Brookfield Renewable Partners L.P. Limited Partnership Units

Good day, and thank you for standing by. Welcome to the Brookfield Renewable Partners third quarter 2023 results conference call and webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Connor Teske, Chief Executive Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for our third quarter 2023 conference call. Before we begin, we would like to remind you that a copy of our news release, investor supplement, and letter to unit holders can be found on our website. We also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks and future results may differ materially. For more information, you are encouraged to review our regulatory filings available on CDAR, EDIAR, and on our website. On today's call, we will provide an update on the business and how we are positioned in the current market environment. Jenny Lee, a vice president in our investment teams in Toronto, will provide an update on our growth activities. And then lastly, Wyatt will conclude the call by discussing our operating results and financial position. Following our remarks, we look forward to taking your questions. We had another successful quarter, utilizing our disciplined approach to growth and execution to outperform our targets and deliver strong operating results. Furthermore, as Jenny will highlight, we recently closed our acquisition of Xelio and Deriva Energy formerly Duke Energy Renewables, as well as advanced our acquisitions of Westinghouse Electric, which we expect to close shortly, and Origin Energy. With the closing of these acquisitions, we are adding significant incremental FFO and are positioning ourselves to continue to deliver on our decade long track record of 10% plus FFO per unit annual growth. That said, We want to also touch briefly on the market environment and our share price. The renewable sector traded down in the public markets on the back of higher interest rates and a perceived tightening of industry margins. And even though we are well positioned to benefit in this environment and insulated from the challenges that are seemingly impacting others in the sector, we have not been immune to the lower trading environment. It is important to note that while we are never pleased when our share price is down, we are long-term focused investors and between our strong position in the market, major global themes, and the overarching sector tailwinds, the outlook for our business has never been better. As we continue to deliver on our growth targets and execute on our strategic priorities, our share price should respond and better reflect the intrinsic value of the business. Most importantly, we are not seeing any reduction in the returns we are able to generate. In fact, quite the opposite. We are seeing an abundance of opportunities to invest at or above our target returns. The combination of accelerating demand for clean power from corporations and fewer players with access to capital is creating a favorable environment for those such as ourselves with capital, capabilities, and a pipeline of projects to deliver for our customers. Notably, we are seeing particularly attractive opportunities to acquire businesses with strong development pipelines, but lack the access to capital or scale operating capabilities to build out these projects. This is creating a powerful and virtuous cycle. We are capturing increasing demand through our existing capabilities and pipeline, while at the same time using our access to capital to add leading platforms in core markets around the world, further enhancing our capabilities and positioning us to capture even further demand in the future as we position ourselves as the clean energy and decarbonization partner of choice for leading corporations. Over the past five years, the amount of clean energy procured annually by corporations has increased by almost 10 times. And looking forward, we do not expect this trend to slow down. Access to energy is now a key constraint for a number of these buyers, including leading technology companies, to execute on their growth plans in some of their highest margin segments. This strong and growing demand from these customers, combined with our ability to provide 24-7 clean power solutions from our technologically diversified fleet and our credibility to deliver scale projects globally and on time, is translating into signing contracts at prices that appropriately compensate us for higher construction and financing costs. As an example, by leveraging our development pipeline, our existing hydro facilities, and our power marketing capabilities, we recently signed an agreement with one of the leading global technology companies to provide them with a total of 18 terawatt hours over the next five years to serve their growing requirements in the U.S. We continue to establish ourselves as a key enabler for the large tech companies, providing them the critical power to support their data centers and growing cloud and artificial intelligence activities. We also want to touch on our approach to development. We continue to be focused on opportunities that we can de-risk quickly and deliver appropriately risk-adjusted returns. So while we are doing more development, We are not compromising on the principles that have served us well to this point and are taking our extensive knowledge built over the past decades to enhance our capabilities globally. We do not build on spec and reduce risks in our investments by not taking basis risk, meaning we simultaneously secure power purchase agreements, customer contracts and financing before ever committing significant capital. We limit construction risk by using a localized approach to construction and development and manage our CapEx spend by leveraging our central procurement capabilities. We also look to leverage our commercial teams to source the highest quality off-takes and focus on the most mature and lowest cost renewable power technologies in the highest growth regions to always ensure that our projects will produce the most de-risked high quality cash flows. As an example, While there have been recent announcements impacting the outlook for offshore wind in the U.S., largely on the back of its competitive position, cost increases, and reliance on subsidies, the development of onshore wind continues to be robust, given the attributes of these projects. There are over 100 gigawatts of onshore capacity expected to come online in the United States by the end of the decade, including almost 9 gigawatts of onshore wind from our development pipelines. We are using this playbook to develop our large global pipeline, which now stands at nearly 150 gigawatts. We expect to deliver 5 gigawatts of new capacity this year and another approximately 15 gigawatts over the next two years, contributing approximately $270 million of additional FFO annually. Much of the capital for these projects has already been invested, and like the rest of our business, these projects are expected to deliver attractive economics given our de-risk approach to execution. With that, we will turn the call over to Jenny to speak about our growth activities.

Thank you, Connor, and good morning, everyone. This past quarter, we agreed to invest approximately $2.2 billion of equity capital, highlighted by our agreement to acquire Banks Renewables, a leading independent UK-based renewable energy development business with approximately 260 megawatts of onshore wind assets. The business also has approximately 800 megawatts of near-term development projects and a further 3,000 megawatt pipeline of earlier stage projects. BANKS is a full-service end-to-end platform with strong capabilities across the entire project's lifecycle, including origination, development, commercial contracting, financing, and operations. The team has been successful developing high-quality projects in the UK, but have generally been limited by access to capital. Under our ownership, we believe we can accelerate organic growth in capital recycling and expand the business via M&A in the fragmented UK market. The transaction is expected to close before year-end. We also agreed to partner with Access Energy, a leading renewable developer in India, to create a new large-scale development platform through which we expect to develop approximately 2,500 megawatts of wind and solar capacity over the next three years. Access is a well-known partner to us through our previous joint venture partnership in which we have already successfully developed almost 2,000 megawatts of capacity over the past two years. This quarter, we made good progress closing our previously announced highly accretive M&A transactions. We closed the acquisition of the remaining 50% interest in Exelio, our leading global solar developer, bringing our total ownership interest to 100%. We also closed the acquisition of Deriva Energy, formerly Duke Energy Renewables, one of the largest renewable platforms in the US with almost 6,000 megawatts of operating and other construction assets diversified across wind, utility-scale solar, and storage. with a sizeable development pipeline of approximately 6,000 megawatts. With this acquisition, we are adding a scale operating renewable platform, generating strong contracted cash flows with a 13-year weighted average remaining contract life. The acquisition is immediately accretive, generating SFO yield in the mid-teens with opportunities to add value by leveraging commercial and operational synergies and executing on the significant optionality to repower the operating wind portfolio over time, using our recent experience, repairing the Shepherd's Flat wind farm. On our acquisition of Westinghouse Electric, we recently received all required regulatory approvals and expect to close the transaction early next week. With this acquisition, we are adding a leading provider of mission-critical technology, services, and products to the nuclear industry from a business that generates infrastructure-like cash flows servicing approximately half the global nuclear fleet. Approximately 85% of Westinghouse's revenues come from long-term contracted or highly recurring customer service provision with nearly 100% customer retention rate. Nuclear power is a reliable zero carbon technology that supports the growth of renewables by providing critical base load power to our grid and is essential to a net zero economy in our view. Since our announced acquisition, we have seen a resurgence in the growth of Outlook for nuclear, with several new builds being announced, a number of which were new contracts awarded to Westinghouse, providing opportunities for growth for Westinghouse's engineering and design business, as well as its core fuel and services business, none of which was underwritten in our acquisition. Westinghouse is also capturing growth in its core business, winning contracts to service almost all of the operating nuclear plants in Eastern Europe, which have historically been served by Russian providers. With the close of this acquisition, we are adding a business which yields double-digit FFO based on highly visible and reliable cash flows. The business also provides significant upside to our underwriting return, some of which have already materialized. Over time, we expect to leverage our commercial contracting capabilities to allow Westinghouse to further grow, as our large customers are seeking sources of clean, dispatchable, and baseload power. This quarter, we also moved forward with our acquisition of Origin Energy, receiving authorizations from the Australian Competition and Consumer Commission in October, and received a unanimous recommendation from Origin's board having increased our offer to the top end of their independent experts' valuation range. providing a compelling opportunity for Origin shareholders to realize the value of their investment. With the shareholder vote scheduled for late November, we expect to close the acquisition in early 2024, adding a large-scale strategic platform in Australia. Origin is Australia's largest integrated power generation and energy retailer, with an industry-leading cost model, driving strong margins and cash flow visibility to fund the large-scale renewables build-out. With this acquisition, we have the opportunity to accelerate the development of renewable generation capacity to serve the existing retail energy customer base and to help decarbonize the Australian grid at this crucial time in its energy transition. In total, over the coming months, we expect to have closed transactions totaling over $9 billion or around $1.5 billion net to Brookfield Renewable deploying equity capital into immediately accretive transactions, adding approximately $200 million in incremental annual FFO. I will now turn it over to Wyatt to discuss our operating results and financial position.