Brookfield Renewable Energy Partners LP Annual Report 2021

FY2021 Annual Report · Brookfield Renewable Energy Partners LP

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Our Operations

We invest in clean energy assets directly, as well as with institutional partners, joint venture partners and
through other arrangements. Our portfolio has approximately 21,000 MW of capacity and annualized LTA
generation of approximately 61,000 GWh, in addition to an approximately 62,000 MW development pipeline,
making us one of the largest pure-play public renewable companies in the world. We leverage our extensive
operating experience to maintain and enhance the value of assets and grow cash flows on an annual basis while
cultivating positive relations with local stakeholders. The table below outlines our portfolio as at December 31,
2021:

Hydroelectric

North America
United States(2)
Canada .............................................................

.................................................

Colombia ...........................................................

Brazil .................................................................

Wind

North America
United States(3)
Canada .............................................................

.................................................

Europe ................................................................

Brazil .................................................................

Asia ....................................................................

Solar – utility(4)
Energy transition

.....................................................

Distributed generation(5)
Storage & other(6)

....................................

...............................................

River
Systems

Facilities

Capacity
(MW)

LTA(1)
(GWh)

—

141

170

229

104

5,572

5,583

6,003

3,168

1,098

4,266

2,921

946

8,133

2,529

483

3,012

970

457

972

5,411

2,633

1,447

3,425

4,872

21,049

13,503

3,656

17,159

15,726

4,924

37,809

7,738

1,437

9,175

2,187

1,950

2,264

15,576

5,658

1,912

—

1,912

60,955

Storage
Capacity
(GWh)

2,543

1,261

3,804

3,703

—

7,507

—

5,220

12,727

(1)

(2)

(3)

(4)

(5)

(6)

LTA is calculated based on our portfolio as at December 31, 2021, reflecting all facilities on a consolidated and an annualized basis from
the beginning of the year, regardless of the acquisition, disposition or commercial operation date. See Item 5.A “Part 9 – Presentation to
Stakeholders and Performance Measurement” for an explanation on our methodology in computing LTA and why we do not consider LTA
for our pumped storage and certain of our other facilities.
Includes a battery storage facility in North America (20 MW).
Includes a battery storage facility in North America (10 MW).
Includes three solar facilities (19 MW) in Asia that have been presented as Assets held for sale.
Includes nine fuel cell facilities in North America (10 MW).
Includes pumped storage in North America (633 MW) and Europe (2,088 MW), four biomass facilities in Brazil (175 MW), one
cogeneration plant in Colombia (300 MW), one cogeneration plant in North America (105 MW), and two cogeneration plants in Europe
(124 MW).

The following table presents the annualized long-term average generation of our portfolio as at December 31,

2021 on a consolidated and quarterly basis:

GENERATION (GWh)(1)

Total

Hydroelectric

North America

United States .............................

Canada .......................................

Colombia .....................................

Brazil ...........................................

Wind

North America

United States .............................

Canada .......................................

Europe .........................................

Brazil ...........................................

Asia ..............................................

3,794

841

4,635

3,593

1,215

9,443

2,032

400

2,432

662

371

530

3,995

3,918

1,064

4,982

3,936

1,228

10,146

2,116

345

2,461

480

494

595

4,030

2,525

873

3,398

3,802

1,241

8,441

1,641

273

1,914

423

606

579

3,522

3,266

878

4,144

4,395

1,240

9,779

1,949

419

2,368

622

479

560

13,503

3,656

17,159

15,726

4,924

37,809

7,738

1,437

9,175

2,187

1,950

2,264

4,029

15,576

Solar – utility(2)

..............................

1,222

1,585

1,670

1,181

5,658

Energy transition ............................

379

586

574

373

1,912

Total ...............................................
(1)

15,039

16,347

14,207

15,362

60,955

LTA is calculated based on our portfolio as at December 31, 2021, reflecting all facilities on an annualized basis from the beginning of the
year, regardless of the acquisition, disposition or commercial operation date. See Item 5.A “Part 9 – Presentation to Stakeholders and
Performance Measurement” for an explanation on our methodology in computing LTA and why we do not consider LTA for our pumped
storage and certain of our other facilities.
Includes three solar facilities (19 MW) in Asia that have been presented as Assets held for sale.

(2)

The following table presents the annualized long-term average generation of our portfolio as at December 31,

2021 on a proportionate and quarterly basis:

GENERATION (GWh)(1)

Total

Hydroelectric

North America

United States .............................

Canada .......................................

Colombia .....................................

Brazil ...........................................

Wind

North America

United States .............................

Canada .......................................

Europe .........................................

Brazil ...........................................

Asia ..............................................

Solar – utility(2)

..............................

Energy transition ............................

Total ...............................................
(1)

2,614

619

3,233

865

988

5,086

835

373

1,208

277

126

130

1,741

419

169

2,805

775

3,580

948

998

5,526

822

326

1,148

210

168

148

1,674

657

265

1,819

624

2,443

916

1,009

4,368

647

260

907

173

210

143

1,433

690

260

2,293

619

2,912

1,058

1,009

4,979

813

392

1,205

251

165

138

1,759

387

167

9,531

2,637

12,168

3,787

4,004

19,959

3,117

1,351

4,468

911

669

559

6,607

2,153

861

7,415

8,122

6,751

7,292

29,580

(2)

Statement Regarding Forward-Looking Statements and Use of Non-IFRS Measures
This Annual Report contains forward-looking information within the meaning of U.S. and Canadian securities laws. We may make such
statements in this Annual Report and in other filing with the U.S. Securities and Exchange Commission (“SEC”) and with securities regulators
in Canada – see “PART 10 – Cautionary Statements”. We make use of non-IFRS measures in this Annual Report – see “Part 10 – Cautionary
Statements”. This Annual Report, our Form 20-F and additional information filed with the SEC and with Securities regulators in Canada are
available on our website at https://bep.brookfield.com, on the SEC's website at www.sec.gov or on SEDAR's website at www.sedar.com.

Letter to Unitholders

2021 was another very strong year for our business. We achieved record FFO per unit, continuing our
track record of double-digit annual growth for over a decade. We agreed to deploy capital in-line with our
targets, growing in every major market we operate and had a record year for development. We have over
15,000 megawatts of capacity under construction or in late-stage development and now have an overall
global development pipeline of approximately 62,000 megawatts. We also maintained our strong balance
sheet and executed over $13 billion of financings, generating $1.5 billion in proceeds from upfinancings
net to Brookfield Renewable, bolstering our liquidity, enhancing our self-funding business model, and
minimizing our exposure to increasing interest rates or near-term maturities.

Looking ahead, decarbonization is now firmly established as an objective of the global economy. As one
of the pre-eminent clean energy companies with a global presence, deep operating capabilities, and
scale, we are uniquely positioned to execute on the most attractive decarbonization investment
opportunities around the world.

As we enter 2022, we continue to be one of the largest owners, operators, and builders of clean energy
globally, with best-in-class growth prospects, and inflation-linked cash flows that are supported by double-
digit years of weighted average contract life.

Given our strong financial and operating performance, robust liquidity and positive outlook for the
business, we are pleased to announce a 5% increase to our distribution to $1.28 per unit on an
annualized basis. This is the 11th consecutive year of at least 5% distribution growth since 2011 when
Brookfield Renewable was spun out.

Highlights for the year include:

• We generated FFO of $934 million or $1.45 per unit, a 10% increase from 2020 or 17% on a
normalized basis. This resulted from the stability of our high-quality inflation-linked contracted
cash flows, organic growth and commercial initiatives, and contributions from acquisitions.

• We advanced key commercial priorities, securing contracts to deliver 11,000 gigawatt hours of
clean energy annually including 6,000 gigawatt hours to corporate offtakers and completed cost
savings initiatives that have delivered $20 million of savings on an annualized basis.

• We commissioned approximately 1,000 megawatts of new capacity and progressed over 15,000

megawatts through construction and advanced-stage development.

• We agreed to invest approximately $4.3 billion (~$1.1 billion net to Brookfield Renewable) of
capital across various transactions in every major market and technology we operate in. We
further diversified our business with our first investment in offshore wind, and we expanded our
hydroelectric and battery storage portfolios.

• We maintained our robust investment grade balance sheet and ended the year with over $4
billion of available liquidity and access to significant sovereign and institutional capital that we can
invest alongside of, which provides enhanced flexibility for future growth.

Don’t Forget About (Our) Hydros

We continue to believe hydropower is the premier renewable technology due to its perpetual nature and
dispatchability. And while the asset classes of wind and solar are certainly growing faster, the benefits of
hydro are rapidly increasing in today’s market environment. As decarbonization continues to drive
additional demand for carbon-free baseload generation, our scale hydroelectric portfolio will continue to
be a meaningful differentiator for our business and positions us as a partner of choice to support
governments and companies in achieving their carbon reduction goals. Further, the dispatchable or
embedded storage benefits of hydro are becoming increasingly beneficial as more intermittent
renewables are added to the grid. Recently, we executed on several initiatives that highlight the unique
and valuable nature of our hydroelectric business.

In December, we signed a 40-year power purchase agreement at our 265-megawatt Lievre facilities in
Canada with Hydro Quebec. The contract represents an attractive premium to the prices the facility has
historically achieved, generating an additional $20 million of revenue per annum. More importantly, given
the duration of the contract and the quality of the counterparty, we concurrently raised an additional C$1.0
billion of 40-year investment grade debt on the facility at very attractive fixed rates. We will redeploy this
capital into growth, and when deployed at our target returns, it is expected to generate over $100 million
of annual net FFO for the business. Said differently, through the recontracting and upfinancing of a single
hydro asset, we can fund the majority of our targeted 2022 equity deployment at exceptionally attractive
rates. With over 5,500 gigawatt hours of generation available for recontracting over the next five years,
and an increasingly constructive pricing environment for our hydro portfolio, we have significant capacity
across our fleet to execute on similar contracts that we expect to contribute additional FFO and generate
a highly accretive funding source for our growth.

In the fourth quarter, we also completed an investment grade upfinancing at our pumped hydro storage
business in the UK. This followed a sustained period of record performance due to an increase in value of
the critical grid-stabilizing ancillary services including back-up capacity it sells to the increasingly
intermittent greener electric grid. With the proceeds from the financing, we have now returned over 100%
of the capital we invested in the business in 2017.

Finally, we continue to leverage our hydroelectric fleet to provide 24/7 green power solutions to our
customers. During the quarter, we signed a 15-year power purchase agreement with a large
manufacturer, alongside a retail supply agreement to serve the entirety of their load requirements in the
U.S. Northwest. The agreement is unique in the market and is part of a differentiated supply solution that
we tailored to our customer’s bespoke requirements. The power purchase agreement will be served by a
110-megawatt solar project in Washington State that we will construct, and when the sun does not shine,
the customer’s energy requirements can be served from our hydroelectric assets in British Columbia.

We continue to see select opportunities for growth in hydroelectric generation, especially for large and
experienced operators like us. Recently, our Colombian business acquired one of the largest privately
held generation portfolios in Colombia, comprised of seven recently built run-of-river hydropower plants
with a total capacity of nearly 150 megawatts for approximately $425 million. This is the largest follow-on
acquisition by our Colombian business since our initial investment in 2016, and we expect it to be highly
complementary and synergistic to our existing operations.

Update On Growth Initiatives

Since our last update, we agreed to invest approximately $2 billion (~$500 million net to Brookfield
Renewable) of capital across various transactions at our target returns of 12-15%.

In North America, we acquired Urban Grid, a leading utility-scale solar developer in the U.S. with a
20,000-megawatt development pipeline and a strong position in the high-value PJM market. Its pipeline

includes 2,000 megawatts of under construction or ready-to-build solar projects and an additional 4,000
megawatts of de-risked advanced stage buildout opportunities, that we expect to build out backed by
corporate contracts over the next six years with additional upside given the depth of its remaining
pipeline. The purchase price is $650 million (~$160 million net to Brookfield Renewable) with the
opportunity to invest hundreds of millions of dollars into further growth in the future. In Europe, we
acquired a German utility-scale solar developer with a 1,700-megawatt pipeline, for approximately $80
million (~$20 million net to Brookfield Renewable) and expect to develop at least 800 megawatts of new
renewable capacity over the next six years from this pipeline. These transactions provide late-stage
development projects in core markets to match with the abundance of corporate demand we are seeing
for green power and will benefit from synergies with our existing operations.

In the UK, we signed an agreement with a leading battery energy storage solutions provider for the option
to fund and own up to 800 megawatts of battery energy storage projects and almost 200 megawatts of
co-located solar projects over the next five years. Large and increasing exposure to intermittent
renewables, together with the decommissioning of thermal plants, has created significant demand for
energy storage in the UK – a dynamic we have great visibility on through First Hydro. We anticipate the
buildout of the projects will require up to approximately $260 million of equity (~$65 million net to
Brookfield Renewable). This will grow our existing 3,400-megawatt global energy storage portfolio and
give us a leading position in the capacity-constrained UK market.

We continued to execute on our growth plans for distributed generation in the fourth quarter. With leading
capabilities in North America, South America, Europe and Asia, we are uniquely positioned to be a global
solutions provider for clean onsite generation. Our DG operating assets have grown to over 1,400
megawatts and our development pipeline has increased to 6,400 megawatts. In the quarter, we expanded
our distributed generation portfolio by acquiring 780 megawatts of operating and development assets in
Europe and South America and we also signed a strategic agreement with Shoals Technologies Group, a
leading provider of solutions for storage, solar and eMobility, to pursue distributed renewable energy
generation and EV charging solutions across the U.S.

In Asia, we completed the acquisition of over 300 megawatts of wind, including a transaction alongside
Apple’s Renewable Energy Fund, increasing our footprint in the region as well as benefiting from
synergies with our existing operations.

Finally, we achieved a record level of development over 2021. We commissioned approximately 1,000
megawatts of new capacity and finished the year with almost 15,000 megawatts of construction and
advanced-stage projects. These projects are diversified across distributed- and utility-scale solar, wind,
storage, hydro and green hydrogen in 14 different countries. In total, we expect these projects to
contribute almost $180 million in annual FFO to our business once completed.

Results From Operations

In 2021, we generated FFO of $934 million or $1.45 per unit, a 10% increase from 2020 or 17% on a
normalized basis, as the business benefited from recent acquisitions, strong underlying asset availability,
and execution on organic growth initiatives.

During the year, our hydroelectric segment delivered FFO of $639 million. The portfolio continues to
exhibit strong cash flow resiliency given the increasingly diversified asset base, strong price environment
and our recent recontracting initiatives delivering strong results even when generation was below long-
term average.

Our wind and solar segments generated a combined $581 million of FFO, representing a 55% increase
over the prior year. We benefited from contributions from acquisitions, and approximately 770 megawatts
of solar and wind projects commissioned during the year.

Our energy transition segment generated $162 million of FFO. Revenues from our pumped storage
assets as well as our distributed generation portfolio continue to demonstrate strong growth as global
electricity generation decarbonizes. Over the past three years, our distributed generation portfolio grew
revenue by approximately 40% annually, bolstered by the acquisitions and strategic partnerships we have
signed.

Balance Sheet And Liquidity

Our financial position remains robust, with approximately $4.1 billion of total available liquidity at year end,
and our business model is self-funded. During the year, we executed on key financing and capital raising
initiatives aimed at maintaining robust access to capital and a prudent debt maturity ladder, as well as
maintaining a low-risk, investment-grade balance sheet.

During 2021, we continued to take advantage of the low interest environment. We executed on $13 billion
of investment grade financings, including $1.5 billion of upfinancings net to Brookfield Renewable,
securing a weighted average debt maturity of 13 years with no material maturities over the next three
years. With these financing activities completed, our business is well protected against the potential of
rising interest rates. We have very limited exposure to near-term maturities or floating interest rates
across our business.

We also continue to use opportunistic capital recycling as an important lever to drive value and fund
growth. During the year, we executed on agreements to sell over 1,600 megawatts, generating proceeds
of $1.5 billion ($540 million net to Brookfield Renewable), including an agreement in the fourth quarter to
sell a 625-megawatt solar PV portfolio in Mexico at an attractive valuation of $400 million (~$50 million net
to Brookfield Renewable).

Outlook

Our long-term goal remains, as always, to deliver 12% to 15% long-term total returns on a per-unit basis.
We plan to accomplish this through the prudent execution of our capital allocation strategy and the
application of our operating expertise to both enhance value and de-risk our business, while maintaining
an investment-grade balance sheet.

On behalf of our employees and directors, we would like to express our sincerest appreciation to our
investors and many business partners for their contributions to our success. Thank you for your continued
support. We look forward to updating you on our progress in 2022.

Sincerely,

Connor Teskey
Chief Executive Officer
February 4, 2022

Endnotes

(1) Any references to capital refer to Brookfield's cash deployed, excluding any debt financing.

(2) Available liquidity of $4.1 billion refer to "Part 5 - Liquidity and Capital Resources" in the Management Discussion and Analysis in

the 2021 Annual Report.

(3) Incremental FFO attributable to the Lievre PPA of $100 million is calculated assuming proceeds are deployed earning a 16% FFO

yield, less financing costs.

(4) 12-15% target returns are calculated as annualized cash return on investment.

OUR COMPETITIVE STRENGTHS

Brookfield Renewable Partners L.P. (“Brookfield Renewable”) is a globally diversified, multi-technology,

owner and operator of clean energy assets.

Our business model is to utilize our global reach to acquire and develop high quality clean energy assets below
intrinsic value, finance them on a long-term, low-risk and investment grade basis through a conservative financing
strategy and then optimize cash flows by applying our operating expertise to enhance value.

One of the largest, public pure play renewable businesses globally. Brookfield Renewable has a 20-year track
record as a publicly traded operator and investor in the renewable power sector. Today we have a large, multi-
technology and globally diversified portfolio of pure-play clean energy assets that are supported by approximately
3,200 experienced operators. Brookfield Renewable invests in assets directly, as well as with institutional partners,
joint venture partners and through other arrangements. Our portfolio consists of approximately 21,000 MW of
installed capacity largely across four continents, a development pipeline of approximately 62,000 MW, and
annualized long-term average generation on a proportionate basis of approximately 29,600 GWh.

The following charts illustrate revenue on a proportionate basis(1):

(1) Figures based on revenue adjusted for LTA generation for the last twelve months, proportionate to Brookfield Renewable.

Helping to accelerate the decarbonization of the electricity girds. Climate change is viewed as one of the most
significant and urgent issues facing the global economy, posing immense risks to social and economic prosperity. In
response, governments and businesses have adopted ambitious plans to support a transition to a decarbonized
economy. We believe that we are well positioned to deliver solutions in support of decarbonization and transition.
With our scale and global operating, development and investing capabilities, we are well situated to partner with
governments and businesses to help them achieve their decarbonization goals.

Stable, diversified and high-quality cash flows with attractive long-term value for LP unitholders. We intend
to maintain a stable, predictable cash flow profile primarily sourced from a diversified portfolio of low operating
cost, long-life hydroelectric, wind and solar assets that sell electricity under long-term, fixed price contracts with
creditworthy counterparties. Approximately 90% of our 2022 proportionate generation output is contracted to public
power authorities, load-serving utilities, industrial users or to Brookfield. Our PPAs have a weighted-average
remaining duration of 15 years, on a proportionate basis, providing long-term cash flow visibility.

Strong financial profile and conservative financing strategy. Brookfield Renewable maintains a robust balance
sheet, strong investment grade rating, and access to global capital markets to ensure cash flow resiliency through the
cycle. Our approach to financing is to raise the majority of our debt in the form of asset-specific, non-recourse
borrowings at our subsidiaries on an investment grade basis with no financial maintenance covenants.

Source of Energy50%22%15%13%HydroelectricWindSolar – utilityEnergy transitionRegion64%19%15%2%North AmericaSouth AmericaEuropeAsiaApproximately 90% of our debt is either investment grade rated or sized to investment grade. Our corporate debt to
total capitalization is 16% and approximately 90% of our borrowings are non-recourse. Corporate borrowings and
non-recourse borrowings each have weighted-average terms of approximately 13 years, with no material maturities
over the next five years. Approximately 90% of our financings are fixed-rate, and only 5% of our debt in North
America and Europe is exposed to changes in interest rates. Our available liquidity as at December 31, 2021 is
approximately $4.1 billion of cash and cash equivalents, investments in marketable securities and the available
portion of credit facilities.

Best-in class operating and development expertise. Brookfield Renewable has approximately 3,200
experienced operators and approximately 120 power marketing experts that are located across the globe to help
optimize the performance and maximize the returns of all our assets. Our expertise in operating, developing and
managing power generation facilities span over 100 years and include full operating, development and power
marketing capabilities.

Well positioned for cash flow growth. We are focused on delivering resilient, stable distributions plus
meaningful growth through all market cycles by driving cash flow growth from existing operations, fully funded by
internally generated cash flow, including inflation escalations in the vast majority of our contracts, margin expansion
through revenue growth and cost reduction initiatives, and building out our approximately 62,000 MW proprietary
development pipeline at premium returns. While we do not rely on acquisitions to achieve our growth targets, our
business seeks upside through engagement in mergers and acquisitions on an opportunistic basis.

Disciplined and Contrarian investment strategy. Our global scale and multi-technology capabilities allow us to
rotate capital where it is scarce in order to earn strong risk-adjusted returns. We take a disciplined approach to
allocating capital into development and acquisitions with a focus on downside protection and preservation of capital.
In the last five years, we have deployed approximately $5 billion of equity as we have invested in, acquired, or
commissioned approximately 9,400 MW across hydroelectric, wind, solar and storage facilities. Our ability to
develop and acquire assets is strengthened by our established operating and project development teams across the
globe, strategic relationship with Brookfield, and our liquidity and capitalization profile. We have in the past
pursued, and we may continue to pursue, development and acquisitions through arrangements with institutional
investors in Brookfield sponsored or co-sponsored partnerships and strategic relationship agreements with corporate
offtakers.

Attractive distribution profile. We pursue a strategy which we expect will provide for highly stable, predictable
cash flows ensuring a sustainable distribution yield. We target a long-term distribution growth rate in the range of
5% to 9% annually.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) MANAGEMENT

Introduction

At Brookfield Renewable, we have over 120 years of experience operating critical, long-duration electricity
assets. With this depth of experience comes the understanding that maintaining a social license to operate is central
to preserving capital, mitigating risk, and creating long-term value. Fundamentally, strong ESG practices drive
further economic value to our business and inherently create higher barriers to entry. Most importantly, operating a
business with strong ESG principles is just the right thing to do. As such, we integrate relevant ESG considerations
into our investing and operating strategies. We believe this philosophy creates an inherent alignment of interest
between us and our partners, investors and stakeholders.

As one of the largest owners, operators and investors in clean energy assets globally, we are helping to
accelerate the decarbonization of electricity grids. Our carbon footprint is one of the lowest in the sector, and our
annual generation of 61 terawatt-hours avoids approximately 29 million tonnes of carbon dioxide emissions
annually. We offer public investors access to one of the largest public, pure-play clean energy companies globally.
As one of the largest issuers of green bonds globally, we offer debt investors the ability to invest in our renewable
power portfolio or in assets directly. Finally, we offer customers the ability to procure renewable generation across
multiple technologies.

We are key partners to all our stakeholders, and as operators of critical infrastructure, maintaining socially
responsible practices - from health and safety to community relations to environmental protection - is a critical
component of operations. We have a health, safety and environmental culture including a focus on zero high-risk
incidents, being events that could have resulted in serious injuries to people or severe impacts to our operations or
the environment. We actively engage with community groups that might be affected by our activities to integrate
their interests, safety and well-being into our decision-making, and we use our resources to contribute directly to
projects, non-profit organizations, and recreational and educational programs.

We operate with the highest ethical standards, conducting our business with integrity. We aim for best practice,
going beyond compliance. We are also strengthening sour practices to ensure that our ESG strategy and principles
are integrated into the strategic planning of each business, and in our regular reporting on ESG to our Board of
Directors.

As our business grows, our ESG strategy will continue to evolve with it, and we remain focused on identifying
and implementing new processes to continue to identify and track areas for potential improvement. Furthermore, we
recognize that it is important to effectively communicate our ESG initiatives to our investors, because it increasingly
influences their decisions. As such, our annual ESG report is available on our website, that, among other things,
illustrates the on-the-ground work we do to maintain our social license to operate.

Our ESG Principles

Our ESG Principles are summarized in the following table:

Mitigate
operations on the environment

impact of our

the

Strive to minimize the environmental impact of our operations and

improve our efficient use of resources over time.

Support the goal of net zero greenhouse gas (GHG) emissions by 2050 or

sooner.

Ensure the well-being and safety of
employees

Foster a positive work environment based on respect for human rights,
valuing diversity, and zero tolerance for workplace discrimination, violence
or harassment.

Operate with leading health and safety practices to support the goal of

zero high-risk safety incidents.

Uphold
practices

strong

governance

Operate to the highest ethical standards by conducting business activities

in accordance with our Code of Business Conduct and Ethics.

Maintain strong stakeholder relationships through transparency and

active engagement.

Be good corporate citizens

Ensure the interests, safety and well-being of the communities in which

we operate are integrated into our business decisions.

Support philanthropy and volunteerism by our employees.

ESG in our Investment Process

To formally incorporate ESG diligence into our investment process, we undertake the following steps for each

potential investment:

1. Due Diligence

a. Utilize internal ESG guidelines to define project scope and conduct initial screen of ESG issues
b.
c. Ensure compliance with ESG standards using internal experts or external consultants via a review

Identify the material ESG factors relevant to the potential investment's industry

of available information and documents and by site visits

d. Determine the impact of material ESG factors on underwriting assumptions and provide required

disclosures in the investment committee presentation once diligence is finalized

2. Investment Decision

a. Develop a post-acquisition ESG action plan
b.

Investment Committee makes investment decision, taking into account the impacts of identified
ESG factors
3. Integration & Ongoing Monitoring

a. Prioritize and revisit ESG factors on an ongoing basis
b. Work with company management on priorities for ESG-related performance improvements
c. Track relevant ESG KPIs
d. Continually look for ways to create value by improving management of ESG factors

Our ESG Priorities

Environmental: Providing Sustainable Solutions

We understand that climate change is one of the most significant and urgent issues facing the global economy,
posing serious risks to communities, businesses and ecosystems around the world. Our strategy is focused on
accelerating the transition to net zero by adding renewable growth, reducing emissions across our portfolio and
managing the risks of climate change in our business. This includes the following:

1. Offer solutions to support the decarbonization of the world: The global economy is transforming from
reliance on fossil fuel-related energy sources to a low-carbon economy. At Brookfield Renewable, we
actively work to continue to position the business to be a meaningful participant in the decarbonization of
the globe by growing our clean energy business.

2. Measure, reduce, and avoid greenhouse gas (“GHG”) emissions: We measure our GHG emissions with
a focus on reducing our emissions on a pathway to net zero. We also track our avoided emissions, meaning
GHG emissions that would have been produced had the electricity we generate been sourced from non-
renewable fossil fuels. Our portfolio's annual generation together with our development pipeline (once
completed) will avoid approximately 77 million tonnes of carbon dioxide emissions annually, which is
equivalent to:

16 million vehicles removed from the road
26 million tons of waste recycled instead of landfilled
14 million homes’ electricity use for one year

a.
b.
c.
d. Over 1 billion trees planted
e. Nearly 3 times London, England's emissions in one year

3. Conduct climate change risk assessments: As a global clean energy business, we are aware that our
assets could be adversely impacted by climate change. We therefore actively assess our physical and
transition risks and are developing plans where necessary to mitigate these risks.

4. Support the market for green securities: We have been significantly involved in green finance having to
date raised approximately $10 billion in corporate and project-level green securities and facilities. Our
project-level green bonds have all received E-1 Green Evaluation scores from S&P, the highest on its scale,
citing Brookfield Renewable’s environmental stewardship, commitment to renewable power and use of
proceeds towards renewable power generation.

Social: Building Trust

Proactively engaging with communities is integral to our operations as it creates an alignment of values and
earns us our social license to operate. We cultivate local relationships by directly engaging with communities, often
through in-person meetings with landowners, business owners, recreational organizations and NGOs. We also
contribute to community projects, non-profit organizations, local tourism, and recreational and educational
programs. In 2021, we partnered with a variety of local organizations, with a focus on key areas such as support for
economic development, education and research, health, well-being, quality of life, environment impact mitigation,
and project conversation. Further, during the year, we contributed almost $3 million in charitable donations across
over 250 charitable organizations.

As owners and operators of critical electricity infrastructure assets, managing the health and safety of our
employees and all the people who access our facilities is our top priority. We take a proactive approach that goes
well beyond regulatory requirements to protect our stakeholders. We have a comprehensive health and safety
management system including a training program which all employees and contractors are required to participate in.
We also have a zero high-risk incidents culture, which is means our policies, training and investigations are focused
on managing potential high-risk incidents.

Our talent management approaches focus on creating opportunities and supporting our employees in unlocking
their full potential. We focus on diversity and inclusion from the recruitment stage, through leadership training
programs, our comprehensive compensation and benefits packages, and our policies and procedures. We leverage
the benefits of diversity by upholding an inclusive environment that encourages contributions from all individuals
and provides equal development and advancement opportunities. We also provide opportunities and promote success
for our female employees. At Brookfield Renewable, 50% of our executive management team and 25% of our Board
of Director's independent members are women.

Governance: Building a Business Responsibly

We operate with the highest ethical standards, conducting our activities with honesty and integrity and in
compliance with laws and regulations. We work to maintain sound governance practices to promote the
accountability of our company and ongoing investor confidence. This involves a continual review of how evolving
legislation, guidelines and best practices should be reflected in our approach. Our governance policy framework for

operating businesses in which we have a controlling interest includes several noteworthy components, and we ensure
that our employees adhere to these high standards:

Code of Business Conduct and Ethics
Each operating business is required to adopt our Code of Business Conduct and Ethics or ensure that existing
practices are consistent with it and equal in substance. Each of our employees is also required to certify compliance
with the Code of Business Conduct and Ethics annually.

Anti-bribery and corruption (ABC) policy
We have a zero-tolerance approach to bribery, including facilitation payments, and we require that our operating
businesses adopt equally stringent ABC policies. Each employee is required to complete annual ABC training.

Ethics hotline
We require every operating business to have a whistle-blower hotline in operation. We also take measures to ensure
that every employee is aware of the existence and purpose of the hotline.

Conflicts of interest policy
As part of our obligation to act in the best interest of our investors, we adhere to a rigorous conflict of interest
policy. Each potential investment is screened for possible conflicts and, if they are identified, they are elevated for
review to the Brookfield Conflicts Committee, which is overseen by several senior executives and the Chief
Compliance Officer of Brookfield, prior to execution of the transaction. In certain circumstances, the independent
Directors of the relevant Brookfield Renewable Board are asked to review and consider for approval matters
involving conflicts of interest.

Personal trading policy
We maintain a stringent personal trading policy. Employees who are actively involved in recommending or making
investment decisions on an ongoing basis, as well as their family members living in the same household, are
restricted from being involved in trading with any non-Brookfield Renewable equity securities.

We integrate ESG into our decision-making, processes and management systems. From our Board of Directors to
the CEOs of our operating businesses and the executives on the ESG Steering Committee, there is full engagement
of our leadership in the implementation

Management’s Discussion and Analysis
For the year ended December 31, 2021

This Management’s Discussion and Analysis for the year ended December 31, 2021 is provided as of February 28, 2022. Unless the context
indicates or requires otherwise, the terms “Brookfield Renewable”, “we”, “us”, and “our company” mean Brookfield Renewable Partners L.P.
and its controlled entities. The ultimate parent of Brookfield Renewable is Brookfield Asset Management Inc. (“Brookfield Asset Management”).
Brookfield Asset Management and its subsidiaries, other than Brookfield Renewable, are also individually and collectively referred to as
“Brookfield” in this Management’s Discussion and Analysis.

Brookfield Renewable’s consolidated equity interests include the non-voting publicly traded limited partnership units (“LP units”) held by public
unitholders and Brookfield, class A exchangeable subordinate voting shares (“exchangeable shares”) of Brookfield Renewable Corporation
(“BEPC”) held by public shareholders and Brookfield, redeemable/exchangeable partnership units (“Redeemable/Exchangeable partnership
units”) in Brookfield Renewable Energy L.P. (“BRELP”), a holding subsidiary of Brookfield Renewable, held by Brookfield, and general
partnership interest (“GP interest”) in BRELP held by Brookfield. Holders of the LP units, Redeemable/Exchangeable partnership units, GP
interest, and exchangeable shares will be collectively referred to throughout as “Unitholders” unless the context indicates or requires otherwise.
LP units, Redeemable/Exchangeable partnership units, GP interest, and BEPC exchangeable shares will be collectively referred to throughout as
"Units", or as "per Unit", unless the context indicates or requires otherwise. The LP units, exchangeable shares and Redeemable/Exchangeable
partnership units have the same economic attributes in all respects. See – “Part 9 – Presentation to Stakeholders and Performance Measurement”.

Brookfield Renewable’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by
the International Accounting Standards Board (“IASB”), which require estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities as at the date of the financial statements and the amounts of revenue and expense during the
reporting periods.

Certain comparative figures have been reclassified to conform to the current year’s presentation.

References to $, C$, €, R$, £, and COP are to United States (“U.S.”) dollars, Canadian dollars, Euros, Brazilian reais, British pounds sterling and
Colombian pesos, respectively. Unless otherwise indicated, all dollar amounts are expressed in U.S. dollars.

For a description on our operational and segmented information and for the non-IFRS financial measures we use to explain our financial results
see “Part 9 – Presentation to Stakeholders and Performance Measurement”. For a reconciliation of the non-IFRS financial measures to the most
comparable IFRS financial measures, see “Part 4 – Financial Performance Review on Proportionate Information – Reconciliation of non-IFRS
measures”. This Management’s Discussion and Analysis contains forward-looking information within the meaning of U.S. and Canadian
securities laws. Refer to – “Part 10 – Cautionary Statements” for cautionary statements regarding forward-looking statements and the use of non-
IFRS measures. Our Annual Report and additional information filed with the Securities Exchange Commission (“SEC”) and with securities
regulators in Canada are available on our website (https://bep.brookfield.com), on the SEC’s website (www.sec.gov), or on SEDAR
(www.sedar.com).

Organization of the Management’s Discussion and Analysis

PART 1 – 2021 Highlights

PART 2 – Financial Performance Review on
Consolidated Information

PART 3 – Additional Consolidated Financial
Information
Summary consolidated statements of financial
position
Related party transactions
Equity

PART 4 – Financial Performance Review on
Proportionate Information
Proportionate results for the years ended December
31, 2021 and 2020
Proportionate results for the years ended December
31, 2020 and 2019
Reconciliation of non-IFRS measures
Contract profile

PART 5 – Liquidity and Capital Resources
Capitalization
Available liquidity
Borrowings

8
8
12

19
24
28

30
30
31
31

PART 5 – Liquidity and Capital Resources
(continued)
Capital expenditures
Consolidated statements of cash flows
Shares, notes and units outstanding
Dividends and distributions
Contractual obligations
Supplemental guarantor financial information
Off-statement of financial position arrangements

PART 6 – Selected Annual and Quarterly
Information

Summary of historical quarterly results

Proportionate results for the fourth quarter

PART 7 – Business Risks and Risk Management

Risk management and financial instruments

PART 8 – Critical Estimates and Accounting
Policies

PART 9 – Presentation to Stakeholders and
Performance Measurement

30
32
33
35
36
36
36
37

PART 1 – 2021 HIGHLIGHTS

YEAR ENDED DECEMBER 31
(MILLIONS, EXCEPT AS NOTED)

Selected financial information

2021

2020

Revenues .................................................................................................................................. $

4,096 $

Net loss attributable to Unitholders .........................................................................................
Basic and diluted net income (loss) per LP unit(1)
Proportionate Adjusted EBITDA(2)
Funds From Operations(2)
Funds From Operations per Unit(2)(3)
Distribution per LP unit ...........................................................................................................

........................................................................................................

..........................................................................................

.......................................................................................

...................................................................

(368)

(0.69)

1,876

934

1.45

1.22

3,810

(304)

(0.61)

1,614

807

1.32

1.16

Operational information

Capacity (MW) ........................................................................................................................

21,049

18,844

Total generation (GWh)

Long-term average generation ..............................................................................................

Actual generation ..................................................................................................................

Proportionate generation (GWh)

Long-term average generation ..............................................................................................

Actual generation ..................................................................................................................

Average revenue ($ per MWh) .............................................................................................

58,913

56,629

29,852

27,150

57,457

52,782

27,998

26,052

(1)

(2)

(3)

Average LP units for the year ended December 31, 2021 were 274.9 million (2020: 271.1 million).
Non-IFRS measure. For reconciliations to the most directly comparable IFRS measure, see “Cautionary Statement Regarding Use of Non-
IFRS Measures” and “PART 4 – Financial Performance Review on Proportionate Information – Reconciliation of Non-IFRS Measures”.
Average Units outstanding for the year ended December 31, 2021 were 645.6 million (2020: 609.5 million), being inclusive of our LP units,
Redeemable/Exchangeable partnership units, BEPC exchangeable shares and GP interest.

AS AT DECEMBER 31
(MILLIONS, EXCEPT AS NOTED)

Liquidity and Capital Resources

December 31, 2021

December 31, 2020

Available liquidity ..................................................................................................

Debt to capitalization – Corporate .........................................................................

Debt to capitalization – Consolidated ....................................................................

Non-recourse borrowings – Consolidated .............................................................
Fixed rate debt exposure on a proportionate basis(1)
Corporate borrowings

..............................................

Average debt term to maturity ............................................................................

Average interest rate ............................................................................................

Non-recourse borrowings on a proportionate basis

Average debt term to maturity ............................................................................

Average interest rate ............................................................................................

4,069
8 %

33 %

90 %

98 %

13 years

3.9 %

13 years

4.2 %

3,270

6 %
27 %
88 %

96 %

14 years

3.9 %

11 years

4.0 %

(1)

Total floating rate exposure is 7% (2020: 9%) of which 5% (2020: 5%) is related to floating rate debt exposure of certain foreign regions
outside of North America and Europe due to the high cost of hedging associated with those regions.

Page 3

Operations

Funds From Operations increased to $934 million or $1.45 on a per Unit basis, representing a 16% increase

from the prior year driven by:

•

Contributions from growth, including 952 MW of development assets reaching commercial operation and
the acquisitions of both an 845 MW wind farm in Oregon and a 360 MW distributed generation portfolio in
the United States;

Higher realized prices across most markets on the back of inflation escalation, commercial contracting
initiatives, and higher global power prices;

Partly offset by unfavorable same store generation

After deducting non-cash depreciation, foreign exchange and derivative gains and other, net loss attributable to
Unitholders was $368 million or $0.69 per LP unit, compared to net loss attributable to Unitholders of $304 million
or $0.61 per LP unit in the prior year.

Refer to Part 2 - Financial Performance Review on Consolidated Information in this Management’s Discussion

and Analysis for details on consolidated statements of income (loss).

We continued to focus on extending our contract profile as we completed the following:
•

Secured contracts to deliver 11,000 GWh of clean energy annually including 6,000 GWh to corporate
offtakers;

•

Signed a 40-year inflation-linked power purchase agreement at a Canadian hydroelectric facility with
Hydro Quebec

Liquidity and Capital Resources

Our access to diverse pools of capital continues to be strong and backed by a resilient balance sheet

•

Liquidity position remains robust, with $4.1 billion of total available liquidity and no meaningful near-term
maturities

Capitalized on both the low interest rate environment and long-term nature of our assets, and sourced
liquidity from diverse funding levers:

◦

Secured approximately $7.1 billion of investment grade non-recourse financings across our
diverse portfolio during the year, including a C$1.1billion strategic upfinancing of a Canadian
hydroelectric facility concurrent with the signing of a power purchase agreement with Hydro
Quebec

Issued two series of our fixed-rate green perpetual subordinated notes for total proceeds of $610
million during the year

Signed or closed on several capital recycling initiatives that are expected to generate over $1.5
billion of proceeds ($535 million net to Brookfield Renewable) including the sale of mature wind
portfolios in Ireland and in the U.S., returning in aggregate, approximately two times our invested
capital

Growth and Development

Together with our institutional partners, we agreed to invest over $4.3 billion ($1.1 million net to Brookfield

Renewable) of capital across various transactions, including:

•

A distributed generation business comprised of 360 MW of operating assets across nearly 600 sites and
over 700 MW of development assets for $684 million ($171 million net to Brookfield Renewable), growing
our leading distributed generation business in the United States;

An 845 MW operating and fully contracted wind portfolio in Oregon, one of the largest onshore wind
projects in North America with one of the largest repowering opportunities in the world, which we are
executing on, for $744 million ($186 million net to Brookfield Renewable);

Page 4

•

Through Isagen, one of the largest privately held generation portfolios in Colombia, comprised of seven
recently built run-of-river hydropower plants, with a total capacity of approximately 150 MW for
approximately $425 million;

Subsequent to year-end, a leading utility-scale solar developer in the United States with a 20,000 MW
development pipeline for $650 million (approximately $160 million net to Brookfield Renewable).
Through this platform, we expect to build out approximately 6,000 MW of new renewable capacity backed
by corporate contracts over the next six years;

A German utility-scale solar developer with 1,700 MW development pipeline in Germany for
approximately $80 million (approximately $20 million net to Brookfield Renewable) and expect to develop
800 MW of new renewable capacity over the next six years from this pipeline;

An agreement with a leading battery energy storage solutions provider in the United Kingdom for the
option to fund and own up to 800 MW of battery energy storage and almost 200 MW of co-located solar
projects over the next five years; and

Approximately 780 MW of distributed generation assets in Europe and South America for approximately
$45 million ($9 million net to Brookfield Renewable)

During 2021, we continued to progress our development pipeline

•

Commissioned 952 MW of development projects, including a 357 MW solar facility in Brazil and
continued to advance 15,066 MW of hydroelectric, wind, pumped storage, solar PV and distributed
generation development projects, including the repowering of an 845 MW wind farm in Oregon, that are
expected to generate annualized Funds From Operations net to Brookfield Renewable of $178 million in
aggregate.

Page 5

PART 2 – FINANCIAL PERFORMANCE REVIEW ON
CONSOLIDATED INFORMATION

The following table reflects key financial data for the year ended December 31:

(MILLIONS, EXCEPT AS NOTED)

2021

2020

Revenues .................................................................................................................... $

4,096 $

3,810 $

Direct operating costs .................................................................................................

(1,365)

(1,274)

Management service costs ..........................................................................................

Interest expense ..........................................................................................................

(288)

(981)

(235)

(976)

Depreciation ...............................................................................................................

(1,501)

(1,367)

Income tax recovery (expense) ..................................................................................

(14)

147

Net (loss) income .......................................................................................................

C$ ...............................................................................................................................
€ ..................................................................................................................................
R$ ...............................................................................................................................
COP ............................................................................................................................

Current Year Variance Analysis (2021 vs 2020)

(45)

(66)
Average FX rates to USD
1.25
0.85
5.40
3,742

1.34
0.88
5.16
3,693

2019

3,971

(1,263)

(135)

(1,001)

(1,271)

(43)

1.33
0.89
3.95
3,280

Revenues totaling $4,096 million represents an increase of $286 million over same period in the prior year due
to the growth of our business. Recently acquired and commissioned facilities contributed 2,455 GWh of generation
and $239 million of revenues, which was partially offset by recently completed asset sales that reduced generation
by 786 GWh and revenues by $88 million. On a same store, local currency basis, revenues increased by
$113 million as the benefit from higher average realized revenue per MWh primarily due to inflation indexation,
recontracting initiatives, and higher global merchant power, as well as higher market prices realized on generation
from our wind assets in Texas during the winter storm in the first quarter of 2021, which contributed $52 million,
was partly offset by lower generation, primarily at our hydroelectric facilities in North America and Brazil.

The weakening of the U.S. dollar relative to the same period in the prior year, primarily against the Canadian
dollar and Euros, increased revenues by approximately $22 million, which was partially offset by a $11 million
unfavorable foreign exchange impact on our operating and interest expenses.

Direct operating costs totaling $1,285 million, excluding the impact of the Texas winter storm, represents an
increase of $11 million over the same period in the prior year as the benefit from cost saving initiatives across our
business and recently completed asset sales were more than offset by additional costs from our recently acquired and
commissioned facilities and the impact of foreign exchange movements noted above.

Direct operating costs relating to the Texas winter storm event totaled $80 million which reflect the cost of
acquiring energy to cover our contractual obligations for our wind assets that were not generating during the period
due to freezing conditions, net of hedging initiatives. The total consolidated impact of the Texas winter storm, net of
the $52 million of revenues noted above, amounted to a $28 million loss, of which Brookfield Renewable’s share
was not material.

Management service costs totaling $288 million represents an increase of $53 million over the same period in

the prior year due to the growth of our business.

Interest expense totaling $981 million represents an increase of $5 million over the same period in the prior year
due to the growth of our business and the foreign exchange movements noted above, partly offset by the benefit of
recent refinancing activities that reduced our average cost of borrowing.

Depreciation expense totaling $1,501 million represents an increase of $134 million over the same period in the

prior year due to the growth of our business and the impact of foreign exchange movements.

Page 6

Income tax expense totaling $14 million represents an increase of $161 million over the same period in the prior
year due to a new tax legislation that was passed during the period that impacted deferred taxes at our Colombian
business.

Net loss totaling $66 million represents an increase of $21 million over the same period in the prior year due to

the above noted items.

Prior Year Variance Analysis (2020 vs 2019)

Revenues totaling $3,810 million represents a decrease of $161 million over the same period in the prior year.
Growth from acquired facilities contributed 1,303 GWh of generation and $213 million of revenues, which was
partially offset by recently completed asset sales that reduced generation by 534 GWh and revenues by $79 million.
On a same store, local currency basis, revenues decreased $107 million primarily due to lower generation relative to
long-term average and the prior year when we experienced above-average hydrology conditions, which was partly
offset by higher average pricing which benefited from inflation indexation of our contracts and re-contracting
initiatives.

The strengthening of the U.S. dollar relative to the same prior period in the prior year, primarily against the
Brazilian real and Colombian peso, reduced revenues by approximately $188 million, which was partially offset by a
$139 million favorable foreign exchange impact on our operating, interest and depreciation expenses.

Direct operating costs totaling $1,274 million represents an increase of $11 million over the same period in the
prior year due to cost reduction initiatives across our business and the impact of foreign exchange movements noted
above being more than offset by higher power purchases, which are passed through to our customers, and additional
costs due to growth from our recently acquired and commissioned facilities.

Management service costs totaling $235 million represents an increase of $100 million over the same period in

the prior year due to the growth of our business.

Interest expense totaling $976 million represents a decrease of $25 million over the same period in the prior
year due to the benefit of recent refinancing activities that reduced our average cost of borrowing and the foreign
exchange movements noted above.

Net loss totaling $45 million represents a decrease of $125 million over the same period in the prior year due to

the above noted items.

Page 7

PART 3 – ADDITIONAL CONSOLIDATED FINANCIAL
INFORMATION

SUMMARY CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

The following table provides a summary of the key line items on the audited annual consolidated statements of

financial position as at December 31:

(MILLIONS)

2021

Assets held for sale ......................................................................................................................... $

58 $

Current assets .................................................................................................................................

Equity-accounted investments ........................................................................................................

Property, plant and equipment, at fair value ..................................................................................

Total assets .....................................................................................................................................

Liabilities directly associated with assets held for sale ..................................................................

Corporate borrowings .....................................................................................................................

Non-recourse borrowings ...............................................................................................................

Deferred income tax liabilities .......................................................................................................

Total liabilities and equity ..............................................................................................................

2,861

1,107

49,432

55,867

2,149

19,380

6,215

55,867

FX rates to USD

C$ ...................................................................................................................................................

€ ......................................................................................................................................................

R$ ...................................................................................................................................................

COP ................................................................................................................................................

1.26

0.88

5.58

3,981

2020

1,742

971

44,590

49,722

2,135

15,947

5,515

49,722

1.27

0.82

5.20

3,432

Property, plant and equipment

Property, plant and equipment totaled $49.4 billion as at December 31, 2021 compared to $44.6 billion as at
December 31, 2020. The $4.8 billion increase was primarily attributable to a $4.5 billion annual revaluation which
recognized the benefit of higher power prices across most markets and the expected growth in demand for renewable
power. Our acquisitions during the year, including an 845 MW wind portfolio, a distributed generation platform
comprised of 360 MW of operating and under construction assets and over 700 MW of development assets in the
United States, and our continued investments in the development of power generating assets and our sustaining
capital expenditure, all increased property, plant and equipment by $4.6 billion. The increase was partially offset by
the sale of a 391 MW wind portfolio in the United States, a 656 MW operating and development wind portfolio in
Ireland and a 271 MW development wind portfolio in Scotland, which decreased property, plant and equipment by
$1.3 billion, and depreciation expense associated with property, plant and equipment of $1.5 billion for the year. The
devaluation of the Brazilian real and the Colombian peso against the U.S. dollar, also resulted in a net decrease to
property, plant and equipment of $1.5 billion.

See Note 12 – Property, plant and equipment, at fair value in our audited annual consolidated financial

statements for information on the revaluation assumptions used and sensitivity analysis.

RELATED PARTY TRANSACTIONS

Brookfield Renewable’s related party transactions are in the normal course of business and are recorded at the
exchange amount. Brookfield Renewable’s related party transactions are primarily with Brookfield Asset
Management.

Brookfield Renewable sells electricity to Brookfield through a single long-term PPA across Brookfield

Renewable’s New York hydroelectric facilities.

Page 8

In 2011, on formation of Brookfield Renewable, Brookfield transferred certain development projects to
Brookfield Renewable for no upfront consideration but is entitled to receive variable consideration on commercial
operation or sale of these projects.

Brookfield Renewable has entered into voting agreements with Brookfield, whereby Brookfield Renewable
gained control of the entities that own certain renewable power generating facilities. Brookfield Renewable has also
entered into a voting agreement with its consortium partners in respect of the Colombian business. The voting
agreements provide Brookfield Renewable the authority to direct the election of the Boards of Directors of the
relevant entities, among other things, and therefore provide Brookfield Renewable with control. Accordingly,
Brookfield Renewable consolidates the accounts of these entities.

Brookfield Renewable participates with institutional investors in Brookfield Americas Infrastructure Fund,
Brookfield Infrastructure Fund II, Brookfield Infrastructure Fund III, Brookfield Infrastructure Fund IV, Brookfield
Global Transition Fund and Brookfield Infrastructure Debt Fund (“Private Funds”), each of which is a Brookfield
sponsored fund, and in connection therewith, Brookfield Renewable, together with our institutional investors, has
access to short-term financing using the Private Funds’ credit facilities.

From time to time, in order to facilitate investment activities in a timely and efficient manner, Brookfield
Renewable will fund deposits or incur other costs and expenses (including by use of loan facilities to consummate,
support, guarantee or issue letters of credit) in respect of an investment that ultimately will be shared with or made
entirely by Brookfield sponsored vehicles, consortiums and/or partnerships (including private funds, joint ventures
and similar arrangements), Brookfield Renewable, or by co-investors.

From time to time, Brookfield Reinsurance Partners L.P., an associate of Brookfield, and its associates may take
part in financings of Brookfield Renewable, including alongside other market participants. Such financings are non-
recourse to Brookfield Renewable and are recorded within Non-recourse borrowings on the consolidated statements
of financial position.

Brookfield Asset Management has provided a $400 million committed unsecured revolving credit facility
maturing in December 2022 and the interest rate applicable on the borrowed amounts is LIBOR plus up to 1.8%. As
at December 31, 2021, there were no draws on the committed unsecured revolving credit facility provided by
Brookfield Asset Management. Brookfield Asset Management had also placed funds on deposit with Brookfield
Renewable in the amounts of nil as at December 2021 (2020:$325 million). The interest expense on the deposit and
draws from the credit facility for the year ended December 31, 2021 was $2 million (2020: $1 million).

In addition to these agreements, Brookfield Renewable and Brookfield have executed other agreements that are
described in Note 29 – Related party transactions in our audited annual consolidated financial statements. For a
description of certain of our agreements with Brookfield, please see Item 7.B “Related Party Transactions” in our
Form 20-F for the annual period ending December 31, 2021.

Page 9

The following table reflects the related party agreements and transactions in the audited annual consolidated

statements of income (loss), for the year ended December 31:

(MILLIONS)

Revenues

2021

2020

2019

Power purchase and revenue agreements ................................................................ $

103 $

286 $

Wind levelization agreement ...................................................................................

—

103 $

286 $

Direct operating costs

Energy purchases ..................................................................................................... $

— $

Energy marketing fee and other services ................................................................
Insurance services(1)

................................................................................................

(8)

(26)

(4)

(24)

(34) $

(28) $

Interest expense ..........................................................................................................

Borrowings .............................................................................................................. $

(2) $

Contract balance accretion .......................................................................................

(21)

(13)

(23) $

(15) $

558

559

(22)

(20)

(23)

(65)

(7)

(8)

(15)

(135)

Management service costs .......................................................................................... $
(1)

(288) $

(235) $

Prior to November 2021, insurance services were paid to external insurance service providers through subsidiaries of Brookfield Asset
Management. The fees paid to the subsidiaries of Brookfield Asset Management in 2021 were nil (2020 was nil and 2019: less than $1
million). As of November 2021, Brookfield, through a regulated subsidiary, began providing insurance coverage through third-party
commercial insurers for the benefits of certain entities in North America. The premiums charged pursuant to these arrangements are at or
lower than market rates, and of the 2021 term premiums to be remitted to Brookfield, $1 million was recorded in the Consolidated
statements of income in 2021.

Page 10

The following table reflects the impact of the related party agreements and transactions on the consolidated

balance sheets as at December 31:

(MILLIONS)

Current assets

Trade receivables and other current assets

Contract asset

Due from related parties

Amounts due from

Non-current assets

Other long-term assets

Contract asset

Related party

2021

2020

Brookfield ..................................................

57 $

Brookfield ..................................................

Equity-accounted investments and other ...

Brookfield ..................................................

Amounts due from

Equity-accounted investments and other ...

Current liabilities

Due to related parties

Amount due to

Brookfield ..................................................

Equity-accounted investments and other ...

Accrued distributions payable on LP units, BEPC

exchangeable shares and Redeemable/
Exchangeable partnership units and GP interest Brookfield ..................................................

Non-recourse borrowings

Other long-term liabilities

Amounts due to

Contract liability

Brookfield Reinsurance and associates ......

Brookfield

Equity-accounted investments, Brookfield
Reinsurance and associates and other .....

Brookfield ..................................................

388

142

119

164

635

669 $

409

455

506

—

602

613

Page 11

EQUITY

General partnership interest in a holding subsidiary held by Brookfield

Brookfield, as the owner of the 1% GP interest in BRELP, is entitled to regular distributions plus an incentive
distribution based on the amount by which quarterly LP unit distributions exceed specified target levels. As at
December 31, 2021, to the extent that LP unit distributions exceed $0.200 per LP unit per quarter, the incentive
distribution is 15% of distributions above this threshold. To the extent that quarterly LP unit distributions exceed
$0.2253 per LP unit per quarter, the incentive distribution is equal to 25% of distributions above this threshold.
Incentive distributions of $80 million were declared during the year ended December 31, 2021 (2020: $65 million).

Preferred equity

The Class A Preference Shares of Brookfield Renewable Power Preferred Equity Inc. (“BRP Equity”) does not
have a fixed maturity date and is not redeemable at the option of the holders. As at December 31, 2021, none of the
issued Class A, Series 5 and 6 Preference Shares have been redeemed by BRP Equity.

In July 2021, the Toronto Stock Exchange accepted notice of BRP Equity's intention to renew the normal course
issuer bid in connection with its outstanding Class A Preference Shares for another year to July 8, 2021, or earlier
should the repurchases be completed prior to such date. Under this normal course issuer bid, Brookfield Renewable
is permitted to repurchase up to 10% of the total public float for each respective series of the Class A Preference
Shares. Shareholders may receive a copy of the notice, free of charge, by contacting Brookfield Renewable. There
were no repurchases of Class A Preference Shares during 2021 in connection with the normal course issuer bid.

Perpetual subordinated notes

In April 2021, Brookfield BRP Holdings (Canada) Inc., a wholly-owned subsidiary of Brookfield Renewable,

issued $350 million of perpetual subordinated notes at a fixed rate of 4.625%.

In December 2021, Brookfield BRP Holdings (Canada) Inc., a wholly-owned subsidiary of Brookfield

Renewable, issued $260 million of perpetual subordinated notes at a fixed rate of 4.875%.

The perpetual subordinated notes are classified as a separate class of non-controlling interest on Brookfield
Renewable's consolidated statements of financial position. Brookfield Renewable incurred interest of $12 million on
the perpetual subordinated notes during the year ended December 31, 2021 (2020: nil). Interest incurred on the
perpetual subordinated notes are presented as distributions in the consolidated statements of changes in equity. The
carrying value of the perpetual subordinated notes, net of transaction costs, is $592 million as at December 31, 2021.

Preferred limited partners’ equity

The Class A Preferred Limited Partnership Units (“Preferred units”) of Brookfield Renewable do not have a
fixed maturity date and are not redeemable at the option of the holders. As at December 31, 2021, none of the Class
A, Series 5 Preferred Limited Partnership Units have been redeemed by Brookfield Renewable.

In the third quarter of 2021, Brookfield Renewable redeemed all of the outstanding Series 9 Preferred Limited

Partnership Units for C$200 million or C$25 per Series 9 Preferred Limited Partnership Unit.

In July 2021, the Toronto Stock Exchange accepted notice of Brookfield Renewable's intention to renew the
normal course issuer bid in connection with the outstanding Preferred units for another year to July 8, 2022, or
earlier should the repurchases be completed prior to such date. Under this normal course issuer bid, Brookfield
Renewable is permitted to repurchase up to 10% of the total public float for each respective series of its Preferred
units. Preferred unit holders may receive a copy of the notice, free of charge, by contacting Brookfield Renewable.
There were no repurchases of Preferred units during 2021 in connection with the normal course issuer bid.

Subsequent to year-end, in January 2022, Brookfield Renewable redeemed all of the outstanding Series 5

Preferred Limited Partnership Units for C$73 million or C$25.25 per Series 5 Preferred Limited Partnership Unit.

Limited partners’ equity, Redeemable/Exchangeable partnership units, and BEPC exchangeable shares

As at December 31, 2021, Brookfield Asset Management owns, directly and indirectly 308,051,190 LP units,
Redeemable/Exchangeable partnership units and BEPC exchangeable shares, on a combined basis, representing

Page 12

approximately 48% of Brookfield Renewable on a fully-exchanged basis (assuming the exchange of Redeemable/
Exchangeable partnership units and BEPC exchangeable shares) and the remaining approximately 52% is held by
public investors.

During the year ended December 31, 2021, Brookfield Renewable issued 230,304 LP units (2020: 182,966 LP

units) under the distribution reinvestment plan at a total value of $9 million (2020: $6 million).

During the year ended December 31, 2021, exchangeable shareholders of BEPC exchanged 16,071 BEPC
exchangeable shares (2020: 136,517 BEPC exchangeable shares) for an equivalent number of LP units at a total
value of $1 million (2020: $2 million).

In December 2021, Brookfield Renewable renewed its normal course issuer bid in connection with its LP units
and outstanding BEPC exchangeable shares. Brookfield Renewable is authorized to repurchase up to 13,750,520 LP
units and 8,610,184 BEPC exchangeable shares, representing 5% of each of its issued and outstanding LP units and
BEPC exchangeable shares. The bids will expire on December 15, 2022, or earlier should Brookfield Renewable
complete its repurchases prior to such date. There were no LP units or BEPC exchangeable shares repurchased
during the years ended December 31, 2021 and 2020.

Page 13

PART 4 – FINANCIAL PERFORMANCE REVIEW ON PROPORTIONATE
INFORMATION

SEGMENTED DISCLOSURES

Segmented information is prepared on the same basis that Brookfield Renewable’s Chief Executive Officer and Chief Financial Officer (collectively, the
chief operating decision maker or “CODM”) manages the business, evaluates financial results, and makes key operating decisions. See “Part 9 – Presentation to
Stakeholders and Performance Measurement” for information on segments and an explanation on the calculation and relevance of proportionate information,
Adjusted EBITDA and Funds From Operations which are non-IFRS measures.

PROPORTIONATE RESULTS FOR THE YEAR ENDED DECEMBER 31

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

(GWh)

(MILLIONS)

Actual Generation

LTA Generation

Revenues

Adjusted EBITDA(2)

Funds From Operations

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Hydroelectric

North America .............

10,470

11,863

12,167

12,166

804 $

Brazil ...........................

Colombia .....................

3,626

3,950

3,663

2,999

4,004

3,555

4,004

3,488

169

224

824

175

211

18,046

18,525

19,726

19,658

1,197

1,210

Wind

North America .............

Europe ..........................

Brazil ...........................

Asia ..............................

Solar ...............................
Energy transition(1)

.......

Corporate ......................

4,009

1,029

589

469

6,096

1,777

1,231

—

3,560

908

552

428

5,448

1,284

795

—

5,051

1,077

670

451

7,249

2,016

861

—

4,239

1,002

671

443

6,355

1,510

475

—

370

125

556

348

314

—

263

105

423

245

169

—

528 $

155

159

842

277

187

511

298

214

562

177

131

870

196

341

232

130

380 $

131

128

639

200

164

396

185

162

(448)

27,150

26,052

29,852

27,998

2,415 $

2,047

1,876 $

1,614

934 $

Total
(1)

(2)

Actual generation includes 442 GWh (2020: 375 GWh) from facilities that do not have a corresponding long-term average. See PART 9 – Presentation to Stakeholders’ for why we do not consider
long-term average for certain of our facilities.
Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.

420

152

662

123

237

139

103

(334)

807

Page 14

HYDROELECTRIC OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for hydroelectric operations for the year ended December

31:

(MILLIONS, EXCEPT AS NOTED)
Revenue .......................................................................................................................................... $

2021
1,197 $

2020
1,210

Other income ..................................................................................................................................

Direct operating costs .....................................................................................................................

Adjusted EBITDA ..........................................................................................................................

Interest expense ..............................................................................................................................

Current income taxes ......................................................................................................................

(432)

842

(191)

(12)

Funds From Operations .................................................................................................................. $

639 $

105

(445)

870

(191)

(17)

662

Generation (GWh) – LTA ...............................................................................................................

Generation (GWh) – actual ............................................................................................................

19,726

18,046

19,658

18,525

The following table presents our proportionate results by geography for hydroelectric operations for the year

ended December 31:

(MILLIONS, EXCEPT AS NOTED)

North America

Actual
Generation
(GWh)

2021

2020

Average
revenue
per MWh(1)
2021

2020

Adjusted
EBITDA

2021

2020

Funds From
Operations
2021

2020

United States .................................................

8,485

9,104 $

73 $

59 $ 403 $ 399 $ 304 $ 305

Canada ...........................................................

1,985

2,759

Brazil ................................................................
Colombia(2)

.......................................................

10,470

11,863

3,626

3,663

3,950

2,999

125

528

155

159

163

562

177

131

380

131

128

115

420

152

Total .................................................................

18,046

18,525 $

66 $

67 $ 842 $ 870 $ 639 $ 662

(1)

Includes realized foreign exchange hedge gains of approximately $23 million included in other income.

(2) Average revenue per MWh was adjusted to net the impact of power purchases.

North America

Funds From Operations at our North American business were $380 million in 2021 versus $420 million in the
prior year as higher average revenue per MWh due to the benefits from inflation indexation, generation mix and
higher market prices were more than offset by lower generation that was 12% below prior year primarily at our
hydroelectric facilities in Ontario, partly offset by stronger generation in New York.

Brazil

Funds From Operations at our Brazilian business were $131 million in 2021 versus $152 million in the prior
year. On a local currency basis, Funds From Operations were 10% lower than the prior year as the benefit of
inflation indexation and recontracting initiatives was more than offset by lower system-wide hydrology. Funds From
Operations were also impacted by the weakening of the Brazilian real versus the U.S. dollar.

Colombia

Funds From Operations at our Colombian business were $128 million in 2021 versus $90 million in the prior
year as the benefit from higher generation (11% above long-term average) and higher average revenue per MWh on
our contracted generation due to inflation indexation and recontracting initiatives were partly offset by lower market
prices realized on our uncontracted generation compared to prior year where market prices were high due to

Page 15

unseasonably low system-wide hydrology. Funds From Operations also benefited from the acquisition of 189 MW
of hydroelectric facilities during the year ($16 million and 67 GWh).

WIND OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for wind operations for the year ended December 31:

(MILLIONS, EXCEPT AS NOTED)
Revenue .......................................................................................................................................... $

Other income ..................................................................................................................................

Direct operating costs .....................................................................................................................

Adjusted EBITDA ..........................................................................................................................

Interest expense ..............................................................................................................................

Current income taxes ......................................................................................................................

2021
556 $

126

(171)

511

(109)

(6)

Funds From Operations .................................................................................................................. $

396 $

2020
423

(125)

341

(100)

(4)

237

Generation (GWh) – LTA ...............................................................................................................

Generation (GWh) – actual ............................................................................................................

7,249

6,096

6,355

5,448

The following table presents our proportionate results by geography for wind operations for the year ended

December 31:

(MILLIONS, EXCEPT AS NOTED)

North America

Actual
Generation
(GWh)

Average
revenue
per MWh

Adjusted
EBITDA

Funds From
Operations

2021

2020

2021

2020

2021

2020

2021

2020

United States(1)

...............................................

2,942

2,426 $

91 $

69 $ 197 $ 108 $ 146 $

Canada ............................................................

1,067

1,134

4,009

3,560

Europe ...............................................................

1,029

Brazil .................................................................

Asia ....................................................................

589

469

908

552

428

121

118

277

187

196

200

164

123

Total ..................................................................
(1) Average revenue per MWh adjusted to exclude the impact of the Texas weather event in February 2021 was $78 per MWh.

5,448 $

6,096

92 $

80 $ 511 $ 341 $ 396 $ 237

North America

Funds From Operations at our North American business were $200 million in 2021 versus $123 million in the
prior year due to growth from our increased ownership in TerraForm Power and other acquisitions, net of asset sales
and a gain on the sale of development assets in the United States ($70 million and 799 GWh). On a same store basis,
Funds From Operations were higher than the prior year as the benefit of higher average revenue per MWh due to
generation mix in higher priced markets was partly offset by lower resource in Canada.

Europe

Funds From Operations at our European business were $164 million in 2021 versus $79 million in the prior year
primarily due to growth from our increased ownership in TerraForm Power and other acquisitions, net of asset sales
and a gain on the sale of our development assets in Ireland and Scotland ($78 million and 61 GWh). On a same store
basis, Funds From Operations were higher than prior year primarily due to higher market prices in Spain and higher
resource.

Page 16

Brazil

Funds From Operations at our Brazilian business of $17 million was consistent with the prior year. On a local
currency basis, Funds From Operations was 5% higher than the prior year due to the benefit from inflation
indexation of our contracts and favorable resource. The increase was fully offset by the weakening of the Brazilian
real versus the U.S. dollar.

Asia

Funds From Operations at our Asian wind business were $15 million in 2021 versus $18 million in the prior
year as the benefit from favorable resources was more than offset by higher interest expense as a result of
upfinancing initiatives to right size the capital structure.

SOLAR OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for solar operations for the year ended December 31:

(MILLIONS, EXCEPT AS NOTED)
Revenue .......................................................................................................................................... $

Other income ..................................................................................................................................

Direct operating costs .....................................................................................................................

Adjusted EBITDA ..........................................................................................................................

Interest expense ..............................................................................................................................

Current income taxes ......................................................................................................................

2021
348 $

(89)

298

(111)

(2)

Funds From Operations .................................................................................................................. $

185 $

2020
245

(63)

232

(90)

(3)

139

Generation (GWh) – LTA ...............................................................................................................
Generation (GWh) – actual ............................................................................................................

2,016
1,777

1,510
1,284

Funds From Operations at our solar business were $185 million in 2021 versus $139 million in the prior year
primarily due to the contribution from our increased ownership in TerraForm Power, newly commissioned facilities
and other acquisitions during the year, net of asset sales and disposition gains that benefited the prior year ($35
million and 441 GWh). On a same store basis, Fund From Operations were higher than prior year primarily due to
favorable resource and higher market price at our Spanish assets.

ENERGY TRANSITION OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for energy transition business for the year ended

December 31:

(MILLIONS, EXCEPT AS NOTED)
Revenue .......................................................................................................................................... $

2021
314 $

2020
169

Other income ..................................................................................................................................

Direct operating costs .....................................................................................................................

Adjusted EBITDA ..........................................................................................................................

Interest expense ..............................................................................................................................

Current income taxes ......................................................................................................................

(118)

214

(49)

(3)

Funds From Operations .................................................................................................................. $

162 $

Generation (GWh) – LTA ...............................................................................................................
Generation (GWh) – actual(1)
.........................................................................................................

861
1,231

(61)

130

(25)

(2)

103

475
795

(1) Actual generation includes 442 GWh (2020: 375 GWh) from facilities that do not have a corresponding long-term average. See PART 9 –

Presentation to Stakeholders’ for why we do not consider long-term average for certain of our facilities.

Page 17

Funds From Operations at our energy transition business were $162 million in 2021 versus $103 million in the
prior year due to the contribution from our distributed generation portfolio through our increased ownership in
TerraForm Power and other acquisitions ($49 million and 397 GWh). On a same store basis, Fund From Operations
increased over prior year due to higher pricing for grid stability services provided by our United Kingdom pumped
storage facility on the back of higher and more volatile power prices.

CORPORATE

The following table presents our results for corporate for the year ended December 31:

(MILLIONS)

2021

Other income .................................................................................................................................. $

41 $

Direct operating costs .....................................................................................................................

Adjusted EBITDA ..........................................................................................................................

Management service costs ..............................................................................................................

Interest expense ..............................................................................................................................
Distributions(1)

................................................................................................................................

(30)

(288)

(78)

(93)

Funds From Operations .................................................................................................................. $

(448) $

Deferred taxes and other ................................................................................................................

Net loss ........................................................................................................................................... $
(1)

Distributions on Preferred Units, Class A Preference Shares and Perpetual Subordinated Notes.

(5)

(453) $

2020

(23)

(217)

(79)

(334)

(227)

(561)

Management service costs totaling $288 million increased $71 million compared to the prior year due to the

growth of our business.

Page 18

PROPORTIONATE RESULTS FOR THE YEAR ENDED DECEMBER 31, 2020 AND 2019

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

(GWh)

(MILLIONS)

Actual Generation

LTA Generation

Revenues

Adjusted EBITDA(2)

Funds From Operations

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

Hydroelectric

North America .............

11,863

13,118

12,166

12,238

824 $

Brazil ...........................

Colombia .....................

3,663

2,999

3,707

3,096

4,004

3,488

3,996

3,488

175

211

905

234

237

18,525

19,921

19,658

19,722

1,210

1,376

Wind

North America .............

3,560

2,969

Europe ..........................

Brazil ...........................

Asia ..............................

Solar ...............................
Energy transition(1)

.......

Corporate ......................

908

552

428

5,448

1,284

795

—

904

630

291

4,794

773

550

—

4,239

1,002

671

443

6,355

1,510

475

—

3,556

996

647

290

5,489

782

196

—

263

105

423

245

169

—

223

375

138

132

—

562 $

177

131

870

196

341

232

130

622

181

144

947

163

274

126

420 $

152

662

123

237

139

103

(334)

Total ...............................

26,052

26,038

27,998

26,189

2,047 $

2,021

1,614 $

1,444

807 $

459

150

101

710

175

(268)

761

(1)

(2)

Actual generation includes 375 GWh (2019: 374 GWh) from facilities that do not have a corresponding long-term average. See PART 9 – Presentation to Stakeholders’ for why we do not consider
long-term average for certain of our facilities.
Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.

Page 19

HYDROELECTRIC OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for hydroelectric operations the year ended December 31:

(MILLIONS, EXCEPT AS NOTED)
Revenue .......................................................................................................................................... $
Other income ..................................................................................................................................
Direct operating costs .....................................................................................................................
Adjusted EBITDA ..........................................................................................................................
Interest expense ..............................................................................................................................
Current income taxes ......................................................................................................................
Funds From Operations .................................................................................................................. $

2020
1,210 $
105
(445)
870
(191)
(17)
662 $

2019
1,376
22
(451)
947
(210)
(27)
710

19,658
18,525

19,722
19,921

The following table presents our proportionate results by geography for hydroelectric operations for the year

ended December 31:

(MILLIONS, EXCEPT AS NOTED)

North America

Actual
Generation
(GWh)

Average
revenue
Per MWh(1)

Adjusted
EBITDA

Funds From
Operations

2020

2019

2020

2019

2020

2019

2020

2019

United States .............................................

9,104

10,525 $

59 $

66 $ 399 $ 473 $ 305 $ 358

Canada .......................................................

2,759

2,593

11,863

13,118

3,663

3,707

2,999

3,096

163

562

177

131

149

622

181

144

115

420

152

101

459

150

101

18,525

19,921 $

67 $

65 $ 870 $ 947 $ 662 $ 710

Brazil ............................................................
Colombia(2)
Total .............................................................
(1)

...................................................

(2)

Includes realized foreign exchange hedge gains of approximately $40 million included in other income.
Average revenue per MWh was adjusted to net the impact of power purchases.

North America

Funds From Operations at our North American business were $420 million in 2020 versus $459 million in the
prior year as higher average revenue per MWh due to the benefits from inflation indexation and cost saving
initiatives were more than offset by generation that was 10% below prior year in which we benefited from above
average generation (7% above long-term average). Funds from Operations were also impacted by the partial sale of
a 25% interest in certain of our Canadian assets ($3 million and 64 GWh) in the first quarter of 2019.

Brazil

Funds From Operations at our Brazilian business were $152 million in 2020 versus $150 million in the prior
year. On a local currency basis, Funds From Operations increased 32% versus the prior year primarily due to cost
reduction initiatives, higher average revenue per MWh due to inflation indexation and recontracting initiatives, and a
positive ruling regarding historical under allocations of generation to our facilities under the centralized pooling
mechanism in Brazil. The increase was partly offset by the weakening of the Brazilian real versus the U.S. dollar.

Colombia

Funds From Operations at our Colombian business were $90 million in 2020 versus $101 million in the prior
year. On a local currency basis, Funds From Operations increased slightly compared to the prior year as the benefit
from cost reduction initiatives and higher average revenue per MWh due to inflation indexation and recontracting

Page 20

initiatives were partly offset by generation that was 14% below long-term average. The increase was more than
offset by the weakening of the Colombian peso versus the U.S. dollar.

WIND OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for wind operations for the year ended December 31:

2020
423 $
43
(125)
341
(100)
(4)
237 $

2019
375
6
(107)
274
(96)
(3)
175

6,355
5,448

5,489
4,794

The following table presents our proportionate results by geography for wind operations for the year ended

December 31:

(MILLIONS, EXCEPT AS NOTED)

North America

Actual
Generation
(GWh)

Average
revenue
per MWh(1)

Adjusted
EBITDA

Funds From
Operations

2020

2019

2020

2019

2020

2019

2020

2019

United States ....................................................

2,426

1,897 $

69 $

67 $ 108 $

85 $

57 $

Canada .............................................................

1,134

1,072

Europe .................................................................

Brazil ..................................................................

Asia .....................................................................

3,560

2,969

908

552

428

904

630

291

118

105

196

163

123

Total ....................................................................

5,448

4,794 $

80 $

78 $ 341 $ 274 $ 237 $ 175

(1)

Includes realized foreign exchange hedge gains of approximately $11 million included in other income.

North America

Funds From Operations at our North American business were $123 million in 2020 versus $98 million in the
prior year, primarily due to growth from our increased ownership in TerraForm Power, net of the disposal of a 40%
equity interest in an 852 MW wind portfolio in the United States ($15 million and 760 GWh) and the benefit of
production guarantees under our long-term service agreements.

Europe

Funds From Operations at our European business were $79 million in 2020 versus $48 million in the prior year
primarily due to growth from our increased ownership in TerraForm Power, net of asset sales ($6 million and 97
GWh), and a gain of $22 million realized on the sale of 47 MW of recently developed wind assets in Ireland. On a
same store basis, Funds From Operations were higher than prior year as higher market prices due to generation mix
and interest cost savings as a result of capital structure optimization were partly offset by lower resources.

Brazil

Funds From Operations at our Brazilian business were $17 million in 2020 versus$19 million in the prior year.
On a local currency basis, Funds From Operations increased by 17% over the prior year due to inflation indexation

Page 21

of our contracts and cost reduction initiatives that were partly offset by lower resource. The increase was more than
offset by the weakening of the Brazilian real versus the U.S. dollar.

Asia

Funds From Operations at our Asian wind business were $18 million in 2020 versus $10 million in the prior
year. The increase is due to higher revenue per MWh attributable to the inflation indexation of our contracts, higher
margin from our cost reduction initiatives and contribution from growth following the acquisition of 210 MW in
India and 200 MW in China ($4 million and 137 GWh).

SOLAR OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for solar operations for the year ended December 31:

(MILLIONS, EXCEPT AS NOTED)

Revenue .......................................................................................................................................... $

Other income ..................................................................................................................................
Direct operating costs .....................................................................................................................
Adjusted EBITDA ..........................................................................................................................
Interest expense ..............................................................................................................................
Current income taxes ......................................................................................................................
Funds From Operations .................................................................................................................. $

2020

245

50
(63)
232
(90)
(3)
139 $

1,510
1,284

2019
138
16
(28)
126
(52)
—
74

782
773

Funds From Operations at our solar business increased to $139 million in 2020 from $74 million in the prior
year, primarily due to the contribution from our increased ownership in TerraForm Power and other acquisitions, net
of disposals of assets in South Africa and Thailand ($45 million and 570 GWh).

ENERGY TRANSITION OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for energy transition business for the year ended

December 31:

2020
169 $
22
(61)
130
(25)
(2)
103 $

Generation (GWh) – LTA ...............................................................................................................
Generation (GWh) – actual(1)
.........................................................................................................

475
795

2019
132
11
(56)
87
(16)
(1)
70

196
550

(1)

Funds From Operations at our energy transition business were $103 million in 2020 versus $70 million in the
prior year due to the contribution from our distributed generation portfolio through our increased ownership in
TerraForm Power and acquisitions ($35 million and 246 GWh).

Page 22

CORPORATE

The following table presents our results for corporate for the year ended December 31:

(MILLIONS)

2020

Other income .................................................................................................................................. $

64 $

Direct operating costs .....................................................................................................................

Adjusted EBITDA ..........................................................................................................................

Management service costs ..............................................................................................................

Interest expense ..............................................................................................................................
Distributions(1)

................................................................................................................................

Funds From Operations .................................................................................................................. $
(1)

Distributions on Preferred Units and Class A Preference Shares.

(23)

(217)

(79)

(334) $

2019

(23)

(116)

(92)

(70)

(268)

Management service costs totaling $217 million increased $101 million compared to the prior year due to the

growth of our business.

Page 23

RECONCILIATION OF NON-IFRS MEASURES

The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS measures. Net income (loss) is reconciled to Adjusted

EBITDA for the year ended December 31, 2021:

Hydroelectric

Wind

Attributable to Unitholders

(MILLIONS)

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Solar

Energy
transition

Corporate

Total

Net income (loss) .............................................................................................................................. $

$ 56

222

(248) $

145

(12) $

(357) $

(66)

Add back or deduct the following: ....................................................................................................

Depreciation ...................................................................................................................................

Deferred income tax expense (recovery) .......................................................................................

Foreign exchange and financial instrument loss (gain) .................................................................
Other(1)

...........................................................................................................................................

368

(49)

(6)

(2)

Management service costs .............................................................................................................

—

Interest expense .............................................................................................................................

Current income tax expense (recovery) .........................................................................................
Amount attributable to equity accounted investments and non-controlling interests(2)

.................

255

(148)

(30)

Adjusted EBITDA .............................................................................................................................

528

155

103

175

(29)

—

119

(483)

159

411

(46)

119

—

167

—

(172)

277

110

(16)

—

(107)

187

263

(2)

(12)

(34)

(23)

—

(64)

187

(69)

(198)

298

(9)

—

(42)

214

(73)

(36)

109

288

—

(14)

1,501

(29)

453

288

981

(1,327)

1,876

(1)

(2)

Refer to Note 9 - Other in the Audited Consolidated Financial Statements for more details on the Other balance, and includes 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.
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.

Page 24

The following table reflects Adjusted EBITDA and Funds From Operations and provides a reconciliation to net income (loss) for the year ended

December 31, 2020:

(MILLIONS)

Hydroelectric

Wind

Attributable to Unitholders

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Solar

Energy
transition

Corporate

Total

Net income (loss) ............................................................................................................................... $

102

$ 110

263

(76) $

(15) $

$ 18

(27) $

(500) $

(45)

Add back or deduct the following: .....................................................................................................

Depreciation ....................................................................................................................................

Deferred income tax expense (recovery) ........................................................................................

Foreign exchange and financial instrument loss (gain) ..................................................................
Other(1)

............................................................................................................................................

Management service costs ..............................................................................................................

Interest expense ...............................................................................................................................

Current income tax expense (recovery) ..........................................................................................
Amount attributable to equity accounted investments and non-controlling interests(2)

..................

343

(38)

—

252

(1)

(5)

(13)

—

(20)

(3)

—

122

334

(37)

(74)

—

163

—

137

(10)

—

(7)

(5)

(2)

—

227

(26)

(16)

129

—

201

(8)

—

(146)

(61)

(380)

(142)

(95)

(68)

(63)

(257)

(81)

Adjusted EBITDA .............................................................................................................................. $

562

$ 177

131

196

$ 25

232

130

1,367

(96)

(17)

318

235

—

(213)

(127)

648

235

976

(1,293)

$ 1,614

(1)

(2)

Page 25

The following table reflects Adjusted EBITDA and Funds From Operations and provides a reconciliation to net income (loss) for the year ended

December 31, 2019:

(MILLIONS)

Hydroelectric

Wind

Attributable to Unitholders

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Solar

Energy
transition

Corporate

Total

Net income (loss) .............................................................................................................................. $

178

$ 65

292

(191) $

(12) $

$ 12

(3) $

(20) $

(249) $

Add back or deduct the following: ....................................................................................................

Depreciation ...................................................................................................................................

Deferred income tax expense (recovery) .......................................................................................

Foreign exchange and financial instrument loss (gain) ..................................................................
Other(1)

............................................................................................................................................

323

(18)

(4)

Management service costs .............................................................................................................

—

Interest expense ..............................................................................................................................

.................

262

(153)

(33)

Adjusted EBITDA .............................................................................................................................

622

181

—

144

(453)

144

323

(13)

(14)

—

179

—

(189)

163

136

165

(17)

—

(8)

—

136

—

(146)

(54)

(41)

(272)

126

—

(84)

(43)

135

—

1,271

(27)

303

135

1,001

(1,425)

1,444

(1)

(2)

Page 26

The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS

measures. Net income (loss) is reconciled to Funds From Operations for the years indicated:

(MILLIONS)
Net income (loss) ......................................................................................................... $
Add back or deduct the following: ...............................................................................
Depreciation ..............................................................................................................
Deferred income tax (recovery) expense ...................................................................
Foreign exchange and financial instruments loss (gain) ...........................................
Other(1)
.......................................................................................................................
Amount attributable to equity accounted investments and non-controlling interest(2)
.
Funds From Operations ................................................................................................ $

2021

2020

(66) $

(45) $

2019

1,501

1,367

1,271

(29)

453

(957)

(213)

(127)

648

(823)

934 $

807 $

(27)

303

(902)

761

(1)

(2)

Refer to Note 9 - Other in the Audited Consolidated Financial Statements for more details on the Other balance, and includes 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.
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.

The following table reconciles the per unit non-IFRS financial measures to the most directly comparable IFRS

measures. Basic earnings per LP unit is reconciled to Funds From Operations per Unit, for the years indicated:

................................................................................................ $

Basic loss per LP unit(1)
Depreciation .................................................................................................................
Foreign exchange and financial instruments loss (gain) ..............................................
Deferred income tax (recovery) expense ....................................................................
Other .............................................................................................................................
Funds From Operations per Unit(2)

............................................................................... $

2021

2020

(0.69) $

(0.61) $

1.43

0.20

(0.21)

0.72

1.24

0.06

(0.29)

0.92

1.45 $

1.32 $

2019

(0.26)

1.10

0.05

(0.05)

0.46

1.30

(1)

(2)

During the year ended December 31, 2021, on average there were 274.9 million LP units outstanding (2020: 271.1 million, 2019:
268.3 million).
Average units outstanding, for the year ended December 31, 2021, were 645.6 million (2020: 609.5 million, 2019: 583.5 million), being
inclusive of GP interest, Redeemable/Exchangeable partnership units, LP units, and BEPC exchangeable shares.

Page 27

CONTRACT PROFILE

We operate the business on a largely contracted basis to provide a high degree of predictability in Funds From
Operations. We maintain a long-term view that electricity prices and the demand for electricity from renewable
sources will rise due to a growing level of acceptance around climate change, the legislated requirements in some
areas to diversify away from fossil fuel based generation and because they are becoming increasingly cost
competitive.

In Brazil and Colombia, we also expect power prices will continue to be supported by the need to build new
supply over the medium-to-long term to serve growing demand. In these markets, contracting for power is the only
current mechanism to buy and sell power, and therefore we would expect to capture rising prices as we re-contract
our power over the medium-term.

The following table sets out our contracts over the next five years for generation output in North America,
Europe and certain other countries, assuming long-term average on a proportionate basis. The table excludes Brazil
and Colombia, where we would expect the energy associated with maturing contracts to be re-contracted in the
normal course given the construct of the respective power markets. In these countries we currently have a contracted
profile of approximately 90% and 77%, respectively, of the long-term average and we would expect to maintain this
going forward. Overall, our portfolio has a weighted-average remaining contract duration of 15 years on a
proportionate basis.

(GWh, except as noted)
Hydroelectric
North America

2022

2023

2024

2025

2026

United States(1)
.............................................................
Canada ..........................................................................

7,078
3,620
10,698

6,067
3,541
9,608

5,319
3,528
8,847

5,121
3,528
8,649

4,567
3,528
8,095

Wind
North America

United States ................................................................
Canada ..........................................................................

Europe ...............................................................................
Asia ...................................................................................

Solar – Utility ....................................................................
Energy transition ...............................................................
Contracted on a proportionate basis .....................................
Uncontracted on a proportionate basis .................................
Long-term average on a proportionate basis ........................
Non-controlling interests .....................................................
Total long-term average .......................................................
Contracted generation as a % of total generation on a

2,814
1,352
4,166
902
459
5,527
1,790
857
18,872
2,039
20,911
16,690
37,601

2,814
1,352
4,166
907
459
5,532
1,871
854
17,865
3,043
20,908
16,690
37,598

2,250
1,352
3,602
907
436
4,945
1,867
842
16,501
4,407
20,908
16,690
37,598

2,250
1,352
3,602
906
436
4,944
1,862
837
16,292
4,616
20,908
16,690
37,598

2,196
1,264
3,460
906
459
4,825
1,858
829
15,607
5,301
20,908
16,690
37,598

proportionate basis ...........................................................
Price per MWh – total generation on a proportionate basis . $
(1)

90 %
85

85 %
88

79 %
91

78 %
92

75 %
94

Includes generation of 1,974 GWh for 2022 , 943 GWh for 2023, and 173 GWh for 2024 secured under financial contracts.

Weighted-average remaining contract durations on a proportionate basis are 17 years in North America, 13

years in Europe, 11 years in Brazil, 3 years in Colombia, and 18 years across our remaining jurisdictions.

In North America, over the next five years, a number of contracts will expire at our hydroelectric facilities.

Based on current market prices for energy and ancillary products, we expect a net positive impact to cash flows.

In our Colombian portfolio, we continue to focus on securing long-term contracts while maintaining a certain

percentage of uncontracted generation so as to mitigate hydrology risk.

Page 28

The majority of Brookfield Renewable’s long-term power purchase agreements within our North American and
European businesses are with investment-grade rated or creditworthy counterparties. The economic exposure of our
contracted generation on a proportionate basis is distributed as follows: power authorities (41%), distribution
companies (21%), industrial users (23%) and Brookfield (15%).

Page 29

PART 5 – LIQUIDITY AND CAPITAL RESOURCES

CAPITALIZATION

A key element of our financing strategy is to raise the majority of our debt in the form of asset-specific, non-
recourse borrowings at our subsidiaries on an investment-grade basis with no maintenance covenants. Substantially
all of our debt is either investment grade rated or sized to investment grade and approximately 90% of debt is project
level.

The following table summarizes our capitalization as at December 31:

(MILLIONS, EXCEPT AS NOTED)
Corporate credit facility(1)
Commercial paper(1)

...................................................... $

Debt

Corporate

Consolidated

2021

2020

2021

— $

—

— $

—

Medium term notes(2)
Non-recourse borrowings(3)

..........................................................

.................................................

Deferred income tax liabilities, net(4)

.....................................

Equity

Non-controlling interest ......................................................

Preferred equity ...................................................................

Perpetual subordinated notes ..............................................
Preferred limited partners’ equity(5)

....................................

2,156

—

2,156

—

613

592

832

Unitholders’ equity .............................................................

9,607

2,140

—

2,140

—

609

—

1,028

9,030

2020

—

2,140

16,006

18,146

5,310

2,156

19,352

21,508

6,018

12,303

11,100

613

592

832

9,607

609

—

1,028

9,030

Total capitalization ................................................................. $

13,800 $

12,807 $

51,473 $

45,223

Debt-to-total capitalization ....................................................
Debt-to-total capitalization (market value)(6)

.........................

16 %

8 %

17 %

6 %

42 %

33 %

40 %

27 %

(1)

Draws on corporate credit facilities and commercial paper issuances are excluded from the debt-to-total capitalization ratios as they are not
a permanent source of capital.

(2) Medium term notes are unsecured and guaranteed by Brookfield Renewable and excludes $7 million (2020: $8 million) of deferred

(3)

(4)

(5)

(6)

financing fees, net of unamortized premiums.
Consolidated non-recourse borrowings include $30 million (2020: $15 million) borrowed under a subscription facility of a Brookfield
sponsored private fund and excludes $132 million (2020: $122 million) of deferred financing fees and $160 million (2020: $63 million) of
unamortized premiums.
Deferred income tax liabilities less deferred income tax assets.
Preferred limited partners' equity as at December 31, 2021 is adjusted to reflect the redemption of C$72 million Series 5 Preferred Units that
was completed on January 31, 2021.
Based on market values of Preferred equity, Perpetual subordinated notes, Preferred limited partners’ equity and Unitholders’ equity.

Page 30

AVAILABLE LIQUIDITY

The following table summarizes the available liquidity as at December 31:

(MILLIONS)

2021

Brookfield Renewable's share of cash and cash equivalents .......................................................... $

540 $

Investments in marketable securities ..............................................................................................

151

Corporate credit facilities

Authorized credit facilities ..........................................................................................................
Draws on credit facilities(1)

..........................................................................................................

Authorized letter of credit facility ...............................................................................................

Issued letters of credit ..................................................................................................................

Available portion of corporate credit facilities ..............................................................................

Available portion of subsidiary credit facilities on a proportionate basis ......................................

2,375

(24)

400

(289)

2,462

916

Available liquidity .......................................................................................................................... $
(1)

Relates to letter of credit issued on Brookfield Renewable’s corporate credit facilities of $1,975 million.

4,069 $

2020

291

183

2,150

—

400

(300)

2,250

546

3,270

We operate with sufficient liquidity to enable us to fund growth initiatives, capital expenditures, distributions
and withstand sudden adverse changes in economic circumstances or short-term fluctuations in generation. We
maintain a strong, investment grade balance sheet characterized by a conservative capital structure, access to
multiple funding levers including a focus on capital recycling on an opportunistic basis, and diverse sources of
capital. Principal sources of liquidity are cash flows from operations, our credit facilities, up-financings on non-
recourse borrowings and proceeds from the issuance of various securities through public markets.

BORROWINGS

The composition of debt obligations, overall maturity profile, and average interest rates associated with our

borrowings and credit facilities on a proportionate basis as at December 31 is presented in the following table:

2021

Weighted-average
Interest
rate %

Term
(years)

2020
Weighted-average

Total

Interest
rate %

Term
(years)

Total

(MILLIONS, EXCEPT AS NOTED)
Corporate borrowings

Medium term notes .................................................

Credit facilities ........................................................

Commercial paper ...................................................

Proportionate non-recourse borrowings(1)

Hydroelectric ...........................................................

Wind ........................................................................

Solar ........................................................................

Energy transition .....................................................

3.9

N/A

4.9

3.9

3.3

3.6

4.2

$ 2,156

N/A

—

4,913

2,371

2,736

996

11,016

$ 13,172

3.9

N/A

0.4

4.6

3.9

3.3

4.0

Proportionate unamortized financing fees, net of unamortized premiums .......

(28)

13,144

Equity-accounted borrowings ...........................................................................

(351)

Non-controlling interests ..................................................................................

8,736

As per IFRS Statements ....................................................................................

$ 21,529

$ 18,082

(1)

See “Part 9 – Presentation to Stakeholders and Performance Measurement” for information on proportionate debt.

Page 31

2,140

—

4,123

2,540

2,534

864

10,061

$ 12,204

(45)

12,159

(332)

6,255

The following table summarizes our undiscounted principal repayments, scheduled amortization and interest

repayable on a proportionate basis as at December 31, 2021:

(MILLIONS)
Debt principal repayments(1)

2022

2023

2024

2025

2026 Thereafter

Total

Medium term notes(2)

..................................... $ — $ — $ — $

317 $ — $

1,839 $ 2,156

Non-recourse borrowings

Credit facilities ............................................

Hydroelectric ...............................................

Wind ............................................................

Solar .............................................................

Energy transition ..........................................

Amortizing debt principal repayments

Non-recourse borrowings

Hydroelectric ...............................................

Wind ............................................................

Solar .............................................................

Energy transition ..........................................

Total .................................................................. $
Interest payable(1)(3)

Corporate borrowings(1)
Non-recourse borrowings

................................. $

—

105

174

227

569

—

413

135

735

102

169

148

146

565

—

114

105

203

141

490

—

352

—

152

509

102

172

138

444

—

291

—

2,209

3,392

422

384

239

647

586

449

414

3,254

5,101

151

163

143

484

933

844

1,348

238

1,498

1,725

2,145

547

3,363

5,915

644 $ 1,300 $

604 $ 1,270 $

898 $

8,456 $ 13,172

83 $

77 $

71 $

664 $ 1,061

Hydroelectric ...............................................

211

208

203

179

154

1,630

2,585

Wind ............................................................

Solar .............................................................

Energy transition ..........................................

171

286

553

689

201

436

411

386

346

298

2,151

4,028

519 $

494 $

469 $

423 $

369 $

2,815 $ 5,089

Total .................................................................. $
(1)

Draws on corporate credit facilities and commercial paper issuances are excluded from the debt repayment schedule as they are not a
permanent source of capital.

(2) Medium term notes are unsecured and guaranteed by Brookfield Renewable and excludes $7 million (2020: $8 million) of deferred

(3)

financing fees, net of unamortized premiums.
Represents aggregate interest payable expected to be paid over the entire term of the obligations, if held to maturity. Variable rate interest
payments have been calculated based on estimated interest rates.

We remain focused on refinancing near-term facilities on acceptable terms and maintaining a manageable
maturity ladder. We do not anticipate material issues in addressing our borrowings through 2025 on acceptable
terms and will do so opportunistically based on the prevailing interest rate environment.

CAPITAL EXPENDITURES

We fund growth capital expenditures with cash flow generated from operations, supplemented by non-recourse
debt sized to investment grade coverage and covenant thresholds. This is designed to ensure that our investments
have stable capital structures supported by a substantial level of equity and that cash flows at the asset level can be
remitted freely to our company. This strategy also underpins our investment grade profile.

To fund large scale development projects and acquisitions, we will evaluate a variety of capital sources
including proceeds from selling mature businesses, in addition to raising money in the capital markets through
equity, debt and preferred share issuances. Furthermore, we have $2.38 billion committed revolving credit facilities

Page 32

available for investments and acquisitions, as well as funding the equity component of organic growth initiatives.
The facilities are intended, and have historically been used, as a bridge to a long-term financing strategy rather than
a permanent source of capital. We believe these capital sources will be sufficient to permit us to deploy the
necessary capital for Brookfield Renewable’s share of the transactions discussed above under “Part 1 - Highlights—
Growth and Development”.

CONSOLIDATED STATEMENTS OF CASH FLOWS

The following table summarizes the key items in the audited annual consolidated statements of cash flows, for

the year ended December 31:

(MILLIONS)

Cash flow provided by (used in):

2021

2020

2019

Operating activities before changes in due to or from related parties and net

working capital change ........................................................................................... $

1,448 $

1,392 $

1,574

Changes in due to or from related parties ...................................................................

Net change in working capital balances ......................................................................

Operating activities .....................................................................................................

Financing activities .....................................................................................................

Investing activities .......................................................................................................

Foreign exchange (loss) gain on cash .........................................................................

(716)

734

2,143

(2,504)

(35)

(155)

1,296

(792)

(426)

(Decrease) increase in cash and cash equivalents ....................................................... $

338 $

91 $

(53)

1,554

(402)

(1,211)

(6)

(65)

Operating Activities

Cash flows provided by operating activities before changes in due to or from related parties and net working
capital changes for the year ended December 31, 2021, totaled $1,448 million compared to $1,392 million in 2020
and $1,574 million in 2019, reflecting the strong operating performance of our business during the periods.

The net change in working capital balances shown in the audited annual consolidated statements of cash flows

is comprised of the following:

(MILLIONS)

2021

2020

2019

Trade receivables and other current assets .................................................................. $

(515) $

(2) $

Accounts payable and accrued liabilities ....................................................................

Other assets and liabilities ...........................................................................................

(282)

(91)

(62)

(716) $

(155) $

(66)

(4)

(53)

Financing Activities

Cash flows from financing activities totaled $2,143 million for the year ended December 31, 2021. The strength
of our balance sheet and access to diverse sources of capital allowed us to fund the growth of our business and
generate $3,225 million of net proceeds from corporate and non-recourse upfinancings, including a C$1.1 billion
strategic financing of a Canadian hydro facility concurrent with signing a power purchase agreement with Hydro
Quebec and $592 million of net proceeds from the issuance of our inaugural perpetual green subordinated notes.
During the year, we redeemed our Series 9 Preferred Limited Partnership Units for $153 million.

Distributions paid during the year ended December 31, 2021, 2020 and 2019 to Unitholders were $854 million,
$769 million and $684 million, respectively. We increased our distributions to $1.22 per LP unit in 2021 (2020:
$1.16 and 2019: $1.10), representing a 5% increase per LP unit, which took effect in the first quarter of 2021. The
distributions paid to preferred shareholders, preferred limited partners’ unitholders, perpetual subordinated
noteholders and participating non-controlling interests in operating subsidiaries totaled $900 million, $628 million
and $913 million, respectively. Our non-controlling interest contributed capital, net of capital repaid, of $689 million
during the year ended December 31, 2021

Page 33

Cash flows used in financing activities totaled $792 million for the year ended December 31, 2020. Our
investment grade balance sheet provided access to multiple sources of capital to fund the growth of our business as
discussed below in our investing activities. This included proceeds raised from our inaugural $200 million Series 17
Preferred Units in the United States during the first quarter of 2020, our issuance of C$350 million ($248 million)
ten-year corporate green bonds, and C$425 million ($319 million) thirty-year corporate green bonds, the sale of a
40% equity interest in an 852 MW wind portfolio in the United States and net up-financing proceeds received from
non-recourse financings, commercial paper and corporate credit facilities, which was more than offset by the
repayments of borrowings, including our repayment of C$400 million ($304 million) Series 8 medium term notes
prior to maturity.

Cash flows used in financing activities totaled $402 million for the year ended December 31, 2019. To further
optimize our capital structure and enhance our liquidity position, we issued C$175 million Series 15 Preferred Units
in the first quarter of 2019 and issued $4.3 billion of long-term debt, including C$600 million corporate green bond
financings in Canada, offset by repayments of $3.8 billion during the year, including the early redemption of our
Series 7 (C$450 million) medium term notes due 2020 which extended the average maturity of our medium term
notes to ten years. To support our growth and recycle capital into more accretive opportunities, we completed the
sale of an additional 25% non-controlling interest in a portfolio of select Canadian hydroelectric assets in the first
quarter of 2019 for proceeds of $268 million. Distributions paid to non-controlling interests of our operating
subsidiaries increased to $844 million in 2019, primarily due to the strong performance of our Colombian business
during the year.

Investing Activities

Cash flows used in investing activities totaled $2,504 million for the year ended December 31, 2021. During the
year, we recycled the capital from the sale of wind portfolios in Europe and the United States, which closed in the
second and third quarter of 2021 for $379 million and $448 million, respectively, into accretive growth opportunities,
investing $1,480 million to acquire, among others, an 845 MW wind portfolio, a distributed generation platform
comprised of 360 MW of operating and under construction solar assets with a development pipeline of over 700
MW of development assets in the United States, and a 23% interest in a scale renewable business in Europe with an
interest in a 3,000 MW offshore wind development pipeline. Our continued investment in our property, plant and
equipment, including the construction of 1,800 MW of solar developments projects in Brazil, of which 357 MW
reached commercial operations during the year, and the continuing initiative to repower existing wind power
projects, totaled $1,967 million for the year ended December 31, 2021.

Cash flows used in investing activities totaled $426 million for the year ended December 31, 2020. We invested
$316 million into our acquisitions, equity-accounted investments and other financial investments, including a 100
MW solar portfolio in Spain, the second tranche of our convertible securities of TransAlta and a portfolio of loans
secured by almost 2,500 MW of operating assets from one of the largest non-banking financial companies in India.
These investments were partially funded by the proceeds received from the completed sale of 47 MW of wind assets
in Ireland completed during the fourth quarter of 2020. Our continued investment in our property, plant and
equipment, including the construction of 1,800 MW of shovel-ready solar development projects in Brazil, was
$447 million

Cash flows used in investing activities totaled $1,211 million for the year ended December 31, 2019. During the
fourth quarter of 2019, we invested $144 million into our equity-accounted investments, including the formation of a
50-50 joint venture in respect of X-Elio. This investment was partially funded by the proceeds received from the
completed sales of five of the six projects making up our wind and solar portfolio in South Africa and 191 MW of
wind assets in Europe. Our continued investment in our property, plant and equipment was $460 million. The cash
used to acquire a 210 MW wind portfolio in India, a 200 MW wind facility in China, and a 320 MW distributed
generation solar facility in the United States totaled $983 million, net of cash acquired.

Page 34

SHARES, NOTES AND UNITS OUTSTANDING

Shares and units outstanding as at December 31 are as follows:

Class A Preference Shares(1)
................................................................................................
Perpetual Subordinated Notes ............................................................................................
Preferred Units(2)

2021

2020

31,035,967
24,400,000

31,035,967
—

Balance, beginning of year ..................................................................................................

52,885,496

44,885,496

Issuance ...............................................................................................................................

—

8,000,000

Redemption of preferred LP Units ......................................................................................

(8,000,000)

—

Balance, end of year ...............................................................................................................

44,885,496

52,885,496

GP interest ............................................................................................................................

3,977,260

Redeemable/Exchangeable partnership units ...................................................................

194,487,939

BEPC exchangeable shares .................................................................................................

172,203,342

172,180,417

LP units

Balance, beginning of year ..................................................................................................

274,837,890

268,466,704

Issued pursuant to merger with TerraForm Power ..............................................................

—

6,051,704

Distribution reinvestment plan ............................................................................................

Exchanged for BEPC exchangeable shares .........................................................................

230,304

16,071

182,965

136,517

Balance, end of year ...............................................................................................................

275,084,265

274,837,890

Total LP units on a fully-exchanged basis(3)

..........................................................................

641,775,546

641,506,246

(1)

(2)

(3)

Class A Preference Shares are broken down by series as follows: 6,849,533 Series 1 Class A Preference Shares are outstanding; 3,110,531
Series 2 Class A Preference Shares are outstanding;9,961,399 Series 3 Class A Preference Shares are outstanding; 4,114,504 Series 5 Class
A Preference Shares are outstanding; and 7,000,000 Series 6 Class A Preference Shares are outstanding.
Preferred Units are broken down by series and certain series are convertible on a one-for-one basis at the option of the holder as follows:
2,885,496 Series 5 Preferred Units are outstanding; 7,000,000 Series 7 Preferred Units are outstanding (convertible for Series 8 Preferred
Units beginning on January 31, 2026); 10,000,000 Series 11 Preferred Units are outstanding (convertible for Series 12 Preferred Units
beginning on April 30, 2022); 10,000,000 Series 13 Preferred Units are outstanding (convertible for Series 14 Preferred Units beginning on
April 30, 2023); 7,000,000 Series 15 Preferred Units are outstanding (convertible for Series 16 Preferred Units beginning on April 30,
2024); and 8,000,000 Series 17 Preferred Units are outstanding.
The fully-exchanged amounts assume the exchange of all Redeemable/Exchangeable partnership units and BEPC exchangeable shares for
LP units.

Page 35

DIVIDENDS AND DISTRIBUTIONS

The following table summarizes the dividends and distributions declared and paid, for the year ended December

31:

(MILLIONS)

Class A Preference Shares .........................................................

Perpetual Subordinated Notes ...................................................

Class A Preferred LP units ........................................................
Participating non-controlling interests – in operating

subsidiaries ............................................................................

GP Interest and incentive distributions .....................................

Redeemable/Exchangeable partnership units ............................

BEPC exchangeable shares .......................................................

LP units .....................................................................................

Declared

Paid

2021

2020

2019

2021

2020

2019

26 $

25 $

26 $

25 $

12 $ — $ — $

9 $ — $ —

55 $

54 $

44 $

55 $

52 $

810 $ 551 $

844 $

810 $

551 $

844

85 $

70 $

55 $

85 $

70 $

237 $ 250 $

268 $

237 $

250 $

267

209 $ 116 $ — $

207 $

100 $ —

335 $ 349 $

370 $

325 $

349 $

363

LP unit distributions per unit on an annualized basis were increased as follows:

Date of
Increase

February 2017

February 2018

February 2019

February 2020

February 2021

February 2022

Amount of
Increase

% Increase

Annual
Distribution

Distribution
Effective Date

$0.05

$0.06

$1.00

$1.05

$1.10

$1.16

$1.22

$1.28

March 2017

March 2018

March 2019

March 2020

March 2021

March 2022

CONTRACTUAL OBLIGATIONS

Please see Note 28 – Commitments, contingencies and guarantees in the audited annual consolidated financial

statements for further details on the following:

•

Commitments – Water, land, and dams usage agreements, and agreements and conditions on
committed acquisitions of operating portfolios and development projects;

Contingencies – Legal proceedings, arbitrations and actions arising in the normal course of business,
and providing for letters of credit; and

Guarantees – Nature of all the indemnification undertakings

SUPPLEMENTAL FINANCIAL INFORMATION

In April 2021, Brookfield BRP Holdings (Canada) Inc., a wholly-owned subsidiary of Brookfield Renewable, issued
$350 million of perpetual subordinated notes at a fixed rate of 4.625%.

In December 2021, Brookfield BRP Holdings (Canada) Inc., a wholly-owned subsidiary of Brookfield Renewable,
issued $260 million of perpetual subordinated notes at a fixed rate of 4.875%.

These notes are fully and unconditionally guaranteed, on a subordinated basis by each of Brookfield Renewable
Partners L.P., BRELP, BRP Bermuda Holdings I Limited, Brookfield BRP Europe Holdings Limited, Brookfield
Renewable Investments Limited and BEP Subco Inc (together, the "guarantor subsidiaries"). The other subsidiaries

Page 36

of Brookfield Renewable do not guarantee the securities and are referred to below as the “non-guarantor
subsidiaries”.

Pursuant to Rule 13-01 of the SEC's Regulation S-X, the following table provides combined summarized
financial information of Brookfield BRP Holdings (Canada) Inc. and the guarantor subsidiaries for the year ended
December 31:

(MILLIONS)
Revenues(1)
Gross profit ......................................................................................................

...................................................................................................... $

Dividend income from non-guarantor subsidiaries .........................................

Net income ......................................................................................................

2021

— $
—
562
532

2020

— $
—
436
410

2019
—
—
2,578
2,429

(1)

Brookfield Renewable's total revenues for the year ended December 31, 2021 were $4,096 million (2020: $3,810 million and 2019:
$3,971 million).

(MILLIONS)
Current assets(1)
Total assets(2)(3)
Current liabilities(4)
Total liabilities(5)
(1)

...................................................................................................................................... $
.......................................................................................................................................

.................................................................................................................................

.....................................................................................................................................

December 31, 2021

December 31, 2020
582
1,958
6,544
6,758

1,145 $
2,688
7,710
7,710

(2)

(3)

(4)

(5)

Amount due from non-guarantor subsidiaries was $904 million (2020: $567 million).
Brookfield Renewable's total assets as at December 31, 2021 and December 31, 2020 were $55,867 million and $49,722 million.
Amount due from non-guarantor subsidiaries was $2,360 million (2020: $1,856 million).
Amount due to non-guarantor subsidiaries was $7,463 million (2020: $6,048 million).
Amount due to non-guarantor subsidiaries was $7,463 million (2020: $6,049 million).

OFF-STATEMENT OF FINANCIAL POSITION ARRANGEMENTS

Brookfield Renewable does not have any off-statement of financial position arrangements that have or are
reasonably likely to have a material current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are
material to investors.

Brookfield Renewable issues letters of credit from its corporate credit facilities for general corporate purposes
which include, but are not limited to, security deposits, performance bonds and guarantees for reserve accounts. As
at December 31, 2021, letters of credit issued amounted to $1,048 million (2020: $716 million).

Page 37

PART 6 – SELECTED QUARTERLY INFORMATION

HISTORICAL OPERATIONAL AND FINANCIAL INFORMATION

YEAR ENDED DECEMBER 31
(MILLIONS, EXCEPT AS NOTED)

Operational information:

2021

2020

2019

Capacity (MW) ..................................................................................................................

21,049

18,884

18,883

Total generation (GWh)

Long-term average generation .......................................................................................

Actual generation ...........................................................................................................

Proportionate generation (GWh)

Long-term average generation .......................................................................................

Actual generation ...........................................................................................................

Average revenue ($ per MWh) .......................................................................................

58,913

56,629

29,852

27,150

57,457

52,782

27,998

26,052

53,926

52,560

26,189

26,038

................................................................................

.............................................................. $ (368)

Additional financial information:
Net income (loss) attributable to Unitholders
Basic earnings (loss) per LP unit(1)
Proportionate Adjusted EBITDA(2)
Funds From Operations(2)
Funds From Operations per Unit(2)(3)
Distribution per LP unit .....................................................................................................
YEAR ENDED DECEMBER 31
2021
(MILLIONS, EXCEPT AS NOTED)
Property, plant and equipment, at fair value ..................................................................... $ 49,432

..................................................................................................

...................................................................................

.................................................................................

(0.69)

1,876

1.45

1.22

934

Equity-accounted investments ...........................................................................................

Total assets ........................................................................................................................

Total borrowings ...............................................................................................................

Deferred income tax liabilities ..........................................................................................

Other liabilities ..................................................................................................................
Participating non-controlling interests – in operating subsidiaries ...................................
General partnership interest in a holding subsidiary held by Brookfield ..........................
Participating non-controlling interests – in a holding subsidiary – Redeemable/

Exchangeable units held by Brookfield ........................................................................

BEPC exchangeable shares ...............................................................................................

Preferred equity .................................................................................................................

Perpetual subordinated notes .............................................................................................

Preferred limited partners’ equity .....................................................................................

Limited partners’ equity ....................................................................................................

Total liabilities and equity .................................................................................................
Debt-to-total capitalization (market value)(4)

....................................................................

1,107

55,867

21,529

6,215

4,127
12,303
59

2,894

2,562

613

592

881

4,092

55,867

33 %

$ (304)

$ (103)

(0.61)

1,614

807

1.32

1.16

(0.26)

1,444

761

1.30

1.10

2020
$ 44,590

2019
$ 41,055

971

49,722

18,082

5,515

4,358
11,100
56

2,721

2,408

609

—

1,028

3,845

49,722

27 %

937

46,196

17,300

4,855

3,561
11,086
68

3,317

—

597

—

833

4,579

46,196

34 %

(1)

(2)

(3)

(4)

For the year ended December 31, 2021, average LP units totaled 274.9 million (2020: 271.1 million and 2019: 268.3 million)
Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure, See “Cautionary Statement Regarding Use of Non-
IFRS Measures” and “PART 4 – Financial Performance Review on Proportionate Information – Reconciliation of Non-IFRS Measures”.
Average Units outstanding for the year ended December 31, 2021 totaled 645.6 million (2020: 609.5 million and 2019: 583.5 million) being
inclusive of our LP units, Redeemable/Exchangeable partnership units, BEPC exchangeable shares and GP interest.
Based on market values of Preferred equity, Perpetual subordinated notes, Preferred limited partners’ equity and Unitholders’ equity.

Page 38

SUMMARY OF HISTORICAL QUARTERLY RESULTS

The following is a summary of unaudited quarterly financial information for the last eight consecutive quarters:

2021

2020

(MILLIONS, EXCEPT AS NOTED)

Total Generation (GWh) – LTA ..........................................................................................................

14,946

13,776

16,092

14,099

14,333

13,446

15,527

14,151

Total Generation (GWh) – actual .........................................................................................................

14,585

13,533

14,683

13,828

13,247

12,007

13,264

14,264

Proportionate Generation (GWh) – LTA .............................................................................................

Proportionate Generation (GWh) – actual ...........................................................................................

7,197

6,637

6,697

6,125

8,356

7,013

7,602

7,375

7,354

6,583

6,618

5,753

7,309

6,552

6,717

7,164

Revenues ..............................................................................................................................................

$ 1,091 $

966 $ 1,019 $ 1,020 $

952 $

867 $

942 $ 1,049

Net income (loss) attributable to Unitholders ..................................................................................

Basic earnings (loss) per LP unit ......................................................................................................

Funds From Operations ........................................................................................................................

Funds From Operations per Unit ..........................................................................................................

Distribution per LP unit .......................................................................................................................

(57)

(0.12)

214

0.33

0.30

(115)

(0.21)

210

0.33

0.30

(63)

(0.13)

268

0.42

0.30

(133)

(0.24)

242

0.38

0.30

(120)

(0.22)

201

0.31

0.29

(162)

(0.29)

157

0.25

0.29

(42)

(0.11)

232

0.40

0.29

0.01

217

0.37

0.29

Page 39

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)

Actual Generation

LTA Generation

Revenues

2021

2020

2021

2020

2021

2020

(MILLIONS)

Adjusted
EBITDA(2)
2021

2020

Funds From
Operations

2021

2020

Hydroelectric

North America ..............................................................................

2,559

2,514

2,913

2,912 $

237 $

182 $

151 $

105 $

115 $

Brazil ............................................................................................

810

849

1,007

Colombia ......................................................................................

1,100

966

1,004

977

4,469

4,329

4,924

4,896

Wind

North America ..............................................................................

1,044

1,132

1,195

1,349

Europe ...........................................................................................

Brazil ............................................................................................

Asia ...............................................................................................

262

128

121

339

141

123

251

168

113

357

169

104

339

278

219

206

Solar ................................................................................................
Energy transition(1)
Corporate .......................................................................................

........................................................................

356

257

—

304

215

—

381

165

—

338

141

—

(7)

1,555

1,735

1,727

1,979

146

145

100

123

149

173

(111)

(117)

Total ................................................................................................

6,637

6,583

7,197

7,354 $

632 $

554 $

431 $

456 $

214 $

201

(1)

Actual generation includes 90 GWh (2020: 98 GWh) from facilities that do not have a corresponding long-term average. See PART 9 – Presentation to Stakeholders’ for why we do not consider long-term average for certain
of our facilities.

(2) Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.

For the three months ended December 31, 2021, Funds From Operations were $214 million versus $201 million in the prior year. Funds From Operations
increased $13 million primarily due to contributions from growth, strong asset availability, and favorable hydroelectric generation, particularly at our assets in the
United States.

Page 40

RECONCILIATION OF NON-IFRS MEASURES

The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS measures. Net income (loss) is reconciled to Adjusted

EBITDA for the three months ended December 31, 2021:

Hydroelectric

Wind

Attributable to Unitholders

(MILLIONS)

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Solar

Energy
transition

Corporate

Total

Net income (loss) .............................................................................................................................. $

$ 13

129

(97) $

(11) $

$ (30) $

(69) $

Add back or deduct the following: ....................................................................................................

Depreciation ...................................................................................................................................

Deferred income tax expense (recovery) .......................................................................................

Foreign exchange and financial instrument loss (gain) .................................................................
Other(1)

...........................................................................................................................................

Management service costs .............................................................................................................

Interest expense .............................................................................................................................

.................

Adjusted EBITDA .............................................................................................................................

(12)

—

(58)

151

(4)

(5)

—

(6)

—

(22)

(134)

111

(29)

—

(1)

(41)

(7)

—

(2)

(17)

(23)

—

(22)

(12)

—

(17)

(48)

(8)

—

(24)

—

(32)

(3)

—

(7)

381

(97)

120

255

(17)

(362)

431

(1)

(2)

Page 41

The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS measures. Net income (loss) is reconciled to Adjusted

EBITDA for the three months ended December 31, 2020:

(MILLIONS)

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Solar

Energy
transition

Corporate

Total

Net income (loss) ............................................................................................................................... $

$ 67

(3) $

(281) $

(5)

Hydroelectric

Wind

Attributable to Unitholders

Add back or deduct the following: .....................................................................................................

Depreciation ....................................................................................................................................

Deferred income tax expense (recovery) ........................................................................................

Foreign exchange and financial instrument loss (gain) ..................................................................
Other(1)

............................................................................................................................................

Management service costs ..............................................................................................................

Interest expense ...............................................................................................................................

..................

(38)

(10)

—

(1)

(14)

(3)

—

(3)

(7)

(3)

—

(34)

(26)

(11)

—

(32)

(111)

(26)

(5)

(24)

(4)

(6)

—

(20)

(71)

—

(17)

(36)

(14)

(4)

—

(3)

(70)

(11)

258

—

337

(185)

(115)

314

243

(254)

Adjusted EBITDA .............................................................................................................................. $

105

$ 63

456

(1)

(2)

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.

Page 42

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 ended December 31:

(MILLIONS)

Net income (loss) .............................................................................................................. $

Add back or deduct the following: ....................................................................................

Depreciation ...................................................................................................................

Deferred income tax (recovery) expense ........................................................................

Foreign exchange and financial instruments loss (gain) ................................................
Other(1)

............................................................................................................................

Amount attributable to equity accounted investments and non-controlling interest(2)
Funds from Operations ...................................................................................................... $
(1)

.....

2021

33 $

381

(97)

120

(277)

214 $

2020

(5)

337

(185)

(115)

314

(145)

201

(2)

Refer to Note 9 - Other in the Audited Consolidated Financial Statements for more details on the Other balance, and includes 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.
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.

The following table reconciles the per unit non-IFRS

The following table reconciles the per Unit non-IFRS financial measures to the most directly comparable IFRS
measures. Basic earnings per LP unit is reconciled to Funds From Operations per Unit, for the three months ended
December 31:

..................................................................................................... $

Basic loss per LP unit(1)
Depreciation ......................................................................................................................
Foreign exchange and financial instruments loss ..............................................................
Deferred income tax expense ............................................................................................
Other ..................................................................................................................................
Funds From Operations per Unit(2)

.................................................................................... $

2021
(0.12) $
0.33
0.10
(0.13)
0.15
0.33 $

2020
(0.22)
0.33
—
(0.22)
0.42
0.31

(1)

(2)

Average LP units outstanding for the three months ended December 31, 2021 were 275.0 million (2020: 274.8 million).
Average Units for the three months ended December 31, 2021 were 645.7 million (2020: 645.5 million), being inclusive of LP units,
Redeemable/Exchangeable partnership units, BEPC exchangeable shares and GP interest.

Page 43

PART 7 – BUSINESS RISKS AND RISK MANAGEMENT

RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

Management’s objectives are to protect Brookfield Renewable against material economic exposures and
variability of results from various financial risks that include electricity price risk, foreign currency risk, interest rate
risk, credit risk, and liquidity risk. These risks are further discussed in Note 5 – Risk management and financial
instruments in the audited annual consolidated financial statements.

The following table outlines Brookfield Renewable’s financial risks and how they are managed:

Financial Risk
Electricity price

Description of Risk
We have exposure to movements in the
market price of electricity.

Management of Risk
'- Enter into long-term contracts that specify the
price at which electricity is sold

Foreign currency

We are exposed to foreign currency risk –
including Canadian dollar, Brazilian real,
Euro, British pound sterling, Colombian
peso, Indian rupee, Chinese yuan and
Malaysia Ringgit – related to operations,
anticipated transactions, and certain foreign
currency debt.

- Maintain a portfolio of short, medium, and
long-term financial contracts to mitigate our
exposure to fluctuations in electricity prices

- Ensure limits and controls are in place for
trading activities

- As of December 31, 2021, we had, on a
proportionate basis, approximately 90% of 2022
generation (2020: 84% of 2021 generation)
contracted under short-term and long-term power
purchase agreements and financial contracts,
excluding Brazil and Colombia. See “Part 4 –
Financial Performance Review on Proportionate
Information”
'- Enter into foreign currency contracts designed
to minimize the exposure to foreign currency
fluctuations

- 30% of cash flow is generated in the United
States while Canadian Dollar and Euro exposure,
representing 40% of our portfolio, is proactively
managed through foreign currency contracts

- Limited foreign currency contracts to hedge our
exposure to currencies in South America and
Asia – representing 30% of our portfolio – due to
the high costs associated with hedging certain
currencies. However, these specific exposures
are mitigated by the annual inflation-linked
escalations in our power purchase agreements

Page 44

Financial Risk
Interest rate

Description of Risk
We are exposed to interest rate risk on the
interest rates of our variable-rate debt, and
on dividend and distribution rate resets on
our Class A Preference Shares and
Preferred Units, respectively.

Management of Risk
'- Assets largely consist of long duration physical
assets, and financial liabilities consist primarily
of long-term fixed-rate debt or floating-rate debt
that has been swapped to fixed rates with interest
rate financial
the
exposure to interest rate fluctuations

to minimize

instruments

- Enter into interest rate contracts to lock-in
fixed rates on certain anticipated future debt
issuances

- Our proportionate floating rate exposure
represents 5% of our total debt, after affecting
for variable-rate debt that has been hedged
through the use of interest rate swaps. Our
floating rate exposure arises primarily from our
South American operations, as we have limited
opportunities to raise fixed-rate debt or hedge
due to the high associated costs

Page 45

Financial Risk
Credit

Liquidity

Description of Risk
We are exposed to credit risk from
operating activities and certain financing
activities, the maximum exposure of which
is represented by the carrying amounts
reported in the statements of financial
position. We are exposed to credit risk if
counterparties to our energy contracts,
interest rate swaps, forward foreign
exchange contracts and physical electricity
and gas transactions as well as trade
receivables are unable to meet their
obligations.
We are exposed to liquidity risk for
financial liabilities.

We are also subject to internal liquidity risk
because we conduct our business activities
through separate legal entities (subsidiaries
and affiliates) and are dependent on receipts
of cash from those entities to defray
corporate expenses and to make dividend
and distribution payments to shareholders
and Unitholders, respectively. Under the
credit agreements for subsidiary debt, it is
conventional for distributions of cash to
Brookfield Renewable to be prohibited if
the loan is in default (notably for non-
payment of principal or interest) or if the
entity fails to achieve a benchmark debt-
service coverage ratio. Refer to Note 19 –
Capital management of the annual
consolidated financial statement for further
disclosures.

Management of Risk
'- Diverse counterparty base with long-standing
credit histories

- Exposure to counterparties with investment-
grade credit ratings

- Use of standard trading contracts and other
standard credit risk mitigation techniques

- As at December 31, 2021, 82% (2020: 84%) of
Brookfield Renewable’s trade receivables were
current
'- As at December 31, 2021, available liquidity
was $4.1 billion. Liquidity is comprised of our
share of cash and cash equivalents, investments
in marketable securities, the available portion of
the corporate credit facilities, and our share of
subsidiary credit
the
available liquidity and debt maturity ladder are
included in “PART 5 – Liquidity and Capital
Resources”

facilities. Details of

- Effective and regular monitoring of debt
covenants and cooperation with lenders to cure
any defaults

- Target investment grade debt or debt with
investment grade characteristics with the ability
to absorb volatility in cash flows

- Long-term duration of debt instruments and the
diversification
in maturity dates over an
extended period of time

- Sufficient cash from operating activities, access
to undrawn credit facilities, and possible capital
markets financing to fund our operations and
fulfill our obligations as they become due

- Ensure access to public capital markets and
maintain a strong investment grade credit rating

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RISK FACTORS

The following represents the most relevant risk factors relating to Brookfield Renewable's business, and is not
all-inclusive. For a description of other possible risks please see the Form 20-F which can be accessed on EDGAR
and SEDAR.

Risks Relating to Our Operations and the Renewable Power Industry

Changes to resource availability, as a result of climate change or otherwise, at any of our facilities could
adversely affect the amount of electricity that we are able to generate.

The revenues generated by our facilities are correlated to the amount of electricity generated, which is in turn
dependent upon available water flows and upon wind, irradiance and weather conditions generally. Hydrology,
wind, irradiance and weather conditions have natural variations from season to season and from year to year and
may also change permanently because of climate change or other factors.

If one or more of our generation facilities were to be subject in the future to flooding, extreme weather
conditions (including severe wind storms and droughts), fires, natural disasters, or if unexpected geological or other
adverse physical conditions were to develop at any of our generation facilities, the generation capacity of that
facility could be significantly reduced or eliminated. For example, our hydroelectric facilities depend on the
availability of water flows within the watersheds in which we operate and could be materially impacted by changes
to hydrology patterns, such as droughts. In the event of severe flooding, our hydrology facilities may be damaged.
Wind energy and solar energy are highly dependent on weather conditions and, in particular, on wind conditions and
irradiance, respectively. The profitability of a wind farm depends not only on observed wind conditions at the site,
which are inherently variable, but also on whether observed wind conditions are consistent with assumptions made
during the project development phase or when a given project was acquired. Similarly, projections of solar resources
depend on assumptions about weather patterns, shading and irradiance, which are inherently uncertain and may not
be consistent with actual conditions at the site. A sustained decline in water flow at our hydroelectric facilities, in
wind conditions at our wind energy facilities or of irradiance at our solar facilities could lead to an adverse change in
the volume of electricity generated, revenues and cash flow.

Climate change may increase the frequency and severity of severe weather conditions and may change existing
weather patterns in ways that are difficult to anticipate, which could result in more frequent and severe disruptions to
our generation facilities and the power markets in which we operate. In addition, customers’ energy needs generally
vary with weather conditions, primarily temperature and humidity. To the extent weather conditions are affected by
climate change, customers’ energy use could increase or decrease depending on the duration and magnitude of
changing weather conditions, which could adversely affect our business, results of operations and cash flows.

Supply and demand in the energy market is volatile and such volatility could have an adverse impact on
electricity prices and an adverse effect on Brookfield Renewable’s assets, liabilities, business, financial condition,
results of operations and cash flow.

A portion of our revenues are tied, either directly or indirectly, to the wholesale market price for electricity in
the markets in which we operate. Wholesale market electricity prices are impacted by a number of factors including:
the management of generation and the amount of excess generating capacity relative to load in a particular market;
the cost of controlling emissions of carbon dioxide and other pollutants; the structure of the electricity market;
weather conditions (such as extremely hot or cold weather) that impact electrical load; the price of fuel (such as
natural gas) that is used to generate electricity; and political instability (such as conflict between Ukraine and Russia
and the disruptive impact it might have on European natural gas markets).

In the long term, there is uncertainty surrounding the trend in electricity demand growth, which is influenced by
macroeconomic conditions, absolute and relative energy prices, and energy conservation and demand-side
management. Correspondingly, from a supply perspective, there are uncertainties associated with long term plans for
the construction or retirement of baseload generation capacity (e.g., the timelines associated with the gradual
retirement of coal and nuclear capacity in certain markets), the timing of generating plant retirements – in part driven
by environmental regulations – and with the scale, pace and structure of replacement capacity, again reflecting a
complex interaction of economic and political pressures and environmental preferences. This volatility and

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uncertainty in the power market generally, including the non-renewable power market, could have an adverse effect
on Brookfield Renewable’s assets, liabilities, business, financial condition, results of operations and cash flow.

As our contracts expire, we may not be able to replace them with agreements on similar terms.

Certain PPAs in our portfolio will be subject to re-contracting in the future. If the price of electricity in power
markets is declining at the time of such re-contracting, it may impact our ability to re-negotiate or replace these
contracts on terms that are acceptable to us, or at all. In addition, a concentrated pool of potential buyers for
electricity generated by our renewable energy facilities in certain jurisdictions may restrict our ability to negotiate
favorable terms under new PPAs or existing PPAs that are subject to re-contracting. We cannot provide any
assurance that we will be able to re-negotiate or replace these contracts once they expire, and even if we are able to
do so, we cannot provide any assurance that we will be able to obtain the same prices or terms we currently receive.
If we are unable to re-negotiate or replace these contracts, or unable to secure prices at least equal to the current
prices we receive, our business, financial condition, results of operation and prospects could be adversely affected.
Conversely, what appears to be an attractive price at the time of recontracting could, if power prices significantly
rise over the PPA’s term, result in us having committed to sell power in the future at below then-market rates.

There is a risk that our concessions and licenses will not be renewed.

We hold concessions and licenses and we have rights to operate our facilities which generally include rights to
the land and water required for power generation and which are subject to renewal at the end of their terms. We
generally expect that our concessions and licenses will be renewed. However, if we are not granted renewal rights,
or if our concessions or licenses are renewed subject to conditions which impose additional costs, or impose
additional restrictions such as setting a price ceiling for energy sales, our profitability and operational activity could
be adversely impacted.

The amount of uncontracted generation in our portfolio may increase.

As at December 31, 2021, approximately 81% of our generation (on a proportionate basis) is contracted over
the following five years under long-term, fixed price contracts with creditworthy counterparties. In 2020 and 2021,
approximately 90% of our generation (on a proportionate basis) was contracted in each of those calendar years. The
portion of our portfolio that is uncontracted may increase gradually over time. We may sell electricity from our
uncontracted generation into the spot-market or other competitive power markets from time to time. With respect to
such transactions, we are not guaranteed any rate of return on our capital investments through mandated rates, and
revenues and results of operations are likely to depend, in large part, upon prevailing market prices. These market
prices may fluctuate substantially over relatively short periods of time and could, in certain circumstances, have an
adverse effect on our business, financial condition, results of operations and cash flows.

The ability to deliver electricity to our various counterparties and buildout our development pipeline requires the
availability of (and access to) interconnection facilities and transmission systems.

Our ability to sell electricity is impacted by the availability of, and access to, the various transmission systems
to deliver power to a contractual delivery point and the arrangements and facilities necessary to interconnect
generation projects to the transmission systems. The absence of this availability and access, our inability to obtain
reasonable terms and conditions for interconnection and transmission agreements, the operational failure or
decommissioning of existing interconnection facilities or transmission facilities, the lack of adequate capacity on
such interconnection or transmission facilities, curtailment as a result of transmission facility downtime, or the
failure of any relevant jurisdiction to expand transmission facilities, may have an adverse effect on our ability to
deliver electricity to our various counterparties or the requirement of counterparties to accept and pay for energy
delivery. Insufficient access to transmission and interconnection systems may also constrain our ability to develop
new utility scale projects, which require transmission systems to have available interconnection points and the
overall capacity necessary to transmit the energy expected to be generated by a development project once it achieves
commercial operation. Lack of access to transmission systems could accordingly adversely affect our assets,
liabilities, business, financial condition, results of operations and cash flow.

The occurrence of dam failures could result in a loss of generating capacity and damage to the environment,
third parties or the public, which could require us to expend significant amounts of capital and other resources
and expose us to significant liability.

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The occurrence of dam failures at any of our hydroelectric generating stations or the occurrence of dam failures
at other generating stations or dams operated by third parties whether upstream or downstream of our hydroelectric
generating stations could result in a loss of generating capacity until the failure has been repaired. If the failure is at
one of our facilities, repairing such failure could require us to expend significant amounts of capital and other
resources. As noted above, such failures could also result in damage to the environment or damages and harm to
third parties or the public, which could expose us to significant liability. A dam failure at a generating station or dam
operated by a third party could result in new and potentially onerous regulations that could impact Brookfield
Renewable’s facilities. Any such new regulations could require material capital expenditures to maintain compliance
and our financial position could be adversely affected.

Developments associated with the COVID-19 pandemic could have an adverse effect on our business.

The spread of the COVID-19 virus, including subsequent mutations, and actions taken globally in response to
COVID-19, generally disrupted business activities in the jurisdictions in which we operate and elsewhere.
Governments around the world implemented measures to control the spread of the virus, including quarantines,
social distancing protocols, “stay at home” orders, travel restrictions, business curtailments, school closures and
other measures that restricted economic and social activity. Governments and central banks around the world also
enacted fiscal and monetary stimulus measures to mitigate the economically harmful impact of these measures.

While our business relies, to a certain extent, on free movement of goods, services, and capital around the
world, all of which were restricted as a result of the COVID-19 pandemic, we have not to date experienced the
material impacts to our operations, financial condition, cash flows or financial performance that has been
experienced by many other businesses. At the outset of the pandemic we implemented a response plan to maintain
our operations despite the outbreak of the virus, including extra safety precautions with respect to our personnel and
contingency plans with respect to our facilities and these measure have to date been generally successful.

Given the ongoing and dynamic nature of the circumstances surrounding COVID-19, it is difficult to predict
how COVID-19, including any responses to it, will impact the global economy and our business or for how long any
disruptions are likely to continue. The extent of such impact will depend on future developments, which are
uncertain, evolving and difficult to predict, including, but not limited to, new information which may emerge
concerning additional variants of COVID-19 that may be able to circumvent the protections afforded by existing
vaccines and/or may be more transmissible (like the Omicron variant) or result in more severe sickness (like the
Delta variant), additional actions which may be taken to contain COVID-19 or treat its impact, such as re-imposing
previously lifted measures or putting in place additional restrictions, and the availability, pace of distribution and
social acceptance of effective vaccines and of government efforts to slow the spread of COVID-19.

We may experience direct or indirect impacts from the pandemic, including delays in development or
construction activities and contract counterparties failing to meet their obligations. The direct or indirect impacts of
the pandemic going forward may also be different from those we currently face. For example, changing workforce
patterns and tightening labour market conditions resulting from the pandemic could make it more difficult for us and
the Service Provider to secure and retain talented professionals in our core markets. Similarly, supply chain
constraints related to the pandemic and economic inflation resulting from government support for economies could
result in higher costs for goods and services and adversely impact our business. Any such developments could have
an adverse effect on our assets, liabilities, business, financial condition, results of operations and cash flows.

We are subject to foreign currency risk which may adversely affect the performance of our operations and our
ability to manage such risk depends, in part, on our ability to implement an effective hedging strategy.

A significant portion of our current operations are in countries where the U.S. dollar is not the functional
currency. These operations pay distributions in currencies other than the U.S. dollar, which we must convert to U.S.
dollars prior to making such distributions. A significant depreciation in the value of such foreign currencies,
measures introduced by foreign governments to control inflation or deflation, currency exchange or export controls
may have an adverse effect on our business, financial condition, results of operations and cash flows. When
managing our exposure to currency risks, we use foreign currency forward contracts and other strategies to mitigate
currency risk and there can be no assurances that these strategies will be successful.

Energy marketing risks may have an adverse effect on our business.

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Our energy marketing business involves the establishment of trading positions in the wholesale and retail
energy markets. To the extent that we enter into forward purchase contracts or take long positions in the energy
markets, a downturn in market prices could result in losses from a decline in the value of such long positions.
Conversely, to the extent that we enter into forward sales contracts or take short positions in the energy markets, an
upturn in market prices could expose us to losses as we attempt to cover any short positions by acquiring energy in a
rising market.

Our trading positions can be impacted by volatility in the energy markets that, in turn, depend on various
factors, including weather in various geographical areas and short-term supply and demand imbalances, which
cannot be predicted with any certainty. A shift in the energy markets could adversely affect our positions which
could also have an adverse effect on our business.

Although we employ a number of risk management controls in order to limit exposure to risks arising from
trading activities, we cannot guarantee that losses will not occur and such losses may be outside the parameters of
our risk controls.

There are general industry risks associated with the power markets in which we operate.

We currently operate in power markets in North America, South America, Europe and Asia, each of which is
affected by competition, price, supply of and demand for power, the location of import/export transmission lines and
overall political, economic and social conditions and policies. Our operations are also largely concentrated in a
relatively small number of countries, and accordingly are exposed to country-specific risks (such as weather
conditions, local economic conditions or political/regulatory environments) that could disproportionately affect us.
A general and extended decline in the North American, South American, European or Asian economies, or in the
economies of the specific countries in which we operate, or sustained conservation efforts to reduce electricity
consumption, could have the effect of reducing demand for electricity and could thereby have an adverse effect on
our business, financial condition, results of operations and cash flows.

Our operations are exposed to health, safety, security and environmental risks.

The ownership, construction and operation of our generation assets carry an inherent risk of liability related to
health, safety, security and the environment, including the risk of government imposed orders to remedy unsafe
conditions and/or to remediate or otherwise address environmental contamination or damage. We could also be
exposed to potential penalties for contravention of health, safety, security and environmental laws and potential civil
liability. In the ordinary course of business we incur capital and operating expenditures to comply with health,
safety, security and environmental laws, to obtain and comply with licenses, permits and other approvals and to
assess and manage related risks. The cost of compliance with these laws (and any future laws or amendments
enacted) may increase over time and result in additional material expenditures. We may become subject to
government orders, investigations, inquiries or other proceedings (including civil claims) relating to health, safety,
security and environmental matters as a result of which our operations may be limited or suspended. The occurrence
of any of these events or any changes, additions to or more rigorous enforcement of health, safety, security and
environmental laws could have an adverse impact on operations and result in additional material expenditures.
Additional environmental, health and safety issues relating to presently known or unknown matters may require
unanticipated expenditures, or result in fines, penalties or other consequences (including changes to operations) that
may be adverse to our business and results of operations.

Counterparties to our contracts may not fulfill their obligations.

If for any reason, any of the purchasers of power under our PPAs are unable or unwilling to fulfill their
contractual obligations under the relevant PPA or if they refuse to accept delivery of power pursuant to the relevant
PPA, our assets, liabilities, business, financial condition, results of operations and cash flow could be adversely
affected as we may not be able to replace the agreement with an agreement on equivalent terms and conditions.
Similarly, external events, such as a severe economic downturn, could impair the ability of some counterparties to
the PPAs or some customers to pay for electricity received.

We rely on computerized business systems, which could expose us to cyber-attacks.

Our business relies on information technology. In addition, our business relies upon telecommunication services
to remotely monitor and control our assets and interface with regulatory agencies, wholesale power markets and

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customers. The information and embedded systems of key business partners, including suppliers of the information
technology systems on which we rely, and regulatory agencies are also important to our operations. In light of this,
we may be subject to cyber security risks or other breaches of information technology security intended to obtain
unauthorized access to our proprietary information and that of our business partners, destroy data or disable,
degrade, or sabotage these systems through the introduction of computer viruses, fraudulent emails, cyber-attacks
and other means, and such breaches could originate from a variety of sources including our own employees or
unknown third parties. There can be no assurance that measures implemented to protect the integrity of these
systems will provide adequate protection, and any such breach of our information technology could go undetected
for an extended period of time. A breach of our cyber security measures or the failure or malfunction of any of our
computerized business systems, associated backup or data storage systems could cause us to suffer a disruption in
one or more parts of our business and experience, among other things, financial loss, a loss of business
opportunities, misappropriation or unauthorized release of confidential or personal information, damage to our
systems and those with whom we do business, violation of privacy and other laws, litigation, regulatory penalties
and remediation and restoration costs as well as increased costs to maintain our systems. For example, the European
General Data Protection Regulation, which came into effect in May 2018, includes stringent operational
requirements for entities processing personal information and significant penalties for non-compliance, as does
similar legislation in certain U.S. states in which we operate. Cyber-security breaches or failures of our information
technology systems could have an adverse effect on our business operations, financial reporting, financial condition
and results of operations, and result in reputational damage.

Risks Relating to Financing

Our ability to finance our operations is subject to various risks relating to the state of capital markets.

We expect to finance future acquisitions, the development and construction of new facilities and other capital
expenditures out of cash generated from our operations, capital recycling, debt and possible future issuances of
equity. Disruptions and volatility in capital markets could increase the Partnership’s cost of capital and adversely
affect its ability to fund its liquidity and capital needs and fund the growth of the business.

There is debt throughout our corporate structure that will need to be replaced from time to time. For example,
BEP, BRELP and the Holding Entities have corporate debt and certain of our Operating Entities have limited
recourse project level debt. Certain of our portfolio companies like TerraForm Power, TerraForm Global and Isagen
also have holding company level debt. Our ability to obtain debt or equity financing to fund our growth, and our
ability to refinance existing corporate and non-recourse indebtedness, is dependent on, among other factors, the
overall state of capital markets (as well as local market conditions, particularly in the case of non-recourse
financings), continued operating performance of our assets, future electricity market prices, the level of future
interest rates, lenders’ and investors’ assessment of our credit risk and investor appetite for investments in renewable
energy and infrastructure assets in general and in Brookfield Renewable’s securities in particular. Also, certain
Brookfield Renewable financing agreements contain conditions that limit our ability to repay indebtedness prior to
maturity without incurring penalties, which may limit our ability to refinance indebtedness or raise new capital on
favorable terms. To the extent that external sources of capital become limited or unavailable or available on onerous
terms, our ability to fund acquisitions and make necessary capital investments to construct new or maintain existing
facilities may be impaired, and as a result, our business, financial condition, results of operations and prospects may
be adversely affected.

We are subject to operating and financial restrictions through covenants in our loan, debt and security
agreements.

Brookfield Renewable is subject to operating and financial restrictions through covenants in our loan, debt and
security agreements. These restrictions prohibit or limit our ability to, among other things, incur additional debt,
provide guarantees for indebtedness, grant liens, dispose of assets, liquidate, dissolve, amalgamate, consolidate or
effect corporate or capital reorganizations, declare distributions, issue equity interests, and create subsidiaries. A
financial covenant in our corporate bonds and in our corporate bank credit facilities limits our overall indebtedness
to a percentage of total capitalization, a restriction which may limit our ability to obtain additional financing,
withstand downturns in our business and take advantage of business and development opportunities. If we breach
our covenants, our credit facilities may be terminated or come due and such event may cause our credit rating to
deteriorate and subject Brookfield Renewable to higher interest and financing costs. From time to time, we also

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acquire businesses and assets that have debt obligations that are in default. We may also be required to seek
additional debt financing on terms that include more restrictive covenants, require repayment on an accelerated
schedule or impose other obligations that limit our ability to grow our business, acquire needed assets or take other
actions that we might otherwise consider appropriate or desirable.

Changes in our credit ratings may have an adverse effect on our financial position and ability to raise capital.

We cannot assure you that any credit rating assigned to Brookfield Renewable or any of its portfolio companies,
operating subsidiaries or other subsidiaries or their debt securities will remain in effect for any given period of time
or that any rating will not be lowered or withdrawn entirely by the relevant rating agency. A lowering or withdrawal
of such ratings may have an adverse effect on our financial position and ability to raise capital.

Risks Relating to Our Growth Strategy

We may be unable to identify sufficient investment opportunities and complete transactions, as planned.

Our strategy for building value for our Unitholders is to seek to acquire or develop high-quality assets and
businesses that generate sustainable and increasing cash flows, with the objective of achieving appropriate risk-
adjusted returns on our invested capital over the long-term. However, there is no certainty that we will be able to
find sufficient investment opportunities and complete transactions that meet our investment criteria. Our investment
criteria consider, among other things, the financial, operating, governance and strategic merits of a proposed
acquisition including whether we expect it will meet our targeted return hurdle and, as such, there is no certainty that
we will be able to continue growing our business by making acquisitions or developing assets at attractive returns.
Competition for assets is significant and competition from other well-capitalized investors or companies may
significantly increase the purchase price or prevent us from completing an acquisition. We may also decline
opportunities that we do not believe meet our investment criteria, which our competition may pursue instead.
Further, our growth initiatives may be subject to a number of closing conditions, including, as applicable, third-party
consents, regulatory approvals (including from competition authorities) and other third-party approvals or actions
that are beyond our control. If all or some of our growth initiatives are unable to be completed on the terms agreed,
we may need to delay certain acquisitions or abandon them altogether. If returns are lower than anticipated from
such initiatives, we also may not be able to achieve growth in our distributions in line with our stated goals and the
market value of our Units may decline.

Our operations in the future may be different from our current business, including through future energy
transition investments.

Our operations today include hydroelectric, wind, utility solar and distributed generation power generation as
well as biomass power generation, cogeneration and storage businesses in North and South America, Europe and
Asia. We may acquire interests in other businesses, and we may seek to divest of certain of our existing operations
in the future. In addition, pursuant to the Relationship Agreement with Brookfield, Brookfield may (but is not
required to) offer us the opportunity to acquire: (i) an integrated utility even if a significant component of such
utility’s operations consist of a non-renewable power generation operation or development, such as a power
generation operation that uses coal or natural gas, (ii) a portfolio of power operations, even if a significant
component of such portfolio’s operations consist of non-renewable power generation, or (iii) renewable power
generation operations or developments that comprise part of a broader enterprise.

The completion of new acquisitions can have the effect of significantly increasing the scale and scope of our
operations, including operations in new geographic areas and industry sectors, and the Service Providers may
have difficulty managing these additional operations. In addition, acquisitions involve risks to our business.

A key part of our strategy will involve seeking acquisition opportunities upon Brookfield’s recommendation
and allocation of opportunities to us. Acquisitions may increase the scale, scope and diversity of our operating
businesses. We depend on the diligence and skill of Brookfield’s and our professionals to effectively manage
Brookfield Renewable, integrating acquired businesses with our existing operations. These individuals may have
difficulty managing additional acquired businesses and may have other responsibilities within Brookfield’s asset
management business. If any such acquired businesses are not effectively integrated and managed, our existing
business, financial condition and results of operations may be adversely affected.

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Future acquisitions will likely involve some or all of the following risks, which could materially and adversely
affect our business, financial condition or results of operations: the difficulty of integrating the acquired operations
and personnel into our current operations; potential disruption of our current operations; diversion of resources,
including Brookfield’s time and attention; the difficulty of managing the growth of a larger organization; the risk of
entering markets in which we have little experience; the risk of becoming involved in labor, commercial or
regulatory disputes or litigation related to the new enterprise (see Item 4.B “Business Overview — Governmental,
Legal and Arbitration Proceedings — Claim Relating to TerraForm Power’s First Wind Acquisition”); risk of
environmental or other liabilities associated with the acquired business; and the risk of a change of control resulting
from an acquisition triggering rights of third parties or government agencies under contracts with, or authorizations
held by the operating business being acquired. While it is our practice to conduct extensive due diligence
investigations into businesses being acquired, it is possible that due diligence may fail to uncover all material risks
in the business being acquired, or to identify a change of control trigger in a material contract or authorization, or
that a contractual counterparty or government agency may take a different view on the interpretation of such a
provision to that taken by Brookfield Renewable, thereby resulting in a dispute. The discovery of any material
liabilities subsequent to an acquisition, as well as the failure of an acquisition to perform according to expectations,
could have an adverse effect on our business, financial condition and results of operations. In addition, if returns are
lower than anticipated from new acquisitions, we may not be able to achieve growth in our distributions in line with
our stated goals and the market value of our securities may decline.

There are several factors which may affect our ability to develop existing sites, repower existing projects and find
new sites suitable for the development of power projects.

Our ability to realize our development growth plans is dependent on our ability to develop existing sites, to
repower existing projects that are nearing the end of their useful lives, and to find new sites suitable for development
into viable projects. Our ability to maintain a development permit often requires specific development steps to be
undertaken. Successful development of renewable power projects is typically dependent on a number of factors,
including: the ability to secure or renew our rights to an attractive site on reasonable terms, often following lengthy
negotiations and/or competitive bidding processes; accurately measuring resource availability at levels deemed
economically attractive for continued project development; the ability to secure new or renewed approvals, licenses
and permits; the acceptance of local stakeholders, including in some cases, Indigenous peoples; the ability to secure
transmission interconnection access or agreements; the ability to successfully integrate new projects or technologies
into existing assets; the ability to acquire suitable labor, equipment and construction services on acceptable terms;
the ability to attract construction project financing; and the ability to secure a long-term PPA or other sales contract
on reasonable terms. Each of these factors can be critical in determining whether or not a particular development
project might ultimately be suitable for construction. Failure to achieve any one of these elements may prevent the
development and construction of a project. When this occurs we may lose all of our investment in development
expenditures and may be required to write-off project development assets.

Development projects may also require large areas of land on which the new projects are to be constructed and
operated. Rights to use land can be obtained through freehold title, leases and other rights of use. Land title systems
vary by jurisdiction and in some cases it may not be possible to ascertain definitively who has the legal right to enter
into land tenure arrangements with the asset owner or to secure the consent of all land owners. A government, court,
regulator, Indigenous group, landowner or other stakeholder may make a decision or take action that adversely
affects the development of a project or the demand for its services. For example, a regulator may restrict our access
to an asset, or may require us to provide third parties with access. The restriction or curtailment of our rights with
respect to an asset by a regulator or otherwise may negatively impact the success of our projects.

Our ability to develop power projects is subject to construction risks and risks associated with the arrangements
we enter into with communities and joint venture partners.

Our ability to develop an economically successful project, whether as a greenfield project or by way of a
repowering of an existing project, is dependent on, among other things, our ability to construct a particular project
on-time and on-budget. The construction and development of generating facilities is subject to environmental,
engineering and construction risks that could result in cost-overruns, delays and reduced performance. A number of
factors that could cause such delays, cost over-runs or reduced performance include, but are not limited to, changes
in local laws or difficulties in obtaining permits, rights of way or approvals, changing engineering and design

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requirements, construction costs exceeding estimates for various reasons, including inaccurate engineering and
planning, failures to properly estimate the cost of raw materials, components, equipment, labor or the inability to
timely obtain them, unanticipated problems with project start-up, the performance of contractors, the insolvency of
the head contractor, a major subcontractor and/or a key equipment supplier, labor disruptions, inclement weather,
defects in design, engineering or construction (including, without limitation, latent defects that do not materialize
during an applicable warranty or limitation period) and project modifications. A delay in the projected completion of
a project can result in a material increase in total project construction costs through higher capitalized interest
charges, additional labor and other expenses, and a resultant delay in the commencement of cash flow. In addition,
such unexpected issues may result in increased debt service costs, operations and maintenance expenses and damage
payments for late delivery or the failure to meet agreed upon generation levels. This may result in an inability of the
project to meet the higher interest and principal repayments arising from the additional debt required. Protracted
delays could also result in a given project being in default of other terms of any applicable construction financing
arrangements.

In addition, we enter into various types of arrangements with communities and joint venture partners, including
in some cases, Indigenous peoples, for the development of projects. In some circumstances, we may be required to
notify, consult, or obtain the consent of certain stakeholders, such as Indigenous peoples, landowners, and/or
municipalities. In some jurisdictions where we have greenfield power projects, it may be possible to claim
Indigenous rights to land and the existence or declaration of Indigenous title may affect the existing or future
activities of our projects and impact their business, financial condition and results of operations. In Canada, for
example, courts have recognized that Indigenous peoples possess constitutionally protected rights in respect of land
used or occupied by their ancestors where treaties have not been concluded to deal with these rights. Certain of these
communities and partners may have or may develop interests or objectives which are different from or even in
conflict with our objectives. Any such differences could have a negative impact on the success of our projects.

Risks Relating to Our Relationship with Brookfield

Brookfield exercises substantial influence over Brookfield Renewable and we are highly dependent on the Service
Providers.

A subsidiary of Brookfield Asset Management is the sole shareholder of the Managing General Partner. As a
result of its ownership of the Managing General Partner, Brookfield is able to control the appointment and removal
of the Managing General Partner’s directors and, accordingly, exercise substantial influence over Brookfield
Renewable. In addition, BEP holds its interest in the Operating Entities indirectly through BRELP and will hold any
future acquisitions indirectly through BRELP, the general partner of which is indirectly owned by Brookfield. As
BEP’s only substantial asset is the limited partnership interests that it holds in BRELP, except future rights under the
Voting Agreement, BEP does not have a right to participate directly in the management or activities of BRELP or
the Holding Entities, including with respect to the making of decisions (although it has the right to remove and
replace the BRELP GP LP).

BEP and BRELP depend on the management and administration services provided by or under the direction of
the Service Provider under our Master Services Agreement. Brookfield personnel and support staff that provide
services to us under our Master Services Agreement are not required to have as their primary responsibility the
management and administration of BEP or BRELP or to act exclusively for either of us and our Master Services
Agreement does not require any specific individuals to be provided by Brookfield to BEP. Failing to effectively
manage our current operations or to implement our strategy could have an adverse effect on our business, financial
condition and results of operations. Our Master Services Agreement continues in perpetuity, until terminated in
accordance with its terms.

The departure of some or all of Brookfield’s professionals could prevent us from achieving our objectives.

We depend on the diligence, skill and business contacts of Brookfield’s professionals and the information and
opportunities they generate during the normal course of their activities. Our future success will depend on the
continued service of these individuals, who are not obligated to remain employed with Brookfield. Brookfield has
experienced departures of key professionals in the past and may do so in the future, and we cannot predict the
impact that any such departures will have on our ability to achieve our objectives. The departure of a significant
number of Brookfield’s professionals for any reason, or the failure to appoint qualified or effective successors in the

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event of such departures, could have an adverse effect on our ability to achieve our objectives. The Amended and
Restated Limited Partnership Agreement of BEP and our Master Services Agreement do not require Brookfield to
maintain the employment of any of its professionals or to cause any particular professionals to provide services to us
or on our behalf.

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PART 8 – CRITICAL ESTIMATES AND JUDGMENTS IN
APPLYING ACCOUNTING POLICIES

The audited annual consolidated financial statements are prepared in accordance with IFRS, which require the
use of estimates and judgments in reporting assets, liabilities, revenues, expenses and contingencies. In the judgment
of management, none of the estimates outlined in Note 1 – Basis of preparation and significant accounting policies
in our audited annual consolidated financial statements are considered critical accounting estimates as defined in
Canadian National Instrument 51-102 – Continuous Disclosure Obligations with the exception of the estimates
related to the valuation of property, plant and equipment, financial instruments, the related deferred income tax
liabilities and decommissioning liabilties. These assumptions include estimates of future electricity prices, discount
rates, expected long-term average generation, inflation rates, terminal year, the amount and timing of operating and
capital costs and the income tax rates of future income tax provisions. Estimates also include determination of
accruals, provisions, purchase price allocations, useful lives, asset valuations, asset impairment testing, deferred tax
liabilities, decommissioning retirement obligations and those relevant to the defined benefit pension and non-
pension benefit plans. Estimates are based on historical experience, current trends and various other assumptions
that are believed to be reasonable under the circumstances.

In making estimates, management relies on external information and observable conditions where possible,
supplemented by internal analysis, as required. These estimates have been applied in a manner consistent with that
in the prior year and there are no known trends, commitments, events or uncertainties that we believe will materially
affect the methodology or assumptions utilized in this report. These estimates are impacted by, among other things,
future power prices, movements in interest rates, foreign exchange volatility and other factors, some of which are
highly uncertain, as described in the “Risk Factors” section of our Form 20-F for the annual period ending
December 31, 2021. The interrelated nature of these factors prevents us from quantifying the overall impact of these
movements on Brookfield Renewable’s financial statements in a meaningful way. These sources of estimation
uncertainty relate in varying degrees to substantially all asset and liability account balances. Actual results could
differ from those estimates.

CRITICAL ESTIMATES

Brookfield Renewable makes estimates and assumptions that affect the carrying value of assets and liabilities,
disclosure of contingent assets and liabilities and the reported amount of income and other comprehensive income
(“OCI”) for the year. Actual results could differ from these estimates. The estimates and assumptions that are critical
to the determination of the amounts reported in the consolidated financial statements relate to the following:

(i)

Property, plant and equipment

The fair value of Brookfield Renewable’s property, plant and equipment is calculated using estimates and
assumptions about future electricity prices from renewable sources, anticipated long-term average generation,
estimated operating and capital expenditures, future inflation rates and discount rates, as described in Note 12 –
Property, plant and equipment, at fair value in our audited annual consolidated financial statements. Judgment is
involved in determining the appropriate estimates and assumptions in the valuation of Brookfield Renewable’s
property, plant and equipment. See Note 1(r)(iii) – Critical judgments in applying accounting policies – Property, plant
and equipment in our audited annual consolidated financial statements for further details.

Estimates of useful lives and residual values are used in determining depreciation. To ensure the accuracy of

useful lives and residual values, these estimates are reviewed on an annual basis.

(ii)

Financial instruments

Brookfield Renewable makes estimates and assumptions that affect the carrying value of its financial
instruments, including estimates and assumptions about future electricity prices, long-term average generation,
capacity prices, discount rates, the timing of energy delivery and the elements affecting fair value of the tax equity
financings. Non-financial instruments are valued using estimates of future electricity prices which are estimated by
considering broker quotes for the years in which there is a liquid market and for the subsequent years Brookfield
Renewable’s best estimate of electricity prices that would allow new entrants into the market. The fair value of
interest rate swaps is the estimated amount that another party would receive or pay to terminate the swap agreements

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at the reporting date, taking into account current market interest rates. This valuation technique approximates the net
present value of future cash flows. See Note 5 – Risk management and financial instruments in our audited annual
consolidated financial statements for more details.

(iii)

Deferred income taxes

The consolidated financial statements include estimates and assumptions for determining the future tax rates
applicable to subsidiaries and identifying the temporary differences that relate to each subsidiary. Deferred income
tax assets and liabilities are measured at the tax rates that are expected to apply during the year when the assets are
realized or the liabilities settled, using the tax rates and laws enacted or substantively enacted at the consolidated
statements of financial position dates. Operating plans and forecasts are used to estimate when the temporary
difference will reverse.

(iv) Decommissioning liabilities

Decommissioning costs will be incurred at the end of the operating life of some of the company’s assets. These
obligations are typically many years in the future and require judgment to estimate. The estimate of
decommissioning costs can vary in response to many factors including changes in relevant legal, regulatory, and
environmental requirements, the emergence of new restoration techniques or experience at other power generating
facilities. Inherent in the calculations of these costs are assumptions and estimates including the ultimate settlement
amounts, inflation factors, discount rates, and timing of settlements.

CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES

The following are the critical judgments that have been made in applying the accounting policies used in the
consolidated financial statements and that have the most significant effect on the amounts in the consolidated
financial statements:

(i)

Preparation of consolidated financial statements

These consolidated financial statements present the financial position, results of operations and cash flows of
Brookfield Renewable. Judgment is required in determining what assets, liabilities and transactions are recognized
in the consolidated financial statements as pertaining to Brookfield Renewable’s operations.

(ii)

Common control transactions

Common control business combinations specifically fall outside the scope of IFRS 3, Business Combinations
(“IFRS 3”), and as such management has used its judgment to determine an appropriate policy to account for these
transactions. Consideration was given to other relevant accounting guidance within the framework of principles in
IFRS and to reflect the economic reality of the transactions, in accordance with IAS 8, Accounting Policies, Changes
in Accounting Estimates and Errors (“IAS 8”). As a result, the consolidated financial statements account for assets
and liabilities acquired at the previous carrying value on the predecessor’s financial statements. Differences between
the consideration given and the assets and liabilities received are recorded directly to equity.

(iii)

Property, Plant and Equipment

The accounting policy relating to Brookfield Renewable’s property, plant and equipment is described in Note
1(g) – Property, plant and equipment and revaluation method in our audited annual consolidated financial
statements. In applying this policy, judgment is used in determining whether certain costs are additions to the
carrying amount of the property, plant and equipment as opposed to repairs and maintenance that are expensed when
incurred. If an asset has been developed, judgment is required to identify the point at which the asset is capable of
being used as intended and to identify the directly attributable costs to be included in the carrying value of the
development asset. The useful lives of property, plant and equipment are determined by independent engineers
periodically with an annual review by management.

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flows further in the model versus using a discounted terminal value. The methodology for wind, solar and storage &
other assets is to align the model length with the expected remaining useful life of the subject assets.

The valuation model incorporates future cash flows from long-term power purchase agreements that are in place
where it is determined that the power purchase agreements are linked specifically to the related power generating
assets. With respect to estimated future generation that does not incorporate long-term power purchase agreement
pricing, the cash flow model uses estimates of future electricity prices using broker quotes from independent sources
for the years in which there is a liquid market. The valuation of generation not linked to long-term power purchase
agreements also requires the development of a long-term estimate of future electricity prices. In this regard the
valuation model uses a discount to the all-in cost of construction with a reasonable return, to secure energy from a
new renewable resource with a similar generation profile to the asset being valued as the benchmark that will
establish the market price for electricity for renewable resources.

Brookfield Renewable’s long-term view is anchored to the cost of securing new energy from renewable sources
to meet future demand growth by the years 2026 to 2035 in North America, 2029 in Colombia, and 2025 in Brazil.
The year of new entry is viewed as the point when generators must build additional capacity to maintain system
reliability and provide an adequate level of reserve generation with the retirement of older coal-fired plants and
rising environmental compliance costs in North America and Europe, and overall increasing demand in Colombia
and Brazil. For the North American and European businesses, Brookfield Renewable has estimated a discount to
these new-build renewable asset prices to determine renewable electricity prices for hydroelectric, solar and wind
facilities. In Brazil and Colombia, the estimate of future electricity prices is based on a similar approach as applied
in North America using a forecast of the all-in cost of development.

Terminal values are included in the valuation of hydroelectric assets in North America and Colombia. For the
hydroelectric assets in Brazil, cash flows have been included based on the duration of the authorization or useful life
of a concession asset with consideration of a one-time thirty-year renewal on qualifying hydroelectric assets.

Discount rates are determined each year by considering the current interest rates, average market cost of capital
as well as the price risk and the geographical location of the operational facilities as judged by management.
Inflation rates are also determined by considering the current inflation rates and the expectations of future rates by
economists. Operating costs are based on long-term budgets escalated for inflation. Each operational facility has a
twenty-year capital plan that it follows to ensure the maximum life of its assets is achieved. Foreign exchange rates
are forecasted by using the spot rates and the available forward rates, extrapolated beyond the period available. The
inputs described above to the discounted cash flow model require management to consider facts, trends and plans in
making its judgments as to what derives a reasonable fair value of its property, plant and equipment.

(iv)

Financial instruments

The accounting policy relating to Brookfield Renewable’s financial instruments is described in Note 1(k) –
Financial instruments in our audited annual consolidated financial statements. In applying the policy, judgments are
made in applying the criteria set out in IFRS 9 – Financial instruments (“IFRS 9”) to record financial instruments at
fair value through profit and loss, and the assessments of the effectiveness of hedging relationships.

(v)

Deferred income taxes

The accounting policy relating to Brookfield Renewable’s income taxes is described in Note 1(m) – Income
taxes in our audited annual consolidated financial statements. In applying this policy, judgments are made in
determining the probability of whether deductions, tax credits and tax losses can be utilized.

NEW ACCOUNTING STANDARDS

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Disclosures

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rate and to the application of hedge accounting, providing an exception such that changes in the formal designation
and documentation of hedge accounting relationships that are needed to reflect the changes required by IBOR
reform do not result in the discontinuation of hedge accounting or the designation of new hedging relationships.

Brookfield Renewable has completed an assessment and implemented its transition plan to address the impact and
effect changes as a result of amendments to the contractual terms of IBOR referenced floating-rate borrowings,
interest rate swaps, and updating hedge designations. The adoption did not have a significant impact on Brookfield
Renewable’s financial reporting.

FUTURE CHANGES IN ACCOUNTING POLICIES

Amendments to IAS 1 – Presentation of Financial Statements (“IAS 1”)

The amendments clarify how to classify debt and other liabilities as current or non-current. The amendments to
IAS 1 apply to annual reporting periods beginning on or after January 1, 2023. Brookfield Renewable is currently
assessing the impact of these amendments.

Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework

The amendments add an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’
gains or losses arising from liabilities and contingent liabilities that would be within the scope of IAS 37 Provisions,
Contingent Liabilities and Contingent Assets or IFRIC 21 Levies, if incurred separately. The exception requires
entities to apply the criteria in IAS 37 or IFRIC 21, respectively, instead of the Conceptual Framework, to determine
whether a present obligation exists at the acquisition date. At the same time, the amendments add a new paragraph to
IFRS 3 to clarify that contingent assets do not qualify for recognition at the acquisition date. The amendments to
IFRS 3 apply to annual reporting periods beginning on or after January 1, 2022. Brookfield Renewable is currently
assessing the impact of the amendments.

There are currently no other future changes to IFRS with potential impact on Brookfield Renewable.

SUBSEQUENT EVENTS

Subsequent to year-end, Brookfield Renewable redeemed all of the outstanding Series 5 Preferred Limited

Partnership Units for C$73 million or C$25.25 per Series 5 Preferred Limited Partnership Unit.

Subsequent to year-end, Brookfield Renewable, together with institutional partners, completed the acquisition
of a 1.7 GW portfolio of utility-scale solar development assets in Germany, for a total investment of €65 million
($76 million), plus working capital adjustments. Brookfield Renewable is expected to hold a 25% interest in the
investment.

Subsequent to year-end, Brookfield Renewable, together with its institutional partners, completed the
acquisition of a utility scale development business with a 20 GW portfolio of utility solar and energy storage
development assets in the United States for approximately $650 million (approximately $160 million net to
Brookfield Renewable), with additional incentive payments that are payable contingent upon certain milestones
being achieved, with Brookfield Renewable expected to hold a 25% interest in the investment.

Subsequent to year-end, Brookfield Renewable, together with its institutional partner, subscribed for additional
shares in Polenergia. This subscription will increase our interest in Polenergia to 32% (8% net to Brookfield
Renewable) and is expected to close in March 2022.

Subsequent to year-end, Brookfield Renewable, together with institutional partners, completed the acquisition
of an initial 26% interest in an approximately 700 MW portfolio of operating and development assets in Spain and
Mexico. Total equity of $220 million ($55 million net to Brookfield Renewable) is expected to be invested into the
project, with the potential to increase ownership interest to almost 60%. Brookfield Renewable is expected to hold a
25% interest in the investment.

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PART 9 – PRESENTATION TO STAKEHOLDERS AND
PERFORMANCE MEASUREMENT

PRESENTATION TO PUBLIC STAKEHOLDERS

Equity

Brookfield Renewable’s consolidated equity interests include (i) non-voting publicly traded LP units, held by
public unitholders and Brookfield, (ii) BEPC exchangeable shares, held by public shareholders and Brookfield, (iii)
Redeemable/Exchangeable Limited partnership units in BRELP, a holding subsidiary of Brookfield Renewable, held
by Brookfield, and (iv) the GP interest in BRELP, held by Brookfield.

The LP units, the BEPC exchangeable shares and the Redeemable/Exchangeable partnership units have the
same economic attributes in all respects, except that the BEPC exchangeable shares provide the holder, and the
Redeemable/Exchangeable partnership units provide Brookfield, the right to request that all or a portion of such
shares or units be redeemed for cash consideration. Brookfield Renewable, however, has the right, at its sole
discretion, to satisfy any such redemption request with LP units, rather than cash, on a one-for-one basis. The public
holders of BEPC exchangeable shares, and Brookfield, as holder of BEPC exchangeable shares and Redeemable/
Exchangeable Partnership Units, participates in earnings and distributions on a per unit basis equivalent to the per
unit participation of the LP units. Because Brookfield Renewable, at its sole discretion, has the right to settle any
redemption request in respect of BEPC exchangeable shares and Redeemable/Exchangeable partnership units with
LP units, the BEPC exchangeable shares and Redeemable/Exchangeable partnership units are classified under
equity, and not as a liability.

Given the exchange feature referenced above, we are presenting LP units, BEPC exchangeable shares,
Redeemable/Exchangeable partnership units, and the GP Interest as separate components of consolidated equity.
This presentation does not impact the total income (loss), per unit or share information, or total consolidated equity.

As at the date of this report, Brookfield owns an approximate 48% LP unit interest, on a fully-exchanged basis, and all general partnership interests in Brookfield Renewable, representing a 0.01% interest, while the remaining approximately 52% is held by the public.

Actual and Long-term Average Generation

For assets acquired, disposed or reached commercial operation during the year, reported generation is calculated
from the acquisition, disposition or commercial operation date and is not annualized. Generation on a same store
basis refers to the generation of assets that were owned during both periods presented. As it relates to Colombia
only, generation includes both hydroelectric and cogeneration facilities. Energy transition includes generation from
our distributed generation, pumped storage, North America cogeneration and Brazil biomass assets.

North America hydroelectric long-term average is the expected average level of generation based on the results
of a simulation based on historical inflow data performed over a period of typically 30 years. Colombia
hydroelectric long-term average is the expected average level of generation based on the results of a simulation
based on historical inflow data performed over a period of typically 20 years. For substantially all of our
hydroelectric assets in Brazil the long-term average is based on the reference amount of electricity allocated to our
facilities under the market framework which levelizes generation risk across producers. Wind long-term average is
the expected average level of generation based on the results of simulated historical wind speed data performed over
a period of typically 10 years. Solar long-term average is the expected average level of generation based on the
results of a simulation using historical irradiance levels in the locations of our projects from the last 14 to 20 years
combined with actual generation data during the operational period.

We compare actual generation levels against the long-term average to highlight the impact of an important
factor that affects the variability of our business results. In the short-term, we recognize that hydrology, wind and
irradiance conditions will vary from one period to the next; over time however, we expect our facilities will continue
to produce in line with their long-term averages, which have proven to be reliable indicators of performance.

Our risk of a generation shortfall in Brazil continues to be minimized by participation in the MRE administered
by the government of Brazil. This program mitigates hydrology risk by assuring that all participants receive, at any
particular point in time, an assured energy amount, irrespective of the actual volume of energy generated. The
program reallocates energy, transferring surplus energy from those who generated an excess to those who generate
less than their assured energy, up to the total generation within the pool. Periodically, low precipitation across the

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entire country’s system could result in a temporary reduction of generation available for sale. During these periods,
we expect that a higher proportion of thermal generation would be needed to balance supply and demand in the
country, potentially leading to higher overall spot market prices.

Generation from our pumped storage and cogeneration facilities in North America is highly dependent on
market price conditions rather than the generating capacity of the facilities. Our pumped storage facility in Europe
generates on a dispatchable basis when required by our contracts for ancillary services. Generation from our biomass
facilities in Brazil is dependent on the amount of sugar cane harvested in a given year. For these reasons, we do not
consider a long-term average for these facilities.

Voting Agreements with Affiliates

For entities previously controlled by Brookfield Asset Management, the voting agreements entered into do not
represent business combinations in accordance with IFRS 3, as all combining businesses are ultimately controlled by
Brookfield Asset Management both before and after the transactions were completed. Brookfield Renewable
accounts for these transactions involving entities under common control in a manner similar to a pooling of interest,
which requires the presentation of pre-voting agreement financial information as if the transactions had always been
in place. Refer to Note 1(r)(ii) – Critical judgments in applying accounting policies – Common control transactions
in our December 31, 2021 audited consolidated financial statements for our policy on accounting for transactions
under common control.

PERFORMANCE MEASUREMENT

Segment Information

Our operations are segmented by – 1) hydroelectric, 2) wind, 3) solar, 4) energy transition (distributed
generation, pumped storage, cogeneration and biomass), and 5) corporate – with hydroelectric and wind further
segmented by geography (i.e. North America, Colombia, Brazil, Europe and Asia). This best reflects the way in
which the CODM reviews results of our company.

We report our results in accordance with these segments and present prior period segmented information in a

consistent manner. See Note 6 – Segmented information in our audited annual consolidated financial statements.

One of our primary business objectives is to generate stable and growing cash flows while minimizing risk for
the benefit of all stakeholders. We monitor our performance in this regard through three key metrics — i) Net
Income (Loss), ii) Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”),
and iii) Funds From Operations.

It is important to highlight that Adjusted EBITDA and Funds From Operations do not have any standardized
meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other
companies and have limitations as analytical tools. We provide additional information below on how we determine
Adjusted EBITDA and Funds From Operations. We also provide reconciliations to Net income (loss). See “PART 4
– Financial Performance Review on Proportionate Information – Reconciliation of Non-IFRS Measures” and
“PART 6 – Selected Annual and Quarterly Information – Reconciliation of Non-IFRS measures”.

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Proportionate Information

Reporting to the CODM on the measures utilized to assess performance and allocate resources has been
provided on a proportionate basis. Information on a proportionate basis reflects Brookfield Renewable’s share from
facilities which it accounts for using consolidation and the equity method whereby Brookfield Renewable either
controls or exercises significant influence or joint control over the investment, respectively. Proportionate
information provides a Unitholder perspective that the CODM considers important when performing internal
analyses and making strategic and operating decisions. The CODM also believes that providing proportionate
information helps investors understand the impacts of decisions made by management and financial results that can
be allocated to Unitholders.

Proportionate financial information is not, and is not intended to be, presented in accordance with IFRS. Tables
reconciling IFRS data with data presented on a proportionate basis have been disclosed. Segment revenues, other
income, direct operating costs, interest expense, depreciation, current and deferred income taxes, and other are items
that will differ from results presented in accordance with IFRS as these items (1) include Brookfield Renewable’s
proportionate share of earnings (loss) from equity-accounted investments attributable to each of the above-noted
items, and (2) exclude the proportionate share of earnings (loss) of consolidated investments not held by us
apportioned to each of the above-noted items.

The presentation of proportionate results has limitations as an analytical tool, including the following:

•

The amounts shown on the individual line items were derived by applying our overall economic
ownership interest percentage and do not necessarily represent our legal claim to the assets and
liabilities, or the revenues and expenses; and

Other companies may calculate proportionate results differently than we do.

Because of these limitations, our proportionate financial information should not be considered in isolation or as

a substitute for our financial statements as reported under IFRS.

Brookfield Renewable does not control those entities that have not been consolidated and as such, have been
presented as equity-accounted investments in its financial statements. The presentation of the assets and liabilities
and revenues and expenses do not represent Brookfield Renewable’s legal claim to such items, and the removal of
financial statement amounts that are attributable to non-controlling interests does not extinguish Brookfield
Renewable’s legal claims or exposures to such items.

Unless the context indicates or requires otherwise, information with respect to the megawatts (“MW”)
attributable to Brookfield Renewable’s facilities, including development assets, is presented on a consolidated basis,
including with respect to facilities whereby Brookfield Renewable either controls or jointly controls the applicable
facility.

Net Income (Loss)

Net income (loss) is calculated in accordance with IFRS.

Net income (loss) is an important measure of profitability, in particular because it has a standardized meaning
under IFRS. The presentation of net income (loss) on an IFRS basis for our business will often lead to the
recognition of a loss even though the underlying cash flows generated by the assets are supported by strong margins
and stable, long-term power purchase agreements. The primary reason for this is that accounting rules require us to
recognize a significantly higher level of depreciation for our assets than we are required to reinvest in the business as
sustaining capital expenditures.

Adjusted EBITDA

Adjusted EBITDA is a non-IFRS measure used by investors to analyze the operating performance of

companies.

Brookfield Renewable uses Adjusted EBITDA to assess the performance of Brookfield Renewable before the
effects of interest expense, income taxes, depreciation, management service costs, non-controlling interests,
unrealized gain or loss on financial instruments, non-cash income or loss from equity-accounted investments,
distributions to preferred shareholders, preferred limited partnership unit holders, perpetual subordinated noteholders

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and other typical non-recurring items. Brookfield Renewable adjusts for these factors as they may be non-cash,
unusual in nature and/or are not factors used by management for evaluating operating performance. Brookfield
Renewable includes realized disposition gains and losses on assets that we developed and/or did not intend to hold
over the long-term within Adjusted EBITDA in order to provide additional insight regarding the performance of
investments on a cumulative realized basis, including any unrealized fair value adjustments that were recorded in
equity and not otherwise reflected in current period Adjusted EBITDA.

Brookfield Renewable believes that presentation of this measure will enhance an investor’s ability to evaluate

its financial and operating performance on an allocable basis.

Funds From Operations

Funds From Operations is a non-IFRS measure used by investors to analyze net earnings from operations
without the effects of certain volatile items that generally have no current financial impact or items not directly
related to the performance of Brookfield Renewable.

Brookfield Renewable uses Funds From Operations to assess the performance of Brookfield Renewable before
the effects of certain cash items (e.g., acquisition costs and other typical non-recurring cash items) and certain non-
cash items (e.g., deferred income taxes, depreciation, non-cash portion of non-controlling interests, unrealized gain
or loss on financial instruments, non-cash gain or loss from equity-accounted investments, and other non-cash items)
as these are not reflective of the performance of the underlying business. In the consolidated financial statements of
Brookfield Renewable, the revaluation approach is used in accordance with IAS 16, Property, Plant and Equipment,
whereby depreciation is determined based on a revalued amount, thereby reducing comparability with peers who do
not report under IFRS as issued by the IASB or who do not employ the revaluation approach to measuring property,
plant and equipment. Management adds back deferred income taxes on the basis that they do not believe this item
reflects the present value of the actual tax obligations that they expect Brookfield Renewable to incur over the long-
term investment horizon of Brookfield Renewable.

Brookfield Renewable believes that analysis and presentation of Funds From Operations on this basis will
enhance an investor’s understanding of the performance of Brookfield Renewable. Funds From Operations is not a
substitute measure of performance for earnings per share and does not represent amounts available for distribution.

Funds From Operations is not a generally accepted accounting measure under IFRS and therefore may differ
from definitions of Funds From Operations used by other entities, as well as the definition of funds from operations
used by the Real Property Association of Canada (“REALPAC”) and the National Association of Real Estate
Investment Trusts, Inc. (“NAREIT”). Furthermore, this measure is not used by the CODM to assess Brookfield
Renewable’s liquidity.

Proportionate Debt

Proportionate debt is presented based on the proportionate share of borrowings obligations relating to the
investments of Brookfield Renewable in various portfolio businesses. The proportionate financial information is not,
and is not intended to be, presented in accordance with IFRS. Proportionate debt measures are provided because
management believes it assists investors and analysts in estimating the overall performance and understanding the
leverage pertaining specifically to Brookfield Renewable’s share of its invested capital in a given investment. When
used in conjunction with Proportionate Adjusted EBITDA, proportionate debt is expected to provide useful
information as to how Brookfield Renewable has financed its businesses at the asset-level. Management believes
that the proportionate presentation, when read in conjunction with Brookfield Renewable’s reported results under
IFRS, including consolidated debt, provides a more meaningful assessment of how the operations of Brookfield
Renewable are performing and capital is being managed.

The presentation of proportionate results has limitations as an analytical tool, including the following:

•

Proportionate debt amounts do not represent the consolidated obligation for debt underlying a consolidated
investment. If an individual project does not generate sufficient cash flows to service the entire amount of
its debt payments, management may determine, in their discretion, to pay the shortfall through an equity
injection to avoid defaulting on the obligation. Such a shortfall may not be apparent from or may not equal
the difference between aggregate Proportionate Adjusted EBITDA for all of the portfolio investments of

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Brookfield Renewable and aggregate proportionate debt for all of the portfolio investments of Brookfield
Renewable; and

•

Other companies may calculate proportionate debt differently.

Because of these limitations, the proportionate financial information of Brookfield Renewable should not be
considered in isolation or as a substitute for the financial statements of Brookfield Renewable as reported under
IFRS.

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PART 10 – CAUTIONARY STATEMENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements and information, within the meaning of Canadian 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, concerning the business and operations of Brookfield Renewable. Forward-looking statements may
include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not
statements of fact. Forward-looking statements in this report include statements regarding the quality of Brookfield
Renewable’s assets and the resiliency of the cash flow they will generate, our anticipated financial performance,
future commissioning of assets, contracted nature of our portfolio, technology diversification, acquisition
opportunities, expected completion of acquisitions and dispositions, including financing and refinancing
opportunities and prospects of Brookfield Renewable, future energy prices and demand for electricity, economic
recovery, achieving long-term average generation, project development and capital expenditure costs, energy
policies, economic growth, growth potential of the renewable asset class, our future growth prospects and
distribution profile, our access to capital. In some cases, forward-looking statements can be identified by the use of
words such as “plans”, “expects”, “scheduled”, “estimates”, “intends”, “anticipates”, “believes”, “potentially”,
“tends”, “continue”, “attempts”, “likely”, “primarily”, “approximately”, “endeavors”, “pursues”, “strives”,
“seeks”, “targets”, “believes”, or variations of such words and phrases, or statements that certain actions, events
or results “may”, “could”, “would”,“should”, “might” or “will” be taken, occur or be achieved. Although we
believe that our anticipated future results, performance or achievements expressed or implied by the forward-
looking statements and information in this report are based upon reasonable assumptions and expectations, we
cannot assure you that such expectations will prove to have been correct. You should not place undue reliance on
forward-looking statements and information as such statements and information involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance or achievements to differ
materially from anticipated future results, performance or achievement expressed or implied by such forward-
looking statements and information.

Factors that could cause actual results to differ materially from those contemplated or implied by forward-
looking statements include, but are not limited to, the following: changes to resource availability, as a result of
climate change or otherwise, at any of our facilities; volatility in supply and demand in the energy markets; our
inability to re-negotiate or replace expiring PPAs on similar terms; an increase in the amount of uncontracted
generation in our portfolio; availability and access to interconnection facilities and transmission systems;
concessions and licenses expiring and not being renewed or replaced on similar terms; our real property rights for
wind and solar renewable energy facilities being adversely affected by the rights of lienholders and leaseholders
that are superior to those granted to us; increases in the cost of operating our facilities; our failure to comply with
conditions in, or our inability to maintain, governmental permits; equipment failures, including relating to wind
turbines and solar panels; the unavailability of necessary equipment, including spare parts and components
required for project development; dam failures and the costs and potential liabilities associated with such failures;
the severity, duration and spread of the COVID-19 outbreak, as well as the direct and indirect impacts that the virus
may have; uninsurable losses and higher insurance premiums; changes in regulatory, political, economic and social
conditions in the jurisdictions in which we operate; force majeure events; adverse changes in currency exchange
rates and our inability to effectively manage foreign currency exposure; health, safety, security and environmental
risks; energy marketing risks; the termination of, or a change to, the MRE balancing pool in Brazil; involvement in
litigation and other disputes, and governmental and regulatory investigations; counterparties to our contracts not
fulfilling their obligations; the time and expense of enforcing contracts against non-performing counterparties and
the uncertainty of success; foreign laws or regulation to which we become subject as a result of future acquisitions
in new markets; our operations being affected by local communities; our reliance on computerized business systems,
which could expose us to cyber-attacks; newly developed technologies in which we invest not performing as
anticipated; increases in water rental costs (or similar fees) or changes to the regulation of water supply; advances
in technology that impair or eliminate the competitive advantage of our projects; labour disruptions and
economically unfavorable collective bargaining agreements; fraud, bribery, corruption, other illegal acts or

Page 65

inadequate or failed internal processes or systems; our inability to finance our operations due to the status of the
capital markets; operating and financial restrictions imposed on us by our loan, debt and security agreements;
changes to our credit ratings; our inability to identify sufficient investment opportunities and complete transactions;
changes to our current business, including through future energy transition investments; our inability to complete
all or some of our capital recycling initiatives; the growth of our portfolio and our inability to realize the expected
benefits of our transactions or acquisitions; our inability to develop greenfield projects or find new sites suitable for
the development of greenfield projects;delays, cost overruns and other problems associated with the construction
and operation of generating facilities and risks associated with the arrangements we enter into with communities
and joint venture partners; Brookfield Asset Management’s election not to source acquisition opportunities for us
and our lack of access to all renewable power acquisitions that Brookfield Asset Management identifies, including
by reason of conflicts of interest; we do not have control over all of our operations or investments; political
instability or changes in government policy; some of our acquisitions may be of distressed companies, which may
subject us to increased risks, including the incurrence of legal or other expenses; a decline in the value of our
investments in securities, including publicly traded securities of other companies; we are not subject to the same
disclosure requirements as a U.S. domestic issuer; the separation of economic interest from control within our
organizational structure; future sales and issuances of LP units, preferred units or securities exchangeable for LP
units, including BEPC exchangeable shares, or the perception of such sales or issuances, could depress the trading
price of the LP units or BEPC exchangeable shares; the incurrence of debt at multiple levels within our
organizational structure; being deemed an “investment company” under the Investment Company Act of 1940; the
effectiveness of our internal controls over financial reporting; our dependence on Brookfield Asset Management and
Brookfield Asset Management’s significant influence over us; the departure of some or all of Brookfield Asset
Management’s key professionals; our lack of independent means of generating revenue; changes in how Brookfield
Asset Management elects to hold its ownership interests in Brookfield Renewable; Brookfield acting in a way that is
not in our best interests or our unitholders; broader impact of climate change; failure of our systems technology;
any changes in the market price of the LP units and BEPC exchangeable shares; and other factors described in our
most recent Annual Report on Form 20-F, including those set forth under Item 3.D “Risk Factors”.

We caution that 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 report 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. For further information on these known and unknown risks, please see “Risk Factors”
included in our most recent Annual Report on Form 20-F and other risks and factors that are described therein.

CAUTIONARY STATEMENT REGARDING USE OF NON-IFRS MEASURES

This report contains references to Adjusted EBITDA, Funds From Operations and Funds From Operations per
Unit which are not generally accepted accounting measures under IFRS and therefore may differ from definitions of
Adjusted EBITDA, Funds From Operations and Funds From Operations per Unit used by other entities. In
particular, our definition of Funds From Operations may differ from the definition of funds from operations used by
other organizations, as well as the definition of funds from operations used by the Real Property Association of
Canada and the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). We believe that Adjusted
EBITDA, Funds From Operations and Funds From Operations per Unit are useful supplemental measures that may
assist investors in assessing our financial performance. None of Adjusted EBITDA, Funds From Operations or
Funds From Operations 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. These non-IFRS measures reflect how we manage our business and, in our opinion, enable the reader to
better understand our business.

Reconciliations of each of Adjusted EBITDA, Funds From Operations and Funds From Operations per Unit to
net income (loss) are presented in our Management’s Discussion and Analysis. We have also provided a
reconciliation of Adjusted EBITDA and Funds From Operations to net income in Note 6 – Segmented information in
the audited annual consolidated financial statements.

Page 66

Management’s Responsibility for Financial Statements

MANAGEMENT’S RESPONSIBILITY

The accompanying consolidated financial statements have been prepared by Brookfield Renewable Partners L.P.
(“Brookfield Renewable”) management which is responsible for their integrity, consistency, objectivity and
reliability. To fulfill this responsibility, Brookfield Renewable maintains policies, procedures and systems of internal
control to ensure that its reporting practices and accounting and administrative procedures are appropriate to provide
a high degree of assurance that relevant and reliable financial information is produced and assets are safeguarded.
These controls include the careful selection and training of employees, the establishment of well-defined areas of
responsibility and accountability for performance, and the communication of policies and the code of conduct
throughout the company.

These consolidated financial statements have been prepared in conformity with International Financial Reporting
Standards as issued by the International Accounting Standards Board and, where appropriate, reflect estimates based
on management’s judgment.

Ernst & Young LLP, the Independent Registered Public Accountants appointed by the directors of the general
partner of Brookfield Renewable, have audited the consolidated financial statements in accordance with the
standards of the Public Company Accounting Oversight Board (United States) to enable them to express to the
partners their opinion on the consolidated financial statements. Their report outlines the scope of their examination
and opinion on the consolidated financial statements.

The consolidated financial statements have been further reviewed and approved by the Board of Directors of the
general partner of Brookfield Renewable acting through its Audit Committee, which is comprised of directors who
are not officers or employees of Brookfield Renewable. The Audit Committee, which meets with the auditors and
management to review the activities of each and reports to the Board of Directors, oversees management’s
responsibilities for the financial reporting and internal control systems. The auditors have full and direct access to
the Audit Committee and meet periodically with the committee both with and without management present to
discuss their audit and related findings.

Connor Teskey
Chief Executive Officer

February 28, 2022

Wyatt Hartley
Chief Financial Officer

Page 67

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Brookfield Renewable Partners Limited (General Partner of Brookfield Renewable
Partners L.P.) and Partners of Brookfield Renewable Partners L.P.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of Brookfield Renewable Partners
L.P. (“Brookfield Renewable” or the “Partnership”) as of December 31, 2021 and 2020, the related consolidated
statements of income (loss), comprehensive income, changes in equity and cash flows for each of the three years in
the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the
financial position of Brookfield Renewable at December 31, 2021 and 2020, and its financial performance and its
cash flows for each of the three years in the period ended December 31, 2021, in conformity with International
Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), Brookfield Renewable’s internal control over financial reporting as of December 31, 2021,
based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2022 expressed an
unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of Brookfield Renewable’s management. Our
responsibility is to express an opinion on Brookfield Renewable’s consolidated financial statements based on our
audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect
to Brookfield Renewable in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks
of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated
financial statements that were communicated or required to be communicated to the audit committee and that: (1)
relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the
accounts or disclosures to which they relate.

Page 68

Description of the Matter

How We Addressed the
Matter in Our Audit

Revaluation of power generating assets
The Partnership measures power generating assets (classified as property, plant and
equipment) using the revaluation method under IAS 16, Property, Plant and
Equipment. As at December 31, 2021, property, plant and equipment on the balance
sheet totaled $49,432 million. Revaluations of property, plant and equipment
recognized in the statement of comprehensive income totaled a gain of $4,573
million and a loss in the statement of income (loss) of ($59) million for 2021. As
discussed in Notes 1(g), 1(q)(i) and 1(r)(iii) and 12 – Property, Plant and
Equipment, at Fair Value to the consolidated financial statements, significant
estimation and management judgment are involved in assessing the estimates and
assumptions regarding the future performance of the power generating assets.

Management applies a dual approach which involves a discounted cash flow model
as well as a market evaluation in determining the fair value of the Partnership’s
power generating assets. Significant assumptions included within the discounted
cash flow models are future electricity prices, terminal value, discount rates,
anticipated long-term average generation and estimated operating and capital
expenditures.

Auditing the measurement of power generating assets is complex due to the highly
judgmental nature of the significant assumptions described above, which required
the involvement of specialists. Changes in these assumptions can have a material
effect on the fair value of the power generating assets.

We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over management’s processes in determining the fair value
of power generating assets. We tested controls over management’s review of the
valuation models, including the controls over the review and approval of all
significant assumptions.

To test the fair value of the power generating assets, our audit procedures included,
among others, evaluating the Partnership’s valuation methodology, the significant
assumptions used, and testing the completeness and accuracy of the underlying data
supporting the significant assumptions. For each power generating asset, we
analyzed the significant drivers of the change in fair value including the future
electricity prices, terminal value and discount rates. With the support of our
valuation specialists, we inspected management’s valuation analysis and assessed
the estimates of future electricity prices by reference to shorter-term broker price
quotes and management’s longer-term market forecasts specific to each region and
power generating asset. We also involved our valuation specialists in the evaluation
of the terminal value and discount rates which included consideration of benchmark
interest rates, geographic location, contracted versus uncontracted assets and type of
technology.

For a sample of power generating assets, we performed audit procedures that
included, among others, agreeing contracted power prices to executed power
purchase agreements and assessing the anticipated long-term average generation
through corroboration with third party engineering reports and historical trends.
Further, we assessed the estimated operating and capital expenditures by
comparison to historical data and to third party data for a selection of assets and
tested the computational accuracy of the fair value model.

Page 69

Description of the Matter

How We Addressed the
Matter in Our Audit

With the assistance of our valuation specialists for the same samples, we also
performed a sensitivity analysis over the future electricity prices, terminal value and
discount rates to evaluate the fair value of power generating assets. We also
evaluated the fair values using other market-based evidence by comparing the
portfolio as a whole to recent similar transactions and by calculating the revenue
and EBITDA multiples of a sample of power generating assets and comparing them
to multiples of comparable public companies.

Furthermore, we evaluated the adequacy of the Partnership’s disclosures regarding
the significant assumptions and sensitivity analysis around the fair value of power
generating assets.

Significant acquisitions
During 2021, the Partnership completed the acquisitions of the Oregon Wind
Portfolio and U.S. Distributed Generation Portfolio, for total consideration of $744
million and $684 million, respectively. As described in Notes 1(n) and 3 –
Acquisitions to the consolidated financial statements, these business combinations
are accounted for using the acquisition method, and the results of operations have
been included in the consolidated financial statements since the corresponding dates
of acquisition.

Auditing the above noted acquisitions is complex given that significant estimation is
required in determining the fair value of the power generating assets acquired. The
significant assumptions include future electricity prices, discount rates and future
generation volumes. These assumptions are forward looking and could be affected
by future economic and market conditions.

We obtained an understanding, evaluated the design and tested the operating
effectiveness of controls over management’s processes in determining the fair value
of power generating assets acquired. We tested controls over management’s review
of the valuation models, including the controls over the review and approval of all
significant assumptions.

To test the fair value of the power generating assets, our audit procedures included,
among others, assessing the significant assumptions described above and testing the
completeness and accuracy of the underlying data. For example, we evaluated the
estimated generation volumes for a sample of power generating assets by comparing
them to third party engineering reports and to generation assumptions used for other
assets within the Partnership’s portfolio in the region. Further, we compared the
future electricity pricing to executed power purchase agreements and assessed the
anticipated long-term average generation through corroboration with third party
engineering reports and historical trends. We involved our valuation specialists to
assist in evaluating the valuation methodologies and the significant assumptions,
including discount rates, used in the Partnership’s models, which included
consideration of benchmark interest rates, geographic location, contracted versus
uncontracted assets and type of technology as well as performing sensitivity
analysis.

We have served as Brookfield Renewable’s auditor since 2011.

Toronto, Canada

February 28, 2022

Page 70

INTERNAL CONTROL OVER FINANCIAL REPORTING

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Brookfield Renewable Partners L.P. (“Brookfield Renewable”) is responsible for establishing and
maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process
designed by, or under the supervision of, the Chief Executive Officer and the Chief Financial Officer and effected by
the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board as defined in Regulation
240.13a–15(f) or 240.15d–15(f).

Management assessed the effectiveness of Brookfield Renewable’s internal control over financial reporting as of
December 31, 2021, based on the criteria set forth in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment,
management concludes that, as of December 31, 2021, Brookfield Renewable’s internal control over financial
reporting is effective. Management excluded from its design and assessment of the internal controls of investments
acquired in 2021, which include an 845 MW wind portfolio in Oregon and a 360 MW distributed generation
portfolio in the United States. whose total assets and net assets on a combined basis constitute approximately 5%
and 4%, respectively, of the consolidated financial statement amounts as of December 31, 2021 and 5% of revenues
for the year then ended.

Brookfield Renewable’s internal control over financial reporting as of December 31, 2021, has been audited by
Ernst & Young LLP, the Independent Registered Public Accounting Firm, who also audited Brookfield Renewable’s
consolidated financial statements for the year ended December 31, 2021. As stated in the Report of Independent
Registered Public Accounting Firm, Ernst & Young LLP expressed an unqualified opinion on the effectiveness of
Brookfield Renewable’s internal control over financial reporting as of December 31, 2021.

Connor Teskey
Chief Executive Officer

February 28, 2022

Wyatt Hartley
Chief Financial Officer

Page 71

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Brookfield Renewable Partners Limited (General Partner of Brookfield Renewable
Partners L.P.) and Partners of Brookfield Renewable Partners L.P.

Opinion on Internal Control Over Financial Reporting

We have audited Brookfield Renewable Partners L.P.’s (“Brookfield Renewable”) internal control over financial
reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO
criteria”). In our opinion, Brookfield Renewable maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2021, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting,
management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not
include the internal controls of the 845 MW wind portfolio in Oregon and 360 MW distributed generation portfolio
in the United States acquired in 2021, which are included in the 2021 consolidated financial statements of
Brookfield Renewable and constituted approximately 5% and 4% of total and net assets on a combined basis,
respectively, as of December 31, 2021 and 5% of revenues for the year then ended. Our audit of internal control over
financial reporting of Brookfield Renewable also did not include an evaluation of the internal control over financial
reporting of the 845 MW wind portfolio in Oregon and 360 MW distributed generation portfolio in the United States
acquired in 2021.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the 2021 consolidated financial statements of Brookfield Renewable and our report dated
February 28, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

Brookfield Renewable’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting included in the
accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express
an opinion on Brookfield Renewable’s internal control over financial reporting based on our audit. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to Brookfield
Renewable in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.

Page 72

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

Toronto, Canada

February 28, 2022

Page 73

BROOKFIELD RENEWABLE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS AT DECEMBER 31
(MILLIONS)
Assets
Current assets

Notes

2021

2020

Cash and cash equivalents ................................................................................................................
Restricted cash ..................................................................................................................................
Trade receivables and other current assets .......................................................................................
Financial instrument assets ...............................................................................................................
Due from related parties ...................................................................................................................
Assets held for sale ...........................................................................................................................

Financial instrument assets ..................................................................................................................
Equity-accounted investments .............................................................................................................
Property, plant and equipment, at fair value ........................................................................................
Intangible assets ...................................................................................................................................
Goodwill ..............................................................................................................................................
Deferred income tax assets ..................................................................................................................
Other long-term assets .........................................................................................................................

Liabilities
Current liabilities

Accounts payable and accrued liabilities .........................................................................................
Financial instrument liabilities .........................................................................................................
Due to related parties ........................................................................................................................
Corporate borrowings .......................................................................................................................
Non-recourse borrowings .................................................................................................................
Provisions .........................................................................................................................................
Liabilities directly associated with assets held for sale ....................................................................

21
22
23
5
29

5
20
12
13
18
11
24

25
5
29
14
14
28

Financial instrument liabilities .............................................................................................................
Corporate borrowings ..........................................................................................................................
Non-recourse borrowings ....................................................................................................................
Deferred income tax liabilities .............................................................................................................
Provisions ............................................................................................................................................ 26, 28
Other long-term liabilities ....................................................................................................................
Equity
Non-controlling interests

5
14
14
11

Participating non-controlling interests – in operating subsidiaries ...................................................
General partnership interest in a holding subsidiary held by Brookfield .........................................
Participating non-controlling interests – in a holding subsidiary – Redeemable/Exchangeable

units held by Brookfield ................................................................................................................
BEPC exchangeable shares .........................................................................................................
Preferred equity .................................................................................................................................
Perpetual subordinated notes ......................................................................................................
Preferred limited partners’ equity ........................................................................................................
Limited partners’ equity .......................................................................................................................

15
15

15
15
15
15
16
17

The accompanying notes are an integral part of these consolidated financial statements.

Approved on behalf of Brookfield Renewable Partners L.P.:

Patricia Zuccotti
Director

David Mann
Director

764 $
261
1,683
60
35
58
2,861
262
1,107
49,432
218
966
197
824
55,867 $

779 $
400
164
—
1,818
55
6
3,222
565
2,149
17,562
6,215
718
1,440

12,303
59

2,894
2,562
613
592
881
4,092

$
$

23,996 $
55,867 $

431
208
928
62
56
57
1,742
407
971
44,590
232
970
205
605
49,722

625
283
506
3
1,026
304
14
2,761
668
2,132
14,921
5,515
712
1,246

11,100
56

2,721
2,408
609
—
1,028
3,845

21,767
49,722

Page 74

BROOKFIELD RENEWABLE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

YEAR ENDED DECEMBER 31
(MILLIONS, EXCEPT AS NOTED)

Notes

2021

2020

Revenues ..................................................................................................

4,096 $

3,810 $

Other income ...........................................................................................
Direct operating costs(1)

...........................................................................

Management service costs .......................................................................

Interest expense .......................................................................................

Share of earnings from equity-accounted investments ............................

Foreign exchange and financial instruments gain (loss) .........................

Depreciation .............................................................................................

Other ........................................................................................................

Income tax (expense) recovery

Current ..................................................................................................

Deferred ................................................................................................

304

128

(1,365)

(1,274)

(288)

(981)

(32)

(1,501)

(307)

(43)

(14)

(235)

(976)

127

(1,367)

(432)

(66)

213

147

Net (loss) income .....................................................................................

(66) $

(45) $

Net (loss) income attributable to:

Non-controlling interests

2019

3,971

105

(1,263)

(135)

(1,001)

(36)

(1,271)

(276)

(70)

(43)

Participating non-controlling interests – in operating subsidiaries .......

209 $

180 $

113

General partnership interest in a holding subsidiary held by

Brookfield .........................................................................................

Participating non-controlling interests – in a holding subsidiary –

Redeemable/Exchangeable units held by Brookfield .......................

BEPC exchangeable shares ...................................................................

Preferred equity .....................................................................................

Perpetual subordinated notes ................................................................

Preferred limited partners’ equity .........................................................

Limited partners’ equity ..........................................................................

Basic and diluted (loss) earnings per LP unit ..........................................
(1)

Direct operating costs exclude depreciation expense disclosed below.

The accompanying notes are an integral part of these consolidated financial statements.

(135)

(119)

(133)

(49)

—

(191)

(184)

(66) $

(45) $

(65)

—

(88)

(0.69) $

(0.61) $

(0.26)

Page 75

BROOKFIELD RENEWABLE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME

YEAR ENDED DECEMBER 31
(MILLIONS)

Notes

2021

2020

Net (loss) income .....................................................................................

(66) $

(45) $

Other comprehensive income that will not be reclassified to net

income

Revaluations of property, plant and equipment ..................................

Actuarial gain (loss) on defined benefit plans ....................................

Deferred income taxes on above items ...............................................

Unrealized (loss) gain on investments in equity securities .................

Equity-accounted investments ............................................................

Total items that will not be reclassified to net income ............................
Other comprehensive income that may be reclassified to net income

Foreign currency translation .................................................................
Gains (losses) arising during the year on financial instruments

designated as cash-flow hedges ........................................................

Unrealized gain (loss) on foreign exchange swaps – net investment

hedge .................................................................................................

Reclassification adjustments for amounts recognized in net income ...

Deferred income taxes on above items .................................................

Equity-accounted investments ..............................................................

Total items that may be reclassified subsequently to net income ............

Other comprehensive income ..................................................................

3,188

2,027

4,573

(1,170)

184

3,620

4,112

(1)

(934)

(1)

(859)

(840)

(64)

(2)

(36)

(854)

2,766

(27)

(35)

(39)

(914)

2,274

2019

2,413

(14)

(488)

(91)

(18)

—

(82)

1,945

2,025

Comprehensive income ...........................................................................

2,700 $

2,229 $

Comprehensive income attributable to:

Non-controlling interests

Participating non-controlling interests – in operating subsidiaries ......
General partnership interest in a holding subsidiary held by

1,048 $

1,292 $

1,117

Brookfield .........................................................................................

Participating non-controlling interests – in a holding subsidiary –

Redeemable/Exchangeable units held by Brookfield .......................

BEPC exchangeable shares ...................................................................

Preferred equity ....................................................................................

Perpetual subordinated notes ................................................................

Preferred limited partners’ equity ............................................................

Limited partners’ equity ..........................................................................

444

394

628

280

103

—

393

The accompanying notes are an integral part of these consolidated financial statements.

2,700 $

2,229 $

316

—

437

2,025

Page 76

BROOKFIELD RENEWABLE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Accumulated other comprehensive income

Non-controlling interests

YEAR ENDED DECEMBER 31
(MILLIONS)

Limited
partners’
equity

Foreign
currency
translation

Revaluation
surplus

Actuarial
losses on
defined
benefit
plans

Cash
flow
hedges

Investments
in equity
securities

Total
limited
partners’
equity

Preferred
limited
partners’
equity

Preferred
equity

Perpetual
subordinated
notes

BEPC
exchangeable
shares

Participating
non-
controlling
interests – in
operating
subsidiaries

General
partnership
interest in a
holding
subsidiary
held by
Brookfield

Participating
non-
controlling
interests – in a
holding
subsidiary –
Redeemable/
Exchangeable
units held by
Brookfield

Total
equity

Balance, as at December 31, 2020 .... $

(988) $

(720) $

5,595

(6) $

(39) $

3,845

1,028

609

— $

2,408

11,100

Net income (loss) ..............................

(191)

Other comprehensive income (loss) ..

Issuance of perpetual subordinated

notes (Note 15) ..............................

Capital contributions (Note 15) .........

Return of capital ................................

Redemption of Preferred LP Units

(Note 16) .......................................

Disposal (Note 4) ..............................

Distributions or dividends declared ..

Distribution reinvestment plan ..........

Other ..................................................

Change in year ..................................

—

(335)

(49)

(528)

—

(116)

—

(6)

(122)

—

938

—

(38)

—

(1)

899

—

(1)

—

(11)

—

(9)

Balance, as at December 31, 2021 .... $

(1,516) $

(842) $

6,494

—

(48) $

Balance, as at December 31, 2019 .... $

(1,114) $

(700) $

6,422

(9) $

(32) $

Net income (loss) ..............................

(184)

Other comprehensive income (loss) ..

Preferred LP units issued ..................

Capital contributions .........................

Return of capital ................................

Disposals ...........................................

Distributions or dividends declared ..

Distribution reinvestment plan ..........

Special distribution/TerraForm

Power acquisition ..........................

Other ..................................................

Change in year ..................................

—

(349)

634

126

—

(249)

—

280

(51)

(20)

—

827

—

(17)

—

(1,465)

(172)

(827)

—

(6)

—

(2)

(7)

—

(13)

(1)

(9)

(191)

819

—

(335)

(55)

247

—

(147)

—

(55)

—

(147)

—

(26)

—

592

—

(12)

—

592

(119)

513

—

(209)

—

(31)

154

209

839

—

1,121

—

(395)

(810)

—

239

1,203

—

(85)

—

(1)

2,721

$ 21,767

(135)

579

—

(66)

2,766

592

1,121

—

(147)

(395)

(237)

(1,769)

—

(34)

173

118

2,229

4,092

881

613

592 $

2,562

12,303

2,894

$ 23,996

4,579

833

597

— $

—

11,086

(184)

577

—

(349)

(561)

(223)

(734)

—

195

—

(54)

—

195

—

(25)

—

(49)

152

—

(116)

—

2,134

287

2,408

180

1,112

—

520

(147)

(15)

(551)

—

(1,101)

—

(70)

—

(10)

(2)

(12)

3,317

$ 20,480

(133)

413

—

(45)

2,274

195

520

(147)

(15)

(250)

(1,415)

—

(462)

(164)

(596)

—

(86)

1,287

Balance, as at December 31, 2020 .... $

(988) $

(720) $

5,595

(6) $

(39) $

3,845

1,028

609

— $

2,408

11,100

2,721

$ 21,767

The accompanying notes are an integral part of these consolidated financial statements.

Page 77

BROOKFIELD RENEWABLE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Accumulated other comprehensive income (loss)

Non-controlling interests

YEAR ENDED DECEMBER 31
(MILLIONS)

Limited
partners’
equity

Foreign
currency
translation

Revaluation
surplus

Actuarial
losses on
defined
benefit
plans

Cash
flow
hedges

Investments
in equity
securities

Total
limited
partners’
equity

Preferred
limited
partners’
equity

Preferred
equity

Participating
non-
controlling
interests – in
operating
subsidiaries

General
partnership
interest in a
holding
subsidiary
held by
Brookfield

Participating
non-controlling
interests – in a
holding
subsidiary –
Redeemable/
Exchangeable
units held by
Brookfield

Total equity

Balance, as at December 31, 2018 .... $

(927) $

(652) $

6,120

(6) $ (34) $

4,505

707

568

10,289

Net income ........................................

(88)

Other comprehensive income (loss) ..

Preferred Units issued .......................

Capital contributions .........................

Disposal .............................................

—

Distributions or dividends declared ..

(370)

Distribution reinvestment plan ..........

Other ..................................................

265

Change in year ..................................

(187)

—

(35)

—

(13)

(48)

—

544

—

(242)

302

—

(4)

—

(3)

—

(11)

(88)

525

—

(370)

Balance, as at December 31, 2019 .... $ (1,114) $

(700) $

6,422

(9) $ (32) $

4,579

—

126

—

(44)

—

126

833

The accompanying notes are an integral part of these consolidated financial statements.

—

(26)

—

113

1,004

—

674

(172)

(844)

—

797

—

(55)

—

(1)

3,266

19,402

(65)

381

—

(268)

—

1,945

126

674

(172)

(1,607)

1,078

597

11,086

3,317

20,480

Page 78

BROOKFIELD RENEWABLE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Notes

2021

2020

2019

(66) $

(45) $

YEAR ENDED DECEMBER 31
(MILLIONS)

Operating activities
Net income ............................................................................................................
Adjustments for the following non-cash items:

Depreciation ......................................................................................................
Unrealized foreign exchange and financial instrument (gain) loss ...................
Share of earnings from equity-accounted investments .....................................
Deferred income tax (recovery) expense ..........................................................
Other non-cash items .........................................................................................
Dividends received from equity-accounted investments ..................................

Changes in due to or from related parties .............................................................
Net change in working capital balances ...............................................................

Financing activities
Proceeds from medium term notes .......................................................................
Repayment of medium term notes ........................................................................
Corporate credit facilities, net ...............................................................................
Commercial paper, net ..........................................................................................
Proceeds from non-recourse borrowings ..............................................................
Repayment of non-recourse borrowings ...............................................................
Repayment of lease liabilities ...............................................................................

Capital contributions from participating non-controlling interests – in

operating subsidiaries .......................................................................................

Capital repaid to participating non-controlling interests – in operating

subsidiaries .......................................................................................................

12
5
20
11

14
14
14
14
14
14

Issuance of equity instruments and related costs .................................................. 15,16,17

Redemption and repurchase of equity instruments

16,17

Distributions paid:

To participating non-controlling interests – in operating subsidiaries,
preferred shareholders, preferred limited partners unitholders, and
perpetual subordinate notes .........................................................................

15,16

To unitholders of Brookfield Renewable or BRELP and shareholders of

Brookfield Renewable Corporation .............................................................

15, 17

Borrowings from related party ..............................................................................

Repayments to related party .................................................................................

Investing activities
Acquisitions, net of cash and cash equivalents, in acquired entity .......................
Investment in equity-accounted investments ........................................................
Investment in property, plant and equipment .......................................................
Proceeds from disposal of assets, net of cash and cash equivalents disposed ......
Purchase of financial assets ..................................................................................
Proceeds from financial assets ..............................................................................
Restricted cash and other ......................................................................................

3
20
12

Foreign exchange (loss) gain on cash ...................................................................
Cash and cash equivalents (decrease) increase .....................................................
Net change in cash classified within assets held for sale ..................................
Balance, beginning of year ................................................................................
Balance, end of year ..........................................................................................

Supplemental cash flow information:

Interest paid .......................................................................................................
Interest received ................................................................................................
Income taxes paid ..............................................................................................

$
$
$

The accompanying notes are an integral part of these consolidated financial statements.

1,501
122
(22)
(29)
(136)
78
1,448
2
(716)
734

—
—
—
(3)
6,877
(3,649)
(29)

1,200

(511)

592

(153)

(900)

(854)

1,188

(1,615)
2,143

(1,426)
(54)
(1,967)
827
(58)
220
(46)
(2,504)
(35)
338
(5)
431
764 $

870 $
45 $
71 $

1,367
(134)
(27)
(213)
388
56
1,392
59
(155)
1,296

570
(304)
(299)
3
3,205
(3,380)
(28)

514

(147)

151

—

(628)

(769)

320

—
(792)

(105)
(23)
(447)
269
(445)
257
68
(426)
13
91
(12)
352
431 $

872 $
28 $
70 $

1,271
32
(29)
(27)
231
16
1,574
33
(53)
1,554

449
(341)
(422)
—
4,318
(3,495)
(31)

705

(113)

126

(1)

(913)

(684)

936

(936)
(402)

(983)
(144)
(460)
291
(138)
145
78
(1,211)
(6)
(65)
(5)
422
352

930
19
72

Page 79

BROOKFIELD RENEWABLE PARTNERS L.P.

NOTES TO THE AUDITED ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

The business activities of Brookfield Renewable Partners L.P.
(“Brookfield Renewable”) consist of owning a portfolio of
renewable power generating facilities primarily in North America,
Colombia, Brazil, Europe, India and China.

Unless the context indicates or requires otherwise, the term
“Brookfield Renewable” means Brookfield Renewable Partners
L.P. and its controlled entities, including Brookfield Renewable
Corporation (“BEPC”). Unless the context indicates or requires
otherwise, the term “the partnership” means Brookfield Renewable
Partners L.P. and its controlled entities, excluding BEPC.

partnership

(“Redeemable/Exchangeable

Brookfield Renewable’s consolidated equity interests include the
non-voting publicly traded limited partnership units (“LP units”)
held by public unitholders and Brookfield, class A exchangeable
subordinate voting shares (“BEPC exchangeable shares”) of
Brookfield Renewable Corporation (“BEPC”) held by public
shareholders and Brookfield, redeemable/exchangeable partnership
in
units
Brookfield Renewable Energy L.P. (“BRELP”), a holding
subsidiary of Brookfield Renewable, held by Brookfield, and
general partnership interest (“GP interest”) in BRELP held by
Brookfield. Holders of the LP units, Redeemable/Exchangeable
partnership units, GP interest, and BEPC exchangeable shares will
be collectively referred to throughout as “Unitholders” unless the
context indicates or requires otherwise. LP units, Redeemable/
Exchangeable partnership units, GP
interest, and BEPC
exchangeable shares will be collectively referred to throughout as
"Units", or as "per Unit", unless the context indicates or requires
otherwise.

units”)

Brookfield Renewable is a publicly traded limited partnership
established under the laws of Bermuda pursuant to an amended and
restated limited partnership agreement dated November 20, 2011
as thereafter amended from time to time.

The registered office of Brookfield Renewable is 73 Front Street,
Fifth Floor, Hamilton HM12, Bermuda.

The immediate parent of Brookfield Renewable is its general
partner, Brookfield Renewable Partners Limited (“BRPL”). The
ultimate parent of Brookfield Renewable is Brookfield Asset
Management Inc. (”Brookfield Asset Management”). Brookfield
Asset Management and its subsidiaries, other than Brookfield
Renewable, are also individually and collectively referred to as
“Brookfield” in these financial statements.

The BEPC exchangeable shares are traded under the symbol
“BEPC” on the New York Stock Exchange and the Toronto Stock
Exchange.

The LP units are traded under the symbol “BEP” on the New York
Stock Exchange and under the symbol “BEP.UN” on the Toronto

“BEP.PR.K”,

Stock Exchange. Brookfield Renewable's Class A Series 5, Series
7, Series 11, Series 13, and Series 15 preferred limited partners’
equity are traded under the symbols “BEP.PR.E”, “BEP.PR.G”,
“BEP.PR.I”,
“BEP.PR.O”
respectively, on
the Toronto Stock Exchange. Brookfield
Renewable's Class A Series 17 preferred limited partners’ equity is
traded under the symbol “BEP.PR.A” on the New York Stock
Exchange. The perpetual subordinated notes are traded under the
symbol “BEPH” and “BEPI” on the New York Stock Exchange.

“BEP.PR.M”

and

Notes to consolidated financial statements
Basis of preparation and significant
accounting policies

Page
80

2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.

Principal subsidiaries
Acquisitions
Disposal of assets
Risk management and financial instruments
Segmented information
Other income
Direct operating costs
Other
Foreign currency translation
Income taxes
Property, plant and equipment, at fair value
Intangible assets
Borrowings
Non-controlling interests
Preferred limited partners’ equity
Limited partners’ equity
Goodwill
Capital management
Equity-accounted investments
Cash and cash equivalents
Restricted cash
Trade receivables and other current assets
Other long-term assets
Accounts payable and accrued liabilities
Provisions
Other long-term liabilities
Commitments, contingencies and guarantees
Related party transactions
Supplemental information
Subsidiary public issuers
Subsequent events

95
96
99
100
110
115
116
116
116
117
119
122
123
128
133
134
135
135
137
137
137
137
138
138
139
139
139
142
150
151
152

Page 80

1. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The accounting policies
used in the consolidated financial statements are based on the IFRS applicable as at December 31, 2021, which
encompass individual IFRS, International Accounting Standards (“IAS”), and interpretations made by the
International Financial Reporting Interpretations Committee (“IFRIC”) and the Standard Interpretations Committee
(“SIC”). The policies set out below are consistently applied to all periods presented, unless otherwise noted.

These consolidated financial statements have been authorized for issuance by the Board of Directors of Brookfield
Renewable’s general partner, BRPL, on February 28, 2022.

Certain comparative figures have been reclassified to conform to the current year’s presentation.

References to $, C$, €, R$, COP, ZAR, THB, INR and CNY are to United States (“U.S.”) dollars, Canadian dollars,
euros, Brazilian real, Colombian pesos, South African rand, Thai baht, Indian rupees and Chinese yuan, respectively.

All figures are presented in millions of U.S. dollars unless otherwise noted.

(b) Basis of preparation

The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of
property, plant and equipment and certain assets and liabilities which have been measured at fair value. Cost is
recorded based on the fair value of the consideration given in exchange for assets.

These consolidated financial statements include the accounts of Brookfield Renewable and its subsidiaries, which
are the entities over which Brookfield Renewable has control. An investor controls an investee when it is exposed,
or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Non-controlling interests in the equity of Brookfield Renewable’s subsidiaries
are shown separately in equity in the consolidated statements of financial position.

Brookfield Renewable has entered into a voting agreement with Brookfield, which provides Brookfield Renewable
with control of the general partner of BRELP. Accordingly, Brookfield Renewable consolidates the accounts of
BRELP and its subsidiaries. In addition, BRELP issued redeemable/exchangeable limited partnership units to
Brookfield (“Redeemable/Exchangeable partnership units”), pursuant to which the holder may, at its request, require
BRELP to redeem the Redeemable/Exchangeable partnership units for cash consideration. This right is subject to
Brookfield Renewable’s right of first refusal which entitles it, at its sole discretion, to elect to acquire all of the
Redeemable/Exchangeable partnership units so presented to BRELP that are tendered for redemption in exchange
for LP units on a one-for-one basis. As Brookfield Renewable, at its sole discretion, has the right to settle the
obligation with LP units, the Redeemable/Exchangeable partnership units are classified as equity of Brookfield
Renewable (“Participating non-controlling interests – in a holding subsidiary – Redeemable/Exchangeable Units
held by Brookfield”).

Brookfield Renewable has entered into voting agreements with Brookfield, whereby Brookfield Renewable gained
control of the entities that own certain renewable power generating operations. Brookfield Renewable has also
entered into a voting agreement with its consortium partners in respect of its Colombian operations. These voting
agreements provide Brookfield Renewable the authority to direct the election of the Boards of Directors of the
relevant entities, among other things, and therefore provide Brookfield Renewable with control. Accordingly,
Brookfield Renewable consolidates the accounts of these entities. Refer to Note 29 – Related party transactions for
further information.

For entities previously controlled by Brookfield Asset Management, the voting agreements entered into do not
represent business combinations in accordance with IFRS 3, Business Combinations (“IFRS 3”), as all combining
businesses are ultimately controlled by Brookfield Asset Management both before and after the transactions were
completed. Brookfield Renewable accounts for these transactions involving entities under common control in a
manner similar to a pooling of interest, which requires the presentation of pre-voting agreement financial

Page 81

information as if the transactions had always been in place. Refer to Note 1(r)(ii) – Critical judgments in applying
accounting policies – Common control transactions for Brookfield Renewable’s policy on accounting for
transactions under common control.

Equity-accounted investments

Equity-accounted investments are entities over which Brookfield Renewable has significant influence or joint
arrangements representing joint ventures. Significant influence is the ability to participate in the financial and
operating policy decisions of the investee, but without controlling or jointly controlling those investees. Such
investments are accounted for using the equity method.

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties
sharing control. Brookfield Renewable accounts for its interests in joint ventures using the equity method.

Under the equity method, the carrying value of an interest in an investee is initially recognized at cost and adjusted
for Brookfield Renewable’s share of net income, other comprehensive income (“FVOCI”), distributions by the
equity-accounted investment and other adjustments to Brookfield Renewable’s proportionate interest in the investee.

(d) Foreign currency translation

All figures reported in the consolidated financial statements and tabular disclosures to the consolidated financial
statements are reflected in millions of U.S. dollars, which is the functional currency of Brookfield Renewable. Each
of the foreign operations included in these consolidated financial statements determines its own functional currency,
and items included in the financial statements of each subsidiary are measured using that functional currency.

Assets and liabilities of foreign operations having a functional currency other than the U.S. dollar are translated at
the rate of exchange prevailing at the reporting date and revenues and expenses at the rate of exchange prevailing at
the dates of the transactions during the period. Gains or losses on translation of foreign subsidiaries are included in
OCI. Gains or losses on foreign currency denominated balances and transactions that are designated as hedges of net
investments in these operations are reported in the same manner.

In preparing the consolidated financial statements of Brookfield Renewable, foreign currency denominated
monetary assets and liabilities are translated into the functional currency using the closing rate at the applicable
consolidated statement of financial position dates. Non-monetary assets and liabilities denominated in a foreign
currency and measured at fair value are translated at the rate of exchange prevailing at the date when the fair value
was determined and non-monetary assets and liabilities measured at historical cost are translated at the historical
rate. Revenues and expenses are measured in the functional currency at the rates of exchange prevailing at the dates
of the transactions with gains or losses included in income.

(e) Cash and cash equivalents

Cash and cash equivalents include cash, term deposits and money market instruments with original maturities of less
than 90 days.

(f) Restricted cash

Restricted cash includes cash and cash equivalents, where the availability of funds is restricted primarily by credit
agreements.

(g) Property, plant and equipment and revaluation method

Power generating assets are classified as property, plant and equipment and are accounted for using the revaluation
method under IAS 16 – Property, Plant and Equipment (“IAS 16”). Property, plant and equipment are initially
measured at cost and subsequently carried at their revalued amount, being the fair value at the date of the
revaluation, less any subsequent accumulated depreciation and any subsequent accumulated impairment losses.

Brookfield Renewable generally determines the fair value of its property, plant and equipment by using a 20-year
discounted cash flow model for the majority of its assets. This model incorporates future cash flows from long-term
power purchase agreements that are in place where it is determined that the power purchase agreements are linked

Page 82

specifically to the related power generating assets. The model also includes estimates of future electricity prices,
anticipated long-term average generation, estimated operating and capital expenditures, terminal values and
assumptions about future inflation rates and discount rates by geographical location. Construction work-in-progress
(“CWIP”) is revalued when sufficient information exists to determine fair value using the discounted cash flow
method. Revaluations are made on an annual basis as at December 31 to ensure that the carrying amount does not
differ significantly from fair value. For power generating assets acquired through business combinations, Brookfield
Renewable initially measures the assets at fair value on the acquisition date, consistent with the policy described in
Note 1(n) – Business combinations, with no revaluation at year-end in the year of acquisition unless there is external
evidence specific to those assets that would indicate the carrying value of the asset has either increased or decreased
materially.

Where the carrying amount of an asset increased as a result of a revaluation, the increase is recognized in income to
the extent the increase reverses a previously recognized decrease recorded through income, with the remainder of the
increase recognized in OCI and accumulated in equity under revaluation surplus and non-controlling interest. When
the carrying amount of an asset decreases, the decrease is recognized in OCI to the extent that a balance exists in
revaluation surplus with respect to the asset, with the remainder of the decrease recognized in income.

Depreciation on power generating assets is calculated on a straight-line basis over the estimated service lives of the
assets, which are as follows:

Dams ....................................................................................................................................................

Penstocks ..............................................................................................................................................

Powerhouses ........................................................................................................................................

Hydroelectric generating units .............................................................................................................

Wind generating units ..........................................................................................................................

Solar generating units ..........................................................................................................................

Gas-fired cogenerating (“Cogeneration”) units ...................................................................................

Other assets ..........................................................................................................................................

Estimated service lives

Up to 115 years

Up to 60 years

Up to 115 years

Up to 30 years

Up to 35 years

Up to 40 years

Up to 60 years

Costs are allocated to significant components of property, plant and equipment. When items of property, plant and
equipment have different useful lives, they are accounted for as separate items (significant components) and
depreciated separately. To ensure the accuracy of useful lives and residual values, a review is conducted annually.

Depreciation is calculated based on the fair value of the asset less its residual value. Depreciation commences when
the asset is in the location and conditions necessary for it to be capable of operating in the manner intended by
management. It ceases at the earlier of the date the asset is classified as held-for-sale and the date the asset is
derecognized. An item of property, plant and equipment and any significant component is derecognized upon
disposal or when no future economic benefits are expected from its use. Other assets include equipment, buildings
and leasehold improvements. Buildings, furniture and fixtures, leasehold improvements and office equipment are
recorded at historical cost, less accumulated depreciation. Land and CWIP are not subject to depreciation.

The depreciation of property, plant and equipment in Brazil is based on the duration of the authorization or the
useful life of a concession asset. The weighted-average remaining duration at December 31, 2021 is 31 years (2020:
32 years). Since land rights are part of the concession or authorization, this cost is also subject to depreciation.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset,
and the net amount is applied to the revalued amount of the asset.

Gains and losses on disposal of an item of property, plant and equipment of operating assets are recognized in Other
income and Other in the consolidated statements of income (loss), respectively. The revaluation surplus is
reclassified within the respective components of equity and not reclassified to net income when the assets are
disposed.

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(h) Leases

At inception of a contract, Brookfield Renewable assesses whether a contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset,
Brookfield Renewable assesses whether:

•

the contract specified explicitly or implicitly the use of an identified asset, and that is physically distinct or
represents substantially all of the capacity of a physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;

Brookfield Renewable has the right to obtain substantially all of the economic benefits from use of the asset
throughout the period of use; and Brookfield Renewable has the right to direct the use of the asset.
Brookfield Renewable has this right when it has the decision-making rights that are most relevant to
changing how and for what purpose the asset is used. In rare cases where the decisions about how and for
what purpose the asset is used are predetermined, Brookfield Renewable has the right to direct the use of
the asset if either:

◦

Brookfield Renewable has the right to operate the asset (or to direct others to operate the asset in a
manner that it determines) throughout the period of use, without the supplier having the right to
change those operating instructions; or

Brookfield Renewable designed the asset in a way that predetermines how and for what purpose it
will be used.

At inception or on reassessment of a contract that contains a lease component, Brookfield Renewable allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for
the leases of land and buildings in which it is a lessee, Brookfield Renewable has elected not to separate non-lease
components and, therefore, accounts for the lease and non-lease components as a single lease component.

Brookfield Renewable recognizes a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.

The right-of use asset is subsequently depreciated using the straight-line method from the commencement date to the
earlier of the end of the useful lives of the right-of-use asset or the end of the lease term. The estimated useful lives
of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of
the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, Brookfield Renewable’s incremental borrowing rate. Generally, Brookfield Renewable uses its
incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

•

Fixed payments, including in-substance fixed payments;

Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at
the commencement date;

Amounts expected to be payable under a residual value guarantee; and

The exercise price under a purchase option that Brookfield Renewable is reasonably certain to exercise,
lease payments in an optional renewable period if Brookfield Renewable is reasonably certain to exercise
an extension option, and penalties for early termination of a lease unless Brookfield Renewable is
reasonably certain not to terminate early

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, if there is a change in Brookfield

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Renewable’s estimate of the amount expected to be payable under a residual value guarantee, or if Brookfield
Renewable changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made either to the carrying amount
of the right-of-use asset or, when the adjustment is a reduction to the right-of-use asset, is recorded in the
consolidated statements of income (loss) if the carrying amount of the right-of-use asset has been reduced to nil.

Brookfield Renewable presents right-of-use assets in property, plant and equipment and lease liabilities in other
long-term liabilities in the consolidated statements of financial position.

Brookfield Renewable has elected not to recognize right-of-use assets and lease liabilities for short-term leases that
have a lease term of twelve months or less and leases of low-value assets. Brookfield Renewable recognizes the
lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(i) Asset impairment

At each statement of financial position date, management assesses whether there is any indication that assets are
impaired. For non-financial tangible and intangible assets (including equity-accounted investments), an impairment
is recognized if the recoverable amount, determined as the greater of the estimated fair value, less costs to sell, and
the discounted future cash flows generated from use and eventual disposal of an asset or cash-generating unit, is less
than its carrying value. The projections of future cash flows take into account the relevant operating plans and
management’s best estimate of the most probable set of conditions anticipated to prevail. Should an impairment loss
subsequently reverse, the carrying amount of the asset is increased to the lesser of the revised estimate of the
recoverable amount, and the carrying amount that would have been recorded had no impairment loss been
recognized previously.

(j) Trade receivables and other current assets

Trade receivables and other current assets are recognized initially at fair value, and subsequently measured at
amortized cost using the effective interest method, less any provision for expected credit losses.

(k) Financial instruments

Initial recognition

Under IFRS 9 – Financial Instruments (“IFRS 9”), regular purchases and sales of financial assets are recognized on
the trade date, being the date on which Brookfield Renewable commits to purchase or sell the asset. Financial assets
are derecognized when the rights to receive cash flows from the financial assets have expired or have been
transferred and Brookfield Renewable has transferred substantially all the risks and rewards of ownership.

At initial recognition, Brookfield Renewable measures a financial asset at its fair value. In the case of a financial
asset not categorized as fair value through profit and loss (“FVPL”), transaction costs that are directly attributable to
the acquisition of the financial asset are included at initial recognition. Transaction costs of financial assets carried at
FVPL are expensed in income.

Classification and measurement

Subsequent measurement of financial assets depends on Brookfield Renewable’s business objective for managing
the asset and the cash flow characteristics of the asset. There are three measurement categories into which
Brookfield Renewable classifies its financial assets:

Amortized cost – Financial assets held for collection of contractual cash flows that represent solely payments of
principal and interest are measured at amortized cost. Interest income is recognized as other income in the financial
statements, and gains/losses are recognized in income when the asset is derecognized or impaired.

FVOCI – Financial assets held to achieve a particular business objective other than short-term trading are designated
at fair value through other comprehensive income (“FVOCI”). For equity instruments designated at FVOCI, there is
no recycling of gains or losses through income. Upon derecognition of the asset, accumulated gains or losses are
transferred from OCI directly to retained earnings.

FVPL – Financial assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. Gains or
losses on these types of assets are recognized in income.

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Brookfield Renewable assesses on a forward-looking basis the expected credit losses (“ECL”) associated with its
assets carried at amortized cost and FVOCI. For trade receivables and contract assets, Brookfield Renewable applied
the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized from initial
recognition of the asset. The simplified approach to the recognition of ECL does not require entities to track the
changes in credit risk; rather, entities recognize a loss allowance at each reporting date based on the lifetime ECL
since the date of initial recognition of the asset.

Evidence of impairment may include:

•

Indications that a debtor or group of debtors is experiencing significant financial difficulty;

A default or delinquency in interest or principal payments;

Probability that a debtor or a group of debtors will enter into bankruptcy or other financial reorganization;

Changes in arrears or economic conditions that correlate with defaults, where observable data indicates that
there is a measurable decrease in the estimated future cash flows.

Trade receivables and contract assets are reviewed qualitatively on a case-by-case basis to determine if they need to
be written off.

ECL are measured as the difference in the present value of the contractual cash flows that are due under contract and
the cash flows expected to be received. ECL is measured by considering the risk of default over the contract period
and incorporates forward looking information into its measurement.

Financial liabilities are classified as financial liabilities at fair value through profit and loss, amortized cost, or
derivatives designated as hedging instruments in an effective hedge. Brookfield Renewable determines the
classification of its financial liabilities at initial recognition. Brookfield Renewable’s financial liabilities include
accounts payable and accrued liabilities, corporate borrowings, non-recourse borrowings, derivative liabilities, due
to related party balances, and tax equity. Financial liabilities are initially measured at fair value, with subsequent
measurement determined based on their classification as follows:

FVPL – Financial liabilities held for trading, such as those acquired for the purpose of selling in the near term,
derivative financial instruments entered into by Brookfield Renewable that do not meet hedge accounting criteria,
and tax equity are classified as fair value through profit and loss. Gains or losses on these types of liabilities are
recognized in income.

Brookfield Renewable owns and operates certain projects in the U.S. under tax equity structures to finance the
construction of solar and wind projects. Such structures are designed to allocate renewable tax incentives, such as
investment tax credits (“ITCs”), production tax credits (“PTCs”) and accelerated tax depreciation, to tax equity
investors. Generally, tax equity structures grant the tax equity investors the majority of the project's U.S. taxable
earnings and renewable tax incentives, along with a smaller portion of the projects’ cash flows, until a contractually
determined point at which the allocations are adjusted (the “Flip Point”). Subsequent to the Flip Point the majority
of the project’s U.S. taxable earnings, renewable tax incentives and cash flows are allocated to the sponsor. The Flip
Point dates are generally dependent on the underlying projects’ reaching an agreed upon after tax investment return,
however, from time to time, the Flip Point dates may be dates specified within the contract. At all times, both before
and after the projects’ Flip Point, Brookfield Renewable retains control over the projects financed with a tax equity
structure. In accordance with the substance of the contractual agreements, the amounts paid by the tax equity
investors for their equity stakes are classified as financial instrument liabilities on the consolidated statements of
financial position and at each reporting date are remeasured to their fair value in accordance with IFRS 9.

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The fair value of the tax equity financing is generally comprised of the following elements:

Elements affecting the fair value of the tax equity financing

Production tax credits (PTCs)

Taxable loss, including tax attributes such as accelerated tax
depreciation

Pay-go contributions

Cash distributions

Description
Allocation of PTCs to the tax equity investor are derived
from the power generated during the period. The PTCs are
recognized in foreign exchange and financial instrument
gain (loss) with a corresponding reduction to the tax equity
liability.

Under the terms of the tax equity agreements, Brookfield
Renewable is required to allocate specified percentages of
taxable losses to the tax equity investor. As amounts are
allocated, the obligation to deliver them is satisfied and a
reduction to the tax equity liability is recorded with a
corresponding amount recorded within foreign exchange
and financial instrument gain (loss) on the consolidated
statements of income (loss).

Certain of
the contracts contain annual production
thresholds. When the thresholds are exceeded, the tax
equity investor is required to contribute additional cash
amounts. The cash amounts paid increase the value of the
tax equity liability.

Certain of the contracts also require cash distributions to the
tax equity investor. Upon payment, the tax equity liability is
reduced in the amount of the cash distribution.

Amortized cost – All other financial liabilities are classified as amortized cost using the effective interest rate
method. Gains and losses are recognized in income when the liabilities are derecognized as well as through the
amortization process. Remeasurement gains and losses on financial liabilities classified as amortized cost are
presented in the consolidated statements of income (loss). Amortized cost is computed using the effective interest
method less any principal repayment or reduction. The calculation takes into account any premium or discount on
acquisition and includes transaction costs and fees that are an integral part of the effective interest rate. This category
includes trade and other payables, dividends payable, interest-bearing loans and borrowings, and corporate credit
facilities.

Derivatives and hedge accounting

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair
value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being
hedged and the type of hedge relationship designated.

Brookfield Renewable designates its derivatives as hedges of:

•

Foreign exchange risk associated with the cash flows of highly probable forecast transactions (cash flow
hedges);

Foreign exchange risk associated with net investment in foreign operations (net investment hedges);

Commodity price risk associated with cash flows of highly probable forecast transactions (cash flow
hedges); and

Floating interest rate risk associated with highly probable payments of debts (cash flow hedges).

At the inception of a hedge relationship, Brookfield Renewable formally designates and documents the hedge
relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for
undertaking the hedge.

A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

•
•

There is an ‘economic relationship’ between the hedged item and the hedging instrument;
The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship;
and

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•

The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged
item that Brookfield Renewable actually hedges and the quantity of the hedging instrument that Brookfield
Renewable actually uses to hedge that quantity of hedged item.

The fair values of various derivative financial instruments used for hedging purposes and movements in the hedge
reserve within equity are shown in Note 5 – Risk management and financial instruments.

When a hedging instrument expires, is sold, is terminated, or no longer meets the criteria for hedge accounting, any
cumulative deferred gain or loss and deferred costs of hedging in equity at that time remain in equity until the
forecasted transaction occurs. When the forecasted transaction is no longer expected to occur, the cumulative gain or
loss and deferred costs of hedging are immediately reclassified to income.

If the hedge ratio for risk management purposes is no longer optimal but the risk management objective remains
unchanged and the hedge continues to qualify for hedge accounting, the hedge relationship will be rebalanced by
adjusting either the volume of the hedging instrument or the volume of the hedged item so that the hedge ratio aligns
with the ratio used for risk management purposes. Any hedge ineffectiveness is calculated and accounted for in
income at the time of the hedge relationship rebalancing.

(i) Cash flow hedges that qualify for hedge accounting

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
is recognized in the cash flow hedge reserve within equity, limited to the cumulative change in fair value of the
hedged item on a present value basis from the inception of the hedge. The gain or loss relating to the ineffective
portion is recognized immediately in income, within foreign exchange and financial instruments gain (loss).

Gains and losses relating to the effective portion of the change in fair value of the entire forward contract are
recognized in the cash flow hedge reserve within equity. Amounts accumulated in equity are reclassified in the
period when the hedged item affects income.

(ii) Net investment hedges that qualify for hedge accounting

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on
the hedging instrument relating to the effective portion of the hedge is recognized in OCI and accumulated in
reserves in equity. The gain or loss relating to the ineffective portion is recognized immediately in income within
foreign exchange and financial instruments gain (loss). Gains and losses accumulated in equity will be reclassified to
income when the foreign operation is partially disposed of or sold.

(iii) Hedge ineffectiveness

Brookfield Renewable’s hedging policy only allows for the use of derivative instruments that form effective hedge
relationships. Sources of hedge effectiveness are determined at the inception of the hedge relationship and measured
through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the
hedged item and hedging instrument. Where the critical terms of the hedging instrument match exactly with the
terms of the hedged item, a qualitative assessment of effectiveness is performed. For other hedge relationships, the
hypothetical derivative method to assess effectiveness is used.

(l) Revenue and expense recognition

The majority of revenue is derived from the sale of power and power related ancillary services both under contract
and in the open market, sourced from Brookfield Renewable’s power generating facilities. The obligations are
satisfied over time as the customer simultaneously receives and consumes benefits as Brookfield Renewable delivers
electricity and related products. Revenue is recorded based upon the output delivered and capacity provided at rates
specified under either contract terms or prevailing market rates. The revenue reflects the consideration Brookfield
Renewable expects to be entitled to in exchange for those goods or services. Costs related to the purchases of power
or fuel are recorded upon delivery. All other costs are recorded as incurred.

Details of the revenue recognized per geographical region and technology are included in Note 6 – Segmented
information.

Where available, Brookfield Renewable has elected the practical expedient available under IFRS 15 – Revenue from
contracts with customers (“IFRS 15”) for measuring progress toward complete satisfaction of a performance

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obligation and for disclosure requirements of remaining performance obligations. The practical expedient allows an
entity to recognize revenue in the amount to which the entity has the right to invoice such that the entity has a right
to the consideration in an amount that corresponds directly with the value to the customer for performance
completed to date by the entity.

If the consideration in a contract that does not apply the practical expedient available under IFRS 15 for measuring
progress toward complete satisfaction of a performance obligation includes a variable amount, Brookfield
Renewable estimates the amount of consideration to which it will be entitled in exchange for transferring the goods
to the customer. The variable consideration is estimated at contract inception and constrained until it is highly
probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the
associated uncertainty with the variable consideration is subsequently resolved.

Brookfield Renewable also sells power and related products under bundled arrangements. Energy, capacity and
renewable credits within power purchase agreements are considered to be distinct performance obligations. A
contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or
as, the performance obligation is satisfied under IFRS 15. Brookfield Renewable views the sale of energy and
capacity as a series of distinct goods that is substantially the same and has the same pattern of transfer measured by
the output method. Brookfield Renewable views renewable credits to be performance obligations satisfied at a point
in time. During the year ended December 31, 2021, revenues recognized at a point in time corresponding to the sale
of renewable credits were $183 million (2020: $164 million and 2019: $114 million). Measurement of satisfaction
and transfer of control to the customer of renewable credits in a bundled arrangement coincides with the pattern of
revenue recognition of the underlying energy generation.

Revenues recognized that are outside the scope of IFRS 15 include realized gains and losses from derivatives used in
the risk management of Brookfield Renewable's generation activities related to commodity prices. From time to
time, Brookfield Renewable also enters into commodity contracts to hedge all or a portion of its estimated revenue
stream when selling electricity to an independent system operated market and there is no PPA available. These
commodity contracts require periodic settlements in which Brookfield Renewable receives a fixed-price based on
specified quantities of electricity and pays the counterparty a variable market price based on the same specified
quantity of electricity. As these derivatives are accounted for under hedge accounting, the changes in fair value are
recorded in revenues in the consolidated statements of income (loss). Financial transactions included in revenues for
the year ended December 31, 2021 decreased revenues by $37 million (increased by 2020: $55 million and 2019: $9
million).

Contract Balances

Contract assets – A contract asset is the right to consideration in exchange for goods or services transferred to the
customer. If Brookfield Renewable performs by transferring goods or services to a customer before the customer
pays consideration or before payment is due, a contract asset is recognized for the earned consideration that is
conditional.

Trade receivables – A receivable represents Brookfield Renewable’s right to an amount of consideration that is
unconditional (i.e., only the passage of time is required before payment of the consideration is due).

Contract liabilities – A contract liability is the obligation to transfer goods or services to a customer for which
Brookfield Renewable has received consideration (or an amount of consideration is due) from the customer. If a
customer pays consideration before Brookfield Renewable transfers goods or services to the customer, a contract
liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are
recognized as revenue when Brookfield Renewable performs under the contract.

(m) Income taxes

Current income tax assets and liabilities are measured at the amount expected to be paid to tax authorities, net of
recoveries, based on the tax rates and laws enacted or substantively enacted at the statement of financial position
dates. Current income tax assets and liabilities are included in trade receivables and other current assets and accounts
payable and accrued liabilities, respectively.

Deferred tax is recognized on taxable temporary differences between the tax basis and the carrying amounts of
assets and liabilities. Deferred tax is not recognized if the temporary difference arises from goodwill or from initial

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recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither
taxable profit nor accounting profit. Deferred income tax assets are recognized for all deductible temporary
differences, carry forwards of unused tax credits and unused tax losses, to the extent that it is probable that
deductions, tax credits and tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed
at each statement of financial position date and reduced to the extent it is no longer probable that the income tax
assets will be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply to the year when the assets are realized or the liabilities settled, using the tax rates and laws enacted or
substantively enacted at the statement of financial position dates.

Current and deferred income taxes relating to items recognized directly in OCI are also recognized directly in OCI.

(n) Business combinations

The acquisition of a business is accounted for using the acquisition method. The consideration for an acquisition is
measured at the aggregate of the fair values, at the date of exchange, of the assets transferred, the liabilities incurred
to former owners of the acquired business, and equity instruments issued by the acquirer in exchange for control of
the acquired business. The acquired business’ identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 – Business combinations (“IFRS 3”), are recognized at their fair values at
the acquisition date, except for income taxes which are measured in accordance with IAS 12 – Income taxes (“IAS
12”), share-based payments which are measured in accordance with IFRS 2 – Share-based payment, and non-current
assets that are classified as held-for-sale which are measured at fair value less costs to sell in accordance with IFRS
5 – Non-current assets held for sale and discontinued operations. The non-controlling interest in the acquiree is
initially measured at the non-controlling interest’s proportion of the net fair value of the identifiable assets, liabilities
and contingent liabilities recognized or when applicable, at the fair value of the shares outstanding.

To the extent that the aggregate of the fair value of consideration paid, the amount of any non-controlling interest
and the fair value of any previously held interest in the acquiree exceeds the fair value of the net identifiable tangible
and intangible assets acquired, goodwill is recognized. To the extent that this difference is negative, the amount is
recognized as a gain in income. Goodwill is not amortized and is not deductible for tax purposes. However, after
initial recognition, goodwill will be measured at cost less any accumulated impairment losses. An impairment
assessment will be performed at least annually, and whenever circumstances such as significant declines in expected
revenues, earnings or cash flows indicate that it is more likely than not that goodwill might be impaired. Goodwill
impairment charges are not reversible.

When a business combination is achieved in stages, previously held interests in the acquired entity are re-measured
to fair value at the acquisition date, which is the date control is obtained, and the resulting gain or loss, if any, is
recognized in income. Amounts arising from interests in the acquired business prior to the acquisition date that have
previously been recognized in OCI are reclassified to income. Upon disposal or loss of control of a subsidiary, the
carrying amount of the net assets of the subsidiary (including any OCI relating to the subsidiary) are derecognized
with the difference between any proceeds received and the carrying amount of the net assets recognized as a gain or
loss in income.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in fair values are
adjusted against the cost of the acquisition where they qualify as measurement period adjustments. All other
subsequent changes in the fair value of contingent consideration classified as liabilities will be recognized in the
consolidated statements of income (loss), whereas changes in the fair values of contingent consideration classified
within equity are not subsequently re-measured.

(o) Assets held for sale

Assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is
highly probable and the non-current asset or disposal group is available for immediate sale in its present condition.
Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale
within one year from the date of classification subject to limited exceptions.

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When Brookfield Renewable is committed to a sale plan involving loss of control of a subsidiary, all of the assets
and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless
of whether Brookfield Renewable will retain a non-controlling interest in its former subsidiary after the sale.

Non-current assets and disposal groups classified as held for sale are measured at the lower of their previous
carrying amount and fair value less costs to sell.

Assets classified as held for sale and the assets of a disposal group are presented separately from other assets in the
consolidated statements of financial position and are classified as current. The liabilities of a disposal group
classified as held for sale are presented separately from other liabilities in the consolidated statements of financial
position and are classified as current.

Once classified as held for sale, property, plant and equipment and intangible assets are not depreciated or
amortized.

(p) Other items

(i) Capitalized costs

Capitalized costs related to CWIP include all eligible expenditures incurred in connection with acquisition,
construction or production of a qualifying asset. A qualifying asset is an asset that takes a substantial period of time
to prepare for its intended use. Interest and borrowing costs related to CWIP are capitalized when activities that are
necessary to prepare the asset for its intended use or sale are in progress, expenditures for the asset have been
incurred and funds have been used or borrowed to fund the construction or development. Capitalization of costs
ceases when the asset is ready for its intended use.

(ii) Pension and employee future benefits

Pension and employee future benefits are recognized in the consolidated financial statements in respect of
employees of the operating entities within Brookfield Renewable. The costs of retirement benefits for defined
benefit plans and post-employment benefits are recognized as the benefits are earned by employees. The projected
unit credit method, using the length of service and management’s best estimate assumptions, is used to value
pension and other retirement benefits. All actuarial gains and losses are recognized immediately through OCI in
order for the net pension asset or liability recognized in the consolidated statements of financial position to reflect
the full value of the plan deficit or surplus. Net interest is calculated by applying the discount rate to the net defined
benefit asset or liability. Changes in the net defined benefit obligation related to service costs (comprising of current
service costs, past services costs, gains and losses on curtailments and non-routine settlements), and net interest
expense or income are recognized in the consolidated statements of income (loss).

Re-measurements, comprising of actuarial gains or losses, the effect of the asset ceiling, and the return on plan
assets (excluding net interest), are recognized immediately in the consolidated statements of financial position with a
corresponding debit or credit to OCI in the period in which they occur. Re-measurements are not reclassified to
income in subsequent periods. For defined contribution plans, amounts are expensed based on employee entitlement.

(iii) Decommissioning, restoration and environmental liabilities

Legal and constructive obligations associated with the retirement of property, plant and equipment are recorded as
liabilities when those obligations are incurred and are measured at the present value of the expected costs to settle
the liability, using a discount rate that reflects the current market assessments of the time value of money and the
risks specific to the liability. The liability is accreted up to the date the liability will be settled with a corresponding
charge to operating expenses. The carrying amount of decommissioning, restoration and environmental liabilities is
reviewed annually with changes in the estimates of timing or amount of cash flows added to or deducted from the
cost of the related asset.

(iv) Provisions

A provision is a liability of uncertain timing or amount. A provision is recognized if Brookfield Renewable has a
present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be
required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future
operating losses. The provision is measured at the present value of the best estimate of the expenditures expected to

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be required to settle the obligation using a discount rate that reflects the current market assessments of the time value
of money and the risks specific to the obligation. Provisions are re-measured at each statement of financial position
date using the current discount rate. The increase in the provision due to the passage of time is recognized as interest
expense.

(v) Interest income

Interest income is earned with the passage of time and is recorded on an accrual basis.

(vi) Government grants

Brookfield Renewable becomes eligible for government grants by constructing or purchasing renewable power
generating assets, and by bringing those assets to commercial operation, coupled with a successful application to the
applicable program or agency. The assessment of whether or not a project has complied with the conditions and that
there is reasonable assurance the grants will be received will be undertaken on a case-by-case basis. Brookfield
Renewable reduces the cost of the asset by the amount of the grant. The grant amounts are recognized in income on
a systematic basis as a reduction of depreciation over the periods, and in the proportions, in which depreciation on
those assets is charged.

With respect to grants related to income, the government assistance (in the form of the difference between market
price and guaranteed fixed price) typically becomes payable once electricity is produced and delivered to the
relevant grid. It is at this point that the receipt of the grant becomes reasonably assured, and therefore the grant is
recognized as revenue in the month that delivery of the electricity occurs.

(q) Critical estimates

Brookfield Renewable makes estimates and assumptions that affect the carrying value of assets and liabilities,
disclosure of contingent assets and liabilities and the reported amount of income and OCI for the year. Actual results
could differ from these estimates. The estimates and assumptions that are critical to the determination of the amounts
reported in the consolidated financial statements relate to the following:

(i) Property, plant and equipment

The fair value of Brookfield Renewable’s property, plant and equipment is calculated using estimates and
assumptions about future electricity prices from renewable sources, anticipated long-term average generation,
estimated operating and capital expenditures, future inflation rates, discount rates and terminal value, as described in
Note 12 – Property, plant and equipment, at fair value. Judgment is involved in determining the appropriate
estimates and assumptions in the valuation of Brookfield Renewable’s property, plant and equipment. See Note
1(r)(iii) – Critical judgments in applying accounting policies – Property, plant and equipment for further details.

Estimates of useful lives and residual values are used in determining depreciation and amortization. To ensure the
accuracy of useful lives and residual values, these estimates are reviewed on an annual basis.

(ii) Financial instruments

Brookfield Renewable makes estimates and assumptions that affect the carrying value of its financial instruments,
including estimates and assumptions about future electricity prices, long-term average generation, capacity prices,
discount rates, the timing of energy delivery and the elements affecting fair value of the tax equity financings. The
fair value of interest rate swaps is the estimated amount that another party would receive or pay to terminate the
swap agreements at the reporting date, taking into account current market interest rates. This valuation technique
approximates the net present value of future cash flows. See Note 5 – Risk management and financial instruments
for more details.

(iii) Deferred income taxes

The consolidated financial statements include estimates and assumptions for determining the future tax rates
applicable to subsidiaries and identifying the temporary differences that relate to each subsidiary. Deferred income
tax assets and liabilities are measured at the tax rates that are expected to apply during the year when the assets are
realized or the liabilities settled, using the tax rates and laws enacted or substantively enacted at the consolidated
statement of financial position dates. Operating plans and forecasts are used to estimate when the temporary
difference will reverse based on future taxable income.

Page 92

(iv) Decommissioning liabilities

Decommissioning costs will be incurred at the end of the operating life of some of Brookfield Renewable’s assets.
These obligations are typically many years in the future and require judgment to estimate. The estimate of
decommissioning costs can vary in response to many factors including changes in relevant legal, regulatory, and
environmental requirements, the emergence of new restoration techniques or experience at other power generating
facilities. Inherent in the calculations of these costs are assumptions and estimates including the ultimate settlement
amounts, inflation factors, discount rates, and timing of settlements.

(r) Critical judgments in applying accounting policies

The following are the critical judgments that have been made in applying the accounting policies used in the
consolidated financial statements that have the most significant effect on the amounts in the consolidated financial
statements:

(i) Preparation of consolidated financial statements

These consolidated financial statements present the financial position, results of operations and cash flows of
Brookfield Renewable. Brookfield Renewable exercises judgment in determining whether non-wholly owned
subsidiaries are controlled by Brookfield Renewable. Brookfield Renewable’s judgment included the determination
of (i) how the relevant activities of the subsidiary are directed; (ii) whether the rights of shareholdings are
substantive or protective in nature; and (iii) Brookfield Renewable’s ability to influence the returns of the subsidiary.

(ii) Common control transactions

Common control business combinations specifically fall outside of scope of IFRS 3 and as such management has
used its judgment to determine an appropriate policy to account for these transactions by considering other relevant
accounting guidance that is within the framework of principles in IFRS and that reflects the economic reality of the
transactions. Brookfield Renewable’s policy is to record assets and liabilities recognized as a result of transactions
between entities under common control at the carrying value on the transferor’s financial statements, and to have the
consolidated statements of income (loss), consolidated statements of comprehensive income, consolidated
statements of financial position, consolidated statements of changes in equity and consolidated statements of cash
flows reflect the results of the combined entities for all periods presented for which the entities were under the
transferor’s common control, irrespective of when the combination takes place. Differences between the
consideration given and the assets and liabilities received are recorded directly to equity.

(iii) Property, plant and equipment

The accounting policy relating to Brookfield Renewable’s property, plant and equipment is described in Note 1(g) –
Property, plant and equipment and revaluation method. In applying this policy, judgment is used in determining
whether certain costs are additions to the carrying amount of the property, plant and equipment as opposed to repairs
and maintenance that are expensed when incurred. If an asset has been developed, judgment is required to identify
the point at which the asset is capable of being used as intended and to identify the directly attributable costs to be
included in the carrying value of the development asset. The useful lives of property, plant and equipment are
determined by independent engineers periodically with an annual review by management.

Annually, Brookfield Renewable determines the fair value of its property, plant and equipment using a methodology
that it has judged to be reasonable. The methodology for hydroelectric assets is generally a twenty-year discounted
cash flow model. Twenty years is the period considered reasonable as Brookfield Renewable has twenty-year capital
plans and it believes a reasonable third party would be indifferent between extending the cash flows further in the
model versus using a discounted terminal value. The methodology for wind, solar and storage & other assets is to
align the model length with the expected remaining useful life of the subject assets.

Page 93

valuation model uses a discount to the all-in cost of construction with a reasonable return, to secure energy from a
new renewable resource with a similar generation profile to the asset being valued as the benchmark that will
establish the market price for electricity for renewable resources.

Brookfield Renewable’s long-term view is anchored to the cost of securing new energy from renewable sources to
meet future demand growth by the years 2026 to 2035 in North America, 2029 in Colombia, and 2025 in Brazil. The
year of new entry is viewed as the point when generators must build additional capacity to maintain system
reliability and provide an adequate level of reserve generation with the retirement of older coal-fired plants and
rising environmental compliance costs in North America and Europe, and overall increasing demand in Colombia
and Brazil. For the North American and European businesses, Brookfield Renewable has estimated a discount to
these new-build renewable asset prices to determine renewable electricity prices for hydroelectric, solar and wind
facilities. In Brazil and Colombia, the estimate of future electricity prices is based on a similar approach as applied
in North America using a forecast of the all-in cost of development.

Discount rates are determined each year by considering the current interest rates, average market cost of capital as
well as the price risk and the geographical location of the operational facilities as judged by management. Inflation
rates are also determined by considering the current inflation rates and the expectations of future rates by
economists. Operating costs are based on long-term budgets escalated for inflation. Each operational facility has a
twenty-year capital plan that it follows to ensure the maximum life of its assets is achieved. Foreign exchange rates
are forecasted by using the spot rates and the available forward rates, extrapolated beyond the period available. The
inputs described above to the discounted cash flow model require management to consider facts, trends and plans in
making its judgments as to what derives a reasonable fair value of its property, plant and equipment.

(iv) Financial instruments

The accounting policy relating to Brookfield Renewable’s financial instruments is described in Note 1(k) – Financial
instruments. In applying the policy, judgments are made in applying the criteria set out in IFRS 9 to record financial
instruments at fair value through profit and loss, fair value through other comprehensive income and the assessments
of the effectiveness of hedging relationships.

(v) Deferred income taxes

The accounting policy relating to Brookfield Renewable’s income taxes is described in Note 1(m) – Income taxes. In
applying this policy, judgments are made in determining the probability of whether deductions, tax credits and tax
losses can be utilized.

(s) Recently adopted accounting standards

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Disclosures

On August 27, 2020, the IASB published Interest Rate Benchmark Reform – Amendments to IFRS 9, IAS 39, IFRS
7, IFRS 4 and IFRS 16 (“Phase II Amendments”), effective January 1, 2021, with early adoption permitted. The
Phase II Amendments provide additional guidance to address issues that will arise during the transition of
benchmark interest rates. The Phase II Amendments primarily relate to the modification of financial assets, financial
liabilities and lease liabilities where the basis for determining the contractual cash flows changes as a result of
Interbank Offered Rates ("IBOR") reform, allowing for prospective application of the applicable benchmark interest
rate and to the application of hedge accounting, providing an exception such that changes in the formal designation
and documentation of hedge accounting relationships that are needed to reflect the changes required by IBOR
reform do not result in the discontinuation of hedge accounting or the designation of new hedging relationships.

Page 94

(t) Future changes in accounting policies

Amendments to IAS 1 – Presentation of Financial Statements (“IAS 1”)

The amendments clarify how to classify debt and other liabilities as current or non-current. The amendments to IAS
1 apply to annual reporting periods beginning on or after January 1, 2023. Brookfield Renewable is currently
assessing the impact of these amendments.

Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework

The amendments add an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains
or losses arising from liabilities and contingent liabilities that would be within the scope of IAS 37 Provisions,
Contingent Liabilities and Contingent Assets or IFRIC 21 Levies, if incurred separately. The exception requires
entities to apply the criteria in IAS 37 or IFRIC 21, respectively, instead of the Conceptual Framework, to determine
whether a present obligation exists at the acquisition date. At the same time, the amendments add a new paragraph to
IFRS 3 to clarify that contingent assets do not qualify for recognition at the acquisition date. The amendments to
IFRS 3 apply to annual reporting periods beginning on or after January 1, 2022. Brookfield Renewable is currently
assessing the impact of the amendments.

There are currently no other future changes to IFRS with potential impact on Brookfield Renewable.

2. PRINCIPAL SUBSIDIARIES

The following table lists the subsidiaries of Brookfield Renewable which significantly affect its financial position
and results of operations as at December 31, 2021:

Jurisdiction of
Incorporation or
Organization

Percentage of
voting securities
owned or
controlled (%)

BP Brazil US Subco LLC ...............................................................................................

Delaware

Brookfield BRP Canada Corp. .......................................................................................

Ontario

Brookfield BRP Europe Holdings (Bermuda) Limited ..................................................

Bermuda

Brookfield Power US Holding America Co. ..................................................................
Isagen S.A. E.S.P.(1)
TerraForm Power Parent, LLC(1)

.......................................................................................................

....................................................................................

Delaware

Colombia

New York

(1)

Voting control held through voting agreements with Brookfield.

100

99.70

100

Page 95

3. ACQUISITIONS

Oregon Wind Portfolio

On March 24, 2021, Brookfield Renewable, together with institutional partners, completed the acquisition of 100%
of a portfolio of three wind generation facilities of approximately 845 MW and development projects of
approximately 400 MW (together, "Oregon Wind Portfolio") located in Oregon, United States. The purchase price
of this acquisition, including working capital and closing adjustments, was approximately $744 million. The total
transaction costs of $6 million were expensed as incurred and have been classified under Other in the consolidated
statement of income. Brookfield Renewable holds a 25% economic interest.

This investment was accounted for using the acquisition method, and the results of operations have been included in
the consolidated financial statements since the date of the acquisition. If the acquisition had taken place at the
beginning of the year, the revenue from the Oregon Wind Portfolio would have been $183 million for the year ended
December 31, 2021.

U.S. Distributed Generation Portfolio

On March 31, 2021, Brookfield Renewable, together with institutional partners, completed the acquisition of 100%
of a distributed generation business (the "U.S. Distributed Generation Portfolio") comprised of 360 MW of
operating and under construction assets across approximately 600 sites and 700 MW of development assets, all in
the United States. The purchase price of this acquisition, including working capital and closing adjustments, was
approximately $684 million. The total transaction costs of $2 million were expensed as incurred and have been
classified under Other in the consolidated statement of income. Brookfield Renewable holds a 25% economic
interest.

This investment was accounted for using the acquisition method, and the results of operations have been included in
the consolidated financial statements since the date of the acquisition. If the acquisition had taken place at the
beginning of the year, the revenue from the U.S. Distributed Generation Portfolio would have been $79 million for
the year ended December 31, 2021.

The purchase price allocation, at fair value, as at December 31, 2021, with respect to the acquisitions are as follows:

(MILLIONS)
Cash and cash equivalents ......................................................... $

Restricted cash ...........................................................................

Trade receivables and other current assets ................................
Property, plant and equipment ...................................................
Current liabilities .......................................................................
Current portion of non-recourse borrowings .............................
Financial instruments .................................................................
Non-recourse borrowings ..........................................................
Provisions ..................................................................................
Other long-term liabilities .........................................................
Fair value of net assets acquired ................................................
Goodwill ....................................................................................
Purchase price ............................................................................ $
(1)

The purchase price allocation is preliminary as at December 31, 2021.

Oregon Wind
Portfolio(1)

U.S. Distributed
Generation Portfolio

1 $

28
1,643
(10)
(74)
(16)
(761)
(83)
(33)
744
—
744 $

1 $

23
723
(6)
(7)
—
(133)
(16)
(23)
567
117
684 $

Total
2

51
2,366
(16)
(81)
(16)
(894)
(99)
(56)
1,311
117
1,428

Page 96

The following investments were accounted for using the equity method as Brookfield Renewable has significant
influence through its position in the business, and the results of operations have been included in the audited annual
consolidated financial statements since the date of investment

Polenergia

In the first quarter of 2021, Brookfield Renewable, together with its institutional partners, closed its purchase of a
23% interest in a large scale renewable business in Poland (“Polenergia”), in connection with its previously
announced tender offer alongside the current majority shareholder, at a cost of approximately $175 million
(approximately $44 million net to Brookfield Renewable for a 6% interest). Brookfield Renewable, together with its
institutional partners and the current majority shareholder, holds a 75% interest in the company.

Completed in 2020

The following investments were accounted for using the acquisition method, and the results of operations have been
included in the audited annual consolidated financial statements since the date of acquisition.

Spanish CSP Portfolio

On February 11, 2020, Brookfield Renewable, through its investment in TerraForm Power, completed the
acquisition of 100% of a portfolio of two concentrated solar power facilities (together, “Spanish CSP Portfolio”)
located in Spain with a combined nameplate capacity of approximately 100 MW. The purchase price of this
acquisition, including working capital adjustments, was €111 million ($121 million). The total acquisition costs of
$1 million were expensed as incurred and have been classified under other in the consolidated statement of income
(loss).

This investment was accounted for using the acquisition method, and the results of operations have been included in
the consolidated financial statements since the date of the acquisition. If the acquisition had taken place at the
beginning of the year, the revenue from the Spanish CSP Portfolio would have been $99 million for the year ended
December 31, 2020.

The purchase price allocation, at fair value, with respect to the acquisition is as follows:

(MILLIONS)
Cash and cash equivalents .......................................................................................................................... $

Spanish CSP Portfolio
22

Restricted cash ............................................................................................................................................

Trade receivables and other current assets .................................................................................................
Property, plant and equipment, at fair value ..............................................................................................
Deferred tax assets .....................................................................................................................................
Other non-current assets .............................................................................................................................
Current liabilities ........................................................................................................................................
Financial instruments .................................................................................................................................
Non-recourse borrowings ...........................................................................................................................
Decommissioning liabilities .......................................................................................................................
Other long-term liabilities ..........................................................................................................................
Fair value of identifiable net assets acquired .............................................................................................
Goodwill .....................................................................................................................................................
Purchase price ............................................................................................................................................ $

33
661
14
8
(17)
(148)
(475)
(23)
(22)
80
41
121

Completed in 2019

India Wind Portfolio

Brookfield Renewable, together with its institutional partners, completed a transaction in India to acquire a 105 MW
operating wind facility on June 7, 2019 and a 105 MW operating wind facility on July 8, 2019 (collectively, the
“India Wind Portfolio”).

Page 97

Brookfield Renewable, along with institutional partners, acquired the India Wind Portfolio for a total consideration
of INR 4.6 billion ($67 million), plus a contingent payment expected to be INR 0.8 billion ($12 million). Brookfield
Renewable holds a 25% economic interest and 100% voting interest. The total acquisition costs of less than $1
million were expensed as incurred and have been classified under other in the consolidated statement of income
(loss).

If the acquisition had taken place at the beginning of the year, the revenue from the India Wind Portfolio would have
been $37 million for the year ended December 31, 2019.

China Wind Facility

On September 30, 2019, Brookfield Renewable, together with its institutional partners, completed the acquisition of
a 200 MW operating wind facility in China (“China Wind Facility”) for a total consideration of CNY 1,140 million
($160 million). Brookfield Renewable holds a 25% economic interest and 100% voting interest. The total
acquisition costs of less than $1 million were expensed as incurred and have been classified under other in the
consolidated statement of income (loss).

If the acquisition had taken place at the beginning of the year, the revenue from the China Wind Facility would have
been $44 million for the year ended December 31, 2019.

U.S. Distributed Generation Portfolio (“2019 TERP DG Portfolio”)

On September 26, 2019, Brookfield Renewable, through its investment in TerraForm Power, acquired a 100%
interest in a 320 MW distributed generation portfolio of renewable energy facilities in the United States, for total
consideration of $735 million. The total acquisition costs of $5 million were expensed as incurred and have been
classified under other in the consolidated statement of income (loss).

If the acquisition had taken place at the beginning of the year, the revenue from the 2019 TERP DG Portfolio would
have been $67 million for the year ended December 31, 2019.

The purchase price allocations, at fair value, with respect to the acquisitions are as follows:

(MILLIONS)
Cash................................................................................... $
Restricted cash .................................................................

Trade receivables and other current assets ........................
Property, plant and equipment, at fair value .....................
Current liabilities ..............................................................
Current portion of non-recourse borrowings ....................
Financial instruments ........................................................
Non-recourse borrowings ..................................................
Deferred income tax liabilities ..........................................
Decommissioning liabilities ..............................................
Other long-term liabilities .................................................
Fair value of identifiable net assets acquired .................... $

India Wind
Portfolio

China Wind
Facility

2019 TERP
DG Portfolio

— $
14

14
243
(1)
(12)
(4)
(158)
(8)
(5)
(4)
79 $

— $
2

51
307
(23)
(18)
—
(131)
(28)
—
—
160 $

3 $
—

47
753
(8)
—
—
—
—
(33)
(27)
735 $

Total
3
16

112
1,303
(32)
(30)
(4)
(289)
(36)
(38)
(31)
974

X-Elio

In December 2019, Brookfield Renewable, along with its institutional partners, completed a 50-50 joint venture in
respect of X-Elio. Headquartered in Spain, X-Elio's portfolio includes approximately 972 MW of operating solar,
approximately 1,000 MW of assets under construction and a 5,000 MW development pipeline with a focus in Spain,
Mexico, U.S. and Japan. Brookfield Renewable retains an approximate 12.5% economic interest in the joint venture.
Brookfield Renewable's consideration was €124 million ($138 million).

Page 98

4. DISPOSAL OF ASSETS

In June 2021, Brookfield Renewable, along with its institutional partners, completed the sale of a 656 MW operating
and development wind portfolio in Ireland. The total consideration was approximately €298 million ($363 million)
and Brookfield Renewable’s interest in the portfolio was approximately 40%. This resulted in a gain on disposition
of $165 million ($66 million net to Brookfield Renewable) recognized in Other income within the consolidated
statements of income. As a result of the disposition, Brookfield Renewable's post-tax portion of the accumulated
revaluation surplus of $29 million was reclassified from accumulated other comprehensive income directly to equity
and presented as a Disposals item in the consolidated statements of changes in equity.

In June 2021, Brookfield Renewable completed the sale of a 271 MW development wind portfolio in Scotland. The
total consideration was approximately £77 million ($108 million) and Brookfield Renewable’s interest in the
portfolio was 100%. This resulted in a gain on disposition of $37 million ($37 million net to Brookfield Renewable)
recognized in Other income within the consolidated statements of income.

In August 2021, Brookfield Renewable, together with its institutional partners, completed the sale of a 391 MW
wind portfolio in the United States. The total consideration was approximately $392 million and Brookfield
Renewable's interest in the portfolio ranged from 20% to 100%. This resulted in a loss on disposition of $9 million
($5 million net loss to Brookfield Renewable) recognized in Other within the consolidated statements of income. As
a result of the disposition, Brookfield Renewable's post-tax portion of the accumulated revaluation surplus of
$60 million was reclassified from accumulated other comprehensive income directly to equity and presented as a
Disposals item in the consolidated statements of changes in equity.

Summarized financial information relating to the disposals are shown below:

(MILLIONS)

Notes

Ireland Wind
Portfolio

Scotland Wind
Portfolio

U.S Wind
Portfolio

Total

Proceeds, net of transaction costs .......................................

358 $

107 $

387 $

852

Carrying value of net assets held for sale

Assets ..............................................................................

Liabilities .........................................................................

Gain (loss) on disposal, net of transaction costs ................
Foreign currency translation and cash flow hedge, net of
investment hedge, associated with the disposal .............

Total gain (loss) on disposal ...............................................

582

(389)

193

165

(35)

130 $

(21)

—

37 $

793 1,466

(397)

(807)

396

659

(9)

193

(6)

(41)

(15) $

152

Page 99

5. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

Brookfield Renewable’s activities expose it to a variety of financial risks, including market risk (i.e., commodity
price risk, interest rate risk, and foreign currency risk), credit risk and liquidity risk. Brookfield Renewable uses
financial instruments primarily to manage these risks.

The sensitivity analysis discussed below reflects the risks associated with instruments that Brookfield Renewable
considers are market sensitive and the potential loss resulting from one or more selected hypothetical changes.
Therefore, the discussion below is not intended to fully reflect Brookfield Renewable’s risk exposure.

(a) Market risk

Market risk is defined for these purposes as the risk that the fair value or future cash flows of a financial instrument
held by Brookfield Renewable will fluctuate because of changes in market prices.

Brookfield Renewable faces market risk from foreign currency assets and liabilities, the impact of changes in
interest rates, and floating rate liabilities. Market risk is managed by funding assets with financial liabilities in the
same currency and with similar interest rate characteristics and holding financial contracts, such as interest rate
swaps and foreign exchange contracts, to minimize residual exposures. Financial instruments held by Brookfield
Renewable that are subject to market risk include borrowings and financial instruments, such as interest rate,
currency and commodity contracts. The categories of financial instruments that can give rise to significant
variability are described below:

(i) Electricity price risk

Brookfield Renewable aims to sell electricity under long-term contracts to secure stable prices and mitigate its
exposure to wholesale markets. Electricity price risk arises from the sale of Brookfield Renewable’s uncontracted
generation and is mitigated by entering into short-term energy derivative contracts. Electricity price risk is defined
for these purposes as the risk that the fair value or future cash flows of a financial instrument held by Brookfield
Renewable will fluctuate because of changes in electricity prices.

The table below summarizes the impact of changes in the market price of electricity as at December 31. The impact
is expressed in terms of the effect on net income and OCI. The sensitivities are based on the assumption that the
market price changes by 5% with all other variables held constant.

Impact of a 5% change in the market price of electricity, on outstanding energy derivative contracts, for the year
ended December 31:

(MILLIONS)
5% increase ................................. $
5% decrease .................................
(1)

Amounts represent the potential annual net pretax impact.

Effect on net income(1)

Effect on OCI(1)

2021

2020

2019

2021

2020

(37) $

(13) $

(21) $

(16) $

2019

(12)

(ii) Foreign currency risk

Foreign currency risk is defined for these purposes as the risk that the fair value of a financial instrument held by
Brookfield Renewable will fluctuate because of changes in foreign currency rates.

Brookfield Renewable has exposure to the Canadian dollar, euro, Brazilian real, Colombian peso, British pound
sterling, Indian rupee, Malaysian ringgit, Chinese yuan and Polish złoty through its investments in foreign
operations. Consequently, fluctuations in the U.S. dollar exchange rate against these currencies increase the
volatility of net income and other comprehensive income. Brookfield Renewable holds foreign currency contracts
primarily to mitigate this exposure.

The table below summarizes the impact to Brookfield Renewable’s financial instruments of changes in the exchange
rate as at December 31. The impact is expressed in terms of the effect on income and OCI. The sensitivities are
based on the assumption that the currency exchange rate changes by five percent with all other variables held
constant.

Page 100

Impact of a 5% change in U.S. dollar exchange rates, on outstanding foreign exchange swaps, for the year ended
December 31:

(MILLIONS)

2021

2020

2019

2021

2020

Effect on net income(1)

Effect on OCI(1)

5% increase .............................. $

29 $

5% decrease .............................
(1)

(29)

Amounts represent the potential annual net pretax impact.

10 $

(7)

49 $

95 $

73 $

(40)

(95)

(72)

2019

(41)

(iii) Interest rate risk

Interest rate risk is defined for these purposes as the risk that the fair value or future cash flows of a financial
instrument held by Brookfield Renewable will fluctuate, because of changes in interest rates.

Brookfield Renewable’s assets largely consist of long duration physical assets. Brookfield Renewable’s financial
liabilities consist primarily of long-term fixed-rate debt or variable-rate debt that has been swapped to fixed rates
with interest rate financial instruments. Other than tax equity, all other non-derivative financial liabilities are
recorded at their amortized cost. Brookfield Renewable also holds interest rate contracts to lock-in fixed rates on
certain anticipated future debt issuances.

Brookfield Renewable will enter into interest rate swaps designed to minimize the exposure to interest rate
fluctuations on its variable-rate debt. Fluctuations in interest rates could impact Brookfield Renewable’s cash flows,
primarily with respect to the interest payable against Brookfield Renewable’s variable rate debt, which is limited to
certain non-recourse borrowings with a total principal value of $6,758 million (2020: $5,960 million). Of this
principal value, $3,493 million (2020: $3,465 million) has been fixed through the use of interest rate contracts. The
fair values of the recognized asset and liability for the interest rate swaps were calculated using a valuation model
with observable interest rates.

The table below summarizes the impact of changes in the interest rate as at December 31. The impact is expressed in
terms of the effect on income and OCI. The sensitivities are based on the assumption that the interest rate changes
by 1% with all other variables held constant.

Impact of a 1% change in interest rates, on outstanding interest rate swaps, variable-rate debt and tax equity, for the
year ended December 31:

(MILLIONS)

2021

2020

2019

2021

2020

1% increase .............................. $

15 $

37 $

114 $

122 $

Effect on net income(1)

Effect on OCI(1)

1% decrease .............................
(1)

Amounts represent the potential annual net pretax impact.

(16)

(38)

(124)

(129)

2019

(69)

(b) Credit risk

Credit risk is the risk of loss due to the failure of a borrower or counterparty to fulfill its contractual obligations.
Brookfield Renewable’s exposure to credit risk in respect of financial instruments relates primarily to counterparty
obligations regarding energy contracts, interest rate swaps, forward foreign exchange contracts and physical
electricity transactions.

Brookfield Renewable minimizes credit risk with counterparties through the selection, monitoring and
diversification of counterparties, and the use of standard trading contracts, and other credit risk mitigation
techniques. In addition, Brookfield Renewable’s power purchase agreements are reviewed regularly and the majority
are with customers having long standing credit histories or investment grade ratings, which limit the risk of non-
collection. See Note 23 – Trade receivables and other current assets, for additional details regarding Brookfield
Renewable’s trade receivables balance.

Page 101

The maximum credit exposure at December 31 was as follows:

(MILLIONS)

2021

Trade receivables and other short-term receivables ......................................................................... $

807 $

Long-term receivables .....................................................................................................................
Financial instrument assets(1)
Due from related parties(1)
Contract asset(1)

................................................................................................................................

................................................................................................................

...........................................................................................................

216

127

177

445

2020

792

108

139

455

1,772 $

1,550

(1)

Includes both the current and long-term amounts.

Liquidity risk is the risk that Brookfield Renewable cannot meet a demand for cash or fund an obligation when due.
Liquidity risk is mitigated by Brookfield Renewable’s cash and cash equivalent balances and its access to undrawn
credit facilities. Details of the available portion of credit facilities are included in Note 14 – Borrowings. Brookfield
Renewable also ensures that it has access to public capital markets and maintains a strong investment grade credit
rating.

Brookfield Renewable is also subject to the risk associated with debt financing. This risk is mitigated by the long-
term duration of debt instruments and the staggered maturity dates over an extended period of time.

Page 102

CASH OBLIGATIONS

The table below classifies the cash obligations related to Brookfield Renewable’s liabilities into relevant maturity
groupings based on the remaining period from the statement of financial position dates to the contractual maturity
date. As the amounts are the contractual undiscounted cash flows (gross of unamortized financing fees and
accumulated amortization, where applicable), they may not agree with the amounts disclosed in the consolidated
statements of financial position.

AS AT DECEMBER 31, 2021
(MILLIONS)

< 1 year

2-5 years

> 5 years

Total

Accounts payable and accrued liabilities ...................................... $
Financial instrument liabilities(1)(2)

...............................................

Due to related parties ....................................................................

..........................................................................

Other long-term liabilities – concession payments ......................
Lease liabilities(1)
Corporate borrowings(1)
Non-recourse borrowings(1)
Interest payable on borrowings(3)

................................................................

..........................................................

..................................................

779 $

— $

400

164

—

1,818

912

358

129

317

6,926

2,989

207

—

305

1,839

10,608

3,987

779

965

198

464

2,156

19,352

7,888

Total .............................................................................................. $

4,104 $

10,759 $

16,959 $

31,822

AS AT DECEMBER 31, 2020
(MILLIONS)

< 1 year

2-5 years

> 5 years

Total

Accounts payable and accrued liabilities ...................................... $
Financial instrument liabilities(1)(2)

...............................................

Due to related parties ....................................................................

..........................................................................

Other long-term liabilities – concession payments ......................
Lease liabilities(1)
Corporate borrowings(1)
Non-recourse borrowings(1)
Interest payable on borrowings(3)

................................................................

..........................................................

..................................................

Total .............................................................................................. $
(1)

625 $

— $

283

506

1,141

824

513

112

314

5,214

2,682

155

—

294

1,826

9,651

2,827

625

951

517

439

2,143

16,006

6,333

3,416 $

8,851 $

14,765 $

27,032

(2)

(3)

Includes both the current and long-term amounts.
Includes tax equity liabilities that will be partially settled by the delivery of non-cash tax attributes.
Represents aggregate interest payable expected to be paid over the entire term of the obligations, if held to maturity. Variable rate interest
payments have been calculated based on estimated interest rates.

Fair value disclosures

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.

Fair values determined using valuation models require the use of assumptions concerning the amount and timing of
estimated future cash flows and discount rates. In determining those assumptions, management looks primarily to
external readily observable market inputs such as interest rate yield curves, currency rates, commodity prices and, as
applicable, credit spreads.

A fair value measurement of a non-financial asset is the consideration that would be received in an orderly
transaction between market participants, considering the highest and best use of the asset.

Assets and liabilities measured at fair value are categorized into one of three hierarchy levels, described below. Each
level is based on the transparency of the inputs used to measure the fair values of assets and liabilities.

Level 1 – inputs are based on unadjusted quoted prices in active markets for identical assets and liabilities;

Page 103

Level 2 – inputs, other than quoted prices in Level 1, that are observable for the asset or liability, either directly or
indirectly; and

Level 3 – inputs for the asset or liability that are not based on observable market data.

The following table presents Brookfield Renewable’s assets and liabilities measured and disclosed at fair value
classified by the fair value hierarchy as at December 31:

(MILLIONS)
Assets measured at fair value:
Cash and cash equivalents .................................. $
Restricted cash(1).................................................
Financial instrument assets(1)

Energy derivative contracts .............................
Interest rate swaps ...........................................
Foreign exchange swaps ..................................
Investments in debt and equity securities(2)
.....
Property, plant and equipment ...........................
Liabilities measured at fair value:
Financial instrument liabilities(1)

Energy derivative contracts .............................
Interest rate swaps ...........................................
Foreign exchange swaps ..................................
Tax equity ........................................................
................................

Contingent consideration(3)
Liabilities for which fair value is disclosed:
Corporate borrowings(1)
Non-recourse borrowings(1)
Total ................................................................... $
(1)

......................................
................................

Level 1

Level 2

Level 3

2021

2020

764 $
312

— $
—

764 $
312

431
283

—
—
—
—
—

34
40
32
95
—

(184)
(228)
(56)
—
—

21
—
—
100
49,432

(42)
—
—
(455)
(3)

55
40
32
195
49,432

(226)
(228)
(56)
(455)
(3)

135
—
4
175
44,590

(33)
(422)
(94)
(402)
(1)

(2,334)
(2,405)
(3,663) $

—
(18,030)
(18,297) $

—
—
49,053 $

(2,334)
(20,435)
27,093 $

(2,448)
(17,991)
24,227

(2)

(3)

Includes both the current amount and long-term amount.
Excludes nil (2020: $155 million) of investments in debt securities that are measured at amortized cost.
Amount relates to business combination completed in 2021 with obligations lapsing from 2022 to 2027.

There were no transfers between levels during the year ended December 31, 2021.

Financial instruments disclosures

The aggregate amount of Brookfield Renewable’s net financial instrument positions as at December 31 are as
follows:

(MILLIONS)

2021

2020

Assets

Liabilities

Net Assets
(Liabilities)

Energy derivative contracts ........................................................ $

55 $

226 $

(171) $

Interest rate swaps ......................................................................

Foreign exchange swaps .............................................................

Investments in debt and equity securities ...................................

Tax equity ...................................................................................

Total ............................................................................................

Less: current portion ...................................................................

195

—

322

228

—

455

965

400

(188)

(24)

195

(455)

(643)

(340)

Long-term portion ....................................................................... $

262 $

565 $

(303) $

102

(422)

(90)

330

(402)

(482)

(221)

(261)

Page 104

The following table presents the change in Brookfield Renewable’s total net financial instrument asset position as at
and for the year ended December 31:

(MILLIONS)
Balance, beginning of year ..................................................................................................
Increases (decreases) in the net financial instrument liability position:

Unrealized (loss) gain through income on tax equity ......................................................
Unrealized (loss) gain through OCI on investments in equity securities .........................
Unrealized (loss) through income on energy derivative contracts ...................................
Unrealized (loss) through OCI on energy derivative contracts ........................................
Unrealized gain (loss) through income on interest rate swaps .........................................
Unrealized gain (loss) through OCI on interest rate swaps ..............................................
Unrealized gain (loss) through income on foreign exchange swaps ................................
Unrealized gain (loss) through OCI on foreign exchange swaps .....................................
Acquisitions, settlements and other ..................................................................................
Balance, end of year ............................................................................................................

Note

2021
(482) $

(a)
(b)
(c)
(c)
(d)
(d)
(e)
(e)

(21)
3
(124)
(148)
72
96
102
8
(149)
(643) $

2020
(413)

(12)
(1)
(28)
(4)
(28)
(57)
126
(40)
(25)
(482)

Financial instrument liabilities designated at fair value through profit and loss

Tax equity ........................................................................................................................

(a)

(455) $

(402)

Financial instrument assets designated at fair value through OCI

Investments in equity securities .......................................................................................

(b)

195 $

175

Financial instrument assets designated at amortized cost

Investments in debt securities ..........................................................................................

(b)

— $

155

Derivative assets not designated as hedging instruments:

Energy derivative contracts ..............................................................................................
Interest rate swaps ............................................................................................................
Foreign exchange swaps ...................................................................................................

Derivative assets designated as hedging instruments:

Derivative liabilities not designated as hedging instruments:

Derivative liabilities designated as hedging instruments:

Total financial instruments, net ...........................................................................................

42 $
18
2
62 $

13 $
22
30
65 $

(130) $
(111)
(8)
(249) $

(96) $
(117)
(48)
(261) $

78
—
4
82

57
—
—
57

(32)
(183)
(23)
(238)

(1)
(239)
(71)
(311)

(643) $

(482)

Page 105

(a) Tax equity

Brookfield Renewable owns and operates certain projects in the United States under tax equity structures to finance
the construction of solar and wind projects. In accordance with the substance of the contractual agreements, the
amounts paid by the tax equity investors for their equity stakes are classified as financial instrument liabilities on the
consolidated statements of financial position.

Gains or losses on the tax equity liabilities are recognized within foreign exchange and financial instruments gain
(loss) in the consolidated statements of income (loss).

(b) Investments in debt and equity securities

Brookfield Renewable's investments in debt and equity securities are classified as FVOCI and amortized cost. Refer
to Note 1(k) – Basis of preparation and significant accounting policies – Financial instruments.

Brookfield Renewable has entered into long-term energy derivative contracts primarily to stabilize or eliminate the
price risk on the sale of certain future power generation. Certain energy contracts are recorded in Brookfield
Renewable’s consolidated financial statements at an amount equal to fair value, using quoted market prices or, in
their absence, a valuation model using both internal and third-party evidence and forecasts.

There is an economic relationship between the hedged items and the hedging instruments as the terms of the energy
derivative contracts match the terms of the expected highly probable forecast transactions (i.e. notional amount and
expected payment date). Brookfield Renewable has established a hedge ratio of 1:1 for the hedging relationships. To
measure the hedge effectiveness, Brookfield Renewable uses the hypothetical derivative method and compares
changes in the fair value of the hedging instruments against the changes in fair value of the hedged items attributable
to the hedged risks. The hedge ineffectiveness can arise from different indexes (and accordingly different curves)
linked to the hedged risk of the hedged items and hedging instruments.

For the year ended December 31, 2021, gains of $25 million relating to energy derivative contracts were realized
and reclassified from OCI to the consolidated statements of income (loss) (2020: $55 million and 2019: $9 million).

Based on market prices as of December 31, 2021, unrealized losses of $72 million (2020: $19 million gain and
2019: $22 million gain) recorded in accumulated other comprehensive income (“AOCI”) on energy derivative
contracts are expected to be settled or reclassified into income in the next twelve months. The actual amount
reclassified from AOCI, however, could vary due to future changes in market prices.

The following table summarizes the energy derivative contracts designated as hedging instruments:

Energy derivative contracts

December 31, 2021

December 31, 2020

Carrying amount (asset/(liability)) .........................................................................

Notional amount – millions of U.S. dollars ...........................................................

Notional amount – GWh ........................................................................................

Weighted average hedged rate for the year ($/MWh) ............................................

(83)

351

10,022

376

11,478

Maturity dates .........................................................................................................

2022 - 2027

2021 - 2027

Hedge ratio .............................................................................................................

Change in discounted spot value of outstanding hedging instruments ..................

Change in value of hedged item used to determine hedge effectiveness ...............

1:1

(124)

117

1:1

(19)

There is $7 million of hedge ineffectiveness losses recognized within foreign exchange and financial instruments
gain (loss) in the consolidated statements of income (loss) related to energy derivative contracts (cash flow hedges)
for the year ended December 31, 2021 (2020: $2 million loss and 2019: nil).

(d) Interest rate hedges

Brookfield Renewable has entered into interest rate hedge contracts primarily to minimize exposure to interest rate
fluctuations on its variable-rate debt or to lock in interest rates on future debt refinancing. All interest rate hedge
contracts are recorded in the consolidated financial statements at fair value.

Page 106

There is an economic relationship between the hedged items and the hedging instruments as the terms of the interest
rate hedges match the terms of the respective fixed-rate debt (i.e., notional amount, maturity, payment and reset
dates). Brookfield Renewable established a hedge ratio of 1:1 for the hedging relationships. To measure the hedge
effectiveness, Brookfield Renewable uses the hypothetical derivative method and compares the changes in the fair
value of the hedging instrument against the changes in fair value of the hedged items attributable to the hedged risk.

The hedge ineffectiveness can arise from:

•

Different interest rate curves being applied to discount the hedged item and hedging instrument

Differences in timing of cash flows of the hedged item and hedging instrument

The counterparties’ credit risk having an asymmetrical impact on the fair value movements of the hedging
instrument and hedged item

At December 31, 2021, agreements with a total notional exposure of $3,437 million were outstanding (2020: $3,748
million) including $789 million (2020: $962 million) associated with agreements that are not formally designated as
hedging instruments. The weighted-average fixed interest rate resulting from these agreements is 1.5% (2020: 3%).

For the year ended December 31, 2021, net movements relating to cash flow hedges realized and reclassified from
OCI to interest expense in the consolidated statements of income (loss) were $18 million losses (2020: $12 million
losses and 2019: $22 million losses).

Based on market prices as of December 31, 2021, unrealized losses of $41 million (2020: $34 million and 2019: $15
million) recorded in AOCI on interest rate swaps are expected to be settled or reclassified into income in the next
twelve months. The actual amount reclassified from AOCI, however, could vary due to future changes in market
rates.

The following table summarizes the interest rate hedges designated as hedging instruments:

Interest rate hedges

December 31, 2021

December 31, 2020

Carrying amount (asset/(liability)) .........................................................................

Notional amount – $ ...............................................................................................
Notional amount – C$(1)
Notional amount – €(1)
Notional amount – COP(1)

............................................................................................

.........................................................................................

......................................................................................

(95)

558

377

1,572

141

(239)

546

342

1,279

619

Maturity dates .........................................................................................................

2022 - 2039

2021 - 2039

Hedge ratio .............................................................................................................

Change in discounted spot value of outstanding hedging instruments ..................

Change in value of hedged item used to determine hedge effectiveness ...............
(1)

1:1

(97)

1:1

(56)

Notional amounts of foreign currency denominated interest rate hedges are presented at the U.S. dollar equivalent value based on the
December 31, 2021 foreign currency spot rate.

The hedge ineffectiveness loss recognized within foreign exchange and financial instruments gain (loss) in the
consolidated statements of income (loss) related to interest rate contracts (cash flow hedges) for the year ended
December 31, 2021 was $17 million losses (2020: $2 million and 2019: $1 million).

(e) Foreign exchange swaps

Brookfield Renewable has entered into foreign exchange swaps to minimize its exposure to currency fluctuations
impacting its investments and earnings in foreign operations, and to fix the exchange rate on certain anticipated
transactions denominated in foreign currencies.

There is an economic relationship between the hedged item and the hedging instrument as the net investment or
anticipated foreign currency transaction creates a translation risk that will match the respective hedging instrument.
Brookfield Renewable established a hedge ratio of 1:1 as the underlying risk of the hedging instrument is identical to
the hedged risk component.

Page 107

Certain Brookfield subsidiaries that Brookfield Renewable controls, through a voting agreement, have entered into
Master Hedge Agreements appointing Brookfield as their agent in entering into certain derivative transactions with
external counterparties to hedge against fluctuations in foreign exchange. Pursuant to each Agreement, Brookfield
was entitled to be reimbursed for any third party costs incurred in connection with the these derivative transactions.
Substantially all of Brookfield Renewable’s foreign exchange swaps are entered into pursuant to a Master Hedge
Agreement.

At December 31, 2021, agreements with a total notional exposure of $2,701 million were outstanding (2020: $1,355
million) including $561 million (2020: $104 million) associated with agreements that are not formally designated as
hedging instruments.

There are no unrealized gains or losses recorded in AOCI on foreign exchange swaps that are expected to be settled
or reclassified into income in the next twelve months (2020: nil and 2019: nil). The actual amount reclassified from
AOCI, however, could vary due to future changes in market rates.

The following table summarizes the foreign exchange swaps designated as hedging instruments:

Foreign exchange swaps

December 31, 2021

December 31, 2020

...........................................

..............................................................

Carrying amount (asset/(liability)) .........................................................................
Notional amount for hedges of the Colombian Peso(1)
Notional amount for hedges of the euro(1)
Notional amount for hedges of the British pounds sterling(1)
Notional amount for hedges of the Chinese yuan(1)
Notional amount for hedges of the Indian rupee(1)
Notional amount for hedges of the Brazilian real(1)
Notional amount for hedges of other currencies(1)
Maturity date ..........................................................................................................

.................................................

...............................................

................................

Hedge ratio .............................................................................................................

Weighted average hedged rate for the year:

COP/$ foreign exchange forward contracts ......................................................

€/$ foreign exchange forward contracts ............................................................

£/$ foreign exchange forward contracts ............................................................

CNY/$ foreign exchange forward contracts ......................................................

INR/$ foreign exchange forward contracts .......................................................

BRL/$ foreign exchange forward contracts ......................................................

(1)

Notional amounts expressed in millions of U.S. dollars

(18)

676

571

125

427

260

(71)

412

212

294

230

2022 - 2023

2021 - 2022

1:1

3,925

0.87

0.76

7.18

5.73

1:1

3,728

0.87

0.81

7.14

5.38

Page 108

The following table presents a reconciliation of the limited partners’ equity reserves impacted by financial
instruments:

(MILLIONS)

Cash flow
hedges

Investments
in equity
securities

Foreign
currency
translation

Balance, as at December 31, 2019 .................................................................... $

(32) $

12 $

(700)

Effective portion of changes in fair value arising from:

Energy derivative contracts ............................................................................

Interest rate swaps ..........................................................................................

Foreign exchange swaps .................................................................................

Amount reclassified to profit or loss .................................................................

Foreign currency revaluation of designated borrowings ...................................

Foreign currency revaluation of net foreign operations ....................................

Valuation of investments in equity securities designated FVOCI ....................

Tax effect ...........................................................................................................

Special distribution/TERP acquisition ..............................................................

Other ..................................................................................................................

(3)

—

(7)

—

(2)

—

(13)

(1)

Balance, as at December 31, 2020 .................................................................... $

(39) $

3 $