Brookfield Renewable Energy Partners L.P.
INTERIM CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
AS AT JUNE 30, 2014 AND DECEMBER 31, 2013 AND
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013
BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
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UNAUDITED |
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| Jun 30 |
| Dec 31 | ||
(MILLIONS) | Notes |
| 2014 |
| 2013 | ||
Assets |
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Current assets |
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| Cash and cash equivalents |
| $ | 225 | $ | 203 | |
| Restricted cash |
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| 172 |
| 169 | |
| Trade receivables and other current assets |
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| 263 |
| 184 | |
| Financial instrument assets | 4 |
| 7 |
| 2 | |
| Due from related parties |
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| 52 |
| 48 | |
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| 719 |
| 606 |
Financial instrument assets | 4 |
| 5 |
| 15 | ||
Equity-accounted investments | 6 |
| 542 |
| 290 | ||
Property, plant and equipment, at fair value | 7 |
| 16,991 |
| 15,741 | ||
Deferred income tax assets | 10 |
| 150 |
| 117 | ||
Other long-term assets |
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| 122 |
| 210 | ||
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| $ | 18,529 | $ | 16,979 | ||
Liabilities |
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Current liabilities |
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| Accounts payable and accrued liabilities | 8 | $ | 269 | $ | 209 | |
| Financial instrument liabilities | 4 |
| 133 |
| 64 | |
| Due to related parties |
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| 80 |
| 110 | |
| Current portion of long-term debt | 9 |
| 486 |
| 517 | |
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| 968 |
| 900 |
Financial instrument liabilities | 4 |
| 15 |
| 9 | ||
Long-term debt and credit facilities | 9 |
| 6,566 |
| 6,106 | ||
Deferred income tax liabilities | 10 |
| 2,372 |
| 2,265 | ||
Other long-term liabilities |
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| 105 |
| 163 | ||
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| 10,026 |
| 9,443 |
Equity |
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Non-controlling interests |
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| Preferred equity | 11 |
| 793 |
| 796 | |
| Participating non-controlling interests - in |
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| |
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| operating subsidiaries | 11 |
| 2,011 |
| 1,303 |
| General partnership interest in a holding subsidiary |
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| held by Brookfield | 11 |
| 55 |
| 54 |
| Participating non-controlling interests - in a holding subsidiary |
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| - Redeemable/Exchangeable units held by Brookfield | 11 |
| 2,681 |
| 2,657 |
Limited partners' equity | 12 |
| 2,963 |
| 2,726 | ||
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| 8,503 |
| 7,536 |
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| $ | 18,529 | $ | 16,979 |
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The accompanying notes are an integral part of these interim consolidated financial statements. |
Approved on behalf of Brookfield Renewable Energy Partners L.P.:
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| Patricia Zuccotti Director | David Mann Director | ||
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 1 |
BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. |
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CONSOLIDATED STATEMENTS OF INCOME |
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UNAUDITED | Notes | Three months ended Jun 30 | Six months ended Jun 30 | ||||||||
(MILLIONS, EXCEPT AS NOTED) |
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| 2014 |
| 2013 |
| 2014 |
| 2013 | |
Revenues | 5 | $ | 474 | $ | 484 | $ | 954 | $ | 921 | ||
Other income |
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| 2 |
| 2 |
| 5 |
| 4 | ||
Direct operating costs |
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| (124) |
| (135) |
| (254) |
| (261) | ||
Management service costs | 5 |
| (13) |
| (11) |
| (24) |
| (23) | ||
Interest expense – borrowings | 9 |
| (102) |
| (106) |
| (203) |
| (208) | ||
Share of earnings from equity-accounted |
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| investments | 6 |
| 2 |
| 2 |
| 3 |
| 6 | |
Unrealized financial instruments (loss) gain | 4 |
| (4) |
| 3 |
| (4) |
| 19 | ||
Depreciation | 7 |
| (129) |
| (137) |
| (255) |
| (265) | ||
Other | 3 |
| (11) |
| (6) |
| 8 |
| (8) | ||
Income before income taxes |
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| 95 |
| 96 |
| 230 |
| 185 | ||
Income tax expense |
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| Current | 10 |
| (6) |
| (8) |
| (14) |
| (11) | |
| Deferred | 10 |
| (17) |
| (10) |
| (19) |
| (11) | |
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| (23) |
| (18) |
| (33) |
| (22) | ||
Net income |
| $ | 72 | $ | 78 | $ | 197 | $ | 163 | ||
Net income attributable to: |
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Non-controlling interests |
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| Preferred equity | 11 | $ | 10 | $ | 10 | $ | 19 | $ | 17 | |
| Participating non-controlling interests - in |
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| operating subsidiaries | 11 |
| 21 |
| 24 |
| 61 |
| 40 |
| General partnership interest in a holding |
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| subsidiary held by Brookfield | 11 |
| - |
| - |
| 1 |
| 1 |
| Participating non-controlling interests - in a |
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| holding subsidiary - Redeemable/ |
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| Exchangeable units held by Brookfield | 11 |
| 20 |
| 22 |
| 57 |
| 52 |
Limited partners' equity | 12 |
| 21 |
| 22 |
| 59 |
| 53 | ||
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| $ | 72 | $ | 78 | $ | 197 | $ | 163 |
Basic and diluted earnings per LP Unit |
| $ | 0.15 | $ | 0.17 | $ | 0.44 | $ | 0.40 | ||
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The accompanying notes are an integral part of these interim consolidated financial statements. |
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Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 2 |
BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. |
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
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UNAUDITED | Three months ended Jun 30 | Six months ended Jun 30 | ||||||||||
(MILLIONS) | Notes |
| 2014 |
| 2013 |
| 2014 |
| 2013 | |||
Net income | $ | 72 | $ | 78 | $ | 197 | $ | 163 | ||||
Other comprehensive income (loss) that may be |
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| reclassified to net income |
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| Financial instruments designated as cash-flow |
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| hedges |
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| (Losses) gains arising during the period | 4 |
| (17) |
| 53 |
| (53) |
| 50 | |
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| Reclassification adjustments for amounts |
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| recognized in net income | 4 |
| - |
| 1 |
| 8 |
| 4 |
| Foreign currency translation |
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| 117 |
| (308) |
| 103 |
| (347) | ||
| Deferred income taxes on above items |
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| 5 |
| (12) |
| 10 |
| (12) | ||
Other comprehensive income (loss) |
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| 105 |
| (266) |
| 68 |
| (305) | |||
Comprehensive income (loss) |
| $ | 177 | $ | (188) | $ | 265 | $ | (142) | |||
Comprehensive income attributable to: |
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Non-controlling interests |
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| Preferred equity | 11 | $ | 36 | $ | (19) | $ | 15 | $ | (28) | ||
| Participating non-controlling interests - in |
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| operating subsidiaries | 11 |
| 27 |
| 10 |
| 67 |
| 28 | |
| General partnership interest in a holding subsidiary |
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| held by Brookfield | 11 |
| 1 |
| (1) |
| 2 |
| (1) | |
| Participating non-controlling interests - in a holding |
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| subsidiary - Redeemable/Exchangeable |
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| units held by Brookfield | 11 |
| 55 |
| (88) |
| 89 |
| (70) | |
Limited partners' equity | 12 |
| 58 |
| (90) |
| 92 |
| (71) | |||
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| $ | 177 | $ | (188) | $ | 265 | $ | (142) |
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The accompanying notes are an integral part of these interim consolidated financial statements. |
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 3 |
BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. | |||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||||||||||
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| Accumulated other comprehensive income |
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| Participating |
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| General | non-controlling |
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| partnership | interests - in a |
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| Actuarial |
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| Participating | interest in | holding subsidiary |
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| losses on |
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| non-controlling | a holding | - Redeemable |
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THREE MONTHS ENDED JUNE 30 | Limited | Foreign |
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| interests - in | subsidiary | /Exchangeable |
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UNAUDITED | partners' | currency | Revaluation | benefit | Cash flow | partners' | Preferred | operating | held by | units held by | Total | ||||||||||||
(MILLIONS) |
| equity | translation | surplus | plans | hedges | equity | equity | subsidiaries | Brookfield | Brookfield | equity | |||||||||||
Balance, as at March 31, 2013 | $ | (231) | $ | 113 | $ | 3,271 | $ | (11) | $ | (25) | $ | 3,117 | $ | 659 | $ | 1,027 | $ | 62 | $ | 3,041 | $ | 7,906 | |
Net income |
| 22 |
| - |
| - |
| - |
| - |
| 22 |
| 10 |
| 24 |
| - |
| 22 |
| 78 | |
Other comprehensive income (loss) |
| - |
| (128) |
| - |
| - |
| 16 |
| (112) |
| (29) |
| (14) |
| (1) |
| (110) |
| (266) | |
Preferred shares issued |
| - |
| - |
| - |
| - |
| - |
| - |
| 174 |
| - |
| - |
| - |
| 174 | |
Distributions or dividends declared |
| (48) |
| - |
| - |
| - |
| - |
| (48) |
| (10) |
| (18) |
| (1) |
| (47) |
| (124) | |
Distribution reinvestment plan |
| 1 |
| - |
| - |
| - |
| - |
| 1 |
| - |
| - |
| - |
| - |
| 1 | |
Other |
| (2) |
| - |
| - |
| - |
| - |
| (2) |
| - |
| - |
| (1) |
| (2) |
| (5) | |
Change in period |
| (27) |
| (128) |
| - |
| - |
| 16 |
| (139) |
| 145 |
| (8) |
| (3) |
| (137) |
| (142) | |
Balance, as at June 30, 2013 | $ | (258) | $ | (15) | $ | 3,271 | $ | (11) | $ | (9) | $ | 2,978 | $ | 804 | $ | 1,019 | $ | 59 | $ | 2,904 | $ | 7,764 | |
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Balance, as at March 31, 2014 | $ | (348) | $ | (78) | $ | 3,158 | $ | (7) | $ | (16) | $ | 2,709 | $ | 766 | $ | 1,571 | $ | 54 | $ | 2,641 | $ | 7,741 | |
Net income |
| 21 |
| - |
| - |
| - |
| - |
| 21 |
| 10 |
| 21 |
| - |
| 20 |
| 72 | |
Other comprehensive income (loss) |
| - |
| 41 |
| - |
| - |
| (4) |
| 37 |
| 26 |
| 6 |
| 1 |
| 35 |
| 105 | |
LP Units issued (Note 11) |
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| Net proceeds |
| 285 |
| - |
| - |
| - |
| - |
| 285 |
| - |
| - |
| - |
| - |
| 285 |
| Adjustment |
| (38) |
| - |
| - |
| - |
| - |
| (38) |
| - |
| - |
| 1 |
| 37 |
| - |
Acquisitions (Note 3) |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| 449 |
| - |
| - |
| 449 | |
Distributions or dividends declared |
| (53) |
| - |
| - |
| - |
| - |
| (53) |
| (10) |
| (35) |
| (1) |
| (51) |
| (150) | |
Distribution reinvestment plan |
| 2 |
| - |
| - |
| - |
| - |
| 2 |
| - |
| - |
| - |
| - |
| 2 | |
Other |
| - |
| - |
| - |
| - |
| - |
| - |
| 1 |
| (1) |
| - |
| (1) |
| (1) | |
Change in period |
| 217 |
| 41 |
| - |
| - |
| (4) |
| 254 |
| 27 |
| 440 |
| 1 |
| 40 |
| 762 | |
Balance, as at June 30, 2014 | $ | (131) | $ | (37) | $ | 3,158 | $ | (7) | $ | (20) | $ | 2,963 | $ | 793 | $ | 2,011 | $ | 55 | $ | 2,681 | $ | 8,503 | |
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The accompanying notes are an integral part of these interim consolidated financial statements. |
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 4 |
BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. | |||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||||||||||
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| Accumulated other comprehensive income |
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| Participating |
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| General | non-controlling |
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| partnership | interests - in a |
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| Actuarial |
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| Participating | interest in | holding subsidiary |
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| losses on |
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| Total |
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| non-controlling | a holding | - Redeemable |
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SIX MONTHS ENDED JUNE 30 | Limited | Foreign |
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| interests - in | subsidiary | /Exchangeable |
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UNAUDITED | partners' | currency | Revaluation | benefit | Cash flow | partners' | Preferred | operating | held by | units held by | Total | ||||||||||||
(MILLIONS) |
| equity | translation | surplus | plans | hedges | equity | equity | subsidiaries | Brookfield | Brookfield | equity | |||||||||||
Balance, as at December 31, 2012 | $ | (227) | $ | 125 | $ | 3,285 | $ | (11) | $ | (25) | $ | 3,147 | $ | 500 | $ | 1,028 | $ | 63 | $ | 3,070 | $ | 7,808 | |
Net income |
| 53 |
| - |
| - |
| - |
| - |
| 53 |
| 17 |
| 40 |
| 1 |
| 52 |
| 163 | |
Other comprehensive income (loss) |
| - |
| (140) |
| - |
| - |
| 16 |
| (124) |
| (45) |
| (12) |
| (2) |
| (122) |
| (305) | |
Preferred shares issued |
| - |
| - |
| - |
| - |
| - |
| - |
| 349 |
| - |
| - |
| - |
| 349 | |
Acquisitions |
| 14 |
| - |
| (14) |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| - | |
Distributions or dividends declared |
| (96) |
| - |
| - |
| - |
| - |
| (96) |
| (17) |
| (80) |
| (2) |
| (94) |
| (289) | |
Distribution reinvestment plan |
| 1 |
| - |
| - |
| - |
| - |
| 1 |
| - |
| - |
| - |
| - |
| 1 | |
Other |
| (3) |
| - |
| - |
| - |
| - |
| (3) |
| - |
| 43 |
| (1) |
| (2) |
| 37 | |
Change in period |
| (31) |
| (140) |
| (14) |
| - |
| 16 |
| (169) |
| 304 |
| (9) |
| (4) |
| (166) |
| (44) | |
Balance, as at June 30, 2013 | $ | (258) | $ | (15) | $ | 3,271 | $ | (11) | $ | (9) | $ | 2,978 | $ | 804 | $ | 1,019 | $ | 59 | $ | 2,904 | $ | 7,764 | |
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Balance, as at December 31, 2013 | $ | (337) | $ | (83) | $ | 3,160 | $ | (7) | $ | (7) | $ | 2,726 | $ | 796 | $ | 1,303 | $ | 54 | $ | 2,657 | $ | 7,536 | |
Net income |
| 59 |
| - |
| - |
| - |
| - |
| 59 |
| 19 |
| 61 |
| 1 |
| 57 |
| 197 | |
Other comprehensive income (loss) |
| - |
| 46 |
| - |
| - |
| (13) |
| 33 |
| (4) |
| 6 |
| 1 |
| 32 |
| 68 | |
LP Unit issued (Note 11) |
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| Net proceeds |
| 285 |
| - |
| - |
| - |
| - |
| 285 |
| - |
| - |
| - |
| - |
| 285 |
| Adjustment |
| (38) |
| - |
| - |
| - |
| - |
| (38) |
| - |
| - |
| 1 |
| 37 |
| - |
Acquisitions (Note 3) |
| 2 |
| - |
| (2) |
| - |
| - |
| - |
| - |
| 694 |
| - |
| - |
| 694 | |
Distributions or dividends declared |
| (104) |
| - |
| - |
| - |
| - |
| (104) |
| (19) |
| (52) |
| (3) |
| (101) |
| (279) | |
Distribution reinvestment plan |
| 2 |
| - |
| - |
| - |
| - |
| 2 |
| - |
| - |
| - |
| - |
| 2 | |
Other |
| - |
| - |
| - |
| - |
| - |
| - |
| 1 |
| (1) |
| 1 |
| (1) |
| - | |
Change in period |
| 206 |
| 46 |
| (2) |
| - |
| (13) |
| 237 |
| (3) |
| 708 |
| 1 |
| 24 |
| 967 | |
Balance, as at June 30, 2014 | $ | (131) | $ | (37) | $ | 3,158 | $ | (7) | $ | (20) | $ | 2,963 | $ | 793 | $ | 2,011 | $ | 55 | $ | 2,681 | $ | 8,503 | |
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The accompanying notes are an integral part of these interim consolidated financial statements. |
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 5 |
BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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| Notes | Three months ended | Six months ended | ||||||||
UNAUDITED |
| Jun 30 |
| Jun 30 | |||||||
(MILLIONS) |
| 2014 |
| 2013 |
| 2014 |
| 2013 | |||
Operating activities |
|
|
|
|
|
|
|
|
| ||
Net income |
| $ | 72 | $ | 78 | $ | 197 | $ | 163 | ||
Adjustments for the following non-cash items: |
|
|
|
|
|
|
|
|
| ||
| Depreciation | 7 |
| 129 |
| 137 |
| 255 |
| 265 | |
| Unrealized financial instrument gain (loss) | 4 |
| 4 |
| (3) |
| 4 |
| (19) | |
| Share of earnings from equity accounted investments | 6 |
| (2) |
| (2) |
| (3) |
| (6) | |
| Deferred income tax expense | 10 |
| 17 |
| 10 |
| 19 |
| 11 | |
| Other non-cash items |
|
| 5 |
| 4 |
| (3) |
| 2 | |
Dividends received from equity-accounted investments | 6 |
| 12 |
| 3 |
| 18 |
| 6 | ||
Changes in due to or from related parties |
|
| (34) |
| (11) |
| 6 |
| (10) | ||
Net change in working capital balances |
|
| (23) |
| 2 |
| (41) |
| 8 | ||
|
|
|
|
| 180 |
| 218 |
| 452 |
| 420 |
Financing activities |
|
|
|
|
|
|
|
|
| ||
Long-term debt - borrowings | 9 |
| 125 |
| 34 |
| 706 |
| 1,146 | ||
Long-term debt - repayments | 9 |
| (238) |
| (207) |
| (534) |
| (1,214) | ||
Capital provided by participating non-controlling interests - |
|
|
|
|
|
|
|
|
| ||
| in operating subsidiaries | 3,11 |
| 449 |
| - |
| 694 |
| 41 | |
Issuance of preferred shares | 11 |
| - |
| 168 |
| - |
| 337 | ||
Issuance of LP Units | 12 |
| 285 |
| - |
| 285 |
| - | ||
Distributions paid: |
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|
| ||
| To participating non-controlling interests - in operating |
|
|
|
|
|
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|
|
| |
|
| subsidiaries and preferred equity | 11 |
| (45) |
| (25) |
| (71) |
| (94) |
| To unitholders of Brookfield Renewable or BRELP | 12 |
| (103) |
| (96) |
| (267) |
| (187) | |
|
|
|
|
| 473 |
| (126) |
| 813 |
| 29 |
Investing activities |
|
|
|
|
|
|
|
|
| ||
Acquisitions | 3 |
| (688) |
| (15) |
| (1,228) |
| (243) | ||
Investment in: |
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|
|
|
|
|
|
|
| ||
| Sustaining capital expenditures |
|
| (16) |
| (13) |
| (27) |
| (21) | |
| Development and construction of renewable power |
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|
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| |
|
| generating assets |
|
| (6) |
| (53) |
| (17) |
| (80) |
Investment tax credits related to renewable power generating assets |
|
| 12 |
| - |
| 12 |
| - | ||
Restricted cash and other |
|
| 40 |
| (1) |
| 14 |
| (5) | ||
|
|
|
|
| (658) |
| (82) |
| (1,246) |
| (349) |
Foreign exchange gain (loss) on cash |
|
| 3 |
| (6) |
| 3 |
| (6) | ||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
| ||
| (Decrease) increase |
|
| (2) |
| 4 |
| 22 |
| 94 | |
| Balance, beginning of period |
|
| 227 |
| 227 |
| 203 |
| 137 | |
| Balance, end of period |
| $ | 225 | $ | 231 | $ | 225 | $ | 231 | |
Supplemental cash flow information: |
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|
|
|
|
|
| ||
| Interest paid |
| $ | 146 | $ | 158 | $ | 197 | $ | 197 | |
| Interest received |
|
| 2 |
| 2 |
| 5 |
| 4 | |
| Income taxes paid |
|
| 8 |
| 5 |
| 22 |
| 19 | |
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The accompanying notes are an integral part of these interim consolidated financial statements. |
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Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 6 |
brookfield renewable energy partners l.p.
notes to the consolidated financial statements
1. organization and description of the business
The business activities of Brookfield Renewable Energy Partners L.P. (“Brookfield Renewable”) consist of owning a portfolio of renewable power generating facilities in the United States, Canada, Brazil and Europe.
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.
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. The ultimate parent of Brookfield Renewable is Brookfield Asset Management Inc. (“Brookfield Asset Management”).
2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
(a) Statement of compliance
The interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting on a basis consistent with the accounting policies disclosed in the audited consolidated financial statements for the fiscal year ended December 31, 2013.
Certain information and footnote disclosure normally included in the annual audited consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board have been omitted or condensed. These interim consolidated financial statements should be read in conjunction with Brookfield Renewable’s December 31, 2013 audited consolidated financial statements.
The interim consolidated financial statements are unaudited and reflect any adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to a fair statement of results for the interim periods in accordance with IFRS.
The results reported in these interim consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for an entire year. Certain comparative figures have been reclassified to conform to the current year’s presentation.
These interim consolidated financial statements have been authorized for issuance by the Board of Directors of its general partner, Brookfield Renewable Partners Limited, on August 6, 2014.
All figures are presented in millions of United States (“U.S.”) dollars unless otherwise noted.
(b) Basis of preparation
The interim 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.
Consolidation
These interim 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
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 7 |
equity of Brookfield Renewable’s subsidiaries are shown separately in equity in the consolidated balance sheets.
(c) New interpretation adopted by Brookfield Renewable
IFRIC 21, Levies was adopted and applied by Brookfield Renewable on January 1, 2014, which had no material impact on the interim consolidated financial statements. Please see Note 2 (q) - Future changes in accounting policies in our December 31, 2013 audited consolidated financial statements.
(d) Future changes
IFRS 15, Revenue from Contracts with Customers (“IFRS 15”)
IFRS 15 was issued by IASB on May 28, 2014. IFRS 15 outlines a single comprehensive model to account for revenue arising from contracts with customers and will replace the majority of existing IFRS requirements on revenue recognition including IAS 18, Revenue, IAS 11, Construction Contracts and related interpretations. The core principle of the standard is to recognize revenue to depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard has prescribed a five-step model to apply the principles. The standard also specifies how to account for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. IFRS 15 is effective for annual periods beginning on or after January 1, 2017. Management is currently evaluating the impact of IFRS 15 on the consolidated financial statements.
Please refer to the December 31, 2013 audited consolidated financial statements for other future changes to IFRS with potential impact on Brookfield Renewable.
3. BUSINESS COMBINATIONS
The following investments were accounted for using the acquisition method, and the results of operations have been included in the consolidated financial statements since the respective dates of acquisition.
Maine Hydroelectric Generation Facilities
In January 2014, Brookfield Renewable acquired a 70 MW hydroelectric portfolio of generation facilities that are expected to generate approximately 400 GWh annually (“Maine Hydro”). The acquisition was completed with institutional partners, and Brookfield Renewable retains an approximate 40% controlling interest in the portfolio. Total cash consideration was $244 million. The acquisition costs of $2 million were expensed as incurred.
California Hydroelectric Generation Facility
In February 2014, Brookfield Renewable acquired the remaining 50% interest in a 30 MW hydroelectric generation facility in California. The total cash consideration was $11 million (the “California Hydro Step Acquisition”). The acquisition was completed with institutional partners, and Brookfield Renewable retains an approximate 22% controlling interest in the facility.
Pennsylvania Hydroelectric Generation Facility
In March 2014, Brookfield Renewable acquired a 33% economic and 50% voting interest in a 417 MW hydroelectric generation facility in Pennsylvania (“Pennsylvania Hydro”) which is expected to generate approximately 1,100 GWh annually. The acquisition was completed with institutional partners, and Brookfield Renewable retains an approximate 40% controlling interest. Total cash consideration was $295 million. Brookfield Renewable has accounted for its acquired 33% economic interest using the equity method. The acquisition costs of $1 million were expensed as incurred.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 8 |
Ireland Wind Portfolio
In June 2014, Brookfield Renewable acquired the wind portfolio of Bord Gáis Energy comprising 326 MW of operating wind capacity across 17 wind projects in Ireland. The acquisition was completed with institutional partners, and Brookfield Renewable retains an approximate 40% controlling interest. Total consideration of €516 million ($707 million) included €521 million ($713 million) in cash reduced for post-closing working capital adjustments and a deferred consideration amount. The acquisition costs of $6 million were expensed as incurred.
Voting Agreements
In January 2014 and March 2014, Brookfield Renewable entered into voting agreements with subsidiaries of Brookfield Asset Management whereby these subsidiaries, as managing members of entities related to Brookfield Infrastructure Fund II (the “BIF II Entities”), in which Brookfield Renewable holds its investments in the Maine Hydro, Pennsylvania Hydro and the Irish wind portfolio with institutional investors, agreed to assign to Brookfield Renewable their voting rights to appoint the directors of the BIF II Entities.
Preliminary price allocations, at fair values, with respect to the acquisitions were as follows:
(MILLIONS) | Maine | Pennsylvania | Ireland | |||
Cash and cash equivalents | $ | 7 | $ | - | $ | 35 |
Restricted cash |
| - |
| - |
| 12 |
Trade receivables and other current assets |
| 13 |
| 6 |
| 10 |
Equity-accounted investments |
| - |
| 301 |
| - |
Property, plant and equipment, at fair value |
| 220 |
| - |
| 1,061 |
Other long-term assets |
| 6 |
| - |
| - |
Current liabilities |
| (1) |
| - |
| (72) |
Long-term debt |
| - |
| - |
| (232) |
Other long-term liabilities |
| (1) |
| (12) |
| (107) |
Net assets acquired | $ | 244 | $ | 295 | $ | 707 |
The estimated fair values of the assets acquired and liabilities assumed are expected to be finalized within 12 months of the acquisition date.
4. risk management and financial instruments
Risk management
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.
There have been no material changes in exposure to these risks since the December 31, 2013 audited consolidated financial statements.
Financial instruments 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,
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 9 |
management looks primarily to external readily observable market inputs such as interest rate yield curves, currency rates, and price, as applicable. The fair value of interest rate swap contracts, which form part of financing arrangements, is calculated by way of discounted cash flows, using market interest rates and 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.
The following table presents Brookfield Renewable’s assets and liabilities measured and disclosed at fair value classified by the fair value hierarchy:
|
| Jun 30, 2014 | Dec 31 | ||||||||
(MILLIONS) | Level 1 | Level 2 | Level 3 | Total | 2013 | ||||||
Assets measured at fair value: |
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|
| |
Cash and cash equivalents | $ | 225 | $ | - | $ | - | $ | 225 | $ | 203 | |
Restricted cash |
| 172 |
| - |
| - |
| 172 |
| 169 | |
Financial instrument assets |
|
|
|
|
|
|
|
|
|
| |
| Energy derivative contracts |
| - |
| 2 |
| - |
| 2 |
| - |
| Interest rate swaps |
| - |
| 5 |
| - |
| 5 |
| 17 |
| Foreign exchange swaps |
| - |
| 5 |
| - |
| 5 |
| - |
Property, plant and equipment(1) |
| - |
| - |
| 16,991 |
| 16,991 |
| 15,741 | |
Liabilities measured at fair value: |
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|
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|
|
|
|
|
|
| |
Financial instrument liabilities |
|
|
|
|
|
|
|
|
|
| |
| Energy derivative contracts |
| - |
| - |
| - |
| - |
| (3) |
| Interest rate swaps |
| - |
| (138) |
| - |
| (138) |
| (70) |
| Foreign exchange swaps |
| - |
| (10) |
| - |
| (10) |
| - |
Liabilities for which fair value is disclosed: |
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|
|
|
|
|
|
|
|
| |
| Long-term debt and credit facilities |
| - |
| (7,849) |
| - |
| (7,849) |
| (7,128) |
Total | $ | 397 | $ | (7,985) | $ | 16,991 | $ | 9,403 | $ | 8,929 |
(1) Refer to Note 7 - Property, plant and equipment, at fair value for further information.
There were no transfers between levels during the six months ended June 30, 2014.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 10 |
The aggregate amount of Brookfield Renewable’s net financial instrument positions are as follows:
|
| Jun 30, 2014 | Dec 31, 2013 | |||||
(MILLIONS) | Assets | Liabilities | Net Liabilities | Net Liabilities | ||||
Energy derivative contracts | $ | 2 | $ | - | $ | (2) | $ | 3 |
Interest rate swaps |
| 5 |
| 138 |
| 133 |
| 53 |
Foreign exchange swaps |
| 5 |
| 10 |
| 5 |
| - |
Total |
| 12 |
| 148 |
| 136 |
| 56 |
Less: current portion |
| 7 |
| 133 |
| 126 |
| 62 |
Long-term portion | $ | 5 | $ | 15 | $ | 10 | $ | (6) |
Energy derivative contracts
Brookfield Renewable has entered into long-term energy derivative contracts primarily to stabilize the price of gas purchases or eliminate the price risk on the sale of certain future power generation. Certain energy contracts are recorded in Brookfield Renewable’s interim 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.
Interest rate swaps
Brookfield Renewable has entered into interest rate swap 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 swap contracts are recorded in the interim consolidated financial statements at an amount equal to fair value.
Foreign exchange swaps
Brookfield Renewable has entered into foreign exchange swaps to minimize its exposure to currency fluctuations impacting its investments in foreign operations, and to fix the exchange rate on certain anticipated transactions denominated in foreign currencies.
The following table reflects the unrealized gains (losses) included in the consolidated statements of income:
|
| Three months ended Jun 30 | Six months ended Jun 30 | ||||||
(MILLIONS) |
| 2014 |
| 2013 |
| 2014 |
| 2013 | |
Energy derivative contracts | $ | - | $ | 1 | $ | - | $ | 10 | |
Interest rate swaps |
| 1 |
| 2 |
| 1 |
| 9 | |
Foreign exchange swaps |
| (5) |
| - |
| (5) |
| - | |
| $ | (4) | $ | 3 | $ | (4) | $ | 19 |
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 11 |
The following table reflects the unrealized gains (losses) included in the consolidated statements of comprehensive income:
|
| Three months ended Jun 30 | Six months ended Jun 30 | ||||||
(MILLIONS) |
| 2014 |
| 2013 |
| 2014 |
| 2013 | |
Energy derivative contracts | $ | 4 | $ | - | $ | (1) | $ | - | |
Interest rate swaps(1) |
| (23) |
| 53 |
| (54) |
| 50 | |
Foreign exchange swaps |
| 2 |
| - |
| 2 |
| - | |
| $ | (17) | $ | 53 | $ | (53) | $ | 50 |
(1) Included in the three and six months ended June 30, 2013 are unrealized gains of $2 million relating to equity-accounted investments.
The following table reflects the reclassification adjustments recognized in net income in the consolidated statements of comprehensive income:
|
| Three months ended Jun 30 | Six months ended Jun 30 | ||||||
(MILLIONS) |
| 2014 |
| 2013 |
| 2014 |
| 2013 | |
Energy derivative contracts | $ | (1) | $ | - | $ | 6 | $ | - | |
Interest rate swaps |
| 1 |
| 1 |
| 2 |
| 4 | |
| $ | - | $ | 1 | $ | 8 | $ | 4 |
5. related party transactions
Brookfield Renewable’s related party transactions are recorded at the exchange amount. Brookfield Renewable’s related party transactions are primarily with Brookfield Asset Management and its subsidiaries.
The following table reflects the related party agreements and transactions on the consolidated statements of income:
|
| Three months ended Jun 30 | Six months ended Jun 30 | ||||||
(MILLIONS) |
| 2014 |
| 2013 |
| 2014 |
| 2013 | |
Revenues |
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|
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|
|
|
|
| |
| Purchase and revenue support agreements | $ | 146 | $ | 134 | $ | 181 | $ | 237 |
| Wind levelization agreement |
| 2 |
| 1 |
| 3 |
| 2 |
|
| $ | 148 | $ | 135 | $ | 184 | $ | 239 |
Direct operating costs |
|
|
|
|
|
|
|
| |
| Energy purchases | $ | (1) | $ | (8) | $ | (7) | $ | (18) |
| Energy marketing fee |
| (5) |
| (5) |
| (10) |
| (10) |
| Insurance services |
| (7) |
| (7) |
| (14) |
| (13) |
|
| $ | (13) | $ | (20) | $ | (31) | $ | (41) |
Management service costs | $ | (13) | $ | (11) | $ | (24) | $ | (23) |
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 12 |
6. EQUITY-ACCOUNTED INVESTMENTS
The following table outlines the changes in Brookfield Renewable’s equity-accounted investments:
|
| Three months ended | Six months ended | Year ended | |||
(MILLIONS) | Jun 30, 2014 | Jun 30, 2014 | Dec 31, 2013 | ||||
Balance, beginning of period | $ | 549 | $ | 290 | $ | 344 | |
Acquisitions (see Note 3): |
|
|
|
|
|
| |
| California Hydro Step Acquisition |
| - |
| (39) |
| - |
| Pennsylvania Hydro |
| - |
| 301 |
| - |
| Canada hydroelectric step acquisition |
| - |
| - |
| (19) |
Revaluation recognized through OCI |
| - |
| - |
| (15) | |
Share of OCI |
| - |
| - |
| 1 | |
Share of net income |
| 2 |
| 3 |
| 9 | |
Dividends declared |
| (12) |
| (15) |
| (18) | |
Foreign exchange gain (loss) |
| 3 |
| 3 |
| (12) | |
Other |
| - |
| (1) |
| - | |
Balance, end of period | $ | 542 | $ | 542 | $ | 290 |
The following table summarizes certain financial information of equity-accounted investments:
|
| Three months ended Jun 30 | Six months ended Jun 30 | ||||||
(MILLIONS) |
| 2014 |
| 2013 |
| 2014 |
| 2013 | |
Revenue | $ | 24 | $ | 26 | $ | 65 | $ | 59 | |
Net income |
| 5 |
| 5 |
| 6 |
| 12 | |
Share of net income (loss) |
|
|
|
|
|
|
|
| |
| Cash earnings |
| 8 |
| 6 |
| 15 |
| 12 |
| Non-cash loss |
| (6) |
| (4) |
| (12) |
| (6) |
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 13 |
7. PROPERTY, PLANT AND EQUIPMENT, AT FAIR VALUE
The following table presents a reconciliation of property, plant and equipment at fair value:
|
|
|
|
|
|
|
| Co- |
|
| |
(MILLIONS) |
| Hydroelectric | Wind energy | CWIP | generation | Total | |||||
As at December 31, 2013 | $ | 12,806 | $ | 2,448 | $ | 441 | $ | 46 | $ | 15,741 | |
Foreign exchange |
| 105 |
| (6) |
| - |
| - |
| 99 | |
Additions(1) |
| 296 |
| 1,061 |
| 49 |
| - |
| 1,406 | |
Transfers |
| 280 |
| (1) |
| (279) |
| - |
| - | |
Depreciation(2) |
| (186) |
| (67) |
| - |
| (2) |
| (255) | |
As at June 30, 2014 | $ | 13,301 | $ | 3,435 | $ | 211 | $ | 44 | $ | 16,991 |
(1) Includes acquisitions of $1,363 million (2013: $1,378).
(2) Assets not subject to depreciation include construction work in process (“CWIP”) and land.
8. accounts payable and accrued liabilities
Brookfield Renewable’s accounts payable and accrued liabilities are as follows:
|
| Jun 30 |
| Dec 31 |
(MILLIONS) |
| 2014 |
| 2013 |
Operating accrued liabilities | $ | 86 | $ | 101 |
Interest payable on corporate and subsidiary borrowings |
| 48 |
| 49 |
Accounts payable |
| 90 |
| 11 |
LP Unitholders’ distribution(1) and preferred dividends payable |
| 20 |
| 40 |
Other |
| 25 |
| 8 |
| $ | 269 | $ | 209 |
(1) Includes amounts payable to external LP Unitholders. Amounts payable to Brookfield Asset Management are included in due to related parties.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 14 |
9. LONG-TERM DEBT AND CREDIT FACILITIES
The composition of debt obligations is presented in the following table:
|
| Jun 30, 2014 | Dec 31, 2013 | ||||||
|
| Weighted-average |
|
| Weighted-average |
|
| ||
|
| Interest | Term |
|
| Interest | Term |
|
|
(MILLIONS EXCEPT AS NOTED) | rate (%) | (years) |
| rate (%) | (years) |
| |||
Corporate borrowings |
|
|
|
|
|
|
|
| |
| Series 3 (CDN$200) | 5.3 | 4.4 | $ | 187 | 5.3 | 4.8 | $ | 188 |
| Series 4 (CDN$150) | 5.8 | 22.4 |
| 141 | 5.8 | 22.9 |
| 141 |
| Series 6 (CDN$300) | 6.1 | 2.4 |
| 281 | 6.1 | 2.9 |
| 282 |
| Series 7 (CDN$450) | 5.1 | 6.3 |
| 422 | 5.1 | 6.8 |
| 424 |
| Series 8 (CDN$400) | 4.8 | 7.6 |
| 375 | 4.8 | 8.1 |
| 377 |
|
| 5.3 | 7.2 | $ | 1,406 | 5.3 | 7.7 | $ | 1,412 |
Subsidiary borrowings |
|
|
|
|
|
|
|
| |
| United States | 5.9 | 9.7 | $ | 2,939 | 6.0 | 9.7 | $ | 2,826 |
| Canada | 5.7 | 14.3 |
| 1,980 | 5.8 | 15.2 |
| 1,877 |
| Brazil | 7.4 | 10.7 |
| 239 | 7.4 | 11.1 |
| 238 |
| Europe | 4.4 | 12.5 |
| 232 | - | - |
| - |
|
| 5.8 | 11.5 | $ | 5,390 | 6.0 | 11.8 | $ | 4,941 |
Credit facilities | 1.5 | 3.3 | $ | 298 | 1.4 | 3.8 | $ | 311 | |
Total debt |
|
| $ | 7,094 |
|
| $ | 6,664 | |
Add: Unamortized premiums(1) |
|
|
| 11 |
|
|
| 11 | |
Less: Unamortized financing fees(1) |
|
|
| (53) |
|
|
| (52) | |
Less: Current portion |
|
|
| (486) |
|
|
| (517) | |
|
|
|
| $ | 6,566 |
|
| $ | 6,106 |
(1) Unamortized premiums and unamortized financing fees are amortized to interest expense over the terms of the borrowing.
Corporate borrowings
Corporate borrowings are obligations of a finance subsidiary of Brookfield Renewable (Note 13 - Subsidiary public issuers). The finance subsidiary may redeem some or all of the borrowings from time to time, pursuant to the terms of the indenture. The balance is payable upon maturity, and interest on corporate borrowings is paid semi-annually.
Subsidiary borrowings
Subsidiary borrowings are generally asset-specific, long-term, non-recourse borrowings denominated in the domestic currency of the subsidiary. Subsidiary borrowings in the United States and Canada consist of both fixed and floating interest rate debt. Brookfield Renewable uses interest rate swap agreements to minimize its exposure to floating interest rates. Subsidiary borrowings in Brazil consist of floating interest rates of TJLP, the Brazil National Bank for Economic Development’s long-term interest rate, or Interbank Deposit Certificate rate, plus a margin.
In January 2014, the $279 million bridge loan associated with a 360 MW operating hydroelectric portfolio located in New England was refinanced to 2017 at LIBOR plus 2.25%.
In February 2014, as part of the Maine Hydro acquisition, $140 million of financing was obtained through a bond issuance with a 5.5% interest rate maturing in 2024.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 15 |
In March 2014, Brookfield Renewable up-financed indebtedness associated with a 349 MW Ontario hydroelectric portfolio through the issuance of C$90 million of senior and C$60 million of subordinate bonds with interest rates of 3.8% and 5.0%, respectively, maturing in June 2023.
In June 2014, Brookfield Renewable refinanced a $125 million debt facility associated with a 167 MW hydroelectric portfolio in New England through the issuance of 8-year notes maturing in January 2022 at a fixed rate of 4.59%.
As part of the acquisition of the 326 MW Irish wind portfolio, Brookfield Renewable assumed a €169 million ($232 million) loan with a fixed interest rate of 4.4%, including the related interest rate swaps, maturing in December 2026.
The maturity of the $250 million credit facility associated with a hydroelectric portfolio in the southeastern United States was extended by six months to November 2014 and the process to secure long term financing in the normal course commenced.
Cash received from borrowings net of repayments was $185 million during the six months ended June 30, 2014.
Credit facilities
Brookfield Renewable and its subsidiaries issue letters of credit from its credit facilities for general corporate purposes, which include, but are not limited to, security deposits, performance bonds and guarantees for debt service reserve accounts.
| Jun 30 | Dec 31 | ||
(MILLIONS) |
| 2014 |
| 2013 |
Available revolving credit facilities | $ | 1,480 | $ | 1,480 |
Drawings(1) |
| (298) |
| (311) |
Issued letters of credit |
| (238) |
| (212) |
Unutilized revolving credit facilities | $ | 944 | $ | 957 |
(1) Amounts are unsecured and revolving. Interest rate is at the LIBOR plus 1.25% (December 31, 2013: 1.25%).
Net repayments of $13 million were made during the six months ended June 30, 2014.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 16 |
10. Income taxes
Brookfield Renewable’s effective income tax rate was 14.3% for the six months ended June 30, 2014 (2013: 11.9%). The effective tax rate is less than the statutory rate primarily due to rate differentials and non-controlling interests income not subject to tax.
11. Non-controlling interests
Brookfield Renewable’s non-controlling interests are comprised of the following:
|
| Jun 30 | Dec 31 | ||
(MILLIONS) |
| 2014 |
| 2013 | |
Preferred equity | $ | 793 | $ | 796 | |
Participating non-controlling interests - in operating subsidiaries |
| 2,011 |
| 1,303 | |
General partnership interest in a holding subsidiary held by Brookfield |
| 55 |
| 54 | |
Participating non-controlling interests - in a holding subsidiary - |
|
|
|
| |
| Redeemable/Exchangeable units held by Brookfield |
| 2,681 |
| 2,657 |
Total | $ | 5,540 | $ | 4,810 |
Preferred equity
Brookfield Renewable’s preferred equity consists of Class A Preference Shares as follows:
|
|
| Earliest | Dividends declared |
|
|
|
| |||
|
| Cumulative | permitted | for the six months |
|
|
|
| |||
| Shares | dividend | redemption | ended June 30 | Jun 30 | Dec 31 | |||||
(MILLIONS) | outstanding | rate | date | 2014 | 2013 | 2014 | 2013 | ||||
Series 1 | 10 | 5.25% | Apr 30, 2015 | $ | 6 | $ | 7 | $ | 234 | $ | 234 |
Series 3 | 10 | 4.40% | Jul 31, 2019 |
| 5 |
| 5 |
| 233 |
| 234 |
Series 5 | 7 | 5.00% | Apr 30, 2018 |
| 4 |
| 4 |
| 163 |
| 164 |
Series 6 | 7 | 5.00% | Jul 31, 2018 |
| 4 |
| 1 |
| 163 |
| 164 |
| 34 |
|
| $ | 19 | $ | 17 | $ | 793 | $ | 796 |
As at June 30, 2014, none of the issued Class A Preference Shares have been redeemed by Brookfield Renewable Power Preferred Equity Inc. (“BRP Equity”).
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 17 |
Participating non-controlling interests – in operating subsidiaries
The net change in participating non-controlling interests – in operating entities is as follows:
| Brookfield |
|
|
|
|
|
|
|
|
|
| |
| Americas | Brookfield |
|
|
|
|
|
|
|
| ||
| Infrastructure | Infrastructure | The Catalyst | Brascan |
|
|
|
| ||||
(MILLIONS) | Fund | Fund | Group | Energetica | Other | Total | ||||||
As at December 31, 2012 | $ | 806 | $ | - | $ | 123 | $ | 58 | $ | 41 | $ | 1,028 |
Net income |
| 21 |
| 1 |
| 18 |
| 1 |
| - |
| 41 |
OCI |
| 133 |
| (2) |
| (26) |
| (10) |
| 4 |
| 99 |
Acquisitions |
| 51 |
| 214 |
| - |
| - |
| - |
| 265 |
Distributions |
| (119) |
| - |
| - |
| (3) |
| - |
| (122) |
Other |
| (1) |
| (6) |
| 1 |
| - |
| (2) |
| (8) |
As at December 31, 2013 | $ | 891 | $ | 207 | $ | 116 | $ | 46 | $ | 43 | $ | 1,303 |
Net income |
| 28 |
| 19 |
| 14 |
| - |
| - |
| 61 |
OCI |
| (5) |
| 8 |
| - |
| 3 |
| - |
| 6 |
Acquisitions (Note 3) |
| - |
| 694 |
| - |
| - |
| - |
| 694 |
Distributions |
| (21) |
| (17) |
| (12) |
| (2) |
| - |
| (52) |
Other |
| - |
| - |
| - |
| - |
| (1) |
| (1) |
As at June 30, 2014 | $ | 893 | $ | 911 | $ | 118 | $ | 47 | $ | 42 | $ | 2,011 |
Interests held by third parties |
| 75-80% |
| 50-60% |
| 25% |
| 20-30% |
| 24-50% |
|
|
General partnership interest in a holding subsidiary held by Brookfield and Participating non-controlling interests – in a holding subsidiary - Redeemable/Exchangeable units held by Brookfield
Brookfield, as the owner of the 1% general partnership interest in Brookfield Renewable Energy L.P. (“BRELP”), is entitled to regular distributions plus an incentive distribution based on the amount by which quarterly distributions exceed specified target levels. To the extent that distributions exceed $0.375 per unit per quarter, the incentive is 15% of distributions above this threshold. To the extent that quarterly distributions exceed $0.4225 per unit, the incentive distribution is equal to 25% of distributions above this threshold.
Consolidated equity includes Redeemable/Exchangeable Partnership Units issued by BRELP. The Redeemable/Exchangeable Partnership Units are held 100% by Brookfield Asset Management, which at its discretion has the right to redeem these units for cash consideration. No Redeemable/Exchangeable Partnership Units have been redeemed for cash consideration. Since this redemption right is subject to Brookfield Renewable’s right, at its sole discretion, to satisfy the redemption request with LP Units of Brookfield Renewable, the Redeemable/Exchangeable Partnership Units are classified as equity in accordance with IAS 32, Financial Instruments: Presentation. The Redeemable/Exchangeable Partnership Units are presented as non-controlling interests since they provide Brookfield the direct economic benefits and exposures to the underlying performance of BRELP. Both the LP Units issued by Brookfield Renewable and the Redeemable/Exchangeable Partnership Units issued by its subsidiary BRELP have the same economic attributes in all respects, except for the redemption right described above. The Redeemable/Exchangeable Partnership Units participate in earnings and distributions on a per unit basis equivalent to the per unit participation of the LP Units of Brookfield Renewable.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 18 |
Issuance of LP Units
On June 10, 2014, Brookfield Renewable completed a bought deal LP Unit offering which included 10,250,000 LP Units at a price of C$31.70 per LP Unit for gross proceeds of C$325 million ($297 million) (the “Offering”). Brookfield Renewable incurred C$13 million ($12 million) for transaction costs associated with the Offering. Proceeds from the Offering were used to purchase additional limited partnership units of BRELP. The excess of the consideration paid over the carrying value of the additional limited partnership units of BRELP purchased by Brookfield Renewable resulted in adjustments to the General partnership interest in a holding subsidiary held by Brookfield and Participating non-controlling interests – in a holding subsidiary - Redeemable/Exchangeable units held by Brookfield of $1 million and $37 million, respectively. BRELP ultimately used the net proceeds to repay outstanding indebtedness and for general corporate purposes.
As at June 30, 2014, General Partnership Units and Redeemable/Exchangeable Partnership Units outstanding were 2,651,506 (December 31, 2013: 2,651,506) and 129,658,623 (December 31, 2013: 129,658,623), respectively.
Distributions
For the three and six months ended June 30, 2014, BRELP declared $1 million and $2 million, respectively in distributions on the general partnership interest (2013: $1 million and $2 million, respectively) and an incentive distribution of $nil and $1 million, respectively (2013: $nil). For the three and six months ended June 30, 2014, BRELP declared distributions on the Redeemable/Exchangeable Partnership Units held by Brookfield of $51 million and $101 million, respectively (2013: $47 million and $94 million, respectively).
12. LIMITED PARTNERS’ EQUITY
Limited partners’ equity
As at June 30, 2014, LP Units outstanding were 143,304,151 (December 31, 2013: 132,984,913) including 40,026,986 (December 31, 2013: 40,026,986) held by Brookfield Asset Management. General partnership interests represent 0.01% of Brookfield Renewable.
During the three and six months ended June 30, 2014, 23,779 and 69,238 LP Units, respectively (2013: 18,250 and 35,953 LP Units, respectively) were issued under the distribution reinvestment plan.
As a result of the Offering (Note 11), Brookfield Asset Management’s direct and indirect interest of 169,685,609 LP Units and Redeemable/Exchangeable partnership units, now represents approximately 62% of Brookfield Renewable on a fully-exchanged basis.
Distributions
Distributions may be made by the general partner of Brookfield Renewable with the exception of instances that there is insufficient cash available, payment rends Brookfield Renewable unable to pay its debt or payment of which might leave Brookfield Renewable unable to meet any future contingent obligations.
For the three and six months ended June 30, 2014, Brookfield Renewable declared distributions on its LP Units of $53 million and $104 million or $0.3875 per LP Unit and $0.775 per LP Unit, respectively (2013: $48 million and $96 million or $0.3625 per LP Unit and $0.725 per LP Unit, respectively).
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 19 |
The composition of the distribution is presented in the following table:
| Three months ended Jun 30 | Six months ended Jun 30 | ||||||
(MILLIONS) |
| 2014 |
| 2013 |
| 2014 |
| 2013 |
Brookfield Asset Management | $ | 16 | $ | 15 | $ | 31 | $ | 29 |
External LP Unitholders |
| 37 |
| 33 |
| 73 |
| 67 |
| $ | 53 | $ | 48 | $ | 104 | $ | 96 |
In February 2014, unitholder distributions were increased to $1.55 per unit on an annualized basis, an increase of ten cents per unit, and took effect with the distribution paid in March 2014.
13. subsidiary public issuers
See Note 9 – Long-term debt and credit facilities for additional details regarding corporate notes. See Note 11 – Non-controlling interests for additional details regarding Class A Preference Shares.
The following tables provide consolidated summary financial information for Brookfield Renewable, BRP Equity, and Brookfield Renewable Energy Partners ULC (“BREP Finance”):
|
|
|
|
|
|
| Brookfield | ||||||
|
| Brookfield | BRP | BREP | Other | Consolidating | Renewable | ||||||
(MILLIONS) |
| Renewable | Equity | Finance | Subsidiaries(1) | adjustments(2) | consolidated | ||||||
As at June 30, 2014: |
|
|
|
|
|
|
|
|
|
|
|
| |
Current assets | $ | 21 | $ | - | $ | 1,423 | $ | 721 | $ | (1,446) | $ | 719 | |
Long-term assets |
| 2,963 |
| 781 |
| - |
| 17,803 |
| (3,737) |
| 17,810 | |
Current liabilities |
| 21 |
| 10 |
| 17 |
| 2,349 |
| (1,429) |
| 968 | |
Long-term liabilities |
| - |
| - |
| 1,400 |
| 8,432 |
| (774) |
| 9,058 | |
Preferred equity |
| - |
| 793 |
| - |
| - |
| - |
| 793 | |
Participating non-controlling interests - |
|
|
|
|
|
|
|
|
|
|
|
| |
| in operating subsidiaries |
| - |
| - |
| - |
| 2,011 |
| - |
| 2,011 |
Participating non-controlling interests - |
|
|
|
|
|
|
|
|
|
|
|
| |
| in a holding subsidiary - Redeemable/ |
|
|
|
|
|
|
|
|
|
|
|
|
| Exchangeable units held by Brookfield |
| - |
| - |
| - |
| 2,681 |
| - |
| 2,681 |
As at December 31, 2013: |
|
|
|
|
|
|
|
|
|
|
|
| |
Current assets | $ | 48 | $ | - | $ | 1,429 | $ | 612 | $ | (1,483) | $ | 606 | |
Long-term assets |
| 2,728 |
| 785 |
| - |
| 16,365 |
| (3,505) |
| 16,373 | |
Current liabilities |
| 50 |
| 10 |
| 17 |
| 2,258 |
| (1,435) |
| 900 | |
Long-term liabilities |
| - |
| - |
| 1,406 |
| 7,914 |
| (777) |
| 8,543 | |
Preferred equity |
| - |
| 796 |
| - |
| - |
| - |
| 796 | |
Participating non-controlling interests - |
|
|
|
|
|
|
|
|
|
|
|
| |
| in operating subsidiaries |
| - |
| - |
| - |
| 1,303 |
| - |
| 1,303 |
Participating non-controlling interests - |
|
|
|
|
|
|
|
|
|
|
|
| |
| in a holding subsidiary - Redeemable/ |
|
|
|
|
|
|
|
|
|
|
|
|
| Exchangeable units held by Brookfield |
| - |
| - |
| - |
| 2,657 |
| - |
| 2,657 |
(1) Includes subsidiaries of Brookfield Renewable, other than BRP Equity and BREP Finance.
(2) Includes elimination of intercompany transactions and balances necessary to present Brookfield Renewable on a consolidated basis.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 20 |
|
|
|
|
|
|
|
|
|
|
| Brookfield | |
| Brookfield | BRP | BREP | Other | Consolidating | Renewable | ||||||
(MILLIONS) | Renewable | Equity | Finance | Subsidiaries(1) | adjustments(2) | consolidated | ||||||
For the three months ended Jun 30, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $ | - | $ | - | $ | - | $ | 474 | $ | - | $ | 474 |
Net income (loss) |
| 21 |
| - |
| - |
| 72 |
| (21) |
| 72 |
For the three months ended Jun 30, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $ | - | $ | - | $ | - | $ | 484 | $ | - | $ | 484 |
Net income (loss) |
| 22 |
| - |
| - |
| 78 |
| (22) |
| 78 |
For the six months ended Jun 30, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $ | - | $ | - | $ | - | $ | 954 | $ | - | $ | 954 |
Net income (loss) |
| 59 |
| - |
| - |
| 197 |
| (59) |
| 197 |
For the six months ended Jun 30, 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $ | - | $ | - | $ | - | $ | 921 | $ | - | $ | 921 |
Net income (loss) |
| 53 |
| - |
| 1 |
| 162 |
| (53) |
| 163 |
(1) Includes subsidiaries of Brookfield Renewable, other than BRP Equity and BREP Finance.
(2) Includes elimination of intercompany transactions and balances necessary to present Brookfield Renewable on a consolidated basis.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 21 |
14. segmented information
Brookfield Renewable operates renewable power assets, which include conventional hydroelectric generating assets located in the United States, Canada and Brazil, and wind farms located in the United States, Canada and Europe. Brookfield Renewable also operates two co-generation (“Co-gen”) facilities. Management evaluates the business based on the type of power generation (Hydroelectric, Wind and Co-gen). Hydroelectric and wind are further evaluated by geography (United States, Canada, Brazil and Europe). The “Other” segment includes CWIP and corporate.
In accordance with IFRS 8, Operating Segments, Brookfield Renewable discloses information about its reportable segments based upon the measures used by management in assessing performance. The accounting policies of the reportable segments are the same as those described in Note 2 of the December 31, 2013 audited consolidated financial statements. Brookfield Renewable analyzes the performance of its operating segments based on revenues, adjusted EBITDA, and funds from operations.
Adjusted EBITDA means revenues less direct costs (including energy marketing costs), plus Brookfield Renewable’s share of cash earnings from equity-accounted investments and other income, before interest, income taxes, depreciation, management service costs and the cash portion of non-controlling interests.
Funds from operations is defined as adjusted EBITDA less interest, current income taxes and management service costs, which is then adjusted for the cash portion of non-controlling interests. For the three and six months ended June 30, 2014, funds from operations include the earnings received from the wind portfolio Brookfield Renewable acquired in Ireland, reflecting its economic interest from January 1, 2014 to June 30, 2014. This amount represents an acquisition price adjustment under IFRS 3, Business combinations (see note 3) but is included in funds from operations for purposes of reporting operating results to Brookfield Renewable’s chief operating decision maker.
Transactions between the reportable segments occur at fair value.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 22 |
|
| Hydroelectric | Wind energy | Co-gen | Other | Total | |||||||||||||
(MILLIONS) | U.S. | Canada | Brazil | U.S. | Canada | Europe |
|
|
| ||||||||||
For the three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| June 30, 2014: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $ | 218 | $ | 107 | $ | 67 | $ | 49 | $ | 29 | $ | - | $ | 4 | $ | - | $ | 474 | |
Adjusted EBITDA |
| 169 |
| 92 |
| 51 |
| 39 |
| 25 |
| - |
| 1 |
| (17) |
| 360 | |
Interest expense - borrowings |
| (37) |
| (18) |
| (5) |
| (10) |
| (10) |
| - |
| - |
| (22) |
| (102) | |
Funds from operations prior to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| non-controlling interests |
| 130 |
| 74 |
| 42 |
| 29 |
| 15 |
| 11 |
| 1 |
| (52) |
| 250 |
Cash portion of non-controlling |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| interests |
| (22) |
| - |
| (3) |
| (17) |
| - |
| - |
| - |
| (10) |
| (52) |
Funds from operations |
| 108 |
| 74 |
| 39 |
| 12 |
| 15 |
| 11 |
| 1 |
| (62) |
| 198 | |
Depreciation |
| (35) |
| (22) |
| (38) |
| (13) |
| (20) |
| - |
| (1) |
| - |
| (129) | |
For the three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| June 30, 2013: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $ | 201 | $ | 107 | $ | 79 | $ | 50 | $ | 34 | $ | - | $ | 13 | $ | - | $ | 484 | |
Adjusted EBITDA |
| 153 |
| 89 |
| 58 |
| 39 |
| 29 |
| - |
| 3 |
| (14) |
| 357 | |
Interest expense - borrowings |
| (38) |
| (17) |
| (6) |
| (10) |
| (10) |
| - |
| - |
| (25) |
| (106) | |
Funds from operations prior to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| non-controlling interests |
| 112 |
| 72 |
| 47 |
| 29 |
| 19 |
| - |
| 3 |
| (50) |
| 232 |
Cash portion of non-controlling |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| interests |
| (16) |
| - |
| (5) |
| (14) |
| - |
| - |
| - |
| (10) |
| (45) |
Funds from operations |
| 96 |
| 72 |
| 42 |
| 15 |
| 19 |
| - |
| 3 |
| (60) |
| 187 | |
Depreciation |
| (35) |
| (23) |
| (41) |
| (16) |
| (19) |
| - |
| (3) |
| - |
| (137) |
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 23 |
|
| Hydroelectric | Wind energy | Co-gen | Other | Total | |||||||||||||
(MILLIONS) | U.S. | Canada | Brazil | U.S. | Canada | Europe |
|
|
| ||||||||||
For the six months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| June 30, 2014: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $ | 424 | $ | 205 | $ | 156 | $ | 78 | $ | 68 | $ | - | $ | 23 | $ | - | $ | 954 | |
Adjusted EBITDA |
| 327 |
| 174 |
| 124 |
| 56 |
| 61 |
| - |
| 12 |
| (34) |
| 720 | |
Interest expense - borrowings |
| (76) |
| (34) |
| (10) |
| (20) |
| (20) |
| - |
| - |
| (43) |
| (203) | |
Funds from operations prior to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| non-controlling interests |
| 247 |
| 140 |
| 104 |
| 36 |
| 41 |
| 11 |
| 12 |
| (101) |
| 490 |
Cash portion of non-controlling |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| interests |
| (57) |
| - |
| (7) |
| (24) |
| - |
| - |
| - |
| (19) |
| (107) |
Funds from operations |
| 190 |
| 140 |
| 97 |
| 12 |
| 41 |
| 11 |
| 12 |
| (120) |
| 383 | |
Depreciation |
| (72) |
| (42) |
| (72) |
| (31) |
| (36) |
| - |
| (2) |
| - |
| (255) | |
For the six months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| June 30, 2013: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues | $ | 386 | $ | 201 | $ | 154 | $ | 73 | $ | 74 | $ | - | $ | 33 | $ | - | $ | 921 | |
Adjusted EBITDA |
| 296 |
| 167 |
| 113 |
| 53 |
| 64 |
| - |
| 11 |
| (28) |
| 676 | |
Interest expense - borrowings |
| (73) |
| (33) |
| (13) |
| (18) |
| (24) |
| - |
| - |
| (47) |
| (208) | |
Funds from operations prior to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| non-controlling interests |
| 220 |
| 134 |
| 91 |
| 35 |
| 40 |
| - |
| 11 |
| (97) |
| 434 |
Cash portion of non-controlling |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| interests |
| (42) |
| - |
| (7) |
| (19) |
| - |
| - |
| - |
| (17) |
| (85) |
Funds from operations |
| 178 |
| 134 |
| 84 |
| 16 |
| 40 |
| - |
| 11 |
| (114) |
| 349 | |
Depreciation |
| (67) |
| (44) |
| (81) |
| (29) |
| (38) |
| - |
| (6) |
| - |
| (265) |
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 24 |
The following table reconciles adjusted EBITDA and funds from operations, presented in the above tables, to net income as presented in the interim consolidated statements of income:
|
|
|
| Three months ended Jun 30 | Six months ended Jun 30 | ||||||
(MILLIONS) |
|
|
|
| 2014 |
| 2013 |
| 2014 |
| 2013 |
Revenues | $ | 474 | $ | 484 | $ | 954 | $ | 921 | |||
Other income |
| 2 |
| 2 |
| 5 |
| 4 | |||
Share of cash earnings from equity-accounted investments |
| 8 |
| 6 |
| 15 |
| 12 | |||
Direct operating costs |
|
|
|
| (124) |
| (135) |
| (254) |
| (261) |
Adjusted EBITDA |
| 360 |
| 357 |
| 720 |
| 676 | |||
Fixed earnings adjustment(1) |
| 11 |
| - |
| 11 |
| - | |||
Interest expense - borrowings |
| (102) |
| (106) |
| (203) |
| (208) | |||
Management service costs |
| (13) |
| (11) |
| (24) |
| (23) | |||
Current income tax expense |
| (6) |
| (8) |
| (14) |
| (11) | |||
Funds from operations prior to non-controlling interests |
| 250 |
| 232 |
| 490 |
| 434 | |||
Less: cash portion of non-controlling interests |
|
|
|
|
|
|
|
| |||
|
| Preferred equity |
| (10) |
| (10) |
| (19) |
| (17) | |
|
| Participating non-controlling interests - in operating |
|
|
|
|
|
|
|
| |
|
|
| subsidiaries |
| (42) |
| (35) |
| (88) |
| (68) |
Funds from operations |
| 198 |
| 187 |
| 383 |
| 349 | |||
Add: cash portion of non-controlling interests |
| 52 |
| 45 |
| 107 |
| 85 | |||
Less: fixed earnings adjustment |
| (11) |
| - |
| (11) |
| - | |||
Depreciation |
| (129) |
| (137) |
| (255) |
| (265) | |||
Unrealized financial instruments (loss) gain |
| (4) |
| 3 |
| (4) |
| 19 | |||
Share of non-cash loss from equity-accounted investments |
| (6) |
| (4) |
| (12) |
| (6) | |||
Deferred income tax expense |
| (17) |
| (10) |
| (19) |
| (11) | |||
Other |
| (11) |
| (6) |
| 8 |
| (8) | |||
Net income | $ | 72 | $ | 78 | $ | 197 | $ | 163 |
(1) The fixed earnings adjustment relates to Brookfield Renewable’s investment in the acquisition of the wind portfolio in Ireland. Pursuant to the terms of the purchase and sale agreement, Brookfield Renewable acquired an economic interest in the wind portfolio from January 1, 2014. The transaction closed on June 30, 2014, and accordingly under IFRS, the $11 million net funds from operations contribution was recorded as part of the purchase price.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 25 |
The following table presents information about Brookfield Renewable’s certain balance sheet items on a segmented basis:
|
| Hydroelectric | Wind energy |
| Co-gen | Other(1) | Total | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
(MILLIONS) | U.S. | Canada | Brazil | U.S. | Canada | Europe |
|
|
|
|
| ||||||||
As at June 30, 2014: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Property, plant and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| equipment, at fair value | $ | 5,997 | $ | 5,043 | $ | 2,261 | $ | 1,166 | $ | 1,208 | $ | 1,061 | $ | 44 | $ | 211 | $ | 16,991 |
Total assets |
| 6,737 |
| 5,150 |
| 2,498 |
| 1,275 |
| 1,235 |
| 1,171 |
| 46 |
| 417 |
| 18,529 | |
Total borrowings |
| 2,283 |
| 1,267 |
| 239 |
| 634 |
| 699 |
| 232 |
| - |
| 1,698 |
| 7,052 | |
Total liabilities |
| 3,485 |
| 2,259 |
| 343 |
| 716 |
| 934 |
| 429 |
| - |
| 1,860 |
| 10,026 | |
For the six months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| June 30, 2014: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| and equipment |
| 296 |
| - |
| - |
| - |
| - |
| 1,061 |
| - |
| 49 |
| 1,406 |
As at December 31, 2013: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Property, plant and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| equipment, at fair value | $ | 5,771 | $ | 4,830 | $ | 2,205 | $ | 1,198 | $ | 1,250 | $ | - | $ | 46 | $ | 441 | $ | 15,741 |
Total assets |
| 6,246 |
| 4,998 |
| 2,484 |
| 1,282 |
| 1,297 |
| - |
| 62 |
| 610 |
| 16,979 | |
Total borrowings |
| 2,157 |
| 1,143 |
| 238 |
| 647 |
| 721 |
| - |
| - |
| 1,717 |
| 6,623 | |
Total liabilities |
| 3,328 |
| 2,144 |
| 398 |
| 720 |
| 995 |
| - |
| 4 |
| 1,854 |
| 9,443 | |
For the year ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| December 31, 2013: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| and equipment |
| 715 |
| 206 |
| - |
| 430 |
| - |
| - |
| - |
| 255 |
| 1,606 |
(1) Includes CWIP and corporate.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 26 |
15. Commitments, contingencies and guarantees
Commitments
In the course of its operations, Brookfield Renewable and its subsidiaries have entered into agreements for the use of water, land and dams. Payment under those agreements varies with the amount of power generated. The various agreements are renewable and extend up to 2054.
Contingencies
Brookfield Renewable and its subsidiaries are subject to various legal proceedings, arbitrations and actions arising in the normal course of business. While the final outcome of such legal proceedings and actions cannot be predicted with certainty, it is the opinion of management that the resolution of such proceedings and actions will not have a material impact on Brookfield Renewable’s consolidated financial position or results of operations.
Guarantees
Brookfield Renewable, on behalf of Brookfield Renewable’s subsidiaries, and the subsidiaries themselves have provided letters of credit, which include, but are not limited to, guarantees for debt service reserves, capital reserves, construction completion and performance. The activity on the issued letters of credit by Brookfield Renewable can be found in Note 9 – Long-term debt and credit facilities. As at June 30, 2014, letters of credit issued by subsidiaries of Brookfield Renewable amounted to $104 million.
In the normal course of operations, Brookfield Renewable and its subsidiaries execute agreements that provide for indemnification and guarantees to third parties of transactions such as business dispositions, capital project purchases, business acquisitions, and sales and purchases of assets and services. Brookfield Renewable has also agreed to indemnify its directors and certain of its officers and employees. The nature of substantially all of the indemnification undertakings prevents Brookfield Renewable from making a reasonable estimate of the maximum potential amount that Brookfield Renewable could be required to pay third parties as the agreements do not always specify a maximum amount and the amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. Historically, neither Brookfield Renewable nor its subsidiaries have made material payments under such indemnification agreements.
Brookfield Renewable Energy Partners L.P. | Q2 2014 Interim Consolidated Financial Statements and Notes |
| Page 27 |