Brookfield Renewable Partners L.P. — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023. This is an annual filing, not a standalone fourth-quarter report. Financial statements are prepared under IFRS in U.S. dollars; Adjusted EBITDA and Funds From Operations (FFO) are non-IFRS measures. Unless specified, figures below are in U.S. dollars.
Business context and reporting period
Brookfield Renewable owns and operates renewable power and energy-transition businesses globally. At year-end, its renewable portfolio had approximately 31,800 MW of operating capacity and a 155,400 MW development pipeline; renewable power represented over 97% of its business. The portfolio includes hydro, wind, solar, distributed energy and storage, as well as sustainable-solutions investments including Westinghouse nuclear services, carbon capture, renewable natural gas and recycling.
Financial and operating performance
| Metric | 2023 | 2022 |
|---|---|---|
| IFRS revenue | $5.038 billion | $4.711 billion |
| IFRS net income | $616 million | $138 million |
| Net loss attributable to Unitholders | $100 million | $295 million |
| Basic loss per LP unit | $0.32 | $0.60 |
| Proportionate Adjusted EBITDA | $2.182 billion | $2.002 billion |
| Proportionate FFO | $1.095 billion | $1.005 billion |
| FFO per Unit | $1.67 | $1.56 |
| Cash from operating activities | $1.865 billion | $1.711 billion |
| Cash and cash equivalents at year-end | $1.141 billion | $998 million |
| Available liquidity | $4.121 billion | $3.695 billion |
| Total borrowings under IFRS | $29.702 billion | $24.850 billion |
| Total assets | $76.128 billion | $64.111 billion |
Operating cash flow increased year over year; investing activities used $4.356 billion and financing activities provided $2.596 billion. Cash and cash equivalents increased by $143 million during the year. Borrowings comprised $2.833 billion of corporate borrowings and $26.869 billion of non-recourse borrowings. The filing reports 40% consolidated debt-to-capitalization on a market-value basis, 12% corporate debt-to-capitalization, and approximately 91% of borrowings as non-recourse. Available liquidity includes cash, marketable securities and undrawn credit facilities.
Consolidated actual generation was 69,704 GWh versus 63,036 GWh in 2022, and below the reported 75,584 GWh long-term average for the 2023 portfolio. Proportionate FFO was $255 million in Q4 2023 versus $225 million in Q4 2022; proportionate segment revenue was $712 million versus $645 million. The quarterly table reports $35 million of Q4 net income attributable to Unitholders and $0.01 basic earnings per LP unit, compared with an $82 million loss and $0.16 loss per unit in Q4 2022.
The filing does not present a standardized IFRS operating-margin measure. Proportionate Adjusted EBITDA and FFO are management-defined non-IFRS measures and should not be treated as substitutes for IFRS results or cash available for distribution.
Material changes versus the prior comparable period
- Revenue rose 7% to $5.038 billion, reflecting growth, acquisitions and higher realized prices. Recent acquisitions and commissioned facilities added $311 million of revenue; asset sales reduced revenue by $89 million. Same-store, constant-currency revenue increased $124 million.
- Adjusted EBITDA rose 9% and FFO rose 9%. Management cited acquisitions, 4,511 MW of new development projects reaching commercial operation, strong asset availability and higher realized prices.
- IFRS net income increased by $478 million, while the loss attributable to Unitholders narrowed to $100 million. The results included non-recurring income and a gain on non-core asset sales; see unusual items below.
- Borrowings increased, alongside expansion of the portfolio and investment in development. Property, plant and equipment increased to $64.005 billion, including acquisition and development activity and foreign-exchange effects.
- In 2023, the partnership issued LP units and BEPC exchangeable shares and completed a concurrent private placement, generating approximately $650 million in gross proceeds. It repurchased and cancelled 1.856 million LP units for $43 million.
Outlook, management commentary, risks and unusual items
- Targets and distributions: Management targets a long-term payout ratio of approximately 70% of FFO and annual distribution growth of 5%–9%. The 2023 annualized LP-unit distribution was $1.35; in February 2024 it was increased to $1.42. Distributions remain subject to the Managing General Partner’s discretion and available cash.
- Contracts and development: The contract-profile table shows 88% of 2024 proportionate generation contracted, at an average price of $79/MWh; weighted-average remaining contract duration was 13 years. Management estimates that commissioned 2023 projects could contribute approximately $65 million of annual run-rate FFO, and that the near-term development pipeline could contribute approximately $300 million of annual run-rate FFO once commissioned. These are estimates, not guarantees.
- Growth and financing: Management reported approximately $9 billion of capital deployed or committed with institutional partners during 2023, including Westinghouse, U.S. and U.K. renewable platforms, and Indian investments. It said there were no meaningful near-term maturities and did not anticipate material refinancing issues through 2028, while noting that refinancing terms depend on market conditions.
- Unusual items: Other income included a $370 million gain from acquisition accounting where the fair value of acquired net assets exceeded consideration, and a $72 million gain on disposition of non-core assets. Management also cited non-recurring income and a gain on sale as factors in the year-over-year improvement in IFRS net income.
- Commitments and contingencies: Capital expenditure commitments were $2.783 billion, including $2.200 billion payable in less than one year. Letters of credit issued totaled $2.126 billion. The partnership reported ordinary-course legal proceedings and said their resolution was not expected to materially affect consolidated financial position or results, while noting outcomes cannot be predicted with certainty.
- Principal risks: Generation and cash flow are exposed to hydrology, wind and solar resource variability; electricity prices and uncontracted generation; PPA renewals and counterparty performance; transmission access, permits and regulation; inflation, interest rates and foreign exchange; project costs and execution; and access to capital. The filing also highlights Brookfield-related conflicts, including shared investment opportunities, fees, governance influence and limited ability to terminate the management agreement.
- Audit and controls: The auditor issued an unqualified opinion on the IFRS financial statements and internal control over financial reporting. Management and the auditor excluded specified 2023 acquisitions from internal-control assessment; those acquisitions represented approximately 10% of consolidated assets and net assets and 3% of 2023 revenue.
Important facts for investors to verify
- Reconcile IFRS net income, the loss attributable to Unitholders, and non-IFRS FFO; assess the effects of the $370 million acquisition-accounting gain and asset-sale gains on reported performance.
- Review the increase in borrowings and debt service, subsidiary-level covenant and distribution restrictions, and the distinction between consolidated and proportionate debt.
- Check the status, funding needs, expected returns and ownership interests of the large development pipeline; project commissioning and run-rate FFO estimates are forward-looking.
- Assess distribution coverage against FFO, the 70% payout-ratio target, and the effect of generation shortfalls, interest costs and preferred or perpetual-security distributions.
- Review acquisition purchase-price allocations, which remained preliminary for certain 2023 acquisitions, and the acquired businesses’ performance and integration.
- Evaluate related-party arrangements and governance: Brookfield received $205 million in management service costs and $111 million in incentive distributions in 2023; Brookfield also has substantial influence and the filing describes extensive potential conflicts.
- Monitor capital commitments, letters of credit, legal contingencies, refinancing conditions and internal-control integration for the acquisitions excluded from the 2023 control assessment.