Brookfield Renewable Partners L.P. (TSX: BEP.UN; NYSE: BEP) (“Brookfield Renewable Partners”, "BEP", or together with Brookfield Renewable Corporation, "Brookfield Renewable") today reported financial results for the three and nine months ended September 30, 2020.

“We had a strong quarter, as we executed on a broad range of transactions that highlight the unique strengths and differentiated value of our business,” said Connor Teskey, CEO of Brookfield Renewable. “Our strategy going forward is unchanged. We remain focused on growing our business, while continuing to deliver on our target of 12-15% long-term returns to equity holders, by leveraging our scale and operational expertise to help governments and businesses around the world transition to a greener future."

Financial Results                
                 
                 
Millions (except per unit or otherwise noted)   Three months ended September 30 Nine months ended September 30
Unaudited   2020     2019     2020     2019  
Total generation (GWh)                
– Long-term average generation   13,446     12,332     43,124     40,077  
– Actual generation   12,007     11,089     39,534     40,095  
Brookfield Renewable Partner's share (GWh)                
– Long-term average generation   6,618     5,821     20,644     19,628  
– Actual generation   5,753     5,213     19,469     20,061  
Net (loss) income Attributable to Unitholders $ (162 ) $ (58 ) $ (184 ) $ (29 )
Per LP unit(1)   (0.44 )   (0.18 )   (0.58 )   (0.17 )
Funds From Operations (FFO)(2)   157     133     606     590  
Per Unit(2)(3)   0.38     0.34     1.52     1.52  
Normalized Funds From Operations (FFO)(2)(4)   206     151     659     581  
Per Unit(2)(3)(4)   0.50     0.39     1.65     1.49  
(1) For the three and nine months ended September 30, 2020, weighted average LP units totaled 181.7 million and 179.9 million, respectively (2019: 178.9 million and 178.9 million, respectively).
(2) Non-IFRS measures. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”.
(3) Average Units outstanding, adjusted for the special distribution as if it had been completed prior to the periods presented, for the three and nine months ended September 30, 2020 were 416.4 million and 398.3 million, respectively (2019: 389.1 million and 389.0 million, respectively), being inclusive of our LP units, Redeemable/Exchangeable partnership units, exchangeable shares and GP interest. The actual Units outstanding at September 30, 2020 were 430.3 million (2019: 311.2 million).
(4) Normalized FFO assumes long-term average generation in all segments except the Brazil and Colombia hydroelectric segments and uses 2019 foreign currency rates. For the three and nine months ended September 30, 2020, the change related to long-term average generation totaled $40 million and $34 million, respectively (2019: $18 million and $(9) million, respectively) and the change related to foreign currency totaled $9 million and $19 million, respectively.

Brookfield Renewable reported FFO of $157 million ($0.38 per unit) for the three months ended September 30, 2020, a 12% increase from prior year, and $206 million ($0.50 per unit) on a normalized basis, a 28% increase from the prior year. After deducting non-cash depreciation, our net loss attributable to unitholders for the three months ended September 30, 2020 was $162 million or $0.44 per LP unit.

Highlights

  • We agreed on transactions to invest ~$900 million (~$250 million net to BEP) of equity;
  • We completed the special distribution of Brookfield Renewable Corporation which has led to increased demand and enhanced liquidity for our securities; and
  • Our liquidity remains robust at $3.3 billion and our balance sheet remains in excellent shape – with no material debt maturities over the next five years and, so far this year, we generated $900 million of proceeds ($326 million net to BEP) from asset recycling initiatives.

Update on Growth Initiatives

Recently we executed on a broad range of transactions that highlight the unique strengths and differentiated value of our business. Our largest transaction was completing the merger of TerraForm Power on an all-stock basis. The transaction was immediately cash accretive, expands our wind and solar business in North America and Europe and further enhances our position as one of the largest, publicly traded pure-play renewable power businesses globally. 

We also closed the acquisition of a 1,200 MW shovel-ready solar development project in Brazil, one of the largest solar projects globally. The project is over 75% contracted under long-term agreement and we intend to leverage our local power marketing expertise to contract the remaining generation and use our global scale to drive down equipment procurement and operating costs to deliver value over time.

This week, we announced our intention to launch an offer to privatize Polenergia, a scale renewable business in Europe, in partnership with the current majority shareholder. The investment represents an opportunity to invest in an attractive onshore wind platform and provides an attractive entry into the offshore wind sector in Europe through a 3,000-megawatt development pipeline, which we expect to construct over the next 5 to 7 years in partnership with an experienced offshore wind developer. 

And we acquired a portfolio of loans from one of the largest non-bank financial companies in India for approximately $200 million. The investment, which is secured by approximately 2,500-megawatts of operating assets, is expected to earn returns in excess of 15%, and further expands our presence in the region.

Finally, we funded the final C$400 million tranche of the C$750 million convertible securities we agreed to invest in TransAlta Corporation at the beginning of 2019. The convertible securities provide us with the option to convert into an interest in TransAlta’s 813 megawatt portfolio of high-quality hydroelectric facilities in Alberta between 2025 and 2028 based on a multiple of 13 times the average annual EBITDA for the three years prior to conversion. The investment, which was the culmination of a multi-year dialogue, enhances our strategic relationship with the company to help advance its goal of transitioning to a low carbon energy future.

Results from Operations

During the third quarter, we generated FFO of $157 million or $0.38 per unit, a 12% increase from prior year as the business benefited from strong asset availability and contributions from organic growth and recent acquisitions. On a normalized basis, our results are up 28%.

During the quarter, our hydroelectric segment delivered FFO of $113 million. While generation for the quarter was below the long-term average level, driven by drier conditions across our fleet, year-to-date generation has been roughly in line with long term average. As we have consistently emphasized, we do not manage the business on under or overperformance of generation relative to the long-term average in any given period. Instead, we remain focused on diversifying the business from both a geographic and technology perspective, which mitigates short-term exposure to resource volatility, and regional or market disruptions.

Across our hydroelectric portfolio, we continue to focus on securing contracts that value the uniqueness of our fleet as a generator of dispatchable carbon free electricity and ancillary services. Subsequent to quarter-end, we agreed to supply 100% renewable energy to one of the first planned industrial-scale green hydrogen production plants in North America and over 90% of JPMorgan’s real estate operations in New York. These transactions demonstrate our ability to address diverse customer needs for renewable supply across both wholesale and retail energy markets. Additionally, in South America we signed 25 contracts in the quarter with high-quality, creditworthy counterparties for a total of almost 2,000 gigawatt-hours per year, substantially contracting our recently acquired development assets in the region.

Our wind and solar segments continue to generate stable revenues and benefit from the diversification of our fleet and highly contracted cash flows with long duration power purchase agreements. During the quarter, these segments generated a combined $126 million of FFO, representing a 70% increase over the prior year, as we benefited from contributions from acquisitions, including our increased ownership in TerraForm Power, and 33 megawatts of solar projects commissioned during the quarter.

Finally, we continued to advance our global development activities, including progressing almost 2,700 megawatts of construction diversified across distributed- and utility-scale solar, wind, storage, and hydro in 8 different countries. We are also progressing approximately 1,110 megawatts of advanced-stage projects through final permitting and contracting. In total, we expect these projects to contribute approximately $116 million in FFO on a run-rate basis.

Balance Sheet and Liquidity

Our financial position continues to be in excellent shape. We have approximately $3.3 billion of total available liquidity, and our investment grade balance sheet has no material maturities over the next five years and approximately 90% of our financings are non-recourse to BEP.

During the quarter, we continued to take advantage of the low interest environment and executed on $900 million of investment grade financings, including a C$425 million, 30-year corporate green bond issuance, which brings our total green financings to date to over $4 billion and extends our average corporate debt duration to 14 years.

We continued to execute on our capital recycling program of monetizing mature, de-risked assets. During the quarter, we closed the sale of the final project in our South African portfolio. Since acquiring these assets as part of a broader global transaction in 2017, we have returned almost $200 million of capital (~$60 million net to BEP) representing over 2.5 times our investment. Following the quarter, we also executed the sale of a 40% equity interest in an 852-megawatt portfolio in the U.S. and 47 megawatts of operating wind assets in Ireland for total proceeds of over $400 million ($233 million net to BEP).

Stock Split

Brookfield Renewable announced today that the Board of Directors of BEP has approved a three-for-two unit split of BEP’s outstanding units. The split will be implemented by way of a subdivision whereby unitholders will receive an additional one-half of a unit for each unit held (i.e. one additional unit for every two units held).

In conjunction with BEP’s unit split, the Board of Directors of Brookfield Renewable Corporation ("BEPC") has approved a concurrent three-for-two share split of BEPC’s outstanding shares. The BEPC split will also be implemented by way of a subdivision whereby shareholders will receive an additional one-half of a share for each share held.

On December 11, 2020, the additional units/shares required to give effect to the unit/share splits will be issued to holders of record at the close of business on December 7, 2020. Any fractional units/shares to be issued to registered holders as a result of the unit/share splits will be rounded up to the nearest whole unit/share. Brookfield Renewable's preferred units will not be affected by the unit/share splits.

As a result of the three-for-two unit/share splits, BEP and BEPC will adjust their distribution/dividend following the effective date to reflect the additional number of units/shares that will be outstanding. The unit/share splits will not dilute holders’ equity and will not be taxable in Canada or the United States.

BEP’s units and BEPC’s shares will begin trading with “due bills” on the Toronto Stock Exchange (“TSX”) and New York Stock Exchange (“NYSE”) at the opening of business on Friday, December 4, 2020 (one trading day before the record date) until Friday, December 11, 2020 (the payment date), inclusively. During such period, anyone who purchases units or shares on the TSX and/or NYSE will receive the entitlement to be issued additional units or shares pursuant to the stock splits. The units and shares will commence trading on an “ex-dividend” (post-split) basis on the TSX and NYSE at the opening of business on Monday, December 14, 2020, as of which date purchases of units and shares will no longer have an attaching entitlement to additional units and shares issued pursuant to the unit/share splits.

Distribution Declaration

The next quarterly distribution in the amount of $0.434 per LP unit, is payable on December 31, 2020 to unitholders of record as at the close of business on November 30, 2020. In conjunction with the Partnership’s distribution declaration, the Board of Directors of BEPC has declared an equivalent quarterly dividend of $0.434 per share, also payable on December 31, 2020 to shareholders of record as at the close of business on November 30, 2020. Brookfield Renewable targets a sustainable distribution with increases targeted on average at 5% to 9% annually.

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 operates one of the world’s largest publicly traded, pure-play renewable power platforms. Our portfolio consists of hydroelectric, wind, solar and storage facilities in North America, South America, Europe and Asia, and totals over 19,000 megawatts of installed capacity and an over 18,000 megawatt development 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 www.bep.brookfield.com and www.bep.brookfield.com/bepc. Important information may be disseminated exclusively via the website; investors should consult the site to access this information.

Brookfield Renewable Partners L.P. and Brookfield Renewable Corporation are the flagship listed renewable power issuers of Brookfield Asset Management, a leading global alternative asset manager with approximately $575 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:
Claire Holland Robin Kooyman
Senior Vice President - Communications Senior Vice President - Investor Relations
(416) 369-8236 (416) 649-8172
claire.holland@brookfield.com robin.kooyman@brookfield.com

Quarterly Earnings Call Details

Investors, analysts and other interested parties can access Brookfield Renewable’s 2020 Third Quarter Results as well as the Letter to Unitholders and Supplemental Information on Brookfield Renewable’s website at www.bep.brookfield.com.

The conference call can be accessed via webcast on November 4, 2020 at 9:00 a.m. Eastern Time at https://edge.media-server.com/mmc/p/zdqvh5w7 or via teleconference at 1-866-688-9430 toll free in North America. If dialing from outside Canada or the U.S., please dial 1-409-216-0817 at approximately 8:50 a.m. Eastern Time. When prompted, enter the conference ID, 2594418. A recording of the teleconference can be accessed through August 14, 2020 at 1-855-859-2056, or from outside Canada and the U.S. please call 1-404-537-3406. When prompted, enter the conference ID, 2594418.

BROOKFIELD RENEWABLE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
     
UNAUDITED (MILLIONS) September 30 December 31
  2020   2019
Assets       As adjusted(1)
Cash and cash equivalents   $ 482   $ 352
Trade receivables and other financial assets   1,725   1,541
Equity-accounted investments   916   937
Property, plant and equipment, at fair value   38,939   41,055
Goodwill   871   949
Deferred income tax and other assets   1,190   1,362
Total Assets   $ 44,123   $ 46,196
Liabilities        
Corporate borrowings   $ 2,419   $ 2,100
Borrowings which have recourse only to assets they finance   15,134   15,200
Accounts payable and other liabilities   4,277   3,561
Deferred income tax liabilities   4,474   4,855
         
Equity        
Non-controlling interests:        
Participating non-controlling interests – in operating subsidiaries $ 8,758   $ 11,086  
General partnership interest held by Brookfield 46   68  
Participating non-controlling interests – Redeemable/Exchangeable units held by Brookfield 2,245   3,317  
Class A shares of Brookfield Renewable Corporation 1,988    
Preferred equity 581   597  
Preferred limited partners' equity 1,028   833  
Limited partners' equity 3,173 17,819 4,579 20,480
Total Liabilities and Equity   $ 44,123   $ 46,196

       

(1) As adjusted to reflect the historical financial statements of TerraForm Power Inc. acquired on July 31, 2020.
BROOKFIELD RENEWABLE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED Three months ended September 30   Nine months ended September 30
(MILLIONS, EXCEPT PER UNIT INFORMATION) 2020     2019       2020     2019  
    As adjusted(1)         As adjusted(1)  
Revenues $ 867     $ 897       $ 2,858     $ 3,006  
Other income 12     38       51     77  
Direct operating costs (281 )   (303 )     (917 )   (937 )
Management service costs (65 )   (36 )     (151 )   (91 )
Interest expense (233 )   (236 )     (733 )   (746 )
Share of (loss) earnings from equity-accounted investments (5 )   7       (4 )   21  
Foreign exchange and financial instrument gain (loss) 38     (24 )     12     (75 )
Depreciation (369 )   (318 )     (1,030 )   (924 )
Other (110 )   (58 )     (125 )   (107 )
Income tax expense          
Current (13 )   (10 )     (29 )   (50 )
Deferred 40     25       28     (4 )
  27     15       (1 )   (54 )
Net income (loss) $ (119 )   $ (18 )     $ (40 )   $ 170  
Net income (loss) attributable to:          
Non-controlling interests:          
Participating non-controlling interests – in operating subsidiaries $ 23     $ 22       $ 85     $ 147  
General partnership interest held by Brookfield 15     11       46     36  
Participating non-controlling interests – Redeemable/Exchangeable units held by Brookfield (67 )   (30 )     (89 )   (28 )
Class A shares of Brookfield Renewable Corporation (18 )         (18 )    
Preferred equity 6     6       19     19  
Preferred limited partners' equity 14     12       40     33  
Limited partners' equity (92 )   (39 )     (123 )   (37 )
  $ (119 )   $ (18 )     $ (40 )   $ 170  
Basic and diluted (loss) earnings per LP unit $ (0.44 )   $ (0.18 )     $ (0.58 )   $ (0.17 )

       

(1) As adjusted to reflect the historical financial statements of TerraForm Power Inc. acquired on July 31, 2020.
BROOKFIELD RENEWABLE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
      
UNAUDITED Three months ended September 30   Nine months ended September 30
(MILLIONS) 2020     2019       2020     2019  
Operating activities   As adjusted(1)         As adjusted(1)  
Net income $ (119 )   $ (18 )     $ (40 )   $ 170  
Adjustments for the following non-cash items:          
Depreciation 369     318       1,030     924  
Unrealized foreign exchange and financial instrument loss (gain) (34 )   22       (15 )   73  
Share of earnings from equity-accounted investments 5     (7 )     4     (21 )
Deferred income tax expense (41 )   (25 )     (28 )   4  
Other non-cash items 85     40       140     141  
Net change in working capital (81 )   40       (74 )   14  
  184     370       1,017     1,305  
Financing activities          
Net corporate borrowings 16     449       266     449  
Commercial paper and corporate credit facilities, net 239     12       80     (709 )
Non-recourse borrowings, net 8     544       1     647  
Capital contributions from participating non-controlling interests – in operating subsidiaries, net 62     35       68     292  
Issuance of preferred limited partnership units           195     126  
Issuance of Units, net (21 )         (21 )    
Distributions paid:          
To participating non-controlling interests - in operating subsidiaries (86 )   (154 )     (426 )   (613 )
To preferred shareholders & limited partners' unitholders (21 )   (17 )     (57 )   (50 )
To unitholders of Brookfield Renewable or BRELP (202 )   (171 )     (567 )   (513 )
Borrowings from related party, net     (322 )          
  (5 )   376       (461 )   (371 )
Investing activities          
Acquisitions net of cash and cash equivalents in acquired entity     (787 )     (105 )   (813 )
Investment in property, plant and equipment (113 )   (62 )     (257 )   (150 )
Disposal of subsidiaries, associates and other securities, net 21     77       35     68  
Restricted cash and other (91 )   (43 )     (78 )   4  
  (183 )   (815 )     (405 )   (891 )
Foreign exchange gain (loss) on cash     (9 )     (10 )   (9 )
Cash and cash equivalents          
Increase (decrease) (4 )   (78 )     141     34  
Net change in cash classified within assets held for sale (3 )   (2 )     (11 )   (9 )
Balance, beginning of period 489     526       352     421  
Balance, end of period $ 482     $ 446       $ 482     $ 446  
(1) As adjusted to reflect the historical financial statements of TerraForm Power Inc. acquired on July 31, 2020.

PROPORTIONATE RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30

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

  (GWh)     (MILLIONS)
  Actual Generation     LTA Generation     Revenues     Adjusted EBITDA     FFO     Net Income (Loss)
  2020 2019     2020 2019     2020 2019     2020 2019       2020   2019       2020   2019  
Hydroelectric                                            
North America 2,151 2,277     2,441 2,443     $ 160 $ 161     $ 101 $ 95       $ 66   $ 55       $ (17 ) $ 1  
Brazil 663 734     1,011 1,009     36 50     32 53       24   46       4   22  
Colombia 792 721     843 853     49 56     32 34       23   24       15   19  
  3,606 3,732     4,295 4,305     245 267     165 182       113   125       2   42  
Wind                                            
North America 832 579     1,008 713     57 46     45 32       24   16       (23 ) (28 )
Europe 209 185     217 198     27 21     19 15       13   10       (20 ) (9 )
Brazil 199 201     208 215     10 11     9 9       7   7       5   (1 )
Asia 105 93     121 97     7 8     6 7       6   5       4    
  1,345 1,058     1,554 1,223     101 86     79 63       50   38       (34 ) (38 )
Solar 666 279     769 293     120 56     104 49       76   36       6   12  
Storage & Other 136 144         16 21     6 9       2   6       (4 ) (1 )
Corporate             17 (2 )     (84 ) (72 )     (132 ) (73 )
Total 5,753 5,213     6,618 5,821     $ 482 $ 430     $ 371 $ 301       $ 157   $ 133       $ (162 ) $ (58 )

PROPORTIONATE RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30

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

  (GWh)     (MILLIONS)
  Actual Generation     LTA Generation     Revenues     Adjusted EBITDA     FFO     Net Income (Loss)
  2020 2019     2020 2019     2020 2019     2020 2019     2020   2019       2020   2019  
Hydroelectric                                            
North America 9,349 10,260     9,254 9,326     $ 642 $ 700     $ 472 $ 501       $ 367   $ 375       $ 68   $ 146  
Brazil 2,814 2,347     2,997 2,520     136 173     114 144       94   119       37   55  
Colombia 2,033 2,890     2,511 2,987     154 174     93 107       67   75       47   56  
  14,196 15,497     14,762 14,833     932 1,047     679 752       528   569       152   257  
Wind                                            
North America 2,428 2,190     2,890 2,622     173 167     138 120       85   67       (40 ) (59 )
Europe 570 663     645 729     64 71     45 50       34   38       (40 ) (18 )
Brazil 409 454     502 475     21 27     18 20       13   14         3  
Asia 305 184     339 186     20 13     17 10       13   8         2  
  3,712 3,491     4,376 4,012     278 278     218 200       145   127       (74 ) (72 )
Solar 1,282 765     1,506 783     230 145     199 123       133   83         11  
Storage & Other 279 308         53 66     26 30       17   20       (5 ) 2  
Corporate             36 (9 )     (217 ) (209 )     (259 ) (227 )
Total 19,469 20,061     20,644 19,628     $ 1,493 $ 1,536     $ 1,158 $ 1,096       $ 606   $ 590       $ (184 ) $ (29 )
                                             
          Normalized long-term average generation adjustment     34   (9 )        
          Normalized foreign exchange adjustment     19            
          Normalized FFO     $ 659   $ 581          

The following table reconciles the non-IFRS financial metrics to the most directly comparable IFRS measures. Net income attributable to Unitholders is reconciled to Funds From Operations and reconciled to Proportionate Adjusted EBITDA for the three and nine months ended September 30:

  Three months ended September 30   Nine months ended September 30
(MILLIONS) 2020   2019     2020   2019  
Net income attributable to:   As adjusted(1)       As adjusted(1)  
Limited partners' equity $ (92 ) $ (39 )   $ (123 ) $ (37 )
General partnership interest in a holding subsidiary held by Brookfield 15   11     46   36  
Participating non-controlling interests – in a holding subsidiary – Redeemable/Exchangeable units held by Brookfield (67 ) (30 )   (89 ) (28 )
Class A shares of Brookfield Renewable Corporation (18 )     (18 )  
Net income attributable to Unitholders $ (162 ) $ (58 )   $ (184 ) $ (29 )
Adjusted for proportionate share of:          
Depreciation 210   160     540   477  
Foreign exchange and financial instruments loss (gain) 33   9     68   44  
Deferred income tax recovery (39 ) (25 )   (30 ) (7 )
Other 115   47     212   105  
Funds From Operations $ 157   $ 133     $ 606   $ 590  
Distributions attributable to:          
Preferred limited partners' equity 14   12     40   33  
Preferred equity 6   6     19   19  
Current income taxes 6   6     14   26  
Interest expense 129   113     347   350  
Management service costs 59   31     132   78  
Proportionate Adjusted EBITDA 371   301     1,158   1,096  
Attributable to non-controlling interests 240   348     887   1,101  
Consolidated Adjusted EBITDA $ 611   $ 649     $ 2,045   $ 2,197  

      

(1) As adjusted to reflect the historical financial statements of TerraForm Power Inc. acquired on July 31, 2020.

The following table reconciles the per unit non-IFRS financial metrics to the most directly comparable IFRS measures. Basic earnings per LP unit is reconciled to FFO per unit, for the three and nine months ended September 30:

  Three months ended September 30   Nine months ended September 30
  2020   2019     2020   2019  
    As adjusted(1)           As adjusted(1)  
Net income (loss) per LP unit(2) $ (0.44 ) $ (0.18 )   $ (0.58 ) $ (0.17 )
Depreciation 0.50   0.42     1.36   1.23  
Foreign exchange and financial instruments loss 0.08   0.02     0.17   0.11  
Deferred income tax recovery (0.09 ) (0.06 )   (0.08 ) (0.02 )
Other 0.33   0.14     0.65   0.37  
Funds From Operations per Unit(3) $ 0.38   $ 0.34     $ 1.52   $ 1.52  
Normalized long-term average generation adjustment 0.10   0.05     0.08   (0.03 )
Normalized foreign exchange adjustment 0.02       0.05    
Normalized Funds From Operations per Unit $ 0.50   $ 0.39     $ 1.65   $ 1.49  

      

(1) As adjusted to reflect the historical financial statements of TerraForm Power Inc. acquired on July 31, 2020.
(2) Average LP units outstanding for the three and nine months ended September 30, 2020 were 181.7 million and 179.9 million, respectively (2019: 178.9 million and 178.9 million). Net (loss) income per LP unit has been adjusted to reflect the dilutive impact of the special distribution.
(3) Average units, adjusted for the special distribution as if it had been completed prior to the periods presented, for the three months and nine months ended September 30, 2020 were 416.4 million and 178.9 million, respectively (2019: 389.1 million and 389.0 million), being inclusive of LP units, Redeemable/Exchangeable partnership units, GP interest, and exchangeable shares.

BROOKFIELD RENEWABLE CORPORATION REPORTS THIRD QUARTER 2020 RESULTS

All amounts in U.S. dollars unless otherwise indicated

The Board of Directors of Brookfield Renewable Corporation ("BEPC" or our "company") (NYSE, TSX: BEPC) today has declared a quarterly dividend of $0.434 per class A exchangeable subordinate voting share of BEPC (a "Share"), payable on December 31, 2020 to shareholders of record as at the close of business on November 30, 2020. This dividend is identical in amount per Share and has identical record and payment dates to the quarterly distribution announced today by BEP on BEP's units.

The Shares of BEPC are structured with the intention of being economically equivalent to the non-voting limited partnership units of Brookfield Renewable Partners L.P. ("BEP" or the "Partnership") (NYSE, BEP; TSX: BEP.UN). We believe economic equivalence is achieved through identical dividends and distributions on the Shares and BEP's Limited Partnership units ("LP units") and each Share being exchangeable at the option of the holder for one BEP unit at any time. Given the economic equivalence, we expect that the market price of the Shares will be significantly impacted by the market price of BEP's LP units and the combined business performance of our company and BEP as a whole. In addition to carefully considering the disclosures made in this news release in its entirety, shareholders are strongly encouraged to carefully review BEP's continuous disclosure filings are available electronically on EDGAR on the SEC's website at www.sec.gov or on SEDAR at www.sedar.com.

Financial Results 
      
      
Millions (except, otherwise noted) Three months ended September 30     Nine months ended September 30
Unaudited 2020   2019     2020     2019
           
Proportionate Generation (GWh) 3,275   3,122     11,607     12,336
Net (loss) income attributable to Brookfield Renewable $ (1,295 ) $ 3     $ (1,222 )   $ 128
Funds From Operations (FFO)(1) $ 64   $ 84     $ 317     $ 383

      

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

Brookfield Renewable Corporation reported FFO of $64 million for the three months ended September 30, 2020, compared to $84 million in the prior year. After deducting non-cash depreciation and remeasurement of the Shares, our net loss attributable to the company for the three months ended September 30, 2020 was $1,295 million.

BROOKFIELD RENEWABLE CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
     
UNAUDITED (MILLIONS) September 30 December 31
  2020   2019
Assets       As adjusted(1)
Cash and cash equivalents   $ 377   $ 304
Trade receivables and other financial assets   1,227   1,118
Equity-accounted investments   345   360
Property, plant and equipment, at fair value   31,170   32,647
Goodwill   871   949
Deferred income tax and other assets   353   379
Total Assets   $ 34,343   $ 35,757
Liabilities        
Exchangeable and class B shares   $ 6,032   $
Borrowings which have recourse only to assets they finance   12,012   11,958
Accounts payable and other liabilities   3,296   2,335
Deferred income tax liabilities   3,287   3,590
         
Equity        
Non-controlling interests:        
Participating non-controlling interests – in operating subsidiaries $ 8,212   $ 10,258  
Participating non-controlling interests – in a holding subsidiary held by Brookfield Renewable 209   268  
Brookfield Renewable 1,295 9,716 7,348 17,874
Total Liabilities and Equity   $ 34,343   $ 35,757
(1) As adjusted to reflect the historical financial statements of the combined United States, Colombian and Brazilian operations of Brookfield Renewable Partners L.P. contributed to our company on July 30, 2020 and TerraForm Power Inc. acquired on July 31, 2020 from Brookfield.
BROOKFIELD RENEWABLE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
       
UNAUDITED Three months ended September 30   Nine months ended September 30
(MILLIONS) 2020   2019     2020   2019  
    As adjusted(1)       As adjusted(1)  
Revenues $ 724   $ 736     $ 2,341   $ 2,445  
Other income 5   32     29   56  
Direct operating costs (238 ) (259 )   (781 ) (785 )
Management service costs (41 ) (28 )   (106 ) (72 )
Interest expense (230 ) (164 )   (587 ) (516 )
Share of (loss) earnings from equity-accounted investments (4 ) 3     (3 ) 9  
Foreign exchange and financial instrument gain (loss) 17   (13 )   11   (22 )
Depreciation (293 ) (247 )   (806 ) (710 )
Other (79 ) (26 )   (64 ) (70 )
Remeasurement of exchangeable and class B shares (1,163 )     (1,163 )  
Income tax expense          
Current (12 ) (12 )   (26 ) (48 )
Deferred 17   9     (32 ) (33 )
  5   (3 )   (58 ) (81 )
Net income (loss) $ (1,297 ) $ 31     $ (1,187 ) $ 254  
Net income (loss) attributable to:          
Non-controlling interests:          
Participating non-controlling interests – in operating subsidiaries $   $ 27     $ 31   $ 118  
Participating non-controlling interests – in a holding subsidiary held by Brookfield Renewable (2 ) 1     4   8  
Brookfield Renewable (1,295 ) 3     (1,222 ) 128  
  $ (1,297 ) $ 31     $ (1,187 ) $ 254  
(1) As adjusted to reflect the historical financial statements of the combined United States, Colombian and Brazilian operations of Brookfield Renewable Partners L.P. contributed to our company on July 30, 2020 and TerraForm Power Inc. acquired on July 31, 2020 from Brookfield.
BROOKFIELD RENEWABLE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
      
UNAUDITED (MILLIONS) Three months ended September 30   Nine months ended September 30
  2020   2019     2020   2019  
Operating activities   As adjusted(1)       As adjusted(1)  
Net income $ (1,297 ) $ 31     $ (1,187 ) $ 254  
Adjustments for the following non-cash items:          
Depreciation 293   247     806   710  
Unrealized foreign exchange and financial instruments loss (gain) (19 ) 13     (14 ) 20  
Share of earnings from equity-accounted investments 4   (3 )   3   (9 )
Deferred income tax expense (17 ) (9 )   32   33  
Other non-cash items 61   10     48   32  
Remeasurement of exchangeable and class B shares 1,163       1,163    
Net change in working capital (47 ) 7     20   107  
  141   296     871   1,147  
Financing activities          
Non-recourse borrowings, net 35   635     112   663  
Capital contributions from participating non-controlling interests 17       29    
Capital contributions from Brookfield Renewable 2   13     102   13  
Issuance of exchangeable shares, net (21 )     (21 )  
Distributions paid and return of capital:          
To participating non-controlling interests (79 ) (124 )   (365 ) (487 )
To Brookfield Renewable   (82 )   (236 ) (267 )
Borrowings from related party, net 77   47     19   (129 )
  31   489     (360 ) (207 )
Investing activities          
Acquisitions net of cash and cash equivalents in acquired entity   (732 )   (105 ) (732 )
Investment in property, plant and equipment (91 ) (46 )   (198 ) (122 )
Disposal of subsidiaries, associates and other securities, net       11    
Restricted cash and other (117 ) (58 )   (143 ) (33 )
  (208 ) (836 )   (435 ) (887 )
Foreign exchange gain (loss) on cash 7   (6 )   (3 ) (6 )
Cash and cash equivalents          
Increase (decrease) (29 ) (57 )   73   47  
Balance, beginning of period 406   446     304   342  
Balance, end of period $ 377   $ 389     $ 377   $ 389  
(1) As adjusted to reflect the historical financial statements of the combined United States, Colombian and Brazilian operations of Brookfield Renewable Partners L.P. contributed to our company on July 30, 2020 and TerraForm Power Inc. acquired on July 31, 2020 from Brookfield.

The following table reconciles net income (loss) attributable to Brookfield Renewable to Funds From Operations for the three and nine months ended September 30:

  Three months ended September 30 Nine months ended September 30
(MILLIONS) 2020 2019 2020 2019
    As adjusted(1)   As adjusted(1)
Net income (loss) attributable to Brookfield Renewable $ (1,295 ) $ 3 $ (1,222 ) $ 128
Adjusted for proportionate share of:        
Depreciation 102   76 247   227
Other 28   5 63   28
Dividends on class A exchangeable shares 66   66  
Remeasurement of exchangeable and class B shares 1,163   1,163  
Funds From Operations $ 64   $ 84 317   383
(1) As adjusted to reflect the historical financial statements of the combined United States, Colombian and Brazilian operations of Brookfield Renewable Partners L.P. contributed to our company on July 30, 2020 and TerraForm Power Inc. acquired on July 31, 2020 from Brookfield.

Cautionary Statement Regarding Forward-looking Statements

This news release contains forward-looking statements and information within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. The words “will”, “intend”, “should”, “could”, “target”, “growth”, “expect”, “believe”, “plan”, derivatives thereof and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify the above mentioned and other forward-looking statements. Forward-looking statements in this news release include statements regarding the quality of Brookfield Renewable’s and its subsidiaries’ businesses and our expectations regarding future cash flows and distribution growth. They include statements regarding the announcement of a three-for-two unit/stock split of BEP and BEPC’s respective units and Shares, including the expected record and payment dates in respect thereof, Brookfield Renewable’s anticipated financial performance, future commissioning of assets, contracted nature of our portfolio, technology diversification, acquisition opportunities, expected completion of acquisitions and dispositions, including the proposed tender offer to privatize Polenergia, financing and refinancing opportunities, BEPC’s eligibility for index inclusion, BEPC’s ability to attract new investors as well as the future performance and prospects of BEPC and BEP, the prospects and benefits of the combination of Brookfield Renewable and TerraForm Power, including certain information regarding the combined company’s expected cash flow profile and liquidity, future energy prices and demand for electricity, economic recovery, achieving long-term average generation, project development and capital expenditure costs, energy policies, economic growth, growth potential of the renewable asset class, the future growth prospects and distribution profile of Brookfield Renewable and Brookfield Renewable’s access to capital. Although Brookfield Renewable believes that these forward-looking statements and information are based upon reasonable assumptions and expectations, you should not place undue reliance on them, or any other forward-looking statements or information in this news release. The future performance and prospects of Brookfield Renewable are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual results of Brookfield Renewable to differ materially from those contemplated or implied by the statements in this news release include (without limitation) our inability to identify sufficient investment opportunities and complete transactions ,including the proposed tender offer to privatize Polenergia; the growth of our portfolio and our inability to realize the expected benefits of our transactions or acquisitions; weather conditions and other factors which may impact generation levels at facilities; economic conditions in the jurisdictions in which Brookfield Renewable operates; ability to sell products and services under contract or into merchant energy markets; changes to government regulations, including incentives for renewable energy; ability to complete development and capital projects on time and on budget; inability to finance operations or fund future acquisitions due to the status of the capital markets; health, safety, security or environmental incidents; regulatory risks relating to the power markets in which Brookfield Renewable operates, including relating to the regulation of our assets, licensing and litigation; risks relating to internal control environment; contract counterparties not fulfilling their obligations; changes in operating expenses, including employee wages, benefits and training, governmental and public policy changes, and other risks associated with the construction, development and operation of power generating facilities. For further information on these known and unknown risks, please see “Risk Factors” included in the Form 20-F of BEP and other risks and factors that are described therein and that are described in the BEP’s and BEPC's registration statement on Form F-1/F-4 filed in connection with the distribution of BEPC’s Shares and the acquisition of TerraForm Power and the Canadian prospectus filed with the securities regulators in Canada qualifying the distribution of BEPC's Shares.

The foregoing list of important factors that may affect future results is not exhaustive. The forward-looking statements represent our views as of the date of this news release and should not be relied upon as representing our views as of any subsequent date. While we anticipate that subsequent events and developments may cause our views to change, we disclaim any obligation to update the forward-looking statements, other than as required by applicable law.

No securities regulatory authority has either approved or disapproved of the contents of this news release. This news release is for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Cautionary Statement Regarding Use of Non-IFRS Measures

This news release contains references to Adjusted EBITDA, FFO, 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 Adjusted EBITDA, 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 Adjusted EBITDA, 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 Adjusted EBITDA, FFO and FFO per Unit to the most directly comparable IFRS measure, please see “- Reconciliation of non-IFRS measures” below and “PART 4 - Financial Performance Review on Proportionate Information - Reconciliation of non-IFRS measures” included in our Management’s Discussion and Analysis for the three and nine months ended September 30, 2020. Normalized FFO assumes long-term average generation in all segments except the Brazil and Colombia hydroelectric segments and uses 2019 foreign currency rates.

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