Brookfield Renewable Energy Partners LP Annual Report 2022

FY2022 Annual Report · Brookfield Renewable Energy Partners LP

Loading PDF…

Our Operations

We invest in renewable power and sustainable solutions assets directly, as well as with institutional partners,
joint venture partners and through other arrangements. Across our business, we leverage our extensive operating
experience to maintain and enhance the value of assets, grow cash flows on an annual basis and cultivate positive
relations with local stakeholders. We include operating assets for which we have access to a priority growth pipeline
that if funded would provide us the opportunity to own a near-majority share of the business.

Our global diversified portfolio of renewable power assets, which makes up over 98% of our business, has
approximately 25,400 MW of operating capacity and annualized LTA generation of approximately 69,700 GWh and
a development pipeline of approximately 110,000 MW.

The table below outlines our operating renewable power portfolio as at December 31, 2022:

River
Systems

Facilities

Capacity
(MW)

LTA(1)
(GWh)

Storage
Capacity
(GWh)

Hydroelectric

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

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

Colombia(3)
Brazil .................................................................

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

Wind

North America
United States(4)
Canada .............................................................

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

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

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

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

Utility-scale solar .................................................

Distributed energy & sustainable solutions

Distributed generation(5)
Storage & other(6)

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

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

—

136

169

229

125

149

6,238

6,261

6,764

2,905

1,361

4,266

2,953

940

8,159

3,652

483

4,135

1,118

457

1,225

6,935

3,957

2,055

4,271

6,326

25,377

11,963

5,178

17,141

15,891

4,811

37,843

11,934

1,438

13,372

2,551

1,950

3,104

20,977

8,476

2,439

—

2,439

69,735

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, 2022, 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 two wind plants in Colombia (32 MW).
Includes a battery storage facility in North America (10 MW).
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).

Recently, we have been making prudent and structured investments in our sustainable solutions portfolio which
is comprised of emerging transition asset classes where our initial investment positions us for potential future large-
scale decarbonization investment. This portfolio includes investments in businesses that have an operating portfolio
of 47 thousand metric tons per annum (“TMTPA”) of carbon capture and storage (“CCS”), 3 million Metric Million
British thermal units (“MMBtu”) of agricultural renewable natural gas (“RNG”) operating production capacity
annually and over 1 million tons of recycled materials. Our sustainable solutions development pipeline includes
opportunities to invest in projects with up to 8 million metric tons per annum (“MMTPA”) of CCS, 19 materials
recovery facilities (“MRFs”) that would result in 2 million tons of recycled materials and 70 digesters that would
produce more than 3 million MMBtu of RNG production capacity annually.

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

2022 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 ..............................................

3,402

1,235

4,637

3,632

1,183

9,452

3,212

400

3,612

772

371

737

5,492

3,469

1,489

4,958

3,985

1,198

10,141

3,138

345

3,483

553

494

760

5,290

2,171

1,236

3,407

3,881

1,214

8,502

2,631

273

2,904

496

606

776

4,782

2,921

1,218

4,139

4,393

1,216

9,748

2,953

420

3,373

730

479

831

5,413

11,963

5,178

17,141

15,891

4,811

37,843

11,934

1,438

13,372

2,551

1,950

3,104

20,977

Utility-scale solar ...........................

1,965

2,219

2,380

1,912

8,476

Distributed energy & sustainable
solutions .........................................

481

714

719

525

2,439

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

17,390

18,364

16,383

17,598

69,735

LTA is calculated based on our portfolio as at December 31, 2022, 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.

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

2022 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 ..............................................

Utility-scale solar ...........................

Distributed energy & sustainable
solutions .........................................

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

2,225

1,010

3,235

875

1,007

5,117

956

324

1,280

275

126

178

1,859

583

179

2,359

1,210

3,569

960

1,020

5,549

944

283

1,227

207

168

187

1,789

789

277

1,466

980

2,446

935

1,034

4,415

782

225

1,007

172

210

191

1,580

833

274

1,950

959

2,909

1,059

1,036

5,004

957

340

1,297

250

165

201

1,913

551

182

8,000

4,159

12,159

3,829

4,097

20,085

3,639

1,172

4,811

904

669

757

7,141

2,756

912

7,738

8,404

7,102

7,650

30,894

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

We had another successful year. We saw strong financial performance across the business, continuing
our track record of double-digit average annual FFO growth for more than a decade. We agreed to deploy
capital ahead of our targets, growing in every market we operate, while dramatically expanding our
renewable operations and also making our first transition investments. We delivered record performance
from our development activities with 19,000 megawatts of capacity under construction and in advanced
stages and increased our global development pipeline to almost 110,000 megawatts.

As we enter 2023, our business has tremendous momentum. We continue to be one of the largest
owners, operators, and builders of clean energy globally, with strong growth prospects, and inflation-
linked cash flows that are supported by double-digit years of weighted average contract life.

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

Given our strong financial and operating performance, robust liquidity, and positive outlook for the
business, we are pleased to announce a 5.5% increase to our distributions to $1.35 per unit on an
annualized basis. This is the 12th consecutive year of at least 5% annual distribution growth since 2011,
when Brookfield Renewable was publicly listed

Highlights for the year include:

• Generated funds from operations (FFO) for the year of over $1.0 billion, or $1.56 per unit, an 8%
increase over the same period last year. This was a result of the stability of our high-quality
initiatives, and
inflation-linked contracted cash
contributions from acquisitions.

flows, organic growth and commercial

•

Advanced key commercial priorities including securing contracts for over 11,000 gigawatt hours
per year of generation, continuing our approach of partnering on a global basis with the largest
corporate purchasers of green power.

Continued to accelerate our development activities, commissioning approximately 3,500
megawatts of new projects that are expected to contribute $45 million of FFO annually on a run-
rate basis. We also continue to execute on our 19,000-megawatt under construction and
advanced stage pipeline, which, along with our sustainable solutions pipeline, is expected to
contribute approximately $235 million of FFO annually
to Brookfield Renewable once
commissioned.

Closed or agreed to invest up to $12 billion ($2.8 billion net to Brookfield Renewable) of capital
across multiple transactions and regions.

• Maintained our strong balance sheet and executed approximately $10 billion of financings,
generating $2 billion ($1.2 billion net to Brookfield Renewable) in proceeds from upfinancings and
bolstering our liquidity, which stands at $3.7 billion, while continuing to minimize our exposure to
floating interest rates or near-term maturities.

•

Completed or are advancing up to $4.6 billion (approximately $1.6 billion net to Brookfield
Renewable) of asset recycling activities.

A Record Year for Growth

2022 has been our strongest year for growth to date. We closed or agreed to invest up to $12 billion ($2.8
billion net to Brookfield Renewable) to be deployed over the next five years, which represents almost half
of our growth target for that period. We invested across all major decarbonization asset classes, including
utility-scale wind and solar, distributed generation, nuclear, battery storage, and transition investments.
This puts us in an excellent position to outperform both our growth and return targets.

The investment environment for renewables remains highly compelling. Corporate clean energy demand,
low-cost energy profile, electrification, and energy independence continue to be key trends accelerating
renewable deployment. Our disciplined approach to investing, long-dated history of owning and operating
clean energy assets, and access to large-scale capital put us in a leadership position. Our track record
demonstrates that we are uniquely capable of capturing some of the most attractive scale opportunities
and we expect to be able to replicate this strategy looking forward.

In renewable development, we agreed to invest up to $6.4 billion (approximately $1.4 billion net to
Brookfield Renewable) of capital through both organic growth within our existing businesses and
acquiring new complementary platforms that enhance our current offering. We invested in three large
renewable development businesses in the U.S. — Urban Grid, Standard Solar, and Scout Clean Energy.
With these investments, we continue to expand our presence in the U.S., and it continues to be our
largest market with approximately 74,000 megawatts in operations and development. On the back of the
Inflation Reduction Act and strong corporate demand, we are actively pulling forward development
projects in the U.S., which is increasing the growth prospects of these businesses beyond our original
underwriting.

Since this time last year, our global renewable power development pipeline has nearly doubled to almost
110,000 megawatts today. Included in this project pipeline are 19,000 megawatts which are advanced
stage and construction-ready. This represents meaningful value in the ground and will contribute
significant cash flows once completed. Additionally, our global, technologically diversified fleet means we
are a partner of choice for multinational corporations seeking large-scale, low carbon energy solutions.

We also formed a strategic partnership with Cameco to acquire Westinghouse, one of the world’s largest
nuclear services businesses. We believe that nuclear power and hydroelectricity are the only forms of
clean, dispatchable, baseload power generation and will be a key enabler of the rapid growth of
intermittent solar and wind. As the leading original equipment manufacturer and provider of essential
products and services to half the global nuclear power generation fleet, Westinghouse is a critical player
in the energy transition. We expect total equity invested to be ~$4.5 billion (up to $750 million net to
Brookfield Renewable). We, alongside our institutional partners, will own a 51% interest with Cameco
owning 49%. Westinghouse is well positioned to capture the increasing global tailwinds for nuclear and
expect the transaction to close in the second half of 2023.

Lastly, we entered a number of new high growth transition asset classes that are complementary to our
core renewable assets, including carbon capture and storage, recycling, and renewable natural gas
(“RNG”), through small upfront investments with experienced partners, that are structured with downside
protection, discretion over future investment and significant potential upside returns on our capital. This
includes an investment in California Bioenergy, a leading California-based developer, operator, and owner
of RNG assets. We have invested an initial $150 million ($30 million net to Brookfield Renewable) into the
business in a downside protected convertible structure and have a priority right to invest up to an
additional $350 million ($70 million net to Brookfield Renewable) to support the development of new
agriculture RNG assets, many of which have offtakes with corporate customers we know through our
renewable platform.

Our Access to Capital Has Become Increasingly Valuable

We have said for many years that the strength of our balance sheet and our ability to invest alongside
large-scale institutional capital represents a significant competitive advantage.

Throughout our history, we have prioritized capitalizing the business with a strong investment grade
balance sheet, utilizing long duration non-recourse debt, and maintaining high levels of liquidity. We have
operated this way for many years, ensuring that we maintain a low risk financial profile and focusing on
financial strength and flexibility. We recognize that this can often be overlooked as part of investors' risk-
reward equation, in particular during expansionary periods. However, we believe it is critical to our long-
term success, and over time, contributes meaningfully to the compounding of our cash flows and the total
returns delivered by our units.

Furthermore, our structure of investing alongside Brookfield’s private funds provides access to scale,
long-term institutional capital, allowing us to target sizable deals where there is often limited competition.
Combined with our platform capabilities, this allows us to execute some of the largest and most attractive
decarbonization opportunities, positioning us to generate strong risk-adjusted returns.

Investor appetite for the energy transition remains very strong. We have seen significant institutional
demand to invest alongside experienced owners, operators, and investors like us. The success of
Brookfield’s first $15 billion transition fund demonstrated this, establishing the world’s largest private fund
dedicated to facilitating the global transition to a net-zero economy. A key part of Brookfield’s private fund
strategy is developing relationships with large pools of long-term private capital who seek both the
opportunity to invest alongside us, both by investing in our private funds, and also directly in the
investment as co-investors. This co-investment program further enhances our access to capital, and it
provides another source of liquidity.

In today’s market, where access to capital is limited for some market participants, this becomes an even
more meaningful competitive advantage. Institutional capital supports our ability to invest in great
businesses and achieve strong results that maximize long-term returns for our investors. The scale of our
transition fund, and the institutional relationships and capital it brings, is another meaningful step change
in our funding strategy that we will continue to employ as we grow our business.

Operating Results

Our underlying business continues to perform very well. During the year, we generated FFO of over $1.0
billion, or $1.56 per unit, reflecting solid performance and an increase of 8% versus the same period last
year. Our operations benefited from strong global power prices, and continued growth, both through
development and acquisitions.

Our business is backed by high-quality cash flows, in large part from our perpetual hydro portfolio, which
has become an increasingly valuable source of clean, baseload power as more intermittent renewables
come online. With over 5,000-gigawatt hours of generation available for re-contracting across our portfolio
over the next five years, and the positive pricing environment for our hydro portfolio, we have significant
capacity across our fleet to execute on accretive contracts that we expect to contribute additional FFO
and generate a low-cost funding source for our growth.

Our hydroelectric segment delivered FFO of $667 million. Our hydro assets globally continue to exhibit
strong cash flow resiliency given our increasingly diversified asset base, inflation-linked power purchase
agreements, and ability to capture strong power prices.

Our wind and solar segments generated a combined $579 million of FFO. We continue to benefit from
contributions from acquisitions and the diversification of our fleet, which are underpinned by long duration
power purchase agreements that provide stable revenues. Our distributed energy and sustainable

solutions segment generated $154 million of FFO, benefiting from both acquisitions and organic growth
across the portfolio.

We have also increased the scale of our development activities, almost doubling our renewable power
pipeline from 62,000 megawatts last year to almost 110,000 megawatts today. In 2022 alone, we
commissioned approximately 3,500 megawatts of capacity, including completing our 850-megawatt
Shepherds Flat wind repowering project on time and on budget.

Furthermore, we have strong visibility into our near-term development pipeline, with almost 5,000
megawatts of projects representing significant dollars in the ground that we expect to build out in the next
year and for which we have secured substantially all required funding. Additionally, over 14,000
megawatts of our remaining advanced-stage development projects have been materially de-risked.
Together with our sustainable solutions pipeline, these projects are expected to contribute approximately
$235 million of incremental run-rate FFO once commissioned.

Balance Sheet And Liquidity

Our financial position remains excellent, and our available liquidity is robust, providing significant flexibility
to fund our growth. We are resilient to rising interest rates globally, with over 90% of our borrowings being
project-level non-recourse debt, with an average remaining term of 12 years, no material near-term
maturities in the next five years, and only 3% exposure to floating rate debt.

Despite market volatility, our access to deep and varied pools of capital continues to be differentiated. We
have approximately $3.7 billion of available liquidity, giving us significant financial flexibility during periods
of capital scarcity. During the year, we secured approximately $10 billion of financings across the
business, resulting in approximately $2 billion ($1.2 billion net to Brookfield Renewable) in upfinancing
proceeds.

We are also accelerating our capital recycling activities, which are both an accretive funding lever and a
critical part of our full-cycle investment strategy. We expect to imminently close the fifth and final tranche
of the sale of our 630-megawatt solar portfolio in Mexico, generating $400 million in the aggregate ($50
million net to Brookfield Renewable). Furthermore, we are advancing numerous capital recycling
opportunities, which have attracted lower cost of capital buyers searching for de-risked and mature
renewable assets. In this regard, we have initiated several capital recycling initiatives that could generate
up to $4 billion in aggregate ($1.5 billion net to Brookfield Renewable) of proceeds when closed and
provide significant incremental liquidity in the coming quarters.

Outlook

Our long-term goal remains to deliver 12-15% long-term total returns for investors. To do this, we will
continue to be disciplined allocators of capital by leveraging our deep funding sources and operational
capabilities to enhance value and de-risk our business.

On behalf of the Board and management of Brookfield Renewable, we thank all our unitholders and
shareholders for their ongoing support. We are excited about Brookfield Renewable’s future and look
forward to updating you on our progress throughout 2023.

Sincerely,

Connor Teskey
Chief Executive Officer
February 4, 2023

OUR COMPETITIVE STRENGTHS

Brookfield Renewable Partners L.P. (together with its controlled entities, “Brookfield Renewable”) is a globally

diversified, multi-technology, owner and operator of renewable power and sustainable solutions assets.

Our business model is to utilize our global reach to acquire and develop high quality renewable power 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. For our sustainable
solutions assets, our strategy is to make small upfront investments with experienced partners that are structured with
downside protection, discretion over future investment and significant potential upside returns on our capital.

One of the largest, public decarbonization businesses globally. Brookfield Renewable has a 20-year track
record as a publicly traded operator and investor in renewable power and sustainable solution assets. Today we have
a large, multi-technology and globally diversified portfolio that is supported by approximately 3,400 experienced
employees. Brookfield Renewable invests in assets directly, as well as with institutional partners, joint venture
partners and through other arrangements. Recently, we have been making investments in our sustainable solutions
portfolio which is comprised of emerging transition asset classes where our initial investment positions us for future
large-scale decarbonization investment.

Our portfolio of renewable power assets consists of approximately 25,400 MW of installed capacity largely
across four continents that produces annualized long-term average generation on a proportionate basis of
approximately 30,900 GWh and a development pipeline of approximately 110,000 MW. Our portfolio of sustainable
solutions includes investment in businesses with an operating portfolio of 47 thousand metric tons per annum
(“TMTPA”) of carbon capture and storage (“CCS”), 3 million Metric Million British thermal units (“MMBtu”) of
agricultural renewable natural gas (“RNG”) annual production capacity and over 1 million tons of recycled
materials.

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

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

Helping to accelerate the decarbonization and stability of the electricity grids. Climate change and energy
security are viewed as two of the most significant and urgent issues facing the global economy, posing immense
risks to the safety and security of communities and to our collective and economic prosperity. In response,

Technology53%20%15%12%HydroelectricWindSolar – utilityDistributed energy &sustainable solutionsRegion62%20%16%2%North AmericaSouth AmericaEuropeAsiagovernments and businesses have adopted ambitious plans to support a transition to a decarbonized economy. We
believe that our scale and global operating, development and investing capabilities make us well positioned to
partner with governments and businesses to help them achieve their decarbonization goals.

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.
Approximately 90% of our debt is either investment grade rated or sized to investment grade metrics. Our corporate
debt to total capitalization is approximately 11% and approximately 91% of our borrowings are non-recourse.
Corporate borrowings and proportionate non-recourse borrowings each have weighted-average terms of
approximately 11 years and 12 years, respectively, with no material maturities over the next five years.
Approximately 90% of our financings are effectively fixed rate and only 7% of our debt outside North America and
Europe is exposed to changes in interest rates. Our available liquidity as at December 31, 2022 is over $3.7 billion of
cash and cash equivalents, investments in marketable securities and the available portion of credit facilities.

Best-in class operators and developers. Brookfield Renewable has approximately 3,400 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 experience operating, developing, and managing power generation
facilities span over 120 years. We continue to accelerate our development activities as we build out our
approximately 110,000 MW renewable power pipeline, and further enhance our decarbonization offering to our
customers through the build out of our sustainable solutions assets, which includes opportunities to invest in projects
with up to 8 MMTPA of CCS, 19 materials recovery facilities MRFs that would result in 2 million tonnes of
recycled materials and 70 digesters that would produce more than 3 million MMBtu of RNG of production capacity
annually.

Well positioned for cash flow growth and an attractive long term distribution profile. We are focused on
delivering resilient, stable distributions with meaningful growth of 5% to 9% annually through all market cycles
from existing operations and new investment. We are fully funded by internally generated cash flows, with inflation
escalations in the vast majority of our contracts, potential margin expansion through revenue growth and cost
reduction initiatives, and the building out our development pipeline at premium returns. While we do not rely on
acquisitions to achieve our growth targets, our business seeks upside through 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.
Our ability to develop and acquire assets is strengthened by our operating and project development teams across the
globe, strategic relationship with Brookfield, and our liquidity and capitalization profile.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”) MANAGEMENT

Our Approach to ESG

Our approach to ESG is a key part of how we conduct our business as an investor, owner and operator of one of
the world’s largest publicly traded, pure-play renewable power platforms and provider of decarbonization solutions.
We believe that strong ESG principles, practices and performance support creating a resilient business and
generating long-term value for our stakeholders.

We embed ESG throughout our investment process, starting with due diligence and through to our exit from the
investment. We tailor ESG due diligence, leveraging our investment and operating expertise and using guidance
from the Sustainability Accounting Standards Board. We seek to proactively identify material ESG risks and
opportunities most relevant to the investment and tailor our due diligence work accordingly. After acquiring or
investing in an asset, we implement a tailored integration plan that includes material ESG-related priorities. The
management teams within each regional business are accountable for integrating new investments and managing
ESG risks and opportunities through the investment’s life cycle. ESG integration and performance are reviewed
centrally on a regular basis through our formal governance processes. Finally, as part of our divestiture process, we
outline potential value creation from several different factors, including ESG considerations.

Environment

Decarbonization is a global goal shared by many governments, corporations and investors. As a leading owner
and developer of clean energy, we built our position in this sector over many decades and will leverage our
operational expertise to support the multi-decade transition required for global decarbonization. Our clean energy
assets already support others globally to reduce their emissions and we will continue to partner to drive emissions
reduction.

We recognize the importance of reducing the emissions from our own business and have set a target to reach net
zero for Scope 1 and 2 emissions across our existing renewable operations by 2030, with a baseline year of 2020.
This target is supported by established plans with a primary focus on emissions reductions, including increasing the
use of renewable energy to power our assets and offices. In addition, we are working to enhance the reporting of
Scope 3 emissions across our wider value chain.

In 2021, we set a target to develop an additional approximately 21,000 MW of new clean energy capacity by
2030, which, if achieved, would represent a doubling of our operating portfolio at the time. In 2022, we developed
over 3,500 MW of new clean energy capacity, and we expect to develop at least an additional 17,500 MW over the
remaining years. We expect to accomplish this by executing on opportunities in our existing development pipeline
as well as continuing to pursue acquisitions. See Item 3.D “Risk Factors — Risks Relating to Our Growth Strategy”
in our most recently Annual Report on Form 20-F.

We integrate wider environmental considerations, including biodiversity protection and water and waste
management, into our decision-making and activities, while striving for continuous improvement in our
environmental management system and overall performance. Our engagement and collaboration with stakeholders,
including communities, Indigenous peoples, local agencies and environmental NGOs, enhance our understanding of
ecosystems and of the environmental impacts of our facilities.

We also support the market for green securities, helping to accelerate the transformation and decarbonization of
global electricity generation, while reducing the cost of our borrowing. Our Green Financing Committee, comprised
of representatives from our Capital Markets and Treasury teams, manages our sustainable financing strategy. The
chief financial officer of BRP Energy Group L.P., and includes any other affiliate of such entity that provides
services to Brookfield Renewable pursuant to our Master Services Agreement or any other service agreement or
arrangement (together, the “Service Provider”) oversees our strategy and includes these matters in reports to the
board of directors of the Brookfield Renewable Partners Limited, which serves as BEP’s general partner (“Managing
General Partner”).

In 2022, we issued approximately $1.6 billion of green securities and financings at both the corporate- and
project-levels. This brought our aggregate green issuances to approximately $11 billion, as of December 31, 2022.
All of our project-level green bonds received E-1 Green Evaluation scores from S&P Global Ratings Canada, a
business unit of S&P Global Canada Corp (“S&P”), the highest on its scale. S&P cited that Brookfield Renewable’s

environmental stewardship, commitment to renewable power and use of proceeds towards renewable power
generation contributed to this top score.

Social

We seek to make a positive difference for our people and the communities in which we operate. Within our
operations, we maintain a strong focus on health and safety, support the development of our employees and strive to
create an open and inclusive work environment for our teams to thrive. We continuously strive to achieve excellence
in health and safety performance and to be industry leaders in risk management and incident prevention. Our health
and safety management philosophy emphasizes the importance of leadership, line management accountability, a
managed system approach and the identification and elimination of high-risk hazards as the cornerstones of
exceptional performance.

Across our value chain, we build strong relationships with our community partners to enable greater benefit
from our investments. We proactively engage with communities and strive to create shared value. We believe having
transparent and well-established relationships with local stakeholders is key to successfully developing and
operating our facilities. When considering investing in or building a new facility, we conduct assessments and due
diligence to identify local stakeholders. Stakeholders can include communities, landowners, business owners,
municipalities, recreational organizations, NGOs or others potentially affected by or interested in our operations. We
consult and work proactively with local stakeholders to ensure that their interests and safety are appropriately
integrated into our decision-making, developments and operations.

We are dedicated to treating stakeholders, including employees, customers, suppliers, and the communities in
which we operate with dignity and respect. Our human rights program includes adhering to all laws and regulations
that apply to our operations regarding fair labor and employment conditions and making efforts within our business
to enhance our due diligence, key contract terms, policies, procedures and collaboration with respect to our human
rights and the supply chain. Our commitment to human rights is integrated throughout our decision-making and
operations.

Governance

We maintain high ethical standards across our organization, key elements of which include our Code of
Business Conduct and Ethics, Anti-Bribery and Anti-Corruption Policy, a whistleblower hotline, and supporting
controls and procedures. To ensure best practices are adopted by our contractors, we have established a Vendor
Code of Conduct to better ensure that our contractors’ values, priorities and business practices are aligned with our
own. The standards set by these policies are designed to meet or exceed applicable law and regulation. We recognize
the importance of transparently reporting our ESG programs and progress to stakeholders including our investors.
As such, we began publishing an annual ESG report in 2020 detailing how we embed environmental, social and
governance principles into our business and recently issued our inaugural report aligning our disclosures with the
recommendations of the Taskforce on Climate-related Financial Disclosures.

Oversight of our ESG matters resides with our Board of Directors and senior leadership team:

•

Board of Directors: The board of directors of the Managing General Partner and its committees oversee our
ESG strategy, which is focused on decarbonization, and review our ESG approach and performance
throughout the year. It also reviews global policies related to sustainability and monitors the performance of
our regional businesses. The board of directors of the managing general partner receives quarterly updates
on ESG performance.

Executive Management Team: The Chief Executive Officer of the Service Provider has ultimate
accountability for implementing strategy for the business, including the delivery of ESG programs and
goals. The Chief Executive Officer of the Service Provider and the executive management team set and
provide oversight for delivery of the strategic vision and priorities of our business.

Regional Business Leads: The Chief Executive Officers of our regional businesses implements local
objectives within their business and are accountable for ESG performance.

ESG Steering Committee: Our ESG Steering Committee sets ESG goals, shares best practices, monitors
progress and performance against our goals and seeks opportunities for improvement. The committee

includes the Chief Executive Officers of our regional operating businesses, our Chief Sustainability Officer,
and our Chief Risk Officer along with various ESG and operations experts from across our businesses.

HSS&E Steering Committee: Our HSS&E Steering Committee manages our strategic health and safety
framework. The committee sets our comprehensive health and safety policies, upholds our robust health
and safety culture and management system, shares best practices, seeks opportunities to continuously
improve our safety performance and monitors performance against our goal to achieve zero high-risk
incidents.

Investment Review: The Service Provider
including climate-related
considerations, into the due diligence process for potential investments, including reviewing material ESG
and other findings from due diligence, prior to investment decisions being made.

incorporates ESG factors,

•

A proactive and focused approach continuing to build upon our high ESG standards creates value in our
business. The initiatives we undertake and the investments we make in building our business are guided by our core
set of values around ESG, as we create a culture and organization that we believe can be successful today and in the
future. For a discussion of the individuals from Brookfield’s management team that are expected to be involved in
our business, please see “Risk Factors” included in our most recent Annual Report on Form 20-F.

Management’s Discussion and Analysis
For the year ended December 31, 2022

This Management’s Discussion and Analysis for the year ended December 31, 2022 is provided as of February 28, 2023. 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 Corporation (“Brookfield Corporation”). Brookfield
Corporation and its subsidiaries, other than Brookfield Renewable, and unless the context otherwise requires, includes Brookfield Asset
Management Ltd (“Brookfield Asset Management”), 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 – 2022 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, 2022 and 2021
Proportionate results for the years ended December
31, 2021 and 2020
Reconciliation of non-IFRS measures
Contract profile

PART 5 – Liquidity and Capital Resources
Capitalization
Available liquidity
Borrowings

7
8
11

18
23
27

29
29
30
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

29
32
33
35
35
36
36
37

PART 1 – 2022 HIGHLIGHTS

YEAR ENDED DECEMBER 31
(MILLIONS, EXCEPT AS NOTED)

Selected financial information

2022

2021

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

4,711 $

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

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

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

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

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

(295)

(0.60)

2,002

1,005

1.56

1.28

4,096

(368)

(0.69)

1,876

934

1.45

1.22

Operational information

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

25,377

21,049

Total generation (GWh)

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

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

Proportionate generation (GWh)

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

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

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

63,656

63,036

30,126

28,669

58,913

56,629

29,852

27,150

(1)

(2)

(3)

Average LP units for the year ended December 31, 2022 were 275.2 million (2021: 274.9 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, 2022 were 645.9 million (2021: 645.6 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, 2022

December 31, 2021

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

3,695
11 %

39 %

91 %

97 %

11 years

4.1 %

12 years

4.9 %

4,129

8 %

33 %

90 %

98 %

13 years

3.9 %

13 years

4.2 %

(1)

Total floating rate exposure is 10% (2021: 7%) of which 7% (2021: 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 2

Operations

Funds From Operations increased to $1,005 million or $1.56 on a per Unit basis, representing an 8% increase

from the prior year driven by:

•

Contributions from growth, including 3,475 MW of new development assets reaching commercial
operation;

Higher realized prices across most markets on the back of inflation escalation and strong global power
pricing; and

Favorable hydroelectric generation versus the prior year across all regions and strong asset availability
across our global fleet

After deducting non-cash depreciation, foreign exchange and financial instrument loss and other, net loss
attributable to Unitholders was $295 million or $0.60 per LP unit, compared to net loss attributable to Unitholders of
$368 million or $0.69 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 over 11,000 GWh of clean energy annually including 5,000 GWh to corporate
offtakers;

Liquidity and Capital Resources

Our access to diverse pools of capital, including private institutional capital, backed by our investment grade

balance sheet, continues to provide us resiliency and a strategic advantage particularly during market volatility

•

Liquidity position remains robust, with $3.7 billion of total available liquidity, providing significant
flexibility to fund growth, and no meaningful near-term maturities

Executed approximately $10 billion of financings, generating $2 billion ($1.2 billion net to Brookfield
Renewable) in proceeds from upfinancings

During the year, issued C$150 million of fixed rate green perpetual Class A preferred limited partnership
units and C$400 million of green bonds

• We expect to imminently close the fifth and final tranche of the sale of our 630-megawatt solar portfolio in
Mexico, generating $400 million in the aggregate ($50 million net to Brookfield Renewable), doubling our
invested capital in less than three years. Furthermore, we are advancing numerous capital recycling
opportunities at strong returns that are expected to generate up to approximately $4 billion ($1.5 billion net
to Brookfield Renewable) of aggregate proceeds when closed

Growth and Development

During the year, together with our institutional partners, we closed or agreed to invest up to $12 billion ($2.8

billion net to Brookfield Renewable) of capital across various transactions, including:

•

Formed a strategic partnership with Cameco to acquire Westinghouse, one of the world’s largest nuclear
services businesses. The total expected equity invested will be approximately $4.5 billion (up to $750
million net to Brookfield Renewable), and we, alongside our institutional partners, will own 51% interest
with Cameco owning 49%;

Invested in three large renewable development businesses in the U.S. for up to $2.7 billion ($540 million
net to Brookfield Renewable), including follow-on investment opportunities, including:

◦

An utility-scale solar developer with 20 GW portfolio of utility-scale solar and energy storage
development assets;

An integrated distributed generation developer with approximately 500 MW of contracted
operating and under construction assets; and

Page 3

◦

A renewables developer with a portfolio of over 800 MW of operating wind assets and pipeline of
over 22 GW of wind, utility-scale solar and storage assets

•

Entered a number of new high growth transition asset classes that are complementary to our core renewable
assets through small upfront investments with experienced partners that are structured with downside
protection, discretion over future investment and significant potential upside returns on our capital:

◦

Invested into three carbon capture businesses in North America with aggregate initial
commitments of $110 million (approximately $25 million net to Brookfield Renewable) and
secured the option to invest up to approximately $1 billion (approximately $210 million net to
Brookfield Renewable) of follow-on capital for future projects meeting our risk-return
requirements;

Invested in a pure-play recycling business in the U.S. with an initial commitment of $200 million
($40 million net to Brookfield Renewable) and secured the option to invest up to approximately
$500 million ($100 million net to Brookfield Renewable) of follow-on capital for future projects
meeting our risk-return requirements; and

Invested in a developer, operator and owner of renewable natural gas assets in the U.S. with an
initial commitment of $150 million ($30 million net to Brookfield Renewable) and secured the
option to invest up to approximately $350 million ($70 million net to Brookfield Renewable) of
follow-on capital for future projects meeting our risk-return requirements

During 2022, we continued to progress our development pipeline

•

Commissioned 3,475 MW of development projects, including the completion of our 845 MW wind
repowering project in Oregon and over 560 MW of our utility-scale solar facility in Brazil. We also
continue to advance the construction of over 19,000 MW of renewable power development projects. We
are also making good progress in our sustainable solutions development pipeline, that along with our
renewable power pipeline, are expected to generate Funds From Operations net to Brookfield Renewable of
$278 million in aggregate once completed.

Page 4

(1,434)

(243)

(1,224)

(1,583)

(1,365)

(1,274)

(288)

(981)

(235)

(976)

(1,501)

(1,367)

(14)

138
Average FX rates to USD

(66)

147

(45)

1.34
0.88
5.16
3,693

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)

2022

2021

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

4,711 $

4,096 $

2020

3,810

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

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

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

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

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

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

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

1.30
0.95
5.16
4,253

1.25
0.85
5.40
3,742

Current Year Variance Analysis (2022 vs 2021)

Revenues totaling $4,711 million represents an increase of $615 million over same period in the prior year due
to the growth of our business and higher power prices. Recently acquired and commissioned facilities contributed
3,544 GWh of generation and $288 million of revenues, which was partially offset by recently completed asset sales
that reduced generation by 996 GWh and revenues by $99 million. On a same store, local currency basis, revenues
increased by $569 million primarily due to higher average realized revenue per MWh due to inflation indexation,
recontracting initiatives, and higher global merchant power, as well as stronger hydrology across our fleet.

The strengthening of the U.S. dollar relative to the same period in the prior year across most of the currencies
decreased revenues by approximately $143 million, which was partially offset by a $90 million favorable foreign
exchange impact on our operating and interest expenses.

Direct operating costs totaling $1,434 million represents an increase of $69 million over the same period in the
prior year due to additional costs from our recently acquired and commissioned facilities being partly offset by cost
saving initiatives across our business, recently completed asset sales and the impact of foreign exchange movement
noted above.

Management service costs totaling $243 million represents a decrease of $45 million over the same period in the

prior year.

Interest expense totaling $1,224 million represents an increase of $243 million over the same period in the prior
year due to the growth in our portfolio and accelerated financing initiatives in Colombia, as well as a C$1.0 billion
strategic upfinancing of our Canadian hydroelectric facility to fund the growth of our business.

Depreciation expense totaling $1,583 million represents an increase of $82 million over the same period in the

prior year due to the growth of our business.

Net income totaling $138 million represents an increase of $204 million over the same period in the prior year

due to the above noted items.

Prior Year Variance Analysis (2021 vs 2020)

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

Page 5

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.

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.

Page 6

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)

2022

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

938 $

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

4,183

1,392

54,283

64,111

351

2,548

22,302

6,507

64,111

FX rates to USD

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

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

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

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

1.35

0.93

5.22

4,810

2021

2,889

1,107

49,432

55,867

2,149

19,380

6,215

55,867

1.26

0.88

5.58

3,981

Property, plant and equipment

Property, plant and equipment totaled $54.3 billion as at December 31, 2022 compared to $49.4 billion as at
December 31, 2021. The $4.9 billion increase was primarily attributable to a $3.7 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 over 800 MW portfolio of operating wind assets and a
development pipeline of over 22 GW, a 20 GW portfolio of utility-scale solar and energy storage development
platform, a distributed generation developer with 500 MW of contracted operating and under construction assets, an
1.8 GW of development pipeline in the United States, as well as our continued investments in the development of
power generating assets and our sustaining capital expenditure, all increased property, plant and equipment by
$5.5 billion. The increase was partially offset by the sale of our 36 MW operating hydroelectric portfolio in Brazil
which decreased property, plant and equipment by $0.1 billion, the strengthening of the U.S. dollar across most of
the currencies which decreased property, plant and equipment by $2.0 billion and depreciation expense associated
with property, plant and equipment of $1.5 billion. During the year, we transferred $0.7 billion of property, plant and
equipment to assets held for sale relating to our institutional partners agreement to sell their 50% interest in a 378
MW operating hydroelectric portfolio in the U.S. Brookfield Renewable will continue to retain its 22% interest in
the investment and accordingly, will not receive proceeds from the sale. The portfolio has been reclassified as held
for sale, as subsequent to our institutional partners’ 50% interest completing this sale, Brookfield Renewable will no
longer consolidate this investment and will recognize its interest as an equity accounted investment.

See Note 13 – Property, plant and equipment, at fair value in our audited annual consolidated financial

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

Page 7

Assets held for sale and Liabilities directly associated with assets held for sale

Assets held for sale and Liabilities directly associated with assets held for sale totaled $938 million and
$351 million, respectively, as at December 31, 2022 compared to $58 million and $6 million, respectively, as at
December 31, 2021.

During the year, Brookfield Renewable, together with institutional partners, completed the sale of its 19 MW
solar assets in Asia for proceeds of approximately MYR $144 million ($33 million and $10 million net to Brookfield
Renewable).

As at December 31, 2022, Assets held for sale and Liabilities directly associated with assets held for sale
include wind assets in the U.S. that were acquired as part of the acquisition of a renewables developer that had a pre-
existing sale and purchase agreement at the time of acquisition, as well as the classification of a 378 MW operating
hydroelectric portfolio in the U.S. as held for sale following our institutional partners agreement to sell their 50%
interest. Brookfield Renewable will continue to retain its 22% interest in the investment and accordingly, will not
receive proceeds from the sale. The portfolio has been reclassified as held for sale, as subsequent to our institutional
partners’ 50% interest completing this sale, Brookfield Renewable will no longer consolidate this investment and
will recognize its interest as an equity-accounted investment.

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 Corporation.

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

Renewable’s New York hydroelectric facilities.

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 partners 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 partners, has
access to 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.

Brookfield Corporation has provided a $400 million committed unsecured revolving credit facility maturing in
December 2023 and the draws bear interest at the London Interbank Offered Rate plus a margin. As at December 31,
2022, there were no draws on the committed unsecured revolving credit facility provided by Brookfield Corporation.
Brookfield Corporation may from time to time place funds on deposit with Brookfield Renewable which are
repayable on demand including any interest accrued. There were nil funds placed on deposit with Brookfield
Renewable as at December 31, 2022 (2021: nil). The interest expense on the deposit and draws from the credit
facility for the year ended December 31, 2022 totaled nil (2021: $2 million).

Page 8

During the fourth quarter of 2022, Brookfield Renewable sold a portfolio of investments, which included partial
interests in consolidated subsidiaries, with an approximate fair value of $388 million to an affiliate of Brookfield in
exchange for securities of equal value. The portfolio of investments represented seed assets in a new product
offering that Brookfield will be marketing and selling to third party investors which at that time will provide
Brookfield Renewable the opportunity to, subject to certain conditions, monetize the securities to generate liquidity.
The securities are recorded as financial instrument assets on the consolidated statements of financial position. The
reduction in partial interests in consolidated subsidiaries is reflected as an increase in non-controlling interests in
operating subsidiaries on the consolidated statements of financial position.

In addition to these agreements, Brookfield Renewable and Brookfield have executed other agreements that are
described in Note 30 – 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, 2022.

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

2022

2021

2020

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

21 $

103 $

286

Direct operating costs

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

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

(1)

—

(8)

(26)

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

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

— $

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

Other related party services ........................................................................................ $

(20)

(20) $

(5) $

(2) $

(21)

(23) $

(4) $

(1) $

(34) $

(4)

(24)

(28)

(2)

(13)

(15)

—

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

(243) $

(288) $

(235)

Prior to November 2021, insurance services were paid to external insurance service providers through subsidiaries of Brookfield
Corporation. The fees paid to the subsidiaries of Brookfield Corporation in 2022 were nil (2021 was nil and 2020: was nil). 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 and claims paid are not included in the table above.

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

balance sheets as at December 31:

Page 9

(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

2022

2021

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

54 $

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

Equity-accounted investments and other ...

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

388

142

105

123

341

128

Amounts due from

Equity-accounted investments and other ...

Current liabilities

Financial Instrument Liabilities

Brookfield Reinsurance .............................

—

Due to related parties

Amount due to

Non-recourse borrowings
Accrued distributions payable on LP units, BEPC

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

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

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

Non-Current liabilities

Financial Instrument Liabilities

Brookfield Reinsurance .............................

Corporate borrowings

Brookfield Reinsurance .............................

Non-recourse borrowings

Brookfield Reinsurance and associates ......

Brookfield

Other long-term liabilities

Amounts due to

Contract liability

Equity

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

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

166

62
321
88

675

1,750

1,843

662

663 $

119

13
—
—

164

—

635

669

Preferred limited partners equity

Brookfield Reinsurance and associates ......

15 $

—

Page 10

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, 2022, 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 $94 million were declared during the year ended December 31, 2022 (2021: $80 million).

Preferred equity

The Class A Preference Shares of Brookfield Renewable Power Preferred Equity Inc. (“BRP Equity”) do not
have a fixed maturity date and are not redeemable at the option of the holders. As at December 31, 2022, none of the
issued Class A, Series 5 and 6 Preference Shares have been redeemed by BRP Equity.

In December 2022, 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 December 15,
2023, or earlier should the repurchases be completed prior to such date. Under this normal course issuer bid, BRP
Equity 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 2022 or 2021 in connection with the
normal course issuer bid.

Perpetual subordinated notes

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 $29 million on
the perpetual subordinated notes during the year ended December 31, 2022 (2021: $12 million). Interest incurred on
the perpetual subordinated notes are presented as distributions in the consolidated statements of changes in equity.

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.

In the first quarter of 2022, Brookfield Renewable redeemed all of the outstanding units of Series 5 Preferred

Limited Partnership units for C$72 million or C$25.25 per Preferred Limited Partnership Unit.

In the second quarter of 2022, Brookfield Renewable issued 6,000,000 Series 18 Preferred Units at a price of
C$25 per unit for gross proceeds of C$150 million. The holders of the Series 18 Preferred Units are entitled to
receive a cumulative quarterly fixed distribution yielding 5.5%.

In the second quarter of 2022, Brookfield Renewable redeemed all of the outstanding units of Series 11

Preferred Units for C$250 million or C$25 per Unit.

In December 2022, the Toronto Stock Exchange accepted notice of Brookfield Renewable's intention to renew
the normal course issuer bid in connection with the outstanding Class A Preferred Limited Partnership Units for
another year to December 15, 2023, 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 Class A Preferred Limited Partnership Units. Unitholders may receive a copy of the
notice, free of charge, by contacting Brookfield Renewable. No shares were repurchased during 2022 or 2021.

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

As at December 31, 2022, Brookfield Corporation owns, directly and indirectly 308,051,190 LP units,
Redeemable/Exchangeable partnership units and BEPC exchangeable shares, on a combined basis, representing
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.

Page 11

During the year ended December 31, 2022, Brookfield Renewable issued 262,177 LP units (2021: 230,304 LP

units) under the distribution reinvestment plan at a total value of $9 million (2021: $9 million).

During the year ended December 31, 2022, exchangeable shareholders of BEPC exchanged 12,308 BEPC
exchangeable shares (2021: 16,071 BEPC exchangeable shares) for an equivalent number of LP units amounting to
less than $1 million (2021:$1 million ).

In December 2022, 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 13,764,352 LP
units and 8,610,905 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, 2023, 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, 2022 or 2021.

Page 12

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

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

Hydroelectric

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

11,285

10,470

12,161

12,167

$ 964 $ 876

603 $

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

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

3,828

4,411

3,626

4,060

4,004

3,950

3,802

3,555

197

273

169

224

19,524

18,046

20,023

19,726

1,434

1,269

Wind

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

3,932

4,009

4,564

5,051

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

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

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

Utility-scale solar .....................................................

Distributed energy & sustainable solutions(1)

.......

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

867

565

595

5,959

1,882

1,304

—

1,029

944

1,077

589

469

669

627

670

451

6,096

6,804

7,249

1,777

2,410

2,016

332

134

538

374

290

370

125

556

348

242

1,231

—

889

861

—

569

155

159

883

277

187

511

298

173

412 $

138

117

667

172

114

326

253

409

131

128

668

200

164

396

185

154

(395)

133

(448)

167

201

971

239

133

430

362

197

Total
(1)

(2)

Actual generation includes 524 GWh (2021: 442 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.

28,669

27,150

30,126

29,852

$ 2,636 $ 2,415

2,002 $ 1,876

$ 1,005 $

934

Page 13

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

2022
1,434 $

2021
1,269

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

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

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

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

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

(510)

971

(262)

(42)

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

667 $

(478)

883

(206)

(9)

668

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

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

20,023

19,524

19,726

18,046

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)

2022

2021

Average
revenue
per MWh(1)
2022

2021

Adjusted
EBITDA(2)
2022

2021

Funds From
Operations
2022

2021

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

7,109

7,088 $

83 $

72 $ 363 $ 359 $ 270 $ 256

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

4,176

3,382

11,285

10,470

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

3,828

3,626

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

4,411

3,950

240

603

167

201

210

569

155

159

142

412

138

117

153

409

131

128

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

19,524

18,046 $

68 $

63 $ 971 $ 883 $ 667 $ 668

(1) Average revenue per MWh was adjusted to net the impact of power purchases and any revenue with no corresponding generation.
(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

North America

Funds From Operations at our North American business were $412 million in 2022 versus $409 million in the
prior year as the benefit from favorable generation 8% above prior year and higher average revenue per MWh due to
inflation indexation on our contracted generation and strong market pricing environment was partly offset by
financing initiatives in Canada completed in 2021 to fund growth ($32 million).

Brazil

Funds From Operations at our Brazilian business were $138 million in 2022 versus $131 million in the prior
year. Excluding the impact of the positive ruling regarding historical under allocation of generation to our facilities
under the centralized pooling mechanism that benefited the prior year ($30 million), Funds From Operations was
significantly higher than prior year primarily due to favorable generation (3% above prior year) and higher average
revenue per MWh on our contracted generation due to inflation indexation as well as contribution from the
commissioning of a 30 MW hydroelectric facility in the second quarter of 2022 ($3 million and 84 GWh).

Page 14

Colombia

Funds From Operations at our Colombian business were $117 million in 2022 versus $128 million in the prior
year. On a local currency basis, Funds From Operations was 4% higher than the prior year due to the benefit from
newly acquired and commissioned facilities during the year ($14 million and 242 GWh), higher generation that was
16% above long-term average and higher average revenue per MWh due to inflation indexation and recontracting
initiatives, partly offset by interest expense as a result of accelerating refinancing initiatives. The increase was more
than offset by 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:

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

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

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

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

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

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

2022
538 $

(164)

430

(96)

(8)

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

326 $

2021
556

126

(171)

511

(106)

(9)

396

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

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

6,804

5,959

7,249

6,096

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

2022

2021

2022

2021

Adjusted
EBITDA(2)
2022

2021

Funds From
Operations

2022

2021

United States(1)

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

2,797

2,942 $

82 $

78 $ 154 $ 197 $ 108 $ 146

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

1,135

1,067

3,932

4,009

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

867

1,029

132

121

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

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

565

595

589

469

239

133

277

187

172

114

200

164

Total ..................................................................
(1) Average revenue per MWh adjusted to include the impact of the Texas weather event in February 2021 was $91 per MWh.
(2) Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this

85 $ 430 $ 511 $ 326 $ 396

6,096 $

5,959

87 $

Management’s Discussion and Analysis.

North America

Funds From Operations at our North American business were $172 million in 2022 versus $200 million in the
prior year. On a same store basis, net of asset sales ($45 million and 387 GWh), Funds From Operations were higher
than prior year primarily due to favorable resources and higher power prices as a result of inflation indexation and
generation mix.

Page 15

Europe

Funds From Operations at our European business were $114 million in 2022 versus $164 million in the prior
year. Excluding contributions from the sale of our Irish wind business and gains on the sale of our development
assets in Ireland and Scotland ($91 million and 164 GWh), Funds From Operations were higher than prior year
primarily due to higher market prices in Spain.

Brazil

Funds From Operations at our Brazilian business of $19 million in 2022 versus $17 million in the prior year as
the benefit from higher average revenue per MWh due to inflation indexation of our contracts was partly offset by
lower resources.

Asia

Funds From Operations at our Asian business were $21 million in 2022 versus $15 million in the prior year due
to growth from newly acquired facilities in China ($6 million and 135 GWh). On a same store basis, the portfolio
performed in line with prior year .

UTILITY-SCALE SOLAR OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for utility-scale 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 ......................................................................................................................

2022
374 $

(102)

362

(102)

(7)

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

253 $

2021
348

(89)

298

(111)

(2)

185

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

2,410
1,882

2,016
1,777

Funds From Operations at our utility-scale solar business were $253 million in 2022 versus $185 million in the
prior year, as the benefit from newly acquired and commissioned facilities, including a gain on sale of a solar
development project in North America ($25 million and 249 GWh), and higher market prices in Spain was partly
offset by lower resources.

Page 16

DISTRIBUTED ENERGY & SUSTAINABLE SOLUTIONS OPERATIONS ON
PROPORTIONATE BASIS

The following table presents our proportionate results for distributed energy & sustainable solutions business

for the year ended December 31:

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

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

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

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

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

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

2022
290 $

(119)

197

(42)

(1)

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

154 $

2021
242

(72)

173

(38)

(2)

133

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

889
1,304

861
1,231

(1)

Actual generation includes 524 GWh (2021: 442 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.

Funds From Operations at our distributed energy & sustainable solutions business were $154 million in 2022
versus $133 million in the prior year primarily due to the benefit from the growth of our distributed generation
portfolio and transition investments ($10 million and 38 GWh) and higher pricing for grid stability services provided
by our pumped storage facilities 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)

2022

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

73 $

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

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

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

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

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

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

(31)

(1)

(243)

(94)

(99)

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

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

(395) $

2021

(30)

—

(288)

(78)

(93)

(448)

Page 17

PROPORTIONATE RESULTS FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020

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

$ 876 $

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

3,626

3,663

4,004

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

3,950

2,999

3,555

3,488

169

224

824

175

211

18,046

18,525

19,726

19,658

1,269

1,210

Wind

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

4,009

3,560

5,051

4,239

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

1,029

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

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

589

469

908

552

428

1,077

1,002

670

451

671

443

6,096

5,448

7,249

6,355

Utility-scale solar ...............................................

1,777

1,284

2,016

1,510

Distributed energy & sustainable solutions(1)
..

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

1,231

—

795

—

861

—

475

—

569 $

155

159

883

277

187

511

298

173

581

177

131

889

196

341

232

111

409 $

131

128

668

200

164

396

185

439

152

681

123

237

139

133

(448)

(334)

263

105

423

245

169

—

370

125

556

348

242

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

27,150

26,052

29,852

27,998

$ 2,415 $ 2,047

$ 1,876 $ 1,614

934 $

807

(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.

Page 18

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

2021
1,269 $
92
(478)
883
(206)
(9)
668 $

2020
1,210
124
(445)
889
(191)
(17)
681

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)

Average
revenue
Per MWh(1)

Adjusted
EBITDA(2)

Funds From
Operations

2021

2020

2021

2020

2021

2020

2021

2020

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

7,088

7,283 $

72 $

69 $ 359 $ 376 $ 256 $ 291

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

3,382

4,580

10,470

11,863

3,626

3,663

3,950

2,999

210

569

155

159

205

581

177

131

153

409

131

128

148

439

152

18,046

18,525 $

63 $

67 $ 883 $ 889 $ 668 $ 681

Brazil ............................................................
Colombia(3)
Total .............................................................
(1)

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

(2)

(3)

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

North America

Funds From Operations at our North American business were $409 million in 2021 versus $439 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 19

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:

2021
556 $
126
(171)
511
(106)
(9)
396 $

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

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(1)

Adjusted
EBITDA(2)

Funds From
Operations

2021

2020

2021

2020

2021

2020

2021

2020

United States(1)

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

2,942

2,426 $

78 $

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

6,096

5,448 $

85 $

80 $ 511 $ 341 $ 396 $ 237

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

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 20

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.

UTILITY-SCALE SOLAR OPERATIONS ON PROPORTIONATE BASIS

The following table presents our proportionate results for utility-scale 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 .................................................................................................................. $

2021

348

39
(89)
298
(111)
(2)
185 $

2020
245
50
(63)
232
(90)
(3)
139

2,016
1,777

1,510
1,284

Funds From Operations at our utility-scale 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 the prior year primarily
due to favorable resource and higher market price at our Spanish assets.

DISTRIBUTED ENERGY & SUSTAINABLE SOLUTIONS OPERATIONS ON
PROPORTIONATE BASIS

The following table presents our proportionate results for distributed energy & sustainable solutions business

for the year ended December 31:

2021
242 $
3
(72)
173
(38)
(2)
133 $

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

861
1,231

2020
169
3
(61)
111
(25)
(2)
84

475
795

(1)

Actual generation includes 442 GWh (2020: 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.

Page 21

Funds From Operations at our distributed energy & sustainable solutions business were $133 million in 2021
versus $84 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).

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)

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

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

Distributions on Preferred Units and Class A Preference Shares.

(30)

(288)

(78)

(93)

(448) $

2020

(23)

(217)

(79)

(334)

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

growth of our business.

Page 22

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, 2022:

(MILLIONS)

Hydroelectric

Wind

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Utility
-scale
solar

Distributed
energy &
sustainable
solutions

Corporate

Total

Attributable to Unitholders

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

(72) $ 61

370

(76) $

(2) $ 35

$ (56) $

124

(296) $

138

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 ..........................................................................................................
Amount attributable to equity accounted investments and non-controlling interests(2)

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

414

(86)

255

—

302

(20)

(3)

—

(234)

(30)

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

603

167

108

(69)

—

237

112

(628)

201

382

(75)

—

169

—

(193)

239

(3)

—

291

(4)

(1)

(35)

109

—

195

(85)

133

(73)

(119)

(229)

362

124

(4)

(47)

—

(159)

197

(80)

(11)

243

109

—

(24)

1,583

(150)

128

462

243

1,224

148

(1,774)

2,002

(1)

(2)

Refer to Note 10 Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other balance also includes
derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of
foreign currency hedges and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included in Funds From Operations.
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 23

The following table reflects Adjusted EBITDA and provides a reconciliation to net income (loss) for the year ended December 31, 2021:

(MILLIONS)

Attributable to Unitholders

Hydroelectric

Wind

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Utility-
scale
solar

Distributed
energy &
sustainable
solutions

Corporate

Total

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

$ 56

222

(248) $ 145

$ (12) $ 27

(357) $

(66)

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

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

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

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

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

368

(50)

(3)

(2)

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

—

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

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

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

255

103

175

(29)

—

119

411

(46)

119

110

(16)

(2)

(12)

—

167

—

263

(34)

(23)

—

187

(8)

—

1,501

(73)

(36)

108

288

—

(29)

452

288

981

(109)

(30)

(483)

(172)

(107)

(64)

(69)

(198)

(81)

(13)

(1,326)

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

569

$ 155

159

277

$ 187

$ 23 $ 24

298

173

$ 1,876

(1)

(2)

Page 24

The following table reflects Adjusted EBITDA and provides a reconciliation to net income (loss) for the year ended December 31, 2020:

(MILLIONS)

Hydroelectric

Wind

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Utility
-scale
solar

Distributed
energy &
sustainable
solutions

Corporate

Total

Attributable to Unitholders

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

102

$ 110

263

(76) $

(15) $ 16

$ 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)

—

(146)

(61)

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

562

177

(20)

(3)

—

122

(380)

131

334

(37)

(74)

—

163

—

(142)

196

137

227

(10)

—

(7)

(5)

(2)

(26)

(16)

129

—

(95)

201

(68)

(63)

(257)

232

(8)

—

(81)

130

(96)

(17)

318

235

—

1,367

(213)

(127)

648

235

976

(1,293)

1,614

(1)

(2)

Page 25

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 ...................................................................................
Foreign exchange and financial instruments loss (gain) ...........................................
Other(1)
.......................................................................................................................
Amount attributable to equity accounted investments and non-controlling interest(2)
.
Funds From Operations ................................................................................................ $

2022

2021

138 $

(66) $

2020

(45)

1,501

1,367

1,583

(150)

128

462

(1,156)

(29)

452

(956)

1,005 $

934 $

(213)

(127)

648

(823)

807

(1)

(2)

Refer to Note 10 Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash
operating expenses necessary for business operations. Other balance also includes derivative and other revaluations and settlements, gains
or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield
Renewable’s economic share of foreign currency hedges and realized disposition gains and losses on assets that we developed and/or did
not intend to hold over the long-term that are included in Funds From Operations.
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 .........................................................
Deferred income tax recovery .....................................................................................
Other .............................................................................................................................
Funds From Operations per Unit(2)

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

2022

2021

(0.60) $

(0.69) $

1.45

0.29

(0.24)

0.66

1.43

0.20

(0.21)

0.72

1.56 $

1.45 $

2020

(0.61)

1.24

0.06

(0.29)

0.92

1.32

(1)

(2)

During the year ended December 31, 2022, on average there were 275.2 million LP units outstanding (2021: 274.9 million, 2020:
271.1 million).
Average units outstanding, for the year ended December 31, 2022, were 645.9 million (2021: 645.6 million, 2020: 609.5 million), being
inclusive of GP interest, Redeemable/Exchangeable partnership units, LP units, and BEPC exchangeable shares.

Page 26

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 hydroelectric portfolios, 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 67%, 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 14 years on a proportionate basis.

(GWh, except as noted)
Hydroelectric
North America

2023

2024

2025

2026

2027

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

7,783
3,541
11,324

6,681
3,528
10,209

Wind
North America

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

Brazil .................................................................................
Europe ...............................................................................
Asia ...................................................................................

3,254
1,191
4,445
589
866
540
6,440

3,220
1,191
4,411
619
866
548
6,444

5,882
3,528
9,410

3,222
1,191
4,413
630
866
548
6,457

5,248
3,528
8,776

3,176
1,114
4,290
630
866
548
6,334

5,109
3,528
8,637

3,045
959
4,004
630
859
556
6,049

Utility-scale solar ..............................................................
Distributed energy & sustainable solutions .......................
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

2,374
968
21,106
1,717
22,823
26,221
49,044

2,436
957
20,046
2,777
22,823
26,221
49,044

2,430
945
19,242
3,581
22,823
26,221
— 49,044

2,418
933
18,461
4,362
22,823
26,221
— 49,044

2,410
916
18,012
4,811
22,823
26,221
— 49,044

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

92 %
84

88 %
86

84 %
86

81 %
88

79 %
89

Includes generation of 2,621 GWh for 2023 , 1,497 GWh for 2024, and 699 GWh for 2025 secured under financial contracts.

Weighted-average remaining contract durations on a proportionate basis are 16 years in North America, 12

years in Europe, 10 years in Brazil, 4 years in Colombia, and 15 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.

Page 27

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.

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 (43%), distribution
companies (22%), commercial and industrial users (20%), and Brookfield (15%).

Page 28

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 91% 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

2022

2021

2022

— $

249

— $

—

— $

249

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)

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

2,307

—

2,307

—

571

592

760

2,156

—

2,156

—

613

592

832

2,307

22,321

24,628

6,331

571

592

760

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

9,608

9,607

9,608

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

13,838 $

13,800 $

57,245 $

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

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

17 %

11 %

16 %

8 %

43 %

39 %

2021

—

2,156

19,352

21,508

6,018

613

592

832

9,607

51,473

42 %

33 %

14,755

12,303

(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 $8 million (2021: $7 million) of deferred

(3)

(4)

(5)

(6)

financing fees, net of unamortized premiums.
Consolidated non-recourse borrowings include $1,838 million (2021: $30 million) borrowed under a subscription facility of a Brookfield
sponsored private fund and excludes $124 million (2021: $132 million) of deferred financing fees and $105 million (2021: $160 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 29

AVAILABLE LIQUIDITY

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

(MILLIONS)

2022

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

444 $

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

211

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

—

500

(344)

2,531

509

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

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

3,695 $

2021

600

151

2,375

(24)

400

(289)

2,462

916

4,129

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.

Page 30

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:

(MILLIONS, EXCEPT AS NOTED)
Corporate borrowings

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

Commercial paper ...................................................
Medium-term notes .................................................

Proportionate non-recourse borrowings(2)(3)

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

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

Utility-scale solar ....................................................

Distributed energy & sustainable solutions .............

2022

Weighted-average
Interest
rate %(1)

Term
(years)

2021
Weighted-average

Total

Interest
rate %

Term
(years)

N/A

5.1
4.1

5.7

4.6

3.6

4.3

4.9

<1
11

—

249
$ 2,307

5,150

1,935

2,367

897

10,349

$ 12,905

N/A

N/A
3.9

4.8

4.2

3.2

3.8

4.2

Total

—

—
2,156

4,913

2,371

2,736

996

N/A
$
13

11,016

$ 13,172

(28)

13,144

(351)

8,736

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

(64)

12,841

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

(373)

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

12,382

As per IFRS Statements ....................................................................................
(1)

(2)

(3)

Includes cash yields on tax equity.
Includes adjustments for project-level refinancing subsequent to December 31, 2022.
See “Part 9 – Presentation to Stakeholders and Performance Measurement” for information on proportionate debt.

$ 24,850

$ 21,529

Page 31

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

repayable on a proportionate basis as at December 31, 2022:

(MILLIONS)
Debt principal repayments(1)(2)

2023

2024

2025

2026

2027 Thereafter

Total

Medium-term notes(3)

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

295 $ — $

369 $

1,643 $ 2,307

Non-recourse borrowings

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

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

Utility-scale solar .........................................

Distributed energy & sustainable solutions .

Amortizing debt principal repayments

Non-recourse borrowings

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

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

Utility-scale solar .........................................

Distributed energy & sustainable solutions .

Total .................................................................. $
Interest payable(1)(2)(4)
Medium-term notes(1)
Non-recourse borrowings

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

110

—

102

167

153

126

123

456

167

140

121

466

362

—

152

514

146

142

133

462

323

138

1,336

2,317

—

454

475

194

577

561

360

435

138

2,459

3,815

173

136

131

468

175

134

125

462

2,019

680

1,173

348

2,833

1,358

1,806

537

4,220

6,534

558 $

633 $ 1,271 $

903 $

969 $

8,322 $ 12,656

95 $

89 $

84 $

77 $

646 $ 1,086

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

290

293

259

228

197

1,557

2,824

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

Utility-scale solar .........................................

Distributed energy & sustainable solutions .

146

335

516

752

221

506

505

451

397

353

2,101

4,313

601 $

600 $

540 $

481 $

430 $

2,747 $ 5,399

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.
Includes adjustments for project-level refinancing subsequent to December 31, 2022.

(2)
(3) Medium-term notes are unsecured and guaranteed by Brookfield Renewable and excludes $8 million (2021: $7 million) of deferred

(4)

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
available for investments and acquisitions, as well as funding the equity component of organic growth initiatives.

Page 32

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):

2022

2021

2020

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

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

1,924 $

1,448 $

1,392

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

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

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

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

(19)

(194)

1,711

3,489

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

(5,066)

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

(28)

(716)

734

2,143

(2,544)

(35)

Increase in cash and cash equivalents ......................................................................... $

106 $

298 $

(155)

1,296

(792)

(382)

136

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, 2022, totaled $1,924 million compared to $1,448 million in 2021
and $1,392 million in 2020, 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)

2022

2021

2020

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

(296) $

(515) $

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

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

109

(7)

(282)

(2)

(91)

(62)

(194) $

(716) $

(155)

Financing Activities

Cash flows from financing activities totaled $3,489 million for the year ended December 31, 2022. The strength
of our balance sheet and access to diverse sources of capital allowed us to fund the growth of our business and
generate $3,486 million of net proceeds from commercial paper, corporate and non-recourse upfinancings, as well as
issue $115 million of fixed-rate green perpetual Class A preferred limited partnership units and $296 million of 10-
year corporate green bonds.

Distributions paid during the year ended December 31, 2022, 2021 and 2020 to Unitholders were $915 million,
$854 million and $769 million, respectively. We increased our distributions to $1.28 per LP unit in 2022 (2021:
$1.22 and 2020: $1.16), representing a 5% increase per LP unit, which took effect in the first quarter of 2022. The
distributions paid to preferred shareholders, preferred limited partners’ unitholders, perpetual subordinated
noteholders and participating non-controlling interests in operating subsidiaries totaled $1,372 million, $900 million
and $628 million, respectively. Our non-controlling interest contributed capital, net of capital repaid, of $1,788
million during the year ended December 31, 2022

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

Page 33

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.

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.

Investing Activities

Cash flows used in investing activities totaled $5,066 million for the year ended December 31, 2022. During the
year, we invested $2,452 million into growth, including, an over 800 MW portfolio of operating wind assets and a
development pipeline of over 22 GW, a 20 GW portfolio of utility solar and energy storage development platform in
the United States, a distributed generation developer with 500 MW of contracted operating and under construction
assets, and an 1.8 GW of development pipeline in the United States, a 1.7 GW of utility-scale solar development
portfolio in Germany and an 83% interest in a 437 MW distributed generation portfolio of high quality operating and
development assets in Chile. Our continued investment in our property, plant and equipment, including the
acquisitions of over 400 MW of operating and development wind portfolios in Brazil and China, as well as the
construction of 1,200 MW solar facility in Brazil and the repowering of an 845 MW wind farm in Oregon, totaled
$2,190 million for the year ended December 31, 2022.

Cash flows used in investing activities totaled $2,544 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 $382 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.

Page 34

SHARES, NOTES AND UNITS OUTSTANDING

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

2022

2021

Class A Preference Shares(1)

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

31,035,967

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

24,400,000

Preferred Units(2)(3)

38,000,000

44,885,496

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

3,977,260

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

194,487,939

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

172,218,098

172,203,342

LP units

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

275,084,265

274,837,890

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

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

262,177

12,308

230,304

16,071

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

275,358,750

275,084,265

Total LP units on a fully-exchanged basis(4)

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

642,064,787

641,775,546

(1)

(2)

(3)

(4)

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:
7,000,000 Series 7 Preferred Units are outstanding (convertible for Series 8 Preferred Units beginning on January 31, 2026); 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 and 6,000,000 Series 18 Preferred Units are outstanding.
During the year, Brookfield Renewable redeemed all of the 2,885,496 outstanding units of Series 5 Preferred Limited Partnership Units and
10,000,000 outstanding units of Series 11 Preferred Units.
The fully-exchanged amounts assume the exchange of all Redeemable/Exchangeable partnership units and BEPC exchangeable shares for
LP units.

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

Declared

Paid

2022

2021

2020

2022

2021

2020

26 $

25 $

26 $

29 $

12 $ — $

27 $

9 $ —

44 $

55 $

54 $

44 $

55 $

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

$ 1,275 $ 810 $

551 $ 1,275 $

810 $

551

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

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

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

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

100 $

85 $

70 $

100 $

85 $

250 $ 237 $

250 $

237 $

250

220 $ 209 $

116 $

220 $

207 $

100

355 $ 335 $

349 $

345 $

325 $

349

Page 35

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

Date of
Increase

February 2019

February 2020

February 2021

February 2022

February 2023

Amount of
Increase

% Increase

Annual
Distribution

Distribution
Effective Date

$0.05

$0.06

$0.07

$1.10

$1.16

$1.22

$1.28

$1.35

March 2019

March 2020

March 2021

March 2022

March 2023

CONTRACTUAL OBLIGATIONS

Please see Note 29 – 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 and December 2021, Brookfield BRP Holdings (Canada) Inc., a wholly-owned subsidiary of
Brookfield Renewable, issued $350 million and $260 million, respectively, of perpetual subordinated notes at a
fixed rate of 4.625% and 4.875%, respectively.

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

2022

— $
—
777
708

2021

— $
—
562
532

2020
—
—
436
410

(1)

Brookfield Renewable's total revenues for the year ended December 31, 2022 were $4,711 million (2021: $4,096 million and 2020:
$3,810 million).

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

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

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

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

December 31, 2022

December 31, 2021
1,145
2,688
7,710
7,710

820 $

2,253
7,862
7,877

(2)

(3)

(4)

(5)

Amount due from non-guarantor subsidiaries was $809 million (2021: $904 million).
Brookfield Renewable's total assets as at December 31, 2022 and December 31, 2021 were $64,111 million and $55,867 million.
Amount due from non-guarantor subsidiaries was $2,167 million (2021: $2,360 million).
Amount due to non-guarantor subsidiaries was $7,408 million (2021: $7,463 million).
Amount due to non-guarantor subsidiaries was $7,408 million (2021: $7,463 million).

Page 36

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, 2022, letters of credit issued amounted to $1,609 million (2021: $1,048 million).

Page 37

PART 6 – SELECTED QUARTERLY INFORMATION

HISTORICAL OPERATIONAL AND FINANCIAL INFORMATION

YEAR ENDED DECEMBER 31
(MILLIONS, EXCEPT AS NOTED)

Operational information:

2022

2021

2020

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

25,377

21,049

18,884

Total generation (GWh)

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

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

Proportionate generation (GWh)

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

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

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

63,656

63,036

30,126

28,669

58,913

56,629

29,852

27,150

57,457

52,782

27,998

26,052

.............................................................................. $ (295)

Additional financial information:
Net loss attributable to Unitholders
Basic 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)

$ (304)

(0.69)

1,876

934

1.45

1.22

(0.61)

1,614

807

1.32

1.16

(0.60)

2,002

1,005

1.56

1.28

YEAR ENDED DECEMBER 31
2022
(MILLIONS, EXCEPT AS NOTED)
Property, plant and equipment, at fair value ..................................................................... $ 54,283

2021
$ 49,432

2020
$ 44,590

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)

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

1,392

64,111

24,850

6,507

6,468
14,755
59

2,892

2,561

571

592

760

4,096

64,111

39 %

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 %

971

49,722

18,082

5,515

4,358
11,100
56

2,721

2,408

609

—

1,028

3,845

49,722

27 %

(1)

(2)

(3)

(4)

For the year ended December 31, 2022, average LP units totaled 275.2 million (2021: 274.9 million and 2020: 271.1 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, 2022 totaled 645.9 million (2021: 645.6 million and 2020: 609.5 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:

2022

2021

(MILLIONS, EXCEPT AS NOTED)

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

17,692

15,097

16,280

15,097

14,946

13,776

16,092

14,099

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

16,450

14,906

16,488

15,196

14,585

13,533

14,683

13,828

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

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

7,655

6,826

6,905

6,440

8,152

7,978

7,414

7,425

7,197

6,637

6,697

6,125

8,356

7,013

7,602

7,375

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

$ 1,196 $ 1,105 $ 1,274 $ 1,136 $ 1,091 $

966 $

1,019 $ 1,020

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

Basic loss per LP unit .........................................................................................................................

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

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

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

(82)

(0.16)

225

0.35

0.32

(136)

(0.25)

243

0.38

0.32

(0.03)

294

0.46

0.32

(78)

(0.16)

243

0.38

0.32

(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

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

2022

2021

2022

2021

2022

2021

(MILLIONS)

Adjusted
EBITDA(2)
2022

2021

Funds From
Operations

2022

2021

Hydroelectric

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

2,427

2,559

2,910

2,913 $

219 $

262 $

131 $

164 $

87 $

123

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

960

810

1,020

1,007

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

1,222

1,100

1,064

1,004

4,609

4,469

4,994

4,924

Wind

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

1,005

1,044

1,300

1,195

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

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

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

234

141

159

262

128

121

262

166

201

251

168

113

342

364

229

232

Utility-scale solar ...........................................................................
Distributed energy & sustainable solutions(1)
Corporate .......................................................................................

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

418

260

—

356

257

—

551

181

—

381

165

—

(7)

1,539

1,555

1,929

1,727

143

131

124

100

158

181

(95)

(111)

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

6,826

6,637

7,655

7,197 $

645 $

617 $

461 $

431 $

225 $

214

(1)

Actual generation includes 123 GWh (2021: 90 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, 2022, Funds From Operations were $225 million versus $214 million in the prior year. Funds From Operations
increased $11 million primarily due to contributions from growth, strong asset availability, and favorable hydroelectric generation, particularly at our assets in the
Brazil and Colombia.

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, 2022:

(MILLIONS)

Attributable to Unitholders

Hydroelectric

Wind

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Utility
-scale
solar

Distributed
energy &
sustainable
solutions

Corporate

Total

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

$ 27

(1) $ 14

$ (90) $

(79) $

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

105

(37)

(18)

—

(83)

131

(9)

(34)

—

(177)

(5)

(13)

—

(49)

(1)

(4)

(1)

—

(26)

—

(30)

(20)

(36)

(59)

(6)

(39)

—

(60)

(24)

—

408

(114)

168

351

(523)

461

(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, 2021:

(MILLIONS)

Hydroelectric

Wind

North
America

Brazil

Colombia

North
America

Europe

Brazil

Asia

Utility-
scale
solar

Distributed
energy &
sustainable
solutions

Corporate

Total

Attributable to Unitholders

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

$ 13

129

(97) $

$ (11) $ 21

(30) $

(70) $

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)

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

(14)

—

(4)

(5)

—

(49)

(6)

—

(22)

(134)

111

(29)

—

(1)

(41)

(7)

—

(2)

(17)

—

(23)

—

(7)

—

(22)

(12)

(17)

(48)

(33)

—

(31)

(3)

—

381

(97)

120

255

(17)

(362)

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

164

$ 26

$ 7

(7) $

431

(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 is reconciled to Funds From Operations for the three months ended December 31:

(MILLIONS)

Net income ........................................................................................................................ $

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

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

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

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

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

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

......

2022

60 $

408

(114)

168

(322)

225 $

2021

381

(97)

120

(277)

214

(2)

Refer to Note 10 Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash
operating expenses necessary for business operations. Other balance also includes derivative and other revaluations and settlements, gains
or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield
Renewable’s economic share of foreign currency hedges and realized disposition gains and losses on assets that we developed and/or did
not intend to hold over the long-term that are included in Funds From Operations.
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 three months ended
December 31:

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

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

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

2022
(0.16) $
0.34
0.10
(0.12)
0.19
0.35 $

2021
(0.12)
0.33
0.10
(0.13)
0.15
0.33

(1)

(2)

Average LP units outstanding for the three months ended December 31, 2022 were 275.3 million (2021: 275.0 million).
Average Units for the three months ended December 31, 2022 were 646.0 million (2021: 645.7 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 6 – 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, 2022, we had, on a
proportionate basis, approximately 92% of 2023
generation (2021: 90% of 2022 generation)
contracted under short-term power purchase
agreements and financial contracts, excluding
Brazil and Colombia. In Brazil and Colombia, on
a proportionate basis, we had approximately
90% and 67% of 2023 (2021: 90% and 77%,
respectively) generation under short-term power
purchase agreements, respectively. 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 and on floating rate debts

- Our proportionate floating rate exposure
represents 7% 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 20 –
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, 2022, 89% (2021: 82%) of
Brookfield Renewable’s trade receivables were
current
'- As at December 31, 2022, available liquidity
was $3.7 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

Page 46

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 Our 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 renewable power facilities are correlated to the amount of electricity produced,
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 variable 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, and to 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 energy markets are 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 energy 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 the conflict between
Ukraine and Russia and the disruptive impact that related sanctions and other related events might have on European
energy 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, energy conservation and demand-side management.
Correspondingly, from a supply perspective, there are uncertainties associated with long term plans for the
construction of baseload generation capacity, the timing of generating plant retirements (e.g., coal) 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 uncertainty in power markets generally, including non-

Page 47

renewable power markets, 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 may appear 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 will not be renewed or that, where concessions are required to build out our
development pipeline, they may not be granted or awarded.

We hold concessions and we have rights to operate our facilities which generally include, in respect of our
hydroelectric projects, 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 will be renewed. However, if we are not granted
renewal rights, or if our concessions 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. In addition, concessions may be required to advance projects in our development pipeline.
There can be no assurance that we will be granted any concession that we require with respect to any given project
or on what timelines or conditions.

The amount of uncontracted generation in our portfolio may increase.

In 2022 and 2021, approximately 87% of our renewable power generation (on a proportionate basis) was
contracted in each of those calendar years under long-term, fixed price contracts with creditworthy counterparties.
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 are driven by factors outside of our control and may fluctuate substantially over relatively short periods of
time and could have an adverse effect on our business, financial condition, results of operations and cash flows.

Our ability to deliver electricity to our various counterparties and buildout our renewable power 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 connect renewable
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.

Page 48

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.

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, severe failures could also result in harm to third parties or the environment, either of
which could expose us to significant liability. A dam failure at a generating station or dam operated by a third party
that is upstream of one of our facilities could result in a loss of revenue due to short term disruption to expected
water flows. Even if the failure is not at a upstream facility, it 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.###

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

Our energy marketing business involves the establishment of 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 energy marketing strategies also depend on counterparties fulfilling their obligations to us and on the
quality of the collateral that they post. Our 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

Page 49

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.

In the course of our business, we enter into a wide range of contacts including but not limited to PPAs,
engineering, procurement and construction contracts, long term service agreements, contracts to purchase equipment
and joint venture agreements. If our counterparties do not perform as expected under these contracts, it may have an
adverse impact on our business and results of operations. For example, if 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
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, the unplanned shutdown of our operating facilities, 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 and in
Brazil. 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 and fund growth initiatives is subject to various risks relating to the state of
capital markets and to our ability to complete all or some of our capital recycling initiatives.

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, including those caused by rising interest rates, 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 LATAM Holdco, NA Holdco, Euro Holdco and Investco and any other direct wholly-owned
subsidiary of BRELP created or acquired after the date of the Amended and Restated Limited Partnership
Agreement of BREL (collectively, “Holding Entities”) have corporate debt, certain of our subsidiaries of the

Page 50

Holding Entities (“Operating Entities”) have limited recourse project level debt and certain of our portfolio
companies, like Isagen, 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 level of future interest rates, 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, 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 seek to recycle capital to fund acquisitions and the development and construction of new projects by selling
certain assets. However, we may not be able to complete all or some of our capital recycling initiatives on our
desired timelines, at favorable prices or at all. For example, adverse market conditions or other factors beyond our
control might mean that we are unable to complete an asset sale at a price that is aligned with our business plan
resulting in a decision to transact at a lower price or to abandon the sales process altogether. If our capital recycling
initiatives do not proceed as planned this could reduce the liquidity available to fund future growth, which could in
turn limit our ability to grow our distributions in line with our stated goals and the market value of our Units could
decline.

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

Brookfield Renewable and its subsidiaries are 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 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 and/or higher interest
rates, 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.

Page 51

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.

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. In particular, many jurisdictions in which we seek to invest impose government consent
requirements on investments by foreign persons. Consents and approvals may not be obtained, may be obtained
subject to conditions which adversely affect anticipated returns, and/or may be delayed and delay or ultimately
preclude the completion of acquisitions, dispositions and other transactions. Government policies and attitudes in
relation to foreign investment may change, making it more difficult to complete acquisitions, dispositions and other
transactions in such jurisdictions. Furthermore, interested stakeholders could take legal steps to prevent transactions
from being completed. We may also be unable to secure financing on acceptable terms (or at all) for our proposed
acquisitions.

For example, in October 2022, Brookfield Renewable, together with institutional partners, agreed to form a
strategic partnership with Cameco to acquire 100% of Westinghouse for an aggregate equity investment of
approximately $4.5 billion (up to $750 million net to Brookfield Renewable). Although we expect closing
conditions to be satisfied and regulatory approvals received on the terms contemplated, we can provide no assurance
that the proposed acquisition will be completed on the anticipated timeframe and terms contemplated, or at all.

If all or some of our acquisitions and other transactions are unable to be completed on the terms agreed, we
may need to modify or delay or, in some cases, abandon these transactions altogether (which may result in the
payment of significant break-up fees). If we are unable to achieve the expected benefits of transactions, the market
value of our units may decline.

Our operations in the future may be different from our current business, including through future sustainable
solutions 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, and we have announced but not closed an investment in a nuclear services business, Westinghouse. Our
development pipeline includes renewable power generation projects as well as CCS, RNG and recycling projects.
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 Provider 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.

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

Page 52

regulatory disputes or litigation related to the new enterprise; 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.

Not all of the projects in our development pipeline will achieve commercial operation.

We have a large development pipeline that includes projects at different levels of advancement, from early stage
projects which may not yet have the permits, licenses or other government approvals that are required, to later stage
projects that we believe have a path to construction readiness, to under-construction projects that are in the process
of being built. Our development pipeline also includes projects that we don’t own 100% of or, in certain
circumstances, control. While the likelihood of a project being built increases when it receives, for example,
required permits, licenses or other government approvals, when it signs construction and equipment supply
agreements, and when it signs an offtake agreement, there can be no assurance that any one or a specific percentage
of the projects in our development pipeline will be built or on what timeline.

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 and some of these factors are outside of our control. Failure to
achieve any one of these elements may prevent the development and construction of a project, or otherwise cause
such project to become obligated to make delay or termination payments or become obligated for other damages
under contracts, experience the loss of tax credits or tax incentives, or experience diminished returns. When this
occurs we may lose all of our investment in development expenditures and may ultimately be required to write-off
project development assets and costs.

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
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,

Page 53

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.

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.

We may 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, 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
Provider.

A subsidiary of Brookfield Corporation 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 Corporation.
As BEP’s only substantial assets are the limited partnership interests and preferred limited partnership interests that
it holds in BRELP, except for 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

Page 54

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
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.

Page 55

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, deferred income tax liabilities,
decommissioning liabilities and impairment of goodwill. 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 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 ended
December 31, 2022. 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 for renewable sources, anticipated long-term average generation,
estimated operating and capital expenditures, future inflation rates and discount rates, as described in Note 13 –
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(s)(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

Page 56

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 6 – 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.

(v) Impairment of goodwill

The impairment assessment of goodwill requires estimation of the value-in-use or fair value less costs of disposal of
the CGUs or groups of CGUs to which goodwill has been allocated.

Brookfield Renewable uses the following critical assumptions and estimates for the value-in-use method: the
circumstances that gave rise to the goodwill, timing and amount of future cash flows expected from the CGUs;
discount rates; terminal capitalization rates; terminal valuation dates and future leverage assumptions.

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

Page 57

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.

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 2026 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(l) –
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.

For Commodity derivatives that have unobservable value, Brookfield Renewable applies judgements
surrounding the inputs used within the valuation model. The valuation model incorporates various inputs and
assumptions including forward power prices, contractual prices, contractual volumes and discount rates. Forward
power prices are based on broker quotes from independent sources, contractual prices are stipulated within each
individual agreement, contractual volumes are either specified within the agreement or determined using future
generation of the power generating assets and discount rates are determined by considering the current interest rates,
average market cost of capital as well as the price risk and geographical location of the power generating assets as
judged by management.

Page 58

(v)

Deferred income taxes

The accounting policy relating to Brookfield Renewable’s income taxes is described in Note 1(n) – 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 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 has
completed an assessment and implemented its transition plan that addresses the impact and effect changes as a result
of amendments to the recognition principle of IFRS 3. The adoption did not have a significant impact on Brookfield
Renewable’s financial reporting.

IFRS Interpretations Committee Agenda Decision - Demand Deposits with Restriction on Use Arising from a
Contract with a Third Party (IAS 7 Statement of Cash Flows)

In April 2022, the IFRS Interpretations Committee (“IFRS IC”) concluded that restrictions on the use of a demand
deposit arising from a contract with a third party do not result in the deposit no longer being cash, unless those
restrictions change the nature of the deposit in a way that it would no longer meet the definition of cash in IAS 7
Statement of Cash Flows. In the fact pattern described in the request, the contractual restrictions on the use of the
amounts held in the demand deposit did not change the nature of the deposit — the entity can access those amounts
on demand. Therefore, the entity should include the demand deposit as a component of “cash and cash equivalents”
in its statement of financial position and in its statement of cash flows. Brookfield Renewable has completed the
assessment and implemented its transition plan that addresses the impact of this IFRS IC agenda decision. The effect
of the IFRIC IC agenda decision resulted in an increase to Cash and cash equivalents and a corresponding decrease
to Restricted cash of $268 million (2021: $136 million), on the consolidated statements of financial position. The
impact on the consolidated statements of cash flows is an increase to Cash and cash equivalents of $268 million
(2021: $136 million and 2020: $176 million) and an increase to cash used in investing activities in the prior year
(2021: $40 million and 2020: $44 million).

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, 2024. Brookfield Renewable is currently
assessing the impact of these amendments.

There are currently no other future changes to IFRS with potential impact on Brookfield Renewable.

Page 59

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 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. Distributed energy & sustainable solutions
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. Utility-scale 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

Page 60

less than their assured energy, up to the total generation within the pool. Periodically, low precipitation across the
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

Brookfield Renewable has entered into voting agreements with Brookfield, whereby Brookfield Renewable
gained control or have significant influence over the entities that own certain renewable power and sustainable
solution investments. 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.

For entities previously controlled by Brookfield Corporation, the voting agreements entered into do not
represent business combinations in accordance with IFRS 3, as all combining businesses are ultimately controlled by
Brookfield Corporation 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(s)(ii) – Critical judgments in applying accounting policies – Common control transactions in
our December 31, 2022 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) utility-scale solar, 4) distributed energy &
sustainable solutions (distributed generation, pumped storage, renewable natural gas, carbon capture and storage,
recycling, and 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.

The reporting to the CODM was revised during the year to incorporate the distributed energy & sustainable
solutions business of Brookfield Renewable. The distributed energy & sustainable solutions business corresponds to
a portfolio of multi-technology assets and investments that support the broader strategy of decarbonization of
electricity grids around the world through distributed generation and offering of other sustainable services. The
financial information of operating segments in the prior period has been restated to present the corresponding results
of the distributed energy & sustainable solutions.

We report our results in accordance with these segments and present prior period segmented information in a

consistent manner. See Note 7 – 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

Page 61

– Financial Performance Review on Proportionate Information – Reconciliation of Non-IFRS Measures” and
“PART 6 – Selected Annual and Quarterly Information – Reconciliation of Non-IFRS measures”.

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.

Page 62

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
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.

Page 63

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
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.

Page 64

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, but are not limited to, 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 portfolio, technology
diversification, acquisition opportunities, expected completion of acquisitions and dispositions, 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 and future
dividends and distributions made to holders of LP units and BEPC's exchangeable shares. 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 achievements 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: general economic conditions and risks relating to the economy, including unfavorable changes in interest rates,
foreign exchange rates, inflation and volatility in the financial markets; changes to resource availability, as a result of climate change or
otherwise, at any of our facilities; supply, demand, volatility and marketing 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 or adverse changes to the MRE balancing
pool in Brazil; availability and access to interconnection facilities and transmission systems; our ability to comply with, secure, replace or renew
concessions, licenses, permits and other governmental approvals needed for our operating and development projects; our real property rights for
our 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 existing facilities and of developing new projects; equipment failures and procurement challenges; dam failures and the costs
and potential liabilities associated with such failures; uninsurable losses and higher insurance premiums; changes in regulatory, political,
economic and social conditions in the jurisdictions in which we operate; force majeure events; health, safety, security and environmental risks;
energy marketing risks and our ability to manage commodity and financial risk; 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; advances in technology that impair
or eliminate the competitive advantage of our projects; increases in water rental costs (or similar fees) or changes to the regulation of water
supply; labor disruptions and economically unfavorable collective bargaining agreements; fraud, bribery, corruption, other illegal acts or
inadequate or failed internal processes or systems; the COVID-19 pandemic, as well as the direct and indirect impacts that a pandemic may
have, or any other pandemic; our inability to finance our operations and fund growth due to the status of the capital markets or our ability
complete capital recycling initiatives; operating and financial restrictions imposed on us by our loan, debt and security agreements; changes to
our credit ratings; the incurrence of debt at multiple levels within our organizational structure; adverse changes in currency exchange rates and
our inability to effectively manage foreign currency exposure through our hedging strategy or otherwise; our inability to identify sufficient
investment opportunities and complete transactions; the growth of our portfolio and our inability to realize the expected benefits of our
transactions or acquisitions; changes to our current business, including through future sustainable solutions investments; our inability to develop
the projects in our development pipeline; 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’s election not to
source acquisition opportunities for us and our lack of access to all renewable power acquisitions that Brookfield identifies, including by reason
of conflicts of interest; we do not have control over all of our operations or investments, including certain investments made through joint
ventures, partnerships, consortiums or structured arrangements; political instability or changes in government policy negatively impacting our
business or assets; some of our acquisitions may be of distressed companies, which may subject us to increased risks; 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; 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 or issuances of our securities will result in dilution of existing holders and even the perception of such sales or issuances taking place could
depress the trading price of the BEP units or BEPC exchangeable shares; our dependence on Brookfield and Brookfield’s significant influence
over us; the departure of some or all of Brookfield’s key professionals; our lack of independent means of generating revenue; changes in how
Brookfield elects to hold its ownership interests in Brookfield Renewable; Brookfield acting in a way that is not in our best interests or our
unitholders; being deemed an “investment company” under the Investment Company Act; the effectiveness of our internal controls over financial
reporting; failure of our systems technology; any changes in the market price of the BEP 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”.

Page 65

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 date subsequent to the date of
this report. 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 7 – 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 Accounting Firm 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, 2023

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, 2022 and 2021, 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, 2022, 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 the Partnership at December 31, 2022 and 2021, and its financial performance and its cash
flows for each of the three years in the period ended December 31, 2022, 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”), the Partnership’s internal control over financial reporting as of December 31, 2022, 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, 2023 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 the Partnership’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 the
Partnership 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, 2022, property, plant and equipment on the
consolidated statement of financial position totaled $54,283 million. Revaluations of
property, plant and equipment recognized in the consolidated statement of
comprehensive income totaled a gain of $3,745 million and a loss in the
consolidated statement of income (loss) of ($40) million for 2022. As discussed in
Notes 1(g), 1(r)(i) and 1(s)(iii) and 13 – Property, Plant and Equipment, at Fair
the consolidated financial statements, significant estimation and
Value
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, whether the asset is contracted or uncontracted
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 corroboration with third party engineering reports.
We also 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 the 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 utility-scale acquisitions
During 2022, the Partnership completed the acquisitions of a U.S. Solar Portfolio
and a U.S. Wind, Solar and Storage Portfolio, for total consideration of $760 million
and $1,092 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, tax equity
liabilities and commodity derivatives acquired. The significant assumptions related
to these estimates include but are not limited to future electricity prices, production
tax credits, generation volumes, discount rates, terminal value and operating and
capital expenditures. 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, tax equity liabilities and commodity derivatives
acquired. We tested controls over management’s review of the power generating
asset, tax equity and commodity derivatives valuation models, including the
controls over the review and approval of all significant assumptions.

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 available engineering reports and
benchmark capacity factors, we also considered industry benchmarks for losses.
Further, 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. For production tax credit rates,
we assessed management’s future projections by comparing against historical
escalations. We involved our valuation specialists to assist in evaluating the
valuation methodologies and the significant assumptions, including discount rates
and terminal values, used in the Partnership’s models, which included consideration
of benchmark interest rates, geographic location, contracted or uncontracted assets
and type of technology as well as performing sensitivity analysis. Further, we
assessed the estimated capital expenditures by comparing forecasts to results of
related industry studies, corroborating against recently signed construction contracts
and component supply agreements. For operating expenditures, we compared
forecasts against industry benchmarks. We also tested the computational accuracy
of the fair value model.

Page 70

Description of the Matter

How We Addressed the
Matter in Our Audit

Significant distributed generation acquisition
During 2022, the Partnership completed the acquisition of a U.S. distributed
generation portfolio for total consideration of $614 million. As described in Notes
1(n) and 3 – Acquisitions to the consolidated financial statements, this business
combination is accounted for using the acquisition method, and the results of
operations have been included in the consolidated financial statements since the
corresponding date of acquisition.

Auditing the above noted acquisition is complex given that significant estimation is
required in determining the fair value of the distributed generation assets acquired.
The significant assumptions include future electricity prices, discount rates, future
generation volumes and operating and capital expenditures. 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 the distributed generation 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 distributed generation assets, our audit procedures
included, among others, assessing the significant assumptions described above for a
sample of assets and testing the completeness and accuracy of the underlying data.
For example, we evaluated the estimated generation volumes for a sample of
distributed generation assets by comparing them to historical generation volumes for
operational assets and to generation assumptions used for other distributed
generation assets within the Partnership’s portfolio in the region for developmental
assets. We also compared management’s estimated generation volumes to industry
benchmarks. Further, for our sample we compared the future electricity pricing and
solar renewable energy credits (SREC) revenue to executed agreements. We
assessed the estimated capital expenditures by comparing forecasts to results of
related industry studies, corroborating against recently signed construction contracts
and component supply agreements. For operating expenditures, we compared
forecasts against industry benchmarks. We also tested the computational accuracy
of the fair value model. 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 as well as performing sensitivity analysis.

/s/ Ernst & Young LLP

We have served as Brookfield Renewable’s auditor since 2011.

Toronto, Canada

February 28, 2023

Page 71

INTERNAL CONTROL OVER FINANCIAL REPORTING

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated
the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period December 31, 2022.
Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of
December 31, 2022, our disclosure controls and procedures are designed at a reasonable assurance level and are
effective to provide reasonable assurance that material information we are required to disclose in reports that we file
or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. While disclosure controls and procedures and
internal controls over financial reporting were adequate and effective we continue to implement certain measures to
strengthen control processes and procedures.

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, 2022, 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, 2022, 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 2022, which include a 20 GW portfolio of utility-scale solar and energy storage development assets in
the United States, a 1.7 GW portfolio of utility-scale solar development assets in Germany, a 437 MW distributed
generation portfolio of operating and development assets in Chile, an integrated distributed generation developer
with approximately 500 MW of contracted operating and under construction assets, and a 1.8 GW of development
pipeline in the United States, and a renewable developer with a portfolio of over 800 MW of operating wind assets
and pipeline of over 22 GW in the United States, whose total assets and net assets on a combined basis constitute
approximately 5% and 7%, respectively, of the consolidated financial statement amounts as of December 31, 2022
and 1% of revenues for the year then ended.

Brookfield Renewable’s internal control over financial reporting as of December 31, 2022, 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, 2022. 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, 2022.

Connor Teskey
Chief Executive Officer

February 28, 2023

Wyatt Hartley
Chief Financial Officer

Page 72

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” or the “Partnership") internal
control over financial reporting as of December 31, 2022, 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, the Partnership maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2022, 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 20 GW portfolio of utility-scale solar and energy storage development assets in
the United States, the 1.7 GW portfolio of utility-scale solar development assets in Germany, the 437 MW
distributed generation portfolio of operating and developmental assets in Chile, the integrated distributed generation
developer with approximately 500 MW of contracted operating and under construction assets, and the 1.8 GW of
development pipeline in the United States, and a renewable developer with a portfolio of over 800 MW of operating
wind assets and pipeline of over 22 GW in the United States. The aforementioned acquisitions are included in the
2022 consolidated financial statements of the Partnership and constituted approximately 5% and 7% of total and net
assets, respectively on a combined basis as of December 31, 2022 and 1% of revenues for the year then ended. Our
audit of internal control over financial reporting of the Partnership also did not include an evaluation of the internal
control over financial reporting of the aforementioned acquisitions.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (“PCAOB”), the 2022 consolidated financial statements of the Partnership and our report dated February 28,
2023 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 the Partnership’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 the Partnership 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

Page 73

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.

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.

/s/ Ernst & Young LLP

Toronto, Canada

February 28, 2023

Page 74

BROOKFIELD RENEWABLE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS AT DECEMBER 31
(MILLIONS)
Assets
Current assets

Notes

2022

2021

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

22
23
24
6
30
5

6
21
13
14
19
12
25

26
6
30
15
15
29
5

Financial instrument liabilities .............................................................................................................
Corporate borrowings ..........................................................................................................................
Non-recourse borrowings ....................................................................................................................
Deferred income tax liabilities .............................................................................................................
Provisions ............................................................................................................................................ 27, 29
Other long-term liabilities ....................................................................................................................
Equity
Non-controlling interests

6
15
15
12

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

16
16

16
16
16
16
17
18

998 $
139
1,860
125
123
938
4,183
1,500
1,392
54,283
209
1,526
176
842
64,111 $

1,086 $
559
588
249
2,027
83
351
4,943
1,670
2,299
20,275
6,507
600
1,531

14,755
59

2,892
2,561
571
592
760
4,096

Total Equity ........................................................................................................................................
Total Liabilities and Equity ..............................................................................................................

$
$

26,286 $
64,111 $

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

900
153
1,683
60
35
58
2,889
262
1,107
49,432
218
966
197
796
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

Page 75

BROOKFIELD RENEWABLE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

YEAR ENDED DECEMBER 31
(MILLIONS, EXCEPT AS NOTED)

Notes

2022

2021

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

4,711 $

4,096 $

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

136

(1,434)

(243)

(1,224)

(128)

(1,583)

(195)

(148)

150

304

(288)

(981)

(32)

(1,501)

(307)

(43)

(14)

(1,365)

(1,274)

2020

3,810

128

(235)

(976)

127

(1,367)

(432)

(66)

213

147

(45)

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

138 $

(66) $

Net (loss) income attributable to:

Non-controlling interests

Participating non-controlling interests – in operating subsidiaries .......

334 $

209 $

180

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 per LP unit ...........................................................
(1)

Direct operating costs exclude depreciation expense disclosed below.

The accompanying notes are an integral part of these consolidated financial statements.

(117)

(104)

(135)

(119)

(166)

(191)

138 $

(66) $

(0.60) $

(0.69) $

(133)

(49)

—

(184)

(45)

(0.61)

Page 76

BROOKFIELD RENEWABLE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME

YEAR ENDED DECEMBER 31
(MILLIONS)

Notes

2022

2021

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

138 $

(66) $

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

6
6

3,745

(852)

(11)

(35)

2,868

4,573

(1,170)

184

3,620

175
63

148

(87)

(30)

(378)

2,490

(64)
64

(2)

(36)

(854)

2,766

(647)

(859)

(840)

2020

(45)

4,112

(1)

(934)

(1)

3,188

(27)
(35)

(39)

(914)

2,274

2,229

Comprehensive income ...........................................................................

2,628 $

2,700 $

Comprehensive income attributable to:

Non-controlling interests

Participating non-controlling interests – in operating subsidiaries ......
General partnership interest in a holding subsidiary held by

1,582 $

1,048 $

1,292

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

100

270

238

(16)

381

444

394

628

The accompanying notes are an integral part of these consolidated financial statements.

2,628 $

2,700 $

280

103

—

393

2,229

Page 77

BROOKFIELD RENEWABLE PARTNERS L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Accumulated other comprehensive income

Non-controlling interests

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

(48) $

4,092

881

613

592 $

2,562

12,303

YEAR ENDED DECEMBER 31
(MILLIONS)

Limited
partners’
equity

Foreign
currency
translation

Revaluation
surplus

Balance, as at December 31, 2021 .... $

(1,516) $

(842) $

6,494

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

(166)

Other comprehensive income (loss) ..

Preferred LP Units issued .................

Capital contributions (Note 16) .........

Redemption of Preferred LP Units

(Note 17) .......................................

Disposal (Note 4) ..............................

Distributions or dividends declared ..

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

Other ..................................................

Change in year ..................................

—

(355)

116

(382)

—

(1)

—

(2)

(3)

—

480

—

(14)

—

(143)

323

Balance, as at December 31, 2022 .... $

(1,898) $

(845) $

6,817

—

(2)

—

(3)

—

(3)

(166)

547

—

(355)

(31)

—

115

—

(236)

—

(44)

—

(121)

(42)

—

(26)

—

(42)

—

(104)

342

—

334

1,248

—

2,131

—

(75)

—

(19)

(1)

—

2,452

4,096

760

571

592 $

2,561

14,755

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

Capital contributions .........................

Return of capital ................................

Redemption of Preferred LP Units ....

Disposals ...........................................

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) $

The accompanying notes are an integral part of these consolidated financial statements.

—

(191)

819

—

(335)

(55)

247

—

(147)

—

(55)

—

(147)

—

592

—

(26) $

(12)

—

592

(119)

513

—

(209)

—

(31)

154

209

839

—

1,121

—

(395)

(810)

—

239

1,203

—

2,894

$ 23,996

(117)

387

—

138

2,490

115

2,131

(236)

(75)

—

(85)

—

(1)

—

(22)

(2)

2,290

2,892

$ 26,286

2,721

$ 21,767

(135)

579

—

(66)

2,766

592

1,121

—

(147)

(395)

(237)

(1,769)

—

(34)

173

118

2,229

(29)

(220)

(1,275)

(100)

(250)

(2,299)

4,092

881

613

592 $

2,562

12,303

2,894

$ 23,996

Page 78

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

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, 2019 ..................... $ (1,114) $

(700) $

6,422

(9) $ (32) $

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

(184)

Other comprehensive income (loss) ..................

Preferred LP Units issued ..................................

LP units purchased for cancellation ...................

Capital contributions ..........................................

Return of Capital ................................................

Disposal .............................................................

—

Distributions or dividends declared ...................

(349)

Distribution reinvestment plan ...........................
Special distribution/TerraForm

Power acquisition .........................................

Other ..................................................................

Change in year ...................................................

634

126

—

(249)

—

280

(51)

(20)

—

827

—

(17)

—

(1,465)

(172)

(827)

—

(6)

—

(2)

(7)

—

(13)

(1)

(9)

4,579

833

597

—

11,086

(184)

577

—

(349)

(561)

(223)

(734)

—

195

—

(54)

(25)

—

195

—

(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

—

(250)

—

(462)

(164)

(596)

(45)

2,274

195

—

520

(147)

(15)

(1,415)

—

(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 79

BROOKFIELD RENEWABLE PARTNERS L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Notes

2022

2021

2020

138 $

(66) $

(45)

YEAR ENDED DECEMBER 31
(MILLIONS)

Operating activities
Net income (loss) ..................................................................................................
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 ...........................................................................
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 ...............................................................

Capital contributions from participating non-controlling interests – in

operating subsidiaries .......................................................................................

Capital repaid to participating non-controlling interests – in operating

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

13
6
21
12

15
15
15
15
15
15

Issuance of equity instruments and related costs .................................................. 16,17,18

Redemption and repurchase of equity instruments

17,18

Distributions paid:

To participating non-controlling interests – in operating subsidiaries,
preferred shareholders, preferred limited partners unitholders, and
perpetual subordinate notes .........................................................................

16,17

To unitholders of Brookfield Renewable or BRELP and shareholders of

Brookfield Renewable Corporation .............................................................

16, 18

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
21
13

Foreign exchange (loss) gain on cash ...................................................................
Cash and cash equivalents 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.

1,583
253
(96)
(150)
107
89
1,924
(19)
(194)
1,711

296
—
—
249
9,547
(6,310)

1,501
122
(22)
(29)
(136)
78
1,448
2
(716)
734

—
—
—
(3)
6,877
(3,678)

1,863

1,200

(75)

115

(252)

(1,372)

(915)

1,470

(1,127)
3,489

(2,452)
(236)
(2,190)
140
(492)
70
94
(5,066)
(28)
106
(8)
900
998 $

1,071 $
37 $
112 $

(511)

592

(153)

(900)

(854)

1,188

(1,615)
2,143

(1,426)
(54)
(1,967)
827
(58)
220
(86)
(2,544)
(35)
298
(5)
607
900 $

870 $
45 $
71 $

1,367
(134)
(27)
(213)
388
56
1,392
59
(155)
1,296

570
(304)
(299)
3
3,205
(3,408)

514

(147)

151

—

(628)

(769)

320

—
(792)

(105)
(23)
(447)
269
(445)
257
112
(382)
14
136
(12)
483
607

872
28
70

Page 80

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 and sustainable solution assets primarily in North
America, South America, Europe and Asia.

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 Corporation
(“Brookfield Corporation”). Brookfield Corporation and
its
subsidiaries, other than Brookfield Renewable, and unless the
context otherwise requires, includes Brookfield Asset Management
Ltd (“Brookfield Asset Management”), are also individually and
collectively referred
these financial
to as “Brookfield”
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
Stock Exchange. Brookfield Renewable's Class A Series 7, Series
13, Series 15, and Series 18 preferred limited partners’ equity are
traded under the symbols “BEP.PR.E”, “BEP.PR.G”, “BEP.PR.I”,
“BEP.PR.K”, “BEP.PR.M”, “BEP.PR.O”, and “BEP.PR.R”,
the Toronto Stock Exchange. Brookfield
respectively, on
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.

Notes to consolidated financial statements
Basis of preparation and significant
accounting policies

Page
81

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
Assets held for sale
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

97
98
103
104
104
115
121
122
122
122
123
125
128
129
134
140
140
142
142
144
144
144
145
145
146
146
146
147
149
157
158

Page 81

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, 2022, 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, 2023.

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

References to $, C$, €, £, R$, COP, INR, MYR and CNY are to United States (“U.S.”) dollars, Canadian dollars,
Euros, British pound, Brazilian reais, Colombian pesos, Indian rupees, Malaysian ringgit 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 30 – Related party transactions for
further information.

For entities previously controlled by Brookfield Corporation, 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 Corporation both before and after the transactions were completed.
Brookfield Renewable accounts for these transactions involving entities under common control in a manner similar

Page 82

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(s)(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 (“OCI”), 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
and construction 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

Page 83

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. 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(o) – 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, 2022 is 35 years (2021:
31 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.

Page 84

(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

Page 85

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) Goodwill

Goodwill represents the excess of the price paid for the acquisition of an entity over the fair value of the net tangible
and intangible assets and liabilities acquired. Goodwill is allocated to the cash generating unit or units (“CGU”) to
which it relates. Brookfield Renewable identifies CGU as identifiable groups of assets that are largely independent
of the cash inflows from other assets or groups of assets.

Goodwill is evaluated for impairment annually or more often if events or circumstances indicate there may be
impairment. Impairment is determined for goodwill by assessing if the carrying value of a CGU, including the
allocated goodwill, exceeds its recoverable amount determined as the greater of the estimated fair value less costs of
disposal or the value in use. Impairment losses recognized in respect of a CGU are first allocated to the carrying
value of goodwill and any excess is allocated to the carrying amount of assets in the CGU. Any goodwill impairment
is charged to profit or loss in the period in which the impairment is identified. Impairment losses on goodwill are not
subsequently reversed. In the year of a business acquisition, the recoverability of the acquired goodwill is assessed
by revisiting the assumptions of the related underwriting model.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gain or loss
on disposal of the operation.

(j) Asset impairment

At each statement of financial position date, Brookfield Renewable assesses whether for non-financial assets there is
any indication that such assets are impaired. This assessment includes a review of internal and external factors which
includes, but is not limited to, changes in the technological, political, economic or legal environment in which the
entity operates in, structural changes in the industry, changes in the level of demand, physical damage and
obsolescence due to technological changes. An impairment is recognized if the recoverable amount, determined as
the higher of the estimated fair value less costs of disposal or the discounted future cash flows generated from use
and eventual disposal from an asset or CGU is less than its carrying value.

For non-financial 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 CGU, 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. Where an impairment loss subsequently reverses, the carrying
amount of the asset or CGU is increased to the lesser of the revised estimate of recoverable amount and the carrying
amount that would have been recorded had no impairment loss been recognized previously.

(k) 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.

Page 86

(l) 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.

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:

Page 87

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 utility-scale 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.

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.

Page 88

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 floating rate 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

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 6 – 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

Page 89

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.

(m) 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 7 – 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
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, 2022, revenues recognized at a point in time corresponding to the sale
of renewable credits were $263 million (2021: $183 million and 2020: $164 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, 2022 decreased revenues by $146 million (decreased by 2021: 37 million and 2020:
$55 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

Page 90

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.

(n) 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
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.

(o) 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, liabilities and
contingent liabilities which are measured under IAS 37 - Provisions, contingent liabilities and contingent assets or
IFRIC 21 - Levies 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

Page 91

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.

(p) 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.

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.

(q) Other items

(i) Capitalized costs

Capitalized costs related to CWIP include 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).

Page 92

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
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.

(r) 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 13 – 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(s)(iii) – Critical judgments in applying accounting policies – Property, plant and equipment for further details.

Page 93

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 6 – 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.

(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.

(v) Impairment of goodwill

The impairment assessment of goodwill requires estimation of the value-in-use or fair value less costs of disposal of
the CGUs or groups of CGUs to which goodwill has been allocated.

(s) 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

Page 94

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.

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 2026 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.

Page 95

(iv) Financial instruments

The accounting policy relating to Brookfield Renewable’s financial instruments is described in Note 1(l) – 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.

For power purchase agreements accounted for under IFRS 9 (“IFRS 9 PPAs”) that have unobservable values,
Brookfield Renewable determines the fair value of these IFRS 9 PPAs using a discounted cash flow model based on
the term of the contract and applies judgements surrounding the inputs used within the valuation model. The
valuation model incorporates various inputs and assumptions including future power prices, contractual prices,
contractual volumes and discount rates. Future power prices are based on broker quotes from independent sources
and for IFRS 9 PPAs with no available broker quotes, future fuel driven merchant prices are incorporated within the
model. Contractual prices are stipulated within each individual agreement, contractual volumes are either specified
within the agreement or determined using future generation of the power generating assets and discount rate used in
the valuation model is the credit adjusted risk free rate.

(v) Deferred income taxes

The accounting policy relating to Brookfield Renewable’s income taxes is described in Note 1(n) – Income taxes. In
applying this policy, judgments are made in determining the probability of whether deductions, tax credits and tax
losses can be utilized.

(t) Recently adopted accounting standards

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 has
completed an assessment and implemented its transition plan that addresses the impact and effect changes as a result
of amendments to the recognition principle of IFRS 3. The adoption did not have a significant impact on Brookfield
Renewable’s financial reporting.

IFRS Interpretations Committee Agenda Decision - Demand Deposits with Restriction on Use Arising from a
Contract with a Third Party (IAS 7 Statement of Cash Flows)

(u) Future changes in accounting policies

Amendments to IAS 1 – Presentation of Financial Statements (“IAS 1”)

Page 96

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, 2024. Brookfield Renewable is currently
assessing the impact of these 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, 2022:

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

Delaware

Isagen S.A. E.S.P.(1)
TerraForm Power Parent, LLC(1)

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

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

Colombia

New York

(1)

Voting control held, in whole or in part, through voting agreements with Brookfield.

100

99.70

100.00

Page 97

3. ACQUISITIONS

The following investments were accounted for using the acquisition method by Brookfield Renewable, and the
results of operations have been included in the audited annual consolidated financial statements since the date of
acquisition.

U.S. Utility-scale Solar Portfolio

On January 24, 2022, Brookfield Renewable, together with its institutional partners, completed the acquisition of
100% interest in a utility scale development business with a 20 GW portfolio of utility-scale solar and energy
storage development assets in the United States. The purchase price of this acquisition, including working capital
and closing adjustments, was $702 million, plus $58 million of additional incentive payments to be paid contingent
upon certain milestones being achieved. The total transaction costs related to the acquisition were $2 million.
Brookfield Renewable holds an approximately 20% economic interest.

Europe Utility-scale Solar Portfolio

On February 2, 2022, Brookfield Renewable, together with institutional partners, completed the acquisition of 100%
interest in a 1.7 GW portfolio of utility-scale solar development assets in Germany. The purchase price of this
acquisition, including working capital and closing adjustments, was approximately €66 million ($73 million), plus
€15 million ($17 million) of additional incentive payments to be paid contingent upon certain milestones being
achieved. The total transaction costs related to the acquisition were €2 million ($2 million). Brookfield Renewable
holds an approximately 20% economic interest.

Chile Distributed Generation Portfolio

On March 17, 2022, Brookfield Renewable, together with institutional partners, completed the acquisition of 83%
interest in a 437 MW distributed generation portfolio of high quality operating and development assets in Chile. The
purchase price of this acquisition, including working capital and closing adjustments, was approximately
$31 million. The total transaction costs related to the acquisition was $1 million. Brookfield Renewable holds an
approximately 20% economic interest in the investment.

During the fourth quarter of 2022, Brookfield Renewable, together with institutional partners, contributed an
additional approximate $4 million to fund the development pipeline, increasing the ownership interest from 83% to
84%.

U.S. Distributed Generation Portfolio

On September 28, 2022, Brookfield Renewable, together with its institutional partners, completed the acquisition of
100% interest in an integrated distributed generation developer with approximately 500 MW of contracted operating
and under construction assets, and an 1.8 GW of development pipeline in the United States. The purchase price of
this acquisition was $614 million, consisting of $538 million initial equity price, a $22 million working capital and
closing adjustments and $98 million to repay previously existing non-recourse borrowings (in aggregate
$123 million net to Brookfield Renewable). The total transaction costs related to the acquisition were $5 million.
Brookfield Renewable holds an approximately 20% 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 $46 million for
the year ended December 31, 2022.

Page 98

U.S. Wind Portfolio

On December 16, 2022, Brookfield Renewable, together with institutional partners, completed the acquisition of
100% interest in a renewable developer with a portfolio of over 800 MW of operating wind assets and pipeline of
over 22 GW of solar and storage assets in the United States. The purchase price of this acquisition, including
working capital and closing adjustments, was approximately $1,092 million. The total transaction costs related to the
acquisition were $4 million. Brookfield Renewable holds an approximately 20% 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. Wind Portfolio would have been $82 million for the year ended
December 31, 2022.

The purchase price allocations, at fair value, as at December 31, 2022, with respect to the acquisitions are as
follows:

Chile
Distributed
Generation
Portfolio

Europe
Utility-
scale Solar
Portfolio

U.S. Utility-
scale Solar
Portfolio (1)

U.S. Distributed
Generation
Portfolio(2)(3)

US Wind
Portfolio(2)

(MILLIONS)
Cash and cash equivalents ............... $
Restricted cash .................................
Trade receivables and other

current assets ...............................
..

Assets classified as held for sale(4)
Property, plant and

equipment, at fair value ...............
Deferred tax assets ..........................
Financial instruments assets(5)
.........
Other non-current assets ..................
Accounts payable and accrued

liabilities ......................................

Current portion of non-recourse

borrowings ...................................

Liabilities classified as held for

sale(4)

............................................
Financial instruments liabilities(5)
...
Non-recourse borrowings ................
Deferred income tax

liabilities ......................................
Provisions ........................................
Other long-term liabilities ...............
Fair value of net assets

acquired .......................................
Non-controlling interests ................. $
Goodwill ..........................................
Purchase price ................................. $
(1)

2 $
—

3 $
—

2
—

21
—
—
1

(1)

—

—
—
(6)

—
—
—

19
(6) $
18
31 $

30
—

1
—
—
—

(5)

—

—
—
—

(7)
—
—

22
— $
68
90 $

22 $
6

48
—

561
—
—
4

(32)

—

—
(15)
(48)

(43)
—
(30)

473
— $
287
760 $

33 $
6

26 $
5

13
—

708
10
10
21

13
240

1,796
—
2
22

Total
86
17

106
240

3,087
10
12
48

(66)

(38)

(142)

(9)

—

(9)

—
(15)
(346)

—
(25)
(35)

(135)
(725)
—

—
(29)
(68)

305
— $
309
614 $

1,109
(26) $
9
1,092 $

(135)
(755)
(400)

(50)
(54)
(133)

1,928
(32)
691
2,587

During the year, Brookfield Renewable recorded purchase price allocation adjustment of $176 million primarily to Property, plant and
equipment, Deferred tax asset, Other non-current assets, Deferred income tax liabilities and Other long-term liabilities.
The purchase price allocation is preliminary as at December 31, 2022. Brookfield Renewable is currently assessing the fair value of
Property, plant and equipment, Financial instruments, Provisions and Deferred tax liabilities for the purchase price allocation and expect to
finalize the balances in 2023.
During the year, Brookfield Renewable recorded purchase price allocation adjustments of $97 million primarily to Property, plant and
equipment, at fair value, Deferred tax assets and Deferred income tax liabilities.
Refer to Note 5 - Assets held for sale
Includes both short-term and long-term balances

(2)

(3)

(4)

(5)

Page 99

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.

Powen

In February 2022, Brookfield Renewable, together with institutional partners, acquired an initial 16% interest in a
DG solar development business in Spain and Mexico with approximately 700 MW of operating and development
assets for $22 million ($6 million net to Brookfield Renewable). During the course of 2022, Brookfield Renewable,
together with institutional partners, subscribed for additional shares for $34 million ($7 million net to Brookfield
Renewable). This subscription increased our interest to approximately 32% (6% net to Brookfield Renewable)

Island Aggregator LP

On June 20, 2022, Brookfield Renewable, together with institutional partners, committed to invest $500 million, of
which $122 million was deployed for a 20% stake in common equity into a private owner and operator of long-term,
U.S. denominated, contracted power and utility assets across the Americas with 1.2 GW of installed capacity and
approximately 1.3 GW development pipeline. Brookfield Renewable holds a 20% interest in this investment through
an intermediate entity.

California Resources Corporation

On August 3, 2022, Brookfield Renewable, together with its institutional partners, formed a joint venture with
California Resources Corporation (“CRC”) to establish a Carbon Management Business that will develop carbon
capture and storage in California. Brookfield Renewable, together with its institutional partners, has committed to
invest up to $500 million to fund the development of identified carbon capture and storage projects in California.
This includes an initial investment of approximately $137 million, of which $48 million was deployed during the
year, which includes a put option that offers strong downside protection at a pre-determined rate of return.
Brookfield Renewable holds an approximate 10% economic interest.

California Bioenergy (“Calbio”)

On December 21, 2022, Brookfield Renewable, together with its institutional partners, closed its purchase of a 10%
interest in a developer, operator and owner of renewable natural gas assets in the U.S. with an initial equity
commitment of $150 million ($30 million net to Brookfield Renewable) and secured the option to invest up to
approximately $350 million ($70 million net to Brookfield Renewable) of follow-on equity capital for future
projects meeting our risk-return requirements. Brookfield Renewable holds an approximate 2% economic interest.

Completed in 2021

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.

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 (loss). 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.

During March 31, 2022, the purchase price allocation was finalized with no material changes from the purchase
price allocation as at December 31, 2021 as disclosed in the 2021 Annual Report.

Page 100

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 (loss). Brookfield Renewable holds a 25% economic
interest.

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

Oregon Wind
Portfolio

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 101

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, 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.

During the first quarter of 2022, Brookfield Renewable, together with its institutional partner, subscribed for
additional shares in Polenergia. This subscription increased the total interest in Polenergia to 32% (8% net to
Brookfield Renewable).

Completed in 2020

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

Page 102

4. DISPOSAL OF ASSETS

In April 2022, Brookfield Renewable, together with its institutional partners, completed the sale of its interest in a
portfolio of 19 MW utility-scale solar assets in Asia (“Malaysia Utility-scale Solar Portfolio”) for proceeds of
approximately MYR 144 million ($33 million and $10 million net to Brookfield Renewable). This resulted in a loss
on disposition of $9 million ($3 million net to Brookfield Renewable) recognized within Other in the consolidated
statements of income (loss). As a result of the disposition, Brookfield Renewable's post-tax portion of the
accumulated revaluation surplus of $3 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 2022, Brookfield Renewable, together with its institutional partners, completed the sale of its 100% interest
in a 36 MW operating hydroelectric portfolio in Brazil (“Brazil Hydroelectric Portfolio”) for proceeds of
R$461 million (approximately $90 million and $23 million net to Brookfield Renewable). Brookfield Renewable
holds an approximately 25% economic interest in each of the project entities within the Brazil Hydroelectric
Portfolio and a 100% voting interest. As a result of the disposition, Brookfield Renewable's post-tax portion of the
accumulated revaluation surplus of $30 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)
Proceeds, net of transaction costs ........................................................ $

Carrying value of net assets held for sale

Assets ............................................................................................
Liabilities ......................................................................................
Non-controlling interests ..............................................................

Loss on disposal, net of transaction costs ............................................ $

Malaysia Utility-
scale Solar Portfolio

Brazil
Hydroelectric
Portfolio

33 $

90 $

55
(6)
(7)
42
(9) $

90
—
—
90
— $

Total
123

145
(6)
(7)
132
(9)

Page 103

5. ASSETS HELD FOR SALE

As at December 31, 2022, assets held for sale within Brookfield Renewable's operating segments include a 378 MW
operating hydroelectric portfolio in the U.S. following our institutional partners agreement to sell their 50% interest.
Brookfield Renewable will continue to retain its 22% interest in the investment and accordingly, will not receive
proceeds from the sale. The portfolio has been reclassified as held for sale, as subsequent to our institutional
partners’ 50% interest completing this sale, Brookfield Renewable will no longer consolidate this investment and
will recognize its interest as an equity-accounted investment.

Assets held for sale also include acquired wind assets in the U.S. that were acquired as part of the acquisition of a
renewables developer that had a pre-existing sale and purchase agreement at the time of acquisition.

The following is a summary of the major items of assets and liabilities classified as held for sale as at December 31:

(MILLIONS)

Assets

2022

2021

Cash and cash equivalents ............................................................................................................. $

9 $

Restricted cash ...............................................................................................................................

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

Financial instrument assets ............................................................................................................

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

Other long-term assets ...................................................................................................................

911

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

938 $

Liabilities

Current liabilities ........................................................................................................................... $

9 $

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

Financial instrument liabilities .......................................................................................................

Other long-term liabilities ..............................................................................................................

Provisions .......................................................................................................................................

171

167

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

351 $

—

Brookfield Renewable continues to consolidate and recognize the revenues, expenses and cash flows associated with
assets held for sale in the consolidated statements of income (loss), consolidated statements of comprehensive
income, and the consolidated statements of cash flows, respectively. Non-current assets classified as held for sale are
not depreciated.

6. 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,

Page 104

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 and IFRS 9
PPAs, 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)

2022

2021

2020

2022

2021

(76) $

(37) $

(13) $

(36) $

(21) $

2020

(16)

(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.

Impact of a 5% change in U.S. dollar exchange rates, on outstanding foreign exchange swaps, for the year ended
December 31:

(MILLIONS)

2022

2021

2020

2022

2021

Effect on net income(1)

Effect on OCI(1)

5% increase .............................. $

27 $

29 $

5% decrease .............................
(1)

Amounts represent the potential annual net pretax impact.

(27)

(29)

10 $

(7)

96 $

95 $

(96)

(95)

2020

(72)

(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.

Page 105

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 $7,823 million (2021: $6,758 million). Of this
principal value, $3,396 million (2021: $3,493 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)

2022

2021

2020

2022

2021

1% increase .............................. $

20 $

15 $

37 $

112 $

114 $

Effect on net income(1)

Effect on OCI(1)

1% decrease .............................
(1)

Amounts represent the potential annual net pretax impact.

(20)

(16)

(38)

(118)

(124)

2020

122

(129)

(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, 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 24 – Trade receivables and other current assets, for additional details regarding Brookfield Renewable’s
trade receivables balance.

The maximum credit exposure at December 31 was as follows:

(MILLIONS)

2022

Trade receivables and other short-term receivables ......................................................................... $

883 $

Long-term receivables .....................................................................................................................
Financial instrument assets(1)
Due from related parties(1)
Contract asset(1)

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

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

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

235

390

251

395

2021

807

216

127

177

445

2,154 $

1,772

(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 15 – 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 106

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 AT DECEMBER 31, 2022
(MILLIONS)

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)

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

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

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

< 1 year

2-5 years

> 5 years

1,086 $

— $

559

586

249

2,027

1,368

1,018

116

664

7,904

4,141

652

—

413

1,643

12,390

4,663

Total

1,086

2,229

587

559

2,556

22,321

10,172

Total .............................................................................................. $

5,907 $

13,850 $

19,773 $

39,530

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)

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

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

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

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

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

4,104 $

10,759 $

16,959 $

31,822

(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;

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.

Page 107

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 ........
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(2)
Liabilities for which fair value is disclosed:
Corporate borrowings(1)
Non-recourse borrowings(1)
Total ................................................................... $
(1)

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

Level 1

Level 2

Level 3

2022

2021

998 $
191

— $
—

998 $
191

900
176

—
—
—
155
—

—
—
—
—
—

37
335
16
39
—

(236)
(82)
(110)
—
—

2
—
—
1,041
54,283

(670)
—
—
(1,131)
(68)

39
335
16
1,235
54,283

(906)
(82)
(110)
(1,131)
(68)

55
40
32
195
49,432

(226)
(228)
(56)
(455)
(3)

(2,362)
(2,115)
(3,133) $

—
(19,002)
(19,003) $

—
—
53,457 $

(2,362)
(21,117)
31,321 $

(2,334)
(20,435)
27,093

(2)

Includes both the current amount and long-term amount.
Amount relates to business combination completed in 2022 with obligations lapsing from 2023 to 2027.

There were no transfers between levels during the year ended December 31, 2022.

Page 108

Financial instruments disclosures

The aggregate amount of Brookfield Renewable’s net financial instrument positions as at December 31 are as follows:

Financial Instruments Assets

Financial Instruments Liabilities

Instruments not
designated as hedges

Instruments
designated
as hedges

Fair value
through
profit & loss

Fair value
through
OCI

(MILLIONS)
IFRS 9 PPAs ...............................................
Energy derivative contracts ........................
Interest rate swaps ......................................
Foreign exchange swaps .............................
Investments in debt and equity securities ...
Tax equity ...................................................
Balance, as at December 31, 2021 ............. $
Less: current portion ...................................
Long-term portion ......................................

IFRS 9 PPAs ............................................... $
Energy derivative contracts ........................
Interest rate swaps ......................................
Foreign exchange swaps .............................
Investments in debt and equity securities ...
Tax equity ...................................................
Balance, as at December 31, 2022 ............. $
Less: current portion ...................................
Long-term portion ......................................

10 $
3 $
22
30
—
—
65 $

— $
12
284
14
—
—
310 $

12 $
30 $
18
2
—
—
62 $

— $
27
51
2
1,010
—
1,090 $

Total
— $ 22
— $ 33
40
—
32
—
195
195
—
—
195 $ 322
(60)
$ 262

— $ —
39
—
335
—
16
—
1,235
225
—
—
225 $ 1,625
(125)
$ 1,500

Instruments
designated as
hedges

Fair value
through
profit & loss

Fair value
through
OCI

Total

Net Assets
(Liabilities)

$
$

(35) $
(61) $
(117)
(48)
—
—
(261) $

(94) $
(37)
(15)
(90)
—
—
(236) $

(7) $
(123) $
(111)
(8)
—
(455)
(704) $

(574) $
(201)
(67)
(20)
—
(1,131)
(1,993) $

— $
(42) $
— $ (184) $
(228)
—
—
(56)
—
(455)
—
— $ (923) $

—

400
$ (523) $

— $ (668) $
(238)
—
(82)
—
—
(110)
—
—
—
(1,131)
— $ (2,229) $

559
$ (1,670) $

(20)
(151)
(188)
(24)
195
(455)
(643)
340
(303)

(668)
(199)
253
(94)
1,235
(1,131)
(604)
434
(170)

Page 109

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:

Balance as at
Dec. 31, 2021
asset (liability)

Changes in
fair value
recognized
in OCI(1)

Changes in fair
value (hedge
ineffectiveness)(2)

Changes in fair
value on
financial
instruments
through profit
and loss(2)

Amounts
reclassified
from OCI to
income

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

(MILLIONS)
IFRS 9 PPAs(3)
Energy derivative contracts ............
Interest rate swaps ..........................
Foreign exchange swaps .................
Investments in debt and equity
securities .......................................
Tax equity .......................................

(20) $
(151)
(188)
(24)

195
(455)
(643) $

(75) $
(117)
331
(56)

(11)
—
72 $

(13) $
2
5
—

—
—
(6) $

(218) $
(132)
85
89

13
115
(48) $

Acquisitions,
settlements and
other
(364) $
57
18
(103)

22 $
142
5
—

Foreign
exchange
gain (loss)

Balance as at
Dec. 31, 2022
asset (liability)
(668)
(199)
253
(94)

— $
—
(3)
—

—
—
169 $

1,046
(791)
(137) $

(8)
—
(11) $

1,235
(1,131)
(604)

(1)

(2)

(3)

Amounts recognized in Equity-accounted investments, Gains (losses) arising during the year on financial instruments designated as cash-flow hedges and Unrealized gain (loss) on foreign
exchange swaps – net investment hedge on the consolidated statements of comprehensive income (loss).
Amounts recognized in Foreign exchange and financial instruments gain (loss) on the consolidated statements of income (loss) excluding realized gains and losses recorded on foreign exchange.
Level 3 power purchase agreements accounted for as energy derivatives that are either designated as a hedge or not designated as a hedge.

Balance as at
Dec. 31, 2020
asset (liability)

Changes in
fair value
recognized
in OCI(1)

Changes in fair
value (hedge
ineffectiveness)(2)

Changes in fair
value on
derivatives not
designated in
hedge
relationships(2)

Amounts
reclassified
from OCI to
income

Acquisitions,
settlements and
other

Foreign
exchange
gain (loss)

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

(MILLIONS)
IFRS 9 PPAs(3)
Energy derivative contracts ...........
Interest rate swaps .........................
Foreign exchange swaps ................
Investments in debt and equity
securities ......................................
Tax equity ......................................

68 $
34
(422)
(90)

330
(402)
(482) $

(151) $
(242)
9
50

3
—
(331) $

(5) $
—
(17)
—

—
—
(22) $

(120) $
3
89
132

19
(21)
102 $

90 $
42
90
—

—
—
222 $

98 $
12
49
(116)

(153)
(32)
(142) $

Balance as at
Dec. 31, 2021
asset (liability)
(20)
(151)
(188)
(24)

— $
—
14
—

(4)
—
10 $

195
(455)
(643)

(1)

(2)

(3)

Page 110

(a) Tax equity

Brookfield Renewable owns and operates certain projects in the United States under tax equity structures to finance
the construction of utility-scale 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 FVPL, FVOCI and amortized
cost. Refer to Note 1(l) – 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, 2022, gains of $146 million relating to energy derivative contracts were realized
and reclassified from OCI to the consolidated statements of income (loss) (2021: $25 million and 2020: 55 million ).

Based on market prices as of December 31, 2022, unrealized losses of $37 million (2021: $72 million loss and 2020:
19 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 and IFRS 9 PPAs

December 31, 2022

December 31, 2021

Carrying amount (asset/(liability)) .........................................................................

Notional amount – GWh ........................................................................................

Weighted average hedged rate for the year ($/MWh) ............................................

(116)

13,674

(83)

10,022

Maturity dates .........................................................................................................

2023-2038

2022 - 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

(90)

1:1

(124)

117

There is $18 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, 2022 (2021: $7 million loss and 2020: $2 million loss).

(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 111

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

As at December 31, 2022, agreements with a total notional exposure of $3,621 million were outstanding (2021:
$3,437 million) including $701 million (2021: $789 million) associated with agreements that are not formally
designated as hedging instruments. The weighted-average fixed interest rate resulting from these agreements is 2.9%
(2021: 1.5%).

For the year ended December 31, 2022, net movements relating to cash flow hedges realized and reclassified from
OCI to interest expense in the consolidated statements of income (loss) were $2 million losses (2021: $18 million
losses and 2020: $12 million losses).

Based on market prices as of December 31, 2022, unrealized losses of $50 million (2021: $41 million and 2020:
$34 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, 2022

December 31, 2021

Carrying amount (asset/(liability)) .........................................................................

Notional amount – $ ...............................................................................................
Notional amount – C$(1)
Notional amount – €(1)
Notional amount – £(1)
Notional amount – COP(1)

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

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

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

269

803

349

1,315

296

157

(95)

558

377

1,572

—

141

Maturity dates .........................................................................................................

2023-2061

2022 - 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

333

(328)

1:1

(97)

Notional amounts of foreign currency denominated interest rate hedges are presented at the U.S. dollar equivalent value based on the
December 31, 2022 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, 2022 was $5 million losses (2021: $17 million and 2020: 2 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.

Page 112

Brookfield Renewable established a hedge ratio of 1:1 as the underlying risk of the hedging instrument is identical to
the hedged risk component.

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.

As at December 31, 2022, agreements with a total notional exposure of $3,669 million were outstanding (2021:
$2,701 million) including $1,804 million (2021: $561 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 (2021: nil and 2020: 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, 2022

December 31, 2021

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

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

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

(76)

302

601

575

128

104

(18)

676

571

125

427

260

2023 - 2024

2022 - 2023

1:1

5,038

0.99

0.83

7.05

5.69

1:1

3,925

0.87

0.76

7.18

5.73

Page 113

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, 2020 .................................................................... $

(39) $

3 $

(720)

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

Other ..................................................................................................................

(38)

—

(3)

—

(17)

(104)

—

(6)

Balance, as at December 31, 2021 .................................................................... $

(48) $

4 $

(842)