Brookfield Renewable Partners (BEP) C O R P O R AT E P R O F I L E M AY 2017
Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements and information within the meaning of Canadian provincial 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. The words will, should, could, potential, tend to, target future, growth, expect, believe, goal, plan, derivatives thereof and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify the above mentioned and other forward-looking statements. Forward-looking statements in this presentation include statements regarding the quality of Brookfield Renewable s business, the expectation for future cash flows and distribution growth, the availability of acquisition opportunities, liquidity, and the timing and completion of current acquisitions, dispositions and development projects. Although Brookfield Renewable believes that these forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on them, or any other forward looking statements or information in this presentation. The future performance and prospects of Brookfield Renewable are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual results of Brookfield Renewable to differ materially from those contemplated or implied by the statements in this presentation include economic conditions in the jurisdictions in which we operate; our ability to sell products and services under contract or into merchant energy markets; weather conditions and other factors which may impact generation levels at our facilities; changes to government regulations, including incentives for renewable energy; our ability to grow within our current markets or expand into new markets; our ability to complete development and capital projects on time and on budget; our inability to finance our operations or fund future acquisitions due to the status of the capital markets; the ability to effectively source, complete and integrate new acquisitions and to realize the benefits of such acquisitions; health, safety, security or environmental incidents; regulatory risks relating to the power markets in which we operate, including relating to the regulation of our assets, licensing and litigation; risks relating to our internal control environment; we do not have control over all of our operations; contract counterparties not fulfilling their obligations; and other risks associated with the construction, development and operation of power generating facilities. 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 presentation and should not be relied upon as representing our views as of any date subsequent to the date of this presentation. 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 Form 20-F. Cautionary Statement Regarding Use Of Non-IFRS Measures This presentation contains references to Adjusted EBITDA, Funds From Operations and Adjusted Funds From Operations, which are not generally accepted accounting measures under IFRS and therefore may differ from definitions of Adjusted EBITDA, Funds From Operations and Adjusted Funds From Operations used by other entities. We believe that Adjusted EBITDA, Funds From Operations and Adjusted Funds From Operations are useful supplemental measures that may assist investors in assessing the financial performance and the cash anticipated to be generated by our operating portfolio. Neither Adjusted EBITDA, Funds From Operations nor Adjusted Funds From Operations per LP 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. References to Brookfield Renewable are to Brookfield Renewable Partners L.P. together with its subsidiary and operating entities unless the context reflects otherwise. All amounts are in U.S. dollars and presented on a consolidated basis unless otherwise specified. 2
Who We Are 3
Leader in Renewable Generation One of the largest public pure-play renewable businesses globally 100 years of experience in power generation Full operating, development and power marketing capabilities Over 2,000 operating employees $25 billion POWER ASSETS 10,600 MEGAWATTS OF CAPACITY 88% HYDROELECTRIC GENERATION Z 260 power generating facilities 15 markets in 7 countries Situated on 82 river systems 4
Global Operations with Local Presence We have integrated operating platforms on three continents with local operating and power marketing expertise NORTH AMERICA $16 Billion AUM 5,900 MW 1,100 employees EUROPE $1 Billion AUM 500 MW 115 employees COLOMBIA $5 Billion AUM 3,000 MW 680 employees BRAZIL $3 Billion AUM 1,200 MW 430 employees 5
Diversified Operating Portfolio Cash flows are supported by a strong contract profile and are diversified by technology and geography Hydro Focused 11% 1% 15% Global Footprint 5% Contracted Cash Flows 8% 15% 88% 65% 92% Hydro Wind Other North America Brazil Colombia Europe Contracted Merchant Based on LTA generation, proportionate to BEP 6
Real Return Assets with Strong Downside Protection ~90% Contracted Revenue Profile 17 year proportionate contract term, inflation-linked escalation Primary investment grade counterparties Cash flow stability across economic cycles Operational Focus High asset availability and reliability Robust sustaining capital program to protect investments Strong cash margins Conservative Capitalization Over $1 billion of available liquidity BBB investment grade credit rating from S&P ~80% of debt is non-recourse to BEP 7
Attractive Risk-Adjusted Returns ~$9 Billion MARKET CAPITALIZATION BEP / BEP.UN NYSE / TSX DUAL LISTING ~6% DIVIDEND YIELD 5% 9% DISTRIBUTION GROWTH Annual Distribution Price Performance $1.55 6.2% CAGR $1.66 $1.78 $1.87 Annualized Total Return 1 1 yr 3 yr 5 yr BEP.UN (TSX) 7% 13% 15% BEP (NYSE) 6% 7% 9% $1.38 $1.45 S&P/TSX Composite 19% 6% 8% S&P 500 17% 10% 13% 2012 2013 2014 2015 2016 2017 1) Source: Bloomberg, including reinvestment of dividends. At March 31, 2017 Our objective is to deliver long-term total returns of 12% 15% to shareholders annually 8
Multiple Levers to Drive Growth Targeted annual distribution increases of 5% 9% are supported by organic cash flow growth and proprietary project development Protect our balance sheet and maintain significant liquidity Position the business for economic growth Deploy capital into global renewable opportunities Investment grade balance sheet Diverse sources and access to capital Inflation protected revenues Track record of cost control Manage power and ancillary sales to benefit from market volatility Lock in value through long-term Power Purchase Agreements Build out our proprietary development pipeline at premium returns Leverage our established continental platforms Continue to focus on hydro opportunities Expand our track record of accretive M&A growth while taking advantage of capital scarcity 9
High Quality Assets 10
High Quality Assets and Low Risk Profile Diversified Operations Scarce, Irreplaceable Assets with High Barriers to Entry Predictable Cash Flows Real Assets, Proven Technologies Invested in 7 countries over 3 continents Geographic diversity reduces exposure to regulatory risk and currencies 260 generating stations spread across 82 river systems Low correlation between watersheds limits exposure to hydrology Market mechanisms in place to provide volume stability Highly regulated environment Significant build / replacement cost Site availability limited by physical and environmental constraints Significant operating expertise required Power marketing, scheduling / dispatch, regulatory compliance Long term customer contracts EBITDA margins > 70% Low sustaining CAPEX 90% contracted cash flows with creditworthy counterparties Contract escalation linked to local inflation indices Perpetual hydroelectric dams Utility scale wind farms Biomass as a complementary technology 11
Best in Class Hydro Portfolio We have a strong track record as a responsible owner, operator and developer of hydroelectric generation facilities Started investing in hydro over 20 years ago, prior to market deregulation in North America Hydroelectric generation is the highest value renewable asset class Our operating platform positions us to create value: Centralized system control Ability to sell power in multiple markets Optimization of resource through storage and ability to sell during peak demand periods Pezzi Rio Grande do Sul, Brazil Geographic diversity spread over 82 river systems Significant barriers to entry requiring deep operational knowledge and marketing expertise White Pine, United States 12
Modern Portfolio of High Quality Wind Assets Wind energy is one of the fastest growing and lowest cost sources of new renewable generation which complements our hydro portfolio Since developing our first wind farm in 2006, we have built a high-quality wind business Focused in areas with scarcity value Located in high-value power markets Benefit from long-term, utility-grade PPAs Prince Wind Farm, Canada Tier 1 turbine equipment (GE, Siemens, Vestas, Enercon, Nordex) In-house and full-scope turbine maintenance strategies Strategy has been to focus on developments or buy for value Brookfield now operates 35 wind facilities with an installed capacity of ~1,500 MW in six countries Sorne Wind Farm, Ireland 13
Deep Operational Expertise Asset Integration Generation Management, Planning and Dispatch 2,000 EXPERIENCED OPERATORS Regulatory Asset Integration Expertise Energy Marketing Expertise 140 POWER MARKETING EXPERTS 3 REGIONAL CONTROL CENTERS National Asset System Integration Control Engineering and Development Health, Safety, Asset Security and Integration Environmental Stakeholder Asset Engagement Integration 14
Construction and Advanced Projects We have ~300 MW of construction and construction-ready assets expected to contribute $45-50 million of annualized FFO once commissioned Project Region Technology Capacity (MW) Expected Commissioning Expected Annualized FFO Serra dos Cavalinhos 1 Brazil Hydro 25 Q1-2017 5.7 Crockandun Europe Wind 15 Q2-2017 1.5 Shantavny Europe Wind 16 Q2-2017 1.0 Silea Verde 4A Brazil Hydro 28 Q3-2017 2.8 Slievecallan Europe Wind 28 Q3-2017 2.8 Ballyhoura Europe Wind 19 Q4-2017 1.5 Silea Verde 4 Brazil Hydro 19 Q3-2018 2.0 Tralorg Europe Wind 19 Q4-2018 3.4 Total 169 ~$21 M 1. Commissioned January 25, 2017 In addition to the assets listed above, we have 127 MW of construction-ready projects expected to contribute an additional $25 to $30 million to FFO annually 15
Financial Profile 16
Robust Balance Sheet Significant Liquidity $1.7 billion committed corporate credit facility through 2021 70% long-term target FFO payout ratio, significant free cash flows Diverse funding sources with access to public and private markets Staggered Debt Maturities No material near-term maturities following completion of recent financings Project debt has an average remaining term of 9 years and rate of 6.2% on a proportionate basis ~80% fixed rate with minimal floating rate exposure funded in local currency $5.5 $5.0 $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 Debt Maturity Ladder ($BILLIONS) Conservative Capitalization 38% consolidated debt-to-capitalization ratio Primarily asset level debt, 79% of which is non-recourse to BEP Investment grade credit ratings with S&P and DBRS $1.5 $1.0 $0.5 $- 2017 2018 2019 2020 2021 After Non-Recourse Maturities Recourse Maturities 17
Conservative Capitalization BEP has maintained a conservative debt to capitalization ratio over the long-term Our high quality cash flow and strong remittance characteristics underscore our investment grade ratings The use of primarily non-recourse, fixed rate financings provides strong protection and credit stability to BEP lenders and investors 38% DEBT TO TOTAL CAPITALIZATION ~7.0X REMITTED CASH FLOW / INTEREST COVERAGE ~3.0X CONSOLIDATED EBITDA / INTEREST COVERAGE 4.5% AVERAGE INTEREST RATE ON CORPORATE BORROWINGS BBB BBB(high) The satisfactory business risk profile reflects our view of the partnership's diverse portfolio and strong contractual profile. We believe that these strengths provide a high degree of stability of cash flows. We believe BEP's hydroelectric generation enjoys strong competitive interconnections to a diverse pool of power markets, and the availability of water storage facilities that enhance the partnership's operational flexibility and profitability. * S&P Research Update: December 19, 2014 BEP s ratings reflect its geographic and resource diversification, and highly contracted portfolio with investment grade counterparties, while also factoring in the inherent renewable resource risk. BEP s financial risk profile is based on its deconsolidated credit metrics that have remained reasonable for the current rating, as supported by its prudent financing strategy of predominantly funding growth initiatives with a mix of non-recourse project level debt, equity and capital from institutional partners. * DBRS Rating Report: March 27, 2015 18
Highly Contracted Cash Flows Our hydro assets are spread across 82 river systems and four countries diversifying hydrology risk; Hydrology risk in Brazil is further mitigated through our participation in the country wide balancing pool which stabilizes generation Power is largely sold under long-term, fixed price, inflation linked contracts with an average proportionate term of 17 years The majority of PPAs are structured as take-or-pay contracts (no minimum volume risk) with high quality investment grade counterparties with long-standing credit histories We expect to re-contract expiring PPAs at levels equal or higher than roll off prices Current all-in power prices exceed our underwriting targets supporting embedded upside in our cash flows Generation (GWh) Contracted Remaining 2017 2018 2019 2020 2021 PPA Counterparty Ratings Hydroelectric 13,821 16,966 15,514 13,032 11,213 Wind 1,754 2,399 2,399 2,345 2,323 Other 212 306 304 305 252 15,787 19,671 18,217 15,682 13,788 Merchant 1,425 3,790 5,244 7,891 9,785 84% 5% 11% LTA 17,212 23,461 23,461 23,573 23,573 % of generation 92% 84% 78% 67% 58% Investment Grade Non-Investment Grade Not Rated Amounts proportionate to BEP 19
Investment Highlights Best in class renewable portfolio providing stable cash flow growth and long-term capital appreciation with strong downside protection Largest independently owned hydroelectric portfolio globally Highest value renewable resource with significant barriers to entry Stable contracted cash flows with growing operating margins Upside tied to economic growth and rising power prices Robust balance sheet and access to global capital markets Over $1 billion of available liquidity to grow the business accretively Proven track record of value creation for shareholders 6% compound dividend growth and 15% annualized total return since 2011 20
Contacts Contact Title E-Mail Address Phone Number Sachin Shah Chief Executive Officer sachin.shah@brookfieldrenewable.com 416.369.6008 Nick Goodman Chief Financial Officer nicholas.goodman@brookfieldrenewable.com 416.369.2546 21
Appendix 22
BEP Generation Overview As at December 31, 2016 Hydroelectric River Systems Facilities Capacity (MW) LTA (GWh) Storage (GWh) North America 1 50 170 4,847 17,775 4,879 Colombia 2 6 7 3,032 14,476 3,703 Brazil 3 26 42 899 4,647 Wind 4 82 219 8,778 36,898 8,582 North America 10 840 2,310 Europe 20 463 1,174 Brazil 5 150 588 35 1,453 4,072 Other 5 6 390 385 Total 6 82 260 10,621 41,355 8,582 1) North America hydroelectric LTA is the expected average level of generation, as obtained from the results of a simulation based on historical inflow data performed over a period of typically 30 years 2) Colombia hydroelectric LTA is the expected average level of generation, as obtained from the results of a simulation based on historical inflow data performed over a period of typically 20 years. Colombia includes both hydroelectric and a 300 MW Co-gen facility. 3) Hydroelectric assets located in Brazil benefit from a market framework which levelizes generation risk across producers 4) Wind LTA is the expected average level of generation, as obtained from the results based on simulated historical wind speed data performed over a period of typically 10 years 5) Includes two Co-gen plants in North America (215 MW) and four biomass facilities in Brazil (175 MW) 6) LTA is calculated on a consolidated and an annualized basis from the beginning of the year, regardless of the acquisition or commercial operation date on a consolidated basis. On a proportionate basis, the annualized LTA is 23,419 GWh 23
Favourable Structure Relative to MLPs Brookfield Renewable is a Bermuda-based publicly traded partnership that owns holding corporations in the U.S., Canada and other jurisdictions. Brookfield Renewable is not a U.S. MLP 1 Comparison of Brookfield Renewable versus MLP Brookfield Renewable MLP 2 Type of entity Publicly traded partnership Publicly traded partnership UBTI 3 No Yes ECI 4 No Yes U.S. tax slip issued K1 K1 Tax profile of distributions Benefits from return of capital Benefits from depreciation Payout ratio ~70% of FFO 80%-90% of distributable cash flow 5 Incentive distributions 25% maximum 50% maximum Brookfield Renewable is committed to structuring its operations to avoid generating UBTI and ECI 1) MLP is Master Limited Partnership 2) Not all MLP s are the same. This represents Brookfield s understanding of common features with these types of vehicles 3) UBTI is unrelated business taxable income 4) ECI is effectively connected income 5) Source: Management estimates based on Barclays Capital Master Limited Partnerships MLP Trader Weekly 24
Leader in Green Energy & Sustainability BEP is the largest member by market capitalization of the S&P/TSX Renewable Energy and Clean Technology Index. BEP is committed to sustainable development principles that reduce the impact of our operations and help to manage the underlying water resources efficiently. Low Impact Hydropower Institute (LIHI) certification is a voluntary certification program designed to help identify and provide market incentives for hydropower operations that are minimizing their environmental impacts. BEP has received LIHI certification for 52 hydro facilities across the US, more than any other operator, making it the U.S. leader in low impact hydropower generation. The Environmental Choice Program is a comprehensive national program sponsored by Environment Canada. It certifies manufacturers and suppliers that produce products and services that are less harmful to the environment. These bear the EcoLogo registered trademark. 22 of our hydroelectric facilities in Ontario, Quebec, and British Columbia meet the strict standards of the Environmental Choice Program. The Brookfield Environmental Education Center was established in Guarani, Minas Gerais, Brazil, from a partnership between Brookfield Energia Renovável and the local community. The project aims to provide the entire population of the Pomba River Valley a place to develop environmental education projects. To make the project sustainable, the local community was trained to manage the Environmental Education Center and created a non-governmental organization to do it. 25