Thank you for standing by and welcome to the Brookfield Renewable Third Quarter 2024 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Connor Teskey, Chief Executive Officer. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining us for our third quarter 2024 conference call. Before we begin, we'd like to remind you that a copy of our news release, investor supplement, and letter to unitholders can be found on our website. We also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially. For more information, you are encouraged to review our regulatory filings available on SEDAR, EDGAR and on our website. On today's call, we will provide a review of our third quarter performance and how we are able to both successfully monetize assets at great returns in the current environment, as well as find opportunities to deploy significant capital into growth at good value. Then, Ignacio Gomez from our investment team will speak to some of our successful asset monetizations announced this past quarter. And lastly, Wyatt will conclude the call by discussing our operating results and financial position. Following our remarks, we look forward to taking your questions. We had a successful quarter with the business performing well. We delivered record funds from operations for the third quarter, benefiting from asset development, recent acquisitions, and strong all-in pricing. On the back of our strong results year-to-date and our outlook for the remainder of the year, we continue to expect to achieve our 10% plus FFO per unit growth target for 2024. We have continued to diversify our business across the most attractive power markets globally, while concentrating on the lowest cost mature technologies, which today represent the most promising and viable solutions to meet accelerating electricity demand growth from digitalization and electrification. The outlook for our business continues to improve, driven by increasing…

Thank you, Connor, and good morning, everyone. As Connor noted, this will be our most successful year for asset recycling ever. As we have already generated record proceeds year-to-date and continue to see robust demand for high quality, cost generative operating platforms and in particular, those with embedded growth opportunities and capabilities. While we underwrite our investments on a hold to maturity basis to deliver our target towards the 15% returns. We can often enhance these returns by monetizing mature assets to buyers with a lower cost of capital, who value the longlife, derisked, infrastructure-like cash flows of renewable power projects. Asset recycling also represents a highly accretive way to fund our business and contributes to our sustainable self-funding model. Important to successful asset monetizations is the strength of our balance sheet, which enables us to be patient and sell assets when markets are constructive. Throughout 2024, we have seen a very robust bid for high-quality assets and platforms. And against this market demand, we have been successful recycling capital from our existing asset base at returns significantly above our targets. While every investment is different, in each case, these results were driven by acquiring for value, improving the assets through the execution of our business plan, and monetizing opportunistically for fair value. In September, we reached an agreement to sell Saeta, which we acquired in 2018 to retake private during a period of market uncertainty that created an attractive value entry point. The portfolio consisted of high quality, contracted assets, where we saw an opportunity to add value, leveraging our scale and operating capabilities. Following the acquisition, which we executed on a bilateral basis, we implemented our business plan, divesting non-core assets and bringing over best practices from our experience, operating renewable assets globally to enhance operations and reduce…

Thanks, Ignacio, and good morning, everyone. Our operating business had a strong quarter, delivering records fund from operations, generating $278 million in the quarter, or $0.42 per unit, up 11% year-over-year. With an increasingly diversified portfolio of operating assets, limited off-taker concentration risk and a strong contract profile, our cash flows are highly resilient. These results in our outlook for the remainder of the year have us positioned well to deliver on 10% plus FFO per unit growth. Our hydroelectric segment benefited during the quarter from solid generation, and we continue to see strong demand for these assets. This quarter we successfully executed two contracts with U.S. utilities at an average price of almost $90 per megawatt hour for an average duration of almost 15-years. The favorable contracts will result in a significant uplift in revenue per year and are expected to result in up-financing proceeds of up to $500 million, which when redeployed at our target returns is expected to generate meaningful incremental annual FFO for the business. With an additional 6,000 gigawatt hours of generation available for re-contracting over the next five years, and an increasingly constructive pricing environment for our hydro portfolio, we have significant capacity across our fleet to execute on similar contracts that we expect to contribute additional FFO and generate a highly accretive funding source for our growth. Our wind, solar, distributed energy, and sustainable solution segments generated record results benefiting from our acquisitions and development activities, as well as continued tailwinds at our nuclear services business, Westinghouse. Our balance sheet continues to strengthen as we ended the quarter with $4.6 billion of available liquidity and our funding model is working well. As Ignacio noted, we were successful in executing on our asset recycling initiatives this quarter, generating record proceeds so far this year and have a positive outlook to continue to rotate capital and generate strong returns going forward. In addition, we expect to execute a total of $30 billion in financing this year, generating $700 million in total up-financing positioning us well to fund our growth activities going forward. In closing, we remain focused on delivering 12% to 15% long-term total return for our investors by prudently deploying capital and executing on our operating initiatives. On behalf of the board and management, we thank all of our unitholders and shareholders for the ongoing support. We are excited about Brookfield Renewables future and look forward to updating you on our progress throughout the remainder of the year. That concludes our formal remarks for today's call. Thank you for joining us this morning. And with that, I'll pass it back to our operator for questions.

Certainly. And our first question for today comes from the line of Sean Steuart from TD Securities. Your question, please.

Thanks. Good morning, everyone. I want to start with the U.S. it's a big part of your advanced organic pipeline. And Connor, you referenced comfort that growth will -- it will remain a growth focus for Brookfield Renewable. I'm wondering though, if you can give us more detailed thoughts on the U.S. return profile and growth potential of tax credits are changed or appealed in the events that the Republicans take the House and Trump can advance that agenda?

Great. Good morning, Sean. Certainly, no doubt a big topic this week. Maybe let's come at this two different ways. We'll come at it from the macro and then we'll come at it from the perspective of our business in particular. From the macro perspective, we would suggest that the government support and regulatory processes and procedures that most commonly touch our business, generally have very strong bipartisan support. And yes, while a new government may tweak or make changes to that, our expectation is it would not be material. However, what's probably more important from the macro side is two things. One, any time a new administration comes in, and this one we expect to be no different, we expect to see a period of tremendous fiscal support to drive industry and manufacturing and data centers in the United States and all those things are going to need incremental power. And that's going to be very beneficial for renewables, that's going to be beneficial for gas, that's going to be beneficial for nuclear. Further, a Republican administration with a focus on domestic growth should no doubt provide longer-term tailwinds that will increase power demand, which again, renewables as the lowest-cost provider of that power should be well positioned to benefit from that incremental demand. Now maybe then switching gears to talk about our business. For years now we've been growing and diversifying our business. We're proud that we have one of, if not the most globally diversified renewables business across both geographies and technologies. But in particular, for years, we've been positioning our business to rely on corporate demand and low cost energy production, not government subsidy. To ensure that in periods of regulatory uncertainty, our business will continue to perform. Today, our business is highly focused in both the lowest cost technologies and the regions that are seeing the greatest growth in electricity demand, which ensures that we are largely insulated from any potential regulatory or subsidy changes, and therefore we don't expect the recent election results to change our business model, our growth outlook, or the return profile we will seek to achieve when deploying capital into growth. Maybe just to finish by putting it bluntly, we are the low-cost producer of a critical commodity that the world, particularly the United States, is going to need more of and therefore we feel that our position is very strong particularly as we move forward and see more growth in the United States.

That's great detail, thanks for that. Second question relates to offshore wind. It looks like the Orsted transaction is, I would say, more of a focused financing deal with a fixed horizon for you guys, more so than that as opposed to a strategic push into the asset class. Can you speak to larger growth aspirations in offshore wind, having referenced the risk profile now fitting into parameters that work for you guys?

For sure. Maybe just to put some context on the Orsted transaction. First and foremost, we are thrilled to be partnered with Orsted, who are the global leader in offshore wind. And we are thrilled to be partnered with the global leader and perhaps what is one of their highest quality, largest and most established offshore wind platforms around the world. And the quality of the assets and the quality of the partner here is really what attracted us to the investment. In terms of the broader asset class, we're very bullish on offshore wind. We think it is a large, fast-growing asset class. It's critical in many markets around the world, and it needs significant amounts of capital. And perhaps some of the headwinds in the asset class over the last two or three years position us as a capital provider, who can support some businesses that maybe have less access to capital today than they have in the past. We will review opportunities in offshore wind the same way we review opportunities in any asset classes, judging the risk and return. But what I would say is we see far more attractive opportunities in that asset class today than probably at any point in the last five or six years. And therefore, we hope there will be more to come.

Thanks for that Connor. That's all I have for now.

Thank you. And our next question comes from the line of Robert Hope from Scotiabank. Your question please.

Good morning, everyone. I want to circle back on the U.S. and maybe dive a little bit deeper into your comments about being the low cost producer. We understand that the tax benefits often do pass-through to customers, but can you maybe dive in a little deeper on what asset classes could be more impacted by changes to tax policy there? And could that shift more towards wind versus solar or which asset class do you think has the best cost outlook regardless of subsidies?

Thanks, Rob. You know, in terms of which asset classes are most susceptible to change, we would purely be speculating at this point. Obviously, the Republican administration has made some comments about certain asset classes. What we would say in general, however, and how we view the business is if you are focused in asset classes like on-source wind and solar, which are not the cheapest cost of electricity production from renewables, but the cheapest cost of electricity production bar none. Today, if those asset classes benefit from tax credits or subsidies, all that allows us to do is simply offer a cheaper PPA to the end customer. In the event that any of those tax subsidies are rolled back or reduced, we will simply flow the lack of those subsidies through a higher PPA price to preserve our returns, our project returns. And the key point there is because onshore wind and solar are so much cheaper than the alternatives, there is room to do that and still be the cheapest form of bulk electricity production. That is why we feel are -- the vast, vast majority of our business, where we do almost entirely all of our renewable power development in the United States, is so insulated from any changes. Clearly, the sectors that potentially could be more exposed are higher cost sectors or sectors that are reliant on government subsidy or government support to either make them economic or to support their go-forward growth. And there are a few of those sectors. We are just fortunate that it's never been part of our business focus to invest in those. And that's why we're relatively calm about any change in government today.

Appreciate that, color. And then maybe pivoting over to the Infinium investment. And more broadly, how are you looking at, we'll call it non-renewable power investments, the potential to be a little bit more on the bleeding edge, and I guess overall, with such a large renewable backlog, how do these kind of investments fit in the framework?

Sure. Our business today is almost entirely renewables and that continues to be the bulk of our growth today and our expected growth going forward. What we would say, however, is while we've dramatically enhanced the growth of our renewables business over the last several years, we've been selective in investing initially into a number of asset classes that we think will be critical to clean energy grids of the future. And the most notable ones there that we've invested in are nuclear, batteries, and biofuels. When it comes to assessing any investment into new asset classes, I would say our approach is pretty robust. And we have the luxury of investing, you know, billions if not tens of billions of dollars into renewables growth each year. And that gives us a very strong benchmark or threshold against which to adjust the risk-adjusted returns of any other asset class or any other investment we make. And if we're investing in something that has either slightly higher construction or development risk, slightly higher revenue construct risk, you know, is a less mature technology with a less mature supply chain, we of course need to be significantly rewarded for taking on those exposures relative to what we could achieve by just investing further in wind and solar. And take the example of Infinium here. Infinium is a sustainable aviation fuel, is a new asset class for us, but really what we're investing here is the build out of a facility that is not the first of its kind. It's a proven technology. Similar facilities have been built out before. But exactly similar to our wind and solar business, we are building a facility that is back-stocked by long-term take or pay contracts with high-quality corporate off-takers. We saw a lot of similarities to producing this sustainable aviation fuel similar to how we do green power. That's what gets us excited and gives us comfort about an investment like Infinium.

Great. Thank you for the color.

Thank you. And our next question comes from the line, Nelson Ng from RBC Capital Markets. Your question, please.

Thanks. Hey, Connor, you've talked a lot about the U.S. sector and I have one more question for you in terms of the U.S. elections. So like obviously with the elections outcome we saw a big drop in share prices of many companies, even companies that don't have any U.S. exposure. Do you generally see more opportunities to deploy capital now with publicly listed names or even in projects where sponsors may be pulling out? Like do you have a shopping list of companies or projects that are potentially significantly undervalued now?

Perhaps the way to answer that question is very simply, our investment pipeline remains incredibly robust. And for years now, our ability to deploy scale capital has been predicated on: one, our ability to do large scale transactions; two, our operating capabilities, particularly around power marketing; and there, our access to capital. And perhaps tying that back to your question, the variability and volatility in share prices following the election results, all that will do is reduce access to capital for those that are reliant on the public markets. And I wouldn't say that's a new trend for us, but simply plays into a trend we've been seeing for a while and as a result we're very encouraged about the investment pipeline we have today. As mentioned at our Investor Day a couple months ago, we continue to expect to deploy increasing amounts of capital into growth in the future. And that's very simply as a result of the demand we continue to see for our product and how our business model is well positioned to execute on that. I really think it just -- the volatility in the stock market after results just plays to that theme of less access to capital for some market participants.

Great color. And switching gears a bit, on the hydro side, in terms of the $90 per megawatt hour, and you mentioned that I think it's contracted to U.S. utilities, going forward when you recontract additional facilities in the U.S., do you expect, or are you seeing more direct demand from let's say big tech or data centers or do you expect re-contracting to continue to be with U.S. utilities?

It's a great question. The point we would highlight here is power demand is going up very, very significantly. Whether we sell that directly to an end customer, or we sell it to a utility who then passes it to an end customer, or we sell it to an end customer, but through a virtual PPA that uses the electricity grid, all of this is driven by the same theme that there is more in-customer demand. And that shows up in our prices and the demand for our power, particularly the clean dispatchable base load power that can come from hydro or nuclear, that comes through in the contract whether it's a direct, a virtual PPA or through a utility. Given what we're seeing in the market, I say we're going to see a mix of all those things, but the important takeaway from our perspective is regardless of how that power gets to the end consumer, the overwhelming things is the increase in demand, the increase in volume, and how that is driving a higher price in the contracts we are seeing.

Great, thanks Connor, I'll leave there.

Thank you. [Operator Instructions] Our next question comes from the line of Rupert Merer from National Bank. Your question, please.

Hi. Good morning, everyone. Connor, you highlight the bifurcation and valuation between mature assets and more complex development assets. We're also seeing some weakness in the stock market and volatility that you discussed and we do seem to be seeing a wave of privatization. So I was wondering if you could quantify the difference in return expectations that you see with this bifurcation between mature and immature, and between public valuations and private valuations?

It's a great question. And it's obviously going to differ by market, by asset class, by size of transaction, but we'll try and be as constructive as we can and we'll share a couple data points with you. Within some of our development platforms and we have a number of scale development platforms in core markets around the world, probably the easiest place to see the difference between development returns and the market price for contracted operating assets is when you look at the development margin within an individual developer. And I would say in general, our best developers around the world are seeing developer margins north of 400 basis points or 450 basis points. And we have some developers around the world that are consistently delivering development margins in the 500 basis points to 600 basis point range. And depending on which asset class and which geography that might be, that might mean you're developing at call it 13% to 15% hold to maturity returns and selling down at 8% to 10% or in other markets that might mean you're developing at 15% to 17% and selling down at 10% or 11%. So I would say that's probably the Delta we're seeing in our most high performing and most attractive markets.

Great, well thank you for the color. And Wyatt, you've highlighted the contracts you signed recently, some attractive prices $90 a megawatt hour, I think you suggested. And if we look at the growth and demand in the U.S. for power for data centers, it does seem like there's more demand than supply today. Supply is going to have a hard time keeping up. How price sensitive do you think the market is? How high can power prices go before your buyers you think will hit the pause button?

Yes, look Rupert, what I would say is that I think from our perspective, we thought that the showing the $90 or sharing the $90 per megawatt hour number was very constructive in the sense that there have been a number of transactions recently around the nuclear space that were also in and around those numbers. Not all of it was fully publicly disclosed, but I think the market is settled around it being around those numbers. And I think from our perspective, what we really want to highlight is that for a dispatchable or base load clean generation, the demand for our product is as strong as ever. And it’s -- you can see it across multiple different markets with multiple different buyers and that is obviously a very constructive thing. In terms of how high the price can go, look, we don't have a crystal ball that's any better than anyone else, but I think from our perspective, we are seeing, especially for the Hydro’s, but on a broader basis for all of our assets, that there is a very constructive market out there, and that's what we're capitalizing on.

Right, I'll leave it there. Thanks for the color.

Thank you. And our next question comes from the line of Mark Jarvi from CIBC. Your question, please.

Yes, good morning, everyone. Maybe just going back to the U.S. election impacts and giving there some uncertainty. What do you think happens on M&A in the U.S. market and being able to valuations on development pipeline? Is there a chance that any of your ongoing asset sales in the U.S. take a pause? What do you think you have to see for clarity before the market opens up again?

Hi, Mark. If they are, we don't expect it to be material. The nature of the -- just speaking, sorry to be redundant, but going back to that bifurcation that we're seeing in the market, the things that we are selling are heavily contracted, de-risked, you know, high quality cash generative operating. These things are pretty embedded cash flow streams at this point that aren't reliant on government subsidy or support programs. So yes, I think everyone's probably going to digest the news of this week, but we don't expect it to have a material impact on the types of assets that we are selling in the current market. Where there could be opportunity, it really ties back to the question that was asked previously, is does the uncertainty of a new administration and some of the positions they might take in the future, reduce access to capital for those that are reliant on it, particularly in the public markets. And that could actually lead to an increase in activity for us on the investment side. But we don't really foresee any material change in what's going to happen on our asset sales side.

Okay. And just coming back to the U.S. Hydro assets, some buyers, large tech buyers, are really focused on additionality. I know Microsoft deals kind of care that way. Are you seeing any other change in tone around other large tech buyers in terms of additionality constraints or do you think they are willing to step to line to contract with the U.S. Hydro to pay that premium?

It's a great question. And there's no perfect answer to this. The real key is the broader market needs more power. And yes, certain buyers are more asked to acquire power from new build, but the broader market just needs as much generation, particularly low-cost generation as it can get. So it doesn't matter if it's new build or existing power, there is still very significant demand. What we would say is given the scale of demand that we are seeing, and particularly how it is accelerating going forward, different institutions, and this extends beyond simply the technology companies, different institutions are taking differing views on how much additionality is required. Is it a completely new build wind and solar or is investing hundreds of millions of dollars to enhance the capacity, extend the life of a hydro, does that meet the additionality of requirements to meet their needs to sign a long-term corporate contract? So I would say it's not a one-size-fits-all scenario, but the broader demand is impacting both operating assets and new-build assets the same.

Okay, and then the last question is just again around the U.S. market. You on nuclear and just the Westinghouse business, would you say the election outcome is neutral, positive to be determined at this point? Any initial perspective on that business?

Yes, it's a pretty hard positive in our minds. Obviously, this administration has expressed support for nuclear. And maybe it's worth just taking a minute to explain Westinghouse's business and how it can benefit as nuclear grows going forward. Westinghouse really has two components of its business model. It is the largest technology product and service supplier to the nuclear power generation fleet globally and in particular the United States. So any growth or activity within the nuclear sector, Westinghouse will benefit whether it's from services, capacity upgrades, life extensions, fuel supply, any growth or activity in the existing fleet is positive for Westinghouse. But then in addition to that, Westinghouse has not only the leading large-scale nuclear reactor around the world, the AP1000, what might not be appreciated is Westinghouse also has the leading SMR, Small Module Reactor Technology. And what's unique about Westinghouse's SMR technology is almost every other, if not every other SMR technology around the world is a first of its kind. And first of its kind go through certain struggles in permitting, in design, in construction, et cetera. Westinghouse's SMR technology is the AP300. It is very simply the downsized AP1000. It is the same design, the same technology, the same fuel. And therefore, as not only the large scale reactor market grows, as well as the SMR reactor grows, Westinghouse is exceedingly well positioned to be a leading and major participant in any new reactor growth in the United States or more broadly around the world. So, you know, how are we viewing Westinghouse? It's not only going to benefit from the growth in nuclear in its core services business, but also in terms of new reactors. And then the additional benefit for us is we are uniquely positioned as the only renewable power player globally that can offer nuclear solutions that can complement our wind and solar offering to our customers. And we feel that's a very, very enviable position to be in today, particularly with the largest corporate clients like the large tech companies.

Okay. Thanks for your time today.

Thank you. And our next question comes from the line of William Grippin from UBS. Your question, please.

Thanks very much. Good morning. Sorry to do this, but just coming back to the policy point here, obviously there's been a lot of hand wringing on what happens to the ITC. A lot of people forget it's been around since 1978 in some form and has been extended under multiple administrations since that time, both Republican and Democratic. So I generally agree with you. I think any risk of change there is very, very low. But more to the point, I think based on our conversations over the last few days, it seems like a lot of investors have actually forgotten about the IRS guidelines around safe harboring, which potentially enable developers to lock in the current ITC level through 2029. Just want to give you an opportunity to talk about maybe what you're doing on that front and help maybe assuage some of these concerns about the impacts of potential policy change?

Yes, certainly. It's a good point and I think the point we would reiterate most specifically is two things. One, we would highlight your point that many of these support programs have been along a lot longer than just the previous administration. They date back far before that and importantly have very strong bipartisan support. You know, it's very well-known and that many Republican States were actually the largest beneficiaries of IRAs. So, while we wouldn't rule out some changes to those tax credits and things like that, if they are going to get changed, we argue as we don't expect it to be meaningful, and even if it is, as discussed previously, our business is well insulated. Maybe just piggybacking on your second point, I might come at it from a slightly different perspective, which is the scale of our business both globally and in the United States really puts us in a favorable position that we are extremely well positioned to handle any changes, whatever they might be. We have globally diversified supply chains. We have one of, if not the largest, renewables business in the United States that can take advantage of any of the policies and procedures like the ones you mentioned. And we're always across those different initiatives to de-risk our broader business. It doesn't end solely at tax credits. It goes to things like supply chain and procurement as well. And regardless of what changes come, we think our business will be well positioned and we've just, we really struggle to see a situation where we don't continue to grow and accelerate our growth in the United States.

Great, thanks very much. And just last small one here, but could you talk to some of the year-on-year drivers you're expecting to contribute to what appears to be accelerating fourth quarter FFO per share growth implied by the guidance?

Yeah, sure. Perhaps I'll start and then Wyatt, please jump in. I would say two, three things and Wyatt, if I'm missing any of the big ones let me know. One, is we've obviously deployed an incredibly significant amount of capital into growth both M&A and development over the last 12-months and that is just increasingly run rating through our numbers. And particularly the deployment since Q4 last year, and maybe even some of the transactions will get done in Q4 that will begin to contribute this year will be the biggest driver. There's no question. Secondly, a number of our businesses are performing very well. In particular, some of the largest, most cash-generative businesses are Hydro’s in Columbia, Westinghouse. They continue to provide great tailwinds to our underlying earnings. And then the third point I would make is we have announced some asset recycling this year. There are going to be some gains on sale that will contribute in the fourth quarter that will provide an additional kind of modest uplift versus the two more significant drivers of growth, the first two things I mentioned. Wyatt, I don't know, am I missing anything?

You captured the big drivers. The only thing I would add is just -- and this is very routine across our business, but we are continuing to capture stronger prices, both in terms of the inflation indexation that is built into our contracts, but then to the point we've referenced a number of times around the Hydro’s, just incrementally capturing more value in those. And so that is also expected to benefit in the fourth quarter.

Got it. Thanks very much. That's all for me.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Connor Teskey for any further remarks.

Thank you everyone for dialing into our earnings call. We appreciate the ongoing interest and support of our business, and we look forward to updating you with our Q4 and year-end results early in the new year. Thank you and have a great day.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.