Brookfield Renewable Partners L.P. (
TSX: BEP.UN;
NYSE: BEP) (“
Brookfield Renewable
Partners”, "
BEP") today reported
financial results for the three and six months ended June 30,
2022.
"The business performed well this quarter, as we
delivered strong financial results, commissioned 1,000 megawatts of
development, and deployed and committed $3 billion into growth
initiatives," said Connor Teskey, CEO of Brookfield Renewable.
"Given the depth of our operating capabilities, globally diverse
asset base, and strong access to capital, we are well positioned in
all market environments to be a partner of choice in helping
governments and businesses achieve their goals of low-cost energy,
net-zero, and energy security."
Financial Results |
|
|
|
|
|
|
|
|
|
Millions (except per unit or otherwise noted) |
|
For the three months endedJune
30 |
For the six months endedJune
30 |
Unaudited |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Select Financial Information |
|
|
|
|
|
|
|
|
Net income (loss) attributable to Unitholders |
$ |
1 |
|
$ |
(63 |
) |
$ |
(77 |
) |
|
(196 |
) |
Per LP unit(1) |
|
(0.03 |
) |
|
(0.13 |
) |
|
(0.19 |
) |
|
(0.37 |
) |
Funds From Operations (FFO)(2) |
|
294 |
|
|
268 |
|
|
537 |
|
|
510 |
|
Per Unit(2)(3) |
|
0.46 |
|
|
0.42 |
|
|
0.83 |
|
|
0.79 |
|
Brookfield Renewable reported FFO of $294
million or $0.46 per Unit for the three months ended June 30,
2022, a 10% increase on a per Unit basis over the same period in
the prior year. After deducting non-cash depreciation, our Net
income attributable to Unitholders for the three months ended
June 30, 2022 was $1 million.
Highlights
- We closed
or agreed to invest $3 billion ($650 million net to Brookfield
Renewable) of capital across various transactions and regions.
- We
advanced key commercial priorities, securing contracts to deliver
an incremental 3,000,000-megawatt hours of clean energy annually
including 600,000 megawatt hours to corporate offtakers. This
includes securing a contract to provide clean energy to one of
BASF’s largest production facilities globally.
- We
continued to accelerate our development activities, commissioning
approximately 1,000 megawatts of new projects. These are expected
to contribute approximately $11 million of FFO annually to
Brookfield Renewable. We also continue to execute on our
17,000-megawatt under-construction and advanced-stage pipeline and
have expanded our development pipeline to 75,000 megawatts and
approximately 8 million metric tons per annum of carbon capture and
storage (“CCS”).
- We are
advancing approximately $560 million ($90 million net to Brookfield
Renewable) of asset recycling activities and continue to maintain
robust financial capacity with $4 billion of available
liquidity, no material near-term maturities, and limited floating
interest rate exposure.
Growth Initiatives
So far this year, we have deployed or agreed to
deploy $4.5 billion ($1 billion net to Brookfield Renewable) of
capital across a wide range of investments, including battery
storage, carbon capture, distributed generation, and utility-scale
wind and solar. To date, our investments into new transition
opportunities comprise only a small portion of our capital
deployment, but mark entry points into segments that we feel have
the potential to grow significantly over time. These investments
represent new and incremental growth levers for our business,
beyond our continued growth in renewables.
Our approach to investing in new transition
opportunities is similar to how we look at renewable investments.
We look for opportunities that are economic without government
subsidy, technologically proven, and underpinned by strong macro
tailwinds. We focus on situations where our key advantages of
access to capital, knowledge of power markets, operating and
development capabilities, extensive customer relationships, and
global reach can differentiate us as investors and operators. Over
time, as more decarbonization products and services scale, we
expect transition investments to grow within our portfolio.
However, investment in clean power generation remains the largest
decarbonization investment opportunity today, and we therefore
expect it to represent the majority of our deployment for the
foreseeable future.
Our global distributed generation business
continues to be a significant area of growth, as the trends of
decentralized power generation and direct customer interaction
accelerate. In the past twelve months, we have grown our U.S.
distributed generation business by three times to 6,500 megawatts
through various organic initiatives. These include our channel
partnerships, joint development agreements, and strategic
partnerships, like our cooperation agreement with Trane
Technologies, which enables us to leverage our respective
capabilities to create decarbonization solutions for customers.
We recently agreed to acquire a leading
integrated distributed generation developer in the U.S. with a
proven track record of developing and operating projects, for $700
million ($140 million net to Brookfield Renewable), representing
our equity purchase price and additional equity deployment to fund
future growth. The business has in-house expertise across all
stages of the development lifecycle, with 500 megawatts of
contracted operating and under construction assets located
primarily in the U.S. northeast and an 1,800-megawatt identified
development pipeline, of which almost 200 megawatts are de-risked
with long-term, creditworthy counterparties.
With this investment, we further enhanced our
position as the global leader in distributed generation with 10,300
megawatts of operating and development assets. With capabilities
and scale across all our core regions, we are well positioned to
keep growing and provide our customers with innovative
decarbonization solutions across multiple markets. This will help
our partners meet their sustainability targets while reducing
operating costs through onsite renewable energy and other
decarbonization services.
We also expanded our North American
CCS platform through a recently announced joint venture
to establish a new carbon management business. Under an arrangement
with California Resource Corporation (“CRC”), an independent oil
and natural gas company committed to the energy transition, we will
partner to fund the development and construction of identified CCS
projects in California, with an initial goal of deploying up to
$500 million of capital ($100 million net to Brookfield Renewable).
We expect that the joint venture, where we will retain the option
to fund projects meeting our objectives, will benefit from a first
mover advantage through CRC’s ownership of prospective CO2 storage
reservoirs that are a critical asset for carbon capture and storage
in California, one of the most desirable jurisdictions globally
given the state’s Low Carbon Fuel Standards credit system. The
joint venture is targeting the injection of 5 million metric tons
per annum and 200 million metric tons of total carbon dioxide
storage development, which if reached, could result in an
additional investment of approximately $1 billion ($200 million net
to Brookfield Renewable).
During the quarter, we invested in a leading
private owner and operator of long-term, U.S. dollar-denominated,
contracted critical power and utility assets across the Americas
with 1,200 megawatts of installed capacity. Our investment will be
used to fund both growth, and decarbonization initiatives,
including the implementation of a Paris-aligned energy transition
plan that includes an approximately 1,300-megawatt renewable
development pipeline. We have committed to invest up to $500
million ($100 million net to Brookfield Renewable) through both
preferred shares and a 20% stake in the common equity.
In Brazil, we signed an agreement to acquire a
high quality approximately 600-megawatt greenfield solar project in
late-stage development located in a region with high solar radiance
and grid availability, as well as potential construction, operating
and connection synergies with our existing portfolio. The project
is expected to require approximately $190 million ($48 million net
to Brookfield Renewable) of equity capital.
In India, we signed an agreement to acquire our
first renewable energy park. Once built, this renewable energy park
will be approximately 500 megawatts and will enable us to provide
decarbonization solutions to commercial and industrial customers at
scale. The project is expected to require approximately $110
million ($22 million net to Brookfield Renewable) of equity
capital. This represents the first investment in a renewable energy
park strategy that we feel is highly replicable and plays to our
strengths of development, construction, and corporate
contracting.
Across the rest of Asia, we agreed to acquire
approximately 750 megawatts of fully contracted wind assets
consisting of primarily ready-to-build or under-construction
projects for a total investment of approximately $340 million ($70
million net to Brookfield Renewable). The projects, some of which
we are acquiring alongside Apple’s renewable energy fund, are
expected to be commissioned over the next year and will tuck into
our existing operations in the region.
We are a Partner of Choice for
Decarbonization
We are expanding and delivering on our
17,000-megawatt construction pipeline. So far this year, we have
commissioned approximately 1,500 megawatts of capacity, which will
contribute approximately $20 million of additional run-rate FFO.
And we are on track to commission an additional 2,800 megawatts of
capacity by end of the year, which are expected to contribute an
incremental approximately $40 million in annual FFO.
This includes progressing wind repowerings in
the U.S., including our 850-megawatt Shepherds Flat project, which
remains on track for substantial completion by the end of the year.
In Brazil, we commissioned our 30-megawatt Foz do Estrela hydro
project and began selling power from our 1,200-megawatt Janauba
solar facility during the quarter.
In Europe, 120 megawatts of new-build onshore
wind assets reached commercial operations during the quarter. All
these projects are contracted with the Polish government under
inflation linked 15-year contracts. In Germany, we injected
additional capital into our business and have doubled the megawatts
expected to achieve ready-to-build status in the first two years.
With the energy situation in Germany well known, we are working as
hard as possible to build new projects as fast as we can.
Elsewhere, we commissioned 200 megawatts of corporate contracted
solar capacity in Australia and our first greenfield project in
India, a 450-megawatt solar facility.
While this level of new generation is
significant, it is representative of the ongoing level of
development activity in our business. Our cash flows have started
to meaningfully benefit from the considerable “dollars in the
ground” that we have invested into our development projects in the
past. Our development investment has increased in recent years and
will continue, meaning we have strong visibility into the future
growth of our cash flows as more of our development projects come
online.
We continue to be well positioned from a supply
chain perspective, given our diversified pipeline and strong global
relationships. While most major components for solar and wind
development projects are experiencing upward pricing pressure, we
lock in the cost of our major components when we sign revenue
contracts. As a result, our under-construction pipeline is well
protected from these risks, and while some costs have escalated, we
have had no material issues in our broader business.
Looking ahead, given our ability to execute
globally and at scale, we remain a top choice for corporates
looking to procure green power. This is because we can be an
attractive and flexible partner by offering a full suite of
decarbonization solutions from our diverse fleet of renewable power
and transition assets across the globe. We recently signed several
agreements for 600,000 megawatt hours of wind and solar development
with multinational corporations who are market leaders in their
respective industries, including Amazon, BASF, Johnson &
Johnson, and Salesforce. Each of these agreements has unique
characteristics but with the consistent underlying theme of helping
these corporations decarbonize their operations.
For example, we are finalizing terms on one of
the largest national account distributed generation portfolios ever
awarded globally, and we signed a 25-year fixed-price renewable
electricity supply agreement with BASF, a multinational chemical
company, to power one of its largest production facilities globally
that it is building in China. All these agreements involve the
build out of significant clean energy by leveraging our deep
development expertise and centralized procurement platform and
represent opportunities to enhance our long-term decarbonization
relationships with these global corporations.
Operating Results
We generated FFO of $294 million or $0.46 per
unit during the quarter, reflecting solid performance and an
increase of 10%. Our operations benefited from strong asset
availability, higher power prices, and continued growth, both
through development and acquisitions.
In the current power price environment, we are
executing on several initiatives to capture value across our
business. At our hydro assets in the U.S. and Colombia, where we
have a majority of our uncontracted generation over the next five
years, we have been executing contracts at very attractive prices.
And while our results benefitted from higher all-in market prices
during the quarter, the impact was relatively limited given we were
largely contracted going into the year. However, throughout this
year and beyond, we have increasing amounts of hydro capacity
across our fleet which will come available to benefit from these
dynamics. At our pumped storage assets in the UK, we have locked in
value through 2024, where typically we only do this months
ahead.
During the quarter, our hydroelectric segment
delivered FFO of $205 million. Our hydro assets globally continue
to exhibit strong cash flow resiliency given the increasingly
diversified asset base and the ability to capture higher power
prices both through inflation linked power purchase agreements and
a positive merchant pricing environment. Across our fleet,
reservoirs are generally at long-term averages, positioning the
portfolio well to capture the higher power prices in the latter
half of the year.
Our wind and solar segments generated a combined
$150 million of FFO. We continue to benefit from contributions from
acquisitions and the diversification of our fleet that is
underpinned by long duration power purchase agreements, which
provide stable revenues.
Lastly, our distributed energy and sustainable
solutions segment generated $38 million of FFO benefitting from
both acquisitions and organic growth across the portfolio.
Balance Sheet And Liquidity
Our balance sheet and liquidity remain strong.
We have approximately $4 billion of available liquidity,
allowing us to opportunistically fund our growth pipeline, and no
material near-term maturities. Additionally, with the recent $15
billion closing of Brookfield’s Global Transition Fund, we have
access to scale capital to invest alongside us, which is a
meaningful advantage given increasingly volatile capital
markets.
During the first half of 2022, we accelerated
many of our financing activities, extending the term of our debt
and locking in attractive interest rates, before recent rate
increases. During the quarter, we executed $2.1 billion of
non-recourse financings across the business. Notably, on the back
of a strong outlook for our Colombian business and in anticipation
of potential market volatility ahead of the recent presidential
elections, we raised $630 million ($150 million net to Brookfield
Renewable) in upfinancings at an average term of over 8 years.
As a result, our balance sheet is in excellent
shape, with an average debt duration across our portfolio of 13
years and very limited floating rate debt, almost all of which is
in Brazil and Colombia, where we have the benefit of full inflation
escalation in our contracts.
We also continued to advance our capital
recycling initiatives which, when closed, will generate $560
million of proceeds ($90 million net to Brookfield Renewable).
During the quarter, we closed the sale of 36 megawatts of Brazilian
hydro assets for proceeds of $90 million ($23 million net to
Brookfield Renewable) and closed the first tranche of the sale of
our 630-megawatt solar portfolio in Mexico for $240 million ($30
million net to Brookfield Renewable), where we expect to nearly
double our invested capital in less than three years.
Distribution Declaration
The next quarterly distribution in the amount of
$0.32 per LP unit, is payable on September 29, 2022 to unitholders
of record as at the close of business on August 31, 2022. In
conjunction with the Partnership’s distribution declaration, the
Board of Directors of BEPC has declared an equivalent quarterly
dividend of $0.32 per share, also payable on September 29, 2022 to
shareholders of record as at the close of business on August 31,
2022. 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
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 approximately 23,000 megawatts of installed capacity and an
approximately 75,000-megawatt and 8 million metric tons per annum
of carbon dioxide (“MMTPA CO2”) 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
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 over $750 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 Second 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 August 5, 2022 at 8:30 a.m. Eastern Time at
https://edge.media-server.com/mmc/p/f352qv5d.
|
|
Brookfield Renewable Partners L.P. |
Consolidated Statements of Financial Position |
|
As of |
UNAUDITED(MILLIONS) |
June 30 |
December 31 |
2022 |
2021 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
823 |
|
$ |
764 |
Trade receivables and other financial assets(5) |
|
|
2,819 |
|
|
2,301 |
Equity-accounted investments |
|
|
1,164 |
|
|
1,107 |
Property, plant and equipment, at fair value |
|
|
49,594 |
|
|
49,432 |
Goodwill, deferred income tax and other assets(6) |
|
|
2,630 |
|
|
2,263 |
Total Assets |
|
$ |
57,030 |
|
$ |
55,867 |
|
|
|
|
|
Liabilities |
|
|
|
|
Corporate borrowings |
|
$ |
2,550 |
|
$ |
2,149 |
Borrowings which have recourse only to assets they finance(7) |
|
|
20,865 |
|
|
19,380 |
Accounts payable and other liabilities(8) |
|
|
4,394 |
|
|
4,127 |
Deferred income tax liabilities |
|
|
6,220 |
|
|
6,215 |
|
|
|
|
|
Equity |
|
|
|
|
Non-controlling interests |
|
|
|
|
Participating non-controlling interests – in operating
subsidiaries |
$ |
11,845 |
|
$ |
12,303 |
|
General partnership interest in a holding subsidiary held by
Brookfield |
|
57 |
|
|
59 |
|
Participating non-controlling interests – in a holding subsidiary –
Redeemable/Exchangeable units held by Brookfield |
|
2,771 |
|
|
2,894 |
|
BEPC exchangeable shares |
|
2,454 |
|
|
2,562 |
|
Preferred equity |
|
601 |
|
|
613 |
|
Perpetual subordinated notes |
|
592 |
|
|
592 |
|
Preferred limited partners' equity |
|
760 |
|
|
881 |
|
Limited partners' equity |
|
3,921 |
|
23,001 |
|
4,092 |
|
23,996 |
Total Liabilities and Equity |
|
$ |
57,030 |
|
$ |
55,867 |
|
|
Brookfield Renewable Partners L.P. |
Consolidated Statements of Operating Results |
UNAUDITED |
For the three months endedJune
30 |
|
For the six months endedJune
30 |
(MILLIONS, EXCEPT AS NOTED) |
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Revenues |
$ |
1,274 |
|
$ |
1,019 |
|
|
$ |
2,410 |
|
$ |
2,039 |
|
Other income |
|
14 |
|
|
220 |
|
|
|
85 |
|
|
247 |
|
Direct operating costs(9) |
|
(366 |
) |
|
(307 |
) |
|
|
(716 |
) |
|
(698 |
) |
Management service costs |
|
(65 |
) |
|
(72 |
) |
|
|
(141 |
) |
|
(153 |
) |
Interest expense |
|
(294 |
) |
|
(246 |
) |
|
|
(560 |
) |
|
(479 |
) |
Share of earnings from
equity-accounted investments |
|
29 |
|
|
2 |
|
|
|
48 |
|
|
7 |
|
Foreign exchange and financial
instrument (loss) gain |
|
(6 |
) |
|
(47 |
) |
|
|
(43 |
) |
|
1 |
|
Depreciation |
|
(389 |
) |
|
(379 |
) |
|
|
(790 |
) |
|
(747 |
) |
Other |
|
(13 |
) |
|
(78 |
) |
|
|
(60 |
) |
|
(177 |
) |
Income tax recovery
(expense) |
|
|
|
|
|
Current |
|
(31 |
) |
|
(22 |
) |
|
|
(73 |
) |
|
(38 |
) |
Deferred |
|
(31 |
) |
|
20 |
|
|
|
(5 |
) |
|
53 |
|
Net income |
$ |
122 |
|
$ |
110 |
|
|
$ |
155 |
|
$ |
55 |
|
Net
income attributable to preferred equity, preferred limited
partners' equity, perpetual subordinated notes and non-controlling
interests in operating subsidiaries |
$ |
(121 |
) |
$ |
(173 |
) |
|
$ |
(232 |
) |
$ |
(251 |
) |
Net income (loss) attributable to Unitholders |
|
1 |
|
|
(63 |
) |
|
|
(77 |
) |
|
(196 |
) |
Basic and diluted loss per LP unit |
$ |
(0.03 |
) |
$ |
(0.13 |
) |
|
$ |
(0.19 |
) |
$ |
(0.37 |
) |
|
|
Brookfield Renewable Partners L.P. |
Consolidated Statements of Cash Flows |
|
|
|
|
|
|
|
For the three months endedJune
30 |
|
For the six months endedJune
30 |
UNAUDITED(MILLIONS) |
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Operating activities |
|
|
|
|
|
Net income |
$ |
122 |
|
$ |
110 |
|
|
$ |
155 |
|
$ |
55 |
|
Adjustments for the following
non-cash items: |
|
|
|
|
|
Depreciation |
|
389 |
|
|
379 |
|
|
|
790 |
|
|
747 |
|
Unrealized foreign exchange and financial instrument loss
(gain) |
|
50 |
|
|
58 |
|
|
|
100 |
|
|
31 |
|
Share of earnings from equity-accounted investments |
|
(29 |
) |
|
(2 |
) |
|
|
(48 |
) |
|
(7 |
) |
Deferred income tax recovery |
|
31 |
|
|
(20 |
) |
|
|
5 |
|
|
(53 |
) |
Other non-cash items |
|
18 |
|
|
(134 |
) |
|
|
18 |
|
|
(120 |
) |
|
|
581 |
|
|
391 |
|
|
|
1,020 |
|
|
653 |
|
Net
change in working capital and other(10) |
|
(143 |
) |
|
(391 |
) |
|
|
(279 |
) |
|
(302 |
) |
|
|
438 |
|
|
— |
|
|
|
741 |
|
|
351 |
|
Financing activities |
|
|
|
|
|
Non-recourse borrowings,
commercial paper, and related party borrowings, net |
|
1,081 |
|
|
211 |
|
|
|
2,355 |
|
|
1,127 |
|
Capital contributions from
participating non-controlling interests – in operating
subsidiaries, net |
|
168 |
|
|
(19 |
) |
|
|
274 |
|
|
795 |
|
Redemption of equity
instruments, net and related costs |
|
(88 |
) |
|
340 |
|
|
|
(137 |
) |
|
340 |
|
Distributions paid: |
|
|
|
|
|
To participating non-controlling interests - in operating
subsidiaries |
|
(666 |
) |
|
(283 |
) |
|
|
(857 |
) |
|
(422 |
) |
To unitholders of Brookfield Renewable or BRELP |
|
(228 |
) |
|
(213 |
) |
|
|
(458 |
) |
|
(429 |
) |
|
|
267 |
|
|
36 |
|
|
|
1,177 |
|
|
1,411 |
|
Investing activities |
|
|
|
|
|
Acquisitions net of cash and
cash equivalents in acquired entity |
|
1 |
|
|
2 |
|
|
|
(779 |
) |
|
(1,426 |
) |
Investment in property, plant
and equipment |
|
(449 |
) |
|
(244 |
) |
|
|
(901 |
) |
|
(533 |
) |
Disposal of associates and
other securities, net |
|
(98 |
) |
|
396 |
|
|
|
(59 |
) |
|
398 |
|
Restricted cash and other |
|
(50 |
) |
|
(28 |
) |
|
|
(100 |
) |
|
(78 |
) |
|
|
(596 |
) |
|
126 |
|
|
|
(1,839 |
) |
|
(1,639 |
) |
Foreign exchange gain (loss) on cash |
|
(19 |
) |
|
5 |
|
|
|
(20 |
) |
|
(6 |
) |
Cash and cash equivalents |
|
|
|
|
|
Decrease (increase) |
|
90 |
|
|
167 |
|
|
|
59 |
|
|
117 |
|
Net change in cash classified within assets held for sale |
|
(1 |
) |
|
5 |
|
|
|
— |
|
|
(18 |
) |
Balance, beginning of period |
|
734 |
|
|
358 |
|
|
|
764 |
|
|
431 |
|
Balance, end of period |
$ |
823 |
|
$ |
530 |
|
|
$ |
823 |
|
$ |
530 |
|
PROPORTIONATE RESULTS FOR THE THREE
MONTHS ENDED JUNE 30
The following chart reflects the generation and
summary financial figures on a proportionate basis
for the three months ended June 30:
|
(GWh) |
|
|
(MILLIONS) |
|
Actual Generation |
|
|
LTA Generation |
|
|
Revenues |
|
|
Adjusted EBITDA |
|
|
FFO |
|
2022 |
2021 |
|
|
2022 |
2021 |
|
|
|
2022 |
|
2021 |
|
|
|
2022 |
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Hydroelectric |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
3,478 |
2,450 |
|
|
3,569 |
3,580 |
|
|
$ |
297 |
$ |
203 |
|
|
$ |
204 |
$ |
138 |
|
|
$ |
155 |
|
$ |
97 |
|
Brazil |
938 |
1,112 |
|
|
1,017 |
998 |
|
|
|
45 |
|
45 |
|
|
|
34 |
|
33 |
|
|
|
24 |
|
|
31 |
|
Colombia |
1,125 |
972 |
|
|
949 |
887 |
|
|
|
67 |
|
51 |
|
|
|
45 |
|
42 |
|
|
|
26 |
|
|
33 |
|
|
5,541 |
4,534 |
|
|
5,535 |
5,465 |
|
|
|
409 |
|
299 |
|
|
|
283 |
|
213 |
|
|
|
205 |
|
|
161 |
|
Wind |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
1,055 |
1,061 |
|
|
1,163 |
1,446 |
|
|
|
85 |
|
86 |
|
|
|
54 |
|
79 |
|
|
|
38 |
|
|
54 |
|
Europe |
210 |
228 |
|
|
215 |
272 |
|
|
|
32 |
|
29 |
|
|
|
33 |
|
67 |
|
|
|
28 |
|
|
63 |
|
Brazil |
126 |
141 |
|
|
167 |
168 |
|
|
|
7 |
|
7 |
|
|
|
6 |
|
6 |
|
|
|
4 |
|
|
4 |
|
Asia |
154 |
129 |
|
|
139 |
117 |
|
|
|
10 |
|
9 |
|
|
|
9 |
|
6 |
|
|
|
6 |
|
|
4 |
|
|
1,545 |
1,559 |
|
|
1,684 |
2,003 |
|
|
|
134 |
|
131 |
|
|
|
102 |
|
158 |
|
|
|
76 |
|
|
125 |
|
Solar |
541 |
538 |
|
|
663 |
620 |
|
|
|
112 |
|
102 |
|
|
|
104 |
|
81 |
|
|
|
74 |
|
|
53 |
|
Distributed energy
& sustainable solutions(11) |
351 |
382 |
|
|
270 |
268 |
|
|
|
68 |
|
65 |
|
|
|
47 |
|
48 |
|
|
|
38 |
|
|
37 |
|
Corporate |
— |
— |
|
|
— |
— |
|
|
|
— |
|
— |
|
|
|
11 |
|
10 |
|
|
|
(99 |
) |
|
(108 |
) |
Total |
7,978 |
7,013 |
|
|
8,152 |
8,356 |
|
|
$ |
723 |
$ |
597 |
|
|
$ |
547 |
$ |
510 |
|
|
$ |
294 |
|
$ |
268 |
|
PROPORTIONATE RESULTS FOR THE SIX MONTHS
ENDED JUNE 30
The following chart reflects the generation and
summary financial figures on a proportionate basis
for the six months ended June 30:
|
(GWh) |
|
|
(MILLIONS) |
|
Actual Generation |
|
|
LTA Generation |
|
|
Revenues |
|
|
Adjusted EBITDA |
|
|
FFO |
|
2022 |
2021 |
|
|
2022 |
2021 |
|
|
|
2022 |
|
2021 |
|
|
|
2022 |
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Hydroelectric |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
6,622 |
5,578 |
|
|
6,806 |
6,813 |
|
|
$ |
533 |
$ |
422 |
|
|
$ |
345 |
$ |
286 |
|
|
$ |
249 |
|
$ |
206 |
|
Brazil |
2,019 |
2,264 |
|
|
2,005 |
1,986 |
|
|
|
93 |
|
97 |
|
|
|
87 |
|
81 |
|
|
|
69 |
|
|
70 |
|
Colombia |
2,097 |
1,805 |
|
|
1,814 |
1,693 |
|
|
|
140 |
|
106 |
|
|
|
98 |
|
77 |
|
|
|
61 |
|
|
60 |
|
|
10,738 |
9,647 |
|
|
10,625 |
10,492 |
|
|
|
766 |
|
625 |
|
|
|
530 |
|
444 |
|
|
|
379 |
|
|
336 |
|
Wind |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
2,202 |
2,168 |
|
|
2,356 |
2,881 |
|
|
|
171 |
|
208 |
|
|
|
114 |
|
160 |
|
|
|
82 |
|
|
116 |
|
Europe |
454 |
599 |
|
|
492 |
652 |
|
|
|
83 |
|
72 |
|
|
|
79 |
|
134 |
|
|
|
69 |
|
|
123 |
|
Brazil |
227 |
267 |
|
|
293 |
294 |
|
|
|
13 |
|
14 |
|
|
|
10 |
|
10 |
|
|
|
7 |
|
|
6 |
|
Asia |
288 |
241 |
|
|
272 |
217 |
|
|
|
19 |
|
16 |
|
|
|
16 |
|
12 |
|
|
|
10 |
|
|
8 |
|
|
3,171 |
3,275 |
|
|
3,413 |
4,044 |
|
|
|
286 |
|
310 |
|
|
|
219 |
|
316 |
|
|
|
168 |
|
|
253 |
|
Solar |
895 |
865 |
|
|
1,086 |
984 |
|
|
|
193 |
|
179 |
|
|
|
194 |
|
140 |
|
|
|
138 |
|
|
83 |
|
Distributed energy
& sustainable solutions(12) |
599 |
601 |
|
|
442 |
438 |
|
|
|
127 |
|
121 |
|
|
|
95 |
|
87 |
|
|
|
75 |
|
|
65 |
|
Corporate |
— |
— |
|
|
— |
— |
|
|
|
— |
|
— |
|
|
|
8 |
|
12 |
|
|
|
(223 |
) |
|
(227 |
) |
Total |
15,403 |
14,388 |
|
|
15,566 |
15,958 |
|
|
$ |
1,372 |
$ |
1,235 |
|
|
$ |
1,046 |
$ |
999 |
|
|
$ |
537 |
|
$ |
510 |
|
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 June 30, 2022:
|
Attributable to Unitholders |
(MILLIONS) |
Hydroelectric |
Wind |
Solar |
Distributed energy& sustainablesolutions |
Corporate |
Total |
Net income (loss) |
$ |
132 |
|
$ |
13 |
|
$ |
1 |
|
$ |
25 |
|
$ |
(49 |
) |
$ |
122 |
|
Add back or deduct the
following: |
|
|
|
|
|
|
Depreciation |
|
154 |
|
|
134 |
|
|
68 |
|
|
31 |
|
|
2 |
|
|
389 |
|
Deferred income tax expense (recovery) |
|
21 |
|
|
21 |
|
|
4 |
|
|
3 |
|
|
(18 |
) |
|
31 |
|
Foreign exchange and financial instrument loss (gain) |
|
25 |
|
|
(20 |
) |
|
10 |
|
|
(2 |
) |
|
(7 |
) |
|
6 |
|
Other(13) |
|
(3 |
) |
|
9 |
|
|
33 |
|
|
— |
|
|
3 |
|
|
42 |
|
Management service costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
65 |
|
|
65 |
|
Interest expense |
|
144 |
|
|
60 |
|
|
46 |
|
|
19 |
|
|
25 |
|
|
294 |
|
Current income tax expense (recovery) |
|
27 |
|
|
2 |
|
|
2 |
|
|
— |
|
|
— |
|
|
31 |
|
Amount attributable to equity accounted investments and
non-controlling interests(14) |
|
(217 |
) |
|
(117 |
) |
|
(60 |
) |
|
(29 |
) |
|
(10 |
) |
|
(433 |
) |
Adjusted EBITDA |
$ |
283 |
|
$ |
102 |
|
$ |
104 |
|
$ |
47 |
|
$ |
11 |
|
$ |
547 |
|
The following table reflects Adjusted EBITDA and
provides a reconciliation from Net income (loss) to Adjusted EBITDA
for the three months ended June 30, 2021:
|
Attributable to Unitholders |
(MILLIONS) |
Hydroelectric |
Wind |
Solar |
District energy& sustainablesolutions |
Corporate |
Total |
Net income (loss) |
$ |
54 |
|
$ |
79 |
|
$ |
27 |
|
$ |
27 |
|
$ |
(77 |
) |
$ |
110 |
|
Add back or deduct the
following: |
|
|
|
|
|
|
Depreciation |
|
140 |
|
|
146 |
|
|
66 |
|
|
27 |
|
|
— |
|
|
379 |
|
Deferred income tax expense (recovery) |
|
(13 |
) |
|
(2 |
) |
|
(7 |
) |
|
2 |
|
|
— |
|
|
(20 |
) |
Foreign exchange and financial instrument loss (gain) |
|
22 |
|
|
19 |
|
|
(4 |
) |
|
4 |
|
|
6 |
|
|
47 |
|
Other(13) |
|
49 |
|
|
97 |
|
|
2 |
|
|
— |
|
|
(16 |
) |
|
132 |
|
Management service costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
72 |
|
|
72 |
|
Interest expense |
|
99 |
|
|
67 |
|
|
43 |
|
|
12 |
|
|
25 |
|
|
246 |
|
Current income tax expense (recovery) |
|
16 |
|
|
4 |
|
|
2 |
|
|
— |
|
|
— |
|
|
22 |
|
Amount attributable to equity accounted investments and
non-controlling interests(14) |
|
(154 |
) |
|
(252 |
) |
|
(48 |
) |
|
(24 |
) |
|
— |
|
|
(478 |
) |
Adjusted EBITDA |
$ |
213 |
|
$ |
158 |
|
$ |
81 |
|
$ |
48 |
|
$ |
10 |
|
$ |
510 |
|
RECONCILIATION OF NON-IFRS
MEASURES
The following table reflects Adjusted EBITDA and
provides a reconciliation to net income (loss) to Adjusted EBITDA
for the six months ended June 30, 2022:
|
Attributable to Unitholders |
(MILLIONS) |
Hydroelectric |
Wind |
Solar |
Distributed energy & sustainable solutions |
Corporate |
Total |
Net income (loss) |
$ |
218 |
|
$ |
(1 |
) |
$ |
9 |
|
$ |
62 |
|
$ |
(133 |
) |
$ |
155 |
|
Add back or deduct the
following: |
|
|
|
|
|
|
Depreciation |
|
311 |
|
|
282 |
|
|
134 |
|
|
61 |
|
|
2 |
|
|
790 |
|
Deferred income tax expense (recovery) |
|
15 |
|
|
32 |
|
|
(7 |
) |
|
— |
|
|
(35 |
) |
|
5 |
|
Foreign exchange and financial instrument loss (gain) |
|
85 |
|
|
(24 |
) |
|
17 |
|
|
(9 |
) |
|
(26 |
) |
|
43 |
|
Other(13) |
|
5 |
|
|
32 |
|
|
54 |
|
|
7 |
|
|
20 |
|
|
118 |
|
Management service costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
141 |
|
|
141 |
|
Interest expense |
|
268 |
|
|
122 |
|
|
86 |
|
|
35 |
|
|
49 |
|
|
560 |
|
Current income tax expense (recovery) |
|
64 |
|
|
6 |
|
|
3 |
|
|
— |
|
|
— |
|
|
73 |
|
Amount attributable to equity accounted investments and
non-controlling interests(14) |
|
(436 |
) |
|
(230 |
) |
|
(102 |
) |
|
(61 |
) |
|
(10 |
) |
|
(839 |
) |
Adjusted EBITDA |
$ |
530 |
|
$ |
219 |
|
$ |
194 |
|
$ |
95 |
|
$ |
8 |
|
$ |
1,046 |
|
The following table reflects Adjusted EBITDA and
provides a reconciliation to net income (loss) to Adjusted EBITDA
for the six months ended June 30, 2021:
|
Attributable to Unitholders |
(MILLIONS) |
Hydroelectric |
Wind |
Solar |
District energy& sustainablesolutions |
Corporate |
Total |
Net income (loss) |
$ |
185 |
|
$ |
20 |
|
$ |
4 |
|
$ |
44 |
|
$ |
(198 |
) |
$ |
55 |
|
Add back or deduct the
following: |
|
|
|
|
|
|
Depreciation |
|
275 |
|
|
294 |
|
|
132 |
|
|
46 |
|
|
— |
|
|
747 |
|
Deferred income tax expense (recovery) |
|
(14 |
) |
|
(6 |
) |
|
(6 |
) |
|
(1 |
) |
|
(26 |
) |
|
(53 |
) |
Foreign exchange and financial instrument loss (gain) |
|
26 |
|
|
19 |
|
|
(22 |
) |
|
(3 |
) |
|
(21 |
) |
|
(1 |
) |
Other(13) |
|
61 |
|
|
168 |
|
|
30 |
|
|
8 |
|
|
57 |
|
|
324 |
|
Management service costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
153 |
|
|
153 |
|
Interest expense |
|
196 |
|
|
125 |
|
|
88 |
|
|
23 |
|
|
47 |
|
|
479 |
|
Current income tax expense (recovery) |
|
27 |
|
|
8 |
|
|
2 |
|
|
1 |
|
|
— |
|
|
38 |
|
Amount attributable to equity accounted investments and
non-controlling interests(14) |
|
(312 |
) |
|
(312 |
) |
|
(88 |
) |
|
(31 |
) |
|
— |
|
|
(743 |
) |
Adjusted EBITDA |
$ |
444 |
|
$ |
316 |
|
$ |
140 |
|
$ |
87 |
|
$ |
12 |
|
$ |
999 |
|
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 endedJune
30 |
|
For the six months endedJune
30 |
UNAUDITED(MILLIONS) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income |
$ |
122 |
|
|
$ |
110 |
|
|
$ |
155 |
|
|
$ |
55 |
|
Add back or deduct the
following: |
|
|
|
|
|
|
|
Depreciation |
|
389 |
|
|
|
379 |
|
|
|
790 |
|
|
|
747 |
|
Deferred income tax recovery |
|
31 |
|
|
|
(20 |
) |
|
|
5 |
|
|
|
(53 |
) |
Foreign exchange and financial instruments gain (loss) |
|
6 |
|
|
|
47 |
|
|
|
43 |
|
|
|
(1 |
) |
Other(15) |
|
42 |
|
|
|
132 |
|
|
|
118 |
|
|
|
324 |
|
Amount
attributable to equity accounted investment and non-controlling
interest(16) |
|
(296 |
) |
|
|
(380 |
) |
|
|
(574 |
) |
|
|
(562 |
) |
Funds From Operations |
$ |
294 |
|
|
$ |
268 |
|
|
$ |
537 |
|
|
$ |
510 |
|
Normalized long-term average
generation adjustment |
|
11 |
|
|
|
73 |
|
|
|
52 |
|
|
|
76 |
|
Normalized foreign currency adjustment |
|
2 |
|
|
|
— |
|
|
|
10 |
|
|
|
— |
|
Normalized Funds From Operations |
$ |
307 |
|
|
$ |
341 |
|
|
$ |
599 |
|
|
$ |
586 |
|
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 endedJune
30 |
|
For the six months endedJune
30 |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Net income (loss) per LP
unit(1) |
$ |
(0.03 |
) |
$ |
(0.13 |
) |
|
$ |
(0.19 |
) |
$ |
(0.37 |
) |
Adjust for the proportionate
share of |
|
|
|
|
|
Depreciation |
|
0.36 |
|
|
0.38 |
|
|
|
0.74 |
|
|
0.75 |
|
Deferred income tax recovery and other |
|
0.11 |
|
|
0.07 |
|
|
|
0.22 |
|
|
0.31 |
|
Foreign exchange and financial instruments loss (gain) |
|
0.02 |
|
|
0.10 |
|
|
|
0.06 |
|
|
0.10 |
|
Funds From Operations per
Unit(3) |
$ |
0.46 |
|
$ |
0.42 |
|
|
$ |
0.83 |
|
$ |
0.79 |
|
Normalized long-term average generation adjustment |
|
0.02 |
|
|
0.11 |
|
|
|
0.09 |
|
|
0.12 |
|
Normalized foreign exchange adjustment |
|
— |
|
|
— |
|
|
|
0.01 |
|
|
— |
|
Normalized Funds From Operations per
Unit(3) |
$ |
0.48 |
|
$ |
0.53 |
|
|
$ |
0.93 |
|
$ |
0.91 |
|
BROOKFIELD RENEWABLE CORPORATION
REPORTS SECOND QUARTER 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 $0.32 per class A exchangeable
subordinate voting share of BEPC (a "Share"), payable on September
29, 2022 to shareholders of record as at the close of business on
August 31, 2022. 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 LP units.
The BEPC exchangeable shares 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 BEPC exchangeable shares and BEP's LP units
and each BEPC exchangeable share being exchangeable at the option
of the holder for one BEP LP 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
available electronically on EDGAR on the SEC's website at
www.sec.gov or on SEDAR at www.sedar.com.
Financial
Results |
|
|
|
|
|
|
Millions (except per unit or otherwise noted) |
For the
three months endedJune 30 |
|
For the six months endedJune
30 |
Unaudited |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
Select Financial Information |
|
|
|
|
|
Net income attributable to the partnership |
$ |
1,046 |
$ |
611 |
|
$ |
70 |
$ |
602 |
Funds From Operations (FFO)(2) |
|
181 |
|
139 |
|
|
334 |
|
265 |
BEPC reported FFO of $181 million for the three
months ended June 30, 2022 compared to $139 million in the
prior year. After deducting non-cash depreciation, remeasurement of
the BEPC exchangeable and class B shares, and other non-cash items
our Net income attributable to the partnership for the three months
ended June 30, 2022 was $1,046 million.
|
|
Brookfield Renewable Corporation |
Consolidated Statements of Financial Position |
|
As of |
UNAUDITED(MILLIONS) |
June 30 |
December 31 |
2022 |
2021 |
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
571 |
|
$ |
410 |
Trade receivables and other financial assets(5) |
|
|
2,220 |
|
|
1,956 |
Equity-accounted investments |
|
|
454 |
|
|
455 |
Property, plant and equipment, at fair value |
|
|
37,258 |
|
|
37,915 |
Goodwill, deferred income tax and other assets(6) |
|
|
1,266 |
|
|
1,250 |
Total Assets |
|
$ |
41,769 |
|
$ |
41,986 |
|
|
|
|
|
Liabilities |
|
|
|
|
Borrowings which have recourse only to assets they finance(7) |
|
$ |
13,956 |
|
$ |
13,512 |
Accounts payable and other liabilities(8) |
|
|
2,975 |
|
|
3,066 |
Deferred income tax liabilities |
|
|
5,017 |
|
|
5,020 |
BEPC exchangeable and class B shares |
|
|
5,993 |
|
|
6,163 |
|
|
|
|
|
Equity |
|
|
|
|
Non-controlling interests: |
|
|
|
|
Participating non-controlling interests – in operating
subsidiaries |
$ |
9,755 |
|
$ |
10,297 |
|
Participating non-controlling interests – in a holding subsidiary
held by the partnership |
|
261 |
|
|
261 |
|
The partnership |
|
3,812 |
|
13,828 |
|
3,667 |
|
14,225 |
Total Liabilities and Equity |
|
$ |
41,769 |
|
$ |
41,986 |
|
|
Brookfield Renewable Corporation |
Consolidated Statements of Income (Loss) |
|
|
|
|
|
UNAUDITED(MILLIONS) |
|
For the three months endedJune
30 |
|
For the six months endedJune
30 |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Revenues |
|
$ |
997 |
|
$ |
817 |
|
|
$ |
1,926 |
|
$ |
1,656 |
|
Other income |
|
|
6 |
|
|
5 |
|
|
|
70 |
|
|
19 |
|
Direct operating costs(9) |
|
|
(296 |
) |
|
(249 |
) |
|
|
(587 |
) |
|
(587 |
) |
Management service costs |
|
|
(43 |
) |
|
(47 |
) |
|
|
(95 |
) |
|
(102 |
) |
Interest expense |
|
|
(255 |
) |
|
(220 |
) |
|
|
(483 |
) |
|
(440 |
) |
Share of (loss) earnings from
equity-accounted investments |
|
|
1 |
|
|
(1 |
) |
|
|
(1 |
) |
|
1 |
|
Foreign exchange and financial
instrument gain (loss) |
|
|
3 |
|
|
(18 |
) |
|
|
(30 |
) |
|
16 |
|
Depreciation |
|
|
(286 |
) |
|
(275 |
) |
|
|
(582 |
) |
|
(565 |
) |
Other |
|
|
— |
|
|
(31 |
) |
|
|
(26 |
) |
|
(177 |
) |
Remeasurement of BEPC
exchangeable and class B shares |
|
|
1,080 |
|
|
694 |
|
|
|
171 |
|
|
788 |
|
Income tax (expense)
recovery |
|
|
|
|
|
|
Current |
|
|
(29 |
) |
|
(18 |
) |
|
|
(67 |
) |
|
(31 |
) |
Deferred |
|
|
(41 |
) |
|
2 |
|
|
|
(41 |
) |
|
19 |
|
Net income |
|
$ |
1,137 |
|
$ |
659 |
|
|
$ |
255 |
|
$ |
597 |
|
Net income (loss) attributable to: |
|
|
|
|
|
|
Non-controlling interests: |
|
|
|
|
|
|
Participating non-controlling interests – in operating
subsidiaries |
|
$ |
90 |
|
$ |
46 |
|
|
$ |
180 |
|
$ |
(10 |
) |
Participating non-controlling interests – in a holding subsidiary
held by the partnership |
|
|
1 |
|
|
2 |
|
|
|
5 |
|
|
5 |
|
The partnership |
|
|
1,046 |
|
|
611 |
|
|
|
70 |
|
|
602 |
|
|
|
$ |
1,137 |
|
$ |
659 |
|
|
$ |
255 |
|
$ |
597 |
|
|
|
Brookfield Renewable Corporation |
Consolidated Statements of Cash Flows |
|
|
|
|
|
|
UNAUDITED(MILLIONS) |
For the three months endedJune
30 |
|
For the six months endedJune
30 |
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Operating activities |
|
|
|
|
|
Net income |
$ |
1,137 |
|
$ |
659 |
|
|
$ |
255 |
|
$ |
597 |
|
Adjustments for the following
non-cash items: |
|
|
|
|
|
Depreciation |
|
286 |
|
|
275 |
|
|
|
582 |
|
|
565 |
|
Unrealized foreign exchange and financial instruments loss
(gain) |
|
29 |
|
|
20 |
|
|
|
84 |
|
|
3 |
|
Share of earnings from equity-accounted investments |
|
(1 |
) |
|
1 |
|
|
|
1 |
|
|
(1 |
) |
Deferred income tax expense |
|
41 |
|
|
(2 |
) |
|
|
41 |
|
|
(19 |
) |
Other non-cash items |
|
7 |
|
|
5 |
|
|
|
(5 |
) |
|
55 |
|
Remeasurement of exchangeable and class B shares |
|
(1,080 |
) |
|
(694 |
) |
|
|
(171 |
) |
|
(788 |
) |
|
|
419 |
|
|
264 |
|
|
|
787 |
|
|
412 |
|
Net change in working capital and other(10) |
|
(96 |
) |
|
(369 |
) |
|
|
(212 |
) |
|
(225 |
) |
|
|
323 |
|
|
(105 |
) |
|
|
575 |
|
|
187 |
|
Financing activities |
|
|
|
|
|
Non-recourse borrowings and
related party borrowings, net |
|
475 |
|
|
565 |
|
|
|
665 |
|
|
617 |
|
Capital contributions from
participating non-controlling interests |
|
135 |
|
|
11 |
|
|
|
196 |
|
|
38 |
|
Distributions paid and return
of capital: |
|
|
|
|
|
To participating non-controlling interests |
|
(642 |
) |
|
(154 |
) |
|
|
(807 |
) |
|
(290 |
) |
|
|
(32 |
) |
|
422 |
|
|
|
54 |
|
|
365 |
|
Investing
activities |
|
|
|
|
|
Acquisitions net of cash and
cash equivalents in acquired entity |
|
— |
|
|
(12 |
) |
|
|
— |
|
|
(12 |
) |
Investment in property, plant
and equipment |
|
(246 |
) |
|
(166 |
) |
|
|
(414 |
) |
|
(405 |
) |
Disposal of subsidiaries,
associates and other securities, net |
|
88 |
|
|
— |
|
|
|
88 |
|
|
— |
|
Restricted cash and other |
|
(102 |
) |
|
(34 |
) |
|
|
(125 |
) |
|
(72 |
) |
|
|
(260 |
) |
|
(212 |
) |
|
|
(451 |
) |
|
(489 |
) |
Foreign exchange gain (loss) on cash |
|
(18 |
) |
|
4 |
|
|
|
(17 |
) |
|
(6 |
) |
Cash and cash equivalents |
|
|
|
|
|
Increase (decrease) |
|
13 |
|
|
109 |
|
|
|
161 |
|
|
57 |
|
Net change in cash classified within assets held for sale |
|
— |
|
|
(11 |
) |
|
|
— |
|
|
(16 |
) |
Balance, beginning of period |
|
558 |
|
|
298 |
|
|
|
410 |
|
|
355 |
|
Balance, end of period |
|
571 |
|
|
396 |
|
|
$ |
571 |
|
$ |
396 |
|
RECONCILIATION OF NON-IFRS
MEASURES
The following table reconciles Net income (loss)
to Funds From Operations:
|
For the three months endedJune
30 |
|
For the six months endedJune
30 |
UNAUDITED(MILLIONS) |
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
Net income |
$ |
1,137 |
|
$ |
659 |
|
|
$ |
255 |
|
$ |
597 |
|
Add back or deduct the
following: |
|
|
|
|
|
Depreciation |
|
286 |
|
|
275 |
|
|
|
582 |
|
|
565 |
|
Foreign exchange and financial instruments loss (gain) |
|
(3 |
) |
|
18 |
|
|
|
30 |
|
|
(16 |
) |
Deferred income tax expense (recovery) |
|
41 |
|
|
(2 |
) |
|
|
41 |
|
|
(19 |
) |
Other(17) |
|
35 |
|
|
64 |
|
|
|
85 |
|
|
64 |
|
Dividends on BEPC exchangeable shares(18) |
|
55 |
|
|
52 |
|
|
|
110 |
|
|
104 |
|
Remeasurement of BEPC exchangeable and BEPC class B shares |
|
(1,080 |
) |
|
(694 |
) |
|
|
(171 |
) |
|
(788 |
) |
Amount attributable to equity accounted investments and
non-controlling interests(19) |
|
(290 |
) |
|
(233 |
) |
|
|
(598 |
) |
|
(242 |
) |
Funds
From Operations |
$ |
181 |
|
$ |
139 |
|
|
$ |
334 |
|
$ |
265 |
|
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
letter to unitholders 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 Brookfield Renewable’s
anticipated financial performance, future commissioning of assets,
contracted nature of our portfolio (including our ability to
recontract certain asset), technology diversification, acquisition
opportunities, expected completion of acquisitions and
dispositions, financing and refinancing opportunities, future
energy prices and demand for electricity, global decarbonization
targets, 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 letter to
unitholders. 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 letter to unitholders include
(without limitation) our inability to identify sufficient
investment opportunities and complete transactions; 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; adverse
outcomes with respect to outstanding, pending or future litigation;
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 in the Form 20-F of BEPC and other risks and factors that are
described therein.
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 June 30” included elsewhere
herein and “Financial Performance Review on Proportionate
Information - Reconciliation of Non-IFRS Measures” included in our
unaudited Q2 2022 interim report. Normalized FFO assumes long-term
average generation in all segments except the Brazil and Colombia
hydroelectric segments and uses 2021 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.
Endnotes
(1) |
|
For the three and six months ended June 30, 2022, average LP
units totaled 275.2 million and 275.1 million,
respectively (2021: 274.9 million and 274.9 million,
respectively ). |
|
|
|
(2) |
|
Non-IFRS
measures. Refer to “Cautionary Statement Regarding Use of
Non-IFRS Measures”. |
|
|
|
(3) |
|
Average
Units outstanding for the three and six months ended June 30,
2022 were 645.9 million and 645.8 million, respectively (2021:
645.6 million and 645.5 million, respectively), being
inclusive of our LP units, Redeemable/Exchangeable partnership
units, BEPC exchangeable shares and general partner interest. The
actual Units outstanding as at June 30, 2022 were 645.9
million (2021: 645.6 million). |
|
|
|
(4) |
|
Normalized
FFO assumes long-term average generation in all segments and uses
2021 foreign currency rates. For the three and six months ended
June 30, 2022, the change related to long-term average generation
totaled $11 million and $58 million, respectively (2021: $73
million and $76 million, respectively ) and the change related to
foreign currency totaled $4 million. |
|
|
|
(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 98 GWh (2021:123 GWh) from facilities that do
not have a corresponding LTA. |
|
|
|
(12) |
|
Actual
generation includes 203 GWh (2021:195 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 $4 billion refers to "Part 5 - Liquidity and
Capital Resources" in the Management Discussion and Analysis in the
Q2 2022 Interim Report. |
|
|
|
(22) |
|
12-15%
target returns are calculated as annualized cash return on
investment. |
|
|
|
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