Brookfield Renewable Announces Record Results and 5.5% Distribution Increase

Brookfield Renewable Partners L.P.

All amounts in U.S. dollars unless otherwise indicated

BROOKFIELD, News, Feb. 03, 2023 (GLOBE NEWSWIRE) -- Brookfield Renewable Partners L.P. (TSX: BEP.UN; NYSE: BEP) (“Brookfield Renewable Partners”, "BEP") today reported financial results for the three and twelve months ended December 31, 2022.

“2022 was another successful year, continuing our track record of double-digit average annual FFO growth for more than a decade and executing on our growth initiatives, increasing our renewable power presence in all our core markets and expanding into transition investments”, said Connor Teskey, CEO of Brookfield Renewable. “Looking forward, we remain a leading global owner, operator, and builder of clean energy that is uniquely positioned with our strong balance sheet, liquidity position and access to institutional capital to capture the largest and most attractive decarbonization investment opportunities around the world.”

		For the three months ended December 31					For the twelve months ended December 31
US$ millions (except per unit amounts), unaudited		2022			2021			2022			2021
Net loss attributable to Unitholders	$	(82	)	$	(57	)	$	(295	)	$	(368	)
–   per LP unit(1)		(0.16	)		(0.12	)		(0.60	)		(0.69	)
Funds From Operations (FFO)(2)		225			214			1,005			934
–   per Unit(2)(3)		0.35			0.33			1.56			1.45

Brookfield Renewable reported FFO of $1.005 billion or $1.56 per Unit for the twelve months ended December 31, 2022, an 8% increase on a per Unit basis over the same period in the prior year. After deducting non-cash depreciation and other expenses, our Net loss attributable to Unitholders for the twelve months ended December 31, 2022 was $295 million or $0.60 per unit.

Other highlights include

• Advanced key commercial priorities including securing contracts for over 11,000 gigawatt hours per year of generation, continuing our approach of partnering on a global basis with the largest corporate purchasers of green power.

• Continued to accelerate our development activities, commissioning approximately 3,500 megawatts of new projects that are expected to contribute $45 million of FFO annually on a run-rate basis. We also continue to execute on our 19,000-megawatt under construction and advanced stage pipeline, which, along with our sustainable solutions pipeline, is expected to contribute approximately $235 million of FFO annually to Brookfield Renewable once commissioned.

• Closed or agreed to invest up to $12 billion ($2.8 billion net to Brookfield Renewable) of capital across multiple transactions and regions.

• Maintained our strong balance sheet and executed approximately $10 billion of financings, generating $2 billion ($1.2 billion net to Brookfield Renewable) in proceeds from upfinancings and bolstering our liquidity, which stands at $3.7 billion, while continuing to minimize our exposure to floating interest rates or near-term maturities.

• Completed or are advancing up to $4.6 billion (approximately $1.6 billion net to Brookfield Renewable) of asset recycling activities.
  

A Record Year for Growth

2022 has been our strongest year for growth to date. We closed or agreed to invest up to $12 billion ($2.8 billion net to Brookfield Renewable) to be deployed over the next five years, which represents almost half of our growth target for that period. We invested across all major decarbonization asset classes, including utility-scale wind and solar, distributed generation, nuclear, battery storage, and transition investments. This puts us in an excellent position to outperform both our growth and return targets.

The investment environment for renewables remains highly compelling. Corporate clean energy demand, low-cost energy profile, electrification, and energy independence continue to be key trends accelerating renewable deployment. Our disciplined approach to investing, long-dated history of owning and operating clean energy assets, and access to large-scale capital put us in a leadership position. Our track record demonstrates that we are uniquely capable of capturing some of the most attractive scale opportunities and we expect to be able to replicate this strategy looking forward.

In renewable development, we agreed to invest up to $6.4 billion (approximately $1.4 billion net to Brookfield Renewable) of capital through both organic growth within our existing businesses and acquiring new complementary platforms that enhance our current offering. We invested in three large renewable development businesses in the U.S. — Urban Grid, Standard Solar, and Scout Clean Energy. With these investments, we continue to expand our presence in the U.S., and it continues to be our largest market with approximately 74,000 megawatts in operations and development. On the back of the Inflation Reduction Act and strong corporate demand, we are actively pulling forward development projects in the U.S., which is increasing the growth prospects of these businesses beyond our original underwriting.

Since this time last year, our global renewable power development pipeline has nearly doubled to almost 110,000 megawatts today. Included in this project pipeline are 19,000 megawatts which are advanced stage and construction-ready. This represents meaningful value in the ground and will contribute significant cash flows once completed. Additionally, our global, technologically diversified fleet means we are a partner of choice for multinational corporations seeking large-scale, low carbon energy solutions.

We also formed a strategic partnership with Cameco to acquire Westinghouse, one of the world’s largest nuclear services businesses. We believe that nuclear power and hydroelectricity are the only forms of clean, dispatchable, baseload power generation and will be a key enabler of the rapid growth of intermittent solar and wind. As the leading original equipment manufacturer and provider of essential products and services to half the global nuclear power generation fleet, Westinghouse is a critical player in the energy transition. We expect total equity invested to be ~$4.5 billion (up to $750 million net to Brookfield Renewable). We, alongside our institutional partners, will own a 51% interest with Cameco owning 49%. Westinghouse is well positioned to capture the increasing global tailwinds for nuclear and expect the transaction to close in the second half of 2023.

Lastly, we entered a number of new high growth transition asset classes that are complementary to our core renewable assets, including carbon capture and storage, recycling, and renewable natural gas (“RNG”), through small upfront investments with experienced partners, that are structured with downside protection, discretion over future investment and significant potential upside returns on our capital. This includes an investment in California Bioenergy, a leading California-based developer, operator, and owner of RNG assets. We have invested an initial $150 million ($30 million net to Brookfield Renewable) into the business in a downside protected convertible structure and have a priority right to invest up to an additional $350 million ($70 million net to Brookfield Renewable) to support the development of new agriculture RNG assets, many of which have offtakes with corporate customers we know through our renewable platform.

Our Access to Capital Has Become Increasingly Valuable

We have said for many years that the strength of our balance sheet and our ability to invest alongside large-scale institutional capital represents a significant competitive advantage.

Throughout our history, we have prioritized capitalizing the business with a strong investment grade balance sheet, utilizing long duration non-recourse debt, and maintaining high levels of liquidity. We have operated this way for many years, ensuring that we maintain a low risk financial profile and focusing on financial strength and flexibility. We recognize that this can often be overlooked as part of investors' risk-reward equation, in particular during expansionary periods. However, we believe it is critical to our long-term success, and over time, contributes meaningfully to the compounding of our cash flows and the total returns delivered by our units.

Furthermore, our structure of investing alongside Brookfield’s private funds provides access to scale, long-term institutional capital, allowing us to target sizable deals where there is often limited competition. Combined with our platform capabilities, this allows us to execute some of the largest and most attractive decarbonization opportunities, positioning us to generate strong risk-adjusted returns.

Investor appetite for the energy transition remains very strong. We have seen significant institutional demand to invest alongside experienced owners, operators, and investors like us. The success of Brookfield’s first $15 billion transition fund demonstrated this, establishing the world’s largest private fund dedicated to facilitating the global transition to a net-zero economy. A key part of Brookfield’s private fund strategy is developing relationships with large pools of long-term private capital who seek both the opportunity to invest alongside us, both by investing in our private funds, and also directly in the investment as co-investors. This co-investment program further enhances our access to capital, and it provides another source of liquidity.

In today’s market, where access to capital is limited for some market participants, this becomes an even more meaningful competitive advantage. Institutional capital supports our ability to invest in great businesses and achieve strong results that maximize long-term returns for our investors. The scale of our transition fund, and the institutional relationships and capital it brings, is another meaningful step change in our funding strategy that we will continue to employ as we grow our business.

Operating Results

Our underlying business continues to perform very well. During the year, we generated FFO of over $1.0 billion, or $1.56 per unit, reflecting solid performance and an increase of 8% versus the same period last year. Our operations benefited from strong global power prices, and continued growth, both through development and acquisitions.

Our business is backed by high-quality cash flows, in large part from our perpetual hydro portfolio, which has become an increasingly valuable source of clean, baseload power as more intermittent renewables come online. With over 5,000-gigawatt hours of generation available for re-contracting across our portfolio over the next five years, and the positive pricing environment for our hydro portfolio, we have significant capacity across our fleet to execute on accretive contracts that we expect to contribute additional FFO and generate a low-cost funding source for our growth.

Our hydroelectric segment delivered FFO of $667 million. Our hydro assets globally continue to exhibit strong cash flow resiliency given our increasingly diversified asset base, inflation-linked power purchase agreements, and ability to capture strong power prices.

Our wind and solar segments generated a combined $579 million of FFO. We continue to benefit from contributions from acquisitions and the diversification of our fleet, which are underpinned by long duration power purchase agreements that provide stable revenues. Our distributed energy and sustainable solutions segment generated $154 million of FFO, benefiting from both acquisitions and organic growth across the portfolio.

We have also increased the scale of our development activities, almost doubling our renewable power pipeline from 62,000 megawatts last year to almost 110,000 megawatts today. In 2022 alone, we commissioned approximately 3,500 megawatts of capacity, including completing our 850-megawatt Shepherds Flat wind repowering project on time and on budget.

Furthermore, we have strong visibility into our near-term development pipeline, with almost 5,000 megawatts of projects representing significant dollars in the ground that we expect to build out in the next year and for which we have secured substantially all required funding. Additionally, over 14,000 megawatts of our remaining advanced-stage development projects have been materially de-risked. Together with our sustainable solutions pipeline, these projects are expected to contribute approximately $235 million of incremental run-rate FFO once commissioned.

Balance Sheet and Liquidity

Our financial position remains excellent, and our available liquidity is robust, providing significant flexibility to fund our growth. We are resilient to 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 deep and varied pools of capital continues to be differentiated. We have approximately $3.7 billion of available liquidity, giving us significant financial flexibility during periods of capital scarcity. During the year, we secured approximately $10 billion of financings across the business, resulting in approximately $2 billion ($1.2 billion net to Brookfield Renewable) in upfinancing proceeds.

We are also accelerating our capital recycling activities, which are both an accretive funding lever and a critical part of our full-cycle investment strategy. We expect to imminently close the fifth and final tranche of the sale of our 630-megawatt solar portfolio in Mexico, generating $400 million in the aggregate ($50 million net to Brookfield Renewable). Furthermore, we are advancing numerous capital recycling opportunities, which have attracted lower cost of capital buyers searching for de-risked and mature renewable assets. In this regard, we have initiated several capital recycling initiatives that could generate up to $4 billion in aggregate ($1.5 billion net to Brookfield Renewable) of proceeds when closed and provide significant incremental liquidity in the coming quarters.

Distribution Declaration

The next quarterly distribution in the amount of $0.3375 per LP unit, is payable on March 31, 2023 to unitholders of record as at the close of business on February 28, 2023. This represents a 5.5% increase to our distribution, bringing our total annual distribution per unit to $1.35.

In conjunction with the Partnership’s distribution declaration, the Board of Directors of BEPC has declared an equivalent quarterly dividend of $0.3375 per share, also payable on March 31, 2023 to shareholders of record as at the close of business on February 28, 2023.

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 U.S. dollars. Unitholders who are residents in the United States will receive payment in U.S. dollars and unitholders who are residents 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 who are residents in Canada who wish to receive a U.S. dollar distribution and registered unitholders who are residents 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 Partners maintains a Distribution Reinvestment Plan (“DRIP”) which allows holders of BEP units who are residents 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 www.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 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 North America, South America, Europe and Asia, and totals approximately 25,400 megawatts of installed capacity and a development pipeline of approximately 110,000 megawatts of renewable power assets, 8 million metric tons per annum ("MMTPA") of carbon capture and storage, 2 million tonnes of recycled material and 3 million metric million British thermal units of renewable natural gas pipeline. Investors can access its portfolio either through Brookfield Renewable Partners L.P. (NYSE: BEP; TSX: BEP.UN), a Bermuda-based limited partnership, or Brookfield Renewable Corporation (NYSE, TSX: BEPC), a Canadian corporation. 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 $800 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.

Contact information:
Media:	Investors:
Simon Maine	Cara Silverman
Managing Director – Communications	Director – Investor Relations
+44 (0)7398 909 278	(416) 649-8172
simon.maine@brookfield.com	cara.silverman@brookfield.com

Quarterly Earnings Call Details

Investors, analysts and other interested parties can access Brookfield Renewable’s Fourth 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 February 3, 2023 at 8:30 a.m. Eastern Time at https://edge.media-server.com/mmc/p/7g8pnz5f.

Brookfield Renewable Partners L.P.
Consolidated Statements of Financial Position
	As of December 31
UNAUDITED (MILLIONS)		2022				2021
Assets
Cash and cash equivalents			$	998			$	900
Trade receivables and other financial assets(4)				3,747				2,193
Equity-accounted investments				1,392				1,107
Property, plant and equipment, at fair value				54,283				49,432
Goodwill, deferred income tax and other assets(5)				3,665				2,235
Total Assets			$	64,085			$	55,867
Liabilities
Corporate borrowings			$	2,548			$	2,149
Borrowings which have recourse only to assets they finance(6)				22,624				19,380
Accounts payable and other liabilities(7)				6,120				4,127
Deferred income tax liabilities				6,507				6,215
Equity
Non-controlling interests
Participating non-controlling interests – in operating subsidiaries	$	14,755			$	12,303
General partnership interest in a holding subsidiary held by Brookfield		59				59
Participating non-controlling interests – in a holding subsidiary – Redeemable/Exchangeable units held by Brookfield		2,892				2,894
BEPC exchangeable shares		2,561				2,562
Preferred equity		571				613
Perpetual subordinated notes		592				592
Preferred limited partners' equity		760				881
Limited partners' equity		4,096		26,286		4,092		23,996
Total Liabilities and Equity			$	64,085			$	55,867

Brookfield Renewable Partners L.P.
Consolidated Statements of Operating Results
UNAUDITED	For the three months ended December 31							For the twelve months ended December 31
(MILLIONS, EXCEPT AS NOTED)		2022			2021				2022			2021
Revenues	$	1,196		$	1,091			$	4,711		$	4,096
Other income		29			15				136			304
Direct operating costs(8)		(374	)		(375	)			(1,434	)		(1,365	)
Management service costs		(44	)		(64	)			(243	)		(288	)
Interest expense		(351	)		(255	)			(1,224	)		(981	)
Share of earnings (loss) from equity-accounted investments		36			19				96			22
Foreign exchange and financial instrument (loss) gain		(25	)		(54	)			(128	)		(32	)
Depreciation		(408	)		(381	)			(1,583	)		(1,501	)
Other		(71	)		(77	)			(195	)		(307	)
Income tax recovery (expense)
Current		(42	)		17				(148	)		(43	)
Deferred		114			97				150			29
Net income (loss)	$	60		$	33			$	138		$	(66	)
Net income attributable to preferred equity, preferred limited partners' equity, perpetual subordinated notes and non-controlling interests in operating subsidiaries	$	(142	)	$	(90	)		$	(433	)	$	(302	)
Net loss attributable to Unitholders	$	(82	)	$	(57	)		$	(295	)	$	(368	)
Basic and diluted loss per LP unit	$	(0.16	)	$	(0.12	)		$	(0.60	)	$	(0.69	)

Brookfield Renewable Partners L.P.
Consolidated Statements of Cash
	For the three months ended December 31							For the twelve months ended December 31
UNAUDITED (MILLIONS)		2022			2021				2022			2021
Operating activities
Net income (loss)	$	60		$	33			$	138		$	(66	)
Adjustments for the following non-cash items:
Depreciation		408			381				1,583			1,501
Unrealized foreign exchange and financial instrument loss		31			100				253			122
Share of (earnings) loss from equity-accounted investments		(36	)		(19	)			(96	)		(22	)
Deferred income tax recovery		(114	)		(97	)			(150	)		(29	)
Other non-cash items		39			(26	)			107			(136	)
		388			372				1,835			1,370
Net change in working capital and other(9)		(110	)		(110	)			(123	)		(636	)
		278			262				1,712			734
Financing activities
Net corporate borrowings		296			—				296			—
Corporate credit facilities, net		(200	)		(150	)			—			—
Non-recourse borrowings, commercial paper, and related party borrowings, net		365			1,273				3,828			2,769
Capital contributions from participating non-controlling interests – in operating subsidiaries, net		1,450			31				1,788			689
Issuance of Perpetual Subordinated Notes, Preferred LP Units and related costs, net		—			252				(137	)		439
Distributions paid:
To participating non-controlling interests - in operating subsidiaries		(263	)		(255	)			(1,372	)		(900	)
To unitholders of Brookfield Renewable or BRELP		(229	)		(212	)			(915	)		(854	)
		1,419			939				3,488			2,143
Investing activities
Acquisitions net of cash and cash equivalents in acquired entity		(1,071	)		—				(2,452	)		(1,426	)
Investment in property, plant and equipment		(712	)		(1,136	)			(2,190	)		(1,967	)
Disposal (purchase) of associates and other assets		(416	)		102				(518	)		935
Restricted cash and other		56			(19	)			94			(86	)
		(2,143	)		(1,053	)			(5,066	)		(2,544	)
Foreign exchange gain (loss) on cash		20			(20	)			(28	)		(35	)
Cash and cash equivalents
Decrease (increase)		(127	)		128				106			298
Net change in cash classified within assets held for sale		(8	)		(1	)			(8	)		(5	)
Balance, beginning of period		1,133			773				900			607
Balance, end of period	$	998		$	900			$	998		$	900

PROPORTIONATE RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31

The following chart reflects the generation and summary financial figures on a proportionate basis for the three months ended December 31:

	(GWh)								(MILLIONS)
	Actual Generation				LTA Generation				Revenues						Adjusted EBITDA(2)							FFO
	2022	2021			2022	2021				2022		2021				2022		2021					2022			2021
Hydroelectric
North America	2,427	2,559			2,910	2,913			$	219	$	262			$	131	$	164				$	87		$	123
Brazil	960	810			1,020	1,007				55		38				40		26					38			18
Colombia	1,222	1,100			1,064	1,004				68		64				58		42					33			40
	4,609	4,469			4,994	4,924				342		364				229		232					158			181
Wind
North America	1,005	1,044			1,300	1,195				91		83				79		53					62			36
Europe	234	262			262	251				32		35				31		36					25			30
Brazil	141	128			166	168				8		5				5		4					5			4
Asia	159	121			201	113				12		8				9		7					5			4
	1,539	1,555			1,929	1,727				143		131				124		100					97			74
Utility-scale solar	418	356			551	381				77		68				54		67					29			41
Distributed energy & sustainable solutions(10)	260	257			181	165				83		54				50		39					36			29
Corporate	—	—			—	—				—		—				4		(7	)				(95	)		(111	)
Total	6,826	6,637			7,655	7,197			$	645	$	617			$	461	$	431				$	225		$	214

PROPORTIONATE RESULTS FOR THE TWELVE MONTHS ENDED DECEMBER 31

The following chart reflects the generation and summary financial figures on a proportionate basis for the twelve months ended December 31:

	(GWh)								(MILLIONS)
	Actual Generation				LTA Generation				Revenues						Adjusted EBITDA(2)						FFO
	2022	2021			2022	2021				2022		2021				2022		2021				2022			2021
Hydroelectric
North America	11,285	10,470			12,161	12,167			$	964	$	876			$	603	$	569			$	412		$	409
Brazil	3,828	3,626			4,060	4,004				197		169				167		155				138			131
Colombia	4,411	3,950			3,802	3,555				273		224				201		159				117			128
	19,524	18,046			20,023	19,726				1,434		1,269				971		883				667			668
Wind
North America	3,932	4,009			4,564	5,051				332		370				239		277				172			200
Europe	867	1,029			944	1,077				134		125				133		187				114			164
Brazil	565	589			669	670				31		29				24		23				19			17
Asia	595	469			627	451				41		32				34		24				21			15
	5,959	6,096			6,804	7,249				538		556				430		511				326			396
Utility-scale solar	1,882	1,777			2,410	2,016				374		348				362		298				253			185
Distributed energy & sustainable solutions(11)	1,304	1,231			889	861				290		242				197		173				154			133
Corporate	—	—			—	—				—		—				42		11				(395	)		(448	)
Total	28,669	27,150			30,126	29,852			$	2,636	$	2,415			$	2,002	$	1,876			$	1,005		$	934

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 December 31, 2022:

	Attributable to Unitholders
(MILLIONS)	Hydroelectric			Wind			Utility-scale solar			Distributed energy & sustainable solutions			Corporate			Total
Net income (loss)	$	161		$	31		$	(90	)	$	37		$	(79	)	$	60
Add back or deduct the following:
Depreciation		152			135			88			32			1			408
Deferred income tax recovery		(52	)		(6	)		(26	)		(6	)		(24	)		(114	)
Foreign exchange and financial instrument loss (gain)		(17	)		(14	)		70			(39	)		25			25
Other(12)		57			39			7			60			5			168
Management service costs		—			—			—			—			44			44
Interest expense		166			66			62			25			32			351
Current income tax expense		31			8			2			1			—			42
Amount attributable to equity accounted investments and non-controlling interests(13)		(269	)		(135	)		(59	)		(60	)		—			(523	)
Adjusted EBITDA	$	229		$	124		$	54		$	50