 1,859 | 281 | 297 | 251 | 308 | 168 | 224 | ||||||||||||||||
| Distributed energy & sustainable solutions(13) | 1,218 | 1,044 | 767 | 708 | 240 | 207 | 169 | 147 | 136 | 118 | ||||||||||||||||
| Corporate | — | — | — | — | — | — | 53 | 38 | (263 | ) | (300 | ) | ||||||||||||||
| Total | 22,316 | 21,843 | 23,385 | 22,471 | $ | 2,114 | $ | 1,991 | $ | 1,652 | $ | 1,541 | $ | 840 | $ | 780 | ||||||||||
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 | Utility- scale solar | Distributed energy & sustainable solutions | Corporate | Total | ||||||||||||
| Net income (loss) | $ | 25 | $ | 60 | $ | 26 | $ | (11 | ) | $ | (76 | ) | $ | 24 | ||||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 165 | 164 | 83 | 35 | 1 | 448 | ||||||||||||
| Deferred income tax expense (recovery) | (27 | ) | 49 | (17 | ) | 4 | 3 | 12 | ||||||||||
| Foreign exchange and financial instrument loss (gain) | (7 | ) | (74 | ) | (29 | ) | (22 | ) | 19 | (113 | ) | |||||||
| Other(14) | 3 | 19 | (14 | ) | 17 | (17 | ) | 8 | ||||||||||
| Management service costs | — | — | — | — | 43 | 43 | ||||||||||||
| Interest expense | 184 | 64 | 53 | 43 | 26 | 370 | ||||||||||||
| Current income tax expense | 8 | 3 | (4 | ) | — | 2 | 9 | |||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(15) | (129 | ) | (162 | ) | (23 | ) | (16 | ) | 36 | (294 | ) | |||||||
| Adjusted EBITDA | $ | 222 | $ | 123 | $ | 75 | $ | 50 | $ | 37 | $ | 507 | ||||||
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 | Utility- scale solar | District energy & sustainable solutions | Corporate | Total | ||||||||||||
| Net income (loss) | $ | (20 | ) | $ | (23 | ) | $ | 25 | $ | 25 | $ | (84 | ) | $ | (77 | ) | ||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 150 | 135 | 69 | 31 | — | 385 | ||||||||||||
| Deferred income tax expense (recovery) | (29 | ) | 9 | (2 | ) | 2 | (21 | ) | (41 | ) | ||||||||
| Foreign exchange and financial instrument loss (gain) | 115 | (39 | ) | (7 | ) | 1 | — | 70 | ||||||||||
| Other(14) | 3 | 42 | 48 | 10 | 63 | 166 | ||||||||||||
| Management service costs | — | — | — | — | 58 | 58 | ||||||||||||
| Interest expense | 152 | 66 | 47 | 20 | 28 | 313 | ||||||||||||
| Current income tax expense | 28 | 2 | 2 | 1 | — | 33 | ||||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(15) | (187 | ) | (105 | ) | (68 | ) | (38 | ) | (14 | ) | (412 | ) | ||||||
| Adjusted EBITDA | $ | 212 | $ | 87 | $ | 114 | $ | 52 | $ | 30 | $ | 495 | ||||||
RECONCILIATION OF NON-IFRS MEASURES
The following table reflects Adjusted EBITDA and provides a reconciliation to net income (loss) to Adjusted EBITDA for the nine months ended
| Attributable to Unitholders | ||||||||||||||||||
| (MILLIONS) | Hydroelectric | Wind | Utility- scale solar | Distributed energy & sustainable solutions | Corporate | Total | ||||||||||||
| Net income (loss) | $ | 356 | $ | 165 | $ | 19 | $ | 68 | $ | (256 | ) | $ | 352 | |||||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 482 | 494 | 250 | 107 | 2 | 1,335 | ||||||||||||
| Deferred income tax expense (recovery) | (28 | ) | 59 | (12 | ) | (18 | ) | (26 | ) | (25 | ) | |||||||
| Foreign exchange and financial instrument loss (gain) | (107 | ) | (189 | ) | (55 | ) | (72 | ) | (9 | ) | (432 | ) | ||||||
| Other(14) | 21 | 38 | (13 | ) | 41 | 8 | 95 | |||||||||||
| Management service costs | — | — | — | — | 155 | 155 | ||||||||||||
| Interest expense | 560 | 212 | 186 | 107 | 101 | 1,166 | ||||||||||||
| Current income tax expense | 67 | 13 | 7 | — | 2 | 89 | ||||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(15) | (536 | ) | (428 | ) | (131 | ) | (64 | ) | 52 | (1,107 | ) | |||||||
| Adjusted EBITDA | $ | 815 | $ | 364 | $ | 251 | $ | 169 | $ | 29 | $ | 1,628 | ||||||
The following table reflects Adjusted EBITDA and provides a reconciliation to net income (loss) to Adjusted EBITDA for the nine months ended
| Attributable to Unitholders | ||||||||||||||||||
| (MILLIONS) | Hydroelectric | Wind | Utility- scale solar | District energy & sustainable solutions | Corporate | Total | ||||||||||||
| Net income (loss) | $ | 198 | $ | (24 | ) | $ | 34 | $ | 87 | $ | (217 | ) | $ | 78 | ||||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 461 | 417 | 203 | 92 | 2 | 1,175 | ||||||||||||
| Deferred income tax expense (recovery) | (14 | ) | 41 | (9 | ) | 2 | (56 | ) | (36 | ) | ||||||||
| Foreign exchange and financial instrument loss (gain) | 200 | (63 | ) | 10 | (8 | ) | (20 | ) | 119 | |||||||||
| Other(14) | 8 | 74 | 102 | 17 | 77 | 278 | ||||||||||||
| Management service costs | — | — | — | — | 199 | 199 | ||||||||||||
| Interest expense | 420 | 188 | 133 | 55 | 77 | 873 | ||||||||||||
| Current income tax expense | 92 | 8 | 5 | 1 | — | 106 | ||||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(15) | (623 | ) | (335 | ) | (170 | ) | (99 | ) | (24 | ) | (1,251 | ) | ||||||
| Adjusted EBITDA | $ | 742 | $ | 306 | $ | 308 | $ | 147 | $ | 38 | $ | 1,541 | ||||||
The following table reconciles the non-IFRS financial metrics to the most directly comparable IFRS measures. Net income is reconciled to Funds From Operations:
| For the three months ended | For the nine months ended | |||||||||||
| UNAUDITED (MILLIONS) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Net income | $ | 24 | $ | (77 | ) | $ | 352 | $ | 78 | |||
| Add back or deduct the following: | ||||||||||||
| Depreciation | 448 | 385 | 1,335 | 1,175 | ||||||||
| Deferred income tax recovery | 12 | (41 | ) | (25 | ) | (36 | ) | |||||
| Foreign exchange and financial instruments gain (loss) | (113 | ) | 70 | (432 | ) | 119 | ||||||
| Other(16) | 8 | 166 | 119 | 278 | ||||||||
| Amount attributable to equity accounted investment and non-controlling interest(17) | (126 | ) | (260 | ) | (509 | ) | (834 | ) | ||||
| Funds From Operations | $ | 253 | $ | 243 | $ | 840 | $ | 780 | ||||
| Normalized long-term average generation adjustment | 55 | 45 | 136 | 103 | ||||||||
| Normalized foreign currency adjustment | (7 | ) | — | 5 | — | |||||||
| Normalized Funds From Operations | $ | 301 | $ | 288 | $ | 981 | $ | 883 | ||||
The following table reconciles the per Unit non-IFRS financial metrics to the most directly comparable IFRS measures. Net income per LP unit is reconciled to Funds From Operations:
| For the three months ended | For the nine months ended | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Net income (loss) per LP unit(1) | $ | (0.14 | ) | $ | (0.25 | ) | $ | (0.34 | ) | $ | (0.44 | ) |
| Adjust for the proportionate share of | ||||||||||||
| Depreciation | 0.38 | 0.36 | 1.14 | 1.10 | ||||||||
| Deferred income tax recovery and other | 0.20 | 0.11 | 0.68 | 0.33 | ||||||||
| Foreign exchange and financial instruments loss (gain) | (0.06 | ) | 0.16 | (0.19 | ) | 0.22 | ||||||
| Funds From Operations per Unit(3) | $ | 0.38 | $ | 0.38 | $ | 1.29 | $ | 1.21 | ||||
| Normalized long-term average generation adjustment | 0.08 | 0.07 | 0.21 | 0.16 | ||||||||
| Normalized foreign exchange adjustment | (0.01 | ) | — | — | — | |||||||
| Normalized Funds From Operations per Unit(3) | $ | 0.45 | $ | 0.45 | $ | 1.50 | $ | 1.37 | ||||
BROOKFIELD RENEWABLE CORPORATION REPORTS
THIRD 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
| For the three months ended | For the nine months ended | ||||||||
| US$ millions (except per unit amounts), unaudited | 2023 | 2022 | 2023 | 2022 | |||||
| Select Financial Information | |||||||||
| Net income (loss) attributable to the partnership | $ | 1,340 | $ | 480 | $ | 566 | $ | 550 | |
| Funds From Operations (FFO)(2) | 151 | 139 | 548 | 473 | |||||
BEPC reported FFO of
| Consolidated Statements of Financial Position | ||||||||
| As of | ||||||||
| UNAUDITED (MILLIONS) | ||||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 513 | $ | 642 | ||||
| Trade receivables and other financial assets(5) | 2,545 | 2,567 | ||||||
| Equity-accounted investments | 554 | 451 | ||||||
| Property, plant and equipment, at fair value | 39,205 | 37,828 | ||||||
| 984 | 1,800 | |||||||
| Total Assets | $ | 43,801 | $ | 43,288 | ||||
| Liabilities | ||||||||
| Borrowings which have recourse only to assets they finance(8) | $ | 13,770 | $ | 13,715 | ||||
| Accounts payable and other liabilities(9) | 2,628 | 3,122 | ||||||
| Deferred income tax liabilities | 5,740 | 5,263 | ||||||
| BEPC exchangeable and class B shares | 3,905 | 4,364 | ||||||
| Equity | ||||||||
| Non-controlling interests: | ||||||||
| Participating non-controlling interests – in operating subsidiaries | $ | 10,809 | $ | 10,680 | ||||
| Participating non-controlling interests – in a holding subsidiary held by the partnership | 273 | 271 | ||||||
| The partnership | 6,676 | 17,758 | 5,873 | 16,824 | ||||
| Total Liabilities and Equity | $ | 43,801 | $ | 43,288 | ||||
| Consolidated Statements of Income (Loss) | ||||||||||||||
| UNAUDITED (MILLIONS) | For the three months ended | For the nine months ended | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| Revenues | $ | 934 | $ | 896 | $ | 2,901 | $ | 2,822 | ||||||
| Other income | 95 | 9 | 147 | 79 | ||||||||||
| Direct operating costs(10) | (388 | ) | (293 | ) | (1,000 | ) | (880 | ) | ||||||
| Management service costs | (26 | ) | (37 | ) | (94 | ) | (132 | ) | ||||||
| Interest expense | (308 | ) | (264 | ) | (929 | ) | (747 | ) | ||||||
| Share of (loss) earnings from equity-accounted investments | (7 | ) | 2 | (7 | ) | 1 | ||||||||
| Foreign exchange and financial instrument gain (loss) | 21 | (68 | ) | 129 | (98 | ) | ||||||||
| Depreciation | (320 | ) | (288 | ) | (953 | ) | (870 | ) | ||||||
| Other | 3 | (28 | ) | 14 | (54 | ) | ||||||||
| Remeasurement of BEPC exchangeable and class B shares | 1,393 | 603 | 710 | 774 | ||||||||||
| Income tax (expense) recovery | ||||||||||||||
| Current | (7 | ) | (31 | ) | (79 | ) | (98 | ) | ||||||
| Deferred | (20 | ) | 16 | (29 | ) | (25 | ) | |||||||
| Net income | $ | 1,370 | $ | 517 | $ | 810 | $ | 772 | ||||||
| Net income (loss) attributable to: | ||||||||||||||
| Non-controlling interests: | ||||||||||||||
| Participating non-controlling interests – in operating subsidiaries | $ | 29 | $ | 35 | $ | 240 | $ | 215 | ||||||
| Participating non-controlling interests – in a holding subsidiary held by the partnership | 1 | 2 | 4 | 7 | ||||||||||
| The partnership | 1,340 | 480 | 566 | 550 | ||||||||||
| $ | 1,370 | $ | 517 | $ | 810 | $ | 772 | |||||||
| Consolidated Statements of Cash Flows | |||||||||||||
| UNAUDITED (MILLIONS) | For the three months ended | For the nine months ended | |||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||
| Operating activities | |||||||||||||
| Net income (loss) | $ | 1,370 | $ | 517 | $ | 810 | $ | 772 | |||||
| Adjustments for the following non-cash items: | |||||||||||||
| Depreciation | 320 | 288 | 953 | 870 | |||||||||
| Unrealized foreign exchange and financial instruments loss (gain) | (27 | ) | 128 | (119 | ) | 212 | |||||||
| Share of earnings from equity-accounted investments | 7 | (2 | ) | 7 | (1 | ) | |||||||
| Deferred income tax expense (recovery) | 20 | (16 | ) | 29 | 25 | ||||||||
| Other non-cash items | (56 | ) | 15 | (27 | ) | 10 | |||||||
| Remeasurement of exchangeable and class B shares | (1,393 | ) | (603 | ) | (710 | ) | (774 | ) | |||||
| 241 | 327 | 943 | 1,114 | ||||||||||
| Net change in working capital and other(11) | 47 | (37 | ) | 189 | (249 | ) | |||||||
| 288 | 290 | 1,132 | 865 | ||||||||||
| Financing activities | |||||||||||||
| Non-recourse borrowings and related party borrowings, net | (196 | ) | 201 | (822 | ) | 866 | |||||||
| Capital contributions from participating non-controlling interests | 32 | 88 | 135 | 284 | |||||||||
| Return of capital to participating non-controlling interests | (30 | ) | (54 | ) | (30 | ) | (54 | ) | |||||
| Issuance of exchangeable shares, net | — | — | 251 | — | |||||||||
| Distributions paid and return of capital: | |||||||||||||
| To participating non-controlling interests | (116 | ) | (251 | ) | (437 | ) | (1,058 | ) | |||||
| To the partnership | — | — | — | — | |||||||||
| (310 | ) | (16 | ) | (903 | ) | 38 | |||||||
| Investing activities | |||||||||||||
| Acquisitions net of cash and cash equivalents in acquired entity | — | — | (81 | ) | — | ||||||||
| Investment in equity-accounted investments | (4 | ) | (48 | ) | (7 | ) | (48 | ) | |||||
| Investment in property, plant and equipment | (185 | ) | (210 | ) | (505 | ) | (624 | ) | |||||
| Disposal of subsidiaries, associates and other securities, net | 137 | 4 | 243 | 92 | |||||||||
| Restricted cash and other | (1 | ) | 33 | (25 | ) | 12 | |||||||
| (53 | ) | (221 | ) | (375 | ) | (568 | ) | ||||||
| Foreign exchange gain (loss) on cash | (10 | ) | (21 | ) | 17 | (38 | ) | ||||||
| Cash and cash equivalents | |||||||||||||
| Increase (decrease) | (85 | ) | 32 | (129 | ) | 297 | |||||||
| Net change in cash classified within assets held for sale | 3 | — | — | — | |||||||||
| Balance, beginning of period | 595 | 790 | 642 | 525 | |||||||||
| Balance, end of period | 513 | 822 | $ | 513 | $ | 822 | |||||||
RECONCILIATION OF NON-IFRS MEASURES
The following table reconciles Net income (loss) to Funds From Operations:
| For the three months ended | For the nine months ended | ||||||||||||
| UNAUDITED (MILLIONS) | 2023 | 2022 | 2023 | 2022 | |||||||||
| Net income (loss) | $ | 1,370 | $ | 517 | $ | 810 | $ | 772 | |||||
| Add back or deduct the following: | |||||||||||||
| Depreciation | 320 | 288 | 953 | 870 | |||||||||
| Foreign exchange and financial instruments loss (gain) | (21 | ) | 68 | (129 | ) | 98 | |||||||
| Deferred income tax expense (recovery) | 20 | (16 | ) | 29 | 25 | ||||||||
| Other(18) | (11 | ) | 89 | 67 | 174 | ||||||||
| Dividends on BEPC exchangeable shares(19) | 61 | 55 | 180 | 165 | |||||||||
| Remeasurement of BEPC exchangeable and BEPC class B shares | (1,393 | ) | (603 | ) | (710 | ) | (774 | ) | |||||
| Amount attributable to equity accounted investments and non-controlling interests(20) | (195 | ) | (259 | ) | (652 | ) | (857 | ) | |||||
| Funds From Operations | $ | 151 | $ | 139 | $ | 548 | $ | 473 | |||||
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 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 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 FFO and 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 September 30” included elsewhere herein and “Financial Performance Review on Proportionate Information - Reconciliation of Non-IFRS Measures” included in our unaudited Q3 2023 interim report. For a reconciliation of FFO and FFO per Unit to the most directly comparable IFRS measure, please see “Reconciliation of Non-IFRS Measures - Quarter Ended September 30” included elsewhere herein and “Financial Performance Review on Proportionate Information - Reconciliation of Non-IFRS Measures” included in our unaudited Q2 2023 interim report.
References to Brookfield Renewable are to
Endnotes
(1) For the three and nine months ended
(2) Non-IFRS measures. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”.
(3) Average Units outstanding for the three and nine months ended
(4) Normalized FFO assumes long-term average generation in all segments and uses 2022 foreign currency rates. For the three and nine 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 corporate borrowings.
(8) Balance includes current and non-current portion of non-recourse borrowings on the consolidated statement of financial position.
(9) 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.
(10) Direct operating costs exclude depreciation expense disclosed below.
(11) Balance includes change in working capital, dividends received from equity accounted investments and changes due to or from related parties.
(12) Actual generation includes 244 GWh (2022:198 GWh) from facilities that do not have a corresponding LTA.
(13) Actual generation includes 537 GWh (2022:401 GWh) from facilities that do not have a corresponding LTA.
(14) 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 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.
(15) 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.
(16) 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 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.
(17) 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.
(18) 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.
(19) Balance is included within interest expense on the consolidated statements of income (loss).
(20) 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.
(21) Any references to capital refer to Brookfield's cash deployed, excluding any debt financing.
(22) Available liquidity of over
(23) 12-15% target returns are calculated as annualized cash return on investment.
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