Mr. Connor Teskey reports

BROOKFIELD RENEWABLE REPORTS RECORD RESULTS AND ANNOUNCES 5% DISTRIBUTION INCREASE

Brookfield Renewable Partners LP (BEP) has released its financial results for the three and 12 months ended Dec. 31, 2023.

All amounts are in United States dollars unless otherwise indicated.

"Two thousand twenty-three was a record year for our business on almost all metrics. We generated record FFO [funds from operations] per unit, added almost 5,000 megawatts of capacity through development, and deployed or committed $9-billion into growth along with our partners. We delivered these results in a rising rate environment and one where supply chains were facing challenges, demonstrating how our access to scale capital, and disciplined approach to development and underwriting differentiate our business and allows us to perform across market cycles," said Connor Teskey, chief executive officer of Brookfield Renewable.

"Going forward, we are well positioned to continue benefiting from accelerating demand for clean power from corporate customers, and specifically the large global technology companies, whose increasing appetite for clean power is being driven by data centre demand, with securing clean energy now squarely on their critical path to growth."

Brookfield Renewable generated record FFO of $1,095-million, or $1.67 per unit, for the 12 months ended Dec. 31, 2023, a 7-per-cent increase on a per-unit basis over the same period in the prior year, including solid fourth quarter results that increased 9 per cent per unit year-on-year. The results reflect the benefit of the company's diverse asset base, high-quality inflation-linked and contracted cash flows, organic growth, and contributions from acquisitions. After deducting non-cash depreciation and other expenses, Brookfield Renewable's net loss attributable to unitholders for the 12 months ended Dec. 31, 2023, was $100-million, or 32 cents per unit.

Other highlights for the year include:

• Brookfield Renewable advanced commercial priorities, including securing contracts for new developments for almost 50 terawatt hours of generation, of which over 90 per cent is with corporate customers.
• Accelerated the company's development activities, commissioning almost 5,000 megawatts of new clean energy capacity globally across wind, solar and battery storage, further diversifying and growing its cash flows. Brookfield Renewable expects commissioned capacity to contribute approximately $60-million of incremental FFO annually on a run-rate basis.
• Brookfield Renewable's advanced-stage development pipeline expanded to almost 24,000 megawatts, which is expected to contribute approximately $300-million of FFO annually to Brookfield Renewable once commissioned.
• Deployed, or agreed to deploy, a record $9-billion of capital ($2-billion net to Brookfield Renewable) into accretive investments across all of its key markets and closed a number of significant transactions in the fourth quarter, including Westinghouse and Deriva Energy, immediately growing the company's cash flows.
• Brookfield Renewable continued to execute on its capital recycling initiatives, generating $800-million of proceeds ($500-million net to Brookfield Renewable), representing nearly three times its invested capital, and providing funds for growth.
• Strengthened the company's best-in-class balance sheet, executing approximately $15-billion of financings and finishing the year with available liquidity of over $4-billion, positioning the business to opportunistically deploy capital at strong risk-adjusted returns.

Brookfield Renewable continues to deliver attractive risk-adjusted returns

Brookfield Renewable was well equipped to navigate the rising rate environment and supply chain challenges that faced the sector over the past 12 months. Most notably, its disciplined approach to development, which focuses on removing risks up front, meant that its development activities remained robust, delivering a record year, at a time when some market participants saw headwinds. Lastly, the company's prudent approach to financing its business, combined with the strength of its balance sheet, durability of its cash flows and diverse sources of scale capital, ensured that Brookfield Renewable was able to continue to pursue growth at a time when some could not, and there was less competition.

Brookfield Renewable capitalized on opportunities, deploying, or agreeing to deploy, $9-billion of capital ($2-billion net to Brookfield Renewable), highlighted by the company's acquisitions of Westinghouse, Deriva Energy, a further 50-per-cent interest in X-Elio which we did not own, Banks Renewables, and investments in CleanMax and Avaada in India.

While the company's proposed acquisition of Origin Energy did not receive the required level of shareholder support, which was a condition precedent to the closing of the transaction, the company is confident in achieving its target deployment of $7-billion to $8-billion over the next five years, and growing its cash flows and distributions in-line with the company's targets. Since the initial announcement of the Origin transaction, Brookfield Renewable has received in-bounds from businesses around the world that are seeking a partner with significant capital and deep operating expertise to accelerate their transition goals and enhance the value of their businesses.

In light of public market conditions and the company's strong conviction in the intrinsic value of its business and growth trajectory, Brookfield Renewable continued to allocate capital to repurchase shares. In 2023, Brookfield Renewable repurchased two million units under its normal course issuer bid (NCIB). Looking forward, Brookfield Renewable will continue to allocate capital based on where it is seeing the best risk-adjusted returns and remain confident the company will continue to create meaningful value for its investors.

Brookfield Renewable has been scaling its development capabilities and delivered almost 5,000 megawatts in the past year, a record for its business, while also pulling forward the company's pipeline. Brookfield Renewable's advanced-stage development pipeline now stands at almost 24,000 megawatts, with just under 7,000 megawatts on target to be delivered this year and over 7,000 megawatts in 2025. These projects are well advanced, with almost 25 per cent of the company's three-year pipeline under construction, over 20 per cent with revenues and inputs fully contracted, and over 30 per cent in the final stages of securing PPAs and construction contracts. These projects and the company's remaining advanced-stage pipeline are expected to contribute approximately $300-million of incremental run-rate FFO once commissioned.

Operating results

Brookfield Renewable's operating business continued to perform well and delivered record FFO, despite cyclical resource volatility and generation below the long-term average at some of the company's assets. Brookfield Renewable generated FFO of $1.1-billion, or $1.67 per unit, a 7-per-cent-per-unit increase year-over-year and a 9-per-cent increase per unit in the fourth quarter. While the company's results fell slightly below its target of over 10-per-cent FFO per unit growth, largely due to later than expected transaction closings during the fourth quarter, the company remains well positioned to achieve its goal going into 2024 and beyond.

Brookfield Renewable is already seeing the benefits of its growth activities, which were back-end weighted this year, with commissioning of nearly half of its almost 5,000 megawatts of new capacity in the fourth quarter and the closing of major acquisitions contributing over $100-million in incremental annual FFO in the final three months of the year. The company expects to also receive an uplift as its fleet reverts to its long-term average generation, particularly from its hydro assets, where the company often sees cyclicality.

Additionally, Brookfield Renewable expects that its growth initiatives will continue to stabilize its results going forward, not only increasingly diversifying its cash flows, but also enhancing the contracted and less variable components of its business. As the company continues to diversify its business, it is reducing the volatility of its results and helping to minimize its exposure to any underlying resource to deliver the company's earnings growth targets. While Brookfield Renewable constantly updates and monitors its long-term average resource figures for financings and management of its operations, the impact of these metrics on the company's financial performance is being mitigated by its broader development, growth and contracting initiatives.

Brookfield Renewable's hydroelectric segment delivered FFO of $624-million. Despite a more challenging year from a resource perspective in the company's high-value markets, the portfolio performed well, benefiting from strong all-in power prices. Reservoirs have rebounded to start 2024, with the first quarter trending positively compared with the end of 2023.

Brookfield Renewable's wind and solar segments generated a combined $643-million of FFO, benefiting from the commissioning of new projects, repowering activities and the company's inflation-linked contracted generation. As is expected during a period of rapid growth, the company has acquired a number of assets that were performing below their long-term average generation under prior ownership. As part of the company's business plans, Brookfield Renewable leverages its operational capabilities, through repowering and other upgrades, to drive improvement in these assets back to their long-term average levels in the first few years postownership. Brookfield Renewable has been executing several repowering and upgrade initiatives in the past couple years that are expected to be completed and start contributing higher earnings this year.

The company's distributed energy and storage, and sustainable solutions segments generated a combined $185-million of FFO, benefiting from organic growth as it scales these businesses. Brookfield Renewable continues to see positive momentum for the more nascent technologies that sit in its sustainable solutions segment. For example, the company's Canadian carbon capture and storage business, Entropy, entered into a fixed-price 15-year carbon credit offtake agreement with the Canada Growth Fund that guarantees an offtake price for 600,000 tonnes per annum of CO2 (carbon dioxide), derisking the project pipeline. Alongside the offtake agreement, Canada Growth Fund agreed to invest up to $200-million in the business at approximately 1.5 times the company's value entry point.

Balance sheet and liquidity

Brookfield Renewable finished the year in an excellent financial position, with over $4-billion of available liquidity providing significant flexibility to finance its growth. Brookfield Renewable's best-in-class balance sheet and access to diverse sources of capital continue to differentiate its business and enable it to opportunistically invest when capital becomes scarce, as it demonstrated this year, adding quality businesses at attractive risk-adjusted returns.

During the year, Brookfield Renewable strengthened its financial position, executing on almost $15-billion in non-recourse financings generating almost $500-million in upfinancing proceeds to Brookfield Renewable. The company also recently updated its green financing framework to incorporate eligible investment categories in line with its strategy to invest in businesses and projects that support the transition to net-zero. Brookfield Renewable subsequently took advantage of a favourable market environment in early January, issuing $400-million of 30-year notes at 5.3 per cent, conservatively raising debt as the company's cash flows grow, maintaining its investment-grade rating and meaningfully extending its debt-maturity profile.

Brookfield Renewable was successful with its capital recycling program, generating $800-million in proceeds ($500-million net to Brookfield Renewable) over the past 12 months, representing almost three times its invested capital. The company's recycling initiatives are a consistent source of financing, which it will continue to scale with its growth in development activities. The company takes a disciplined and practical approach to asset rotation, looking to sell assets when they are in demand and attracting valuations at or above its internal assessments, regardless of technology or geography.

Brookfield Renewable sold a 150-megawatt solar project in Spain which it commissioned in early 2023, generating $100-million in proceeds (approximately $20-million net to Brookfield Renewable). The company also executed the sale of a minority interest in a portfolio of contracted wind assets in Canada which it developed over 10 years ago, returning over 3.5 times its invested capital over this period.

Brookfield Renewable's approach to selling assets that are in demand irrespective of technology or geography has served it well and generated meaningful returns above its underwriting targets for investors. The company expects to continue to leverage this financing source going forward as it brings on-line new projects and acquires new platforms.

Distribution declaration

The next quarterly distribution, in the amount of 35.5 cents per LP unit, is payable on March 28, 2024, to unitholders of record as at the close of business on Feb. 29, 2024. This represents a 5-per-cent increase to the company's distribution, bringing its total annual distribution per unit to $1.42.

In conjunction with the partnership's distribution declaration, the board of directors of Brookfield Renewable Corp. (BEPC) have declared an equivalent quarterly dividend of 35.5 cents per share, also payable on March 28, 2024, to shareholders of record as at the close of business on Feb. 29, 2024.

The quarterly dividends on the company's preferred shares and preferred LP units have also been declared.

Distribution currency option

The quarterly distributions payable on the company's 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 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 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.

Additional information on Brookfield Renewable's distributions and preferred share dividends can be found on its website.

Brookfield Renewable Partners LP

Brookfield Renewable operates one of the world's largest publicly traded platforms for renewable power and sustainable solutions. Its renewable power portfolio consists of hydroelectric, wind, utility-scale solar and storage facilities in North America, South America, Europe and Asia, and totals almost 33,000 megawatts of installed capacity and a development pipeline of approximately 155,000 megawatts. The company's portfolio of sustainable solutions assets includes its investments in Westinghouse (a leading global nuclear services business), and a utility and independent power producer with operations in the Caribbean and Latin America to facilitate the decarbonization of its operations, as well as 57,000 tonnes per annum of carbon capture and storage capacity, annual production capacity of three million British thermal units (MMBtu) of agricultural renewable natural gas, and recycling capacity of over one million tons of materials annually. The company's sustainable solutions development pipeline consists of 14 million tonnes per annum of carbon capture and storage capacity, 3.5 million MMBtu of renewable natural gas production annually, 1.6 million tons of recycled material annual capacity, one million tons of annual green ammonia production capacity and 5,000 megawatts of annual solar panel manufacturing capacity.

Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with over $850-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 its website, on 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's fourth quarter 2023 results, as well as the letter to unitholders and supplemental information, on Brookfield Renewable's website.

The conference call can be accessed via webcast on Feb. 2, 2024, at 8:30 a.m. ET, on-line.

We seek Safe Harbor.