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Brookfield Renewable Announces Record Results and 5% Distribution Increase

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BROOKFIELD, News, Feb. 04, 2021 (GLOBE NEWSWIRE) -- Brookfield Renewable Partners L.P. (TSX: BEP.UN; NYSE: BEP) (“Brookfield Renewable” or "BEP") today reported financial results for the three and twelve months ended December 31, 2020.

“2020 was another year of significant growth for our business. Despite the economic challenges around the world, we delivered record results and continued to broaden our operations, as we look forward to a multi-decade opportunity to advance decarbonization and assist with the transition of global electricity grids to a more sustainable future,” said Connor Teskey, CEO of Brookfield Renewable. “Our size, scale across multiple technologies, and depth of operating and development expertise continues to be a meaningful differentiator in sourcing growth opportunities, and executing large, high value investments.”

Financial Results

      
      
    
    
Millions (except per unit or otherwise noted)For the three months ended December 31 For the twelve months ended December 31
Unaudited2020  2019  2020  2019 
Total generation (GWh)       
– Long-term average generation14,333  13,850  57,457  53,926 
– Actual generation13,248  12,465  52,782  52,560 
Brookfield Renewable Partner's share (GWh)       
– Long-term average generation7,354  6,561  27,998  26,189 
– Actual generation6,583  5,977  26,052  26,038 
Net loss attributable to Unitholders$(120) $(74) $(304) $(103)
Per LP unit(1)(0.22) (0.15) (0.61) (0.26)
Funds From Operations (FFO)(2)201  171  807  761 
Per Unit(1)(2)(3)0.31  0.29  1.32  1.30 
Normalized Funds From Operations (FFO)(2)(4)265  167  924  725 
Per Unit(1)(2)(3)(4)0.41  0.28  1.52  1.24 


(1)Adjusted for the 3-for-2 Unit split effective December 11, 2020.
(2)Non-IFRS measures. Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”.
(3)Average Units outstanding for the three and twelve months ended December 31, 2020 were 645.5 million and 609.5 million, respectively (2019: 583.6 million and 583.5 million, respectively), being inclusive of our LP units, Redeemable/Exchangeable partnership units, BEPC exchangeable shares and general partner interest. The actual LP units outstanding at December 31, 2020 were 645.5 million (2019: 466.9 million).
(4)Normalized FFO assumes long-term average generation in all segments except the Brazil and Colombia hydroelectric segments and uses 2019 foreign currency rates. For the three and twelve months ended December 31, 2020, the change related to long-term average generation totaled $41 million and $75 million, respectively (2019: $(4) million and $(36) million, respectively) and the change related to foreign currency totaled $23 million and $42 million, respectively.


Brookfield Renewable reported FFO of $807 million ($1.32 per LP unit) for the twelve months ended December 31, 2020, a 6% increase from the prior year supported by contributions from growth initiatives and strong asset availability. After deducting non-cash depreciation, our Net loss attributable to Unitholders for the twelve months ended December 31, 2020 was $304 million or $0.61 per LP unit.

Highlights

  • Advanced key commercial priorities, including delivering on almost $40 million in cost saving initiatives ($17 million net to Brookfield Renewable), securing contracts to deliver 3,500 gigawatt hours of clean energy annually (which has the equivalent carbon avoidance of planting almost 30 million trees), and signing a number of strategic contracts with corporate offtakers;
  • Agreed to invest ~$4.6 billion (~$2.5 billion net to Brookfield Renewable) of equity across ten transactions, deploying capital in every major market we operate;
  • Completed the merger of TerraForm Power, consolidating our activities in North America and Europe;
  • Commissioned approximately 460 megawatts of new capacity and progressed close to 4,200 megawatts through construction and advanced-stage permitting, and increase the size of our development pipeline to over 23,000 megawatts;
  • Maintained a strong balance sheet and bolstered our liquidity, with over $3.3 billion of available liquidity, raising over $1 billion from asset recycling initiatives, closing $3.4 billion of investment-grade financings and extending the average duration of our corporate debt from 10 to 14 years; and
  • Broadened our investor base with the creation of BEPC and through our addition to several U.S. and global indices.

Update on Growth Initiatives

In December, we agreed to acquire Exelon Generation Company’s U.S. distributed generation (DG) business comprising 360 megawatts of operating generation across nearly 600 sites with an additional over 700 megawatts under development for $810 million (approximately $200 million net to Brookfield Renewable). In 2017, we took our first step into DG with an acquisition after having identified a significant opportunity to build a high-quality scale business in a highly fragmented and rapidly growing market. Since then, through both acquisitions and organic initiatives, we have expanded the business as demand for on-site generation continued to grow as cost declines in solar technology and decarbonization ambitions of commercial and industrial clients accelerated.

With this acquisition, we will own one of the leading distributed generation businesses in the U.S., with deep operating, development and origination capabilities, and a 2,000 megawatt portfolio that generates high-quality contracted cash flows that are diversified by geography and customer. This investment represents the continuation of this strategy and furthers our goal of offering corporates and other institutions a ‘one-stop’ solution for on- and off-site energy generation, storage and procurement and energy efficiency services to help them achieve their decarbonization objectives and transition to a lower carbon future.

In December, we agreed to acquire the Shepherds Flat wind farm, an 845 megawatt fully contracted wind generation facility located in Oregon for $700 million ($175 million net to Brookfield Renewable). The project, which is fully contracted with a high-quality offtaker, is one of the largest onshore wind projects in the United States and includes an attractive repowering opportunity that we expect to deliver by the end of 2022. This repowering opportunity is one of the largest in the world and is expected to increase total generation by approximately 25% increasing the clean energy produced by approximately 400 gigawatt hours annually. Having the expertise to undertake a project of this size showcases our decades of expertise to drive operational efficiencies while generating attractive returns.

We also continue to use our differentiated operating and commercial capabilities to acquire ready-to-build development assets in Brazil at premium returns. In December, we agreed to acquire a 270 megawatt late-stage development wind project, including an option over a further 200 megawatt expansion. Ahead of construction, we intend to leverage our energy marketing capabilities to contract the project, which is located in one of the highest wind regions in the country. Our relationships with global turbine manufacturers, as one of the largest acquirers globally, should enable us to outperform on equipment procurement, installation and operating costs. With this latest addition, in the last 18-months, we have acquired a collection of projects that once constructed, will represent a combined portfolio of over 2,000 megawatts of long-term contracted wind and solar assets, more than doubling our renewable energy capacity in the country.

Results from Operations

In 2020, we generated FFO of $807 million, a 6% increase from prior year, as the business benefited from recent acquisitions, strong underlying asset availability, and execution on organic growth initiatives. On a normalized basis, our per unit results are up 23%.

During the year, our hydroelectric segment delivered FFO of $662 million. Although we experienced some drier conditions across our fleet, particularly in regions with higher value contracts, overall generation for the year was in line with the long-term average and our reservoirs are well positioned for a strong first quarter, which underscores the benefit of our diverse portfolio.

Our wind and solar segments continue to generate stable revenues and benefit from the diversification of our fleet and highly contracted cash flows with long duration power purchase agreements. During the year, these segments generated a combined $376 million of FFO, representing a 51% increase over the prior year, as we benefited from contributions from acquisitions, and approximately 440 megawatts of solar and wind projects commissioned during the year.

Our energy transition segment generated $103 million of FFO during the year as our portfolio continues to help commercial and industrial partners achieve their decarbonization goals and provides critical grid-stabilizing ancillary services and back-up capacity required to address the increasing intermittency of greener electric grids. For example, our First Hydro storage portfolio achieved five of its highest revenue days ever in the last couple months as we sold essential stabilizing services to the UK power grid in response to high demand from cold weather and intermittently low wind generation levels.

Across our portfolio, we continue to focus on partnering with a broad range of customers in their decarbonization efforts. During the year, we executed agreements to supply 100% renewable energy to one of the first planned industrial-scale green hydrogen production plants in North America with Plug Power and over 90% of JPMorgan’s real estate operations in New York State. In South America, our focus continues to be on extending the average duration of our power purchase agreements, which today stand at 8 years in Brazil and 3 years in Colombia. We signed two long-term inflation-linked power purchase agreements for our recently acquired solar development projects in Brazil, substantially contracting these assets.

In recent months, many governments in our target markets have outlined new policies to address climate change. In North America, where the majority of our hydro fleet is located, governments are increasingly considering potential carbon pricing mechanisms, for which our business is uniquely positioned to benefit. As examples, the current U.S. administration has re-established a working group that is expected to increase the social cost of carbon to more than $50 per tonne and in Canada a carbon tax has been set at $30 per tonne for 2020 and is set to increase almost 6 times to $170 by 2030. Carbon taxes or carbon pricing provide long-term support for growing wind and solar capacity, which also increases the value of our hydroelectric power facilities due to their dispatchable nature and the grid-stabilizing services they can provide.

While we always prioritize contracted generation, for our perpetual hydroelectric facilities, we always look to ensure we retain upside optionality for when we believe prices will improve. Across our hydroelectric fleet in North America, we have contracts rolling off for assets that primarily deliver power to markets in the U.S. northeast. Fortunately, these contracts, on a net basis, deliver power at prices in the range of the current market. Therefore, on renewal, we expect minimal impact to our overall revenue, while retaining meaningful potential upside should prices see future support from carbon pricing mechanisms.

Finally, we continued to advance our global development activities, including progressing 2,789 megawatts of construction diversified across distributed- and utility-scale solar, wind, storage, and hydro in over 11 different countries. We are also progressing 1,394 megawatts of advanced-stage projects through final permitting and contracting. In total, we expect these projects to contribute approximately $109 million in FFO net to Brookfield Renewable on a run-rate basis when completed.

Balance Sheet and Liquidity

We continue to maintain a robust financial position. We have approximately $3.3 billion of total available liquidity, and our investment grade balance sheet has no material maturities over the next five years and approximately 82% of our financings are non-recourse to Brookfield Renewable.

During 2020, we continued to take advantage of the low interest environment and executed on $3.4 billion of investment grade financings, extending our average corporate debt maturity to 14 years and reducing our borrowing costs by $5 million per year. We continue to advance our green financing strategy to benefit from growing demand for green securities and diversify our debt investor base.

Environmental, Social and Governance (ESG) Reporting

Operating a business with strong ESG principles is simply the right thing to do, and we have always believed that strong ESG practices drive long-term value to our business and create higher barriers to entry. Inherent in our position as one of the largest publicly traded renewable energy companies, is the understanding that climate change poses a serious threat to communities, businesses and ecosystems around the world. We have established ourselves as one of the preeminent renewables franchises and are playing a critical role in addressing climate change and reducing carbon across the world, by shifting power generation, which accounts for more than 70% of global carbon emissions, to a sustainable pathway for the future. To demonstrate our commitment, we were proud to announce in our second ESG report, which was published today, our ambition to double our avoided carbon emissions by 2030.

Distribution Declaration and Increase

The next quarterly distribution in the amount of $0.30375 per LP unit, is payable on March 31, 2021 to unitholders of record as at the close of business on February 26, 2021. This represents a 5% increase to our distribution, bringing our total annual distribution per unit to $1.215.

In conjunction with the Partnership’s distribution declaration, the Board of Directors of BEPC has declared an equivalent quarterly dividend of $0.30375 per share, also payable on March 31, 2021 to shareholders of record as at the close of business on February 26, 2021.

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 maintains a Distribution Reinvestment Plan (“DRIP”) which allows holders of its LP Units who are resident 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 https://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 https://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 19,000 megawatts of installed capacity and an approximately 23,000 megawatt development pipeline. Brookfield Renewable is listed on the New York and Toronto stock exchanges. Further information is available at https://bep.brookfield.com. Important information may be disseminated exclusively via the website; investors should consult the site to access this information.

Brookfield Renewable is the flagship listed renewable power company of Brookfield Asset Management, a leading global alternative asset manager with approximately $600 billion of assets under management.

Please note that Brookfield Renewable’s previous audited annual and unaudited quarterly reports filed with the U.S. Securities and Exchange Commission (“SEC”) and securities regulators in Canada, are available on our website at https://bep.brookfield.com, on SEC’s website at www.sec.gov and on SEDAR’s website at www.sedar.com. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.

Contact information: 
Media:Investors:
Claire HollandRobin Kooyman
Vice President - CommunicationsSenior Vice President – Investor Relations
(416) 369-8236(416) 369-2616
claire.holland@brookfield.comrobin.kooyman@brookfield.com

Quarterly Earnings Call Details

Investors, analysts and other interested parties can access Brookfield Renewable’s 2020 Fourth Quarter And Full-Year Results as well as the Letter to Unitholders and Supplemental Information on Brookfield Renewable’s website at https://bep.brookfield.com.

The conference call can be accessed via webcast on February 4, 2021 at 9:00 a.m. Eastern Time at https://edge.media-server.com/mmc/p/zrk38kj4 or via teleconference at 1-866-688-9430 toll free in North America. If dialing from outside Canada or the U.S., please dial 1-409-216-0817 at approximately 8:50 a.m. Eastern Time. When prompted, enter the conference ID, 4993154. A recording of the teleconference can be accessed through February 11, 2021 at 1-855-859-2056, or from outside Canada and the U.S. please call 1-404-537-3406. When prompted, enter the conference ID, 4993154.




Brookfield Renewable Partners L.P.
Consolidated Statements of Financial Position
 As of
 December 31December 31
UNAUDITED
(MILLIONS)		20202019
Assets    
Cash and cash equivalents   $431    $352 
Trade receivables and other financial assets 1,661  1,541 
Equity-accounted investments 971  937 
Property, plant and equipment, at fair value 44,590  41,055 
Goodwill 970  949 
Deferred income tax and other assets 1,099  1,362 
Total Assets $49,722  $46,196 
     
Liabilities    
Corporate borrowings $2,135  $2,100 
Borrowings which have recourse only to assets they finance 15,947  15,200 
Accounts payable and other liabilities 4,358  3,561 
Deferred income tax liabilities 5,515  4,855 
     
Equity    
Non-controlling interests    
Participating non-controlling interests - in operating subsidiaries$11,100  $11,086  
General partnership interest in a holding subsidiary held by Brookfield56  68  
Participating non-controlling interests - in a holding subsidiary – Redeemable/Exchangeable units held by Brookfield2,721  3,317  
Class A shares of Brookfield Renewable Corporation2,408  —  
Preferred equity609  597  
Preferred limited partners' equity1,028  833  
Limited partners' equity3,845 21,767 4,579 20,480 
Total Liabilities and Equity $49,722  $46,196 


Brookfield Renewable Partners L.P.
Consolidated Statements of Operating Results
      
 For the three months ended December 31 For the twelve months ended December 31
UNAUDITED
(MILLIONS, EXCEPT AS NOTED)		 2020   2019    2020   2019 
Revenues$952  $965   $3,810  $3,971 
Other income77  28   128  105 
Direct operating costs(357) (326)  (1,274) (1,263)
Management service costs(84) (44)  (235) (135)
Interest expense(243) (255)  (976) (1,001)
Share of earnings from equity-accounted investments31  8   27  29 
Foreign exchange and financial instrument gain (loss)115  39   127  (36)
Depreciation(337) (347)  (1,367) (1,271)
Other(307) (169)  (432) (276)
Income tax expense            
Current(37) (20)  (66) (70)
Deferred185  31   213  27 
 148  11   147  (43)
Net income (loss)$(5) $(90)  $(45) $80 
Net income (loss) attributable to preferred equity and non-controlling interests in operating subsidiaries (115)  16    (259)  (183)
Net income (loss) attributable to Unitholders$(120) $(74)  $(304) $(103)
Basic and diluted (loss) earnings per LP unit$(0.22) $(0.15)  $(0.61) $(0.26)


Brookfield Renewable Partners L.P.
Consolidated Statements of Cash Flows
          
 For the three months ended December 31 For the twelve months ended December 31
UNAUDITED
(MILLIONS)		  2020   2019    2020   2019 
Operating activities         
Net income $(5) $(90)  $(45) $80 
Adjustments for the following non-cash items:         
Depreciation 337  347   1,367  1,271 
Unrealized foreign exchange and financial instrument loss (gain) (119) (41)  (134) 32 
Share of earnings from equity-accounted investments (31) (8)  (27) (29)
Deferred income tax expense (185) (31)  (213) (27)
Other non-cash items 248  90   388  231 
Net change in working capital and other 34  (18)  (40) (4)
  279  249   1,296  1,554 
Financing activities         
Net corporate borrowings —  (341)  266  108 
Commercial paper and corporate credit facilities, net (376) 287   (296) (422)
Non-recourse borrowings, net (204) 145   (203) 792 
Capital contributions from participating non-controlling interests - in operating subsidiaries, net 407  300   475  592 
Issuance of preferred limited partnership units —  —   195  126 
Issuance of Units, net (23) (1)  (44) (1)
Distributions paid:         
To participating non-controlling interests - in operating subsidiaries (233) (231)  (659) (844)
To preferred shareholders & limited partners' unitholders' (20) (19)  (77) (69)
To unitholders of Brookfield Renewable or BRELP (202) (171)  (769) (684)
Borrowings from related party, net 320  —   320  — 
  (331) (31)  (792) (402)
Investing activities         
Acquisitions net of cash and cash equivalents in acquired entity —  (170)  (105) (983)
Investment in property, plant and equipment (190) (310)  (447) (460)
Disposal of subsidiaries, associates and other securities, net 23  86   58  154 
Restricted cash and other 146  74   68  78 
  (21) (320)  (426) (1,211)
Foreign exchange gain (loss) on cash 23  4   13  (6)
Cash and cash equivalents         
Increase (decrease) $(50) $(98)  $91  $(65)
Net change in cash classified within assets held for sale (1) 4   (12) (5)
Balance, beginning of period 482  446   352  422 
          
Balance, end of period $431  $352   $431  $352 


PROPORTIONATE RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31

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

 (GWh)  (MILLIONS)
 Actual Generation  LTA Generation  Revenues  Adjusted EBITDA  FFO  Net Income (Loss)
 2020 2019   2020 2019    2020  2019    2020  2019    2020  2019    2020  2019 
Hydroelectric                      
North America2,514 2,858   2,912 2,912   $182 $205   $104 $130   $67 $93   $4 $3 
Brazil849 817   1,007 1,009   39 61   63 37   58 31    58 4 
Colombia966 749   977 968   57 63   38 37   23 26    21 16 
 4,329 4,424   4,896 4,889   278 329   205 204   148 150    83 23 
Wind                      
North America1,132 779   1,349 934   90 56   58 43   39 31   36 (28)
Europe338 241   357 267   41 24   51 17   45 10   13 7 
Brazil143 176   169 172   6 10   6 8   4 5   2 (2)
Asia123 107   104 104   8 7   8 6   5 2   (1)4 
 1,736 1,303   1,979 1,477   145 97   123 74   93 48   50 (19)
Solar303 139   339 139   77 26   84 29   52 16   34 (23)
Energy transition215 111   140 56   54 33   39 22   28 16   15 8 
Corporate— —   — —   — —   5 19   (120)(59)  (302)(63)
Total6,583 5,977   7,354 6,561   $554 $485   $456 $348   $201 $171   $(120)$(74)


PROPORTIONATE RESULTS FOR THE YEAR ENDED DECEMBER 31

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

 (GWh)  (MILLIONS)
 Actual Generation  LTA Generation  Revenues  Adjusted EBITDA  FFO  Net Income (Loss)
 2020 2019   2020 2019    2020  2019    2020  2019    2020  2019    2020  2019 
Hydroelectric                      
North America11,863 13,118   12,166 12,238   $824 $905   $562 $622   $420 $459   $68 $142 
Brazil3,663 3,707   4,004 3,996   175 234   177 181   152 150    95 59 
Colombia2,999 3,096   3,488 3,488   211 237   131 144   90 101    68 72 
 18,525 19,921   19,658 19,722   1,210 1,376   870 947   662 710    231 273 
Wind                      
North America3,560 2,969   4,239 3,556   263 223   196 163   123 98   (4)(87)
Europe908 904   1,002 996   105 95   96 67   79 48   (27)(11)
Brazil552 630   671 647   27 37   24 28   17 19   3 1 
Asia428 291   443 290   28 20   25 16   18 10   4 6 
 5,448 4,794   6,355 5,489   423 375   341 274   237 175   (24)(91)
Solar1,284 773   1,510 782   245 138   232 126   139 74   49 (37)
Energy transition795 550   475 196   169 132   130 87   103 70   1 42 
Corporate— —   — —   — —   41 10   (334)(268)  (561)(290)
Total26,052 26,038   27,998 26,189   $2,047 $2,021   $1,614 $1,444   $807 $761   $(304)$(103)

The following table reconciles the non-IFRS financial metrics to the most directly comparable IFRS measures. Net income attributable to Unitholders is reconciled to Funds From Operations and reconciled to Proportionate Adjusted EBITDA for the three months and twelve months ended December 31:

 For the three months ended December 31 For the twelve months ended December 31
UNAUDITED
(MILLIONS)		 2020   2019   2020   2019 
Net income attributable to:     
Limited partners' equity$(61) $(51) $(184) $(88)
General partnership interest in a holding subsidiary held by Brookfield16  14  62  50 
Participating non-controlling interests - in a holding subsidiary - Redeemable/Exchangeable units held by Brookfield(44) (37) (133) (65)
Class A shares of Brookfield Renewable Corporation(31) —  (49) — 
Net income attributable to Unitholders$(120) $(74) $(304) $(103)
Adjusted for proportionate share of:     
Depreciation216  166  756  643 
Foreign exchange and financial instruments loss (gain)2  (14) 35  30 
Deferred income tax recovery (145)  (23)  (175)  (30) 
Other248  116  495  221 
Funds From Operations$201  $171  $807  $761 
Normalized long-term average generation adjustment41  (4) 75  (36)
Normalized foreign currency adjustment23  —  42  — 
Normalized Funds From Operations$265  $167  $924  $725 
Normalized Funds From Operations Adjustments(64) 4  (117) 36 
Distributions attributable to:     
Preferred limited partners' equity14  11  54  44 
Preferred equity6  7  25  26 
Current income taxes12  5
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About BEP

Brookfield Renewable Partners L.P. is a publicly traded limited partnership that owns and operates renewable power assets, with corporate headquarters in Toronto, Ontario, Canada. It is 60% owned by Brookfield Asset Management.