← Back to BEP filing summaryOriginal filing text · Part I
Item 5 — Management's Discussion and Analysis
Brookfield Renewable Partners L.p. · 20-F · FY 2025 · Period ended Dec 31, 2025
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5.A OPERATING RESULTS
Basis of Presentation
Brookfield Renewable’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), which require estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and the amounts of revenue and expense during the reporting periods.
Holders of the GP interest, Redeemable/Exchangeable partnership units, and LP units will be collectively referred to throughout Item 5.A as “Unitholders”, “Units”, or as “per Unit”, unless the context indicates or requires otherwise.
Certain comparative figures have been reclassified to conform to the current year’s presentation.
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Organization of Management’s Discussion and Analysis
PART 1 – 2025 Highlights 108
PART 2 – Financial Performance Review on Consolidated Information 111
PART 3 – Additional Consolidated Financial Information 113
Summary consolidated statements of financial position 113
Related party transactions 114
Equity 118
PART 4 – Financial Performance Review on Proportionate Information 120
Proportionate results for the years ended December 31, 2025 and 2024 120
Proportionate results for the years ended December 31, 2024 and 2023 125
Reconciliation of non-IFRS measures 130
Contract profile 134
PART 5 – Liquidity and Capital Resources 136
Capitalization 136
Available liquidity 137
Borrowings 138
PART 5 – Liquidity and Capital Resources (continued) 136
Capital expenditures 140
Consolidated statements of cash flows 140
Shares, notes and units outstanding 142
Dividends and distributions 143
Contractual obligations 143
Supplemental guarantor financial information 143
Off-statement of financial position arrangements 144
PART 6 – Selected Annual and Quarterly Information 145
Summary of historical quarterly results 146
Proportionate results for the fourth quarter 147
PART 7 – Business Risks and Risk Management 151
Risk management and financial instruments 151
PART 8 – Critical Estimates and Accounting Policies 154
PART 9 – Presentation to Stakeholders and Performance Measurement 159
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PART 1 – 2025 HIGHLIGHTS
YEAR ENDED DECEMBER 31 (MILLIONS, EXCEPT AS NOTED) 2025 2024
Selected financial information
Revenues $ 6,407 $ 5,876
Net loss attributable to Unitholders(1) (19) (464)
Basic and diluted net loss per LP unit(2) (0.25) (0.89)
Proportionate Adjusted EBITDA(3) 2,698 2,408
Funds From Operations(3) 1,334 1,217
Funds From Operations per Unit(3)(4) 2.01 1.83
Distribution per LP unit 1.49 1.42
Operational information
Capacity (MW) 47,203 46,211
Total generation (GWh)
Long-term average generation 123,028 94,339
Actual generation 116,010 80,842
Proportionate generation (GWh)
Actual Renewable generation 33,157 30,947
(1)Includes $71 million of losses attributed to Limited Partner equity, $44 million of losses attributed to BEPC exchangeable shares and class A.2 exchangeable shares, $48 million of losses attributed to Participating non-controlling interests – in a holding subsidiary – Redeemable/Exchangeable units held by Brookfield, and $144 million of income attributed to the General partnership interest in a holding subsidiary held by Brookfield.
(2)Average LP units for the year ended December 31, 2025 were 287.0 million (2024: 285.5 million).
(3)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure, see “Part 4 - Financial Performance Review on Proportionate Information - Reconciliation of Non-IFRS Measures” and “Part 10 - Cautionary Statements”.
(4)Average Units outstanding for the year ended December 31, 2025 were 665.1 million (2024: 663.6 million), being inclusive of our LP units, Redeemable/Exchangeable partnership units, BEPC exchangeable shares and class A.2 exchangeable shares and GP interest.
AS AT DECEMBER 31 (MILLIONS, EXCEPT AS NOTED) December 31, 2025 December 31, 2024
Liquidity and Capital Resources
Available liquidity $ 4,625 $ 4,320
Debt to capitalization – Corporate 14 % 15 %
Debt to capitalization – Consolidated 39 % 40 %
Non-recourse borrowings as a percentage of total borrowings – Consolidated 90 % 91 %
Fixed rate debt exposure on a proportionate basis(1) 96 % 95 %
Corporate borrowings
Average debt term to maturity 13 years 12 years
Average interest rate 4.6 % 4.5 %
Non-recourse borrowings on a proportionate basis
Average debt term to maturity 10 years 11 years
Average interest rate 5.9 % 5.4 %
(1)Total floating rate exposure is 16% (2024: 13%) of which 12% (2024: 8%) is related to floating rate debt exposure of certain regions outside of North America and Europe due to the high cost of hedging associated with those regions.
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Operations
Funds From Operations of $1,334 million or $2.01 on a per Unit basis is higher than the prior year driven by:
•Improved results from our hydroelectric portfolio due to stronger hydrology across our Canadian and Colombian fleets
•Our embedded growth from our contracted, inflation-linked cash flows
•Our growth activities, including accretive acquisitions and the delivery of 8 GW of new projects over the past 12 months; and
•Contributions from our scaling capital recycling activities, crystallizing value and generating capital to fund growth
After deducting non-cash depreciation, foreign exchange and derivative gains or losses and other, and adding back certain non-cash gains excluded from FFO, net loss attributable to Unitholders was $19 million or $0.25 per LP unit, compared to net loss attributable to Unitholders of $464 million or $0.89 per LP unit in the prior year.
Refer to Part 2 - Financial Performance Review on Consolidated Information in this Management’s Discussion and Analysis for details on the consolidated statements of income (loss).
Through our investments, we continue to be the partner of choice to procure clean power:
•In 2025, we advanced commercial priorities, securing favorable long-term contracts for over 9 GW of generation capacity across our operating fleet;
•Westinghouse entered into a landmark agreement with the U.S. Government to support delivering new nuclear reactors utilizing Westinghouse technology in America; and
•Signed a first-of-its-kind Hydro Framework Agreement with Google to deliver up to 3 GW of hydroelectric capacity in the U.S.
Growth and Development
During the year, together with our institutional partners, we have deployed, or committed to deploy $8.8 billion (over $1.9 billion net to Brookfield Renewable) into growth, further diversifying our business and positioning our franchise to capture incremental demand. Our growth initiatives were highlighted by:
•The successful privatization of Neoen, our largest single investment to date; the acquisition of Geronimo Power, a scale U.S. platform; and an increase in our ownership of Isagen, our Colombian hydro business, to ~37%; and
•Delivered ~8 GW of new renewable capacity and are on track to reach a ~10 GW run rate per annum by 2027
Liquidity and Capital Resources
Our best-in-class balance sheet with investment grade BBB+ credit rating and access to diverse sources of capital continues to differentiate our business and position us to opportunistically deploy scale capital.
•We finished the year with approximately $4.6 billion of available liquidity. Our diverse and robust funding model and continued commitment to sizing debt on investment grade metrics has positioned us to opportunistically deploy scale capital;
•We successfully completed over $37 billion in financings in 2025, a record for our business, opportunistically extending average maturities and optimizing our portfolio's capital structure; and
•In November, we completed a $650 million bought-deal equity issuance and concurrent private placement, and subsequent to year-end we opportunistically issued C$500 million of 30-year notes at 5.20%, achieving our lowest spread ever for a corporate financing
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Together with our institutional partners, we completed or reached agreements in 2025 to sell assets generating ~$4.5 billion (~$1.3 billion net to Brookfield Renewable) delivering ~2.4x our invested capital and returns above the high end of our target range, while generating substantial capital to reinvest into accretive growth, including:
•The majority sale of a North American distributed generation business, an aggregate 50% interest in a portfolio of non-core hydro assets in the U.S. and a portfolio of derisked operating solar and wind assets in the U.S.; and
•We also recently agreed to sell a portfolio of operating wind and solar assets in the U.S., each of which was developed by one of our development platforms. The sale is expected to generate ~$1.3 billion (~$316 million net to Brookfield Renewable) in proceeds. The closing of this transaction is subject to customary closing conditions, with closing expected to occur in the first half of 2026. The transaction also includes a framework for potential future sales of an additional up to $1.5 billion of qualifying assets to the same buyers establishing a potential recurring source of liquidity to fund our growth and crystallize further value.
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PART 2 – FINANCIAL PERFORMANCE REVIEW ON CONSOLIDATED INFORMATION
The following table reflects key financial data for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2025 2024 2023
Revenues $ 6,407 $ 5,876 $ 5,038
Other income 1,589 627 671
Direct operating costs (2,903) (2,580) (1,933)
Management service costs (223) (204) (205)
Interest expense (2,457) (1,988) (1,627)
Depreciation (2,425) (2,010) (1,852)
Other (1,214) (713) (212)
Income tax recovery 614 191 48
Net income (loss) 712 (9) 616
Average FX rates to USD
C$ 1.40 1.37 1.35
€ 0.89 0.92 0.92
R$ 5.59 5.39 4.99
COP 4,052 4,071 4,328
Current Year Variance Analysis (2025 vs 2024)
Revenues totaling $6,407 million represents an increase of $531 million compared to the prior year as the growth of our business, inflation escalation on our contracted generation, and the benefits of strong hydrology from our Canadian and Colombian hydroelectric assets, was partially offset by lower hydrology at our U.S. and Brazilian businesses and the impact of recently completed asset sales. Recently acquired and commissioned facilities that we consolidate contributed 14,164 GWh of generation and $1,073 million of revenues, offset by recently completed asset sales that reduced generation by 4,728 GWh and revenues by $451 million. On a same store, constant currency basis, revenues decreased by $79 million as the benefits from higher resources at our Canadian and Colombia hydroelectric assets as well as inflation escalation on our contracted generation in Canada, Brazil and Colombia, were offset by unfavorable hydrology at our U.S. and Brazilian businesses and lower spot prices on our uncontracted Colombian generation caused by higher system-wide hydrology.
The strengthening of the Colombian peso and Euro relative to the U.S. dollar compared to the prior year was partially offset by the relative weakening of the Brazilian real and Canadian dollar, decreasing revenues by $12 million, and decreasing direct operating costs and interest expense by $5 million.
Direct operating costs totaling $2,903 million represents an increase of $323 million over the same period in the prior year due primarily to additional costs from our recently acquired and commissioned facilities, partially offset by our recently completed asset sales and the above noted weakening of the U.S. dollar.
Other income included $408 million of gains relating to our capital recycling initiatives, including the sale of a majority interest in a U.S. distributed generation business, a 2.2 GW pumped storage facility in Europe and a
315 MW wind facility in Australia. Other income also included $836 million of gains associated with the change in the basis of accounting following the deconsolidation of a renewable operating and development platform in India and the reclassification of our investment in Westinghouse as a financial asset.
Management service costs totaling $223 million represents an increase of $19 million compared to prior year due to the growth of our business.
Interest expense totaling $2,457 million represents an increase of $469 million over the same period in the prior year due primarily to recent acquisitions, including the cost of temporary bridge funding associated with the acquisition of Neoen and Geronimo Power that are attributable to our institutional partners and financing initiatives to fund development activities.
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Depreciation expense totaling $2,425 million represents an increase of $415 million over the same period in the prior year due to the growth of our business.
Deferred tax recovery totaling $365 million represents an increase of $334 million over the same period in the prior year due to the simplification of Neoen’s organizational structure that resulted in a deferred income tax recovery of $208 million.
Other of $1,214 million during the period includes stamp duties levied upon reaching prescribed ownership thresholds in certain jurisdictions Neoen operates that were factored into our underwriting and changes in the fair value of property, plant, and equipment that primarily reflect the derecognition of investment tax credits capitalized to development assets at acquisition that have subsequently been monetized upon commercialization, with a corresponding gain recognized in foreign exchange and financial instruments or income tax in the consolidated statement of income (loss).
Net income totaling $712 million represents an increase of $721 million compared to prior year due to the above noted items.
Prior Year Variance Analysis (2024 vs 2023)
Revenues totaling $5,876 million represents an increase of $838 million compared to prior year due to the growth of our business, inflation escalation on contracted generation and higher asset availability. Recently acquired and commissioned facilities contributed 14,376 GWh of generation and $764 million of revenues, which was partially offset by recently completed asset sales that reduced generation by 900 GWh and revenues by $80 million. On a same store, constant currency basis, revenues increased by $142 million as the benefits from inflation escalation on our contracted generation in Canada, Brazil and Colombia and stronger generation at our wind and solar portfolios were offset by lower resources at our hydroelectric portfolio.
The strengthening of the Colombian peso relative to the U.S. dollar compared to the prior year was offset by the relative weakening of the Brazilian real and Canadian dollar and increased revenues by $12 million offset by a $32 million unfavorable impact on our operating and interest expenses.
Direct operating costs totaled $2,580 million representing an increase of $647 million compared to prior year due primarily to additional costs from our recently acquired and commissioned facilities, higher power purchases in Colombia, which are passed through to our customers, and the above noted foreign exchange fluctuations partly offset by our recently completed asset sales.
Management service costs totaled $204 million representing a decrease of $1 million compared to prior year.
Interest expense totaling $1,988 million represents an increase of $361 million compared to prior year due to recent acquisitions, financing initiatives to fund development activities and the above noted foreign exchange fluctuations.
Depreciation expense totaling $2,010 million represents an increase of $158 million compared to prior year due to the growth of our business and the strengthening of the Colombian peso relative to the U.S. dollar.
Net loss totaling $9 million represents a decrease of $625 million compared to prior year due to the above noted items and other income relating to non-recurring items that benefited the prior year.
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PART 3 – ADDITIONAL CONSOLIDATED FINANCIAL INFORMATION
SUMMARY CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
The following table provides a summary of the key line items on the audited annual consolidated statements of financial position as at December 31:
(MILLIONS) 2025 2024
Current assets $ 12,298 $ 8,835
Equity-accounted investments 4,087 2,740
Property, plant and equipment, at fair value 70,456 73,475
Assets held for sale 6,142 2,049
Total assets 98,701 94,809
Corporate borrowings 3,686 3,802
Non-recourse borrowings 31,206 30,588
Deferred income tax liabilities 9,395 8,439
Liabilities directly associated with assets held for sale 4,021 1,036
Total liabilities and equity 98,701 94,809
FX rates to USD
C$ 1.37 1.44
€ 0.85 0.97
R$ 5.50 6.19
COP 3,757 4,409
Property, plant and equipment & Equity-accounted investments
Property, plant and equipment totaled $70.5 billion as at December 31, 2025 compared to $73.5 billion as at December 31, 2024. The acquisition of Geronimo Power increased property, plant and equipment by $0.5 billion and our continued investment in the development of power generating assets increased property plant and equipment by $7.6 billion. Our annual revaluation, which recognized the benefit of derisked cash flows at our development assets, higher power prices across South America and European markets and the expected growth in demand for renewable power, increased property, plant and equipment by $2.0 billion and the strengthening of most currencies against the U.S. dollar increased property, plant and equipment by $4.0 billion. These increases were more than offset by dispositions and assets classified as held for sale that decreased property, plant and equipment by $14.7 billion and depreciation expense that decreased property, plant and equipment by $2.4 billion.
Equity-accounted investments totaled $4.1 billion as at December 31, 2025, compared to $2.7 billion as at December 31, 2024, representing an increase of $1.3 billion. The increase was primarily driven by the acquisition of Geronimo Power, the recognition of our remaining 53% interest in a U.S. distributed generation development platform and our remaining 25% interest in a 845 MW U.S. wind portfolio as equity-accounted investments following partial dispositions, the change in basis of accounting of a renewable operating and development platform in India to equity-accounted investments and the strengthening of most currencies against the U.S. dollar. These increases were partially offset by the change in basis of accounting of our investment in Westinghouse to a financial asset and the sale of a 50% interest in a 200 MW multi-national distributed generation development business.
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Assets held for sale and Liabilities directly associated with assets held for sale
Assets held for sale and Liabilities directly associated with assets held for sale totaled $6.1 billion and $4.0 billion, respectively, as at December 31, 2025 and comprised of a 633 MW under construction solar asset in India, a 45 MW portfolio of operating hydroelectric assets in the United States, a 833 MW portfolio of operating solar assets in the U.S., a 200 MW portfolio of distributed generation assets in Spain, and a 2.3 GW portfolio of operating renewable energy assets in the U.S.
RELATED PARTY TRANSACTIONS
Brookfield Renewable's related party transactions are in the normal course of business and are recorded at the exchange amount. Brookfield Renewable's related party transactions are primarily with Brookfield Corporation.
Brookfield Renewable sells electricity to Brookfield through a single long-term PPA across Brookfield Renewable’s New York hydroelectric facilities. Brookfield will support the price that Brookfield Renewable receives for energy generated by certain facilities in the United States.
In 2011, on formation of Brookfield Renewable, Brookfield transferred certain development projects to Brookfield Renewable for no upfront consideration but is entitled to receive variable consideration on commercial operation or sale of these projects.
From time to time Brookfield Renewable may enter into or terminate voting agreements with Brookfield, whereby Brookfield Renewable gains control or significant influence of the entities that own certain renewable power generating facilities. Brookfield Renewable has also entered into voting agreements with its consortium partners in respect of both the Colombian business and Neoen. The voting agreements provide Brookfield Renewable the authority to direct the election of the Boards of Directors of the relevant entities, among other things, and therefore provide Brookfield Renewable with control. Accordingly, Brookfield Renewable consolidates the accounts of these entities.
Brookfield Renewable participates with institutional partners in Brookfield Americas Infrastructure Fund, Brookfield Infrastructure Fund II, Brookfield Infrastructure Fund III, Brookfield Infrastructure Fund IV, Brookfield Infrastructure Fund V, Brookfield Infrastructure Debt Fund, Brookfield Global Transition Fund I, Brookfield Global Transition Fund II, and the Catalytic Transition Fund (“Private Funds”). Brookfield Renewable, together with our institutional partners, has access to financing under Brookfield sponsored credit facilities.
From time to time, in order to facilitate investment activities in a timely and efficient manner, Brookfield Renewable will fund deposits or incur other costs and expenses (including by use of loan facilities to consummate, support, guarantee or issue letters of credit) in respect of an investment that ultimately will be shared with or made entirely by Brookfield sponsored vehicles, consortiums and/or partnerships (including private funds, joint ventures and similar arrangements), Brookfield Renewable, or by a co-investor.
Brookfield Corporation has provided a $400 million unsecured revolving credit facility maturing in December 2030 and the draws bear interest at the Secured Overnight Financing Rate plus 1.80%. During the current period, there were no draws on the committed unsecured revolving credit facility provided by Brookfield Corporation.
Brookfield Corporation may from time to time place funds on deposit with Brookfield Renewable which are repayable on demand including any interest accrued. There were nil funds placed on deposit with Brookfield Renewable as at December 31, 2025 (2024: nil). The interest expense on the Brookfield Corporation credit facility and deposit for the year ended December 31, 2025 totaled nil (2024: nil and 2023: nil).
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From time to time Brookfield Renewable may enter into short-term arrangements with private funds consolidated by Brookfield that permit such entities to place funds on deposit with Brookfield Renewable up to a limit of $750 million per deposit. Interest earned or incurred on such deposits fall between the interest rate that would otherwise be payable by Brookfield Renewable under its commercial paper program or credit facilities with unrelated parties and the interest rate that would otherwise be available to the applicable depositing party in similar transactions on an arms’ length basis with unrelated parties. Each deposit carries a maturity date which must not exceed three months, however the private fund consolidated by Brookfield may request repayment upon three business days' written notice. As at December 31, 2025, there were $268 million (2024: nil) of funds placed on deposit with Brookfield Renewable, which carries an interest rate of 4.02%. Deposits placed are reflected within due to related parties on the consolidated statements of financial position. The interest expense paid on the deposits for year ended December 31, 2025 totaled approximately less than $1 million (2024: nil).
Brookfield Renewable from time to time may enter into agreements with Brookfield and its subsidiaries to transfer income tax credits generated by renewable energy projects. During the year ended December 31, 2025, Brookfield Renewable transferred $19 million (2024: $131 million) of income tax credits to Brookfield and its subsidiaries.
During the fourth quarter of 2025, an associate of Brookfield Renewable signed a tax credit transfer agreement for $111 million with a private fund managed by BAM.
From time to time, Brookfield Wealth Solutions and its related entities may agree to provide financing to Brookfield Renewable. In addition, Brookfield Wealth Solutions and its related entities may also participate, alongside unaffiliated third parties on market terms and at market rates, in capital raises undertaken by Brookfield Renewable that are recognized within preferred limited partners’ equity, corporate and non-recourse borrowings in the statement of financial position. During the year ended December 31, 2025, Brookfield Renewable, together with its institutional partners, agreed to $200 million of tax equity financings through a preferred equity structure accounted for in accordance with IFRS 9 with Brookfield Wealth Solutions. As at December 31, 2025, Brookfield Renewable, together with its institutional partners, had the following balances owing to Brookfield Wealth Solutions: $58 million of non-recourse borrowings (December 31, 2024: $65 million); $7 million of corporate borrowings (December 31, 2024:$7 million); $49 million of tax equity financings classified as financial instrument liabilities (December 31, 2024: $1 million); $11 million of preferred limited partners equity (December 31, 2024: $10 million); and $750 million of borrowings classified as due to related party (December 31, 2024: $348 million).
During the first quarter of 2025, Brookfield Renewable, together with its institutional partners, completed the sale of a 52 MW utility-scale solar asset in Jamaica owned by Neoen to an associate of Brookfield Renewable for proceeds of approximately $19 million (approximately $2 million net to Brookfield Renewable). The asset was subject to a pre-existing sale and purchase agreement negotiated at arm's length that was entered into prior to Brookfield Renewable acquiring Neoen and therefore no gain or loss was recorded as a result of the transaction.
During the third quarter of 2025, Brookfield Renewable, together with its institutional partners, completed the sale of a 6% minority interest in a renewable operating and development platform in India for proceeds of $45 million ($9 million net to Brookfield Renewable) to an associate of the initial public offering’s (“IPO”) founder group to facilitate the IPO of equity shares by the platform. The disposal was treated as an equity transaction under IFRS 10, Consolidated Financial Statements and therefore no gain or loss was recorded as a result of the transaction. Brookfield Renewable, together with its institutional partners, provided financing to the associate for approximately $70 million ($14 million net to Brookfield Renewable) to facilitate the sale. The remainder of the proceeds were used to acquire additional shares from unaffiliated third parties, at an equivalent value, as part of the IPO process. Subsequent to year-end, as a result of the successful launch of the IPO, 3% interest was transferred to a member of the IPO Founder Group for nominal consideration, as part of a pre-existing agreement.
During the fourth quarter of 2025, Brookfield Renewable completed the acquisition of an incremental 15% ownership in Isagen for $1 billion from institutional partners within a private fund consolidated by Brookfield, at a value equivalent to the purchase price agreed to with an unaffiliated third party. Brookfield Renewable increased its ownership in the business to approximately 37.3% and continues to consolidate the business. In connection with closing of the transaction, Brookfield Renewable obtained $400 million in financing from Brookfield Wealth Solutions.
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During the fourth quarter of 2025, Brookfield Renewable, together with its institutional partners, completed the sale of a 25% interest in a 403 MW portfolio of operating hydroelectric assets in the U.S. for proceeds of approximately $230 million ($111 million net to Brookfield Renewable) to a private fund managed by BAM, at a value equivalent to what was agreed to with an unaffiliated third party.
During the fourth quarter of 2025, Brookfield Renewable, together with its institutional partners, completed the sale of a 100% interest in a 1.5 GW portfolio of operating distributed generation assets in the U.S. 53% was sold, for proceeds, net of transaction costs, of approximately $1.1 billion ($445 million net to Brookfield Renewable), to a private fund managed by BAM, at a value equivalent to what was agreed to with the unaffiliated third party that acquired the remaining 47%.
During the fourth quarter of 2025, Brookfield Renewable, together with its institutional partners, agreed to contribute its 100% interest in a 200 MW Spanish distributed generation business with a fair value of approximately €116 million ($136 million) into a U.K. distributed generation joint venture with a Brookfield Renewable associatefor an additional 16% interest.
During the fourth quarter of 2025, a subsidiary of Brookfield Corporation purchased 6,967,670 LP Units at the LP unit offering price of $29.90 (net of underwriting commissions).
Subsequent to year-end, Brookfield Renewable, together with its institutional partners, agreed to the sale of a 2.3 GW U.S. renewables portfolio for proceeds of approximately $1.3 billion ($316 million net to Brookfield Renewable), of which 33.3% was agreed to be sold to a private fund managed by BAM, at a value equivalent to what was agreed to with the unaffiliated third parties that agreed to acquire the remaining 66.6% interest in the portfolio. The closing of this transaction is subject to customary closing conditions.
In addition, our company has executed, amended, or terminated other agreements with Brookfield that are described in Note 29 – Related party transactions in our audited annual consolidated financial statements. For a description of certain of our agreements with Brookfield, please see Item 7.B “Related Party Transactions” in our Form 20-F for the year ended December 31, 2025.
The following table reflects the related party agreements and transactions in the audited annual consolidated statements of income (loss), for the year ended December 31:
(MILLIONS) 2025 2024 2023
Revenues
Power purchase and revenue agreements $ 18 $ — $ 14
Development services 23 — —
$ 41 $ — $ 14
Other income
Gain on disposition $ — $ 23 $ —
Interest and other investment income 19 — —
Distribution income — 3 8
$ 19 $ 26 $ 8
Direct operating costs
Other related party services $ (22) $ (12) $ (5)
Interest expense
Borrowings $ (189) $ (63) $ (35)
Contract balance accretion (31) (30) (26)
$ (220) $ (93) $ (61)
Other
Other related party services $ — $ 5 $ 3
Financial instrument gain 1 3 21
$ 1 $ 8 $ 24
Management service costs $ (223) $ (204) $ (205)
Current income tax
Investment tax credits $ 19 $ 131 $ —
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The following table reflects the impact of the related party agreements and transactions on the consolidated statements of financial position as at December 31:
(MILLIONS) Related party 2025 2024
Current assets
Trade receivables and other current assets
Contract asset Brookfield $ 74 $ 65
Due from related parties
Amounts due from Brookfield(1) 511 573
Equity-accounted investments and other 433 300
944 873
Assets held for sale Equity-accounted investments and other — 125
Financial instrument assets Brookfield — 38
Non-current assets
Financial instrument assets Brookfield 71 —
Other long-term assets
Contract asset Brookfield 209 250
Due from related parties Equity-accounted investments and other 12 8
Current liabilities
Contract liability Brookfield 63 47
Due to related parties
Amounts due to Brookfield(2) 4,427 4,005
Equity-accounted investments and other 2,476 684
Brookfield Wealth Solutions 123 123
Accrued distributions payable on LP units, BEPC exchangeable shares, class A.2 exchangeable shares, Redeemable/Exchangeable partnership units and GP interest Brookfield 45 43
7,071 4,855
Liabilities held for sale Brookfield 9 31
Non-current liabilities
Financial instrument liabilities Brookfield — 13
Brookfield Wealth Solutions 49 1
Due to related parties
Amounts due to Brookfield 21 309
Brookfield Wealth Solutions 627 225
Equity-accounted investments and other 45 58
693 592
Corporate borrowings Brookfield Wealth Solutions 7 7
Non-recourse borrowings Brookfield Wealth Solutions 58 65
Other long-term liabilities
Contract liability Brookfield 679 686
Equity
Preferred limited partners equity Brookfield Wealth Solutions $ 11 $ 10
(1)Includes receivables of $378 million (2024: $376 million) associated with the Brookfield Global Transition Fund credit facility.
(2)Includes payables of $397 million (2024: $32 million), $511 million (2024: $87 million), and $2,454 million (2024: $3,493 million) associated with the Brookfield Infrastructure Fund IV, Brookfield Global Transition Fund, and Brookfield Global Transition Fund II credit facilities, respectively.
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EQUITY
General partnership interest in a holding subsidiary held by Brookfield
Brookfield, as the owner of the 1% GP interest in BRELP, is entitled to regular distributions plus an incentive distribution based on the amount by which quarterly LP unit distributions exceed specified target levels. As at December 31, 2025, to the extent that LP unit distributions exceed $0.20 per LP unit per quarter, the incentive is 15% of distributions above this threshold. To the extent that quarterly LP unit distributions exceed $0.2253 per LP unit per quarter, the incentive distribution is equal to 25% of distributions above this threshold. Incentive distributions of $145 million were declared during the year ended December 31, 2025 (2024: $128 million).
Preferred equity
The Class A Preference Shares of Brookfield Renewable Power Preferred Equity Inc. (“BRP Equity”) do not have a fixed maturity date and are not redeemable at the option of the holders. As at December 31, 2025, none of the issued Class A Preference Shares have been redeemed by BRP Equity.
During the year, Brookfield Renewable declared the fixed quarterly distributions on the Class A Preference Shares, Series 1 of BRP Equity during the five years commencing May 1, 2025 will be paid at an annual rate of 5.203%. During the year, Brookfield Renewable declared the floating quarterly distributions on the Class A Preference Shares, Series 2 of BRP Equity during the three months commencing May 1, 2025 will be paid at an annualized rate of 5.27%.
During the year, 1,619 Class A Preference Shares, Series 1 of BRP Equity were converted, on a one-for-one basis, into Class A Preference Shares, Series 2 of BRP Equity.
During the year, 1,524,396 Class A Preference Shares, Series 2 of BRP Equity were converted, on a one-for-one basis, into Class A Preference Shares, Series 1 of BRP Equity.
In December 2025, the Toronto Stock Exchange accepted notice of BRP Equity's intention to renew the normal course issuer bid in connection with its outstanding Class A Preference Shares for another year to December 17, 2026, or earlier should the repurchases be completed prior to such date. Under this normal course issuer bid, BRP Equity is permitted to repurchase up to 10% of the total public float for each respective series of the Class A Preference Shares. There were no repurchases of Class A Preference Shares during 2025 or 2024 in connection with the normal course issuer bid.
Perpetual subordinated notes
The perpetual subordinated notes are classified as a separate class of non-controlling interest on Brookfield Renewable's consolidated statements of financial position. Brookfield Renewable incurred interest of $40 million on the perpetual subordinated notes during the year ended December 31, 2025 (2024: $37 million). Interest incurred on the perpetual subordinated notes are presented as distributions in the consolidated statements of changes in equity.
Preferred limited partners’ equity
The Class A Preferred Limited Partnership Units (“Preferred units”) of Brookfield Renewable do not have a fixed maturity date and are not redeemable at the option of the holders.
In December 2025, the Toronto Stock Exchange accepted notice of Brookfield Renewable's intention to renew the normal course issuer bid in connection with the outstanding Class A Preferred Limited Partnership Units for another year to December 17, 2026, or earlier should the repurchases be completed prior to such date. Under this normal course issuer bid, Brookfield Renewable is permitted to repurchase up to 10% of the total public float for each respective series of its Class A Preferred Limited Partnership Units. No units were repurchased during 2025 or 2024.
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Limited partners’ equity, Redeemable/Exchangeable partnership units, and exchangeable shares
On November 10, 2025, Brookfield Renewable completed the issuance of 15,050,200 LP Units on a bought deal basis at a price of $29.90 per LP Unit for gross proceeds of $450 million. Concurrently, a subsidiary of Brookfield Corporation purchased 6,967,670 LP Units at the LP unit offering price (net of underwriting commission). The aggregate gross proceeds of the offering and the concurrent private placement was approximately $650 million. Brookfield Renewable incurred $18 million in related transaction costs inclusive of fees paid to the underwriters that was recorded in equity.
As at December 31, 2025, Brookfield Holders held a direct and indirect interest of approximately 47% of Brookfield Renewable on a fully-exchanged basis. Brookfield Holders held a direct and indirect interest of 320,608,493 LP units, Redeemable/Exchangeable partnership units, BEPC exchangeable shares and class A.2 exchangeable shares, on a combined basis and the remaining is held by public investors.
During the year ended December 31, 2025, Brookfield Renewable issued 276,638 LP units (2024: 285,010 LP units) under the distribution reinvestment plan at a total value of $7 million (2024: $7 million).
During the year ended December 31, 2025, exchangeable shareholders of BEPC exchanged 36,058 BEPC exchangeable shares (2024: 10,675 BEPC exchangeable shares) for an equivalent number of LP units amounting to less than $1 million (2024: less than $1 million).
In December 2025, Brookfield Renewable renewed its normal course issuer bid in connection with its LP units and outstanding BEPC exchangeable shares. Brookfield Renewable is authorized to repurchase up to 15,296,104 LP units and 7,244,255 BEPC exchangeable shares, representing 5% of each of its issued and outstanding LP units and BEPC exchangeable shares. The bids will expire on December 17, 2026, or earlier should Brookfield Renewable complete its repurchases prior to such date. During the year ended December 31, 2025, there were 1,522,975 LP units (2024: 2,279,654 units) repurchased and cancelled at a total cost of $34 million (2024: $52 million).There were no BEPC exchangeable shares repurchased during the years ended December 31, 2025 or 2024.
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PART 4 – FINANCIAL PERFORMANCE REVIEW ON PROPORTIONATE INFORMATION
SEGMENTED DISCLOSURES
Segmented information is prepared on the same basis that Brookfield Renewable’s Chief Executive Officer and Chief Financial Officer (collectively, the chief operating decision makers or “CODM”) manages the business, evaluates financial results, and makes key operating decisions. See “PART 9 – Presentation to Stakeholders and Performance Measurement” for information on segments and an explanation on the calculation and relevance of proportionate information, Adjusted EBITDA and Funds From Operations which are non-IFRS measures.
PROPORTIONATE RESULTS FOR THE YEAR ENDED DECEMBER 31
The following chart reflects the generation and summary financial figures on a proportionate basis for the year ended December 31:
(GWh) (MILLIONS)
Renewable Actual Generation Renewable LTA Generation Revenues Adjusted EBITDA(1) Funds From Operations(1)
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Hydroelectric
North America 10,400 10,821 12,155 12,155 $ 1,063 $ 932 $ 659 $ 575 $ 378 $ 300
Brazil 3,557 3,809 3,888 4,043 197 208 138 151 121 130
Colombia 4,594 2,950 4,377 3,646 347 338 226 176 108 81
18,551 17,580 20,420 19,844 1,607 1,478 1,023 902 607 511
Wind 8,406 8,276 9,536 9,604 596 629 481 631 303 484
Utility-scale solar 4,759 3,712 5,699 4,365 469 416 494 464 345 349
Distributed energy & storage 1,441 1,379 1,282 1,111 261 227 504 229 453 186
Sustainable solutions — — — — 609 496 198 165 161 143
Corporate — — — — — — (2) 17 (535) (456)
Total 33,157 30,947 36,937 34,924 $ 3,542 $ 3,246 $ 2,698 $ 2,408 $ 1,334 $ 1,217
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
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HYDROELECTRIC OPERATIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for hydroelectric operations for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2025 2024
Revenue $ 1,607 $ 1,478
Other income 108 44
Direct operating costs (692) (620)
Adjusted EBITDA(1) 1,023 902
Interest expense (393) (364)
Current income taxes (23) (27)
Funds From Operations $ 607 $ 511
Generation (GWh) – LTA 20,420 19,844
Generation (GWh) – actual 18,551 17,580
Average revenue per MWh(2) 71 74
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
(2)Average revenue per MWh was adjusted to net the impact of power purchases and any revenue with no corresponding generation.
The following table presents our proportionate results by geography for hydroelectric operations for the year ended December 31:
Actual Generation (GWh) Averagerevenueper MWh(1) AdjustedEBITDA(2) Funds From Operations
(MILLIONS, EXCEPT AS NOTED) 2025 2024 2025 2024 2025 2024 2025 2024
North America
United States 6,441 7,235 $ 83 $ 83 $ 405 $ 358 $ 241 $ 198
Canada 3,959 3,586 70 67 254 217 137 102
10,400 10,821 78 78 659 575 378 300
Brazil 3,557 3,809 55 55 138 151 121 130
Colombia 4,594 2,950 69 82 226 176 108 81
Total 18,551 17,580 $ 71 $ 74 $ 1,023 $ 902 $ 607 $ 511
(1)Average revenue per MWh was adjusted to net the impact of power purchases and any revenue with no corresponding generation.
(2)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
North America
Funds From Operations at our North American business were $378 million in 2025 versus $300 million in the prior year driven by stronger hydrology across our Canadian fleet and our inflation-indexed contracts, partially offset by a weaker Canadian dollar. We also advanced our capital rotation strategy through the sale of a stake in a U.S. non-core hydro asset portfolio, crystalizing significant value from our initial acquisition.
Brazil
Funds From Operations at our Brazilian business were $121 million in 2025 versus $130 million in the prior year as the benefit from inflation indexation on our contracted generation was offset by lower hydrology and the strengthening of the Brazilian reais versus the U.S. dollar.
Colombia
Funds From Operations at our Colombian business were $108 million in 2025 versus $81 million in the prior year benefitting from stronger hydrology, inflation indexation on contracted generation, lower cash taxes from recently acquired development assets and our increased ownership in the business, partially offset by lower spot prices on our uncontracted generation caused by higher system-wide hydrology, driving lower average revenue per MWh across the global hydroelectric portfolio.
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WIND OPERATIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for wind operations for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2025 2024
Revenue $ 596 $ 629
Other income 127 235
Direct operating costs (242) (233)
Adjusted EBITDA(1) 481 631
Interest expense (161) (130)
Current income taxes (17) (17)
Funds From Operations $ 303 $ 484
Generation (GWh) – LTA 9,536 9,604
Generation (GWh) – actual 8,406 8,276
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
Funds From Operations at our wind business were $303 million in 2025 versus $484 million in the prior year as the benefit from newly acquired and commissioned facilities, including our investments in Neoen and an offshore wind portfolio in the U.K. was offset by gains on the sale of development assets that benefited the prior year and the impact from the sale of wind assets in the U.S., Portugal and Spain that reduced results compared to last year.
UTILITY-SCALE SOLAR OPERATIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for utility-scale solar operations for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2025 2024
Revenue $ 469 $ 416
Other income 173 180
Direct operating costs (148) (132)
Adjusted EBITDA(1) 494 464
Interest expense (133) (114)
Current income taxes (16) (1)
Funds From Operations $ 345 $ 349
Generation (GWh) – LTA 5,699 4,365
Generation (GWh) – actual 4,759 3,712
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
Funds From Operations at our utility-scale solar business were $345 million in 2025 versus $349 million in the prior year as the benefit of newly acquired and commissioned facilities, including our investments in Neoen and Geronimo Power, was offset by the sale of solar assets in Spain that reduced results compared to last year.
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DISTRIBUTED ENERGY & STORAGE OPERATIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for distributed energy & storage business for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2025 2024
Revenue $ 261 $ 227
Other income 355 88
Direct operating costs (112) (86)
Adjusted EBITDA(1) 504 229
Interest expense (47) (38)
Current income taxes (4) (5)
Funds From Operations $ 453 $ 186
Generation (GWh) – LTA 1,282 1,111
Generation (GWh) – actual 1,441 1,379
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
Funds From Operations at our distributed energy & storage business were $453 million in 2025 as the business benefited from recently acquired and commissioned facilities, including our investment in Neoen and Geronimo Power and a gain on the majority sale of a North American distributed energy business versus $186 million in the prior year
SUSTAINABLE SOLUTIONS OPERATIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for sustainable solutions business for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2025 2024
Revenue $ 609 $ 496
Other income 50 66
Direct operating costs (461) (397)
Adjusted EBITDA(1) 198 165
Interest expense (32) (22)
Current income taxes (5) —
Funds From Operations $ 161 $ 143
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
Funds From Operations at our sustainable solutions business were $161 million in 2025 versus $143 million in the prior year as the benefits of growth and contributions from our global nuclear services business were partially offset by tax recoveries that benefited the prior year.
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CORPORATE
The following table presents our results for corporate for the year ended December 31:
(MILLIONS) 2025 2024
Other income $ 39 $ 56
Direct operating costs (41) (39)
Adjusted EBITDA(1) (2) 17
Management service costs (223) (204)
Interest expense (203) (167)
Distributions(2) (104) (102)
Current income taxes (3) —
Funds From Operations $ (535) $ (456)
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
(2)Distributions on Preferred Units, Class A Preference Shares and Perpetual Subordinated Notes.
Funds From Operations was $535 million due to additional corporate level financing initiatives to support growth over the last twelve months and higher management service costs due to the growth of our business.
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PROPORTIONATE RESULTS FOR THE YEAR ENDED DECEMBER 31, 2024 AND 2023
The following chart reflects the generation and summary financial figures on a proportionate basis for the year ended December 31:
(GWh) (MILLIONS)
Renewable Actual Generation Renewable LTA Generation Revenues Adjusted EBITDA(1) Funds From Operations(1)
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Hydroelectric
North America 10,821 11,603 12,155 12,161 $ 932 $ 1,029 $ 575 $ 670 $ 300 $ 402
Brazil 3,809 3,974 4,043 4,099 208 240 151 172 130 146
Colombia 2,950 3,408 3,646 3,647 338 293 176 175 81 76
17,580 18,985 19,844 19,907 1,478 1,562 902 1,017 511 624
Wind 8,276 6,367 9,604 7,865 629 511 631 493 484 382
Utility-scale solar 3,712 2,489 4,365 3,123 416 365 464 372 349 261
Distributed energy & storage 1,379 1,241 1,111 956 227 241 229 180 186 133
Sustainable solutions — — — — 496 147 165 61 143 52
Corporate — — — — — — 17 59 (456) (357)
Total 30,947 29,082 34,924 31,851 $ 3,246 $ 2,826 $ 2,408 $ 2,182 $ 1,217 $ 1,095
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
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HYDROELECTRIC OPERATIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for hydroelectric operations for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2024 2023
Revenue $ 1,478 $ 1,562
Other income 44 33
Direct operating costs (620) (578)
Adjusted EBITDA(1) 902 1,017
Interest expense (364) (367)
Current income taxes (27) (26)
Funds From Operations $ 511 $ 624
Generation (GWh) – LTA 19,844 19,907
Generation (GWh) – actual 17,580 18,985
Average revenue per MWh(2) 74 72
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
(2)Average revenue per MWh was adjusted to net the impact of power purchases and any revenue with no corresponding generation.
The following table presents our proportionate results by geography for hydroelectric operations for the year ended December 31:
Actual Generation (GWh) Averagerevenueper MWh(1) AdjustedEBITDA(2) Funds From Operations
(MILLIONS, EXCEPT AS NOTED) 2024 2023 2024 2023 2024 2023 2024 2023
North America
United States 7,235 7,766 $ 83 $ 84 $ 358 $ 425 $ 198 $ 271
Canada 3,586 3,837 67 63 217 245 102 131
10,821 11,603 78 77 575 670 300 402
Brazil 3,809 3,974 55 60 151 172 130 146
Colombia 2,950 3,408 82 69 176 175 81 76
Total 17,580 18,985 $ 74 $ 72 $ 902 $ 1,017 $ 511 $ 624
(1)Average revenue per MWh was adjusted to net the impact of power purchases and any revenue with no corresponding generation.
(2)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
North America
Funds From Operations at our North American business were $300 million in 2024 versus $402 million in the prior year as the benefit from recontracting initiatives and inflation indexation on our contracted generation was offset by weaker hydrology, lower average revenue per MWh in the U.S. due primarily to generation mix and the weakening of the Canadian dollar versus the U.S. dollar.
Brazil
Funds From Operations at our Brazilian business were $130 million in 2024 versus $146 million in the prior year. On a constant currency basis, Funds From Operations increased as the benefit of inflation indexation of our contracts was partially offset by less favorable hydrology conditions and commercial initiatives that benefited the prior year.
Colombia
Funds From Operations at our Colombian business were were $81 million in 2024 versus $76 million in the prior year as we benefited from higher average revenue per MWh due to recontracting initiatives, inflation indexation on contracted generation, and higher pricing realized on our uncontracted generation, partially offset by lower resources.
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WIND OPERATIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for wind operations for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2024 2023
Revenue $ 629 $ 511
Other income 235 146
Direct operating costs (233) (164)
Adjusted EBITDA(1) 631 493
Interest expense (130) (105)
Current income taxes (17) (6)
Funds From Operations $ 484 $ 382
Generation (GWh) – LTA 9,604 7,865
Generation (GWh) – actual 8,276 6,367
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
Funds From Operations at our wind business were $484 million in 2024 versus $382 million in the prior year as we benefited from newly acquired and commissioned facilities, stronger generation on a same store basis and gains related to the partial sale of North American development assets and the sale of a European development portfolio, partially offset by gains on the sale of development assets that benefited the prior year.
UTILITY-SCALE SOLAR OPERATIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for utility-scale solar operations for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2024 2023
Revenue $ 416 365
Other income 180 106
Direct operating costs (132) (99)
Adjusted EBITDA(1) 464 372
Interest expense (114) (110)
Current income taxes (1) (1)
Funds From Operations $ 349 $ 261
Generation (GWh) – LTA 4,365 3,123
Generation (GWh) – actual 3,712 2,489
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
Funds From Operations at our utility-scale solar business were $349 million in 2024 versus $261 million in the prior year, as we benefited from newly acquired and commissioned facilities, stronger generation on a same store basis, gains related to the sale of certain North American development assets and a European development portfolio, partially offset by gains on the sale of development assets that benefited the prior year.
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DISTRIBUTED ENERGY & STORAGE OPERATIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for distributed energy & storage business for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2024 2023
Revenue $ 227 $ 241
Other income 88 20
Direct operating costs (86) (81)
Adjusted EBITDA(1) 229 180
Interest expense (38) (43)
Current income taxes (5) (4)
Funds From Operations $ 186 $ 133
Generation (GWh) – LTA 1,111 956
Generation (GWh) – actual 1,379 1,241
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
Funds From Operations at our distributed energy & storage business were $186 million in 2024 versus $133 million in the prior year due to the benefits from recently acquired and commissioned facilities.
SUSTAINABLE SOLUTIONS ON A PROPORTIONATE BASIS
The following table presents our proportionate results for sustainable solutions business for the year ended December 31:
(MILLIONS, EXCEPT AS NOTED) 2024 2023
Revenue $ 496 $ 147
Other income 66 19
Direct operating costs (397) (105)
Adjusted EBITDA(1) 165 61
Interest expense (22) (6)
Current income taxes — (3)
Funds From Operations $ 143 $ 52
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
Funds From Operations at our sustainable solutions business were $143 million in 2024 versus $52 million in the prior year due to growth and development including our investment in our global nuclear services business.
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CORPORATE
The following table presents our results for corporate for the year ended December 31:
(MILLIONS) 2024 2023
Other income $ 56 $ 88
Direct operating costs (39) (29)
Adjusted EBITDA(1) 17 59
Current income taxes — —
Management service costs (204) (205)
Interest expense (167) (114)
Distributions(2) (102) (97)
Funds From Operations $ (456) $ (357)
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
(2)Distributions on Preferred Units and Class A Preference Shares and Perpetual Subordinated Notes.
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RECONCILIATION OF NON-IFRS MEASURES
The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS measures. Net income (loss) is reconciled to Adjusted EBITDA for the year ended December 31, 2025:
Hydroelectric Wind Utility-scale solar Distributed energy & storage Sustainable solutions Corporate Total
(MILLIONS) North America Brazil Colombia
Net income (loss) $ 8 $ 34 $ 178 $ (92) $ (283) $ 484 $ 878 $ (495) $ 712
Add back or deduct the following:
Depreciation 399 72 195 878 578 260 43 — 2,425
Deferred income tax (recovery) expense (32) (7) 1 (213) (169) 98 1 (44) (365)
Foreign exchange and financial instrument (gain) loss (41) (19) 29 (497) (448) (245) (244) 31 (1,434)
Other(1) 95 3 42 332 554 490 (577) 42 981
Management service costs — — — — — — — 223 223
Interest expense 376 58 355 694 528 204 4 238 2,457
Current income tax expense (recovery) 28 7 41 10 67 (405) — 3 (249)
Amount attributable to equity accounted investments and non-controlling interests(2) (174) (10) (615) (631) (333) (382) 93 — (2,052)
Adjusted EBITDA attributable to Unitholders $ 659 $ 138 $ 226 $ 481 $ 494 $ 504 $ 198 $ (2) $ 2,698
(1)Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included within Adjusted EBITDA.
(2)Amount attributable to equity accounted investments corresponds to the Adjusted EBITDA to Brookfield Renewable that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries, excluding amounts attributable to Unitholders. By adjusting Adjusted EBITDA attributable to non-controlling interest, Brookfield Renewable is able to remove the portion of Adjusted EBITDA earned at non-wholly owned subsidiaries that are not attributable to Brookfield Renewable.
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The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS measures. Net income (loss) is reconciled to Adjusted EBITDA for the year ended December 31, 2024:
Hydroelectric Wind Utility-scale solar Distributed energy & storage Sustainable solutions Corporate Total
(MILLIONS) North America Brazil Colombia
Net income (loss) $ 59 $ (9) $ 200 $ 149 $ (150) $ 62 $ 110 $ (430) $ (9)
Add back or deduct the following:
Depreciation 420 71 145 805 414 144 11 — 2,010
Deferred income tax (recovery) expense (10) (4) 16 (1) 6 1 4 (43) (31)
Foreign exchange and financial instrument (gain) loss (105) (1) (16) (201) (175) (199) (177) (6) (880)
Other(1) (33) 58 (7) 84 384 178 41 94 799
Management service costs — — — — — — — 204 204
Interest expense 353 54 361 491 355 159 14 201 1,988
Current income tax expense (recovery) 2 8 60 (6) (85) (136) — (3) (160)
Amount attributable to equity accounted investments and non-controlling interests(2) (111) (26) (583) (690) (285) 20 162 — (1,513)
Adjusted EBITDA attributable to Unitholders $ 575 $ 151 $ 176 $ 631 $ 464 $ 229 $ 165 $ 17 $ 2,408
(1)Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included within Adjusted EBITDA.
(2)Amount attributable to equity accounted investments corresponds to the Adjusted EBITDA to Brookfield Renewable that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries, excluding amounts attributable to Unitholders. By adjusting Adjusted EBITDA attributable to non-controlling interest, Brookfield Renewable is able to remove the portion of Adjusted EBITDA earned at non-wholly owned subsidiaries that are not attributable to Brookfield Renewable.
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The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS measures. Net income (loss) is reconciled to Adjusted EBITDA for the year ended December 31, 2023:
Hydroelectric Wind Utility-scale solar Distributed energy & storage Sustainable solutions Corporate Total
(MILLIONS) North America Brazil Colombia
Net income (loss) $ 207 $ 28 $ 188 $ 307 $ 209 $ (90) $ 102 $ (335) $ 616
Add back or deduct the following:
Depreciation 424 101 127 709 348 56 85 2 1,852
Deferred income tax (recovery) expense (69) 3 5 20 (43) (37) (22) (33) (176)
Foreign exchange and financial instrument (gain) loss (153) (2) (7) (239) (17) (5) (89) 10 (502)
Other(1) 19 12 8 (111) (171) 111 3 23 (106)
Management service costs — — — — — — — 205 205
Interest expense 333 48 364 297 282 59 94 150 1,627
Current income tax expense 1 8 76 20 13 — — 10 128
Amount attributable to equity accounted investments and non-controlling interests(2) (92) (26) (586) (510) (249) 86 (112) 27 (1,462)
Adjusted EBITDA attributable to Unitholders $ 670 $ 172 $ 175 $ 493 $ 372 $ 180 $ 61 $ 59 $ 2,182
(1)Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included within Adjusted EBITDA.
(2)Amount attributable to equity accounted investments corresponds to the Adjusted EBITDA to Brookfield Renewable that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries, excluding amounts attributable to Unitholders. By adjusting Adjusted EBITDA attributable to non-controlling interest, Brookfield Renewable is able to remove the portion of Adjusted EBITDA earned at non-wholly owned subsidiaries that are not attributable to Brookfield Renewable.
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The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS measures. Net income (loss) is reconciled to Funds From Operations for the years indicated:
(MILLIONS) 2025 2024 2023
Net income (loss) $ 712 $ (9) $ 616
Add back or deduct the following:
Depreciation 2,425 2,010 1,852
Foreign exchange and financial instruments gain (1,434) (880) (502)
Deferred income tax recovery (365) (31) (176)
Other(1) 981 799 (106)
Amount attributable to equity accounted investments and non-controlling interest(2) (985) (672) (589)
Funds From Operations $ 1,334 $ 1,217 $ 1,095
(1)Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and the company’s economic share of foreign currency hedges and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included in Funds From Operations.
(2)Amount attributable to equity accounted investments corresponds to the Funds From Operations that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries, excluding amounts attributable to Unitholders. By adjusting Funds From Operations attributable to non-controlling interest, Brookfield Renewable is able to remove the portion of Funds From Operations earned at non-wholly owned subsidiaries that are not attributable to Brookfield Renewable.
The following table reconciles the per unit non-IFRS financial measures to the most directly comparable IFRS measures. Basic earnings per LP unit is reconciled to Funds From Operations per Unit, for the years indicated:
2025 2024 2023
Basic loss per LP unit(1) $ (0.25) $ (0.89) $ (0.32)
Depreciation 1.72 1.55 1.55
Foreign exchange and financial instruments gain (0.13) (0.41) (0.21)
Deferred income tax recovery (0.29) (0.09) (0.19)
Other(2) 0.96 1.67 0.84
Funds From Operations per Unit(3) $ 2.01 $ 1.83 $ 1.67
(1)During the year ended December 31, 2025, on average there were 287.0 million LP units outstanding (2024: 285.5 million, 2023: 282.4 million).
(2)Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included within Adjusted EBITDA.
(3)Average units outstanding, for the year ended December 31, 2025, were 665.1 million (2024: 663.6 million, 2023: 657.1 million), being inclusive of GP interest, Redeemable/Exchangeable partnership units, LP units, BEPC exchangeable shares and class A.2 exchangeable shares.
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CONTRACT PROFILE
We operate our power business on a largely contracted basis to provide a high degree of predictability in Funds From Operations. We maintain a long-term view that electricity prices and the demand for electricity will rise due to electrification of the global economy including segments like industrial and transportation as well as from increasing digitalization. We also expect demand for clean power to grow as renewables are the cheapest form of bulk electricity generation, on the increasing level of acceptance around climate change and the legislated requirements in some areas to diversify away from fossil fuel based generation.
In Brazil and Colombia, we also expect power prices will continue to be supported by the need to build new supply over the medium-to-long term to serve growing demand and therefore we would expect to capture rising prices as we re-contract our power over the medium-term.
The following table sets out our power contracts over the next five years for generation output in North America, Brazil, Europe and certain other countries, assuming long-term average on a proportionate basis. The table excludes Brazil hydroelectric and Colombia portfolios, where we would expect the energy associated with maturing contracts to be re-contracted in the normal course given the construct of the respective power markets. In these countries we currently have a contracted profile of approximately 85% and 75%, respectively, of the long-term average and we would expect to maintain this going forward. Overall, our power portfolio has a weighted-average remaining contract duration of 13 years on a proportionate basis.
(GWh, except as noted) 2026 2027 2028 2029 2030
Hydroelectric
North America
United States(1) 6,829 6,924 6,440 6,483 6,429
Canada 4,060 4,097 4,097 4,049 4,049
10,889 11,021 10,537 10,532 10,478
Wind 8,533 7,952 7,728 7,409 7,257
Utility-scale solar 5,270 5,357 5,319 5,280 5,247
Distributed energy & storage 442 440 438 434 431
Sustainable solutions 58 58 56 46 30
Contracted on a proportionate basis 25,192 24,828 24,078 23,701 23,443
Uncontracted on a proportionate basis 2,623 2,987 3,737 4,114 4,372
Long-term average on a proportionate basis 27,815 27,815 27,815 27,815 27,815
Non-controlling interests 73,238 73,238 73,238 73,238 73,238
Total long-term average 101,053 101,053 101,053 101,053 101,053
Contracted generation as a % of total generation on a proportionate basis 91% 89% 87% 85% 84%
Price per MWh – total generation on a proportionate basis $ 74 $ 75 $ 77 $ 78 $ 79
(1)Includes generation of 1,326 GWh for 2026, 627 GWh for 2027 secured under financial contracts.
The table reflects the current average price of contracted generation across our investments. The weighted-average contract price has decreased slightly since the third quarter of 2025 due to the sale of our U.S. distributed generation business in the fourth quarter of 2025.
Weighted-average remaining power contract durations on a proportionate basis are 13 years in North America, 17 years in Europe, 9 years in Brazil, 5 years in Colombia, and 15 years across our remaining jurisdictions.
In North America, over the next five years, a number of contracts will expire at our hydroelectric facilities. Based on current market prices for energy and ancillary products, we expect a net positive impact to cash flows.
In our Colombian portfolio, we continue to focus on securing long-term contracts while maintaining a certain percentage of uncontracted generation so as to mitigate hydrology risk.
The majority of Brookfield Renewable’s long-term power purchase agreements within our North American and European businesses are with investment-grade rated or creditworthy counterparties. The economic exposure of our
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contracted generation on a proportionate basis is distributed as follows: power authorities (33%), distribution companies (24%), commercial and industrial users (32%), and Brookfield (11%).
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PART 5 – LIQUIDITY AND CAPITAL RESOURCES
CAPITALIZATION
A key element of our financing strategy is to raise the majority of our debt in the form of asset-specific, non-recourse borrowings at our subsidiaries on an investment-grade basis with no maintenance covenants. Substantially all of our debt is either investment grade rated or sized to investment grade and approximately 90% of debt is non-recourse.
The following table summarizes our capitalization as at December 31:
Corporate Consolidated
(MILLIONS, EXCEPT AS NOTED) 2025 2024 2025 2024
Corporate credit facility(1) $ — $ 240 $ — $ 240
Commercial paper(1) 194 431 194 431
Debt
Medium-term notes(2) 3,187 3,008 3,187 3,008
Hybrid notes(2) 328 139 328 139
Non-recourse borrowings(3) — — 31,555 30,904
3,515 3,147 35,070 34,051
Deferred income tax liabilities, net(4) — — 8,902 8,109
Equity
Non-controlling interest — — 24,164 26,168
Preferred equity 563 537 563 537
Perpetual subordinated notes 737 737 737 737
Preferred limited partners’ equity 634 634 634 634
Unitholders’ equity 8,876 8,380 8,876 8,380
Total capitalization $ 14,325 $ 13,435 $ 78,946 $ 78,616
Debt-to-total capitalization(1) 25 % 23 % 44 % 43 %
Debt-to-total capitalization (market value)(5) 14 % 15 % 39 % 40 %
(1)Draws on corporate credit facilities and commercial paper issuances are excluded from the debt-to-total capitalization ratios as they are not a permanent source of capital.
(2)Medium-term and Hybrid notes are unsecured and guaranteed by Brookfield Renewable and excludes $23 million (2024: $16 million) of deferred financing fees, net of unamortized premiums.
(3)Consolidated non-recourse borrowings include $1,569 million (2024: $1,494 million) borrowed under a subscription facility of a Brookfield sponsored private fund and excludes $168 million (2024: $171 million) of deferred financing fees and $181 million (2024: $145 million) of unamortized premiums and discounts.
(4)Deferred income tax liabilities less deferred income tax assets.
(5)Based on market values of Preferred equity, Perpetual subordinated notes, Preferred limited partners’ equity and Unitholders’ equity.
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AVAILABLE LIQUIDITY
The following table summarizes the available liquidity as at December 31:
(MILLIONS) 2025 2024
Brookfield Renewable's share of cash and cash equivalents $ 963 $ 770
Investments in marketable securities 159 201
Corporate credit facilities
Authorized credit facilities 2,450 2,450
Draws on credit facilities — (240)
Authorized letter of credit facility 450 500
Issued letters of credit (414) (335)
Available portion of corporate credit facilities 2,486 2,375
Available portion of subsidiary credit facilities on a proportionate basis 1,017 974
Available liquidity $ 4,625 $ 4,320
We operate with sufficient liquidity to enable us to fund growth initiatives, capital expenditures, distributions or other expenditures and withstand sudden adverse changes in economic circumstances or short-term fluctuations in generation. We maintain a strong, investment grade balance sheet characterized by a conservative capital structure, access to multiple funding levers including a focus on capital recycling on an opportunistic basis, and diverse sources of capital. Principal sources of liquidity are cash flows from operations, our credit facilities, up-financings on non-recourse borrowings and proceeds from the issuance of various securities through public markets.
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BORROWINGS
The composition of debt obligations, overall maturity profile, and average interest rates associated with our borrowings and credit facilities on a proportionate basis as at December 31 is presented in the following table:
2025 2024
Weighted-average Weighted-average
(MILLIONS, EXCEPT AS NOTED) Interest rate %(1) Term (years) Total(1) Interest rate %(1) Term (years) Total(1)
Corporate borrowings
Credit facilities N/A 5 $ — 5.6 5 $ 240
Commercial paper 4.3 <1 194 5.0 <1 431
Medium-term notes 4.5 12 3,187 4.4 12 3,008
Hybrid notes 5.4 30 328 5.5 30 139
Proportionate non-recourse borrowings(2)
Hydroelectric 6.6 10 6,478 6.0 11 4,887
Wind 4.8 9 2,772 4.7 10 2,144
Utility-scale solar 5.3 11 2,993 5.2 12 2,431
Distributed energy and storage 5.8 7 425 4.3 7 870
Sustainable solutions 5.7 5 404 6.3 6 399
5.9 10 13,072 5.4 11 10,731
$ 16,781 $ 14,549
Proportionate unamortized financing fees, net of unamortized premiums (85) (114)
16,696 14,435
Equity-accounted borrowings (1,507) (1,438)
Non-controlling interests and other(3) 19,703 21,393
As per IFRS Statements $ 34,892 $ 34,390
(1)Includes proportionate share of cash obligations on tax equity and yields on tax equity.
(2)See “Part 9 – Presentation to Stakeholders and Performance Measurement” for information on proportionate debt.
(3)Includes tax equity liabilities.
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The following table summarizes our undiscounted principal repayments, scheduled amortization and interest repayable on a proportionate basis as at December 31, 2025:
(MILLIONS) 2026 2027 2028 2029 2030 Thereafter Total
Debt principal repayments(1)
Medium-term notes(2) $ — $ 364 $ — $ 346 $ 346 $ 2,131 $ 3,187
Hybrid note(2) — — — — — 328 328
Non-recourse borrowings
Hydroelectric 420 410 179 697 971 1,532 4,209
Wind 82 38 191 361 210 34 916
Utility-scale solar 115 41 182 325 166 124 953
Distributed energy & storage 5 11 93 54 100 80 343
Sustainable solutions — — — — 332 4 336
622 500 645 1,437 1,779 1,774 6,757
Amortizing debt principal repayments
Non-recourse borrowings
Hydroelectric 191 189 245 169 228 1,247 2,269
Wind 151 173 168 176 180 1,008 1,856
Utility-scale solar 154 167 179 167 176 1,197 2,040
Distributed energy & storage 8 4 5 10 4 51 82
Sustainable solutions 9 8 20 7 7 17 68
513 541 617 529 595 3,520 6,315
Total $ 1,135 $ 1,405 $ 1,262 $ 2,312 $ 2,720 $ 7,753 $ 16,587
Interest payable(1)(2)(3)
Medium-term notes $ 143 $ 136 $ 130 $ 123 $ 109 $ 1,076 $ 1,717
Hybrid note 18 18 18 18 18 440 530
Non-recourse borrowings
Hydroelectric 430 388 335 323 262 1,523 3,261
Wind 134 125 112 93 65 347 876
Utility-scale solar 131 125 116 112 91 737 1,312
Distributed energy & storage 21 20 18 14 10 36 119
Sustainable solutions 24 24 23 21 20 4 116
740 682 604 563 448 2,647 5,684
Total $ 901 $ 836 $ 752 $ 704 $ 575 $ 4,163 $ 7,931
(1)Draws on corporate credit facilities and commercial paper issuances are excluded from the debt repayment schedule as they are not a permanent source of capital.
(2)Medium-term and Hybrid notes are unsecured and guaranteed by Brookfield Renewable and excludes $23 million (2024: $16 million) of deferred financing fees, net of unamortized premiums.
(3)Represents aggregate interest payable expected to be paid over the entire term of the obligations, if held to maturity. Variable rate interest payments have been calculated based on estimated interest rates.
We remain focused on refinancing near-term facilities on acceptable terms and maintaining a manageable maturity ladder. We do not anticipate material issues in addressing our borrowings through 2030 on acceptable terms and will do so opportunistically based on the prevailing interest rate environment.
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CAPITAL EXPENDITURES
We fund growth capital expenditures with cash flow generated from operations, supplemented by non-recourse debt sized to investment grade coverage and covenant thresholds. This is designed to ensure that our investments have stable capital structures supported by a substantial level of equity and cash flows at the asset level can be remitted freely to our company. This strategy also underpins our investment grade profile.
To fund large scale development projects and acquisitions, we will evaluate a variety of capital sources including proceeds from selling mature businesses and upfinancings, in addition to raising money in the capital markets through equity, debt and preferred share issuances. Furthermore, we have $2.45 billion in committed revolving credit facilities available for investments and acquisitions, as well as funding the equity component of organic growth initiatives. The facilities are intended, and have historically been used, as a bridge to a long-term financing strategy rather than a permanent source of capital.
CONSOLIDATED STATEMENTS OF CASH FLOWS
The following table summarizes the key items in the audited annual consolidated statements of cash flows, for the year ended December 31:
(MILLIONS) 2025 2024 2023
Cash flow provided by (used in):
Operating activities before changes in due to or from related parties and net working capital change $ 1,572 $ 1,562 $ 1,390
Changes in due to or from related parties 250 44 7
Net change in working capital balances (675) (332) 468
Operating activities 1,147 1,274 1,865
Financing activities 6,418 7,649 2,596
Investing activities (8,647) (6,800) (4,356)
Foreign exchange gain (loss) on cash 121 (95) 38
(Decrease) increase in cash and cash equivalents $ (961) $ 2,028 $ 143
Operating Activities
Cash flows provided by operating activities before changes in due to or from related parties and net working capital changes for the year ended December 31, 2025, totaled $1,572 million compared to $1,562 million in 2024 and $1,390 million in 2023, reflecting the strong operating performance of our business during the periods.
Financing Activities
Cash flows provided by financing activities totaled $6,418 million for the year ended December 31, 2025. The strength of our balance sheet and access to diverse sources of capital enabled us to fund our growth as discussed below and allowed us to generate net proceeds of $10,491 million for the year ended December 31, 2025, from corporate and non-recourse borrowings, net inflows from related parties, and net capital contributions from participating non-controlling interests, including the issuance of C$450 million ($307 million) of medium term notes, C$250 million ($184 million) of hybrid notes, $632 million of equity financing net of transaction fees through a bought deal and concurrent private placement of LP units, and partially offset by the repayment of C$400 million ($291 million) of medium-term notes prior to maturity, execution of open market purchases and the mandatory cash tender offer for convertible bonds of Neoen and the acquisition of an incremental 15% ownership interest in Isagen. Non-recourse financings included several up-financings across our hydro fleet on the back of signing favourable long-term contracts, generating incremental liquidity to fund growth on an investment grade basis.
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Cash flows provided by financing activities totaled $7,649 million for the year ended December 31, 2024. The strength of our balance sheet and access to diverse sources of capital enabled us to fund our growth as discussed below and allowed us to generate net proceeds of $9,885 million for the year ended December 31, 2024, from corporate, non-recourse, related party financings, and net capital contributions from participating non-controlling interests, including the issuance of C$800 million ($587 million) aggregate of medium term notes, the issuance of $150 million perpetual green subordinated notes, and the issuance of C$200 million ($139 million) fixed-to-fixed reset rate subordinated hybrid notes.
Distributions, including incentive distributions to the general partners, paid during the year ended December 31, 2025, 2024 and 2023 to Unitholders were $1,140 million, $1,061 million and $990 million, respectively. We increased our distributions to $1.492 per LP unit in 2025 (2024: $1.420 and 2023: $1.350), representing a 5.2% increase per LP unit relative to the prior year, which took effect in the first quarter of 2025. The distributions paid to preferred shareholders, preferred limited partners' unitholders, perpetual subordinate notes, and participating non-controlling interests in operating subsidiaries during the year ended December 31, 2025, 2024 and 2023 totaled $2,933 million, $993 million, and $967 million, respectively.
Investing Activities
Cash flows used in investing activities totaled $8,647 million for the year ended December 31, 2025. During the year, we invested $4,855 million into the acquisition of businesses, net of their cash and cash equivalents, including the completion of our Neoen acquisition through the execution of open market purchases and the mandatory cash tender offer for an incremental 47% interest, the acquisition of Geronimo Power and incremental capital injections into our structured investments and equity accounted investments. Our continued investment in the construction and development of wind, solar, distributed generation, and storage development projects globally totaled $6,587 million for the year ended December 31, 2025. Our capital recycling initiatives generated $3,163 million of proceeds from asset sales for the year ended December 31, 2025, including the sale of a 1,004 MW portfolio of wind and solar assets in India, a 2.2 GW pumped storage facility in Europe, a 25% interest in an 845 MW portfolio of wind assets in the U.S., the sale of a 650 MW portfolio of operating and under construction wind, solar and battery projects in Australia, a 315 MW portfolio of wind projects in Australia, a 760 MW portfolio of wind and solar assets in France, a 100% interest in a 1.5 GW portfolio of operating distributed generation assets and a 47% interest in a 2.3 GW distributed generation development platform in the United States, and the sale of certain financial securities.
Cash flows used in investing activities totaled $6,800 million for the year ended December 31, 2024. During the year, we invested $2,940 million into acquiring businesses net of their cash and cash equivalents, including a 53% controlling interest in Neoen, a 74% controlling stake in a leading wind-focused commercial and industrial renewable business in India and a fully integrated distributed generation focused renewable platform in South Korea. We also invested $1,368 million into our structured investments in sustainable solutions and equity accounted investments including acquiring a 12% interest in a ~3.5 GW portfolio of offshore wind assets located in the U.K., a 49% interest in a tri-party joint venture with a 600 MW wind portfolio, and a 67% interest in an eFuels facility in the U.S. that will be capable of producing 500 barrels per day. Our continued investment including the construction and development of wind, solar, distributed generation, and storage development projects globally including the U.S., Brazil, and India totaled $3,733 million for the year ended December 31, 2024. Our capital recycling initiatives generated $1,275 million of proceeds from asset sales for the year ended December 31, 2024 including a portfolio of 63 MW of solar assets, 682 MW of wind assets, and a 1.6 GW development pipeline in Spain and Portugal, a 50% interest in a 67 MW portfolio of wind facilities in the U.K., a 90 MW portfolio of hydroelectric assets and a 85 MW portfolio of biomass facilities in Brazil, and a 30 MW hydroelectric asset in the U.S.
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Cash flows used in investing activities totaled $4,356 million for the year ended December 31, 2023. During the year, we invested $2,160 million into growth including the acquisition of Westinghouse through a strategic partnership, the purchase of an incremental 4% interest in X-Elio, a developer and operator of renewable power assets in the US with 5,900 MW of operating and under construction assets and a 6,100 MW development pipeline, a U.K. renewable developer with 260 MW onshore wind assets, 800 MW near-term development and another 3 GW of later stage projects, renewable platforms in India with 4,500 MW of operating and development assets, 136 MW and 60 MW portfolios of operating wind assets in Brazil, a distributed generation platform with approximately 730 MW of development pipeline in Brazil, and a 200 MW solar development project in China. Our continued investment in our property, plant and equipment, including 675 MW of wind, solar and distributed generation development projects in the U.S., 248 MW of wind development projects in Brazil, 281 MW of wind development projects in China, 268 MW of solar development assets in India and 60 MW of solar assets in Colombia totaled $2,809 million for the year ended December 31, 2023, partially offset by proceeds of $648 million generated from the sale of non-core wind and solar assets and securities for the year ended December 31, 2023.
SHARES, NOTES AND UNITS OUTSTANDING
Shares and units outstanding as at December 31 are as follows:
December 31, 2025 December 31, 2024
Class A Preference Shares(1) 31,035,967 31,035,967
Perpetual Subordinated Notes
Balance, beginning of year 30,400,000 24,400,000
Issuance — 6,000,000
Balance, end of year 30,400,000 30,400,000
Preferred Units(2)
Balance, beginning of year 31,000,000 38,000,000
Redemption of preferred LP Units — (7,000,000)
Balance, end of year 31,000,000 31,000,000
GP interest 3,977,260 3,977,260
Redeemable/Exchangeable partnership units 194,487,939 194,487,939
BEPC exchangeable shares and Class A.2 exchangeable shares(3)
Balance, beginning of year 179,640,851 179,651,526
Exchanged for BEP LP units (36,058) (10,675)
Balance, end of year 179,604,793 179,640,851
LP units
Balance, beginning of year 285,180,371 287,164,340
Issuance 22,017,870 —
Repurchase of LP units for cancellation (1,522,975) (2,279,654)
Distribution reinvestment plan 276,638 285,010
Issued in exchange for BEPC exchangeable shares 36,058 10,675
Balance, end of year 305,987,962 285,180,371
Total LP units on a fully-exchanged basis(4) 680,080,694 659,309,161
(1)Class A Preference Shares are broken down by series as follows: 8,372,310 (2024: 6,849,533) Series 1 Class A Preference Shares are outstanding; 1,587,754 (2024: 3,110,531) Series 2 Class A Preference Shares are outstanding; 9,961,399 (2024: 9,961,399) Series 3 Class A Preference Shares are outstanding; 4,114,504 (2024: 4,111,504) Series 5 Class A Preference Shares are outstanding; and 7,000,000 (2024: 7,000,000) Series 6 Class A Preference Shares are outstanding.
(2)Preferred Units are broken down by series and certain series are convertible on a one for one basis at the option of the holder as follows: 7,000,000 Series 7 Preferred Units are outstanding (convertible for Series 8 Preferred Units beginning on January 31, 2026); 10,000,000 Series 13 Preferred Units are outstanding (convertible for Series 14 Preferred Units beginning on April 30, 2028); 8,000,000 Series 17 Preferred Units are outstanding; and 6,000,000 Series 18 Preferred Units are outstanding.
(3)Includes 144,885,110 (December 31, 2024: 144,921,168) BEPC exchangeable shares and 34,719,683 (December 31, 2024: 34,719,683) Class A.2 exchangeable shares.
(4)The fully-exchanged amounts assume the exchange of all Redeemable/Exchangeable partnership units, BEPC exchangeable shares and class A.2 exchangeable shares for LP units.
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DIVIDENDS AND DISTRIBUTIONS
The following table summarizes the dividends and distributions declared and paid, for the year ended December 31:
Declared Paid
(MILLIONS) 2025 2024 2023 2025 2024 2023
Class A Preference Shares $ 30 $ 28 $ 27 $ 25 $ 28 $ 27
Perpetual Subordinated Notes 40 37 29 40 37 29
Class A Preferred LP units 34 37 41 32 37 41
Participating non-controlling interests – in operating subsidiaries 2,314 891 1,428 2,836 891 870
GP Interest and incentive distributions 151 134 116 151 134 116
Redeemable/Exchangeable partnership units 293 277 265 292 276 263
BEPC exchangeable shares and class A.2 exchangeable shares 269 256 241 270 256 241
LP units 434 406 383 427 395 370
LP unit distributions per unit on an annualized basis were increased as follows:
Date of Increase Amount of Increase % Increase Annual Distribution Distribution Effective Date
February 2020 $0.06 5% $1.160 March 2020
February 2021 $0.06 5% $1.215 March 2021
February 2022 $0.06 5% $1.280 March 2022
February 2023 $0.07 5% $1.350 March 2023
February 2024 $0.07 5% $1.420 March 2024
January 2025 $0.07 5% $1.492 March 2025
January 2026 $0.08 5% $1.568 March 2026
CONTRACTUAL OBLIGATIONS
Please see Note 28 – Commitments, contingencies and guarantees in the audited annual consolidated financial statements for further details on the following:
•Commitments – Water, land, and dam usage agreements, and agreements and conditions on committed acquisitions of operating portfolios and development projects;
•Contingencies – Legal proceedings, arbitrations and actions arising in the normal course of business, and providing for letters of credit; and
•Guarantees – Nature of all the indemnification undertakings and guarantees to third-parties for certain transactions.
SUPPLEMENTAL FINANCIAL INFORMATION
In April 2021, December 2021 and March 2024, Brookfield BRP Holdings (Canada) Inc., a wholly-owned subsidiary of Brookfield Renewable, issued $350 million, $260 million and $150 million, respectively, of perpetual subordinated notes at a fixed rate of 4.625%, 4.875% and 7.250%, respectively.
These notes are fully and unconditionally guaranteed, on a subordinated basis by each of Brookfield Renewable Partners L.P., BRELP, BRP Bermuda Holdings I Limited, Brookfield BRP Europe Holdings Limited, and BEP Subco Inc (together, the "guarantor subsidiaries"). The other subsidiaries of Brookfield Renewable do not guarantee the securities and are referred to below as the “non-guarantor subsidiaries”.
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Pursuant to Rule 13-01 of the SEC's Regulation S-X, the following table provides combined summarized financial information of Brookfield BRP Holdings (Canada) Inc. and the guarantor subsidiaries for the year ended December 31:
(MILLIONS) 2025 2024 2023
Revenues(1) $ — $ — $ —
Gross profit — — —
Dividend income from non-guarantor subsidiaries 988 746 511
Net income 715 547 428
(1)Brookfield Renewable's total revenues for the year ended December 31, 2025 were $6,407 million (2024: $5,876 million and 2023: $5,038 million).
(MILLIONS) December 31, 2025 December 31, 2024
Current assets(1) $ 831 $ 392
Total assets(2)(3) 1,099 507
Current liabilities(4) 8,524 7,259
Total liabilities(4) 8,568 7,698
(1)Amount due from non-guarantor subsidiaries was $815 million (2024: $383 million).
(2)Brookfield Renewable's total assets as at December 31, 2025 and December 31, 2024 were $98,701 million and $94,809 million.
(3)Amount due from non-guarantor subsidiaries was $949 million (2024: $408 million).
(4)Amount due to non-guarantor subsidiaries was $7,908 million (2024: $6,629 million).
OFF-STATEMENT OF FINANCIAL POSITION ARRANGEMENTS
Brookfield Renewable does not have any off-statement of financial position arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Brookfield Renewable issues letters of credit from its corporate credit facilities for general corporate purposes which include, but are not limited to, security deposits, performance bonds and guarantees for reserve accounts. As at December 31, 2025, letters of credit issued amounted to $4,399 million (2024: $2,792 million).
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PART 6 – SELECTED QUARTERLY INFORMATION
HISTORICAL OPERATIONAL AND FINANCIAL INFORMATION
YEAR ENDED DECEMBER 31 (MILLIONS, EXCEPT AS NOTED) 2025 2024 2023
Operational information:
Capacity (MW) 47,203 46,211 32,949
Total generation (GWh)
Long-term average generation 123,028 94,339 75,584
Actual generation 116,010 80,842 69,704
Proportionate generation (GWh)
Actual Renewable generation 33,157 30,947 29,082
Additional financial information:
Net loss attributable to Unitholders $ (19) $ (464) $ (100)
Basic loss per LP unit(1) (0.25) (0.89) (0.32)
Proportionate Adjusted EBITDA(2) 2,698 2,408 2,182
Funds From Operations(2) 1,334 1,217 1,095
Funds From Operations per Unit(2)(3) 2.01 1.83 1.67
Distribution per LP unit 1.49 1.42 1.35
YEAR ENDED DECEMBER 31 (MILLIONS, EXCEPT AS NOTED) 2025 2024 2023
Property, plant and equipment, at fair value $ 70,456 $ 73,475 $ 64,005
Equity-accounted investments 4,087 2,740 2,546
Total assets 98,701 94,809 76,128
Total borrowings 34,892 34,390 29,702
Deferred income tax liabilities 9,395 8,439 7,174
Other liabilities 19,440 15,524 9,273
Participating non-controlling interests – in operating subsidiaries 24,164 26,168 18,863
General partnership interest in a holding subsidiary held by Brookfield 52 50 55
Participating non-controlling interests – in a holding subsidiary – Redeemable/Exchangeable units held by Brookfield 2,524 2,457 2,684
BEPC exchangeable shares and class A.2 exchangeable shares 2,330 2,269 2,479
Preferred equity 563 537 583
Perpetual subordinated notes 737 737 592
Preferred limited partners’ equity 634 634 760
Limited partners’ equity 3,970 3,604 3,963
Total liabilities and equity 98,701 94,809 76,128
Debt-to-total capitalization (market value)(4) 39 % 40 % 40 %
(1)For the year ended December 31, 2025, average LP units totaled 287.0 million (2024: 285.5 million and 2023: 282.4 million)
(2)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure, See “Cautionary Statement Regarding Use of Non-IFRS Measures” and “PART 4 – Financial Performance Review on Proportionate Information – Reconciliation of Non-IFRS Measures”.
(3)Average Units outstanding for the year ended December 31, 2025 totaled 665.1 million (2024: 663.6 million and 2023: 657.1 million) being inclusive of our LP units, Redeemable/Exchangeable partnership units, BEPC exchangeable shares, class A.2 exchangeable shares and GP interest.
(4)Based on market values of Preferred equity, Perpetual subordinated notes, Preferred limited partners’ equity and Unitholders’ equity.
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SUMMARY OF HISTORICAL QUARTERLY RESULTS
The following is a summary of unaudited quarterly financial information for the last eight consecutive quarters:
2025 2024
(MILLIONS, EXCEPT AS NOTED) Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
Total Generation (GWh) – LTA 31,323 29,779 31,450 30,476 24,779 22,151 24,895 22,514
Total Generation (GWh) – actual 28,798 27,554 30,650 29,008 21,121 18,819 21,467 20,300
Proportionate Renewable Generation (GWh) – LTA 9,590 8,529 9,819 8,999 8,616 8,132 9,522 8,654
Proportionate Actual Renewable Generation (GWh) 7,759 7,186 9,542 8,670 6,868 7,320 8,298 8,461
Revenues $ 1,539 $ 1,596 $ 1,692 $ 1,580 $ 1,432 $ 1,470 $ 1,482 $ 1,492
Net income (loss) attributable to Unitholders 410 (120) (112) (197) (9) (181) (154) (120)
Basic income (loss) per LP unit 0.54 (0.23) (0.22) (0.35) (0.06) (0.32) (0.28) (0.23)
Funds From Operations 346 302 371 315 304 278 339 296
Funds From Operations per Unit 0.51 0.46 0.56 0.48 0.46 0.42 0.51 0.45
Distribution per LP unit 0.37 0.37 0.37 0.37 0.36 0.36 0.36 0.36
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PROPORTIONATE RESULTS FOR THE THREE MONTHS ENDED DECEMBER 31
The following chart reflects the generation and summary financial figures on a proportionate basis for the three months ended December 31:
(GWh) (MILLIONS)
Actual Renewable Generation Renewable LTA Generation Revenues Adjusted EBITDA(1) Funds From Operations(1)
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Hydroelectric
North America 1,664 1,880 2,910 2,910 $ 207 $ 165 $ 133 $ 88 $ 57 $ 22
Brazil 840 904 983 983 49 48 33 41 29 36
Colombia 1,787 776 1,697 1,009 136 100 90 50 34 28
4,291 3,560 5,590 4,902 392 313 256 179 120 86
Wind 2,224 2,289 2,591 2,588 169 172 137 265 86 214
Utility-scale solar 942 731 1,159 896 73 58 92 99 52 70
Distributed energy & storage 302 288 250 230 73 50 224 37 206 23
Sustainable solutions — — — — 178 144 44 47 37 38
Corporate — — — — — — (9) (9) (155) (127)
Total 7,759 6,868 9,590 8,616 $ 885 $ 737 $ 744 $ 618 $ 346 $ 304
(1)Non-IFRS measures. For reconciliations to the most directly comparable IFRS measure see “Reconciliation of Non-IFRS Measures” in this Management’s Discussion and Analysis.
For the three months ended December 31, 2025, Funds From Operations were $346 million versus $304 million in the prior year. Funds From Operations increased $42 million primarily due to contributions from recently acquired and commissioned facilities, the benefits of inflation indexation on our contracted generation in Canada, Brazil and Colombia, an increase in ownership in Isagen and a gain on the sale of a North American distributed energy platform.
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RECONCILIATION OF NON-IFRS MEASURES
The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS measures. Net income (loss) is reconciled to Adjusted EBITDA for the three months ended December 31, 2025:
Hydroelectric Wind Utility-scale solar Distributed energy & storage Sustainable solutions Corporate Total
(MILLIONS) North America Brazil Colombia
Net (loss) income $ (62) $ 31 $ 59 $ (164) $ (91) $ 280 $ 764 $ (139) $ 678
Add back or deduct the following:
Depreciation 103 18 52 215 158 67 9 — 622
Deferred income tax (recovery) expense (26) (6) 10 (53) (49) 65 1 (15) (73)
Foreign exchange and financial instrument (gain) loss (20) (27) (35) (148) (361) (144) (131) 2 (864)
Other(1) 57 2 36 227 362 419 (616) 16 503
Management service costs — — — — — — — 61 61
Interest expense 106 15 104 168 138 41 1 65 638
Current income tax expense (recovery) 24 1 17 10 17 (261) (1) 1 (192)
Amount attributable to equity accounted investments and non-controlling interests(2) (49) (1) (153) (118) (82) (243) 17 — (629)
Adjusted EBITDA attributable to Unitholders $ 133 $ 33 $ 90 $ 137 $ 92 $ 224 $ 44 $ (9) $ 744
(1)Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included within Adjusted EBITDA.
(2)Amount attributable to equity accounted investments corresponds to the Adjusted EBITDA to Brookfield Renewable that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries, excluding amounts attributable to Unitholders. By adjusting Adjusted EBITDA attributable to non-controlling interest, Brookfield Renewable is able to remove the portion of Adjusted EBITDA earned at non-wholly owned subsidiaries that are not attributable to Brookfield Renewable.
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The following table reconciles the non-IFRS financial measures to the most directly comparable IFRS measures. Net income (loss) is reconciled to Adjusted EBITDA for the three months ended December 31, 2024:
Hydroelectric Wind Utility-scale solar Distributed energy & storage Sustainable solutions Corporate Total
(MILLIONS) North America Brazil Colombia
Net (loss) income $ (55) $ 33 $ 93 $ 203 $ (134) $ 25 $ 105 $ (82) $ 188
Add back or deduct the following:
Depreciation 108 16 34 184 87 45 3 — 477
Deferred income tax (recovery) expense (21) (1) 7 21 (11) (32) 5 (17) (49)
Foreign exchange and financial instrument gain (26) (21) (13) (86) (120) (65) (114) (13) (458)
Other(1) 10 4 (3) 81 330 115 22 8 567
Management service costs — — — — — — — 47 47
Interest expense 90 15 80 136 97 38 4 49 509
Current income tax (recovery) expense (1) 2 15 (16) (50) (115) — (1) (166)
Amount attributable to equity accounted investments and non-controlling interests(2) (17) (7) (163) (258) (100) 26 22 — (497)
Adjusted EBITDA attributable to Unitholders $ 88 $ 41 $ 50 $ 265 $ 99 $ 37 $ 47 $ (9) $ 618
(1)Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and Brookfield Renewable’s economic share of foreign currency hedges and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included within Adjusted EBITDA.
(2)Amount attributable to equity accounted investments corresponds to the Adjusted EBITDA to Brookfield Renewable that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries, excluding amounts attributable to Unitholders. By adjusting Adjusted EBITDA attributable to non-controlling interest, Brookfield Renewable is able to remove the portion of Adjusted EBITDA earned at non-wholly owned subsidiaries that are not attributable to Brookfield Renewable.
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The following table reconciles the non-IFRS financial metrics to the most directly comparable IFRS measures. Net income is reconciled to Funds From Operations for the three months ended December 31:
(MILLIONS) 2025 2024
Net income $ 678 $ 188
Add back or deduct the following:
Depreciation 622 477
Foreign exchange and financial instruments gain (864) (458)
Deferred income tax recovery (73) (49)
Other(1) 503 567
Amount attributable to equity accounted investments and non-controlling interest(2) (520) (421)
Funds from Operations $ 346 $ 304
(1)Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and the company’s economic share of foreign currency hedges and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included in Funds From Operations.
(2)Amount attributable to equity accounted investments corresponds to the Funds From Operations that are generated by its investments in associates and joint ventures accounted for using the equity method. Amounts attributable to non-controlling interest are calculated based on the economic ownership interest held by non-controlling interests in consolidated subsidiaries, excluding amounts attributable to Unitholders. By adjusting Funds From Operations attributable to non-controlling interest, Brookfield Renewable is able to remove the portion of Funds From Operations earned at non-wholly owned subsidiaries that are not attributable to Brookfield Renewable.
The following table reconciles the per Unit non-IFRS financial measures to the most directly comparable IFRS measures. Basic earnings per LP unit is reconciled to Funds From Operations per Unit, for the three months ended December 31:
2025 2024
Basic earnings (loss) per LP unit(1) $ 0.54 $ (0.06)
Depreciation 0.46 0.39
Foreign exchange and financial instruments gain (0.20) (0.24)
Deferred income tax recovery (0.29) (0.04)
Other(2) — 0.41
Funds From Operations per Unit(3) $ 0.51 $ 0.46
(1)Average LP units outstanding for the three months ended December 31, 2025 were 295.4 million (2024: 285.1 million).
(2)Other corresponds to amounts that are not related to the revenue earning activities and are not normal, recurring cash operating expenses necessary for business operations. Other also includes derivative and other revaluations and settlements, gains or losses on debt extinguishment/modification, transaction costs, legal, provisions, amortization of concession assets and the company’s economic share of foreign currency hedges and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains and losses on assets that we developed and/or did not intend to hold over the long-term that are included in Funds From Operations as well as amounts attributable to holders of Redeemable/Exchangeable partnership units, GP interest and exchangeable shares.
(3)Average Units for the three months ended December 31, 2025 were 673.5 million (2024: 663.2 million), being inclusive of LP units, Redeemable/Exchangeable partnership units, BEPC exchangeable shares and class A.2 exchangeable shares and GP interest.
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PART 7 – BUSINESS RISKS AND RISK MANAGEMENT
RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
Management’s objectives are to protect Brookfield Renewable against material economic exposures and variability of results from various financial risks that include electricity price risk, foreign currency risk, interest rate risk, credit risk, and liquidity risk. These risks are further discussed in Note 6 – Risk management and financial instruments in the audited annual consolidated financial statements.
The following table outlines Brookfield Renewable’s financial risks and how they are managed:
Financial Risk Description of Risk Management of Risk
Electricity price We have exposure to movements in the market price of electricity. '- Enter into long-term contracts that specify the price at which electricity is sold - Maintain a portfolio of short, medium, and long-term financial contracts to mitigate our exposure to fluctuations in electricity prices - Ensure limits and controls are in place for trading activities - As of December 31, 2025, we have, on a proportionate basis, approximately 91% of 2026 generation (2024: 88% of 2025 generation) contracted under power purchase agreements and financial contracts, excluding Brazil and Colombia. In Brazil and Colombia, on a proportionate basis, we had approximately 85% and 75% of 2026 (2024: 80% and 85%, of 2025, respectively) generation contracted under power purchase agreements, respectively. See “Part 4 – Financial Performance Review on Proportionate Information”
Foreign currency We are exposed to foreign currency risk – including Canadian dollar, Brazilian real, Euro, British pound sterling, Colombian peso, Indian rupee, Chinese yuan and Australian dollar – related to operations, anticipated transactions, and certain foreign currency debt. '- Enter into foreign currency contracts designed to minimize the exposure to foreign currency fluctuations- 46% of cash flow is generated in the United States while Canadian Dollar and Euro exposure, representing 30% of our portfolio, is proactively managed through foreign currency contracts- Limited foreign currency contracts to hedge our exposure to currencies in South America and Asia-Pacific – representing 24% of our portfolio – due to the high costs associated with hedging certain currencies. However, these specific exposures are largely mitigated by the annual inflation-linked escalations in our power purchase agreements
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Financial Risk Description of Risk Management of Risk
Interest rate We are exposed to interest rate risk on the interest rates of our variable-rate debt, and on dividend and distribution rate resets on our Class A Preference Shares and Preferred Units, respectively. '- Assets largely consist of long duration physical assets, and financial liabilities consist primarily of long-term fixed-rate debt or floating-rate debt that has been swapped to fixed rates with interest rate financial instruments to minimize the exposure to interest rate fluctuations - Enter into interest rate contracts to lock-in fixed rates on certain anticipated future debt issuances and on floating rate debts - Our proportionate floating rate exposure represents 16% of our total debt, after affecting for variable-rate debt that has been hedged through the use of interest rate swaps. Our floating rate exposure arises primarily from our South American operations, as we have limited opportunities to raise fixed-rate debt or hedge due to the high associated costs
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Financial Risk Description of Risk Management of Risk
Credit We are exposed to credit risk from operating activities and certain financing activities, the maximum exposure of which is represented by the carrying amounts reported in the statements of financial position. We are exposed to credit risk if counterparties to our energy contracts, interest rate swaps, forward foreign exchange contracts and physical electricity and gas transactions as well as trade receivables are unable to meet their obligations. '- Diverse counterparty base with long-standing credit histories - Exposure to counterparties with investment-grade credit ratings - Use of standard trading contracts and other standard credit risk mitigation techniques - As at December 31, 2025, 88% (2024: 83%) of Brookfield Renewable’s trade receivables were current
Liquidity We are exposed to liquidity risk for financial liabilities. We are also subject to internal liquidity risk because we conduct our business activities through separate legal entities (subsidiaries and affiliates) and are dependent on receipts of cash from those entities to defray corporate expenses and to make dividend and distribution payments to shareholders and Unitholders, respectively. Under the credit agreements for subsidiary debt, it is conventional for distributions of cash to Brookfield Renewable to be prohibited if the loan is in default (notably for non-payment of principal or interest) or if the entity fails to achieve a benchmark debt-service coverage ratio. Refer to Note 19 – Capital management of the annual consolidated financial statement for further disclosures. '- As at December 31, 2025, available liquidity was $4.6 billion. Liquidity is comprised of our share of cash and cash equivalents, investments in marketable securities, the available portion of the corporate credit facilities, and our share of subsidiary credit facilities. Details of the available liquidity and debt maturity ladder are included in “Part 5 – Liquidity and Capital Resources”- Effective and regular monitoring of debt covenants and cooperation with lenders to cure any defaults- Target investment grade debt or debt with investment grade characteristics with the ability to absorb volatility in cash flows- Long-term duration of debt instruments and the diversification in maturity dates over an extended period of time- Sufficient cash from operating activities, access to undrawn credit facilities, and possible capital markets financing to fund our operations and fulfill our obligations as they become due- Ensure access to public capital markets and maintain a strong investment grade credit rating
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PART 8 – CRITICAL ESTIMATES AND JUDGMENTS IN APPLYING ACCOUNTING POLICIES
The consolidated financial statements are prepared in accordance with IFRS, which require the use of estimates and judgments in reporting assets, liabilities, revenues, expenses and contingencies. In the judgment of management, none of the estimates outlined in Note 1 – Basis of preparation and material accounting policy information in our audited consolidated financial statements are considered critical accounting estimates as defined in Canadian National Instrument 51-102 – Continuous Disclosure Obligations with the exception of the estimates related to the valuation of property, plant and equipment, financial instruments, deferred income tax liabilities, decommissioning liabilities and impairment of goodwill. These assumptions include estimates of future electricity prices, discount rates, expected long-term average generation, inflation rates, terminal year, the amount and timing of operating and capital costs, forecasted development MWs per annum, future leverage assumptions, and the income tax rates of future income tax provisions. Estimates also include determination of accruals, provisions, purchase price allocations, useful lives, asset valuations, asset impairment testing and those relevant to the defined benefit pension and non-pension benefit plans. Estimates are based on historical experience, current trends and various other assumptions that are believed to be reasonable under the circumstances.
In making estimates, management relies on external information and observable conditions where possible, supplemented by internal analysis, as required. These estimates have been applied in a manner consistent with that in the prior year and there are no known trends, commitments, events or uncertainties that we believe will materially affect the methodology or assumptions utilized in this report. These estimates are impacted by, among other things, future power prices, movements in interest rates, foreign exchange volatility and other factors, some of which are highly uncertain, as described in the “Risk Factors” section. The interrelated nature of these factors prevents us from quantifying the overall impact of these movements on Brookfield Renewable’s financial statements in a meaningful way. These sources of estimation uncertainty relate in varying degrees to substantially all asset and liability account balances. Actual results could differ from those estimates.
CRITICAL ESTIMATES
Brookfield Renewable makes estimates and assumptions that affect the carrying value of assets and liabilities, disclosure of contingent assets and liabilities and the reported amount of income and other comprehensive income (“OCI”) for the year. Actual results could differ from these estimates. The estimates and assumptions that are critical to the determination of the amounts reported in the consolidated financial statements relate to the following:
(i)Property, plant and equipment
The fair value of Brookfield Renewable’s property, plant and equipment is calculated using estimates and assumptions about future electricity prices for renewable sources, anticipated long-term average generation, estimated operating and capital expenditures, future inflation rates and discount rates, as described in Note 13 – Property, plant and equipment, at fair value in our audited annual consolidated financial statements. Judgment is involved in determining the appropriate estimates and assumptions in the valuation of Brookfield Renewable’s property, plant and equipment. See Note 1(s)(iii) – Critical judgments in applying accounting policies – Property, plant and equipment in our audited annual consolidated financial statements for further details.
Estimates of useful lives and residual values are used in determining depreciation. To ensure the accuracy of useful lives and residual values, these estimates are reviewed on an annual basis.
(ii)Financial instruments
Brookfield Renewable makes estimates and assumptions that affect the carrying value of its financial instruments, including estimates and assumptions about future electricity prices, contractual volumes, expected long-term average generation, capacity prices, discount rates, the timing of energy delivery and the elements affecting fair value of tax equity financings. Non-financial instruments are valued using estimates of future electricity prices which are estimated by considering broker quotes for the years in which there is a liquid market and for the subsequent years Brookfield Renewable’s best estimate of electricity prices that would allow new entrants into the market. This valuation technique approximates the net present value of future cash flows. For certain financial instruments, Brookfield Renewable applies an income approach, utilizing inputs derived from board-approved
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business plans and applying valuation techniques consistent with IFRS to determine the fair value of its interest in the underlying entity.
For power purchase agreements accounted for under IFRS 9 (“IFRS 9 PPAs”) that have unobservable values, Brookfield Renewable determines the fair value of these IFRS 9 PPAs using a discounted cash flow model based on the term of the contract and applies judgments surrounding the inputs used within the valuation model. The valuation model incorporates various inputs and assumptions including future power prices, contractual prices, contractual volumes and discount rates. Future power prices are based on broker quotes from independent sources and for IFRS 9 PPAs with no available broker quotes, future fuel driven merchant prices are incorporated within the model. Contractual prices are stipulated within each individual agreement, contractual volumes are either specified within the agreement or determined using estimated future generation of the power generating assets and discount rate used in the valuation model is the credit adjusted risk free rate. See Note 6 – Risk management and financial instruments in our audited annual consolidated financial statements for more details.
(iii)Deferred income taxes
The consolidated financial statements include estimates and assumptions for determining the future tax rates applicable to subsidiaries and identifying the temporary differences that relate to each subsidiary. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply during the year when the assets are realized or the liabilities settled, using the tax rates and laws enacted or substantively enacted at the consolidated statements of financial position dates. Operating plans and forecasts are used to estimate when the temporary difference will reverse.
(iv) Decommissioning liabilities
Decommissioning costs will be incurred at the end of the operating life of some of the company’s assets. These obligations are typically many years in the future and require judgment to estimate. The estimate of decommissioning costs can vary in response to many factors including changes in relevant legal, regulatory, and environmental requirements, the emergence of new restoration techniques or experience at other power generating facilities. Inherent in the calculations of these costs are assumptions and estimates including the ultimate settlement amounts, inflation factors, discount rates, and timing of settlements.
(v) Impairment of goodwill
The impairment assessment of goodwill requires estimation of the value-in-use or fair value less costs of disposal of the cash generating unit or units (“CGUs”) or groups of CGUs to which goodwill has been allocated.
Brookfield Renewable uses the following critical assumptions and estimates for the value-in-use method: the circumstances that gave rise to the goodwill, timing and amount of future cash flows expected from the CGUs; discount rates; terminal capitalization rates; terminal valuation dates forecasted development MWs per annum, and future leverage assumptions for the platforms.
CRITICAL JUDGMENTS IN APPLYING ACCOUNTING POLICIES
The following are the critical judgments that have been made in applying the accounting policies used in the consolidated financial statements and that have the most significant effect on the amounts in the consolidated financial statements:
(i)Preparation of consolidated financial statements
These consolidated financial statements present the financial position, results of operations and cash flows of Brookfield Renewable. Judgment is required in determining which assets, liabilities and transactions are recognized in the consolidated financial statements as pertaining to Brookfield Renewable’s operations.
(ii)Common control transactions
Common control business combinations specifically fall outside the scope of IFRS 3, Business Combinations (“IFRS 3”), and as such management has used its judgment to determine an appropriate policy to account for these transactions. Consideration was given to other relevant accounting guidance within the framework of principles in IFRS and to reflect the economic reality of the transactions, in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”). As a result, the consolidated financial statements account for assets
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and liabilities acquired at the previous carrying value on the predecessor’s financial statements. Differences between the consideration given and the assets and liabilities received are recorded directly to equity.
(iii)Property, Plant and Equipment
The accounting policy relating to Brookfield Renewable’s property, plant and equipment is described in Note 1(g) – Property, plant and equipment and revaluation method in our audited annual consolidated financial statements. In applying this policy, judgment is used in determining whether certain costs are additions to the carrying amount of the property, plant and equipment as opposed to repairs and maintenance that are expensed when incurred. If an asset has been developed, judgment is required to identify the point at which the asset is capable of being used as intended and to identify the directly attributable costs to be included in the carrying value of the development asset. The useful lives of property, plant and equipment are determined by independent engineers periodically with an annual review by management.
Annually, Brookfield Renewable determines the fair value of its property, plant and equipment using a methodology that it has judged to be reasonable. The methodology for hydroelectric assets is generally a twenty-year discounted cash flow model. Twenty years is the period considered reasonable as Brookfield Renewable has twenty-year capital plans and it believes a reasonable third party would be indifferent between extending the cash flows further in the model versus using a discounted terminal value. The methodology for wind, solar and other assets is to align the model length with the expected remaining useful life of the subject assets.
The valuation model incorporates future cash flows from long-term power purchase agreements that are in place where it is determined that the power purchase agreements are linked specifically to the related power generating assets. With respect to estimated future generation that does not incorporate long-term power purchase agreement pricing, the cash flow model uses estimates of future electricity prices using broker quotes from independent sources for the years in which there is a liquid market. The valuation of generation not linked to long-term power purchase agreements also requires the development of a long-term estimate of future electricity prices. In this regard the valuation model uses a discount to the all-in cost of construction with a reasonable return, to secure energy from a new renewable resource with a similar generation profile to the asset being valued as the benchmark that will establish the market price for electricity for renewable resources.
Brookfield Renewable’s long-term view is anchored to the cost of securing new energy from renewable sources to meet future demand growth by the years 2030 to 2035 in North America, 2030 in Colombia, and 2029 in Brazil. The year of new entry is viewed as the point when generators must build additional capacity to maintain system reliability and provide an adequate level of reserve generation with the retirement of older coal-fired plants and rising environmental compliance costs in North America and Europe, and overall increasing demand in Colombia and Brazil. Brookfield Renewable has based its long term energy views for existing assets on a discount to price required to incentivize new build generation, considering the expected technology profile of the relevant region.
Terminal values are included in the valuation of hydroelectric assets in North America and Colombia. For the hydroelectric assets in Brazil, cash flows have been included based on the duration of the authorization or useful life of a concession asset with consideration of a one-time thirty-year renewal on qualifying hydroelectric assets.
Discount rates are determined each year by considering the current interest rates, average market cost of capital as well as the price risk and the geographical location of the operational facilities as judged by management. Inflation rates are also determined by considering the current inflation rates and the expectations of future rates by economists. Operating costs are based on long-term budgets escalated for inflation. Each operational facility has a twenty-year capital plan that it follows to ensure the maximum life of its assets is achieved. Foreign exchange rates are forecasted by using the spot rates and the available forward rates, extrapolated beyond the period available. The inputs described above to the discounted cash flow model require management to consider facts, trends and plans in making its judgments as to what derives a reasonable fair value of its property, plant and equipment.
(iv)Financial instruments
The accounting policy relating to Brookfield Renewable’s financial instruments is described in Note 1(l) – Financial instruments in our audited annual consolidated financial statements. In applying the policy, judgments are made in applying the criteria set out in IFRS 9 – Financial instruments (“IFRS 9”) to record financial instruments at fair value through profit and loss, and the assessments of the effectiveness of hedging relationships.
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For commodity derivatives that have unobservable value, Brookfield Renewable applies judgements surrounding the inputs used within the valuation model. The valuation model incorporates various inputs and assumptions including forward power prices, contractual prices, contractual volumes and discount rates. Forward power prices are based on broker quotes from independent sources, contractual prices are stipulated within each individual agreement, contractual volumes are either specified within the agreement or determined using future generation of the power generating assets and discount rates are determined by considering the current interest rates, average market cost of capital as well as the price risk and geographical location of the power generating assets as judged by management.
(v)Deferred income taxes
The accounting policy relating to Brookfield Renewable’s income taxes is described in Note 1(n) – Income taxes in our audited annual consolidated financial statements. In applying this policy, judgments are made in determining the probability of whether deductions, tax credits and tax losses can be utilized.
FUTURE CHANGES IN ACCOUNTING POLICIES
IFRS 18 - Presentation and Disclosure in Financial Statements (“IFRS 18”)
In April 2024, the IASB issued IFRS 18, Presentation and Disclosure of Financial Statements. IFRS 18 is effective for periods beginning on or after January 1, 2027, with early adoption permitted. IFRS 18 is expected to improve the quality of financial reporting by requiring defined subtotals in the statement of profit or loss, requiring disclosure about management-defined performance measures, and adding new principles for aggregation and disaggregation of information. Brookfield Renewable is currently assessing the impact of this standard on its presentation and disclosures.
Amendments to IFRS 9 - Financial Instruments (“IFRS 9”) and IFRS 7 - Financial Instruments: Disclosures (“IFRS 7”) - Classification and Measurement of Financial Instruments
The amendments clarify the requirements for the timing of recognition and derecognition of financial liabilities settled through an electronic cash transfer system, add further guidance for assessing the contractual cash flow characteristics of financial assets with contingent features, and adds new or amended disclosures relating to investments in equity instruments designated at Fair Value through Other Comprehensive Income “FVOCI” and financial instruments with contingent features. The amendments to IFRS 9 and IFRS 7 apply to annual reporting periods beginning on or after January 1, 2026. Brookfield Renewable has assessed the impact of these amendments and have noted no material impact.
Amendments to IFRS 9 - Financial Instruments (“IFRS 9”) and IFRS 7 - Financial Instruments: Disclosures (“IFRS 7”) - Contracts Referencing Nature-Dependent Electricity
The amendments apply only to contracts referencing nature-dependent electricity and clarify the application of the “own-use” requirements, the use of hedge accounting, and adds new disclosure requirements around the effect of these contracts on the partnership’s financial performance and cash flows. The amendments to IFRS 9 and IFRS 7 apply to annual reporting periods beginning on or after January 1, 2026. Brookfield Renewable has assessed the impacts of these amendments and have noted no material impact.
There are currently no other future changes to IFRS Accounting Standards with a potential material impact on Brookfield Renewable.
SUBSEQUENT EVENTS
Subsequent to year-end, Brookfield Renewable, together with its institutional partners, completed the sale of 25% of a 403 MW portfolio of operating hydroelectric assets in the U.S for proceeds of approximately $230 million ($111 million net to Brookfield Renewable). Brookfield Renewable continues to consolidate this business.
Subsequent to year-end, Brookfield Renewable established an at-the-market (“ATM”) equity program under which it may, at its discretion, offer and sell up to $400 million of BEPC exchangeable shares directly from treasury. To date, 635,247 BEPC exchangeable shares were issued for gross proceeds of approximately $28 million.
Subsequent to year-end, Brookfield Renewable repurchased and cancelled 635,247 LP units on the Toronto Stock Exchange at a total cost of approximately $20 million.
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Subsequent to year-end, Brookfield Renewable, together with its institutional partners, agreed to the sale of a 2.3 GW portfolio of operating wind and solar assets in the U.S. for proceeds of approximately $1.3 billion ($316 million net to Brookfield Renewable). The closing of this transaction is subject to customary closing conditions.
Subsequent to year-end, Brookfield Renewable issued C$500 million of Series 20 medium-term notes. The medium-term notes have a fixed interest rate of 5.204% and a maturity date of January 15, 2056. The Series 20 medium-term notes are corporate-level green bonds.
Subsequent to year-end, Brookfield Renewable, together with its institutional partners, completed the sale of a 73 MW portfolio of operating wind assets in the U.K. for proceeds of approximately £61 million ($82 million) (£16 million ($21 million) net to Brookfield Renewable).
Subsequent to year-end, Brookfield Renewable, together with its institutional partners, completed a private placement sale of shares in a renewable operating and development platform in India, selling a 7% interest for proceeds of approximately INR7.8 billion ($86 million) (INR1.6 billion ($17 million) net to Brookfield Renewable). In addition, as a result of the successful launch of the IPO, a 3% interest was transferred to a member of the platform’s IPO Founder Group for nominal consideration, as part of a pre-existing arrangement. The IPO process was completed on February 25, 2025 and the platform will be listed on the designated stock exchanges in India on or about March 2, 2026. On February 26, 2026 the platform filed the prospectus which reflects an additional divestment by Brookfield Renewable, together with its institutional partners, of an approximate 10% interest for gross proceeds to be received of approximately INR8.9 billion ($99 million) (INR1.8 billion ($19 million) net to Brookfield Renewable).
Subsequent to year-end, Brookfield Renewable redeemed all of the outstanding units of Series 7 Preferred Limited Partnership units for C$175 million.
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PART 9 – PRESENTATION TO STAKEHOLDERS AND PERFORMANCE MEASUREMENT
PRESENTATION TO PUBLIC STAKEHOLDERS
Equity
Brookfield Renewable’s consolidated equity interests include (i) non-voting publicly traded LP units, held by public unitholders and Brookfield, (ii) BEPC exchangeable shares, held by public shareholders and Brookfield Holders (iii) class A.2 exchangeable shares, held by Brookfield, (iii) Redeemable/Exchangeable Limited partnership units in BRELP, a holding subsidiary of Brookfield Renewable, held by Brookfield, and (iv) the GP interest in BRELP, held by Brookfield.
The LP units, the BEPC exchangeable shares, class A.2 exchangeable shares and the Redeemable/Exchangeable partnership units have the same economic attributes in all respects, except that the BEPC exchangeable shares and class A.2 exchangeable shares provide the holder, and the Redeemable/Exchangeable partnership units provide Brookfield, the right to request that all or a portion of such shares or units be redeemed for cash consideration. Brookfield Renewable, however, has the right, at its sole discretion, to satisfy any such redemption request related to Redeemable/Exchangeable partnership units and BEPC exchangeable shares with LP units, rather than cash, on a one-for-one basis. Similarly, Brookfield Renewable has the right, at its sole discretion, to satisfy any such redemption request related to class A.2 exchangeable shares with BEPC exchangeable shares or LP units, at the election of Brookfield, rather than cash, on a one-for-one basis. The public holders of BEPC exchangeable shares, and Brookfield Holders, as holder of BEPC exchangeable shares, class A.2 exchangeable shares and Redeemable/Exchangeable partnership units, participates in earnings and distributions on a per unit basis equivalent to the per unit participation of the LP units. Because Brookfield Renewable, at its sole discretion, has the right to settle any redemption request in respect of BEPC exchangeable shares and Redeemable/Exchangeable partnership units with LP units and any redemption request in respect of class A.2 exchangeable shares with BEPC exchangeable shares or LP units, at the election of Brookfield, the BEPC exchangeable shares, class A.2 exchangeable shares and Redeemable/Exchangeable partnership units are classified under equity, and not as a liability.
Given the exchange feature referenced above, we are presenting LP units, BEPC exchangeable shares and class A.2 exchangeable shares, Redeemable/Exchangeable partnership units, and GP Interest as separate components of consolidated equity. This presentation does not impact the total income (loss), per unit or share information, or total consolidated equity.
As at the date of this report, Brookfield owns an approximate 48% LP unit interest, on a fully-exchanged basis, and all general partnership interests in Brookfield Renewable, representing a 0.01% interest, while the remaining approximately 52% is held by the public.
Actual and Long-term Average Generation
For assets acquired, disposed or reached commercial operation during the year, reported generation is calculated from the acquisition, disposition or commercial operation date and is not annualized. Generation on a same store basis refers to the generation of assets that were owned during both periods presented. As it relates to Colombia only, generation includes both hydroelectric and cogeneration facilities. Distributed energy & sustainable solutions includes generation from our distributed generation, pumped storage, North America cogeneration, and Brazil biomass assets.
North America hydroelectric long-term average is the expected average level of generation based on the results of a simulation based on historical inflow data performed over a period of typically 30 years. Colombia hydroelectric long-term average is the expected average level of generation based on the results of a simulation based on historical inflow data performed over a period of typically 20 years. For substantially all of our hydroelectric assets in Brazil the long-term average is based on the reference amount of electricity allocated to our facilities under the market framework which levelizes generation risk across producers. Wind long-term average is the expected average level of generation based on the results of simulated historical wind speed data performed over a period of typically 10 years. Utility-scale solar long-term average is the expected average level of generation based on the results of a simulation using historical irradiance levels in the locations of our projects from the last 14 to 20 years combined with actual generation data during the operational period.
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We compare actual generation levels against the long-term average to highlight the impact of an important factor that affects the variability of our business results. In the short-term, we recognize that hydrology, wind and irradiance conditions will vary from one period to the next; over time however, we expect our facilities will continue to produce in line with their long-term averages, which have proven to be reliable indicators of performance.
Our risk of hydrology generation shortfall in Brazil continues to be minimized by participation in the MRE administered by the government of Brazil. This program mitigates hydrology risk by assuring that all participants receive, at any particular point in time, an assured energy amount, irrespective of the actual volume of energy generated. The program reallocates energy, transferring surplus energy from those who generated an excess to those who generate less than their assured energy, up to the total generation within the pool. Periodically, low precipitation across the entire country’s system could result in a temporary reduction of generation available for sale. During these periods, we expect that a higher proportion of thermal generation would be needed to balance supply and demand in the country, potentially leading to higher overall spot market prices.
Generation from our pumped storage and cogeneration facilities in North America is highly dependent on market price conditions rather than the generating capacity of the facilities. Our pumped storage facility in Europe generates on a dispatchable basis when required by our contracts for ancillary services. Generation from our biomass facilities in Brazil is dependent on the amount of sugar cane harvested in a given year. For these reasons, we do not consider a long-term average for these facilities.
Voting Agreements with Affiliates
Brookfield Renewable has entered into voting agreements with Brookfield, whereby Brookfield Renewable gained control or have significant influence over the entities that own certain renewable power and sustainable solution investments. Brookfield Renewable has also entered into a voting agreement with its consortium partners in respect of the Colombian business and Neoen. The voting agreements provide Brookfield Renewable the authority to direct the election of the Boards of Directors of the relevant entities, among other things, and therefore provide Brookfield Renewable with control. Accordingly, Brookfield Renewable consolidates the accounts of these entities.
For entities previously controlled by Brookfield Corporation, the voting agreements entered into do not represent business combinations in accordance with IFRS 3, as all combining businesses are ultimately controlled by Brookfield Corporation both before and after the transactions were completed. Brookfield Renewable accounts for these transactions involving entities under common control in a manner similar to a pooling of interest, which requires the presentation of pre-voting agreement financial information as if the transactions had always been in place. Refer to Note 1(s)(ii) – Critical judgments in applying accounting policies – Common control transactions in our December 31, 2025 audited consolidated financial statements for our policy on accounting for transactions under common control.
PERFORMANCE MEASUREMENT
Segment Information
Our operations are segmented by – 1) hydroelectric, 2) wind, 3) utility-scale solar, 4) distributed energy & storage (distributed generation, pumped storage and battery energy storage systems), 5) sustainable solutions (agricultural renewable natural gas, carbon capture and storage, recycling, cogeneration, biomass, nuclear services, eFuels, and power transformation), and 6) corporate - with hydroelectric further segmented by geography (i.e., North America, Colombia, and Brazil). This best reflects the way in which the CODM reviews results of our company.
We report our results in accordance with these segments and present prior period segmented information in a consistent manner. See Note 7 – Segmented information in our audited annual consolidated financial statements.
One of our primary business objectives is to generate stable and growing cash flows while minimizing risk for the benefit of all stakeholders. We monitor our performance in this regard through three key metrics — i) Net Income (Loss), ii) Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), and iii) Funds From Operations.
It is important to highlight that Adjusted EBITDA and Funds From Operations do not have any standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other companies and have limitations as analytical tools. We provide additional information below on how we determine
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Adjusted EBITDA and Funds From Operations. We also provide reconciliations to Net income (loss). See “Part 4 – Financial Performance Review on Proportionate Information – Reconciliation of Non-IFRS Measures” and “Part 6 – Selected Annual and Quarterly Information – Reconciliation of Non-IFRS measures”.
Proportionate Information
Reporting to the CODM on the measures utilized to assess performance and allocate resources has been provided on a proportionate basis. Information on a proportionate basis reflects Brookfield Renewable’s share from facilities which it accounts for using consolidation and the equity method whereby Brookfield Renewable either controls or exercises significant influence or joint control over the investment, respectively. Proportionate information provides a Unitholder perspective that the CODM considers important when performing internal analyses and making strategic and operating decisions. The CODM also believes that providing proportionate information helps investors understand the impacts of decisions made by management and financial results that can be allocated to Unitholders.
Proportionate financial information is not, and is not intended to be, presented in accordance with IFRS. Tables reconciling IFRS data with data presented on a proportionate basis have been disclosed. Segment revenues, other income, direct operating costs, interest expense, current income taxes, and other are items that will differ from results presented in accordance with IFRS as these items (1) include Brookfield Renewable’s proportionate share of earnings (loss) from equity accounted investments attributable to each of the above-noted items, (2) exclude the proportionate share of earnings (loss) of consolidated investments not held by us apportioned to each of the above-noted items, and (3) other income includes but is not limited to our proportionate share of settled foreign currency and other hedges, income earned on financial assets and structured investments in sustainable solutions, monetization of tax attributes at certain development projects and realized disposition gains on non-core assets and on recently developed assets that we have monetized to reflect the economic value created from our development activities as we design, build and commercialize new renewable energy capacity and sell these assets to lower cost of capital buyers which may not otherwise be reflected in our consolidated statements of income.
The presentation of proportionate results has limitations as an analytical tool, including the following:
•The amounts shown on the individual line items were derived by applying our overall economic ownership interest percentage and do not necessarily represent our legal claim to the assets and liabilities, or the revenues and expenses; and
•Other companies may calculate proportionate results differently than we do.
Because of these limitations, our proportionate financial information should not be considered in isolation or as a substitute for our financial statements as reported under IFRS.
Brookfield Renewable does not control those entities that have not been consolidated and as such, have been presented as equity-accounted investments in its financial statements. The presentation of the assets and liabilities and revenues and expenses do not represent Brookfield Renewable’s legal claim to such items, and the removal of financial statement amounts that are attributable to non-controlling interests does not extinguish Brookfield Renewable’s legal claims or exposures to such items.
Unless the context indicates or requires otherwise, information with respect to the megawatts (“MW”) attributable to Brookfield Renewable’s facilities, including development assets, is presented on a consolidated basis, including with respect to facilities whereby Brookfield Renewable either controls or jointly controls the applicable facility.
Net Income (Loss)
Net income (loss) is calculated in accordance with IFRS.
Net income (loss) is an important measure of profitability, in particular because it has a standardized meaning under IFRS. The presentation of net income (loss) on an IFRS basis for our business will often lead to the recognition of a loss even though the underlying cash flows generated by the assets are supported by strong margins and stable, long-term power purchase agreements. The primary reason for this is that accounting rules require us to recognize a significantly higher level of depreciation for our assets than we are required to reinvest in the business as sustaining capital expenditures.
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Adjusted EBITDA
Adjusted EBITDA is a non-IFRS measure used by investors to analyze the operating performance of companies.
Brookfield Renewable uses Adjusted EBITDA to assess the performance of its operations before the effects of interest expense, income taxes, depreciation, management service costs, non-controlling interests, unrealized gain or loss on financial instruments, non-cash income or loss from equity-accounted investments, distributions to preferred shareholders, preferred limited partnership unit holders, perpetual subordinated noteholders and other typical non-recurring items. Brookfield Renewable adjusts for these factors as they may be non-cash, unusual in nature and/or are not factors used by management for evaluating operating performance. Brookfield Renewable includes other income within Adjusted EBITDA in order to provide additional insight regarding the performance of investments on a cumulative realized basis, including any unrealized fair value adjustments that were recorded in equity and not otherwise reflected in the current period.
Brookfield Renewable believes that presentation of this measure will enhance an investor’s ability to evaluate its financial and operating performance on an allocable basis.
Funds From Operations
Funds From Operations is a non-IFRS measure used by investors to analyze net earnings from operations without the effects of certain volatile items that generally have no current financial impact or items not directly related to the performance of Brookfield Renewable.
Brookfield Renewable uses Funds From Operations to assess the performance of Brookfield Renewable before the effects of certain cash items (e.g., acquisition costs and other typical non-recurring cash items) and certain non-cash items (e.g., deferred income taxes, depreciation, non-cash portion of non-controlling interests, unrealized gain or loss on financial instruments, non-cash gain or loss from equity-accounted investments, and other non-cash items) as these are not reflective of the performance of the underlying business. Brookfield Renewable includes other income in order to provide additional insight regarding the performance of investments on a cumulative realized basis, including any unrealized fair value adjustments that were recorded in equity and not otherwise reflected in the current period. In the consolidated financial statements of Brookfield Renewable, the revaluation approach is used in accordance with IAS 16, Property, Plant and Equipment, whereby depreciation is determined based on a revalued amount, thereby reducing comparability with peers who do not report under IFRS as issued by the IASB or who do not employ the revaluation approach to measuring property, plant and equipment. Management adds back deferred income taxes on the basis that they do not believe this item reflects the present value of the actual tax obligations that they expect Brookfield Renewable to incur over the long-term investment horizon of Brookfield Renewable.
Brookfield Renewable believes that analysis and presentation of Funds From Operations on this basis will enhance an investor’s understanding of the performance of Brookfield Renewable. Funds From Operations is not a substitute measure of performance for earnings per share and does not represent amounts available for distribution.
Funds From Operations is not a generally accepted accounting measure under IFRS and therefore may differ from definitions of Funds From Operations used by other entities, as well as the definition of funds from operations used by the Real Property Association of Canada (“REALPAC”) and the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”). Furthermore, this measure is not used by the CODM to assess Brookfield Renewable’s liquidity.
Proportionate Debt
Proportionate debt is presented based on the proportionate share of borrowings obligations relating to the investments of Brookfield Renewable in various portfolio businesses. The proportionate financial information is not, and is not intended to be, presented in accordance with IFRS. Proportionate debt measures are provided because management believes it assists investors and analysts in estimating the overall performance and understanding the leverage pertaining specifically to Brookfield’s share of its invested capital in a given investment. When used in conjunction with Proportionate Adjusted EBITDA, proportionate debt is expected to provide useful information as to how Brookfield Renewable has financed its businesses at the asset-level. Management believes that the proportionate presentation, when read in conjunction with Brookfield Renewable’s reported results under IFRS,
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including consolidated debt, provides a more meaningful assessment of how the operations of Brookfield Renewable are performing and capital is being managed.
The presentation of proportionate results has limitations as an analytical tool, including the following:
•Proportionate debt amounts do not represent the consolidated obligation for debt underlying a consolidated investment. If an individual project does not generate sufficient cash flows to service the entire amount of its debt payments, management may determine, in their discretion, to pay the shortfall through an equity injection to avoid defaulting on the obligation. Such a shortfall may not be apparent from or may not equal the difference between aggregate Proportionate Adjusted EBITDA for all of the portfolio investments of Brookfield Renewable and aggregate proportionate debt for all of the portfolio investments of Brookfield Renewable; and
•Other companies may calculate proportionate debt differently.
Because of these limitations, the proportionate financial information of Brookfield Renewable should not be considered in isolation or as a substitute for the financial statements of Brookfield Renewable as reported under IFRS.
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5.B LIQUIDITY AND CAPITAL RESOURCES
See Item 5.A “Operating Results — Liquidity and Capital Resources”
5.C RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
None.
5.D TREND INFORMATION
See Item 4.B “Business Overview — Renewable Power Growth Opportunity” to understand our global renewable power drivers, core markets and growth opportunities.
See Item 5.A “Operating Results” for information on the following trend information:
•“— Financial Performance Review on Proportionate Information” (variability of generation);
•“— Liquidity and Capital Resources” (funding of growth initiatives, capital expenditures, distributions and general business purposes); and
•“— Contract Profile” (Funds From Operations).
5.E CRITICAL ACCOUNTING ESTIMATES
See Item 5.A “Operating Results — Part 8 — Critical Estimates and Accounting Policies”.