Mr. Connor Teskey reports

BROOKFIELD RENEWABLE REPORTS STRONG THIRD QUARTER RESULTS

Brookfield Renewable Partners LP has released its financial results for the three and nine months ended Sept. 30, 2023. All amounts in United States dollars unless otherwise indicated.

"We had another successful quarter, utilizing our disciplined approach to growth and execution to outperform our targets and deliver strong operating results. We recently closed our acquisitions of X-Elio and Deriva Energy (formerly Duke Energy Renewables), and advanced our acquisitions of Westinghouse Electric, which is expected to close shortly, and Origin Energy. By closing several previously announced acquisitions in the fourth quarter of 2023, we are adding significant incremental FFO [funds from operations] and positioning ourselves to continue to deliver on our decade-long track record of 10-per-cent-plus FFO per unit annual growth," said Connor Teskey, chief executive officer of Brookfield Renewable Partners. "The prospects for our business are as strong as ever. Our recent investments are performing well and we are seeing historical levels of demand for our product, and with access to capital becoming increasingly scarce for some market participants, we are seeing many opportunities to invest significant capital at very attractive risk-adjusted returns."

Brookfield Renewable Partners reported FFO of $253-million in the quarter, or $1.29 per unit year-to-date, representing a 7-per-cent increase compared with the prior year. The results reflect strong operating activities as it benefits from its highly diversified operating platform, inflation-indexed cash flows and development in line with plan. After deducting non-cash depreciation and other expenses, the company's net loss attributable to unitholders for the three months ended Sept. 30, 2023, was $64-million.

Key highlights:

• Brookfield Renewable Partners was successful in its growth activities this quarter, signing transactions for $2.2-billion of equity investment ($450-million net to Brookfield Renewable Partners) alongside its institutional partners, taking advantage of the company's access to scale capital and opportunities in the market;
• Continued to advance development activities, commissioning approximately 2,200 megawatts of capacity year-to-date, and are on target to deliver approximately 5,000 megawatts this year, adding approximately $70-million of annual FFO;
• The company expects to execute just short of $20-billion of non-recourse financing this year, generating over $800-million in upfinancing proceeds to Brookfield Renewable Partners, while maintaining its strong investment-grade credit rating, and ended the quarter with $4.4-billion of available liquidity, providing significant flexibility to continue executing on its growth and development strategy;
• Advanced key commercial priorities this quarter, including signing contracts to deliver an incremental 5,700 gigawatt-hours per year of generation, including 4,100 gigawatt-hours to corporate offtakers, where the company continues to see accelerating demand;
• Continued to execute its asset recycling activities, where it is seeing strong demand for derisked assets, generating approximately $1.4-billion of proceeds (approximately $600-million net to Brookfield Renewable Partners) over the past 18 months, which on average represents almost three times its invested capital.

Brookfield Renewable Partners returns remain robust

The renewables sector traded down in the public markets on the back of higher interest rates and a perceived tightening of industry margins. Even though the company is well positioned to benefit in this environment, and insulated from the challenges that are seemingly impacting others in the sector, Brookfield Renewable Partners has not been immune to the lower market prices. And while the company is never pleased when its share price is down, the company is long-term focused investors and believes the outlook for its business is better than ever. As the company continues to deliver on its growth targets and execute on its strategic priorities, the company's share price should respond and better reflect the intrinsic value of the business.

Most importantly, Brookfield Renewable Partners is not seeing a reduction in the return it is able to generate on its capital. In fact, quite the opposite, Brookfield Renewable Partners is seeing plentiful opportunities to deploy capital at or above its target returns, as demand for clean power from corporations continues to accelerate. This opportunity is more pronounced in the current market where access to capital is becoming increasingly scarce for some market participants -- creating a favourable environment for those such as Brookfield Renewable Partners, with the capital, capabilities and pipeline of projects to deliver for its clients. Notably, there are particularly attractive opportunities to acquire high-quality businesses with strong pipelines, but lack the access to capital or scale operating capabilities to build out the projects.

In this environment, Brookfield Renewable Partners' continuing approach to M&A (mergers and acquisitions) is particularly effective. It is leveraging its existing capabilities and development pipeline to capture the growing demand, while at the same time using its access to capital to add leading platforms in core markets around the world. These additions further enhance the company's capabilities and position Brookfield Renewable Partners as the clean energy and decarbonization partner of choice for leading corporations. And by consistently enhancing its business, the company expects to be even more well positioned to capture a greater portion of the market demand in the future. It is a powerful and virtuous cycle.

Over the last five years, the amount of clean energy procured annually by corporates has increased almost 10 times and, looking forward, Brookfield Renewable Partners does not expect this trend to slow down. Access to energy is now the key constraint for a number of these businesses, which acquire large amounts of power, including leading global technology companies, to execute their growth plans.

As one of the only scale multitechnology global clean energy businesses in the world, with an almost 150,000 megawatt development pipeline, Brookfield Renewable Partners is uniquely positioned to benefit. With its extensive energy marketing and operational capabilities, its ability to offer 24/7 clean power solutions from the company's technologically diversified fleet, and its ability to credibly deliver scale projects on time across all key global markets, Brookfield Renewable Partners has become a go-to partner providing bespoke solutions to meet the needs of the largest procurers of clean energy globally.

As a result, Brookfield Renewable Partners continues to see a very robust market to contract its capacity and has been successful in signing contracts at prices that appropriately compensate the company for higher construction and financing costs. As an example, by leveraging the company's development pipeline, its existing hydro facilities and its power marketing capabilities, Brookfield Renewable Partners recently signed an agreement with one of the leading global tech companies to provide it with a total of 18 terawatt-hours (equal to the annual electricity consumption of almost two million homes in the United States) over the next five years, to serve its growing requirements in the U.S.

Brookfield Renewable Partners' approach to development continues to be focused on delivering appropriate risk-adjusted returns and focusing on investment opportunities that it can derisk quickly. The company does not build on spec, and reduces risk in its investments by simultaneously securing power purchase agreements, construction contracts and financing before committing significant capital. Brookfield Renewable Partners limits construction risk by using a localized approach to construction and development, and manages its investment spend by leveraging the company's central procurement capabilities. Lastly, Brookfield Renewable Partners leverages its commercial teams to source the highest-quality offtakes and focuses on the most mature and lowest-cost renewable power technologies (solar and onshore wind) in the highest-growth regions to ensure its projects produce the most derisked, high-quality cash flows. This approach has served the company well for decades and allows it to deliver consistent performance in all market conditions.

Brookfield Renewable Partners is also crystalizing and proving out its returns through the company's asset recycling initiatives. In the current environment, the company continues to see strong demand for derisked assets with long-term contracts and fixed rate financing in place. As an example, Brookfield Renewable Partners recently agreed to the sale of a 150-megawatt solar facility in Europe that it commissioned earlier this year for proceeds of $100-million, representing almost three times its invested capital. This marks the continuation of a successful asset recycling program that in the last 18 months has generated approximately $1.4-billion of proceeds (approximately $600-million net to Brookfield Renewable Partners), which on average represents an almost three-times multiple of its invested capital. Looking forward, Brookfield Renewable Partners expects that its capital recycling program will continue to be a key component of its overall source of funds and a means of generating value above its underwriting targets for investors.

Brookfield Renewable Partners is set to benefit from the closing of a number of highly accretive M&A transactions

The company is making good progress closing its previously announced acquisitions. Brookfield Renewable Partners recently closed the acquisition of 50 per cent of X-Elio, its leading global solar developer, bringing its ownership interest in that business to 100 per cent. The company also closed the acquisition of Deriva Energy, one of the largest renewable platforms in the U.S., with 5,900 megawatts of operating and under-construction wind, utility-scale solar and storage assets, and a 6,100-megawatt development pipeline.

Brookfield Renewable Partners continues to advance the regulatory approval process for its acquisition of Westinghouse Electric, and it expects to satisfy all conditions to closing this week, with closing imminently thereafter. The company has also progressed its acquisition of Origin Energy, receiving authorizations from the Australian Competition and Consumer Commission in October, and received a unanimous recommendation from Origin's board, having increased the company's offer to the top end of its independent expert's valuation range, providing a compelling opportunity for Origin's shareholders to realize the value of their investment. With the shareholder vote scheduled for late November, Brookfield Renewable Partners is targeting to close the acquisition in early 2024.

The company is also seeing an increasing number of opportunities to acquire scale portfolios and platforms, given the recent move in public market valuations, combined with the increasing need for capital across the sector. This environment plays to the company's strengths as it can invest at attractive risk-adjusted returns when others are pulling back.

Recently, Brookfield Renewable Partners agreed to acquire Banks Renewables for approximately $600-million (approximately $120-million net to Brookfield Renewable Partners), a leading independent United Kingdom renewables developer with approximately 260 megawatts of onshore wind assets, approximately 800 megawatts of near-term development and another 3,000 megawatts of later-stage projects. The company expects the Banks transaction to close prior to year-end. Brookfield Renewable Partners also agreed to partner with Axis Energy, a leading renewable developer in India, with which the company has successfully developed 1,800 megawatts of capacity over the past two years, creating a new development platform with 1,200 megawatts of advanced-stage capacity and another approximately 5,000 megawatts of projects in the development phase. Under the agreement, the company is targeting to invest up to $850-million (up to $170-million net to Brookfield Renewable Partners) over the next three years to develop approximately 2,500 megawatts of wind and solar capacity.

In total, over the coming months, Brookfield Renewable Partners expects to have closed transactions totalling $9.2-billion ($1.5-billion net to Brookfield Renewable) of capital that will be immediately accretive, adding approximately $200-million in expected incremental annual FFO and continuing to grow the value of the business, positioning the company to continue to deliver on its decade-long record of 10-per-cent-plus FFO per unit annual growth.

In light of public market conditions, and the company's strong conviction in the intrinsic value of its business and growth trajectory, the company has also started to allocate capital to repurchase shares. Starting this quarter, Brookfield Renewable Partners repurchased almost 1.5 million units under its normal course issuer bid. Looking forward, the company will continue to allocate capital based on where it is seeing the best risk-adjusted returns, and remains confident that it will continue to create meaningful value for its investors.

Operating results

Brookfield Renewable Partners generated FFO of $253-million, or 38 cents per unit, in the third quarter, bringing its year-to-date FFO per unit to $1.29, a 7-per-cent increase compared with the prior year. The company's business continues to deliver strong results, benefiting from its highly diversified operating platform, inflation-indexed cash flows and strong all-in pricing.

Brookfield Renewable Partners' business is backed by high-quality cash flows, in large part from its perpetual hydro portfolio which generates dispatchable, clean, baseload power that has become increasingly valuable in today's environment. The company is also well positioned to benefit from the increased demand for reliable, carbon-free generation, with significant capacity available for recontracting over the next five years in a very positive environment for prices of electricity. Brookfield Renewable Partners expects to be able to execute new contracts which will contribute additional FFO and allow the company to up-finance many of the assets due to their low levels of debt.

Brookfield Renewable Partners' hydroelectric segment delivered FFO of $129-million. Its hydro assets globally continue to exhibit strong cash flow resiliency given the company's increasingly diversified asset base, inflation-linked power purchase agreements and ability to capture strong power prices.

The company's wind and solar segments generated a combined $145-million of FFO. Brookfield Renewable Partners continues to benefit from contributions from acquisitions and the diversification of its fleet, which is underpinned by long-duration power purchase agreements that provide stable revenues. The company's distributed energy and sustainable solutions segment generated $39-million of FFO, benefiting from both acquisitions and organic growth across the portfolio.

Brookfield Renewable Partners' renewable power development pipeline stands at almost 150,000 megawatts, nearly 1.5 times larger than it was at this time last year. The company also continues to be successful starting development on projects earlier than had been planned and scaling its development to meet growing demand for clean power. The company has approximately 5,000 megawatts on schedule for commissioning this year, and approximately 7,000 megawatts and approximately 8,000 megawatts on target for delivery in 2024 and 2025, respectively. Much of the capital for these projects is already invested, and the company will see the returns on that capital when the projects begin producing cash upon commissioning. Brookfield Renewable Partners expects newly commissioned capacity this year to contribute approximately $70-million in additional FFO annually and commissioned capacity in the following two years to contribute a combined $180-million in additional FFO annually.

Balance sheet and liquidity

Brookfield Renewable Partners' financial position remains excellent and its available liquidity is robust, providing significant flexibility to finance its growth. The company is resilient to rising global interest rates, with approximately 90 per cent of its borrowings being project-level non-recourse debt, with an average remaining term of over 10 years, no material near-term maturities in the next five years and only 3 per cent exposure to floating-rate debt.

Despite market volatility, the company continues to have access to deep and varied pools of capital, differentiating its business. Brookfield Renewable Partners finished the quarter with $4.4-billion of available liquidity, giving it significant optionality during periods of capital scarcity. So far this year, the company has secured over $10-billion of non-recourse financing across the business and expects to raise an additional $8-billion in non-recourse financing by year-end, generating over $800-million in total upfinancing proceeds to Brookfield Renewable Partners for the year.

Distribution declaration

The next quarterly distribution in the amount of 33.75 cents per LP unit, is payable on Dec. 29, 2023, to unitholders of record as at the close of business on Nov. 30, 2023. In conjunction with the partnership's distribution declaration, the board of directors of Brookfield Renewable Corp. has declared an equivalent quarterly dividend of 33.75 cents per share, also payable on Dec. 29, 2023, to shareholders of record as at the close of business on Nov. 30, 2023. Brookfield Renewable targets a sustainable distribution with increases targeted on average at 5 per cent to 9 per cent annually.

The quarterly dividends on Brookfield Renewable Partners' preferred shares and preferred LP units have also been declared.

Distribution currency option

The quarterly distributions payable on the Brookfield Renewable Partners 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 Partners' transfer agent, Computershare Trust Company of Canada, in writing at 100 University Ave., 8th floor, Toronto, Ont., M5J 2Y1, or by phone at 1-800-564-6253. Beneficial unitholders (that is, 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 Brookfield Renewable Partners 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 the company's website.

Brookfield Renewable Partners LP

Brookfield Renewable Partners operates one of the world's largest publicly traded, pure-play renewable power platforms. Our portfolio consists of hydroelectric, wind, utility-scale solar and storage facilities in North America, South America, Europe and Asia, and totals approximately 31,500 megawatts of installed capacity and a development pipeline of approximately 143,400 megawatts of renewable power assets, 14 million metric tonnes per annum (MMTPA) of carbon capture and storage, two million tons of recycled material, and four million metric million British thermal units of renewable natural gas production annually. Investors can access its portfolio either through Brookfield Renewable Partners, a Bermuda-based limited partnership, or Brookfield Renewable Corp., a Canadian corporation.

Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with approximately $850-billion of assets under management.

Please note that Brookfield Renewable Partners' 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 its website, on the SEC's website and on SEDAR+. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.

Quarterly earnings call details

Investors, analysts and other interested parties can access Brookfield Renewable Partners' third quarter 2023 results, as well as the letter to unitholders and supplemental information, on the company's website.

The conference call can be accessed via webcast on Nov. 3, 2023, at 8:30 a.m. ET.

We seek Safe Harbor.