Good day and thank you for standing by. Welcome to the Brookfield Renewable Partners Third Quarter 2023 Results Conference Call and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Connor Teskey, Chief Executive Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for our third quarter 2023 conference call. Before we begin, we would like to remind you that a copy of our news release, investor supplement and letter to unit holders can be found on our website. We also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and future results may differ materially. For more information, you are encouraged to review our regulatory filings available on SEDAR, EDGAR, and on our website. On today's call, we will provide an update on the business and how we are positioned in the current market environment. Jenny Li, our Vice President in our investment teams in Toronto, will provide an update on our growth activities. And then lastly, Wyatt will conclude the call by discussing our operating results and financial position. Following our remarks we look forward to taking your questions. We had another successful quarter utilizing our disciplined approach to growth and execution to outperform our targets and deliver strong operating results. Furthermore, as Jenny will highlight, we recently closed our acquisition of X-Elio and Deriva Energy, formerly Duke Energy Renewables, as well as advanced our acquisitions of Westinghouse Electric, which we expect to close shortly, and Origin Energy. With the closing of these acquisitions, we are adding significant incremental FFO and are positioning ourselves to continue to deliver on our decade-long track record of 10% plus FFO per unit annual growth. That said, we want to also touch briefly on the market environment and our share price. The renewable sector traded down in the public markets on the back of higher interest rates and a perceived tightening of industry margins. And even though we are well…

Thank you, Connor, and good morning, everyone. This past quarter, we agreed to invest approximately $2.2 billion of equity capital, highlighted by our agreement to acquire Banks Renewables, a leading independent U.K.-based renewable energy development business with approximately 260 megawatts of onshore wind assets. The business also has approximately 800 megawatts of near-term development projects and a further 3,000 megawatt pipeline of earlier stage projects. Banks is a full-service end-to-end platform with strong capabilities across the entire project life cycle, including origination, development, commercial contracting, financing, and operations. The team has been successful developing high-quality projects in the U.K., but have generally been limited by access to capital. Under our ownership, we believe we can accelerate organic growth in capital recycling and expand the business via M&A in the fragmented U.K. market. The transaction is expected to close before year end. We also agreed to partner with Axis Energy, a leading renewable developer in India, to create a new large-scale development platform through which we expect to develop approximately 250 megawatts -- 2,500 megawatts of wind and solar capacity over the next three years. Axis is a well-known partner to us through our previous joint venture partnership in which we have already successfully developed almost 2,000 megawatts of capacity over the past two years. This quarter, we made good progress closing our previously announced highly accretive M&A transactions. First, we close the acquisition of the remaining 50% interest in X-Elioc, our leading global solar developer, bringing our total ownership interest to 100%. We also close the acquisition of Deriva Energy, formerly Duke Energy Renewables, one of the largest renewable platforms in the U.S. With almost 6,000 megawatts of operating and other construction assets diversified across wind, utility scale solar, and storage with a sizable development pipeline of approximately 6,000 megawatts.…

Thank you, Jenny. As Connor spoke to in his earlier remarks, we continue to build on our strong first-half of the year. Operating results reflect our highly diversified platform, inflation index cash flows, and strong all-in pricing. We generated FFO of $253 million or $1.29 per unit year-to-date equating to a 7% increase, compared to last year and continue to be positioned to deliver our 10% plus FFO per unit growth target for the year. Our business is backed by high quality cash flows, in large part from our perpetual hydro portfolio, which is becoming increasingly valuable in today's environment, where customers are looking for 24/7 clean power solutions. The dispatchable base load power that our hydro’s generate provide a unique advantage for us in partnering with buyers of clean power. We are also set to benefit from re-contracting these assets over the next several years, which will not only contribute additional FFO in the strong current pricing environment, but also act as a highly accretive funding source for growth as we up finance many of the assets due to their low levels of debt. Our financial position remains strong. We expect to execute just short of $20 billion of non-recourse financing this year, generating over $800 million in up-financing proceeds, while maintaining our strong investment grade credit rating. We ended the quarter with $4.4 billion of available liquidity, providing significant flexibility to continue executing on our growth and development strategy. We have also been crystallizing and proving out our returns through asset recycling. In the past 18 months, we have generated $1.4 billion in proceeds from our asset recycling program, which on average represents almost 3 times our invested capital. Despite it being a scarcer environment for capital, we continue to see strong demand for appropriately sized de-risk assets…

Thank you. [Operator Instructions] And our first question will come from Sean Steuart from TD Securities. Your line is open.

Thank you. Good morning everyone. A couple of questions. Connor, you touched on I guess a broadening growth opportunity set given valuation contraction across the sector. We've seen an accelerating meltdown in public valuations especially for offshore wind. You guys have taken a measured approach to that asset class? Do you have any updated thoughts on prospective growth initiatives in offshore wind as you potentially take advantage of valuation disconnect there?

Good morning, Sean. Thanks for the question. I think it's important that we be clear here. We quite like offshore. We think it's a mature technology. It's a large-scale technology. It provides a differentiated load pattern that is very important to energy grids in certain markets around the world. And therefore, we would willingly invest in offshore if we saw the right risk-adjusted returns. Our lack of exposure to offshore traditionally is not a result of the technology, but rather the investment profile that offshore opportunities has traditionally provided, where you had to invest significant amounts of capital, hundreds of millions if not billions of dollars up front, for the right to buy or sorry, the right to build out a project in three or four or five or six years when you didn't know the environment you would be building it. You didn't know CapEx costs or financing costs or things like that. And that is precisely the basis risk that we try to be very, very disciplined about and remove in the investment opportunities we pursue and the execution of our development pipeline. So it was nothing to do with offshore technology itself. We simply didn't like the investment profile, because it didn't fit with our approach of trying to remove basis risk. As we look at the opportunity today, we do think there are a number of opportunities where that basis risk is increasingly shrinking. You know, if a project needed to win approval three or four years ago and it is going to get built out, you know, next year or the year after, that basis risk has shrunk materially. And now with some of the headwinds in the sector, there might be some eager sellers as well. So I would say we feel comfortable with our disciplined approach to entering the sector. And we do think it looks a lot more attractive to us today than it has in the past.

Okay, thanks for that detail. And just following on that, as you think about M&A prospects, even since the investor day in September, valuations have changed quite a bit. Can you speak to discrepancies between public and private opportunities across the M&A opportunities you're looking at right now?

Certainly. Probably put it in two buckets. One is there's a continuing trend that I would say has been attractive for a couple years and remains attractive today. And that is there are a number of high quality, I will say, private medium-sized developers in core markets that have fantastic pipelines and asset bases, but simply don't have the scale, the access to capital, or the operating capabilities to build out those projects and really to capture the value in those pipelines that they have assembled. And we've been executing a number of those acquisitions and I think that will continue in private markets going forward. And then in public markets, you know, make no mistake about it. We're constantly tracking the public markets and for a couple of years there, it was very difficult to execute in the public markets at our target returns. But given the adjustments in market valuations, there are a number of names that I would say are increasingly entering the strike zone in terms of attractive value and therefore we do think we could be more active on the public side going forward than we have been over the last couple of years.

Okay. That's all I have for now. I'll get back in the queue. Thanks, Connor.

Thank you. Our next question will come from Robert Hope from Scotiabank. Your line is open.

Good morning everyone. In the letter and on the call so far you've spoken very favorably about kind of perspectives in the prospective investment environment whether that's kind of private or public opportunities. You have a number of acquisitions closing here in the coming months as well. While your liquidity is strong, how do you think about the access to capital moving forward? Is the opportunity set in front of you in excess of your available capital, or could you see yourselves maybe accelerate some asset sales to further bolster your liquidity profile?

Certainly. So I think there's probably two things to highlight. As Wyatt mentioned in some of our disclosures, we've had a very active year for financings and in particular up-financing. And we've done all of that while maintaining our investment grade credit metrics and our investment grade approach to asset level non-recourse fixed rate financing. And that's really provided us a very meaningful component of the capital needed to fund the growth we've announced in a very accretive manner. The other thing I would highlight is when you close such large transactions such as Westinghouse and potentially Origin, those businesses have tremendous access to capital themselves. And they come with large undrawn revolvers that can be used to fund their ongoing growth. And therefore, as our platform grows, so does our access to liquidity and capital going forward. So, obviously, we're closing a number of transactions this quarter. We're at about $4.5 billion of liquidity today. If we closed all the transactions in our pipeline, we'd still be at least $3.5 billion of liquidity rough numbers. And that gives us plenty of dry powder to pursue any large and attractive opportunities that come our way. Given the environment, this is something we keep very top of mind. We want to make sure that we're always well positioned to pursue growth in environments such as this where we see very attractive returns.

Appreciate that. And then just maybe moving to the unit and share buybacks. Can you maybe walk us through how you're thinking about intrinsic value there and more specifically in terms of access to capital? Are you seeing or how do you think about the risk-adjusted returns of buying back your own share versus what appear to be very attractive returns in other areas of your business?

Certainly. So we think about it the same way, I would say. We always want to be disciplined in the use of our liquidity and the use of our investment capital. And with what we would view as kind of the irrational decline in our share prices over the last couple months, for the first time in a long time, we saw it as a clear opportunity to buy back some of our shares for value. And to be clear, when we're buying back those shares, we're working within the daily volume restrictions of our NCIB and we've been doing that for a number of weeks now and probably will likely continue to do it for a number of weeks going forward. But in terms of how we think about capital allocation between the two, we view our capital as fungible and we equally weight the returns that we can make in buying back our own shares versus the returns we can make in investing in growth. For years, that balance has been heavily tilted to growth, but with the recent decline in the sectors, we expect to be doing both going forward.

Appreciate the colors, Thank you.

Thank you. Our next question will come from David Quezada from Raymond James. Your line is open.

Thanks. Good morning, everyone. Maybe just starting out with Westinghouse, sounds like that is shaping up pretty well for closing pretty soon. I'm just wondering if you could just remind us, you know, maybe longer term, how you see nuclear fitting into your future plans. I know that Westinghouse has that microreactor technology. I'm just curious, will your ambitions extend beyond Westinghouse or will that be your vehicle for kind of targeting the nuclear market?

Certainly. So maybe just a fun point of color for everyone. We actually got our last regulatory approval on Westinghouse, I would say within an hour before this call. So we are all good to go and we do expect to close this transaction next week. In terms of why we're so excited about Westinghouse, I would say two things off the top and then I'll get into some of the detail. When we look at the growth drivers of wind and solar, they are very clearly decarbonization, electrification, and energy security. And when you look at what the drivers of nuclear power are, it's the same thing. Decarbonization, electrification, and energy security. And then the second thing I would say is, we've been tracking nuclear for a long number of years now. And I think we've always had a very favorable view of it because of the front row seat we have to the value of clean dispatchable baseload power that we see through our own existing hydro portfolio. The value of that clean dispatchable energy, clean dispatchable baseload energy is not growing incrementally, it's inflecting higher. And today there's really two places where you can get that type of energy supply, and that's hydro and nuclear. And going forward, we will have meaningful leading positions in both. When it comes to Westinghouse, Westinghouse obviously offers a full suite of nuclear power generation products. It's probably most well-known for its market-leading AP1000 reactor, which is what is typically used in large markets to support countries and major utilities get off large, I would say, coal or thermal supply stacks. But what's important to recognize about Westinghouse is they also have an AP300 technology, which is a small module of reactor technology. And the important thing about the AP300 is…

Awesome, that's great color. Thanks for that Connor. And then maybe just kind of a follow-up to commentary around M&A and I'm thinking about hydro specifically. I'm just wondering if hydroasset seems like historically they've traded hands at higher multiples. Are you seeing any M&A opportunities shape up in the hydrospace where you could look to grow your fleet there?

Certainly. So, it's a good question, but what I would say is there's simply less hydro being built around the world. The hydro fleet around the world is a much more contained perimeter of assets and therefore there is going to be less deal activity. I would say we monitor it in all of our core markets. We have been buyers of hydro over the last couple of years, most notably in South America, and those investments have performed really, really well for us. But what I would say is we look at acquisitions in hydro no different than we look at acquisitions in every other technology. If we can buy for good value, we'll obviously deploy the capital there, but if we're seeing better risk-adjusted returns elsewhere, we'll allocate that capital away. And the other point I would make is we increasingly look at asset sales the same way. If someone is to offer us a value on a hydro asset that far exceeds that what we think the value of that asset is in our portfolio, we would consider selling hydro as well. We look at hydro as a technology. We value it very, very significantly, but we look at it emotionlessly the similar way we look at all the other renewable asset classes.

Excellent. Thanks for that, Connor. I'll turn it over.

Thank you. [Operator Instructions] Our next question will come from Rupert Merer from National Bank. Your line is open.

Hi, good morning. Connor, on asset recycling, are you still seeing strong appetite in the market to support your recycling program? And can you comment on the direction of prices you're seeing and how that might vary by market?

Rupert, it's a really, really good question. And I would say one thing we've seen this year, which is probably appropriate color that we can share, is it's important to recognize what's happening in the market right now, which is there is still a huge influx of capital into the renewable power energy transition decarbonization space. But I would say the vast majority of that capital is flowing into the segment of the market that is looking for, I would say, small to medium sized assets that are very de-risked and are operating and contracted. Larger scale platforms that require more operational intensity and more development, that's where we've seen good opportunities to buy for value. Selling well-sized assets that are de-risked, that's where we're seeing good opportunities to sell for value. And we've really taken that into account in terms of our approach to asset sales. And therefore, as we look at the asset sales we've completed recently and the ones in our pipeline going forward, they really focus on, I would say, small to medium-sized assets that are very de-risked and can attract a very low cost of capital, and we continue to see a very, very strong bid for those assets. In general, I would say across almost all our major markets around the world. Off the top of my head, I can't really think of one now where we aren't seeing still a robust bid for those well-sized de-risked contracted assets.

So with that interest in investing in the sector from other investors in the space, how are you seeing the capital being made available through your private partnerships and your other institutional partners? Are they still writing checks to support deals alongside Brookfield?

Yes, absolutely. Stronger today than ever before. And I think we're seeing that not only through our Brookfield's broader funds business, but also the willingness of large global institutional, highly sophisticated investors to on a discretionary basis co-invest into some of our larger transactions. And Westinghouse, which we will close next week, is a great example of that. We saw very significant co-investor demand to come alongside of Brookfield Renewable in investing in that transaction. And we feel that's great. If one, really validates our investment thesis. And two, it also allows us to continue to look to execute on the largest and most attractive opportunities at a scale that very few around the world can match. So we continue to see very, very robust demand for exposure to this space from large sophisticated institutional investors.

Great. And then just finally, you may not want to comment on this, but the -- it seems the Origin Energy deal doesn't have support from all of the shareholders. Just wondering what the options are to get that deal over the line or what your next steps will be if you have some challenges there. Any thoughts on Origin?

Certainly. So, unfortunately, this is a live transaction involving a public company, so we can't comment on it on this call.

Fair enough.

We did get our ACCC approval. We, this past week, increased our bid on the back of very strong outperformance by the company between the signing of the transaction earlier this year and the points to-date that we're at now. And we got a unanimous support from the board and have increased our price to the top end or slightly above the range of value provided in a third-party fairness opinion. At that point, this is probably all I can say, but we continue to work to execute the transaction and we'll do so in the coming weeks.

Understood. Thanks for that. I'll get back in the queue.

Thank you. And I am showing no further questions from our phone lines. I'd now like to turn the conference back over to Connor Teskey for any closing remarks.

Great. Thank you, operator, and thank you everyone for joining the call today. We appreciate your continued interest and support of Brookfield Renewable and we look forward to updating you next quarter on our Q4 and full-year results. Have a fantastic day.

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.