Brookfield Renewable (BEPC) - 2025 Q1 - Quarterly Report

Consolidated Financial Statements Consolidated Statements of Financial Position As of March 31, 2025, total assets increased to $44.96 billion from $44.13 billion at the end of 2024, primarily driven by a rise in the fair value of property, plant, and equipment. Total equity also grew to $12.44 billion from $12.11 billion over the same period Key Balance Sheet Items (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $44,964 | $44,129 | | Cash and cash equivalents | $614 | $624 | | Property, plant and equipment, at fair value | $39,731 | $38,696 | | Total Liabilities | $32,522 | $32,021 | | Non-recourse borrowings | $14,111 | $13,775 | | Deferred income tax liabilities | $6,689 | $6,493 | | Total Equity | $12,442 | $12,108 | Consolidated Statements of Income (Loss) For the three months ended March 31, 2025, the company reported a net loss of $5 million, a significant decrease from a net income of $491 million in the same period of 2024. The change was primarily driven by lower revenues, which fell to $907 million from $1.125 billion, and the absence of a large remeasurement gain that occurred in the prior year Q1 Income Statement Highlights (in millions) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $907 | $1,125 | | Direct operating costs | $(368) | $(484) | | Interest expense | $(413) | $(363) | | Remeasurement gains | $223 | $548 | | Net (Loss) Income | $(5) | $491 | Consolidated Statements of Comprehensive Income Comprehensive income for Q1 2025 was $395 million, an increase from $208 million in Q1 2024. This was primarily due to a significant positive foreign currency translation adjustment of $554 million, which offset the net loss and other comprehensive losses Q1 Comprehensive Income (in millions) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (Loss) Income | $(5) | $491 | | Foreign currency translation | $554 | $(171) | | Other comprehensive income (loss) | $(156) | $(112) | | Comprehensive Income | $395 | $208 | Consolidated Statements of Changes in Equity Total equity increased from $12.11 billion at the end of 2024 to $12.44 billion as of March 31, 2025. The increase was driven by other comprehensive income of $400 million and capital contributions of $101 million, partially offset by a net loss of $5 million and dividends declared of $149 million Q1 2025 Changes in Equity (in millions) | Item | Amount | | :--- | :--- | | Balance, as at December 31, 2024 | $12,108 | | Net loss | $(5) | | Other comprehensive income | $400 | | Capital contributions | $101 | | Dividends declared | $(149) | | Other | $(13) | | Balance, as at March 31, 2025 | $12,442 | Consolidated Statements of Cash Flows For Q1 2025, net cash provided by operating activities was $110 million, a decrease from $257 million in Q1 2024. Investing activities used $252 million, primarily for investments in property, plant, and equipment. Financing activities provided $104 million. Overall, cash and cash equivalents decreased by $10 million during the quarter Q1 Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $110 | $257 | | Net Cash from Financing Activities | $104 | $137 | | Net Cash from Investing Activities | $(252) | $(371) | | Net Change in Cash | $(38) | $23 | Notes to the Unaudited Interim Consolidated Financial Statements Note 1: Basis of Presentation and Accounting Policies The financial statements are prepared in accordance with IAS 34, Interim Financial Reporting. A key event was the 'Arrangement' completed on December 24, 2024, where Brookfield Renewable Corporation (BEPC) became the successor issuer to the former BEPC (renamed BRHC). The transaction is accounted for using a continuity of interest basis, reflecting BRHC's historical carrying values - The financial statements are prepared on a basis consistent with the December 31, 2024 audited consolidated financial statements[20] - On December 24, 2024, the company completed an 'Arrangement' to maintain its business structure benefits while addressing proposed Canadian tax law changes. This made the current BEPC the 'successor issuer' to the former entity[24] - Due to common control by the partnership both before and after the Arrangement, the acquisition of BRHC is reflected using BRHC's historical carrying values to show a continuity of interests[25][27] Note 2: Risk Management and Financial Instruments The company is exposed to market, credit, and liquidity risks, which it manages using financial instruments. As of March 31, 2025, net financial instrument assets totaled $29 million. The majority of assets measured at fair value, such as Property, Plant and Equipment ($39.7 billion), are classified as Level 3, indicating reliance on unobservable market data Fair Value Hierarchy of Assets and Liabilities (March 31, 2025, in millions) | Category | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Assets measured at fair value | $678 | $203 | $39,754 | $40,635 | | Liabilities measured at fair value | $0 | $(379) | $(413) | $(792) | Net Financial Instrument Position (in millions) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Financial Instrument Assets | $821 | $786 | | Total Financial Instrument Liabilities | $792 | $652 | | Net Assets | $29 | $134 | Note 3: Segmented Information The company's operations are segmented by technology: Hydroelectric, Wind, Utility-scale solar, Distributed energy & sustainable solutions, and Corporate. Performance is primarily assessed using Funds From Operations (FFO) on a proportionate basis. For Q1 2025, total FFO was $139 million, with the Hydroelectric segment being the largest contributor at $114 million - The company's operations are segmented by technology: 1) hydroelectric, 2) wind, 3) utility-scale solar, 4) distributed energy & sustainable solutions, and 5) corporate[51] - Performance is analyzed based on Funds From Operations (FFO), a non-IFRS measure used to assess performance before certain non-cash and non-recurring items[58][59] Funds From Operations by Segment (Q1 2025, in millions) | Segment | FFO | | :--- | :--- | | Hydroelectric | $114 | | Wind | $23 | | Utility-scale solar | $22 | | Distributed energy & sustainable solutions | $5 | | Corporate | $(25) | | Total | $139 | Note 4: Income Taxes The effective income tax rate for Q1 2025 was 350.0%, a significant deviation from the statutory rate due to rate differentials, non-deductible expenses, and other factors. The company has applied temporary relief from recognizing deferred taxes related to the new global minimum top-up tax, which is not expected to have a significant impact - The effective income tax rate was 350.0% for Q1 2025, compared to 6.3% for Q1 2024[65] - The company has applied temporary mandatory relief from recognizing and disclosing deferred taxes related to the global minimum top-up tax, which is not anticipated to have a significant impact[66] Note 5: Property, Plant and Equipment The fair value of property, plant, and equipment (PP&E) increased to $39.73 billion at March 31, 2025, from $38.70 billion at year-end 2024. The increase was primarily driven by a $948 million positive foreign exchange adjustment and $359 million in additions, partially offset by $307 million in depreciation Reconciliation of PP&E (in millions) | Item | Amount | | :--- | :--- | | Balance, as at December 31, 2024 | $38,696 | | Additions | $359 | | Foreign exchange | $981 | | Depreciation | $(307) | | Other | $(2) | | Balance, as at March 31, 2025 | $39,731 | - During Q1 2025, the company acquired a 177 MW portfolio of utility-scale solar development assets in the U.S., adding $23 million to PP&E[68] Note 6: Borrowings Total non-recourse borrowings stood at $14.11 billion as of March 31, 2025, with a weighted-average interest rate of 7.0% and an average term of 8 years. These borrowings are typically asset-specific and denominated in the local currency of the subsidiary Non-Recourse Borrowings by Segment (March 31, 2025) | Segment | Carrying Value (millions) | Weighted-Avg Rate (%) | Term (years) | | :--- | :--- | :--- | :--- | | Hydroelectric | $7,772 | 7.8% | 6 | | Wind | $1,961 | 6.0% | 8 | | Utility-scale solar | $3,420 | 6.1% | 12 | | Distributed energy & sustainable solutions | $1,024 | 5.1% | 9 | | Total | $14,177 | 7.0% | 8 | Note 7: Non-controlling Interests Non-controlling interests totaled $11.01 billion as of March 31, 2025, up from $10.77 billion at the end of 2024. The majority ($10.74 billion) relates to participating interests in operating subsidiaries held by third parties, including various Brookfield-sponsored infrastructure funds Composition of Non-controlling Interests (in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Participating non-controlling interests – in operating subsidiaries | $10,737 | $10,508 | | Participating non-controlling interests – in a holding subsidiary | $269 | $259 | | Total | $11,006 | $10,767 | Note 8: Exchangeable Shares Various classes of exchangeable shares are classified as financial liabilities due to their redemption features and are remeasured based on the market price of BEP units. As of March 31, 2025, the total financial liability for these shares was $8.38 billion, down from $8.60 billion at year-end 2024, primarily due to a remeasurement loss of $223 million - BEPC exchangeable shares, BRHC class B and C shares, and class A.2 exchangeable shares are classified as liabilities and remeasured to reflect the NYSE closing price of a BEP unit[75][78] Continuity of Exchangeable Shares Liability (in millions) | Item | Amount | | :--- | :--- | | Balance, as at December 31, 2024 | $8,600 | | Share exchanges | $0 | | Remeasurement of liability | $(223) | | Balance, as at March 31, 2025 | $8,377 | - During Q1 2025, the company declared dividends of $68 million on BEPC and class A.2 exchangeable shares and $95 million on BRHC class C shares, which are presented as interest expense[80] Note 9: Goodwill Goodwill increased to $727 million as of March 31, 2025, from $692 million at the end of 2024, with the change attributed to foreign exchange and other adjustments Goodwill Reconciliation (in millions) | Item | Amount | | :--- | :--- | | Balance, as at December 31, 2024 | $692 | | Foreign exchange and other | $35 | | Balance, as at March 31, 2025 | $727 | Note 10: Equity-Accounted Investments The value of equity-accounted investments rose to $774 million as of March 31, 2025, from $753 million at year-end 2024. The increase reflects a new investment of $20 million, offset by a share of net loss of $2 million Equity-Accounted Investments Reconciliation (in millions) | Item | Amount | | :--- | :--- | | Balance, as at December 31, 2024 | $753 | | Investment | $20 | | Share of net loss | $(2) | | Foreign exchange translation and other | $3 | | Balance, as at March 31, 2025 | $774 | Note 15: Commitments, Contingencies and Guarantees As of March 31, 2025, the company had capital expenditure commitments of $631 million, primarily for growth initiatives. Additionally, letters of credit issued by the company's subsidiaries totaled $1.009 billion - The company has capital expenditure commitments of $631 million, with $272 million payable in 2025[92] - Letters of credit issued by subsidiaries as at March 31, 2025 were $1,009 million, slightly up from $1,002 million at year-end 2024[98] Note 16: Related Party Transactions The company engages in significant transactions with its parent, the partnership, and Brookfield. Key transactions in Q1 2025 included $130 million in interest expense on borrowings and distributions to related parties. As of March 31, 2025, amounts due from related parties were $1.2 billion, while amounts due to related parties were $1.06 billion - In connection with the December 2024 Arrangement, the company entered into deposit and credit agreements with subsidiaries of the partnership, including a $150 million revolving credit facility[104] Key Related Party Transactions - Income Statement (Q1 2025, in millions) | Item | Amount | | :--- | :--- | | Revenues (Power purchase agreements) | $24 | | Interest income | $10 | | Direct operating costs | $(15) | | Interest expense (Borrowings and distributions) | $(130) | | Management service costs | $(23) | Related Party Balances (March 31, 2025, in millions) | Balance | Amount | | :--- | :--- | | Due from related parties (Current) | $1,197 | | Due to related parties (Current) | $521 | | Due to related parties (Non-current) | $535 | General Information Corporate and Investor Information This section provides essential corporate details, including the head office address in New York, key officers such as CEO Connor Teskey and CFO Patrick Taylor, and the board of directors. The company's exchangeable shares are listed on the NYSE and TSX under the ticker 'BEPC' - Key Officers: Connor Teskey (Chief Executive Officer), Patrick Taylor (Chief Financial Officer)[114] - The company's exchangeable shares are listed on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) under the symbol 'BEPC'[115]