All amounts in
BROOKFIELD, News,
"We had another successful quarter, as we delivered excellent financial results and executed on several large-scale transactions from our robust pipeline of renewable and energy transition growth opportunities," said
| For the three months ended |
For the nine months ended |
|||||||||||
| US$ millions (except per unit amounts), unaudited | 2022 | 2021 | 2022 | 2021 | ||||||||
| Net loss attributable to Unitholders | $ | (136 | ) | $ | (115 | ) | $ | (213 | ) | $ | (311 | ) |
| – per LP unit(1) | (0.25 | ) | (0.21 | ) | (0.44 | ) | (0.58 | ) | ||||
| Funds From Operations (FFO)(2) | 243 | 210 | 780 | 720 | ||||||||
| – per Unit(2)(3) | 0.38 | 0.33 | 1.21 | 1.12 | ||||||||
Brookfield Renewable reported FFO of
Highlights
- We closed or secured investments of up to
$6 billion ($1.5 billion net to Brookfield Renewable) of capital across various transactions and regions. - We advanced key commercial priorities, securing contracts to deliver an incremental 2,600-gigawatt hours of clean energy annually including 1,200-gigawatt hours to corporate offtakers.
- We continued to accelerate our development activities, commissioning approximately 2,700 megawatts of new projects. This includes commencing the commissioning of our 1,200-megawatt solar facility in
Brazil . We also continue to execute on our 19,000-megawatt under-construction and advanced-stage pipeline. Together these projects are expected to contribute approximately$260 million of FFO annually to Brookfield Renewable - We have completed or are advancing
$1.4 billion ($520 million net to Brookfield Renewable) of asset recycling activities and continue to maintain robust financial capacity with over$3 .5 billion of available liquidity, no material near-term maturities, and limited floating rate exposure.
Growth Initiatives
2022 has already been a record year for growth. We have secured opportunities to deploy up to
We continue to believe that renewable opportunities represent the largest decarbonization opportunities today and will remain so for the foreseeable future. However, we are increasingly finding attractive opportunities across emerging transition asset classes where our initial investments will position us for future large-scale decarbonization investment. We have already begun investing in these emerging assets classes in a prudent and structured manner.
Importantly, we are well positioned to fund this accelerated pace of growth. Our access to deep and varied sources of capital is increasingly valuable in the current environment. A significant portion of our recent growth is already funded or is structured to have capital deployed over a prolonged period and/or at our option. Further, we intend to more actively take advantage of the strong bids we are seeing for a number of our mature assets where we have successfully executed our business plans. Recycling proceeds from mature assets into new growth opportunities remains one of the most value accretive levers within our business, and we are advancing several attractive opportunities in this regard.
We continue to see significant growth in our
We recently signed an agreement to acquire Scout Clean Energy for
Our distributed generation business continues to be a significant area of growth globally, as the trends of decentralized power generation and direct customer interaction accelerate. In the past twelve months, in the
The timing of these investments has afforded us significant upside potential. We underwrote these investments, as well as Urban Grid—our utility-scale solar development platform that we acquired in the first quarter—to attractive returns prior to the enactment of the Inflation Reduction Act. However, all three platforms will meaningfully benefit from the Inflation Reduction Act, which provides significant upside to our underwriting.
Nuclear is Critical to the Net-Zero Transition and Energy Security
In October, we agreed to form a strategic partnership with Cameco to acquire Westinghouse, one of the world’s largest nuclear services businesses. The partnership brings together Cameco’s expertise as one of the largest global suppliers of uranium fuel for nuclear energy with Brookfield Renewable’s clean energy capabilities to create a powerful platform for strategic growth across the nuclear sector. The total equity invested will be approximately
Westinghouse and nuclear power generation benefit from the same industry tailwinds as wind, solar, and hydro—decarbonization, electrification, and energy security. Recent geopolitical uncertainty is accelerating the need for countries to achieve energy independence. Further, any credible net-zero plan must include a meaningful and growing amount of nuclear power. Intermittent renewable technologies must be complemented by dispatchable resources. As the owner of one of the largest hydro businesses globally, we are seeing the increasing value of clean, dispatchable, baseload power generation. Like hydro, nuclear power provides a reliable and economic source of electricity to the grid. Going forward, we believe hydro and nuclear power will be the key technologies facilitating the rapid growth of intermittent solar and wind.
As the leading original equipment manufacturer and scale provider of mission-critical technologies, products, and services to half the global nuclear power generation fleet, Westinghouse is well positioned to capture nuclear industry tailwinds. Further, Westinghouse serves as a critical enabler of the energy transition across the world, providing products and services essential for the continued operation and growth of the global nuclear fleet.
The business operates well in all environments, given it is underpinned by highly durable cash flows, with approximately 85% of revenue coming from long-term, inflation-linked contracted or highly recurring service provision and a nearly 100% customer retention rate. Further, Westinghouse takes no commodity, construction, or significant fixed price contract risk, and it operates in countries where the liability for nuclear accidents lies entirely with the plant operators.
With over 50 gigawatts of plant extensions announced and more than 60 gigawatts of new-build reactors expected between 2020 and 2040 across more than 20 countries globally, Westinghouse is well positioned to benefit. The company has also secured new business servicing dozens of nuclear facilities across Eastern European countries that
Other Growth Initiatives
We recently agreed to two transition investments, progressing our strategy of prudently entering large and growing investible markets. Each of these opportunities has a small initial investment, is structured with significant downside protection, provides discretion over future investment, and establishes partnerships with experienced leaders in a growing space. This provides us with preferred investor status on significant capital investment opportunities and widens the range of decarbonization solutions we can offer our corporate customers around the world.
We formed a funding partnership with
We also agreed to invest in a
Operating Results
We are a real assets business that performs positively in an inflationary environment. Our cash flows remain stable and growing given they are supported by long-term contracts with creditworthy offtakes that are indexed to inflation. As material and construction costs of new projects go up, these costs can be passed onto customers in the form of higher PPA prices that are still at a significant discount to market energy prices.
Additionally, in the current market, we are able to offer critical electricity to the global economy at the lowest cost. Renewables have zero input cost, meaning that, unlike thermal generation, we do not need to rely on fossil fuel imports and are not subject to short-term price volatility. Further, as noted earlier, our large, scarce, perpetual hydro portfolio has become increasingly valuable in today’s environment as a provider of dispatchable, clean, baseload power. The punchline is simple: in addition to our record levels of growth, our underlying business continues to perform well and is backed by high-quality cash flows.
During the quarter, we generated FFO of
Our hydroelectric segment delivered FFO of
Our wind and solar segments generated a combined
We are also expanding and delivering on our 19,000-megawatt construction and advanced-stage pipeline with significant development dollars in the ground. So far this year, we have commissioned approximately 2,700 megawatts of capacity, including nearly completing our 850-megawatt Shepherds Flat wind repowering project, and we are on track to commission an additional 1,400 megawatts of new capacity by the end of the year. Together, these projects are expected to contribute approximately
Balance Sheet and Liquidity
Our balance sheet is in excellent shape, with S&P and Fitch affirming our credit rating at BBB+ with a stable outlook. We remain resilient to the rising interest rates globally, with over 90% of our borrowings being project level non-recourse debt, with an average remaining term of 12 years, no material near-term maturities in the next five years, and only 3% exposure to floating rate debt.
Despite market volatility, our access to diverse pools of capital continues to be differentiated, We have over
We are also accelerating our capital recycling program, which is not only an important part of our funding plan, but also a critical way we create value through a full cycle investment strategy. Continuing our recent trend of consistent monetizations, we have now agreed to close the sale of two solar facilities in
To date this year, we have initiated capital recycling initiatives that we expect to generate approximately
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 over
Please note that Brookfield Renewable’s previous audited annual and unaudited quarterly reports filed with the
| Contact information: | |
| Media: | Investors: |
| Managing Director – Communications | Director – Investor Relations |
| +44 (0)7398 909 278 | (416) 649-8172 |
| [email protected] | [email protected] |
Quarterly Earnings Call Details
Investors, analysts and other interested parties can access Brookfield Renewable’s Third Quarter 2022 Results as well as the Letter to Unitholders and Supplemental Information on Brookfield Renewable’s website at https://bep.brookfield.com.
The conference call can be accessed via webcast on
| Consolidated Statements of Financial Position | ||||||||
| As of | ||||||||
| UNAUDITED (MILLIONS) |
||||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 846 | $ | 764 | ||||
| Trade receivables and other financial assets(5) | 3,525 | 2,301 | ||||||
| Equity-accounted investments | 1,261 | 1,107 | ||||||
| Property, plant and equipment, at fair value | 49,079 | 49,432 | ||||||
| 2,677 | 2,263 | |||||||
| Total Assets | $ | 57,388 | $ | 55,867 | ||||
| Liabilities | ||||||||
| Corporate borrowings | $ | 2,761 | $ | 2,149 | ||||
| Borrowings which have recourse only to assets they finance(7) | 22,021 | 19,380 | ||||||
| Accounts payable and other liabilities(8) | 4,709 | 4,127 | ||||||
| Deferred income tax liabilities | 5,926 | 6,215 | ||||||
| Equity | ||||||||
| Non-controlling interests | ||||||||
| Participating non-controlling interests – in operating subsidiaries | $ | 11,380 | $ | 12,303 | ||||
| General partnership interest in a holding subsidiary held by Brookfield | 53 | 59 | ||||||
| Participating non-controlling interests – in a holding subsidiary – Redeemable/Exchangeable units held by Brookfield | 2,613 | 2,894 | ||||||
| BEPC exchangeable shares | 2,314 | 2,562 | ||||||
| Preferred equity | 560 | 613 | ||||||
| Perpetual subordinated notes | 592 | 592 | ||||||
| Preferred limited partners' equity | 760 | 881 | ||||||
| Limited partners' equity | 3,699 | 21,971 | 4,092 | 23,996 | ||||
| Total Liabilities and Equity | $ | 57,388 | $ | 55,867 | ||||
| Consolidated Statements of Operating Results | |||||||||||||
| UNAUDITED | For the three months ended |
For the nine months ended |
|||||||||||
| (MILLIONS, EXCEPT AS NOTED) | 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenues | $ | 1,105 | $ | 966 | $ | 3,515 | $ | 3,005 | |||||
| Other income | 22 | 42 | 107 | 289 | |||||||||
| Direct operating costs(9) | (344 | ) | (292 | ) | (1,060 | ) | (990 | ) | |||||
| Management service costs | (58 | ) | (71 | ) | (199 | ) | (224 | ) | |||||
| Interest expense | (313 | ) | (247 | ) | (873 | ) | (726 | ) | |||||
| Share of earnings (loss) from equity-accounted investments | 12 | (4 | ) | 60 | 3 | ||||||||
| Foreign exchange and financial instrument (loss) gain | (60 | ) | 21 | (103 | ) | 22 | |||||||
| Depreciation | (385 | ) | (373 | ) | (1,175 | ) | (1,120 | ) | |||||
| Other | (64 | ) | (53 | ) | (124 | ) | (230 | ) | |||||
| Income tax recovery (expense) | |||||||||||||
| Current | (33 | ) | (22 | ) | (106 | ) | (60 | ) | |||||
| Deferred | 41 | (121 | ) | 36 | (68 | ) | |||||||
| Net income (loss) | $ | (77 | ) | $ | (154 | ) | $ | 78 | $ | (99 | ) | ||
| Net income attributable to preferred equity, preferred limited partners' equity, perpetual subordinated notes and non-controlling interests in operating subsidiaries | $ | (59 | ) | $ | 39 | $ | (291 | ) | $ | (212 | ) | ||
| Net loss attributable to Unitholders | (136 | ) | (115 | ) | (213 | ) | (311 | ) | |||||
| Basic and diluted loss per LP unit | $ | (0.25 | ) | $ | (0.21 | ) | $ | (0.44 | ) | $ | (0.58 | ) | |
| Consolidated Statements of Cash Flows | |||||||||||||
| For the three months ended |
For the nine months ended |
||||||||||||
| UNAUDITED (MILLIONS) |
2022 | 2021 | 2022 | 2021 | |||||||||
| Operating activities | |||||||||||||
| Net loss | $ | (77 | ) | $ | (154 | ) | $ | 78 | $ | (99 | ) | ||
| Adjustments for the following non-cash items: | |||||||||||||
| Depreciation | 385 | 373 | 1,175 | 1,120 | |||||||||
| Unrealized foreign exchange and financial instrument loss (gain) | 122 | (9 | ) | 222 | 22 | ||||||||
| Share of (earnings) loss from equity-accounted investments | (12 | ) | 4 | (60 | ) | (3 | ) | ||||||
| Deferred income tax recovery | (41 | ) | 121 | (36 | ) | 68 | |||||||
| Other non-cash items | 50 | 10 | 68 | (110 | ) | ||||||||
| 427 | 345 | 1,447 | 998 | ||||||||||
| Net change in working capital and other(10) | (33 | ) | (117 | ) | (312 | ) | (526 | ) | |||||
| 394 | 228 | 1,135 | 472 | ||||||||||
| Financing activities | |||||||||||||
| Corporate credit facilities, net | 200 | 150 | 200 | 150 | |||||||||
| Non-recourse borrowings, commercial paper, and related party borrowings, net | 1,108 | 262 | 3,463 | 1,496 | |||||||||
| Capital contributions from participating non-controlling interests – in operating subsidiaries, net | 64 | (137 | ) | 338 | 658 | ||||||||
| Redemption of equity instruments, net and related costs | — | (153 | ) | (137 | ) | 187 | |||||||
| Distributions paid: | |||||||||||||
| To participating non-controlling interests - in operating subsidiaries | (252 | ) | (223 | ) | (1,109 | ) | (645 | ) | |||||
| To unitholders of Brookfield Renewable or BRELP | (228 | ) | (213 | ) | (686 | ) | (642 | ) | |||||
| 892 | (314 | ) | 2,069 | 1,204 | |||||||||
| Investing activities | |||||||||||||
| Acquisitions net of cash and cash equivalents in acquired entity | (602 | ) | — | (1,381 | ) | (1,426 | ) | ||||||
| Investment in property, plant and equipment | (577 | ) | (298 | ) | (1,478 | ) | (831 | ) | |||||
| Disposal of associates and other securities, net | (43 | ) | 435 | (102 | ) | 833 | |||||||
| Restricted cash and other | (11 | ) | (48 | ) | (111 | ) | (126 | ) | |||||
| (1,233 | ) | 89 | (3,072 | ) | (1,550 | ) | |||||||
| Foreign exchange gain (loss) on cash | (30 | ) | (10 | ) | (50 | ) | (16 | ) | |||||
| Cash and cash equivalents | |||||||||||||
| Decrease (increase) | 23 | (7 | ) | 82 | 110 | ||||||||
| Net change in cash classified within assets held for sale | — | 14 | — | (4 | ) | ||||||||
| Balance, beginning of period | 823 | 530 | 764 | 431 | |||||||||
| Balance, end of period | $ | 846 | $ | 537 | $ | 846 | $ | 537 | |||||
PROPORTIONATE RESULTS FOR THE THREE MONTHS ENDED
The following chart reflects the generation and summary financial figures on a proportionate basis for the three months ended
| (GWh) | (MILLIONS) | |||||||||||||||||||||||||
| Actual Generation | LTA Generation | Revenues | Adjusted EBITDA | FFO | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Hydroelectric | ||||||||||||||||||||||||||
| 2,236 | 2,333 | 2,445 | 2,441 | $ | 212 | $ | 192 | $ | 127 | $ | 119 | $ | 76 | $ | 80 | |||||||||||
| 849 | 552 | 1,035 | 1,011 | 49 | 34 | 40 | 48 | 31 | 43 | |||||||||||||||||
| 1,092 | 1,045 | 924 | 858 | 65 | 54 | 45 | 40 | 23 | 28 | |||||||||||||||||
| 4,177 | 3,930 | 4,404 | 4,310 | 326 | 280 | 212 | 207 | 130 | 151 | |||||||||||||||||
| Wind | ||||||||||||||||||||||||||
| 725 | 797 | 908 | 975 | 70 | 70 | 46 | 64 | 28 | 48 | |||||||||||||||||
| 179 | 168 | 190 | 174 | 19 | 18 | 23 | 17 | 20 | 11 | |||||||||||||||||
| 197 | 194 | 210 | 208 | 10 | 10 | 9 | 9 | 7 | 7 | |||||||||||||||||
| 148 | 107 | 154 | 121 | 10 | 8 | 9 | 5 | 6 | 3 | |||||||||||||||||
| 1,249 | 1,266 | 1,462 | 1,478 | 109 | 106 | 87 | 95 | 61 | 69 | |||||||||||||||||
| Utility-scale solar | 569 | 556 | 773 | 651 | 104 | 101 | 114 | 91 | 86 | 61 | ||||||||||||||||
| Distributed energy & sustainable solutions(11) | 445 | 373 | 266 | 258 | 80 | 67 | 52 | 47 | 43 | 39 | ||||||||||||||||
| Corporate | — | — | — | — | — | — | 30 | 6 | (77 | ) | (110 | ) | ||||||||||||||
| Total | 6,440 | 6,125 | 6,905 | 6,697 | $ | 619 | $ | 554 | $ | 495 | $ | 446 | $ | 243 | $ | 210 | ||||||||||
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 | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Hydroelectric | ||||||||||||||||||||||||||
| 8,858 | 7,911 | 9,251 | 9,254 | $ | 745 | $ | 614 | $ | 472 | $ | 405 | $ | 325 | $ | 286 | |||||||||||
| 2,868 | 2,816 | 3,040 | 2,997 | 142 | 131 | 127 | 129 | 100 | 113 | |||||||||||||||||
| 3,189 | 2,850 | 2,738 | 2,551 | 205 | 160 | 143 | 117 | 84 | 88 | |||||||||||||||||
| 14,915 | 13,577 | 15,029 | 14,802 | 1,092 | 905 | 742 | 651 | 509 | 487 | |||||||||||||||||
| Wind | ||||||||||||||||||||||||||
| 2,927 | 2,965 | 3,264 | 3,856 | 241 | 287 | 160 | 224 | 110 | 164 | |||||||||||||||||
| 633 | 767 | 682 | 826 | 102 | 90 | 102 | 151 | 89 | 134 | |||||||||||||||||
| 424 | 461 | 503 | 502 | 23 | 24 | 19 | 19 | 14 | 13 | |||||||||||||||||
| 436 | 348 | 426 | 338 | 29 | 24 | 25 | 17 | 16 | 11 | |||||||||||||||||
| 4,420 | 4,541 | 4,875 | 5,522 | 395 | 425 | 306 | 411 | 229 | 322 | |||||||||||||||||
| Utility-scale solar | 1,464 | 1,421 | 1,859 | 1,635 | 297 | 280 | 308 | 231 | 224 | 144 | ||||||||||||||||
| Distributed energy & sustainable solutions(12) | 1,044 | 974 | 708 | 696 | 207 | 188 | 147 | 134 | 118 | 104 | ||||||||||||||||
| Corporate | — | — | — | — | — | — | 38 | 18 | (300 | ) | (337 | ) | ||||||||||||||
| Total | 21,843 | 20,513 | 22,471 | 22,655 | $ | 1,991 | $ | 1,798 | $ | 1,541 | $ | 1,445 | $ | 780 | $ | 720 | ||||||||||
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) | $ | (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 | (10 | ) | 60 | |||||||||
| Other(13) | 3 | 42 | 48 | 10 | 73 | 176 | ||||||||||||
| 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(14) | (187 | ) | (105 | ) | (68 | ) | (38 | ) | (14 | ) | (412 | ) | ||||||
| Adjusted EBITDA | $ | 212 | $ | 87 | $ | 114 | $ | 52 | $ | 30 | $ | 495 | ||||||
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) | $ | (60 | ) | $ | (51 | ) | $ | 32 | $ | 16 | $ | (91 | ) | $ | (154 | ) | ||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 132 | 149 | 66 | 25 | 1 | 373 | ||||||||||||
| Deferred income tax expense (recovery) | 146 | (6 | ) | (4 | ) | (1 | ) | (14 | ) | 121 | ||||||||
| Foreign exchange and financial instrument loss (gain) | 3 | (8 | ) | (12 | ) | 2 | (6 | ) | (21 | ) | ||||||||
| Other(13) | 12 | 46 | 23 | 5 | 21 | 107 | ||||||||||||
| Management service costs | — | — | — | — | 71 | 71 | ||||||||||||
| Interest expense | 98 | 62 | 47 | 16 | 24 | 247 | ||||||||||||
| Current income tax expense | 18 | 2 | 1 | 1 | — | 22 | ||||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(14) | (142 | ) | (99 | ) | (62 | ) | (17 | ) | — | (320 | ) | |||||||
| Adjusted EBITDA | $ | 207 | $ | 95 | $ | 91 | $ | 47 | $ | 6 | $ | 446 | ||||||
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) | $ | 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 | ) | (36 | ) | 103 | |||||||||
| Other(13) | 8 | 74 | 102 | 17 | 93 | 294 | ||||||||||||
| 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(14) | (623 | ) | (335 | ) | (170 | ) | (99 | ) | (24 | ) | (1,251 | ) | ||||||
| Adjusted EBITDA | $ | 742 | $ | 306 | $ | 308 | $ | 147 | $ | 38 | $ | 1,541 | ||||||
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) | $ | 125 | $ | (31 | ) | $ | 36 | $ | 60 | $ | (289 | ) | $ | (99 | ) | |||
| Add back or deduct the following: | ||||||||||||||||||
| Depreciation | 407 | 443 | 198 | 71 | 1 | 1,120 | ||||||||||||
| Deferred income tax expense (recovery) | 132 | (12 | ) | (10 | ) | (2 | ) | (40 | ) | 68 | ||||||||
| Foreign exchange and financial instrument loss (gain) | 29 | 11 | (34 | ) | (1 | ) | (27 | ) | (22 | ) | ||||||||
| Other(13) | 73 | 172 | 53 | 13 | 138 | 449 | ||||||||||||
| Management service costs | — | — | — | — | 224 | 224 | ||||||||||||
| Interest expense | 294 | 187 | 135 | 39 | 71 | 726 | ||||||||||||
| Current income tax expense | 45 | 10 | 3 | 2 | — | 60 | ||||||||||||
| Amount attributable to equity accounted investments and non-controlling interests(14) | (454 | ) | (369 | ) | (150 | ) | (48 | ) | (60 | ) | (1,081 | ) | ||||||
| Adjusted EBITDA | $ | 651 | $ | 411 | $ | 231 | $ | 134 | $ | 18 | $ | 1,445 | ||||||
The following table reconciles the non-IFRS financial metrics to the most directly comparable IFRS measures. Net income (loss) is reconciled to Funds From Operations:
| For the three months ended |
For the nine months ended |
|||||||||||
| UNAUDITED (MILLIONS) |
2022 | 2021 | 2022 | 2021 | ||||||||
| Net income | $ | (77 | ) | $ | (154 | ) | $ | 78 | $ | (99 | ) | |
| Add back or deduct the following: | ||||||||||||
| Depreciation | 385 | 373 | 1,175 | 1,120 | ||||||||
| Deferred income tax recovery | (41 | ) | 121 | (36 | ) | 68 | ||||||
| Foreign exchange and financial instruments gain (loss) | 60 | (21 | ) | 103 | (22 | ) | ||||||
| Other(15) | 176 | 107 | 294 | 449 | ||||||||
| Amount attributable to equity accounted investment and non-controlling interest(16) | (260 | ) | (216 | ) | (834 | ) | (796 | ) | ||||
| Funds From Operations | $ | 243 | $ | 210 | $ | 780 | $ | 720 | ||||
| Normalized long-term average generation adjustment | 45 | 42 | 103 | 118 | ||||||||
| Normalized foreign currency adjustment | 4 | — | 8 | — | ||||||||
| Normalized Funds From Operations | $ | 292 | $ | 252 | $ | 891 | $ | 838 | ||||
The following table reconciles the per Unit non-IFRS financial metrics to the most directly comparable IFRS measures. Net income (loss) per LP unit is reconciled to Funds From Operations:
| For the three months ended |
For the nine months ended |
||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| Net income (loss) per LP unit(1) | $ | (0.25 | ) | $ | (0.21 | ) | $ | (0.44 | ) | $ | (0.58 | ) | |
| Adjust for the proportionate share of | |||||||||||||
| Depreciation | 0.36 | 0.35 | 1.10 | 1.09 | |||||||||
| Deferred income tax recovery and other | 0.13 | 0.19 | 0.35 | 0.51 | |||||||||
| Foreign exchange and financial instruments loss (gain) | 0.14 | — | 0.20 | 0.10 | |||||||||
| Funds From Operations per Unit(3) | $ | 0.38 | $ | 0.33 | $ | 1.21 | $ | 1.12 | |||||
| Normalized long-term average generation adjustment | 0.07 | 0.06 | 0.16 | 0.18 | |||||||||
| Normalized foreign exchange adjustment | — | — | 0.01 | — | |||||||||
| Normalized Funds From Operations per Unit(3) | $ | 0.45 | $ | 0.39 | $ | 1.38 | $ | 1.30 | |||||
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 | 2022 | 2021 | 2022 | 2021 | |||||
| Net income attributable to the partnership | $ | 480 | $ | 214 | $ | 550 | $ | 816 | |
| Funds From Operations (FFO)(2) | 139 | 152 | 473 | 417 | |||||
BEPC reported FFO of
| Consolidated Statements of Financial Position | ||||||||
| As of | ||||||||
| UNAUDITED (MILLIONS) |
||||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 566 | $ | 410 | ||||
| Trade receivables and other financial assets(5) | 2,370 | 1,956 | ||||||
| Equity-accounted investments | 505 | 455 | ||||||
| Property, plant and equipment, at fair value | 36,158 | 37,915 | ||||||
| 1,206 | 1,250 | |||||||
| Total Assets | $ | 40,805 | $ | 41,986 | ||||
| Liabilities | ||||||||
| Borrowings which have recourse only to assets they finance(7) | $ | 13,588 | $ | 13,512 | ||||
| Accounts payable and other liabilities(8) | 3,325 | 3,066 | ||||||
| Deferred income tax liabilities | 4,774 | 5,020 | ||||||
| BEPC exchangeable and class B shares | 5,390 | 6,163 | ||||||
| Equity | ||||||||
| Non-controlling interests: | ||||||||
| Participating non-controlling interests – in operating subsidiaries | $ | 9,304 | $ | 10,297 | ||||
| Participating non-controlling interests – in a holding subsidiary held by the partnership | 246 | 261 | ||||||
| The partnership | 4,178 | 13,728 | 3,667 | 14,225 | ||||
| Total Liabilities and Equity | $ | 40,805 | $ | 41,986 | ||||
| Consolidated Statements of Income (Loss) | ||||||||||||||
| UNAUDITED (MILLIONS) |
For the three months ended |
For the nine months ended |
||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
| Revenues | $ | 896 | $ | 806 | $ | 2,822 | $ | 2,462 | ||||||
| Other income | 9 | 29 | 79 | 48 | ||||||||||
| Direct operating costs(9) | (293 | ) | (254 | ) | (880 | ) | (841 | ) | ||||||
| Management service costs | (37 | ) | (45 | ) | (132 | ) | (147 | ) | ||||||
| Interest expense | (264 | ) | (231 | ) | (747 | ) | (671 | ) | ||||||
| Share of (loss) earnings from equity-accounted investments | 2 | 1 | 1 | 2 | ||||||||||
| Foreign exchange and financial instrument gain (loss) | (68 | ) | 39 | (98 | ) | 55 | ||||||||
| Depreciation | (288 | ) | (269 | ) | (870 | ) | (834 | ) | ||||||
| Other | (28 | ) | (44 | ) | (54 | ) | (221 | ) | ||||||
| Remeasurement of BEPC exchangeable and class B shares | 603 | 286 | 774 | 1,074 | ||||||||||
| Income tax (expense) recovery | ||||||||||||||
| Current | (31 | ) | (20 | ) | (98 | ) | (51 | ) | ||||||
| Deferred | 16 | (145 | ) | (25 | ) | (126 | ) | |||||||
| Net income | $ | 517 | $ | 153 | $ | 772 | $ | 750 | ||||||
| Net income (loss) attributable to: | ||||||||||||||
| Non-controlling interests: | ||||||||||||||
| Participating non-controlling interests – in operating subsidiaries | $ | 35 | $ | (59 | ) | $ | 215 | $ | (69 | ) | ||||
| Participating non-controlling interests – in a holding subsidiary held by the partnership | 2 | (2 | ) | 7 | 3 | |||||||||
| The partnership | 480 | 214 | 550 | 816 | ||||||||||
| $ | 517 | $ | 153 | $ | 772 | $ | 750 | |||||||
| Consolidated Statements of Cash Flows | |||||||||||||
| UNAUDITED (MILLIONS) |
For the three months ended |
For the nine months ended |
|||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||
| Operating activities | |||||||||||||
| Net income | $ | 517 | $ | 153 | $ | 772 | $ | 750 | |||||
| Adjustments for the following non-cash items: | |||||||||||||
| Depreciation | 288 | 269 | 870 | 834 | |||||||||
| Unrealized foreign exchange and financial instruments loss (gain) | 128 | (27 | ) | 212 | (24 | ) | |||||||
| Share of earnings from equity-accounted investments | (2 | ) | (1 | ) | (1 | ) | (2 | ) | |||||
| Deferred income tax expense | (16 | ) | 145 | 25 | 126 | ||||||||
| Other non-cash items | 15 | (5 | ) | 10 | 50 | ||||||||
| Remeasurement of exchangeable and class B shares | (603 | ) | (286 | ) | (774 | ) | (1,074 | ) | |||||
| Dividends received from equity-accounted investments | |||||||||||||
| 327 | 248 | 1,114 | 660 | ||||||||||
| Net change in working capital and other(10) | (37 | ) | (163 | ) | (249 | ) | (495 | ) | |||||
| 290 | 85 | 865 | 165 | ||||||||||
| Financing activities | |||||||||||||
| Non-recourse borrowings and related party borrowings, net | 201 | 91 | 866 | 815 | |||||||||
| Capital contributions from participating non-controlling interests | 88 | 4 | 284 | 42 | |||||||||
| Return of capital to participating non-controlling interests | (54 | ) | (181 | ) | (54 | ) | (181 | ) | |||||
| Distributions paid and return of capital: | |||||||||||||
| To participating non-controlling interests | (251 | ) | (201 | ) | (1,058 | ) | (491 | ) | |||||
| (16 | ) | (287 | ) | 38 | 185 | ||||||||
| Investing activities | |||||||||||||
| Acquisitions net of cash and cash equivalents in acquired entity | — | — | — | (12 | ) | ||||||||
| Investment in equity-accounted investments | (48 | ) | — | (48 | ) | — | |||||||
| Investment in property, plant and equipment | (210 | ) | (158 | ) | (624 | ) | (563 | ) | |||||
| Disposal of subsidiaries, associates and other securities, net | 4 | 376 | 92 | 376 | |||||||||
| Restricted cash and other | (4 | ) | (6 | ) | (129 | ) | (78 | ) | |||||
| (258 | ) | 212 | (709 | ) | (277 | ) | |||||||
| Foreign exchange gain (loss) on cash | (21 | ) | (9 | ) | (38 | ) | (15 | ) | |||||
| Cash and cash equivalents | |||||||||||||
| Increase (decrease) | (5 | ) | 1 | 156 | 58 | ||||||||
| Net change in cash classified within assets held for sale | — | 16 | — | — | |||||||||
| Balance, beginning of period | 571 | 396 | 410 | 355 | |||||||||
| Balance, end of period | 566 | 413 | $ | 566 | $ | 413 | |||||||
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) |
2022 | 2021 | 2022 | 2021 | |||||||||
| Net income | $ | 517 | $ | 153 | $ | 772 | $ | 750 | |||||
| Add back or deduct the following: | |||||||||||||
| Depreciation | 288 | 269 | 870 | 834 | |||||||||
| Foreign exchange and financial instruments loss (gain) | 68 | (39 | ) | 98 | (55 | ) | |||||||
| Deferred income tax expense (recovery) | (16 | ) | 145 | 25 | 126 | ||||||||
| Other(17) | 89 | 330 | 174 | 330 | |||||||||
| Dividends on BEPC exchangeable shares(18) | 55 | 52 | 165 | 156 | |||||||||
| Remeasurement of BEPC exchangeable and BEPC class B shares | (603 | ) | (286 | ) | (774 | ) | (1,074 | ) | |||||
| Amount attributable to equity accounted investments and non-controlling interests(19) | (259 | ) | (472 | ) | (857 | ) | (650 | ) | |||||
| Funds From Operations | $ | 139 | $ | 152 | $ | 473 | $ | 417 | |||||
Cautionary Statement Regarding Forward-looking Statements
This news release contains forward-looking statements and information within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of Section 27A of the
The foregoing list of important factors that may affect future results is not exhaustive. The forward-looking statements represent our views as of the date of this letter to unitholders and should not be relied upon as representing our views as of any subsequent date. While we anticipate that subsequent events and developments may cause our views to change, we disclaim any obligation to update the forward-looking statements, other than as required by applicable law.
No securities regulatory authority has either approved or disapproved of the contents of this letter to unitholders. This letter to unitholders is for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Cautionary Statement Regarding Use of Non-IFRS Measures
This news release contains references to to FFO, FFO per Unit, Normalized FFO and Normalized FFO per Unit, which are not generally accepted accounting measures under IFRS and therefore may differ from definitions of Adjusted EBITDA, FFO, FFO per Unit, Normalized FFO and Normalized FFO per Unit used by other entities. We believe that FFO, FFO per Unit, Normalized FFO and Normalized FFO per Unit are useful supplemental measures that may assist investors in assessing the financial performance and the cash anticipated to be generated by our operating portfolio. None of FFO, FFO per Unit, Normalized FFO and Normalized FFO per Unit should be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, analysis of our financial statements prepared in accordance with IFRS. For a reconciliation of FFO and FFO per Unit to the most directly comparable IFRS measure, please see “Reconciliation of Non-IFRS Measures - Three Months Ended September 30” included elsewhere herein and “Financial Performance Review on Proportionate Information - Reconciliation of Non-IFRS Measures” included in our unaudited Q3 2022 interim report. Normalized FFO assumes long-term average generation in all segments and uses 2021 foreign currency rates.
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 2021 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 non-recourse borrowings on the consolidated statement of financial position. |
| (8) | Balance includes accounts payable and accrued liabilities, financial instrument liabilities, due to related parties, provisions, liabilities directly associated with assets held for sale and other long-term liabilities. |
| (9) | Direct operating costs exclude depreciation expense disclosed below. |
| (10) | Balance includes dividends received from equity accounted investments and changes due to or from related parties. |
| (11) | Actual generation includes 198 GWh (2021:157 GWh) from facilities that do not have a corresponding LTA. |
| (12) | Actual generation includes 401 GWh (2021:352 GWh) from facilities that do not have a corresponding LTA. |
| (13) | Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other balance also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included within Adjusted EBITDA. |
| (14) | Amount attributable to equity accounted investments corresponds to the Adjusted EBITDA to Brookfield Renewable that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries. By adjusting Adjusted EBITDA attributable to non-controlling interest, our partnership is able to remove the portion of Adjusted EBITDA earned at non-wholly owned subsidiaries that are not attributable to our partnership. |
| (15) | Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other balance also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included in Funds From Operations. |
| (16) | Amount attributable to equity accounted investments corresponds to the Funds From Operations that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries. By adjusting Funds From Operations attributable to non-controlling interest, our partnership is able to remove the portion of Funds From Operations earned at non-wholly owned subsidiaries that are not attributable to our partnership. |
| (17) | Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other balance also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and the company’s economic share of foreign currency hedges and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included in Funds From Operations. |
| (18) | Balance is included within interest expense on the consolidated statements of income (loss). |
| (19) | Amount attributable to equity accounted investments corresponds to the Funds From Operations that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries. By adjusting Funds From Operations attributable to non-controlling interest, our company is able to remove the portion of Funds From Operations earned at non-wholly owned subsidiaries that are not attributable to our company. |
| (20) | Any references to capital refer to Brookfield's cash deployed, excluding any debt financing. |
| (21) | Available liquidity of over |
| (22) | 12-15% target returns are calculated as annualized cash return on investment. |
Source:
| Title | Document |
|---|---|
English |