UNITED STATES SECURITIES
AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 20-F  ☐REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF
1934 OR xANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐SHELL COMPANY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  Commission file number:
001-35530 BROOKFIELD RENEWABLE
ENERGY PARTNERS L.P. (Exact name of Registrant
as specified in its charter) Bermuda (Jurisdiction
of incorporation or organization) 73 Front Street, 5th
Floor, Hamilton HM 12, Bermuda (Address
of principal executive offices)  Jane
Sheere 73 Front
Street, 5th Floor, Hamilton HM 12, Bermuda Telephone:
441-295-1443 Facsimile:
441-296-4475  (Name,
telephone, e-mail and/or facsimile number and address of company contact
person) Copies to: Andrew J. Beck Torys LLP 1114
Avenue of the Americas New York,
NY 10036 Telephone:
212-880-6000 Fax:
212-880-0200 Securities registered or
to be registered pursuant to Section 12(b) of the Act:


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Title
  of Class
 
 Name of each exchange on which registeredLimited Partnership Units
 
 New York Stock Exchange, Toronto Stock
  Exchange
  Securities registered or to be registered
pursuant to Section 12(g) of the Act: None Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of
each of the issuer’s classes of capital or common stock as of the close of the
period covered by the annual report: 143,356,854
Limited Partnership Units as of December 31, 2014 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act.YesxNo☐ If this report is an annual or transition
report, indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.Yes☐NoS Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days.YesSNo☐ Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files).Yes☐No☐ Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
See definition of “accelerated filer and large accelerated filer” in Rule 12b-2
of the Exchange Act (Check one):  Large
  accelerated filerx
 
 Accelerated
  filer☐
 
 Non-accelerated
  filer☐
 Indicate by check mark which basis of
accounting the registrant has used to prepare the financial statements included
in this filing:  ☐U.S. GAAP
 
 xInternational Financial Reporting Standards as
  issued by
  the International
  Accounting Standards Board
 
 ☐Other
 If “Other” has been checked in response to
the previous question indicate by check mark which financial statement item the
registrant has elected to follow.Item 17☐Item 18☐ If this is an annual report, indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act). Yes☐NoS


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TABLE OF CONTENTSINTRODUCTION AND USE OF CERTAIN
  TERMS
 6FORWARD-LOOKING STATEMENTS
 13CAUTIONARY STATEMENT REGARDING THE
  USE OF NON-IFRS MEASURES
 15PART I
 16ITEM 1.
 IDENTITY OF DIRECTORS, SENIOR
  MANAGEMENT AND ADVISERS
 16ITEM 2.
 OFFER STATISTICS AND EXPECTED
  TIMETABLE
 16ITEM 3.
 KEY INFORMATION
 163.A
 SELECTED FINANCIAL DATA
 163.B
 CAPITALIZATION AND INDEBTEDNESS
 193.C
 REASONS FOR THE OFFER AND USE OF
  PROCEEDS
 193.D
 RISK FACTORS
 19ITEM 4.
 INFORMATION ON THE COMPANY
 464.A
 HISTORY AND DEVELOPMENT OF THE
  COMPANY
 464.B
 BUSINESS OVERVIEW
 494.C
 ORGANIZATIONAL STRUCTURE
 714.D
 PROPERTY, PLANT AND EQUIPMENT
 76ITEM 4A.
 UNRESOLVED STAFF COMMENTS
 76ITEM 5.
 OPERATING AND FINANCIAL REVIEW AND
  PROSPECTS
 765.A
 OPERATING RESULTS
 765.B
 LIQUIDITY AND CAPITAL RESOURCES
 1135.C
 RESEARCH AND DEVELOPMENT, PATENTS
  AND LICENSES, ETC.
 1135.D
 TREND INFORMATION
 1135.E
 OFF-BALANCE SHEET ARRANGEMENTS
 1145.F
 TABULAR DISCLOSURE OF CONTRACTUAL
  OBLIGATIONS
 114ITEM 6.
 DIRECTORS, SENIOR MANAGEMENT AND
  EMPLOYEES
 1146.A
 DIRECTORS AND SENIOR MANAGEMENT
 1146.B
 COMPENSATION
 1246.C
 BOARD PRACTICES
 1256.D
 EMPLOYEES
 1346.E
 SHARE OWNERSHIP
 134ITEM 7.
 MAJOR SHAREHOLDERS AND RELATED PARTY
  TRANSACTIONS
 1347.A
 MAJOR SHAREHOLDERS
 1347.B
 RELATED PARTY TRANSACTIONS
 1357.C
 INTEREST OF EXPERTS AND COUNSEL
 145ITEM 8.
 FINANCIAL INFORMATION
 1458.A
 CONSOLIDATED STATEMENTS AND OTHER
  FINANCIAL INFORMATION
 1458.B
 SIGNIFICANT CHANGES
 145
  Page3


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ITEM 9.
 THE OFFER AND
  LISTING
 1459.A
 OFFER AND LISTING
  DETAILS
 1459.B
 PLAN OF
  DISTRIBUTION
 1479.C
 MARKETS
 1479.D
 SELLING
  SHAREHOLDERS
 1479.E
 DILUTION
 1479.F
 EXPENSES OF THE
  ISSUE
 147ITEM 10.
 ADDITIONAL
  INFORMATION
 14710.A
 SHARE CAPITAL
 14710.B
 MEMORANDUM AND
  ARTICLES OF ASSOCIATION
 14710.C
 MATERIAL CONTRACTS
 18310.D
 EXCHANGE CONTROLS
 18410.E
 TAXATION
 18410.F
 DIVIDENDS AND
  PAYING AGENTS
 20510.G
 STATEMENT OF
  EXPERTS
 20510.H
 DOCUMENTS ON
  DISPLAY
 20510.I
 SUBSIDIARY
  INFORMATION
 205ITEM 11.
 QUANTITATIVE AND
  QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 205ITEM 12.
 DESCRIPTION OF
  SECURITIES OTHER THAN EQUITY SECURITIES
 205PART II
 206ITEM 13.
 DEFAULTS, DIVIDEND
  ARREARAGES AND DELINQUENCIES
 206ITEM 14.
 MATERIAL
  MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
 206ITEM 15.
 CONTROLS AND
  PROCEDURES
 206ITEM 16.
 [RESERVED]
 20716.A
 AUDIT COMMITTEE
  FINANCIAL EXPERT
 20716.B
 CODE OF ETHICS
 20716.C
 PRINCIPAL
  ACCOUNTANT FEES AND SERVICES
 20716.D
 EXEMPTIONS FROM THE
  LISTING STANDARDS FOR AUDIT COMMITTEE
 20716.E
 PURCHASES OF EQUITY
  SECURITIES BY THE ISSUER AND AFFILIATED PURCHASER16.F
 CHANGE IN
  REGISTRANT'S CERTIFYING ACCOUNTANT
 20816.G
 CORPORATE
  GOVERNANCE
 208
  Page4


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PART III
 
 
 208ITEM 17.
 FINANCIAL
  STATEMENTS
 208ITEM 18.
 FINANCIAL
  STATEMENTS
 208ITEM 19.
 EXHIBITS
 208SIGNATURE
 212INDEX TO FINANCIAL
  STATEMENTS
 F-1
   Page5


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Table of Contents
 INTRODUCTION AND USE OF CERTAIN
TERMS Unless otherwise specified, information provided in this annual
report on Form 20-F (this “Form 20-F”) is as of December 31, 2014.
Unless the context requires otherwise, when used in this Form 20-F, the terms
“Brookfield Renewable”, “we”, “us” and “our” refer to BREP, BRELP, the Holding
Entities and the Operating Entities, each as defined in this Form 20-F, individually
or collectively, as applicable; “BREP” refers to Brookfield Renewable Energy
Partners L.P.; and “Brookfield” refers to Brookfield Asset Management Inc. and
its subsidiaries (other than Brookfield Renewable). All references to “our
portfolio” include 100% of the capacity and energy of the facilities even
though we do not own 100% of the economic output of such facilities (see the
table under Item 4.B. “Business Overview — Our Operations” for details on
our portfolio). “ABCA” means theBusiness
Corporations Act(Alberta),R.S.A. 2000, c. B-9, as amended,
including the regulations promulgated under such Act. “Adjusted EBITDA”
means revenues less direct costs (including energy marketing costs), plus our
share of cash earnings from equity-accounted investments and other income,
before interest, income taxes, depreciation, management service costs and the
cash portion of non-controlling interests. Refer to “Cautionary Statement
Regarding Use of Non-IFRS Measures.” “Adjusted Funds From Operations”
means Funds From Operations less Brookfield Renewable’s share of levelized
sustaining capital expenditures (based on long-term capital expenditure plans).
Refer to “Cautionary Statement Regarding Use of Non-IFRS Measures”. “Affiliate” or “affiliate”
of any person is a person that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with such
person. “Amended and Restated
Limited Partnership Agreement of BRELP” means the amended and restated
limited partnership agreement of BRELP, dated November 20, 2011, as
amended May 4, 2012. “Amended and Restated
Limited Partnership Agreement of BREP” means the amended and restated
limited partnership agreement of BREP, dated November 20, 2011. “ANEEL” has the
meaning given to it under Item 4.B “Business Overview – Continental Operating
Platforms – Latin American Business”. “Audit Committee”
means the audit committee of the board of directors of the Managing General
Partner. “BAIF” means
Brookfield Americas Infrastructure Fund. “Base Management Fee”
has the meaning given to it under Item 6.A “Directors and Senior Management —
Our Master Services Agreement — Management Fee”. “Base Marketing Fee”
has the meaning given to it under Item 7.B “Related Party Transactions — Energy
Marketing Agreement”. “BC Hydro” means
British Columbia Hydro and Power Authority. “BEM LP” means
Brookfield Energy Marketing LP, an indirect wholly-owned subsidiary of
Brookfield Asset Management. “Bond Indenture”
means the amended and restated indenture, dated as of November 23, 2011,
among Brookfield Renewable Energy Partners ULC (formerly BRP Finance ULC), The
Bank of New York Mellon and BNY Trust Company of Canada, as amended and
restated from time to time, governing the Finco Bonds. “BPUSHA” means
Brookfield Power US Holding America Co. “BRELP” means
Brookfield Renewable Energy L.P. “BRELP General Partner”
means BRP Bermuda GP Limited, which serves as the general partner of BRELP GP
LP. “BRELP GP LP” means
BREP Holding L.P., which serves as the general partner of BRELP. Page6


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Table of Contents
 “BREP”
means Brookfield Renewable Energy Partners L.P. “Brookfield” means
Brookfield Asset Management and any subsidiary of Brookfield Asset Management,
other than entities within Brookfield Renewable. “Brookfield Asset
Management” means Brookfield Asset Management Inc. “Brookfield Renewable”
means BREP, BRELP, the Holding Entities and the Operating Entities, taken
together. “Brookfield Renewable
Power Assets” means Brookfield’s renewable power assets (other than the
assets held by the Fund) that were transferred to BREP on November 28, 2011. “BRP Equity” means
Brookfield Renewable Power Preferred Equity Inc. “BRPI” means
Brookfield Renewable Power Inc., an indirect wholly-owned subsidiary of
Brookfield Asset Management. “CBCA” means theCanada
Business Corporations Act, R.S.C. 1985, c. C-44, as amended, including the
regulations promulgated under such Act. “CDS” means CDS
Clearing and Depository Services Inc. “CFA” means a
“controlled foreign affiliate” as defined in the Tax Act. “Class A Limited Voting
Shares” means the Class A Limited Voting Shares of Brookfield Asset
Management. “Class A Preference
Shares” means the Class A Preference Shares, issuable in series (which
includes the Series 1 Shares, the Series 2 Shares, the Series 3 Shares, the
Series 4 Shares, the Series 5 Shares and the Series 6 Shares), of BRP Equity. “Class B Preference
Shares” means the Class B Preference Shares, issuable in series, of BRP
Equity. “Code” means the
Code of Business Conduct and Ethics of Brookfield Renewable. “CODM” has the
meaning given to it under Item 5.A “Operating Results — Performance
Measurement”. “Common Shares”
means the common shares of BRP Equity. “Conflicts Policy”
has the meaning given to it under Item 7.B “Related Party Transactions —
Conflicts of Interest and Fiduciary Duties — Conflicts of Interest”. “CPI” means the
Canadian consumer price index. “CRA” means the
Canada Revenue Agency. “DRIP” means BREP’s
distribution reinvestment plan. “DRS Statement”
means a Direct Registration System statement. “DTC” means The
Depository Trust Company. “Energy Marketing
Agreement” has the meaning given to it under Item 7.B “Related Party
Transactions — Energy Marketing Agreement”. “Energy Revenue
Agreement” has the meaning given to it under Item 7.B “Related Party
Transactions — Energy Revenue Agreement”. “EPA” has the
meaning given to it under item 4.B “Business Overview — Renewable Power Growth
Opportunity”. “EURIBOR” means the
European Interbank Offered Rate. “Euro
Holdco”means Brookfield BRP Europe Holdings (Bermuda) Limited. “E.U.” means the
European Union. Page7


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Table of Contents
 “Exchange
Act” means the United States Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder. “FAPI” means
“foreign accrual property income” as defined in the Tax Act. “FATCA” means the
Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore
Employment Act of 2010. “FERC” has the
meaning given to it under Item 4.B “Business Overview – Continental Operating
Platforms – North American Business”. “Finco” means
Brookfield Renewable Energy Partners ULC, formerly named “BRP Finance ULC”. “Finco Bonds” means
all outstanding bonds issued by Finco pursuant to the Bond Indenture. “Fixed Amount” has
the meaning given to it under Item 7.B “Related Party Transactions — Energy
Revenue Agreement”. “Foreign Tax Credit
Generator Rules” has the meaning given to it under Item 3.D “Risk Factors —
Risks Related to Taxation — Canada”. “Form 20-F” means
this annual report filed on Form 20-F. “Fund” means
Brookfield Renewable Power Fund, a limited purpose trust established under the
laws of the Province of Québec, and where appropriate, includes its
subsidiaries. “Funds From Operations”
means Adjusted EBITDA less interest, current income taxes and management
service costs, which is then adjusted for the cash-portion of non-controlling
interests. For the year ended December 31, 2014, “Funds From Operations”
include the earnings received from the wind portfolio we acquired in Ireland,
reflecting our economic interest from January 1, 2014 to June 30, 2014. Refer
to “Cautionary Statement Regarding Use of Non-IFRS Measures”. “GLHA” has the
meaning given to it under Item 7.B “Related Party Transactions — Other Power
Agreements”. “GLPL” has the
meaning given to it under Item 7.B “Related Party Transactions — Other Power
Agreements”. “Governing Body” in
relation to an entity, means the board of directors or equivalent of such
entity. “Government of Canada
Yield” on any date means the yield to maturity on such date (assuming
semi-annual compounding) of a Canadian dollar denominated non-callable
Government of Canada bond with a term to maturity of five years as quoted as of
10:00 a.m. (Toronto time) on such date and which appears on the Bloomberg
Screen GCAN5YR Page on such date; provided that, if such rate does not appear
on the Bloomberg Screen GCAN5YR Page on such date, the Government of Canada
Yield will mean the average of the yields determined by two registered Canadian
investment dealers selected by BRP Equity, as being the yield to maturity on
such date (assuming semi-annual compounding) which a Canadian dollar denominated
non-callable Government of Canada bond would carry if issued in Canadian
dollars at 100% of its principal amount on such date with a term to maturity of
five years. “GP Interest” has
the meaning given to it under item 5.A “Operating Results — Presentation to
Public Stakeholders”. “Guarantors” means,
collectively, BREP, BRELP, NA Holdco, LATAM Holdco, Euro Holdco and Investco. “GW” means
gigawatt. “GWh” means
gigawatt hour. “Holder” means an
LP Unitholder who, for purposes of the Tax Act and at all relevant times, holds
its LP Units as capital property and deals at arm’s length and is not
affiliated (within the meaning of the Tax Act) with BREP, BRELP, the Managing
General Partner, the BRELP General Partner, BRELP GP LP and their respective
affiliates (within the meaning of the Tax Act). Page8


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Table of Contents
 “Holding
Entities” means LATAM Holdco, NA Holdco, Euro Holdco and any direct
wholly-owned subsidiary of BRELP created or acquired after the date of the
Amended and Restated Limited Partnership Agreement of BRELP, which includes, as
applicable, Investco. “HPI” has the
meaning given to it under Item 7.B “Related Party Transactions — Other Power
Agreements”. “HSS&E” has the
meaning given to it under Item 4.B “Business Overview — Operating Philosophy”. “IASB”
means theInternational Accounting Standards Board. “IFRS” means the
International Financial Reporting Standards, as issued by the IASB. “Indirect CFA” has
the meaning given to it under Item 3.D “Risk Factors — Risks Related to
Taxation — Canada”. “Investco”means
Brookfield Renewable Investments Limited. “Investment Company Act”
means the United States Investment Company Act of 1940, as amended, and the
rules and regulations promulgated under such Act. “IPCC” has the
meaning given to it under Item 4.B “Business Overview — Renewable Power Growth
Opportunity”. “IRS” means the United
States Internal Revenue Service. “LATAM Holdco”
means BRP Bermuda Holdings I Limited. “LIBOR” means
London Interbank Offered Rate. “Licensing Agreement”
has the meaning given to it under Item 7.B “Related Party Transactions —
Licensing Agreement”. “LP Unitholders”
means limited partners of BREP, which are holders of LP Units. “LP Units” means
the non-voting limited partnership units in the capital of BREP. “LTA” means
long-term average. “Managing General
Partner” means Brookfield Renewable Partners Limited, which serves as BREP’s
general partner. “Market Price”
means the volume weighted average of the trading price for our LP Units on the
NYSE for the five trading days immediately preceding the date the relevant
distribution is paid by BREP. “Master Services
Agreement” means the second amended and restated master management and
administration agreement, dated February 26, 2015, as amended from time to
time, among Brookfield Asset Management, BREP, BRELP, the Holding Entities, the
Service Provider and others. “MI 61-101” means
Canadian Multilateral Instrument 61-101 —Protection of Minority Securityholders
in Special Transactions. “MPT” means
Mississagi Power Trust. “MRE” means the
hydrological balancing pool administered by the government of Brazil. “MW” means megawatt. “MWh” means
megawatt hour. “NA Holdco” means
Brookfield BRP Holdings (Canada) Inc. “NEOs” has the
meaning given to it under Item 6.B “Compensation — Our Management”. “Nominating and
Governance Committee” means the nominating and governance committee of the
board of directors of the Managing General Partner. “Non-Resident Entities”
has the meaning given to it under Item 3.D “Risk Factors — Risks Related to Taxation
— Canada”. Page9


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Table of Contents
 “Non-Resident
Holder” means a Holder who, for purposes of the Tax Act and at all relevant
times, is not, and is not deemed to be, resident in Canada and who does not use
or hold and is not deemed to use or hold its LP Units in connection with a
business carried on in Canada. “Non-Resident
Subsidiaries” has the meaning given to it under Item 3.D “Risk Factors —
Risks Related to Taxation — Canada”. “Non-Resident LP Unitholders”
has the meaning given to it under Item 3.D “Risk Factors — Risks Related to
Taxation — Canada”. “Non-U.S. Holder” has
the meaning given to it under Item 10.E “Taxation — Material U.S. Federal
Income Tax Considerations”. “NYSE” means the
New York Stock Exchange. “Operating Entities”
means the entities which, from time to time, directly or indirectly hold
Brookfield Renewable’s operations and hold assets or operations that Brookfield
Renewable may acquire in the future which are not held by the Service
Recipients, including any assets or operations held through joint ventures,
partnerships and consortium arrangements. “PFIC” means a
passive foreign investment company. “PJM ISO” means the
market operated by PJM Interconnection, L.L.C. “Power Agency
Agreements” has the meaning given to it under Item 7.B “Related Party Transactions
— Power Agency Agreements”. “PPA” means a power
purchase agreement, power guarantee agreement or similar long-term agreement
between a seller and buyer of electrical power generation. “Preference Share
Guarantees” means the Series 1 Guarantee, the Series 2 Guarantee, the
Series 3 Guarantee, the Series 4 Guarantee, the Series 5 Guarantee and the
Series 6 Guarantee. “Preference Shares”
means the Class A Preference Shares and the Class B Preference Shares. “QEF Election”
means an election by a U.S. Holder to treat such U.S. Holder’s share of BREP’s interest
in a PFIC as a “qualified electing fund”. “Qualifying Income
Exception” has the meaning given to it under Item 10.E “Taxation — Material
U.S. Federal Income Tax Considerations — Partnership Status of BREP and BRELP”. “Redeemable/Exchangeable
partnership unit” means a unit of BRELP that has the rights of the
Redemption-Exchange Mechanism. “Redeemable/Exchangeable
Unitholders” means limited partners of BRELP, which are holders of
Redeemable/Exchangeable partnership units. “Redemption-Exchange
Mechanism” means the mechanism by which Brookfield may request redemption
of its limited partnership interests in BRELP in whole or in part in exchange
for cash, subject to the right of Brookfield Renewable to acquire such
interests (in lieu of such redemption) in exchange for LP Units. “REFIT”means the Republic
of Ireland’s Renewable Energy Feed-in Tariff 1 and Renewable Energy Feed-in
Tariff 2 programs. “Registration Rights
Agreement” means the registration rights agreement, dated November 28,
2011, between Brookfield and Brookfield Renewable. “Regular Distribution
Waterfall” has the meaning given to it under Item 10.B “Memorandum and
Articles of Association —Description of the Amended and Restated Limited
Partnership Agreement of BRELP — Distributions”. “Relationship Agreement”
means the relationship agreement, dated November 28, 2011, by and among
Brookfield Asset Management, Brookfield Renewable, BRELP, the Service Provider and
others. Page10


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Table of Contents
 “Relevant
Foreign Tax Law” has the meaning given to it under Item 10.E “Taxation —
Material Canadian Federal Income Tax Considerations — Holders Resident in
Canada — Computation of Income or Loss”. “Resident Holder”
means a Holder who, for the purposes of the Tax Act and at all relevant times,
is or is deemed to be a resident of Canada. “RPS” has the
meaning given to it under Item 4.B “Business Overview — Renewable Power Growth
Opportunity”. “RRIF” has the meaning
given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”. “RRSP” has the meaning
given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”. “S&P” means
Standard & Poor’s Ratings Services. “Sarbanes-Oxley Act”
means the United States Sarbanes-Oxley Act of 2002, including the rules and
regulations promulgated thereunder. “SEC” means the United
States Securities and Exchange Commission. “Securities Act”
means the United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder. “SEDAR” means the
System for Electronic Document Analysis and Retrieval administered by the
Canadian Securities Administrators. “Series 1 Guarantee”
has the meaning given to it under Item 10.B “Memorandum and Articles of
Association — BRP Equity — Class A Preference Shares — Specific Provisions of
the Class A Preference Shares, Series 1 — Series 1 Guarantee”. “Series 1 Shares”
means the Class A Preference Shares, Series 1 of BRP Equity. “Series 2 Guarantee”
has the meaning given to it under Item 10.B. “Memorandum and Articles of
Association — BRP Equity — Class A Preference Shares — Specific Provisions of
Class A Preference Shares, Series 2 — Series 2 Guarantee”. “Series 2 Shares”
means the Class A Preference Shares, Series 2 of BRP Equity. “Series 2 Shares
Conversion Date” has the meaning given to it under Item 7.B “Related Party
Transactions — BRP Equity — Specific Provisions of the Class A Preference
Shares, Series 2 — Redemption”. “Series 3 Guarantee”
has the meaning given to it under Item 7.B “Related Party Transactions — BRP
Equity — Specific Provisions of the Class A Preference Shares, Series 3 —
Series 3 Guarantee”. “Series 3 Shares”
means the Class A Preference Shares, Series 3 of BRP Equity. “Series 3 Shares Annual
Fixed Dividend Rate” has the meaning given to it under Item 7.B “Related
Party Transactions — BRP Equity — Specific Provisions of the Class A Preference
Shares, Series 3 — Dividends”. “Series 4 Guarantee”
has the meaning given to it under Item 7.B “Related Party Transactions — BRP
Equity — Specific Provisions of the Class A Preference Shares, Series 4 —
Series 4 Guarantee”. “Series 4 Shares”
means the Class A Preference Shares, Series 4 of BRP Equity. “Series 4 Shares
Conversion Date” has the meaning given to it under Item 7.B “Related Party
Transactions — BRP Equity — Specific Provisions of the Class A Preference
Shares, Series 4 — Redemption”. “Series 5 Guarantee”
has the meaning given to it under Item 7.B “Related Party Transactions — BRP
Equity — Specific Provisions of the Class A Preference Shares, Series 5 —
Series 5 Guarantee”. “Series 5 Shares”
means the Class A Preference Shares, Series 5 of BRP Equity. Page11


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Table of Contents
 “Series
6 Guarantee” has the meaning given to it under Item 7.B “Related Party
Transactions — BRP Equity — Specific Provisions of the Class A Preference
Shares, Series 6 — Series 6 Guarantee”. “Series 6 Shares”
means the Class A Preference Shares, Series 6 of BRP Equity. “Service Provider”
means BRP Energy Group L.P., Brookfield Renewable Energy Group (Bermuda) Limited,
Brookfield Global Renewable Energy Advisor Limited and Brookfield Asset
Management Private Institutional Capital Adviser (Canada), L.P., and, unless
the context otherwise requires, includes any other affiliate of such entities
that provides services to Brookfield Renewable pursuant to our Master Services
Agreement or any other service agreement or arrangement. “Service Recipients”
means BREP, BRELP, the Holding Entities and any other entity, at the option of
the Holding Entities and the Operating Entities. “SHPP” means a
small hydroelectric power plant, which is a category of hydro power facilities
in Brazil with 30 MW of capacity or less. “SIFT Rules” means
the rules in the Tax Act applicable to a “SIFT partnership” as defined in the
Tax Act, pursuant to which certain income and gains earned by a SIFT
partnership are subject to income tax at the partnership level at a rate
similar to a corporation, and allocations of such income and gains to its
partners are taxed as a dividend from a taxable Canadian corporation. “Tax Act” means the
CanadianIncome Tax Act, R.S.C. 1985, c. 1. (5th Supp), as amended,
including the regulations promulgated under such Act. “Tax Proposals”
means all specific proposals to amend the Tax Act publicly announced by or on
behalf of the Minister prior to the date hereof. “TFSA” has the meaning
given to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”. “Total Capitalization
Value” means, in any quarter, the sum of (i) the fair market value of
an LP Unit multiplied by the number of LP Units issued and outstanding on the
last trading day of the quarter (assuming full conversion of any limited
partnership interests held by any member of Brookfield in BRELP into LP Units),
plus (ii) for each class or series of security of a Service Recipient
(other than LP Units) issued to third parties, the fair market value of such
security multiplied by the number of securities of such class or series issued
and outstanding on the last trading day of the quarter (calculated on a
fully-diluted basis), plus (iii) the principal amount of all debt not
captured by paragraph (ii) owed by each Service Recipient (excluding for
this purpose any Operating Entity) on the last trading day of the quarter to
any person that is not a member of the Brookfield Renewable, which debt has
recourse to any Service Recipient, less any amount of cash held by all Service
Recipients (excluding for this purpose any Operating Entity) on such day. “Treasury Regulations”
means the Treasury regulations promulgated under the U.S. Internal Revenue
Code. “Treaty” means the
Canada-U.S. Income Tax Convention (1980). “TSX” means the
Toronto Stock Exchange. “UBTI” has the meaning
given to it under Item 3.D “Risk Factors — Risks Related to Taxation — United
States”. “U.S.” or “United
States” means the United States of America. “U.S. Holder” has
the meaning given to it under Item 10.E “Taxation — Material U.S. Federal
Income Tax Considerations”. “U.S. Internal Revenue
Code” means the United States Internal Revenue Code of 1986, as amended. “Voting Agreement”
means the voting agreement, dated November 28, 2011, between BREP and
Brookfield that provides BREP, through the Managing General Partner, with a
number of voting rights, including the right to direct all eligible votes in
the election of the directors of the BRELP General Partner.  Page12


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Table of Contents
 FORWARD-LOOKING STATEMENTS This
Form 20-F contains forward-looking statements concerning the business and
operations of Brookfield Renewable. Forward-looking statements may include
estimates, plans, expectations, opinions, forecasts, projections, guidance or
other statements that are not statements of fact. Forward-looking statements in
this Form 20-F include statements regarding the quality of Brookfield Renewable’s
assets and the resiliency of the cash flow they will generate, BREP’s
anticipated financial performance, future commissioning of assets, contracted
portfolio, technology diversification, acquisition opportunities, expected
completion of acquisitions, future energy prices and demand for electricity,
economic recovery, achieving long-term average generation, project development
and capital expenditure costs, diversification of shareholder base, energy
policies, economic growth, growth potential of the renewable asset class, the
future growth prospects and distribution profile of BREP and BREP’s access to
capital. Forward-looking statements can be identified by the use of words such
as “plans”, “expects”, “scheduled”, “estimates”, “intends”, “anticipates”,
“believes”, “potentially”, “tends”, “continue”, “attempts”, “likely”,
“primarily”, “approximately”, “endeavors”, “pursues”, “strives”, “seeks” or
variations of such words and phrases, or statements that certain actions,
events or results “may”, “could”, “would”, “might” or “will” be taken, occur or
be achieved. Although we believe that our anticipated future results, performance
or achievements expressed or implied by the forward-looking statements and
information in this Form 20-F are based upon reasonable assumptions and
expectations, we cannot assure you that such expectations will prove to have
been correct. You should not place undue reliance on forward-looking statements
and information as such statements and information involve known and unknown
risks, uncertainties and other factors which may cause our actual results,
performance or achievements to differ materially from anticipated future
results, performance or achievement expressed or implied by such
forward-looking statements and information. Factors that could
cause actual results to differ materially from those contemplated or implied by
forward-looking statements include, but are not limited to, the following: ·we
are not subject to the same disclosure requirements as a U.S. domestic issuer; ·the
separation of economic interest from control or the incurrence of debt at
multiple levels within our organizational structure; ·being
deemed an “investment company” under the Investment Company Act; ·the
effectiveness of our internal controls over financial reporting; ·changes
to hydrology at our hydroelectric stations, to wind conditions at our wind
energy facilities or to weather generally at any biomass cogeneration facility; ·counterparties
to our contracts not fulfilling their obligations, and as our contracts expire,
not being able to replace them with agreements on similar terms; ·increases
in water rental costs (or similar fees) or changes to the regulation of water
supply; ·volatility
in supply and demand in the energy market; ·the increasing amount of uncontracted generation in our portfolio; ·general
industry risks relating to operating in the North American, Latin American and
European power sectors; ·increased
regulation of our operations; ·our
concessions and licenses not being renewed; ·increases
in the cost of operating our plants; ·our
failure to comply with conditions in, or our inability to maintain, governmental
permits; ·equipment
failure; ·dam
failures and the costs of repairing such failures; ·exposure
to force majeure events; ·exposure
to uninsurable losses; ·adverse
changes in currency exchange rates; ·availability
and access to interconnection facilities and transmission systems; ·health,
safety, security and environmental risks; ·disputes,
governmental and regulatory investigations and litigation; ·our
operations being affected by local communities; Page13


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 ·fraud,
bribery, corruption, other illegal acts, inadequate or failed internal
processes or systems, or from external events; ·our
reliance on computerized business systems; ·advances
in technology that impair or eliminate the competitive advantage of our
projects; ·newly
developed technologies in which we invest not performing as anticipated; ·labor
disruptions and economically unfavorable collective bargaining agreements; ·our
inability to finance our operations due to the status of the capital markets; ·operating
and financial restrictions imposed on us by our loan, debt and security
agreements; ·changes
in our credit ratings; ·changes
to government regulations that provide incentives for renewable energy; ·our
inability to identify sufficient investment opportunities and complete
transactions; ·the
growth of our portfolio and our inability to realize the expected benefits of
our transactions; ·our
inability to develop existing sites or find new sites suitable for the
development of greenfield projects; ·delays,
cost overruns and other problems associated with the construction and development
of our generating facilities; ·the
arrangements we enter into with communities and joint venture partners; ·Brookfield’s
election not to source acquisition opportunities for us and our lack of access
to all renewable power acquisitions that Brookfield identifies; ·our
lack of control over our operations conducted through joint ventures,
partnerships and consortium arrangements; ·our
ability to issue equity or debt for future acquisitions and developments is dependent
on capital markets; ·foreign
laws or regulation to which we become subject as a result of future
acquisitions in new markets; ·the
departure of some or all of Brookfield’s key professionals; ·changes
in how Brookfield elects to hold its ownership interests in Brookfield Renewable; ·the
completion and expected benefits of announced transactions; and ·other
factors described in this Form 20-F, including those set forth under Item 3.D
“Risk Factors”, Item 4.B “Business Overview” and Item 5.A “Operating Results”. We caution that the
foregoing list of important factors that may affect future results is not
exhaustive. The forward-looking statements represent our views as of the date
of this Form 20-F and should not be relied upon as representing our views as of
any date subsequent to the date of this Form 20-F. While we anticipate that
subsequent events and developments may cause our views to change, we disclaim
any obligation to update the forward-looking statements, other than as required
by applicable law. For further information on these known and unknown risks,
please see Item 3.D “Risk Factors”. Historical
Performance and Market Data This Form 20-F
contains information relating to our business as well as historical performance
and market data. When considering this data, you should bear in mind that
historical results and market data may not be indicative of the future results
that you should expect from us. Financial Information The financial
information contained in this Form 20-F is presented in U.S. dollars and,
unless otherwise indicated, has been prepared in accordance with IFRS. All
figures are unaudited unless otherwise indicated. In this Form 20-F, all
references to “$” are to U.S. dollars. Canadian dollars, Brazilian Reais and
Euros are identified as “C$”, “R$” and “€”, respectively.  Page14


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 CAUTIONARY STATEMENT REGARDING
USE OF NON-IFRS MEASURES This Form
20-F contains references to Adjusted EBITDA, Funds From Operations and Adjusted
Funds From Operations which are not generally accepted accounting measures
under IFRS and therefore may differ from definitions of Adjusted EBITDA, Funds From
Operations and Adjusted Funds From Operations used by other entities. We
believe that Adjusted EBITDA, Funds From Operations and Adjusted Funds From
Operations are useful supplemental measures that may assist investors in
assessing the financial performance and the cash anticipated to be generated by
our operating portfolio. None of Adjusted EBITDA, Funds From Operations or Adjusted
Funds From Operations should be considered as the sole measure of our performance
and should not be considered in isolation from, or as a substitute for,
analysis of our financial statements prepared in accordance with IFRS.
Reconciliations of each of Adjusted EBITDA, Funds From Operations, and Adjusted
Funds From Operations to net income (loss) and cash flows from operating
activities are presented in Item 5.A “Operating Results —Financial Review
by Segments for the Year Ended December 31, 2014” and Item 5.A “Operating Results
— Financial Review by Segments for the Year Ended December 31, 2013.”  Page15


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Table of Contents
 PART I ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable. ITEM 2.OFFER STATISTICS AND
EXPECTED TIMETABLE Not
applicable. ITEM 3.KEY INFORMATION 3.ASELECT FINANCIAL DATA The
information in this section, excluding the operational information and
distributions per unit set forth in the tables below, is derived from and
should be read in conjunction with the audited consolidated financial
statements of Brookfield Renewable as at December 31, 2014 and 2013, and for
the years ended December 31, 2014, 2013 and 2012 and related notes which are included
elsewhere in this Form 20-F. See
Item 5. “Operating and Financial Review and Prospects,” Item 8.
“Financial Information” and Item 18. “Financial Statements”. Page16


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Table of Contents
 HISTORICAL OPERATIONAL AND
FINANCIAL INFORMATION For the years ended December 31(MILLIONS, EXCEPT AS NOTED)
 
 
 2014
 2013
 2012
 2011(1)
 2010(1)Operational information:(2)Capacity (MW)
 
 6,707
 
 5,849
 
 5,304
 
 4,536
 
 4,309Long-term average generation (GWh)(3)
 
 23,296
 
 21,836
 
 18,202
 
 16,297
 
 15,887Actual generation (GWh)(3)
 
 22,548
 
 22,222
 
 15,942
 
 15,877
 
 14,480Average revenue ($ per MWh)
 
 
 
 77
 
 77
 
 82
 
 74
 
 72Selected financial information:Revenues
 $
 1,704
 $
 1,706
 $
 1,309
 
 1,169
 $
 1,045Adjusted EBITDA(4)
 
 1,216
 
 1,208
 
 852
 
 804
 
 751Funds From Operations(4)
 
 560
 
 594
 
 347
 
 332
 
 269Adjusted Funds From Operations(4)
 
 502
 
 538
 
 295
 
 284
 
 221Net income (loss)
 
 203
 
 215
 
 (95)
 
 (451)
 
 294Distributions per LP Unit(5)
 
 
 
 1.55
 
 1.45
 
 1.38
 
 0.34
 
 -
 As at December 31(MILLIONS, EXCEPT AS NOTED)
 
 2014
 
 2013
 
 2012
 
 2011(1)
 
 2010(1)Balance sheet data:Property, plant and equipment, at fair value
 $
 18,566
 $
 15,741
 $
 15,702
 $
 14,002
 $
 12,260Equity-accounted investments
 
 273
 
 290
 
 344
 
 405
 
 269Total assets
 
 19,849
 
 16,999
 
 16,943
 
 15,713
 
 13,882Long-term debt and credit facilities
 
 7,678
 
 6,623
 
 6,119
 
 5,519
 
 4,994Deferred income tax liabilities
 
 2,637
 
 2,265
 
 2,349
 
 2,367
 
 2,424Total liabilities
 
 10,968
 
 9,463
 
 9,135
 
 8,529
 
 8,709Preferred equity
 
 728
 
 796
 
 500
 
 241
 
 252Participating non-controlling interests -in operating subsidiaries
 
 2,062
 
 1,303
 
 1,028
 
 629
 
 206General partnership interest in a holdingsubsidiary held by Brookfield
 
 59
 
 54
 
 63
 
 64
 
 34Participating non-controlling interests -  in aholding  subsidiary - Redeemable/Exchangeable units held by Brookfield
 
 2,865
 
 2,657
 
 3,070
 
 3,089
 
 1,643Limited partners' equity
 
 3,167
 
 2,726
 
 3,147
 
 3,161
 
 1,683Total equity
 
 8,881
 
 7,536
 
 7,808
 
 7,184
 
 5,173Debt to total capitalization(6)
 
 40%
 
 41%
 
 38%
 
 37%
 
 40%
  (1)For
periods prior to November 28, 2011, the date of completion of a strategic
combination of the renewable power generating assets of Brookfield Renewable
Power Inc. and Brookfield Renewable Power Fund, the financial information for
Brookfield Renewable represents the combined financial information for the
Brookfield Renewable Power Division, a division of Brookfield Asset Management. (2)Includes
100% of capacity and generation from equity-accounted investments. (3)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (4)Non-IFRS
measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures”,
“Financial Review by Segments for the Year Ended 2014”. (5)Represents
distributions per unit to holders of Redeemable/Exchangeable partnership units,
LP Units and GP interest. (6)Total
capitalization is calculated as total debt plus deferred income tax
liabilities, net of deferred income tax assets, and equity. Page17


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Table of Contents
 FINANCIAL REVIEW FOR THE YEARS ENDED DECEMBER 31, 2014 TO 2010 The following table reflects the Adjusted
EBITDA, Funds From Operations, Adjusted Funds From Operations and the
reconciliation to net income (loss) for the years indicated: (MILLIONS, EXCEPT AS NOTED)
 
 2014
 
 2013
 
 2012
 
 2011
 
 2010Generation (GWh) - LTA
 
 23,296
 
 21,836
 
 18,202
 
 16,297
 
 15,887Generation (GWh) - actual(1)
 
 22,548
 
 22,222
 
 15,942
 
 15,877
 
 14,480Revenues
 $
 1,704
 $
 1,706
 $
 1,309
 $
 1,169
 $
 1,045Other income
 
 10
 
 11
 
 16
 
 19
 
 12Share of cash earnings fromequity-accounted investments
 
 26
 
 21
 
 13
 
 23
 
 22Direct operating costs
 
 (524)
 
 (530)
 
 (486)
 
 (407)
 
 (328)Adjusted EBITDA(2)
 
 1,216
 
 1,208
 
 852
 
 804
 
 751Fixed earnings adjustment(2)
 
 11
 
 -
 
 -
 
 -
 
 -Interest expense – borrowings
 
 (415)
 
 (410)
 
 (411)
 
 (411)
 
 (404)Management service costs
 
 (51)
 
 (41)
 
 (36)
 
 (1)
 
 -Current income taxes
 
 (18)
 
 (19)
 
 (14)
 
 (8)
 
 (32)Less: cash portion of non-controlling
  interestsPreferred equity
 
 (38)
 
 (37)
 
 (16)
 
 (13)
 
 (10)Participating non-controlling interests -in operating subsidiaries
 
 (145)
 
 (107)
 
 (28)
 
 (39)
 
 (36)Funds From Operations(3)
 
 560
 
 594
 
 347
 
 332
 
 269Less: sustaining capital expenditures(4)
 
 (58)
 
 (56)
 
 (52)
 
 (48)
 
 (48)Adjusted Funds From Operations(3)
 
 502
 
 538
 
 295
 
 284
 
 221Add: cash portion of non-controlling
  interests
 
 183
 
 144
 
 44
 
 52
 
 46Less: Fixed earning adjusment
 
 (11)
 
 -
 
 -
 
 -
 
 -Add: sustaining capital expenditures(4)
 
 58
 
 56
 
 52
 
 48
 
 48Other items:Depreciation and amortization(5)
 
 (548)
 
 (535)
 
 (483)
 
 (468)
 
 (446)Unrealized financial instrument gain (loss)
 
 10
 
 37
 
 (23)
 
 (20)
 
 584Loss on Fund unit liability
 
 -
 
 -
 
 -
 
 (376)
 
 (159)Share of non-cash loss fromequity-accounted investments
 
 (23)
 
 (12)
 
 (18)
 
 (13)
 
 (7)Deferred income tax recovery
 
 29
 
 18
 
 54
 
 50
 
 3Other
 
 3
 
 (31)
 
 (16)
 
 (8)
 
 4Net income (loss)
 $
 203
 $
 215
 $
 (95)
 $
 (451)
 $
 294Net income (loss) attributable to:Non-controlling interestsPreferred equity
 $
 38
 $
 37
 $
 16
 $
 13
 $
 10Participating non-controlling interests -in operating subsidiaries
 
 51
 
 41
 
 (40)
 
 11
 
 25General partnership interest in a holdingsubsidiary held by Brookfield
 
 1
 
 1
 
 (1)
 
 (5)
 
 3Participating non-controlling interests -
  ina holding subsidiary - Redeemable/Exchangeable units held by Brookfield
 
 55
 
 67
 
 (35)
 
 (232)
 
 127Limited partners' equity
 
 58
 
 69
 
 (35)
 
 (238)
 
 129Basic and diluted earnings (loss) per LP
  Unit(6)
 $
 0.42
 $
 0.52
 $
 (0.26)
 $
 (1.79)
 $
 0.97
 (1)Variations
in generation are described under Item 5.A “Operating Results – Segmented
Disclosures.” (2)The
fixed earnings adjustment relates to Brookfield Renewable’s investment in the
acquisition of the wind portfolio in Ireland. Pursuant to the terms of the
purchase and sale agreement, Brookfield Renewable acquired an economic interest
in the wind Page18


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Table of Contents
 portfolio from January 1, 2014. The
transaction closed on June 30, 2014, and accordingly under IFRS, the $11
million net Funds From Operations contribution was recorded as part of the
purchase price. (3)Non-IFRS
measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures” and
“Financial Review by Segments for the Year Ended December 31, 2014” and
“Financial Review by Segments for the Year Ended December 31, 2013”. (4)Based
on long-term capital expenditure plans. (5)See
Note 2(f) - Change in accounting estimates in our audited consolidated
financial statements concerning changes in estimates related to depreciation
expense. (6)Average
LP Units outstanding during the year totaled 138.8 million (2013 and 2012:
132.9 million and 2011: 132.8 million). 3.B              CAPITALIZATION AND INDEBTEDNESS Not applicable. 3.C              REASONS FOR THE OFFER AND USE OF PROCEEDS Not applicable. 3.D              RISK
FACTORS You should carefully consider the following
factors in addition to the other information set forth in this Form 20-F. If
any of the following risks actually occur, our business, financial condition,
results of operations and prospects could be adversely affected and the value
of our LP Units would likely decline, and you could lose all or part of your
investment. Risks
Related to BREP BREP
is a “foreign private issuer” under U.S. securities laws and is therefore
subject to disclosure obligations different from requirements applicable to
U.S. domestic registrants listed on the NYSE. Although BREP is subject to the periodic
reporting requirement of the Exchange Act, the periodic disclosure required of
foreign private issuers under the Exchange Act is different from periodic
disclosure required of U.S. domestic registrants. Therefore, there may be less
publicly available information about BREP than is regularly published by or
about other public companies in the United States. BREP is exempt from certain
other sections of the Exchange Act to which U.S. domestic issuers are subject,
including the requirement to provide our LP Unitholders with information
statements or proxy statements that comply with the Exchange Act. In addition,
insiders and large LP Unitholders of BREP are not obligated to file reports
under Section 16 of the Exchange Act, and certain corporate governance
rules that are imposed by the NYSE will be inapplicable to BREP. We
may be subject to the risks commonly associated with a separation of economic
interest from control or the incurrence of debt at multiple levels within an
organizational structure. Our
ownership and organizational structure is similar to structures whereby one
company controls another company which in turn holds controlling interests in
other companies; thereby, the company at the top of the chain may control the
company at the bottom of the chain even if its effective equity position in the
bottom company is less than a controlling interest. Brookfield is the sole shareholder
of the Managing General Partner and, as a result of such ownership of the
Managing General Partner, Brookfield will be able to control the appointment
and removal of the Managing General Partner’s directors and, accordingly, will
exercise substantial influence over us. In turn, we often have a majority
controlling interest or a significant influence in our investments. Even though
Brookfield has an effective economic interest in our business of approximately
62% as a result of its ownership of our LP Units and the
Redeemable/Exchangeable partnership units, over time Brookfield may reduce this
economic interest while still maintaining its controlling interest, and,
therefore, Brookfield may use its control rights in a manner that conflicts
with the economic interests of our other LP Unitholders. For example, despite
the fact that we have the Conflicts Policy in place, which addresses the
requirement for independent approval and other requirements for transactions in
which there is greater potential for a conflict of interest to arise, including
transactions with affiliates of Brookfield, because Brookfield will be able to
exert substantial influence over us, and, in turn, over our investments, there
is a greater risk of transfer of assets of our investments at non-arm’s length
values to Brookfield and its affiliates. In addition, debt incurred at multiple
levels within the chain of control could exacerbate the separation of economic
interest from controlling interest at such levels, thereby creating an
incentive to leverage us and our investments. Any such Page19


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 increase
in debt would also make us more sensitive to declines in revenues, increases in
expenses and interest rates, and adverse market conditions. The servicing of
any such debt would also reduce the amount of funds available to pay
distributions to us and ultimately to our LP Unitholders. BREP is not, and does not intend to become,
regulated as an “investment company” under the Investment Company Act (and
similar legislation in other jurisdictions) and if BREP was deemed an
“investment company” under the Investment Company Act, applicable restrictions
could make it impractical for us to operate as contemplated. The
Investment Company Act (and similar legislation in other jurisdictions)
provides certain protections to investors and imposes certain restrictions on
companies that are registered as investment companies. BREP is not an
“investment company” under the Investment Company Act and does not intend to
become one. If BREP were to be deemed an investment companyunder the Investment
Company Act, we might be required to materially restrict or limit the scope of
our operations or plans as it would be impractical for us to operate as
intended: agreements and arrangements between and among us and Brookfield would
be impaired, the type and amount of acquisitions that we would be able to make
as a principal would be limited, and our business, financial condition and
results of operations would be materially adversely affected. We would also be
limited in the types of acquisitions that we might make, and we might need to
modify our organizational structure or dispose of assets of which we would not
otherwise dispose. Accordingly, we would be required to take extraordinary
steps to address the situation, such as the amendment or termination of our
Master Services Agreement, the restructuring of BREP and the Holding Entities,
the amendment of the Amended and Restated Limited Partnership Agreement of BREP
or the termination of BREP, any of which could materially adversely affect the
value of our LP Units. In addition, if BREP were deemed to be an investment
company under the Investment Company Act, it would be taxable as a corporation
for U.S. federal income tax purposes, and such treatment could materially
adversely affect the value of our LP Units. Our
failure to maintain effective internal controls could have a material adverse
effect on our business in the future and the price of our LP Units. Pursuant to Section 404 of the
Sarbanes-Oxley Act, our management has delivered a report that assesses the
effectiveness of our internal controls over financial reporting (in which they
concluded that these internal controls are effective) and our independent
registered public accounting firm has delivered an attestation report on our
management’s assessment of, and the operating effectiveness of, our internal
controls over financial reporting in conjunction with their opinion on our
audited consolidated financial statements. Any failure to maintain adequate internal
controls over financial reporting or to implement required, new or improved
controls, or difficulties encountered in their implementation, could cause us
to report material weaknesses in our internal controls over financial reporting
and could result in a more than remote possibility of errors or misstatements
in our consolidated financial statements that would be material. If we or our
independent registered public accounting firm were to conclude that our
internal controls over financial reporting were not effective, investors could
lose confidence in our reported financial information and the price of our LP
Units could decline. Our failure to achieve and maintain effective internal
controls could have a material adverse effect on our business in the future,
our access to the capital markets and investors’ perception of us. In addition,
material weaknesses in our internal controls could require significant expense
and management time to remediate. Risks
Related to Our Operations and the Renewable Power Industry Changes
to hydrology at our hydroelectric stations, wind conditions at our wind energy
facilities or weather conditions generally at any biomass cogeneration facility
could materially adversely affect the volume of electricity generated. The revenues generated by our facilities are
proportional to the amount of electricity generated which in turn is dependent
upon available water flows, wind conditions and weather conditions generally.
Hydrology, wind and weather conditions generally have natural variations from
season to season and from year to year and may also change permanently because
of climate change or other factors. A natural disaster could also impact water
flows within the watersheds in which we operate. Water rights are also generally
owned or controlled by governments that reserve the right to control water
levels or may impose water-use requirements as a condition of license renewal.
Wind energy is highly dependent on Page20


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 weather conditions
and, in particular, on wind conditions. The profitability of a wind farm
depends not only on observed wind conditions at the site, which are inherently
variable, but also on whether observed wind conditions are consistent with
assumptions made during the project development phase. Weather conditions have
historically caused variability in the ethanol and sugar industries. We
recentlyentered
into an agreement to acquire biomass cogeneration facilities in Brazil with 175
MW of aggregate installed capacity. If we close the transaction,a decline in sugarcane
supply caused by drought, frost or floods, to the sugar and ethanol mills that
are the feedstock suppliers of these facilities, could limit the volume of
energy these facilities are able to generate.A sustained decline in
water flow at our hydroelectric stations or in wind conditions at our wind
energy facilities could lead to a material adverse change in the volume of
electricity generated, revenues and cash flow. In Brazil,
hydroelectric power generators have access to the MRE, which, within the
limitation referred to below, stabilizes hydrology by assuring that all
participant plants in the MRE receive a reference amount of electricity,
approximating long-term average irrespective of the actual volume of energy
generated whether above or below long-term average and substantially all our
assets are part of that pool. In cases of nationwide drought, when the pool as
a whole is in shortfall relative to the long-term average, an asset can expect
to share the nationwide shortfall pro-rata with the rest of the pool. In
addition, specific rules provide the minimum percentages of the reference
amount of electricity that must be actually generated each year for assuring
participation in the MRE. The energy reference amount is assessed yearly according
to the criteria of such regulation, and can be adjusted positively or
negatively. If the MRE is terminated or changed, or the Brookfield Renewable
reference amount is revised, Brookfield Renewable’s financial results would be
exposed to variations in hydrology in Brazil. As of February 2015, Brazil was
experiencing a sustained period of drought, with reservoirs in the South East
region of the country, where the majority of Brazilian hydroelectric power
generation is located, reaching approximately 17% of their capacity. As a
result of these conditions, the Brazilian Federal Government adopted power
consumption rationalization measures and indicated that further measures could
be deployed if poor hydrology persists. Counterparties
to our contracts may not fulfill their obligations and, as our contracts
expire, we may not be able to replace them with agreements on similar terms. If, for any reason, any of the purchasers of
power under our PPAs, including Brookfield, are unable or unwilling to fulfill
their contractual obligations under the relevant PPA or if they refuse to
accept delivery of power pursuant to the relevant PPA, our assets, liabilities,
business, financial condition, results of operations and cash flow could be
materially and adversely affected as we may not be able to replace the
agreement with an agreement on equivalent terms and conditions. External
events, such as a severe economic downturn, could impair the ability of some
counterparties to the PPAs or some end use customers to pay for electricity
received. Certain PPAs in our portfolio will be subject
to re-contracting in the future. We cannot provide any assurance that we will
be able to re-negotiate these contracts once their terms expire, and even if we
are able to do so, we cannot provide any assurance that we will be able to
obtain the same prices or terms we currently receive. If we are unable to
renegotiate or replace these contracts, or unable to secure prices at least
equal to the current prices we receive, our business, financial condition,
results of operation and prospects could be adversely affected. Conversely, a significant percentage of our
sales will be made by facilities subject to indefinite term contracts with
Brookfield (taking into account its rights of renewal) at fixed prices per MWh
of our electricity sold. Accordingly, with respect to those facilities, our
ability to realize improved revenues due to increases in market prices for
renewable power may be limited. A significant portion of the power we
generate is sold under long-term PPAs with Brookfield, public utilities or
industrial or commercial end-users, some of whom may not be rated by any rating
agency. For example, approximately 45% of our 2015 contracted generation is
with Brookfield entities, the majority of which are not rated and whose
obligations are not guaranteed by Brookfield Asset Management. Increases
in water rental costs (or similar fees) or changes to the regulation of water
supply may impose additional obligations on Brookfield Renewable. Page21


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 Water rights are
generally owned or controlled by governments that reserve the right to control
water levels or may impose water-use requirements as a condition of license
renewal that differ from those arrangements in place today. We are required to
make rental payments and pay property taxes for water rights or pay similar
fees for use of water once our hydroelectric projects are in commercial
operation. Significant increases in water rental costs or similar fees in the
future or changes in the way that governments regulate water supply could have
a material adverse effect on our assets, liabilities, business, financial
condition, results of operations and cash flow. Supply
and demand in the energy market, including the non-renewable energy market, is
volatile and such volatility could have an adverse impact on electricity prices
and a material adverse effect on Brookfield Renewable assets, liabilities,
business, financial condition, results of operations and cash flow. A portion of Brookfield Renewable’s revenues
are tied, either directly or indirectly, to the wholesale market price for
electricity in the markets in which Brookfield Renewable operates. Wholesale
market electricity prices are impacted by a number of factors including: the
price of fuel (for example, natural gas) that is used to generate other sources
of electricity; the management of generation and the amount of excess
generating capacity relative to load in a particular market; the cost of
controlling emissions of pollution, including potentially the cost of carbon;
the structure of the market; and weather conditions that impact electrical
load. More generally, there is uncertainty surrounding the trend in electricity
demand growth, which is greatly influenced by macroeconomic conditions, by
absolute and relative energy prices, and by developments in energy conservation
and demand-side management. Correspondingly, from a supply perspective, there
are uncertainties associated with the timing of generating plant retirements –
in part driven by environmental regulations – and with the scale, pace and
structure of replacement capacity, again reflecting a complex interaction of
economic and political pressures and environmental preferences. We expect that
recent drops in oil prices – and by extension, lower natural gas prices – may
increase volatility and may lower prices in certain power markets, which may
have a potentially adverse impact on prices for uncontracted generation. This
volatility and uncertainty in the energy market, including the non-renewable
energy market, could have a material adverse effect on Brookfield Renewable’s
assets, liabilities, business, financial condition, results of operations and
cash flow. We
expect the amount of uncontracted generation in our portfolio to increase. Although
approximately 86% of our generation (on a proportionate basis) will continue to
be contracted over the next five years under long-term, fixed price contracts
with creditworthy counterparties, we currently expect that the portion of our
portfolio that is uncontracted will increase gradually over time. In 2013, 93%
of our generation (on a proportionate basis) was contracted and, in 2014, that
percentage dropped to 92% of our generation (on a proportionate basis). While
increases in uncontracted generation may allow us be opportunistic and take
advantage of high spot-market prices, it will also increase our exposure to
variability in power prices, which could, in certain circumstances, have an
adverse effect on our business, financial condition, results of operations and
cash flows. There
are general industry risks associated with operating in power markets in North
America, Latin America and Europe. We operate in power markets in North America,
Latin America and Europe (specifically, Canada, the United States, Brazil, the
Republic of Ireland and Northern Ireland), each of which is affected by
competition, price, supply of and demand for power, the location of
import/export transmission lines and overall political, economic and social
conditions and policies. A general and extended decline in the North American,
Latin American or European economies, or in the economies of the specific
countries in which we operate, or sustained conservation efforts to reduce
electricity consumption, could have the effect of reducing demand for electric
energy over time. Our
operations are highly regulated and may be exposed to increased regulation
which could result in additional costs to Brookfield Renewable. Our generation assets are subject to
extensive regulation by various government agencies and regulatory bodies in
different countries at the federal, regional, state, provincial and local
level. As legal requirements frequently change and are subject to
interpretation and discretion, we may be unable to Page22


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 predict
the ultimate cost of compliance with these requirements or their effect on our
operations. Any new law, rule or regulation could require additional
expenditure to achieve or maintain compliance or could adversely impact our
ability to generate and deliver energy. Also, operations that are not currently
regulated may become subject to regulation which could result in additional
cost to our business. Further, changes in wholesale market structures or rules,
such as generation curtailment requirements or limitations to access the power
grid, could have a material adverse effect on our ability to generate revenues
from our facilities. For example, in North America, many of our assets are
subject to the operating and market-setting rules determined by independent
system operators, such as the ISO New England. These independent system
operators could introduce rules in a way that adversely impact our operations. There
is a risk that our concessions and licenses will not be renewed. We hold concessions and licenses and we have
rights to operate our facilities which generally include rights to the land and
water required for power generation. We expect that our rights and/or our
licenses will be renewed. However, if we are not granted renewal rights, or if
our concessions and licenses, as the case may be, are renewed subject to
conditions which impose additional costs, or impose additional restrictions
such as setting a price ceiling for energy sales, our profitability and
operational activity could be adversely impacted. The cost of operating
our plants could increase for reasons beyond our control. While we currently maintain a low and
competitive cost position, there is a risk that increases in our cost structure
that are beyond our control could materially adversely impact our financial
performance. Examples of such costs include compliance with new conditions
imposed during the relicensing process, municipal property taxes, water rental
fees and the cost of procuring materials and services required for our maintenance
activities. We
may fail to comply with the conditions in, or may not be able to maintain, our
governmental permits. Our generation assets and construction
projects are required to comply with numerous supranational (in the case of the
E.U.), federal, regional, state, provincial and local statutory and regulatory
standards and to maintain numerous licenses, permits and governmental approvals
required for operation. Some of the licenses, permits and governmental
approvals that have been issued to our operations contain conditions and
restrictions, or may have limited terms. If we fail to satisfy the conditions
or comply with the restrictions imposed by our licenses, permits and
governmental approvals, or the restrictions imposed by any statutory or
regulatory requirements, we may become subject to regulatory enforcement action
and the operation of the assets could be adversely affected or be subject to
fines, penalties or additional costs or revocation of regulatory approvals, permits
or licenses. In addition, we may not be able to renew, maintain or obtain all
necessary licenses, permits and governmental approvals required for the
continued operation or further development of our projects, as a result of
which the operation or development of our assets may be limited or suspended.
Our failure to renew, maintain or obtain all necessary licenses, permits or
governmental approvals may have a material adverse effect on our assets,
liabilities, business, financial condition, results of operations and cash
flow. We
may experience equipment failure. Our generation assets may not continue to
perform as they have in the past and there is a risk of equipment failure due
to wear and tear, latent defect, design error, operator error, or early
obsolescence, among other things, which could have a material adverse effect on
our assets, liabilities, business, financial condition, results of operations
and cash flow. In particular, wind generation turbines are less commercially
proven than hydroelectric assets and have shorter lifespans. The
occurrence of dam failures could result in a loss of generating capacity and
repairing such failures could require us to expend significant amounts of
capital and other resources. The occurrence of dam failures at any of our
hydroelectric generating stations or the occurrence of dam failures at other
generating stations or dams operated by third parties whether upstream or
downstream of our hydroelectric generating stations could result in a loss of
generating capacity and repairing such failures could require us to expend
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 Such
failures could result in damage to the environment or damages and harm to third
parties or the public, which could expose us to significant liability. We
may be exposed to force majeure events. The occurrence of a significant event that
disrupts the ability of our generation assets to produce or sell power for an
extended period, including events which preclude existing customers from purchasing
electricity, could have a material adverse effect on our assets, liabilities,
business, financial condition, results of operations and cash flow. In
addition, force majeure events affecting our assets could result in damage to
the environment or harm to third parties or the public, which could expose us
to significant liability. Our generation assets could be exposed to effects of
severe weather conditions, natural disasters and potentially catastrophic
events such as a major accident or incident. An assault or an action of
malicious destruction, sabotage or terrorism committed on our generation assets
could also disrupt our ability to generate or sell power. In certain cases,
there is the potential that some events may not excuse Brookfield Renewable
from performing its obligations pursuant to agreements with third parties.
Brookfield Renewable may be liable for damages or suffer further losses as a
result. In addition, many of our generation assets are located in remote areas
which may make access for repair of damage difficult. We
may be exposed to uninsurable losses. While we maintain insurance coverage, such
insurance may not continue to be offered on an economically feasible basis and
may not cover all events that could give rise to a loss or claim involving our
assets or operations. If our insurance coverage is insufficient and we are
forced to bear such losses or claims, our financial position could be
materially and adversely affected. We
are subject to foreign currency risk which may adversely affect the performance
of our operations. A significant portion of our current
operations are in countries where the U.S. dollar is not the functional
currency. These operations pay distributions in currencies other than the U.S.
dollar, which we must convert to U.S. dollars prior to making distributions. A
significant depreciation in the value of such foreign currencies or measures
which may be introduced by foreign governments to control inflation or
deflation may have a material adverse effect on our business, financial
condition, results of operations and cash flows. The
ability to deliver electricity to our various counterparties requires the
availability of and access to interconnection facilities and transmission
systems. Our ability to sell electricity is impacted
by the availability of, and access to, the various transmission systems to
deliver power to its contractual delivery point and the arrangements and
facilities for interconnecting the generation projects to the transmission
systems. The absence of this availability and access, our inability to obtain
reasonable terms and conditions for interconnection and transmission
agreements, the operational failure of existing interconnection facilities or
transmission facilities, the lack of adequate capacity on such interconnection
or transmission facilities, may have a material adverse effect on our ability
to deliver electricity to our various counterparties or the requirement of
counterparties to accept and pay for energy delivery, which could materially
and adversely affect our assets, liabilities, business, financial condition,
results of operations and cash flow. Our
operations are exposed to health, safety, security and environmental risks. The ownership, construction and operation of
our generation assets carry an inherent risk of liability related to public
safety, health, safety, security and the environment, including the risk of
government imposed orders to remedy unsafe conditions and/or to remediate or
otherwise address environmental contamination or damage. We could also be
exposed to potential penalties for contravention of health, safety, security
and environmental laws and potential civil liability. In the ordinary course of
business we incur capital and operating expenditures to comply with health,
safety, security and environmental laws to obtain and comply with licenses,
permits and other approvals and to assess and manage related risks. The cost of
compliance with these laws (and any future laws or amendments enacted) may
increase over time and result in additional material expenditures. We may
become subject to government orders, investigations, inquiries or other
proceedings (including civil claims) relating to health, safety, security and
environmental matters as a result of which our operations may be limited or Page24


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 suspended. The occurrence of any of these events or any
changes, additions to or more rigorous enforcement of health, safety, security
and environmental laws could have a material and adverse impact on operations
and result in additional material expenditures. Additional environmental,
health and safety issues relating to presently known or unknown matters may
require unanticipated expenditures, or result in fines, penalties or other
consequences (including changes to operations) that may be material and adverse
to our business and results of operations. Our renewable power
business may be involved in disputes, governmental and regulatory
investigations and possible litigation. In
the normal course of our operations, Brookfield Renewable is involved in
various legal actions that could expose it to liability for damages. The
outcome with respect to outstanding, pending or future actions cannot be
predicted with certainty and may be adverse to us and as a result could have a
material adverse effect on our assets, liabilities, business, financial
condition, results of operations and cash flow. We are subject to governmental
or regulatory investigations from time to time. Governmental and regulatory
investigations, regardless of their outcome, are generally costly, divert
management attention, and have the potential to damage our reputation. There
has been increasing global focus on the implementation and enforcement of
anti-bribery and anti-corruption legislation by various governmental agencies,
including the SEC and Department of Justice in the U.S.  The unfavorable
resolution of any governmental or regulatory investigation could result in
criminal liability, fines, penalties or other monetary or non-monetary remedies
and could materially affect our business or results of operations. The
operation of our generating facilities could be affected by local communities. We may become impacted by the interests of
local communities and stakeholders, including in some cases, Aboriginal peoples,
that affect the operation of our facilities. Certain of these communities may
have or may develop interests or objectives which are different from or even in
conflict with our objectives, including the use of our project lands and
waterways near our facilities. Any such differences could have a negative
impact on the successful operation of our facilities. As well, disputes
surrounding, and settlements of, land claims of Aboriginal peoples regarding
lands on or near which our generating assets reside could interfere with
operations and/or result in additional operating costs or restrictions. We
may suffer a significant loss resulting from fraud, bribery, corruption, other
illegal acts, inadequate or failed internal processes or systems, or from
external events. We may suffer a significant loss resulting
from fraud, bribery, corruption, other illegal acts, inadequate or failed
internal processes or systems, or from external events, such as the occurrence
of disasters or security threats affecting our ability to operate. We operate
in different markets and rely on our employees and certain third parties to
follow our policies and processes as well as applicable laws in their
activities. Risk of illegal acts or failed systems is managed through our infrastructure,
controls, systems and people, complemented by central groups focusing on
enterprise-wide management of specific operational risks such as fraud,
trading, outsourcing, and business disruption, as well as personnel and systems
risks. Specific programs, policies, standards, methodologies and training have
been developed to support the management of these risks. These risks can result
in direct or indirect financial loss, reputational impact or regulatory
censure. We
rely on computerized business systems. Our business places significant reliance on
information technology. In addition, our business also relies upon
telecommunication services to remotely monitor and control our assets and
interface with regulatory agencies, wholesale power markets and customers. The
information and embedded systems of key business partners and regulatory
agencies are also important to our operations. In light of this, we may be
subject to cybersecurity risks or other breaches of information technology
security. A breach of our cyber/data security measures or the failure or
malfunction of any of our computerized business systems, associated backup or
data storage systems for a significant time period could have a material
adverse effect on our business operations, financial reporting, financial
condition and results of operations. Advances
in technology could impair or eliminate the competitive advantage of our
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 There
are other alternative technologies that can produce renewable power, such as
fuel cells, microturbines and photovoltaic (solar) cells. These alternative
technologies currently produce electricity at a higher average price than our
generation facilities; however, research and development activities are ongoing
to seek improvements in such alternative technologies and their cost of
producing electricity is gradually declining. Additionally, research and
developments activities are ongoing to seek improvements and reductions in
carbon emissions from conventional fossil fuel generation. It is possible that
advances will further reduce the cost of alternative methods of power
generation. If this were to happen, the competitive advantage of our projects
may be significantly impaired or eliminated and our assets, liabilities,
business, financial condition, results of operations and cash flow could be
materially and adversely affected as a result. There
can be no guarantee that newly developed technologies that we invest in will
perform as anticipated. We may invest in and use newly developed,
less proven, technologies in our development projects or in maintaining or
enhancing our existing assets. There is no guarantee that such new technologies
will perform as anticipated. The failure of a new technology to perform as
anticipated may materially and adversely affect the profitability of a
particular development project. Performance
of our Operating Entities may be harmed by future labor disruptions and
economically unfavorable collective bargaining agreements. Certain of BREP’s subsidiaries are parties to
collective agreements that expire periodically and those subsidiaries may not
be able to renew their collective agreements without a labor disruption or
without agreeing to significant increases in cost. In the event of a labor
disruption such as a strike or lock-out, the ability of our generation assets
to generate electricity may be impaired. Our results from operations and cash
flow could be materially and adversely affected as a result. The
economic viability of the feedstock suppliers of the biomass cogeneration
facilities we have agreed to purchase is linked to the market price for sugar
and ethanol, and the prices of these commodities are cyclical and are affected
by general economic conditions in Brazil and globally. In November 2014, we entered into an
agreement to acquire a 488 MW multi-technology renewable portfolio in Brazil.
As part of this acquisition, we will be purchasing biomass cogeneration
facilities, with 175 MW of aggregate installed capacity. The principal
feedstock of these facilities is “bagasse” –a dry, fibrous residue left after the
extraction of juice from sugar cane. The biomass cogeneration facilities that
we expect to acquire are attached to mills that are the suppliers of the bagasse,
which they provide to these facilities in exchange for some of the steam and
electricity that the facilities produce. The excess electricity that is not delivered
to the relevant mill is sold under contract to commercial offtakers, to the
government by way of a regulated auction process or directly into the market.
The viability of these mills depends on prevailing market prices for ethanol
and sugar as well as other factors, all of which are out of our control. These
facilities are dependent on one supplier of bagasse, who is the owner of the
mills. If such supplier becomes unavailable, it could have a material adverse
effect on the value of this investment. Risks
Related to Financing Our
ability to finance our operations is subject to various risks relating to the state
of the capital markets. There is debt throughout our corporate
structure: BREP, BRELP and the Holding Entities have corporate debt and many
Operating Entities have limited recourse project level debt (the majority of
which is non-recourse to BREP). This debt will need to be replaced from time to
time. Brookfield Renewable’s financings may contain conditions that limit its
ability to repay indebtedness prior to maturity without incurring penalties,
which may limit its ability to raise capital and financing on favourable terms.
Refinancing risk includes, among other factors, dependence on continued
operating performance of Brookfield Renewable’s assets, future electricity
market prices, future capital markets conditions, the level of future interest
rates and investors’ assessment of BREP’s credit risk at such time. In
addition, certain of our financings are, and future financings may be, exposed
to floating interest rate risks, and if interest rates increase, an increased
proportion of our cash flow may be required to service indebtedness. Future Page26


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 acquisitions, development and construction of new
facilities and other capital expenditures will be financed out of cash
generated from our operations, borrowings and possible future sales of equity.
Our ability to obtain financing to finance our growth is dependent on, among
other factors, the overall state of the capital markets, continued operating
performance of our assets, future electricity market prices, the level of
future interest rates and investors’ assessment of our credit risk at such
time, and investor appetite for investments in renewable energy and
infrastructure assets in general and in Brookfield Renewable’s securities in
particular. To the extent that external sources of capital become limited or
unavailable or available on onerous terms, our ability to make necessary
capital investments to construct new or maintain existing facilities will be
impaired, and as a result, our business, financial condition, results of
operations and prospects may be materially and adversely affected. We
are subject to operating and financial restrictions through covenants in our
loan, debt and security agreements. Brookfield Renewable is subject to operating
and financial restrictions through covenants in our loan, debt and security
agreements. These restrictions prohibit or limit our ability to, among other
things, incur additional debt, provide guarantees for indebtedness, create
liens, dispose of assets, liquidate, dissolve, amalgamate, consolidate or
effect corporate or capital reorganizations, declare distributions, issue
equity interests, and create subsidiaries. A financial covenant in our
corporate bonds and in our corporate bank credit facilities limits our overall
indebtedness to a percentage of total capitalization, a restriction which may
limit our ability to obtain additional financing, withstand downturns in our
business and take advantage of business and development opportunities. If we
breach our covenants, our credit facilities may be terminated or come due and
such event may cause our credit rating to deteriorate and subject Brookfield
Renewable to higher interest and financing costs. We may also be required to
seek additional debt financing on terms that include more restrictive
covenants, require repayment on an accelerated schedule or impose other
obligations that limit our ability to grow our business, acquire needed assets
or take other actions that we might otherwise consider appropriate or
desirable. Changes
in our credit ratings may have an adverse effect on our financial position and
ability to raise capital. The credit rating assigned to BREP or any of
our subsidiaries’ debt securities may not remain in effect for any given period
of time. A rating may be changed or withdrawn entirely by the relevant rating
agency. A lowering or withdrawal of such ratings may have an adverse effect on
our financial position and ability to raise capital. Risks
Related to Our Growth Strategy Government
regulations providing incentives for renewable energy could change at any time. Development of new renewable energy sources
and the overall growth of the renewable energy industry are dependent on state
or provincial, national, supranational and international policies in support of
such development. Policies which incentivize the development of renewables
include renewable energy purchase obligations imposed on local service
entities, tax incentives, including investment tax credits, production tax
credits and accelerated depreciation and direct subsidies. In particular,
Canada and the United States, and some of their respective provinces and
states, have pursued for several years, and in many cases continue to pursue,
policies of active support for renewable energy. In Brazil, SHPPs benefit from
a special discount for the use of the transmission and distribution system
which enables them to secure higher electricity prices in the market. In theRepublic of Ireland, the majority of our assets are underpinned by
the REFIT program that ensures generators receive a minimum fixed annual
electricity price, indexed by inflation annually over a contract term of 15
years. Our Northern Irish wind farm assets earn sterling denominated revenues
by receiving a minimum fixed price Renewable Obligation Certificate for twenty
years, in addition to the market price. The attractiveness of renewable energy to
purchasers, as well as the economic return available to project sponsors, is
often dependent on the cost of fossil fuels as well as the level of incentives
available, and the availability of such incentives is uncertain. There is a
risk that government regulations that provide incentives for renewable energy,
or that have increased emission standards or other environmental regulation of
traditional thermal coal-fired generation, could change at any time in a manner
that adversely impacts the market for renewables generally. Any such change may
impact the Page27


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 competitiveness of renewable energy
generally and the economic value and ability to develop our projects in
particular. In addition, some of these incentives are subject to sunset
provisions which mean they will expire unless renewed. The budget difficulties
facing many governments create greater challenges and uncertainty in getting
incentives renewed. In addition, even if incentives are renewed prior to their
expiration, uncertainty regarding renewal can create substantial risks and
delays for developers of renewable power projects. As a result, we may face
reduced ability to develop our project pipeline and realize our development growth
objectives. We may also suffer material write-offs of development assets as a
result. We
may be unable to identify sufficient investment opportunities and complete
transactions as planned. Our strategy for building LP Unitholder value
is to seek to acquire or develop high-quality assets and businesses that
generate sustainable and increasing cash flows, with the objective of achieving
appropriate risk-adjusted returns on our invested capital over the long-term.
However, there is no certainty that we will be able to find sufficient
investment opportunities and complete transactions that meet our investment
criteria. Our investment criteria consider, among other things, the financial,
operating, governance and strategic merits of a proposed acquisition and, as
such, there is no certainty that we will be able to acquire or develop
additional high-quality assets at attractive prices to continue growing our
business. Competition for assets is significant and competition from other
well-capitalized investors or companies may significantly increase the purchase
price or prevent us from completing an acquisition. Further, our growth
initiatives are subject to a number of closing conditions, including, as
applicable, third party consents, regulatory approvals (including competition
authorities) and other third party approvals that are beyond our control and
may not be satisfied. If all or some of our growth initiatives are unable to be
completed on the terms agreed, we may need to delay certain acquisitions or
terminate these acquisitions altogether. Future
growth of our portfolio may subject us to additional risks and the expected
benefits of our transactions may not materialize. Our strategy is to continue to expand our
business through acquisitions and developments. If we are not able to complete
our growth initiatives as expected in whole or in part, we may not be able to
identify alternative investments that are of a comparable quality to those
contemplated in the growth initiatives, in a timely manner, or at all. In
addition, if returns are lower than anticipated from new acquisitions or
projects, we may not be able to achieve growth in our distributions in line
with our stated goals and the market value of our LP Units may decline.
Further, acquisitions involve risks that could materially and adversely affect
our business, including risks related to the integration of the assets or
businesses and integration or retention of personnel relating to the acquired
assets or companies and the inability to achieve potential synergies. In
addition, liabilities may exist that Brookfield Renewable does not discover in
its due diligence prior to the consummation of an acquisition, or circumstances
may exist with respect to the entities or assets acquired that could lead to future
liabilities and, in each case, Brookfield Renewable may not be entitled to
sufficient, or any, recourse against the vendors or contractual counterparties
to an acquisition agreement. The discovery of any material liabilities
subsequent to an acquisition, as well as the failure of a new acquisition to
perform according to expectations, could have a material adverse effect on
Brookfield Renewable’s assets, liabilities, business, financial condition,
results of operations and cash flow. There
are several factors which may affect our ability to develop existing sites and
find new sites suitable for the development of greenfield power projects. Our ability to realize our greenfield
development growth plans is dependent on our ability to develop existing sites
and find new sites suitable for development into viable projects. Ability to
maintain a development permit often requires specific development steps to be
undertaken. Successful development of greenfield power projects, whether
hydroelectric or wind, is typically dependent on a number of factors, including
the ability to secure an attractive site on reasonable terms; the ability to
measure resource availability at levels deemed economically attractive for
continued project development; the ability to secure approvals, licenses and
permits; the acceptance of local stakeholders, including in some cases,
Aboriginal peoples, of proposed developments; the ability to secure
transmission interconnection access or agreements; and the ability to secure a
long-term PPA or other sales contract on reasonable terms. Page28


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 Each
of these factors can be critical in determining whether or not a particular
development project might ultimately be suitable for construction. Failure to
achieve any one of these elements may prevent the development and construction
of a project. When this occurs we may lose all of our investment in development
expenditures and may be required to write-off project development assets. The
development of our generating facilities is subject to various construction
risks and risks associated with the various types of arrangements we enter into
with communities and joint venture partners. Our ability to develop an economically
successful project is dependent on, among other things, our ability to
construct a particular project on-time and on-budget. The construction and
development of generating facilities is subject to various environmental,
engineering and construction risks that could result in cost-overruns, delays
and reduced performance. A number of factors that could cause such delays, cost
over-runs or reduced performance include, but are not limited to, permitting
delays, changing engineering and design requirements, the costs of
construction, the performance and necessary experience of contractors, labor
disruptions and inclement weather. In addition, we enter into various types of
arrangements with communities and joint venture partners, including in some
cases, Aboriginal peoples, for the development of projects. Certain of these
communities and partners may have or may develop interests or objectives which
are different from or even in conflict with our objectives. Any such
differences could have a negative impact on the success of our projects. Brookfield
has no obligation to source acquisition opportunities for us and we may not
have access to all renewable power acquisitions that Brookfield identifies. Our ability to grow through acquisitions
depends on Brookfield’s ability to identify and present us with acquisition
opportunities. Brookfield established BREP to hold and acquire renewable power
generating operations or developments on a global basis. However, Brookfield
has no obligation to source acquisition opportunities specifically for us. In
addition, Brookfield has not agreed to commit to us any minimum level of
dedicated resources for the pursuit of renewable power-related acquisitions.
There are a number of factors which could materially and adversely impact the
extent to which suitable acquisition opportunities are made available from Brookfield,
for example: ·it
is an integral part of Brookfield’s (and our) strategy to pursue the
acquisition or development of renewable power assets through consortium
arrangements with institutional investors, strategic partners or financial
sponsors and to form partnerships to pursue such acquisitions on a specialized
or global basis. Although Brookfield has agreed with us that it will not enter
any such arrangements that are suitable for us without giving us an opportunity
to participate in them, there is no minimum level of participation to which we
will be entitled; ·the
same professionals within Brookfield’s organization that are involved in
acquisitions that are suitable for us are responsible for the consortiums and
partnerships referred to above, as well as having other responsibilities within
Brookfield’s broader asset management business. Limits on the availability of
such individuals will likewise result in a limitation on the availability of
acquisition opportunities for us; ·Brookfield
will only recommend acquisition opportunities that it believes are suitable for
us. Our focus is on assets where we believe that our operations-oriented
approach can be deployed to create value. Accordingly, opportunities where
Brookfield cannot play an active role in influencing the underlying operating
company or managing the underlying assets may not be suitable for us, even
though they may be attractive from a purely financial perspective. Legal,
regulatory, tax and other commercial considerations will likewise be an important
consideration in determining whether an opportunity is suitable and could limit
our ability to participate in these certain investments; ·in
addition to structural limitations, the question of whether a particular
acquisition is suitable is highly subjective and is dependent on a number of
factors including an assessment by Brookfield relating to our liquidity
position at the time, the risk profile of the opportunity, its fit with the
balance of our then current operations and other factors. If Brookfield
determines that an opportunity is not suitable for us, it may still pursue such
opportunity on its own behalf, or on behalf of a Brookfield sponsored
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 In making these
determinations, Brookfield may be influenced by factors that result in a
misalignment or conflict of interest. See Item 7.B “Related Party
Transactions — Conflicts of Interest and Fiduciary Duties”. We
do not have control over all our operations. We have structured some of our operations as
joint ventures, partnerships and consortium arrangements. An integral part of
our strategy is to participate with institutional investors in Brookfield
sponsored or co-sponsored consortiums for asset acquisitions and as a partner
in or alongside Brookfield sponsored or co-sponsored partnerships that target
acquisitions that suit our profile. These arrangements are driven by the
magnitude of capital required to complete acquisitions of renewable assets and
other industry-wide trends that we believe will continue. Such arrangements
involve risks not present where a third party is not involved, including the
possibility that partners or co-venturers might become bankrupt or otherwise
fail to fund their share of required capital contributions. Additionally,
partners or co-venturers might at any time have economic or other business
interests or goals different from Brookfield Renewable and Brookfield. Joint ventures, partnerships and consortium
investments generally provide for a reduced level of control over an acquired
company because governance rights are shared with others. Accordingly,
decisions relating to the underlying operations, including decisions relating
to the management and operation and the timing and nature of any exit, are
often made by a majority vote of the investors or by separate agreements that
are reached with respect to individual decisions. For example, when we
participate with institutional investors in Brookfield sponsored or
co-sponsored consortiums for asset acquisitions and as a partner in or
alongside Brookfield sponsored or co-sponsored partnerships, there is often a
finite term to the investment, which could lead to the investment being sold
prior to the date we would otherwise choose. In addition, such operations may be subject
to the risk that any joint venture, partnership or consortium may make
business, financial or management decisions with which we do not agree or the
management of the company may take risks or otherwise act in a manner that does
not serve our interests. Because we may not have the ability to exercise
control over such operations, we may not be able to realize some or all of the
benefits that we believe will be created from Brookfield’s involvement. If any
of the foregoing were to occur, our financial condition and results of operations
could suffer as a result. In addition, all of our current operations
with less than 100% ownership are structured joint ventures, partnerships,
consortium arrangements or leasehold interests. The sale or transfer of
interests in some of these operations are subject to rights of first refusal or
first offer, tag along rights or drag along rights and some agreements in these
operations provide for buy-sell or similar arrangements. Such rights may be
triggered at a time when we may not want them to be exercised and such rights
may inhibit our ability to sell our interest in an entity within the desired
time frame or on any other desired basis. In addition, the operations are also
all subject to pre-emptive or default rights which may lead to the joint venture
or third parties compulsorily acquiring assets from the joint venture. We may be required to
issue equity or debt for future acquisitions and developments and our ability
to do so will be dependent on the overall state of the capital markets. Future acquisitions and developments,
construction of new facilities and other capital expenditures will be financed
out of cash generated from our operations, borrowings and possible future sales
of equity. As such, financing our growth may depend on raising additional
equity and/or debt capital. Our ability to do so is dependent on, among other
factors, our credit rating, the overall state of the capital markets and
investor appetite for investments in renewable energy assets in general and our
securities in particular. We
may pursue acquisitions in new markets that are subject to foreign laws or
regulation that are more onerous than the laws and regulations we are currently
subject to. We may pursue acquisitions in new markets
that are subject to regulation by various foreign governments and regulatory
authorities and to the application of foreign laws. Such foreign laws or
regulations may not provide for the same type of legal certainty and rights, in
connection with our Page30


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 contractual relationships in such
countries, as are afforded to our projects in North America, Latin America and
Europe, which may adversely affect our ability to receive revenues or enforce
our rights in connection with our foreign operations. In addition, the laws and
regulations of some countries may limit our ability to hold a majority interest
in some of the projects that we may develop or acquire, thus limiting our
ability to control the development, construction and operation of such
projects. Any existing or new operations may also be subject to significant
political, economic and financial risks, which vary by country, and may
include: ·changes
in government policies or personnel; ·changes
in general economic conditions; ·restrictions
on currency transfer or convertibility; ·changes
in labor relations; ·political
instability and civil unrest; ·regulatory
or other changes in the local electricity market; and ·breach
or repudiation of important contractual undertakings by governmental entities
and expropriation and confiscation of assets and facilities for less than fair
market value. Risks
Related to Our Relationship with Brookfield Brookfield
exercises substantial influence over Brookfield Renewable and we are highly
dependent on the Service Provider. A subsidiary of Brookfield Asset Management
is the sole shareholder of the Managing General Partner. As a result of its
ownership of the Managing General Partner, Brookfield is able to control the
appointment and removal of the Managing General Partner’s directors and,
accordingly, exercise substantial influence over Brookfield Renewable. In
addition, BREP holds its interest in the Operating Entities indirectly through
BRELP and will hold any future acquisitions indirectly through BRELP, the
general partner of which is indirectly owned by Brookfield. As BREP’s only
substantial asset is the limited partnership interests that it holds in BRELP,
except future rights under the Voting Agreement, BREP does not have a right to
participate directly in the management or activities of BRELP or the Holding
Entities, including with respect to the making of decisions (although it has
the right to remove and replace the BRELP GP LP). BREP and BRELP depend on the management and
administration services provided by or under the direction of the Service
Provider under our Master Services Agreement. Brookfield personnel and support
staff that provide services to us under our Master Services Agreement are not
required to have as their primary responsibility the management and
administration of BREP or BRELP or to act exclusively for either of us and our
Master Services Agreement does not require any specific individuals to be
provided by Brookfield to BREP. Any failure to effectively manage our current
operations or to implement our strategy could have a material adverse effect on
our business, financial condition and results of operations. Our Master
Services Agreement continues in perpetuity, until terminated in accordance with
its terms. The
departure of some or all of Brookfield’s professionals could prevent us from
achieving our objectives. We will depend on the diligence, skill and
business contacts of Brookfield’s professionals and the information and
opportunities they generate during the normal course of their activities. Our
future success will depend on the continued service of these individuals, who
are not obligated to remain employed with Brookfield. Brookfield has
experienced departures of key professionals in the past and may do so in the
future, and we cannot predict the impact that any such departures will have on
our ability to achieve our objectives. The departure of a significant number of
Brookfield’s professionals for any reason, or the failure to appoint qualified
or effective successors in the event of such departures, could have a material
adverse effect on our ability to achieve our objectives. The Amended and
Restated Limited Partnership Agreement of BREP and our Master Services
Agreement do not require Brookfield to maintain the employment of any of its
professionals or to cause any particular professionals to provide services to
us or on our behalf. The
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 Our arrangements with
Brookfield do not require Brookfield to maintain any ownership level in BREP or
in BRELP. Accordingly, the Managing General Partner may transfer its general
partnership interest to a third party, including in a merger or consolidation
or in a transfer of all or substantially all of its assets, without the consent
of our LP Unitholders provided the transferee is an affiliate of the BRELP General
Partner. In addition, Brookfield may sell or transfer all or part of its
interests in the Service Provider or in the Managing General Partner, in each
case, without the approval of our LP Unitholders. If a new owner were to
acquire ownership of the Managing General Partner and to appoint new directors
or officers of its own choosing, it would be able to exercise substantial
influence over Brookfield Renewable’s policies and procedures and exercise
substantial influence over our management and the types of acquisitions that we
make. Such changes could result in Brookfield Renewable’s capital being used to
make acquisitions in which Brookfield has no involvement or in making
acquisitions that are substantially different from our targeted acquisitions. Additionally,
BREP cannot predict with any certainty the effect that any transfer in the
ownership of the Managing General Partner would have on the trading price of
our LP Units or Brookfield Renewable’s ability to raise capital or make
investments in the future, because such matters would depend to a large extent
on the identity of the new owner and the new owner’s intentions with regard to
BREP. As a result, the future of BREP would be uncertain and Brookfield
Renewable’s business, financial condition and results of operations may suffer. Brookfield
is not necessarily required to act in the best interests of the Service
Recipients, Brookfield Renewable or our LP Unitholders. Our Master Services Agreement and our other
arrangements with Brookfield do not impose any duty on the Service Provider to
act in the best interest of the Service Recipients, and the Service Provider is
not prohibited from engaging in other business activities that compete with the
Service Recipients. Additionally, the Managing General Partner, the general
partner of BRELP, the Service Provider and their affiliates will have access to
material confidential information. Although some of these entities will be
subject to confidentiality obligations pursuant to confidentiality agreements or
pursuant to implied duties of confidence, none of the Amended and Restated
Limited Partnership Agreement of BREP, the Amended and Restated Limited
Partnership Agreement of BRELP nor our Master Services Agreement contains
general confidentiality provisions. See Item 7.B “Related Party
Transactions — Conflicts of Interest and Fiduciary Duties”. Our
Master Services Agreement and our other arrangements with Brookfield do not
impose on Brookfield any fiduciary duties to act in the best interests of our
LP Unitholders. Our Master Services Agreement and our other
arrangements with Brookfield do not impose on Brookfield any duty (statutory or
otherwise) to act in the best interests of the Service Recipients, nor do they
impose other duties that are fiduciary in nature. As a result, the Managing
General Partner, a wholly-owned subsidiary of Brookfield Asset Management, in
its capacity as our general partner, will have sole authority to enforce the
terms of such agreements and to consent to any waiver, modification or
amendment of their provisions in accordance with our conflicts policy. The
Bermuda Limited Partnership Act of 1883, under which BREP and BRELP were
established, does not impose statutory fiduciary duties on a general partner of
a limited partnership in the same manner that corporate statutes, such as theCanadaBusiness Corporations Actand theDelaware Revised Uniform Limited
Partnership Act, impose fiduciary duties on directors of a corporation. In
general, under applicable Bermudian legislation, a general partner has certain
limited duties to its limited partners, such as the duty to render accounts,
account for private profits and not compete with the partnership in business.
In addition, Bermuda common law recognizes that a general partner owes a duty
of utmost good faith to its limited partners. These duties are, in most
respects, similar to duties imposed on a general partner of a limited
partnership under U.S. and Canadian law. However, to the extent that the
Managing General Partner and BRELP GP LP owe any fiduciary duties to Brookfield
Renewable and our LP Unitholders, these duties have been modified pursuant to
the Amended and Restated Limited Partnership Agreement of BREP and the Amended
and Restated Limited Partnership Agreement of BRELP as a matter of contract
law. We have been advised by Bermuda counsel that such modifications are not
prohibited under Bermuda law, subject to typical qualifications as to
enforceability of contractual provisions, such as the application of general equitable
principles. This is similar to Delaware law which Page32


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 expressly
permits modifications to the fiduciary duties owed to partners, other than an
implied contractual covenant of good faith and fair dealing. The Amended and Restated Limited Partnership
Agreement of BREP and the Amended and Restated Limited Partnership Agreement of
BRELP contain various provisions that modify the fiduciary duties that might
otherwise be owed to Brookfield Renewable and our LP Unitholders, including
when conflicts of interest arise. For example, the agreements provide that the
Managing General Partner, the BRELP General Partner and their affiliates do not
have any obligation under the Amended and Restated Limited Partnership
Agreements of BREP or the Amended and Restated Limited Partnership Agreement of
BRELP, or as a result of any duties stated or implied by law or equity,
including fiduciary duties, to present business or investment opportunities to
BREP, BRELP, any Holding Entity or any other holding entity established by us. They
also allow affiliates of the Managing General Partner and BRELP General Partner
to engage in activities that may compete with us or our activities. Further,
when resolving conflicts of interest, neither the Amended and Restated Limited
Partnership Agreement of BREP nor the Amended and Restated Limited Partnership
Agreement of BRELP impose limitations on the discretion of the independent
directors or the factors which they may consider in resolving any such
conflicts. The independent directors of our Managing General Partner can
therefore take into account the interests of third parties, including
Brookfield, when resolving conflicts of interest. These modifications to the
fiduciary duties are detrimental to our LP Unitholders because they restrict
the remedies available for actions that might otherwise constitute a breach of
fiduciary duty and permit conflicts of interest to be resolved in a manner that
is not in the best interests of Brookfield Renewable or the best interests of
our LP Unitholders. See Item 7.B. “Related Party Transactions — Conflicts
of Interest and Fiduciary Duties”. Our
organizational and ownership structure may create significant conflicts of
interest that may be resolved in a manner that is not in the best interests of Brookfield Renewable
or the best interests of our LP Unitholders. Our organizational and ownership structure
involves a number of relationships that may give rise to conflicts of interest
between Brookfield Renewable and our LP Unitholders, on the one hand, and
Brookfield, on the other hand. In certain instances, the interests of
Brookfield may differ from the interests of Brookfield Renewable and our LP
Unitholders, including with respect to the types of acquisitions made, the
timing and amount of distributions by BREP, the reinvestment of returns
generated by our operations, the use of leverage when making acquisitions and
the appointment of outside advisers and service providers, including as a
result of the reasons described under Item 7.B “Related Party Transactions”. In addition, the Service Provider, an
affiliate of Brookfield, will provide management services to us pursuant to our
Master Services Agreement. Pursuant to our Master Services Agreement, we pay an
annual Base Management Fee to the Service Provider equal to $20 million (which
amount is annually adjusted for inflation, with the first adjustment having
been made on January 1, 2013, at an inflation factor based on year over
year United States consumer price index) plus 1.25% of the amount by which the
Total Capitalization Value exceeds an initial reference value determined based
on its market capitalization on November 28, 2011. In the event that the
measured Total Capitalization Value in a given period is less than the initial
reference value, the Service Provider will receive only the Base Management Fee
of $20 million annually (subject to an annual escalation by the specified
inflation factor described above). The Base Management Fee is calculated and
paid on a quarterly basis. BRELP GP LP will also receive incentive
distributions based on the amount by which quarterly distributions on the
limited partnership units of BRELP exceed specified target levels as set forth
in the Amended and Restated Limited Partnership Agreement of BRELP. For a
further explanation of the Base Management Fee and incentive distributions, see
Item 6.A “Directors and Senior Management — Our Master Services Agreement
— Management Fee” and Item 7.B “Related Party Transactions — Incentive
Distributions”. This relationship may give rise to conflicts of interest
between us and our LP Unitholders, on the one hand, and Brookfield, on the
other, as Brookfield’s interests may differ from the interests of Brookfield
Renewable and our LP Unitholders. The Managing General Partner, the sole shareholder
of which is Brookfield, has sole authority to determine whether we will make
distributions and the amount and timing of these distributions. The
arrangements we have with Brookfield may create an incentive for Brookfield to
take actions which would have the effect of increasing distributions and fees
payable to it, which may be to the detriment of us and Page33


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 our
LP Unitholders. For example, because the Base Management Fee is calculated
based on the Total Capitalization Value it may create an incentive for
Brookfield to increase or maintain the Total Capitalization Value over the
near-term when other actions may be more favorable to us or our LP Unitholders.
Similarly, Brookfield may take actions to increase our distributions in order
to ensure Brookfield is paid incentive distributions in the near-term when
other investments or actions may be more favorable to us or our LP Unitholders.
Also, through Brookfield’s ownership of our LP Units and the
Redeemable/Exchangeable partnership units, it currently has an effective
economic interest in our business of approximately 62% and therefore may be
incented to increase distributions payable to our LP Unitholders and thereby to
Brookfield. The
Managing General Partner may be unable or unwilling to terminate our Master
Services Agreement. Our Master Services Agreement provides that
the Service Recipients may terminate the agreement only if: the Service
Provider defaults in the performance or observance of any material term,
condition or covenant contained in the agreement in a manner that results in
material harm to the Service Recipients and the default continues unremedied
for a period of 60 days after written notice of the breach is given to the
Service Provider; the Service Provider engages in any act of fraud, misappropriation
of funds or embezzlement against any Service Recipient that results in material
harm to us; the Service Provider is grossly negligent in the performance of its
duties under the agreement and such negligence results in material harm to the
Service Recipients; or upon the happening of certain events relating to the
bankruptcy or insolvency of the Service Provider. The Managing General Partner
cannot terminate the agreement for any other reason, including if the Service
Provider or Brookfield experiences a change of control or due solely to the
poor performance or under-performance of Brookfield Renewable’s operations or
assets, and the agreement continues in perpetuity, until terminated in
accordance with its terms. In addition, because the Managing General Partner is
an affiliate of Brookfield, it may be unwilling to terminate our Master
Services Agreement, even in the case of a default. If the Service Provider’s
performance does not meet the expectations of investors, and the Managing
General Partner is unable or unwilling to terminate our Master Services
Agreement, the market price of our LP Units could suffer. Furthermore, the
termination of our Master Services Agreement would terminate BREP’s rights
under the Relationship Agreement and the Licensing Agreement. See Item 7.B
“Related Party Transactions — Relationship Agreement” and Item 7.B
“Related Party Transactions — Licensing Agreement”. The
liability of the Service Provider is limited under our arrangements with it and
we have agreed to indemnify the Service Provider against claims that it may
face in connection with such arrangements, which may lead it to assume greater
risks when making decisions relating to us than it otherwise would if acting
solely for its own account. Under our Master Services Agreement, the
Service Provider has not assumed any responsibility other than to provide or
arrange for the provision of the services described in our Master Services
Agreement in good faith and will not be responsible for any action that the Managing
General Partner takes in following or declining to follow its advice or
recommendations. In addition, under the Amended and Restated Limited
Partnership Agreement of BREP, the liability of the Managing General Partner
and its affiliates, including the Service Provider, is limited to the fullest
extent permitted by law to conduct involving gross negligence, bad faith, fraud
or willful misconduct or, in the case of a criminal matter, action that was
known to have been unlawful. The liability of the Service Provider under our
Master Services Agreement is similarly limited. In addition, BREP has agreed to
indemnify the Service Provider to the fullest extent permitted by law from and
against any claims, liabilities, losses, damages, costs or expenses incurred by
an indemnified person or threatened in connection with our operations,
investments and activities or in respect of or arising from our Master Services
Agreement or the services provided by the Service Provider, except to the
extent that the claims, liabilities, losses, damages, costs or expenses are
determined to have resulted from the conduct in respect of which such persons
have liability as described above. These protections may result in the Service
Provider tolerating greater risks when making decisions than otherwise would be
the case, including when determining whether to use leverage in connection with
acquisitions. The indemnification arrangements to which the Service Provider is
a party may also give rise to legal claims for indemnification that are adverse
to Brookfield Renewable and our LP Unitholders. Page34


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 Risks Related to Our LP Units We
may need additional funds in the future and BREP may issue additional LP Units
in lieu of incurring indebtedness which may dilute existing holders of our LP
Units or BREP may issue securities that have rights and privileges that are
more favorable than the rights and privileges accorded to our LP Unitholders. Under the Amended and Restated Limited
Partnership Agreement of BREP, BREP may issue additional partnership
securities, including LP Units and options, rights, warrants and appreciation
rights relating to partnership securities for any purpose and for such
consideration and on such terms and conditions as the Managing General Partner
may determine. The Managing General Partner’s board of directors will be able
to determine the class, designations, preferences, rights, powers and duties of
any additional partnership securities, including any rights to share in BREP’s
profits, losses and distributions, any rights to receive partnership assets
upon a dissolution or liquidation of BREP and any redemption, conversion and
exchange rights. The Managing General Partner may use such authority to issue
additional LP Units, which could dilute holders of our LP Units, or to issue
securities with rights and privileges that are more favorable than those of our
LP Units. Holders of LP Units do not have any pre-emptive right or any right to
consent to or otherwise approve the issuance of any such securities or the
terms on which any such securities may be issued. Our
LP Unitholders do not have a right to vote on BREP matters or to take part in
the management of BREP. Under the Amended and Restated Limited
Partnership Agreement of BREP, our LP Unitholders are not entitled to vote on
matters relating to BREP, such as acquisitions, dispositions or financing, or
to participate in the management or control of BREP. In particular, our LP
Unitholders do not have the right to remove the Managing General Partner, to
cause the Managing General Partner to withdraw from BREP, to cause a new
general partner to be admitted to BREP, to appoint new directors to the
Managing General Partner’s board of directors, to remove existing directors
from the Managing General Partner’s board of directors or to prevent a change
of control of the Managing General Partner. In addition, except as prescribed
by applicable laws, our LP Unitholders’ consent rights apply only with respect
to certain amendments to the Amended and Restated Limited Partnership Agreement
of BREP. As a result, unlike holders of common shares of a corporation, our LP
Unitholders are not able to influence the direction of BREP, including its
policies and procedures, or to cause a change in its management, even if they
are unsatisfied with the performance of BREP. Consequently, our LP Unitholders
may be deprived of an opportunity to receive a premium for their LP Units in
the future through a sale of BREP and the trading price of our LP Units may be
adversely affected by the absence or a reduction of a takeover premium in the
trading price. The
market price of our LP Units may be volatile. The market price of our LP Units may be
highly volatile and could be subject to wide fluctuations. Some of the factors
that could negatively affect the price of our LP Units include: general market
and economic conditions, including disruptions, downgrades, credit events and
perceived problems in the credit markets; actual or anticipated variations in
our quarterly operating results or distributions; changes in our investments or
asset composition; write-downs or perceived credit or liquidity issues
affecting our assets; market perception of BREP, our business and our assets;
our level of indebtedness and/or adverse market reaction to any indebtedness we
incur in the future; our ability to raise capital on favorable terms; loss of
any major funding source; the termination of our Master Services Agreement or
additions or departures of our or Brookfield’s key personnel; changes in market
valuations of similar renewable power companies; speculation in the press or
investment community regarding us or Brookfield; and changes in U.S. tax laws
that make it impractical or impossible for BREP to continue to be taxable as a
partnership for U.S. federal income tax purposes. Securities markets in general have
experienced extreme volatility that has often been unrelated to the operating
performance of particular companies or partnerships. Any broad market
fluctuations may adversely affect the trading price of our LP Units. Non-U.S.
Holders may be subject to foreign currency risk associated with BREP’s
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 A significant number
of BREP’s LP Unitholders may reside in countries where the U.S. dollar is not
the functional currency. Our distributions are denominated in U.S. dollars but
may be settled in the local currency of the LP Unitholder receiving the
distribution. For each Non-U.S. Holder, the value received in the local
currency from the distribution will be determined based on the exchange rate
between the U.S. dollar and the applicable local currency at such time. As
such, if the U.S. dollar depreciates significantly against the local currency
of the Non-U.S. Holder, the value received by such LP Unitholder in its local
currency will be adversely affected. U.S.
investors in our LP Units may find it difficult or impossible to enforce
service of process and enforcement of judgments against us and directors and
officers of the Managing General Partner and the Service Provider. We were established under the laws of
Bermuda, and many of our subsidiaries are organized in jurisdictions outside of
Canada and the United States. In addition, our executive officers and the
experts identified in this Form 20-F are located outside of the United States
and some are also located outside of Canada. Certain of the directors and
officers of the Managing General Partner and the Service Provider reside
outside of the United States. A substantial portion of our assets are, and the
assets of the directors and officers of the Managing General Partner and the
Service Provider and the experts identified in this Form 20-F may be, located
outside of Canada and the United States. It may not be possible for investors
to effect service of process within the United States or within Canada upon the
directors and officers of the Managing General Partner and the Service
Provider. It may also not be possible to enforce against us, the experts
identified in this Form 20-F or the directors and officers of the Managing
General Partner and the Service Provider judgments, obtained in Canadian or
U.S. courts predicated upon the civil liability provisions of securities laws
in Canada or the United States as applicable. We
may not be able to continue paying comparable or growing cash distributions to
our LP Unitholders in the future. The amount of cash we can distribute to our
LP Unitholders depends upon the amount of cash we receive from BRELP and,
indirectly, the Holding Entities and the Operating Entities. The amount of cash
BRELP, the Holding Entities and the Operating Entities generate will fluctuate
from quarter to quarter and will depend upon, among other things: the weather
in the jurisdictions in which they operate; the level of their operating costs;
and prevailing economic conditions. In addition, the actual amount of cash we
will have available for distribution will also depend on other factors, such
as: the level of costs related to litigation and regulatory compliance matters;
the cost of acquisitions, if any; our debt service requirements; fluctuations
in our working capital needs; our ability to borrow under our credit
facilities; our ability to access capital markets; restrictions on
distributions contained in our debt agreements; and the amount, if any, of cash
reserves established by our Managing General Partner in its discretion for the
proper conduct of our business. As a result of all these factors, we cannot
guarantee that we will have sufficient available cash to pay a specific level
of cash distributions to our LP Unitholders. Furthermore, our LP Unitholders
should be aware that the amount of cash we have available for distribution
depends primarily upon the cash flow of BRELP, the Holding Entities and the
Operating Entities, and is not solely a function of profitability, which is
affected by non-cash items. As a result, we may declare and/or pay cash
distributions during periods when we record net losses. We
rely on BRELP and, indirectly, the Holding Entities and the Operating Entities
to provide us with the funds necessary to pay distributions and meet our
financial obligations. BREP’s sole direct investment is its limited
partnership interest in BRELP, which owns all of the common shares or equity
interests, as applicable, of the Holding Entities, through which we hold all of
our interests in the Operating Entities. We have no independent means of
generating revenue. As a result, we depend on distributions and other payments
from BRELP and, indirectly, the Holding Entities and the Operating Entities to
provide us with the funds necessary to pay distributions on our LP Units and to
meet our financial obligations. BRELP, the Holding Entities and the Operating
Entities are legally distinct from BREP and they will generally be required to
service their debt obligations before making distributions to us or their
parent entity, as applicable, thereby reducing the amount of our cash flow
available to pay distributions on our LP Units, fund working capital and
satisfy other needs. Any other entities through which we may conduct operations
in the future will also be legally distinct from BREP and may be Page36


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 restricted in their ability to pay dividends and
distributions or otherwise make fund available to us under certain conditions. We anticipate that the only distributions we
will receive in respect of our limited partnership interests in BRELP will
consist of amounts that are intended to assist us in making distributions to
our LP unitholders in accordance with our distribution policy and to allow us
to pay expenses as they become due. Risks
Related to Taxation General Changes
in tax law and practice may have a material adverse effect on the operations of
BREP, the Holding Entities, and the Operating Entities and, as a consequence,
the value of BREP’s assets and the net amount of distributions payable to LP
Unitholders. The Brookfield Renewable structure, including
the structure of the Holding Entities and the Operating Entities, is based on
prevailing taxation law and practice in the local jurisdictions (such as
Canada, the United States, Brazil, the Republic of Ireland and Northern
Ireland) in which Brookfield Renewable operates. Any change in tax legislation
(including in relation to taxation rates) and practice in these jurisdictions
could adversely affect these entities, as well as the net amount of distributions
payable to LP Unitholders. Taxes and other constraints that would apply to the
Brookfield Renewable entities in such jurisdictions may not apply to local
institutions or other parties, and such parties may therefore have a
significantly lower effective cost of capital and a corresponding competitive
advantage in pursuing such acquisitions. BREP’s
ability to make distributions depends on it receiving sufficient cash
distributions from its underlying operations, and BREP cannot assure LP
Unitholders that it will be able to make cash distributions to them in amounts
that are sufficient to fund their tax liabilities, in which case certain LP
Unitholders may be required to pay income taxes on their share of BREP’s income
even though they have not received sufficient cash distributions from BREP. The Holding Entities and Operating Entities
of BREP may be subject to local taxes in each of the relevant territories and
jurisdictions in which they operate, including taxes on income, profits or
gains and withholding taxes. As a result, BREP’s cash available for
distribution is indirectly reduced by such taxes, and the post-tax return to LP
Unitholders is similarly reduced by such taxes. BREP intends for future
acquisitions to be assessed on a case-by-case basis and, where possible and
commercially viable, structured so as to minimize any adverse tax consequences
to LP Unitholders as a result of making such acquisitions. In general, an LP Unitholder that is subject
to income tax in Canada or the United States must include in income its
allocable share of BREP’s items of income, gain, loss, and deduction
(including, so long as it is treated as a partnership for tax purposes, BREP’s
allocable share of those items of BRELP) for each of BREP’s fiscal years ending
with or within such LP Unitholder’s tax year. See Item 10.E “Taxation —
Material Canadian Federal Income Tax Considerations” and “Taxation — Material
U.S. Federal Income Tax Considerations”. However, the cash distributed to an LP
Unitholder may not be sufficient to pay the full amount of such LP Unitholder’s
tax liability in respect of its investment in BREP, because each LP
Unitholder’s tax liability depends on such holder’s particular tax situation.
If BREP is unable to distribute cash in amounts that are sufficient to fund our
LP Unitholders’ tax liabilities, each of our LP Unitholders will still be
required to pay income taxes on its share of BREP’s taxable income. As
a result of holding LP Units, LP Unitholders may be subject to U.S. state,
local or non-U.S. taxes and return filing obligations in jurisdictions in which
they are not resident for tax purposes or otherwise not subject to tax. LP Unitholders may be subject to U.S. state,
local, and non-U.S. taxes, including unincorporated business taxes and estate,
inheritance or intangible taxes that are imposed by the various jurisdictions
in which BREP entities do business or own property now or in the future, even
if LP Unitholders do not reside in any of those jurisdictions. LP Unitholders
may be required to file income tax returns and pay income taxes in some or all
of these jurisdictions. Further, LP Unitholders may be subject to penalties for
failure to comply with these requirements. Although BREP will attempt, to the
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 practicable, to structure BREP
operations and investments so as to minimize income tax filing obligations by
LP Unitholders in such jurisdictions, there may be circumstances in which BREP
is unable to do so. It is the responsibility of each LP Unitholder to file all
U.S. federal, state, local, and non-U.S. tax returns that may be required of
such LP Unitholder. LP
Unitholders may be exposed to transfer pricing risks. To the extent that BREP, BRELP, the Holding
Entities or the Operating Entities enter into transactions or arrangements with
parties with whom they do not deal at arm’s length, including Brookfield,
pursuant to the applicable law relating to transfer pricing, the relevant tax
authorities may seek to adjust the quantum or nature of the amounts received or
paid by such entities if they consider that the terms and conditions of such
transactions or arrangements differ from those that would have been made between
persons dealing at arm’s length and could impose penalties for failing to
comply with applicable law relating to transfer pricing. This could result in
more tax (and penalties and interest) being paid by such entities, and
therefore the return to investors could be reduced. For Canadian tax purposes,
a transfer pricing adjustment may in certain circumstances result in additional
income being allocated to an LP Unitholder with no corresponding cash
distribution or in a dividend being deemed to be paid by a Canadian resident to
a non-arm’s length non-resident, which deemed dividend is subject to Canadian
withholding tax. The Managing General Partner and the BRELP
General Partner believe the fees charged by or paid to non-arm’s length persons
are consistent with applicable law relating to transfer pricing, however, no
assurance can be given in this regard. The
IRS or the CRA may not agree with certain assumptions and conventions that BREP
uses in order to comply with applicable U.S. and Canadian federal income tax
laws or that BREP uses to report income, gain, loss, deduction, and credit to
LP Unitholders. BREP will apply certain assumptions and
conventions in order to comply with applicable tax laws and to report income,
gain, deduction, loss, and credit to an LP Unitholder in a manner that reflects
such LP Unitholder’s beneficial ownership of partnership items, taking into
account variation in ownership interests during each taxable year because of
trading activity. A successful IRS or CRA challenge to such assumptions or
conventions could adversely affect the amount of tax benefits available to LP
Unitholders and could require that items of income, gain, deduction, loss, or
credit be adjusted, reallocated or disallowed in a manner that adversely
affects LP Unitholders. See Item 10.E “Taxation”. United
States If
either BREP or BRELP were to be treated as a corporation for U.S. federal
income tax purposes, the value of LP Units might be adversely affected. The value of LP Units to LP Unitholders will
depend in part on the treatment of BREP and BRELP as partnerships for U.S.
federal income tax purposes. However, in order for BREP to be treated as a
partnership for U.S. federal income tax purposes, under present law, 90% or
more of BREP’s gross income for every taxable year must consist of qualifying
income, as defined in Section 7704 of the U.S. Internal Revenue Code, and the
partnership must not be required to register, if it were a U.S. corporation, as
an investment company under the Investment Company Act and related rules.
Although the Managing General Partner intends to manage BREP’s affairs so that
BREP will not need to be registered as an investment company if it were a U.S.
corporation and so that it will meet the 90% test described above in each
taxable year, BREP may not meet these requirements, or current law may change
so as to cause, in either event, BREP to be treated as a corporation for U.S.
federal income tax purposes. If BREP (or BRELP) were treated as a corporation
for U.S. federal income tax purposes, adverse tax consequences could result for
LP Unitholders and BREP (or BRELP, as applicable), as described in greater
detail in Item 10.E “Taxation — Material U.S. Federal Income Tax Considerations
— Partnership Status of BREP and BRELP”. BREP
may be subject to U.S. backup withholding tax if any LP Unitholder fails to
comply with U.S. federal tax reporting rules, and such excess withholding tax
cost will be an expense borne by BREP and, therefore, by all of our LP
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 BREP may become
subject to U.S. backup withholding tax with respect to any LP Unitholder who
fails to timely provide BREP (or the applicable intermediary) with an IRS Form
W-9 or IRS Form W-8, as applicable. See Item 10.E “Taxation — Material U.S.
Federal Income Tax Considerations — Administrative Matters — Backup
Withholding”. To the extent that any LP Unitholder fails to timely provide the
applicable form (or such form is not properly completed), BREP might treat such
U.S. backup withholding taxes as an expense, which would be borne indirectly by
all LP Unitholders on a pro rata basis (including LP Unitholders that fully
comply with their U.S. tax reporting obligations). Tax-exempt
organizations may face certain adverse U.S. tax consequences from owning LP
Units. The Managing General Partner and the BRELP
General Partner intend to use commercially reasonable efforts to structure the
activities of BREP and BRELP, respectively, to avoid generating income
connected with the conduct of a trade or business (which income generally would
constitute “unrelated business taxable income” (“UBTI”) to the extent
allocated to a tax-exempt organization). However, no assurance can be provided
that neither BREP nor BRELP will generate UBTI in the future. In particular,
UBTI includes income attributable to debt-financed property, and neither BREP
nor BRELP is prohibited from financing the acquisition of property with debt.
In addition, even if indebtedness were not used by BREP or BRELP to acquire
property but were instead used to fund distributions to LP Unitholders, if a
tax-exempt organization were to use such proceeds to make an investment outside
BREP, the IRS could assert that such investment constituted debt-financed
property to such LP Unitholder. The potential for income to be characterized as
UBTI could make LP Units an unsuitable investment for a tax-exempt
organization. Each tax-exempt organization should consult an independent tax
adviser to determine the U.S. federal income tax consequences with respect to
an investment in LP Units. If
BREP were engaged in a U.S. trade or business, non-U.S. persons would face
certain adverse U.S. tax consequences from owning LP Units. The Managing General Partner and the BRELP
General Partner intend to use commercially reasonable efforts to structure the
activities of BREP and BRELP, respectively, to avoid generating income treated
as effectively connected with a U.S. trade or business, including effectively
connected income attributable to the sale of a “United States real property interest”,
as defined in the U.S. Internal Revenue Code. If, contrary to the Managing
General Partner’s expectations, BREP is considered to be engaged in a U.S.
trade or business or realizes gain from the sale or other disposition of a
United States real property interest, non-U.S. LP Unitholders would be required
to file U.S. federal income tax returns and would be subject to U.S. federal
withholding tax at the regular graduated rates. To
meet U.S. federal income tax and other objectives, BREP and BRELP may invest
through U.S. and non-U.S. Holding Entities that are treated as corporations for
U.S. federal income tax purposes, and such Holding Entities may be subject to
corporate income tax. To meet U.S. federal income tax and other
objectives, BREP and BRELP may invest through U.S. and non-U.S. Holding
Entities that are treated as corporations for U.S. federal income tax purposes,
and such Holding Entities may be subject to corporate income tax. Consequently,
items of income, gain, loss, deduction, or credit realized in the first
instance by the Operating Entities will not flow, for U.S. federal income tax
purposes, directly to BRELP, BREP, or LP Unitholders, and any such income or
gain may be subject to a corporate income tax, in the United States or other
jurisdictions, at the level of the Holding Entity. Any such additional taxes
may adversely affect BREP’s ability to maximize its cash flow. LP
Unitholders taxable in the United States may be viewed as holding an indirect
interest in an entity classified as a PFIC for U.S. federal income tax
purposes. U.S. Holders may face adverse U.S. tax
consequences arising from the ownership of a direct or indirect interest in a
PFIC. Based on the organizational structure of BREP, as well as BREP’s expected
income and assets, the Managing General Partner and the BRELP General Partner
currently believe that a U.S. Holder is unlikely to be regarded as owning an
interest in a PFIC solely by reason of owning LP Units during the taxable year
ending December 31, 2015. However, there can be no assurance that an existing
BREP entity or a future entity in which BREP acquires an interest will not be
classified as a PFIC with respect to a U.S. Holder, because PFIC status is a
factual determination that depends on the assets and income of a given entity
and must be made on an annual basis. In general, gain realized by a U.S. Page39


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 Holder from the sale of stock of a PFIC is subject to tax
at ordinary income rates, and an interest charge generally applies.
Alternatively, a U.S. Holder that makes certain elections with respect to a
direct or indirect interest in a PFIC may be required to recognize taxable
income prior to the receipt of cash relating to such income. The adverse
consequences of owning an interest in a PFIC, as well as certain tax elections
for mitigating these adverse consequences, are described in greater detail in
Item 10.E “Taxation — Material U.S. Federal Income Tax Considerations —
Consequences to U.S. Holders — Passive Foreign Investment Companies”. Each U.S.
Holder should consult an independent tax adviser regarding the implication of
the PFIC rules for an investment in LP Units. Tax
gain or loss from the disposition of LP Units could be more or less than
expected. If a sale of LP Units by an LP Unitholder is
taxable in the United States, the LP Unitholder will recognize gain or loss for
U.S. federal income tax purposes equal to the difference between the amount
realized and the LP Unitholder’s adjusted tax basis in those LP Units. Prior
distributions to an LP Unitholder in excess of the total net taxable income
allocated to such LP Unitholder will have decreased such holder’s tax basis in
its LP Units. Therefore, such excess distributions will increase an LP
Unitholder’s taxable gain or decrease such holder’s taxable loss when our LP
Units are sold, and may result in a taxable gain even if the sale price is less
than the original cost. A portion of the amount realized, whether or not
representing gain, could be ordinary income to such LP Unitholder. The
Brookfield Renewable structure involves complex provisions of U.S. federal
income tax law for which no clear precedent or authority may be available. The
tax characterization of the Brookfield Renewable structure is also subject to
potential legislative, judicial, or administrative change and differing
interpretations, possibly on a retroactive basis. The U.S. federal income tax treatment of LP
Unitholders depends in some instances on determinations of fact and
interpretations of complex provisions of U.S. federal income tax law for which
no clear precedent or authority may be available. LP Unitholders should be
aware that the U.S. federal income tax rules, particularly those applicable to
partnerships, are constantly under review (including currently) by the
Congressional tax-writing committees and other persons involved in the
legislative process, the IRS, the U.S. Treasury Department and the courts,
frequently resulting in revised interpretations of established concepts,
statutory changes, revisions to regulations and other modifications and
interpretations, any of which could adversely affect the value of LP Units and
be effective on a retroactive basis. For example, changes to the U.S. federal
tax laws and interpretations thereof could make it more difficult or impossible
for BREP to be treated as a partnership that is not taxable as a corporation
for U.S. federal income tax purposes, change the character or treatment of
portions of BREP’s income, reduce the net amount of distributions available to
LP Unitholders, or otherwise affect the tax considerations of owning LP Units.
In addition, BREP’s organizational documents and agreements permit the Managing
General Partner to modify the limited partnership agreement of BREP from time
to time, without the consent of our LP Unitholders, to address such changes. In
some circumstances, such revisions could have a material adverse impact on some
or all LP Unitholders. BREP’s
delivery of required tax information for a taxable year may be subject to
delay, which could require an LP Unitholder who is a U.S. taxpayer to request
an extension of the due date for such LP Unitholder’s income tax return. BREP has agreed to use commercially
reasonable efforts to provide U.S. tax information (including IRS Schedule K-1
information needed to determine an LP Unitholder’s allocable share of BREP’s
income, gain, losses and deductions) no later than 90 days after the close of
each calendar year. However, providing this U.S. tax information to LP
Unitholders will be subject to delay in the event of, among other reasons, the
late receipt of any necessary tax information from lower-tier entities. It is
therefore possible that, in any taxable year, an LP Unitholder will need to
apply for an extension of time to file such LP Unitholder’s tax returns. See
Item 10.E “Taxation — Material U.S. Federal Income Tax Considerations —
Administrative Matters — Information Returns”. The
sale or exchange of 50% or more of our LP Units will result in the constructive
termination of BREP for U.S. federal income tax purposes. BREP will be considered to have been
terminated for U.S. federal income tax purposes if there is a sale or exchange
of 50% or more of our LP Units within a 12-month period. A constructive
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 of BREP would, among other things, result
in the closing of its taxable year for U.S. federal income tax purposes for all
LP Unitholders and could result in the possible acceleration of income to
certain LP Unitholders and certain other consequences that could adversely
affect the value of LP Units. However, the Managing General Partner does not
expect a constructive termination, should it occur, to have a material impact
on the computation of the future taxable income generated by BREP for U.S.
income tax purposes. See Item 10.E “Taxation — Material U.S. Federal Income Tax
Considerations — Administrative Matters — Constructive Termination”. Under
FATCA, certain payments made or received by BREP could be subject to a 30%
federal withholding tax, unless certain requirements are met. Under FATCA, a 30% withholding tax may apply
to certain payments of U.S.-source income made to BREP, BRELP, the Holding
Entities, or the Operating Entities, or by BREP to an LP Unitholder under
certain circumstances, unless certain requirements are met, as described in
greater detail in Item 10.E “Taxation – Material U.S. Federal Income Tax
Considerations – Administrative Matters – Foreign Account Tax Compliance”. The
30% withholding tax may also apply to certain payments made on or after January
1, 2017 that are attributable to U.S. source income or that constitute gross
proceeds from the disposition of property that could produce U.S. source
dividends or interest. To ensure compliance with FATCA, information regarding
certain LP Unitholders’ ownership of our LP Units may be reported to the U.S.
Internal Revenue Service or to a non-U.S. governmental authority. Each of our
LP Unitholders should consult an independent tax adviser regarding the
consequences under FATCA of an investment in LP Units. Canada The
Canadian federal income tax consequences to LP Unitholders could be materially
different in certain respects from those described in this Form 20-F if BREP or
BRELP is a “SIFT partnership” (as defined in the Tax Act). Under the rules in the Tax Act applicable to
a “SIFT partnership” (the “SIFT Rules”), certain income and gains earned
by a “SIFT partnership” are subject to income tax at the partnership level at a
rate similar to a corporation and allocations of such income and gains to its
partners are taxed as a dividend from a taxable Canadian corporation. In
particular, a “SIFT partnership” will be required to pay a tax on the total of
its income from businesses carried on in Canada, income from “non-portfolio
properties” (as defined in the Tax Act) other than taxable dividends, and
taxable capital gains from dispositions of “non-portfolio properties”.
“Non-portfolio properties” include, among other things, equity interests or
debt of corporations, trusts or partnerships that are resident in Canada, and
of non-resident persons or partnerships the principal source of income of which
is one or any combination of sources in Canada, that are held by the “SIFT
partnership” and have a fair market value that is greater than 10% of the
equity value of such entity, or that have, together with debt or equity that
the “SIFT partnership” holds of entities affiliated (within the meaning of the
Tax Act) with such entity, an aggregate fair market value that is greater than
50% of the equity value of the “SIFT partnership”. The tax rate applied to the
above mentioned sources of income and gains is set at a rate equal to the “net
corporate income tax rate”, plus the “provincial SIFT tax rate” (each as
defined in the Tax Act). A partnership will be a “SIFT partnership”
throughout a taxation year if at any time in the taxation year (i) it is a
“Canadian resident partnership” (as defined in the Tax Act), (ii) “investments”
(as defined in the Tax Act) in the partnership are listed or traded on a stock
exchange or other public market, and (iii) it holds one or more “non-portfolio
properties”. For these purposes, a partnership will be a “Canadian resident
partnership” at a particular time if (a) it is a “Canadian partnership” (as
defined in the Tax Act) at that time, (b) it would, if it were a corporation,
be resident in Canada (including, for greater certainty, a partnership that has
its central management and control located in Canada), or (c) it was formed
under the laws of a province. A “Canadian partnership” for these purposes is a
partnership all of whose members are resident in Canada or are partnerships
that are “Canadian partnerships”. Under the SIFT Rules, BREP and BRELP could
each be a “SIFT partnership” if it is a “Canadian resident partnership”.
However, BRELP would not be a “SIFT partnership” if BREP is a “SIFT partnership”
regardless of whether BRELP is a “Canadian resident partnership” on the basis
that BRELP would be an “excluded subsidiary entity” (as defined in the Tax
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 BREP and BRELP will
be a “Canadian resident partnership” if the central management and control of
these partnerships is located in Canada. This determination is a question of
fact and is expected to depend on where the Managing General Partner and the
BRELP General Partner are located and exercise central management and control
of the respective partnerships. The Managing General Partner and the BRELP
General Partner will each take appropriate steps so that the central management
and control of these entities is not located in Canada such that the SIFT Rules
should not apply to BREP or BRELP at any relevant time. However, no assurance
can be given in this regard. If BREP or BRELP is a “SIFT partnership”, the
Canadian federal income tax consequences to our LP Unitholders could be
materially different in certain respects from those described in Item 10.E
“Taxation — Material Canadian Federal Income Tax Considerations”. In addition,
there can be no assurance that the SIFT Rules will not be revised or amended in
the future such that the SIFT Rules will apply. If
the subsidiaries that are corporations and that are not resident or deemed to
be resident in Canada for purposes of the Tax Act (“Non-Resident Subsidiaries”)
and that are “controlled foreign affiliates” (as defined in the Tax Act and
referred to in this Form 20-F as CFAs) in which BRELP directly invests
earned income that is “foreign accrual property income” (as defined in the Tax
Act and referred to in this Form 20-F as “FAPI”), our LP Unitholders may be
required to include amounts allocated from BREP in computing their income for
Canadian federal income tax purposes even though there may be no corresponding
cash distribution. Any Non-Resident Subsidiaries in which BRELP
directly invests are expected to be CFAs of BRELP. If any CFA of BRELP or any
direct or indirect subsidiary thereof that itself is a CFA of BRELP (an“Indirect
CFA”) earns income that is characterized as FAPI in a particular
taxation year of the CFA or Indirect CFA, the FAPI allocable to BRELP must be
included in computing the income of BRELP for Canadian federal income tax
purposes for the fiscal period of BRELP in which the taxation year of that CFA
or Indirect CFA ends, whether or not BRELP actually receives a distribution of
that FAPI. BREP will include its share of such FAPI of BRELP in computing its
income for Canadian federal income tax purposes and LP Unitholders will be
required to include their proportionate share of such FAPI allocated from BREP
in computing their income for Canadian federal income tax purposes. As a
result, LP Unitholders may be required to include amounts in their income for
Canadian federal income tax purposes even though they have not and may not
receive an actual cash distribution of such amounts. The Tax Act contains
anti-avoidance rules to address certain foreign tax credit generator
transactions (the“Foreign Tax Credit Generator Rules”).
Under the Foreign Tax Credit Generator Rules, the “foreign accrual tax” (as defined
in the Tax Act) applicable to a particular amount of FAPI included in BRELP’s
income in respect of a particular CFA of BRELP may be limited in certain
specified circumstances. See Item 10.E “Taxation — Material Canadian Federal
Income Tax Considerations”. LP
Unitholders may be required to include imputed amounts in their income for
Canadian federal income tax purposes in accordance with section 94.1 of the Tax
Act. Section 94.1 of the Tax Act contains rules
relating to investments in entities that are not resident in Canada or deemed
to be resident for purposes of the Tax Act or not situated in Canada, other
than a CFA of the taxpayer (“Non-Resident Entities”), that could in
certain circumstances cause income to be imputed to LP Unitholders for Canadian
federal income tax purposes, either directly or by way of allocation of such
income imputed to BREP or to BRELP. See Item 10.E “Taxation — Material Canadian
Federal Income Tax Considerations”. Our
LP Units may not continue to be “qualified investments” under the Tax Act for
registered plans. Provided that our LP Units are listed on a
“designated stock exchange” (as defined in the Tax Act), which currently
includes the TSX and the NYSE, our LP Units will be “qualified investments”
under the Tax Act for a trust governed by a registered retirement savings plan
(“RRSP”), deferred profit sharing plan, registered retirement income
fund (“RRIF”), registered education savings plan, registered disability
savings plan, and tax-free savings account (“TFSA”). However, there can
be no assurance that tax laws relating to qualified investments will not be
changed. Taxes may be imposed in respect of the acquisition or holding of
non-qualified investments by such registered plans and certain other taxpayers
and with respect to the acquisition or holding of “prohibited investments” (as
defined in the Tax Act) by a TFSA or an RRSP or RRIF. Page42


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 Notwithstanding the
foregoing, a holder of a TFSA or an annuitant under an RRSP or RRIF, as the
case may be, will be subject to a penalty tax if our LP Units held in the TFSA,
RRSP or RRIF are a “prohibited investment” for the TFSA, RRSP or RRIF, as the
case may be. Generally, our LP Units will not be a “prohibited investment” if
the holder of the TFSA or the annuitant under the RRSP or RRIF, as applicable,
deals at arm’s length with BREP for purposes of the Tax Act and does not have a
“significant interest” (as defined in the Tax Act for the purposes of the
prohibited investment rules) in BREP. Prospective holders who intend to hold
our LP Units in a TFSA, RRSP or RRIF should consult with their own tax advisers
regarding the application of the foregoing “prohibited investment” rules having
regard to their particular circumstances. LP
Unitholders’ foreign tax credits for Canadian federal income tax purposes will
be limited if the Foreign Tax Credit Generator Rules apply in respect of the
foreign “business-income tax” or “non-business-income tax” (each as defined in
the Tax Act) paid by BREP or BRELP to the government of a foreign country. Under the Foreign Tax Credit Generator Rules,
the foreign “business-income tax” or “non-business-income tax” for Canadian
federal income tax purposes for any taxation year may be limited in certain
circumstances. If the Foreign Tax Credit Generator Rules apply, the allocation
to an LP Unitholder of foreign “business-income tax” or “non-business-income
tax” paid by BREP or BRELP, and therefore such LP Unitholder’s foreign tax
credits for Canadian federal income tax purposes, will be limited. See Item
10.E “Taxation — Material Canadian Federal Income Tax Considerations”. LP
Unitholders who are not and are not deemed to be resident in Canada for
purposes of the Tax Act and who do not use or hold and are not deemed to use or
hold their LP Units in connection with a business carried on in Canada
(“Non-Resident LP Unitholders”) may be subject to Canadian federal income tax
with respect to any Canadian source business income earned by BREP or BRELP if
BREP or BRELP were considered to carry on business in Canada. If BREP or BRELP were considered to carry on
business in Canada for purposes of the Tax Act, Non-Resident LP Unitholders
would be subject to Canadian federal income tax on their proportionate share of
any Canadian source business income earned or considered to be earned by BREP,
subject to the potential application of the safe harbor rule in section 115.2
of the Tax Act, and any relief that may be provided by any relevant income tax
treaty or convention. The
Managing General Partner and the BRELP General Partner intend to manage the
affairs of BREP and BRELP, to the extent possible, so that they do not carry on
business in Canada and are not considered or deemed to carry on business in
Canada for purposes of the Tax Act. Nevertheless, because the determination of
whether BREP or BRELP is carrying on business and, if so, whether that business
is carried on in Canada, is a question of fact that is dependent upon the
surrounding circumstances, the CRA might contend successfully that either or
both of BREP and BRELP carries on business in Canada for purposes of the Tax
Act. If BREP or BRELP is considered to carry on
business in Canada or is deemed to carry on business in Canada for the purposes
of the Tax Act, Non-Resident LP Unitholders that are corporations would be required
to file a Canadian federal income tax return for each taxation year in which
they are a Non-Resident LP Unitholder regardless of whether relief from
Canadian taxation is available under an applicable income tax treaty or
convention. Non-Resident LP Unitholders who are individuals would be required
to file a Canadian federal income tax return for any taxation year in which
they are allocated income from BREP from carrying on business in Canada that is
not exempt from Canadian taxation under the terms of an applicable income tax
treaty or convention. Non-Resident
LP Unitholders may be subject to Canadian federal income tax on capital gains
realized by BREP or BRELP on dispositions of “taxable Canadian property” (as
defined in the Tax Act). A Non-Resident LP Unitholder will be subject
to Canadian federal income tax on its proportionate share of capital gains
realized by BREP or BRELP on the disposition of “taxable Canadian property”
other than “treaty-protected property” (as defined in the Tax Act). “Taxable
Canadian property” includes, but is not limited to, property that is used or
held in a business carried on in Canada and shares of corporations that are not
listed on a “designated stock exchange” if more than 50% of the fair market
value of the Page43


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 shares is derived from certain Canadian
properties during the 60-month period immediately preceding the particular
time. Property of BREP and BRELP generally will be “treaty-protected property”
to a Non-Resident LP Unitholder if the gain from the disposition of the
property would, because of an applicable income tax treaty or convention, be
exempt from tax under the Tax Act. The Managing General Partner and the BRELP
General Partner do not expect BREP and BRELP to realize capital gains or losses
from dispositions of “taxable Canadian property”. However, no assurance can be
given in this regard. Non-Resident LP Unitholders will be required to file a
Canadian federal income tax return in respect of a disposition of “taxable
Canadian property” by BREP or BRELP unless the disposition is an “excluded
disposition” for the purposes of section 150 of the Tax Act. However,
Non-Resident LP Unitholders that are corporations will still be required to
file a Canadian federal income tax return in respect of a disposition of “taxable
Canadian property” that is an “excluded disposition” if tax would otherwise be
payable under Part I of the Tax Act by such Non-Resident LP Unitholders in
respect of the disposition but is not because of an applicable income tax
treaty or convention (otherwise than in respect of a disposition of “taxable
Canadian property” that is “treaty-protected property” of the corporation). In
general, an “excluded disposition” is a disposition of property by a taxpayer
in a taxation year where (a) the taxpayer is a non-resident of Canada at the
time of the disposition; (b) no tax is payable by the taxpayer under Part I of
the Tax Act for the taxation year; (c) the taxpayer is not liable to pay any
amounts under the Tax Act in respect of any previous taxation year (other than
certain amounts for which the CRA holds adequate security); and (d) each
“taxable Canadian property” disposed of by the taxpayer in the taxation year is
either (i) “excluded property” (as defined in subsection 116(6) of the Tax Act)
or (ii) property in respect of the disposition of which a certificate under
subsection 116(2), (4) or (5.2) of the Tax Act has been issued by the CRA.
Non-Resident LP Unitholders should consult their own tax advisers with respect
to the requirements to file a Canadian federal income tax return in respect of
a disposition of “taxable Canadian property” by BREP or BRELP. Non-Resident
LP Unitholders may be subject to Canadian federal income tax on capital gains
realized on the disposition of LP Units if our LP Units are “taxable Canadian
property”. Any capital gain arising from the disposition
or deemed disposition of LP Units by a Non-Resident LP Unitholder will be
subject to taxation in Canada, if, at the time of the disposition or deemed
disposition, our LP Units are “taxable Canadian property”, unless our LP Units
are “treaty-protected property” to such Non-Resident LP Unitholder. In general,
our LP Units will not constitute “taxable Canadian property” of any
Non-Resident LP Unitholder at the time of disposition or deemed disposition,
unless (a) at any time in the 60-month period immediately preceding the
disposition or deemed disposition, more than 50% of the fair market value of
our LP Units was derived, directly or indirectly, excluding through a
corporation, partnership or trust, the shares or interests in which were not
themselves “taxable Canadian property”), from one or any combination of (i)
real or immovable property situated in Canada, (ii) “Canadian resource
property” (as defined in the Tax Act), (iii) “timber resource property” (as
defined in the Tax Act), and (iv) options in respect of, or interests in, or
for civil law rights in, such property, whether or not such property exists, or
(b) our LP Units are otherwise deemed to be “taxable Canadian property”. Since
BREP’s assets will consist principally of units of BRELP, our LP Units would
generally be “taxable Canadian property” at a particular time, if the units of
BRELP held by BREP derived, directly or indirectly, excluding through a
corporation, partnership or trust, the shares or interests in which were not
themselves “taxable Canadian property”), more than 50% of their fair market
value from properties described in (i) to (iv) above, at any time in the
60-month period preceding the particular time. Our LP Units will be
“treaty-protected property” if the gain on the disposition of our LP Units is
exempt from tax under the Tax Act under the terms of an applicable income tax
treaty or convention. The Managing General Partner does not expect our LP Units
to be “taxable Canadian property” of any Non-Resident LP Unitholder at any time
but no assurance can be given in this regard. See Item 10.E “Taxation —
Material Canadian Federal Income Tax Considerations — Holders Not Resident in
Canada”. Even if our LP Units constitute “taxable Canadian property”, our LP
Units will be “treaty-protected property” if the gain on the disposition of our
LP Units is exempt from tax under the Tax Act under the terms of an applicable
income tax treaty or convention. If our LP Units constitute “taxable Canadian
property”, Non-Resident LP Unitholders will be required to file a Canadian
federal income tax return in respect of a disposition of our LP Units unless
the disposition is an “excluded disposition” (as discussed above). If our LP Units
constitute “taxable Canadian property”, Non-Resident LP Unitholders should
consult their own tax advisers with respect to the requirement to file a
Canadian federal income tax return in respect of a disposition of LP Units. Page44


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 Non-Resident LP Unitholders may be
subject to Canadian federal income tax reporting and withholding tax
requirements on the disposition of “taxable Canadian property”. Non-Resident LP Unitholders who dispose of
“taxable Canadian property”, other than “excluded property” and certain other
property described in subsection 116(5.2) of the Tax Act, (or who are
considered to have disposed of such property on the disposition of such
property by BREP or BRELP) are obligated to comply with the procedures set out
in section 116 of the Tax Act and obtain a certificate pursuant to the Tax Act.
In order to obtain such certificate, the Non-Resident LP Unitholder is required
to report certain particulars relating to the transaction to the CRA not later
than 10 days after the disposition occurs. The Managing General Partner and the
BRELP General Partner do not expect our LP Units to be “taxable Canadian
property” of any Non-Resident LP Unitholder and do not expect BREP or BRELP to
dispose of property that is “taxable Canadian property” but no assurance can be
given in these regards. Payments
of dividends or interest (other than interest exempt from Canadian federal
withholding tax) by residents of Canada to BRELP will be subject to Canadian
federal withholding tax and the payers may be unable to apply a reduced rate
taking into account the residency or entitlement to relief under an applicable
income tax treaty or convention of our LP Unitholders. BREP and BRELP will be deemed to be a
non-resident person in respect of certain amounts paid or credited or deemed to
be paid or credited to them by a person resident or deemed to be resident in
Canada, including dividends or interest. Dividends or interest (other than
interest exempt from Canadian federal withholding tax) paid or deemed to be
paid by a person resident or deemed to be resident in Canada to BRELP will be
subject to withholding tax under Part XIII of the Tax Act at the rate of 25%.
However, the CRA’s administrative practice in similar circumstances is to
permit the rate of Canadian federal withholding tax applicable to such payments
to be computed by looking through the partnership and taking into account the
residency of the partners (including partners who are resident in Canada) and
any reduced rates of Canadian federal withholding tax that any non-resident
limited partners may be entitled to under an applicable income tax treaty or
convention provided that the residency status and entitlement to treaty
benefits can be established. In determining the rate of Canadian federal
withholding tax applicable to amounts paid by the Holding Entities to BRELP,
the Managing General Partner and the BRELP General Partner expect the Holding
Entities to look-through BRELP and BREP to the residency of BREP’s partners
(including partners who are resident in Canada) and to take into account any
reduced rates of Canadian federal withholding tax that non-resident partners
may be entitled to under an applicable income tax treaty or convention in order
to determine the appropriate amount of Canadian federal withholding tax to
withhold from dividends or interest paid to BRELP. However, there can be no
assurance that the CRA would apply its administrative practice in this context.
If the CRA’s administrative practice is not applied and the Holding Entities
withhold Canadian federal withholding tax from applicable payments on a
look-through basis, the Holding Entities may be liable for additional amounts
of Canadian federal withholding tax plus any associated interest and penalties.
Under the Treaty, a Canadian-resident payer is required in certain
circumstances to look-through fiscally transparent partnerships, such as BREP
and BRELP, to the residency and Treaty entitlements of their partners and take
into account the reduced rates of Canadian federal withholding tax that such
partners may be entitled to under the Treaty. Under the Amended and Restated
Limited Partnership Agreement of BREP, the amount of any taxes withheld or paid
by BREP, BRELP or the Holding Entities in respect of our LP Units may be
treated either as a distribution to our LP Unitholders or as a general expense
of BREP as determined by the Managing General Partner in its sole discretion.
However, it is the current intention of the Managing General Partner to treat
all such amounts as a distribution to our LP Unitholders. While the Managing General Partner and the
BRELP General Partner expect the Holding Entities to look-through BREP and
BRELP in determining the rate of Canadian federal withholding tax applicable to
amounts paid or deemed to be paid by the Holding Entities to BRELP, we may be
unable to accurately or timely determine the residency of our LP Unitholders
for purposes of establishing the extent to which Canadian federal withholding
taxes apply or whether reduced rates of withholding tax apply to some or all of
our LP Unitholders. In such a case, the Holding Entities will withhold Canadian
federal withholding tax from all payments made to BRELP that are subject to
Canadian federal withholding tax at the rate of 25%. Canadian-resident LP
Unitholders will be entitled to claim a credit for such taxes against their
Canadian federal income tax liability but Non-Resident LP Unitholders will need
to take certain steps to receive a refund or credit in respect of any such
Canadian federal withholding taxes withheld equal to the Page45


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 difference
between the withholding tax at a rate of 25% and the withholding tax at the
reduced rate they are entitled to under an applicable income tax treaty or
convention. LP Unitholders should consult their own tax advisers concerning all
aspects of Canadian federal withholding taxes. ITEM 4.       INFORMATION ON THE COMPANY 4.A              HISTORY AND DEVELOPMENT OF THE COMPANY Overview Brookfield
Renewable owns one of the world’s largest, publicly-traded, pure-play renewable
power portfolios with 6,707 MW of installed capacity. The portfolio includes
204 hydroelectric generating stations on 72 river systems and 28 wind
facilities. Our portfolio is spread across 13 power markets in Canada, the
United States, Brazil, the Republic of Ireland and Northern Ireland, providing
significant geographic and operational diversification. Our
objective is to pay distributions to our LP Unitholders that are sustainable on
a long-term basis while retaining within our operations sufficient liquidity
for recurring growth capital expenditures and general purposes. We currently
have a target payout ratio of approximately 60% to 70% of Funds From Operations
and in 2014 we increased our long-term distribution growth rate target from 3%
to 5% annually to 5% to 9% annually.  We believe that this new distribution
rate will leave us with approximately $100 million of available cash per year
to further invest in accretive projects, particularly organic growth
initiatives which we believe can comfortably support the higher end of our 5 –
9% distribution target.  These organic growth initiatives include the
commercialization of our 2,000 MW development pipeline at premium returns, the
realization of additional operating efficiencies, and the capture of rising
power prices by market-based facilities recently acquired in the current
low-priced market environment.  While 86% of our portfolio (on a proportionate
basis) will continue to be contracted over the next five years under long-term,
fixed price contracts with creditworthy counterparties, including Brookfield,
we have acquired a prudent level of market-based hydroelectric generation in
the United States underwritten in the current low power price environment.   We
believe that this embeds our business with attractive organic upside: as power
prices rise, as we anticipate they will, we will seek to lock in these higher
and more sustainable prices through long-term contracts. In
addition to organic growth, we continue to grow the business with an
acquisition strategy that has a proven track record, and we have consistently
demonstrated our ability to acquire high-quality assets by applying our
disciplined and selective underwriting approach. Our acquisition strategy is
being implemented across each of our North American, Latin American and
European platforms. In 2014, we, along with our institutional partners,
acquired 502 MW of hydroelectric assets in North America, 326 MW of wind assets
in Europe and entered into an agreement toacquire
a 488 MW multi-technology renewable portfolio in Latin America. We have done
thisby engaging sellers of a strategic, industrial or financial
nature, while also continuing to advance other solid acquisition opportunities
in these regions. We believe that our scale, significant capitalization and
sound investment-grade ratings will continue to enhance our ability to secure
and fund new transactions globally. We
anticipate that our organic growth initiatives can support an attractive
distribution yield and growth target, which will be meaningfully enhanced by
our acquisition strategy. As such,
we believe we are well-positioned to be a premium vehicle for investors seeking
to invest in the renewable power sector. Our LP Units are listed on the TSX
under the symbol “BEP.UN” and on the NYSE under the symbol “BEP”. We
anticipate that the only distributions we will receive in respect of our
limited partnership interests in BRELP will consist of amounts that are
intended to assist us in making distributions to our LP Unitholders in
accordance with our distribution policy and to allow us to pay expenses as they
become due. History and Development of
Our Business BREP is a
Bermuda exempted limited partnership that was established on June 27, 2011
under the provisions of theExempted Partnerships Act 1992of Bermuda
and theLimited Partnership Act 1883of Bermuda. Our registered and head
office is 73 Front Street, 5th Floor, Hamilton HM 12, Bermuda, and Page46


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 the telephone number is 441-295-1443. BREP was
established to serve as the primary vehicle through which Brookfield acquires
renewable power assets on a global basis. Brookfield owns approximately 62% of BREP
on a fully-exchanged basis and the remaining approximately 38% is held by the
public. Recent Developments The
following is a summary of the material developments affecting our business from
January 1, 2014 up to the date of this Form 20-F. Construction and Development of New
Facilities Our development pipeline includes
projects in each of Brookfield Renewable’s continental platforms.  In Canada, we achieved commercial
operation on ourapproximately C$200 million, 45 MW hydroelectric facility in
British Columbia, on scope, schedule and budget.  In Brazil, we commenced construction in
November on ourapproximatelyR$235 million ($89 million), 25 MW Serra
dos Cavalinhos I hydro project in the state of Rio Grande do Sul. We are
working with an experienced project contractor to build this facility which is
expected to enter commercial operation in the first quarter of 2017.  In the Republic of Ireland, our approximately €130 million ($174million), 88 MW wind
project, which was under construction when we acquired it as part of our
purchase of the Irish wind portfolio in June, 2014, has achieved commercial
operation on scope, schedule and budget and is generating revenue. A 37 MW wind
project was also completed in the first quarter of 2015 and construction of a
12 MW wind project is underway with completion targeted for July 2015. Acquisitions and Dispositions In January 2014, Brookfield
Renewable acquired a 70 MW portfolio of hydroelectric facilities that are
expected to generate 372 GWh annually. The acquisition was completed with
institutional partners and Brookfield Renewable retains an approximate 40%
controlling interest in the portfolio. Total cash consideration was $244
million.  In February 2014, Brookfield Renewable
acquired the remaining 50% interest in a 30 MW hydroelectric facility in
California that is expected to generate $81 GWh annually. The acquisition was
completed with institutional partners and Brookfield Renewable retains an
approximate 22% controlling interest in the facility. The total cash
consideration was $11 million.  In March 2014, Brookfield Renewable
acquired a 33% economic and 50% voting interest in a 417 MW hydroelectric
facility in Pennsylvania that is expected to generate 1,129 GWh annually. Total
cash consideration was $295 million.  In August 2014, Brookfield Renewable
acquired the remaining 67% economic and 50% voting interest in this facility
for additional cash consideration of $614 million. These acquisitions were
completed with institutional partners and Brookfield Renewable retains an
approximate 40% controlling interest.  In June 2014, Brookfield Renewable
acquired a 326 MW wind portfolio in the Republic of Ireland and Northern
Ireland that is expected to generate 837 GWh annually. The acquisition was
completed with institutional partners and Brookfield Renewable retains an
approximate 40% controlling interest. Total consideration of €524 million ($718
million) included €521 million ($713 million) in cash increased for post-closing
adjustments.  In November 2014,Brookfield
Renewable entered into an agreement to acquire a 488 MW portfolio in Brazil
comprising hydroelectric, wind, and biomass generating capacity that is
expected to generate 2,100 GWh annually. The acquisition will be completed with
institutional partners and Brookfield Renewablewillretain
an approximate 40% controlling interest. The acquisition is expected to close
in the first half of 2015, subject to regulatory approvals and closing
conditions.  Page47


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 In February 2015, Brookfield
Renewable acquired two advanced hydroelectric development projects totaling 47
MW in Brazil that, once fully commissioned, are expected to generate 280 GWh
annually. The acquisition was completed with institutional partners and
Brookfield Renewable retains an approximate 40%controllinginterest. In February 2015, Brookfield Renewable entered into an
agreement to acquire a 123 MW wind portfolioin Portugal that is expected to generate 260 GWh annually.The acquisition will
be completed with institutional partners and Brookfield Renewablewillretain an approximate
40% controlling interest.The transaction is expected to close in 2015, subject to
closing conditions. Project Financings During
2014, the following project financings were completed for our portfolio: In
January 2014, the $279 million bridge loan associated with a 360 MW
hydroelectric portfolio in New England was refinanced to July 2017 at LIBOR
plus 2.25%, maturing in 2017. In
February 2014, as part of the acquisition of the 70 MW hydroelectric portfolio
in New England, $140 million of financing was obtained through a bond issuance
with a 5.5% interest rate, maturing in February 2024. In March
2014, we up-financed indebtedness associated with a 349 MW hydroelectric
portfolio in Ontario through the issuance of C$90 million of senior and C$60
million of subordinate bonds with interest rates of  3.8% and 5.0%,
respectively, maturing in June 2023. In May
2014, we extended the $250 million credit facility associated with our 378 MW
hydroelectric portfolio in the southeastern United States for six months to
November 2014 at a fixed rate of LIBOR plus 2.75%. We further extended this
credit facility in November 2014 to May 2016 maintaining the interest rate of
LIBOR plus 2.75%. In June
2014, we refinanced a $125 million debt facility associated with a 167 MW
hydroelectric portfolio in New England through the issuance of 8-year notes at
a fixed rate of 4.59%, maturing in January 2022. In June
2014, as part of the acquisition of the 326 MW wind portfolio in the Republic
of Ireland and Northern Ireland, we assumed a €169 million ($232 million) loan
with a fixed interest rate of 4.6%, including the related interest rate swaps,
maturing in December 2026. In August
2014, as part of the acquisition of the 417 MW hydroelectric facility in
Pennsylvania, we assumed a $65 million bond at a fixed interest rate of 7.1%,
maturing in 2018. The bond was fully prepaid in November 2014. In August
2014, we secured a €160 million ($210 million) term loan for 153 MW of our wind
facilities in the Republic of Ireland with an initial fixed rate of 2.9%,
including the related interest rate swaps, maturing in December 2026. In
October 2014, we secured a $560 million term loan associated with a 417 MW
hydroelectric facility in Pennsylvania. A portion of the proceeds was used to
prepay the high-yielding $65 million bond initially assumed in connection with
the acquisition of the facility. The debt bears interest at LIBOR plus 1.75%,
with the margin increasing 25 basis points annually. The term loan matures in
June 2018. In
November 2014, we secured an 18-month extension on a $250 million term loan
associated with a hydroelectric portfolio in Tennessee and North Carolina with
a fixed interest rate of 3.20%, including the related interest rate swaps. The
term loan matures in May 2016. In
December 2014, we secured a €188 million ($227 million) construction and term
loan for 137 MW of our development projects in Republic of Ireland. An amount
of €168 million ($203 million) was initially drawn on the loan at a rate of
2.82%, including the related interest rate swaps, maturing in December 2027. In
February 2015, we up-financed indebtedness associated with a 45 MW
hydroelectric facility in British Columbia by issuing C$90 million of bonds with
an interest rate of 2.95%, maturing in May 2023. Page48


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 In February 2015, we secured a 12 month extension on $75 million
of holding company-level debt associated with a portfolio of hydroelectric and
wind facilities in the United States held through BAIF. The debt bears interest
at LIBOR plus 2.75%, maturing in February 2016. Corporate
Financings In June
2014, we completed a bought deal LP Unit offering of 10.25 million LP Units at
a price of C$31.70 per LP Unit for gross proceeds of C$325 million. In July
2014, BREP filed a Form F-3 shelf registration statement with the SEC, which
shelf registration statement became automatically effective. In August
2014, we extended the maturity for $1,280 million in corporate credit
facilities to June 2019 and reduced the applicable margin from 1.25% to 1.20%.
The credit facilities now also provide us with an option to borrow in Euro (€)
and British Pound Sterling (£). In
December 2014, the TSX accepted a notice of BREP’s intention to commence a
normal course issuer bid, which permits BREP to repurchase up to 7,100,000 of
its issued and outstanding LP Units. In
December 2014, we extended the maturity of the $200 million committed unsecured
revolving credit facility provided by Brookfield Asset Management for one year,
to December 2015 on the same terms. Other Our 110
MW national gas-fired plant in Ontario had been operating on an uncontracted
basis between April and October of 2014, during which time it had only nominal
generation.  In October 2014, the facility was formally withdrawn from service
but is being maintained so that it is available to be restarted should
economics change. 4.B              BUSINESS OVERVIEW Our
Operations Page49


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 In 2014, we operated our facilities through
regional operating centers in the United States, Canada, Brazil and Europe
which are designed to maintain and enhance the value of our assets, while
cultivating positive relations with local stakeholders. We own and manage 204
hydroelectric generating stations, 28 wind facilities, and two natural
gas-fired plants. Overall, the assets we own or manage have 6,707 MW of
generating capacity and annual generation of 23,742 GWh based on long-term
averages. The table below outlines our portfolio as at December 31, 2014: River
 
 Generating
 Capacity(1)
 LTA(1)(2)
 StorageSystems
 Facilities
 Units
 (MW)
 (GWh)
 (GWh)HydroelectricUnited States(3)
 
 30
 
 136
 
 421
 
 3,191
 
 11,464
 
 3,582Canada(3)
 
 19
 
 33
 
 73
 
 1,361
 
 5,184
 
 1,261Brazil(4)
 
 23
 
 35
 
 75
 
 670
 
 3,614
 
 N/A72
 
 204
 
 569
 
 5,222
 
 20,262
 
 4,843WindUnited States
 
 -
 
 8
 
 724
 
 538
 
 1,394
 
 -Canada
 
 -
 
 3
 
 220
 
 406
 
 1,197
 
 -Europe
 
 -
 
 17
 
 171
 
 326
 
 837
 
 --
 
 28
 
 1,115
 
 1,270
 
 3,428
 
 -Other
 
 -
 
 2
 
 6
 
 215
 
 52
 
 -72
 
 234
 
 1,690
 
 6,707
 
 23,742
 
 4,843
 (1)Includes
100% of capacity and generation from equity-accounted investments. (2)Long-term
average (“LTA”) is calculated on an annualized basis from the beginning of the
year, regardless of the acquisition or commercial operation date. (3)Hydroelectric
LTA is the expected average level of generation, as obtained from the results
of a simulation based on historical inflow data performed over a period of
typically 30 years. (4)Brazilian
hydroelectric assets benefit from a market framework which levelizes generation
risk across producers. Page50


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 The following table presents the
annualized long-term average generation of our portfolio as at December 31,
2014 on a quarterly basis: GENERATION (GWh)(1)(2)
 
 Q1
 
 Q2
 
 Q3
 
 Q4
 
 TotalHydroelectricUnited States(3)
 
 3,193
 
 3,276
 
 2,199
 
 2,796
 
 11,464Canada(3)
 
 1,241
 
 1,492
 
 1,233
 
 1,218
 
 5,184Brazil(4)
 
 929
 
 898
 
 887
 
 900
 
 3,6145,363
 
 5,666
 
 4,319
 
 4,914
 
 20,262WindUnited States
 
 311
 
 468
 
 341
 
 274
 
 1,394Canada
 
 324
 
 292
 
 238
 
 343
 
 1,197Europe
 
 256
 
 183
 
 163
 
 235
 
 837891
 
 943
 
 742
 
 852
 
 3,428Other
 
 10
 
 6
 
 32
 
 4
 
 52Total
 
 6,264
 
 6,615
 
 5,093
 
 5,770
 
 23,742
 (1)Includes
100% of generation from equity-accounted investments. (2)LTA
is calculated on an annualized basis from the beginning of the year, regardless
of the acquisition or commercial operation date. (3)Hydroelectric
LTA is the expected average level of generation, as obtained from the results
of a simulation based on historical inflow data performed over a period of
typically 30 years. (4)Brazilian
hydroelectric assets benefit from a market framework which levelizes generation
risk across producers. We have
comprehensive power operations and development capabilities located in each of
our core markets that position us to maintain and increase the value of our
asset base while competitively positioning us for continued growth. Our
business has approximately 1,500 employees. See Item 6.D “Employees”. We
maintain a portfolio of hydroelectric, wind and pumped storage development
projects in Canada, the United States, Brazil and Europe. See Item 7.B
“Related Party Transactions — Development Projects”. Operating Philosophy We employ
a hands-on, operations-oriented, long-term owner’s approach in the management
of our portfolio.  We believe that this approach ensures that we maintain and,
where possible, enhance the value of our assets by being able to quickly
identify and manage any technical, economic or stakeholder issue that may
arise.  As of 2015, the operation of our generating facilities is largely
decentralized into three continental platforms covering North America, Latin
America and Europe. We supplement our continental platforms with a strong
corporate team that provides oversight on a global basis of the functions of
BREP and, among other things, establishes consistent global policies in
compliance, information technology, health, safety and security, human
resources, stakeholder relations, procurement, governance and anti-bribery and
corruption. We also
benefit from the expertise of Brookfield which provides strategic direction,
corporate oversight, commercial and business development expertise, and
oversees decisions with regard to the funding and growth of our business. We
believe this approach leads to a strong decision-making culture and long-term
owner-oriented investment philosophy to build value. The
cornerstones of our operational philosophy are: Page51


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 Strong continental platforms.In each
of our core markets, we have built strong platforms with full construction,
development and operational capabilities. Each of our platforms benefits from a
centralized, automated plant dispatch and control center allowing remote
operation of most of our facilities and a central interface with regulatory and
market authorities, as well as offtakers. These capabilities allow us to
leverage our platforms when growing our business. Culture
of health, safety, security and environmental leadership.We
strive to achieve excellence in safety performance and to be recognized as an
industry leader in accident prevention. Our overall objective is to incur zero
high risk safety incidents and zero lost time injuries. We have adopted written
Health, Safety, Security and Environmental (“HSS&E”) policies that
include frameworks for oversight, compliance, compliance audits and sharing
best practices both within our operations and the global Brookfield group. We
maintain a HSS&E Steering Committee, consisting of, among others, the Chief
Executive Officer and the President and Chief Operating Officer of the Service
Provider and the Chief Executive Officer of each continental platform, and
require all employees, contractors, agents and others involved in our
operations to comply with our established HSS&E practices. Disciplined
management of operating costs.Our operations are focused on
maintaining the cost competitive position of our portfolio through disciplined
management of operating costs with the objective of annually offsetting the costs
of inflation. In addition, the scalability of our platforms allow us to grow
the portfolio while only minimally increasing  incremental fixed costs thus
ensuring a stable and predictable cost profile over the long-term. Focus on
asset reliability and availability.Maintaining high reliability and
availability of our plants is critical as our long-term contracts provide for
payment to us for all energy delivered. To the greatest extent possible, our
operating teams perform all periodic and planned maintenance activities during
periods of low hydrology or wind, in order to minimize lost revenue
opportunities and take advantage of excess capacity at our plants. Long-term
ownership and asset reinvestment.We seek to preserve and enhance
the productivity, reliability and longevity of each of our generating
facilities. The cornerstone of our asset maintenance and enhancement program is
a 20-year forward-looking capital reinvestment plan. Our operating teams work
closely with independent engineering firms recognized as industry leaders in
renewable energy production and maintenance to develop a detailed capital plan
for each asset. We develop and implement our plans by taking a long-term
owner’s perspective and, in particular, believe the low capital expenditure
maintenance requirements and long useful life of our assets are attractive
attributes of hydroelectric assets. Hydroelectric power generation is a mature,
efficient and relatively simple technology that has not changed significantly
over the past century. Positive
local stakeholder relationships.We strive to maintain
transparent and well-established relationships with local stakeholder groups
and the communities in which we operate, which we believe is a key element of
successfully operating and developing renewable power facilities. In order to
ensure the successful renewal and implementation of our water power licenses
and land leases, we consult and work proactively with local stakeholders and
communities potentially affected by our operations. We
maintain a performance-based culture in our operations and develop annual
performance targets in each of the above areas to measure the performance of
our operating teams.       Page52


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 Continental
Operating Platforms  
                            North American Business The
principal office of our North American platform is located in Gatineau, Québec
and oversees our operations in the United States and Canada.Our North American platform employs approximately 900 employees. United States Our main
offices in the United States are located in Boston, Massachusetts and Los
Angeles, California while our U.S. National System Control Center, which can
remotely control and monitor nearly all of our facilities in the country, is
located in Marlborough, Massachusetts. We employ approximately Page53


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 570 people, approximately 36% of whom are covered by
collective agreements. We have experienced positive relations with our
unionized work force in the United States. Approximately
half of our renewable business is located in the United States, the world’s
largest economy and second-largest energy market. We are strategically focused
on power markets in the Northeast, Mid-Atlantic, Southeast and California, with
additional operations in Arizona, Minnesota and Louisiana. The
majority of our capacity in the United States is located in New York, Pennsylvania
and New England. In New York, we are one of the largest independent power
producers with 75 hydroelectric facilities with an aggregate installed capacity
of 711 MW. In Pennsylvania, we recently acquired a 417 MW hydroelectric facility.
In New England, we have 1,274 MW of operating hydroelectric capacity and a 50%
joint-venture operating interest in a 600 MW hydroelectric pumped storage
facility located in Massachusetts. Pumped storage is a form of hydroelectric
power which uses reversible turbines permitting energy to be stored by pumping
water up into a reservoir, and then producing power at a later time by
releasing the water during a period in which power prices are higher. We also
own eight wind farms located primarily in California and New Hampshire with a combined
installed capacity of 537 MW. The California wind farms are primarily
located in the Tehachapi area, one of the most proven wind resource areas in
the United States, attractively located near the Los Angeles load center. We
also own one combined cycle, natural gas-fired facility in Syracuse, New York,
which sells its power output on a merchant basis and is predominantly used to
meet power needs at times of peak demand. Our
rights to operate our hydroelectric facilities in the United States are secured
primarily through long-term licenses from the Federal Energy Regulatory
Commission (the “FERC”), the federal agency that regulates the licensing
of substantially all hydroelectric power plants in the United States. The FERC
has oversight of substantially all of our ongoing hydroelectric project
operations, including dam safety inspections, environmental monitoring,
compliance with license conditions, and the license renewal process. Our
ability to sell power from certain of our generation facilities is also subject
to the receipt and maintenance of certain approvals from the FERC, including
the authority to sell power at market-based rates. Canada Our main
offices in Canada are located in Gatineau, Québec and
Ottawa and Toronto, Ontario. Our Canadian National System Control Center is
located in Gatineau, Québec and allows remote monitoring and control of all of
our assets in Canada. In Canada, we have full hydroelectric and wind operating
capabilities, as well as development and construction oversight expertise.We employ
approximately 330 people in the country and approximately 27% of these employees
are covered by collective agreements. We have experienced positive relations with
our unionized work force in Canada. Canada
has a strong hydropower tradition andisthethird
largest hydropower generatorin the world.  Our facilities are situated
in QuébecandOntario– the twolargest power marketsin Canada – as well as in
British Columbia.  These three provinces account forapproximately three-quarters of Canada’s population.Eachprovincehas
adopted policies to increase the contribution of renewables in the supply mix
by offering long-term contracts with government-owned utilities through
competitive RFPs or feed-in-tariffs. Most of
our Canadian hydroelectric assets are larger utility-scale facilities with
water storage reservoirs that can together store approximately 1,300 GWh, or
approximately 25% of Brookfield Renewable’s annual average hydroelectric
generation in Canada. We
entered the Canadian wind business in 2004 and since then have completed the
development, construction and operation of three wind farms in Ontario, with a
combined installed capacity of 406 MW. We also have several projects in various
stages of development. In 2014, we achieved commercial operation on our 45 MW
Kokish hydroelectric project in British Columbia, which was completed on scope,
schedule and under budget.  In addition to our renewable power assets, we own a
110 MW national gas-fired plant that was operating on an uncontracted basis
between April and October of 2014, during which time it had only nominal
generation.  In October 2014, the facility was formally Page54


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 withdrawn
from service but is being maintained so that it is available to be restarted
should economics change. We hold a
variety of long-term waterpower licenses issued by the provinces where our
operations are situated. These waterpower licenses permit us to use land, water
and waterways for the generation of electricity. These licenses also contain
terms that deal with water management, land use, public safety, recreation and
the environment. At the end of the license period, license holders can apply to
the requisite government body to have their licenses renewed. Latin American Business The principal office of our Latin American platformis
locatedin Rio de Janeiroand oversees our operationsin Brazil.OurLatin American platform employs approximately325
employees. Brazil Our main
office in Brazil is located in Rio de Janeiro while ourBrazilian
National System Control Center, from which we centrally control and monitor our
hydroelectric power stations, is located in Curitiba, Paraná.  All of our
employees in Brazil are covered by annual collective agreements. We have
experienced positive relations with our work force in Brazil. Brookfield
first invested in Brazil over 100 years ago. Recognizing Brazil’s growing
demand for power and strong renewable resource base, Brookfield re-entered the
Brazilian power market in 2003 and, since then, has grown its hydroelectric
asset base significantly to 35 facilities on 23 river systems totaling
approximately 670 MW of installed capacity. We own facilities located in the
seven Brazilian states located in the south, southeast and mid-west regions of
the country. These regions represent approximately 80% of the country’s
population and economic activity. As such, we believe our business in Brazil is
particularly well positioned to participate in one of the world’s fastest
growing electricity markets in a large and diversified economy with further
development potential. We have
developed and built 14 facilities totaling 313 MW of capacity since 2003 and we
have several hydro projects in various stages of development.We
have recently started construction of the 25 MW Serra dos Cavalinhos I hydro
project in the state of Rio Grande do Sul, which is expected to enter
commercial operation in 2017.In February 2015, we acquired two advanced
hydro development projects totaling 47 MW, located on the Verde River in the
state of Mato Grosso do Sul, Brazil.Additionally, we have two
hydro projects totaling 43 MW which we expect to commence construction by
year-end 2015.In November 2014, we announced an
agreement to acquire a 488 MW multi-technology renewable portfolio in Brazil.
The transaction is subject to regulatory approvals and other customary closing
conditions and is expected to close in the first half of 2015. Rights to
hydroelectric sites are secured in Brazil by obtaining authorizations and
concessions from the Brazilian Ministry of Mines and Energy through the
National Agency for Electric Energy (“ANEEL”). We generally focus on the
SHPP, a category of hydroelectric power plant with less than 30 MW of capacity.
SHPP plants can be secured directly from ANEEL, whereas sites for hydroelectric
plants above 50 MW can only be granted by public auction, requiring developers
to bid the lowest tariff in order to win the concession and a PPA with local
utilities. Of our authorizations and concessions, 90% have remaining terms of
more than 14 years. Generally, concessions and authorizations provide for an
initial term of 30 years and renewal rights for an additional 20-year period.  European Business The principal office of our European operationsis
locatedin London, in the United Kingdom. Our European platform, including
our office in Cork, employs approximately 80 employees. Republic
of Ireland and Northern Ireland This year’s acquisition of our Irish wind portfolio marks our
entry into the European market. The Republic of Ireland and Northern Ireland
have among the strongest onshore wind resources in Europe and local markets
with stable contractual frameworks for renewables.  Our 19 wind energy
facilities are located in both the Republic of Ireland and Northern Ireland and
currently total 441 MW of installed capacity. Page55


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 In 2015, we fully commissioned our 88 MW
Knockacummer project and our 37 MW Kill Hills project. We have also initiated
construction of the 12 MW Glentane 2 project, an extension to the Knockacummer
site, with completion targeted for July 2015.  In addition to these projects we
have a wind development pipeline of approximately 200 MW, which positions the
portfolio for continued growth. Of this, 60 MW has received planning consent
and we expect to initiate construction on some of this capacity in 2015. A
substantial portion of our staff is currently dedicated to greenfield activities
and our development team has initiated all but two of our current projects from
the greenfield stage. The majority of wind farm assets in the Republic of Ireland are
underpinned by the REFIT program. This renewable energy feed in tariff ensures
that generators receive a minimum fixed annual electricity price, indexed by
inflation annually over a contract term of 15 years, providing a revenue stream
that is the higher of market prices or the REFIT price. The REFIT payments are
guaranteed under legislation for eligible assets. There are 77 MW of non-REFIT
wind assets that are currently contracted at below market prices with the Irish
Energy Supply Board (ESB) until 2018, and will operate as merchant assets
thereafter, along with 20 MW of existing merchant wind generation. The wind
farm assets in Northern Ireland earn British Pound Sterling (£) denominated
revenues by receiving both a fixed price Renewable Obligation Certificate for
twenty years, in addition to the market price. The land on which our wind farms are situated is typically leased
or owned outright.  Where we hold leases, we typically hold a long-term lease
for an initial 25- to 30-year term with a further right to renew. Additional
licenses relevant to the wind farms include both electricity grid connection
agreements with the national and distribution level grid system operators and
planning permissions from the relevant local planning authorities. See Item 3.D “Risk Factors — Risks Related to our Operations and
the Renewable Power Industry — Our operations are highly regulated and may be
exposed to increased regulation which could result in additional costs to
Brookfield Renewable” and Item 3.D “Risk Factors — Risks Related to our
Operations and the Renewable Power Industry — There is a risk that our
concessions and licenses will not be renewed”. Registered and Head Office Our registered
and headofficeis based
in Hamilton, Bermuda. Corporate Office Our main
corporate office is based in Toronto, Ontario and provides oversight on a
global basis of Brookfield Renewable. Our corporate group has approximately 50
employees who are located in North America, Latin America and Europe.  Our
Competitive Strengths BREP is the owner and
operator of a diversified portfolio of high quality assets that produce electricity
from renewable resources. Our business model is to
utilize our global reach to identify and acquire high quality renewable power generating
assets at favorable valuations, finance them on a long-term, low-risk basis,
and enhance the cash flows and values of these assets using our experienced
operating teams to earn reliable, attractive, long-term total returns for the
benefit of our LP Unitholders. One
of the largest, listed pure-play renewable platforms.We own one of the
world’s largest, publicly-traded, pure-play renewable power portfolios with
approximately $20 billion in assets, 6,707 MW of installed capacity, and
long-term average generation from operating assets of 23,742 GWh. Our portfolio
includes 204 hydroelectric generating stations on 72 river systems and 28 wind
facilities, diversified across 13 power markets in the North America, Latin
America and Europe.  Page56


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 Generation by Technology
 
 Generation by Market
 Focus on
attractive hydroelectric asset class.Our assets are predominantly hydroelectric and represent one of
the longest life, lowest-cost and most environmentally-preferred forms of power
generation. Our North American assets have the ability to store water in
reservoirs approximating 29% of their annualized long-term average generation.
Our assets in Brazil benefit from a framework in that country that levelizes
generation risk across hydroelectric producers. The ability to store water in
reservoirs in North America and to benefit from levelized generation in Brazil
provides partial protection against short-term changes in water supply. As a
result of our scale and the quality of our assets, we are competitively
positioned compared to other listed renewable power platforms, providing
significant scarcity value to investors. Well positioned for global growth
mandate.We have strong organic growth potential
with an approximate 2,000 MW development pipeline spread across all of our
operating jurisdictions, combined with the ability to capture operating
efficiencies and the value of rising power prices for the market-based portion
of our portfolio. Our organic growth is complemented by our strong acquisition
ability. Over the last ten years, we have acquired or commissioned approximately
80 hydroelectric assets totaling approximately 2,600 MW and 28 wind assets
totaling 1,270 MW. For the year ended December 31, 2014, we acquired or commissioned
hydroelectric assets and wind assets that have an installed capacity of 547 MW
and 326 MW, respectively. Our ability to develop and acquire assets is
strengthened by our established operating and project development teams,
strategic relationship with Brookfield, and our strong liquidity and
capitalization profile. We have, in the past, and may continue in the future to
pursue the acquisition or development of assets through arrangements with
institutional investors in Brookfield sponsored or co-sponsored partnerships. Attractive distribution profile.We pursue a strategy which we
expect will provide for highly stable, predictable cash flows sourced from
predominantly long-life hydroelectric assets ensuring an attractive
distribution yield. We target a distribution payout ratio in the range of
approximately 60% to 70% of Funds From Operations and, in the third quarter of
2014, announced an increase in our long-term distribution growth rate target to
a range of 5% to 9% annually. Stable, high quality cash flows
with attractive long-term value for LP Unitholders.We intend to maintain a highly
stable, predictable cash flow profile sourced from a diversified portfolio of
low operating cost, long-life hydroelectric and wind assets that sell
electricity under long-term, fixed price contracts with creditworthy
counterparties. Approximately 85% of our 2015 generation output is sold
pursuant to PPAs to public power authorities, load-serving utilities,
industrial users or to Brookfield. The Page57


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 PPAs for our
assets have a weighted-average remaining duration of 18 years, providing
long-term cash flow stability. Strong financial profile.With approximately $20 billion of assets and a conservative
leverage profile, our consolidated debt-to-capitalization is 40%. Our liquidity
position remains strong with approximately$1.0 billionof cash and available portions
of credit facilities. Approximately 78% of our borrowings are non-recourse to
BREP.Corporate borrowings and
subsidiary borrowings have weighted-average terms of approximately seven and
ten years, respectively. Renewable Power
Growth Opportunity Renewable energy
continues to grow around the world due to its positive environmental profile,
supply diversification benefits and increasing cost-competitiveness with
traditional technologies.  Global installed renewable power is now approaching
1,500 GW worldwide.  Significant new renewable generation supply continues to
be built, consisting primarily of new hydro and wind capacity, with the
industry adding in the range of 100 GW or $200 billion of new renewable power
supply each year. The following chart illustrates the global growth in various
renewable power generation sectors from 2000 to 2013. _________________
  Sources: 
  BP Statistical Review of World Energy - June 2014 (for wind, geothermal and
  solar capacity 2000-2013); U.S. Energy Information Administration -
  International Energy Statistics (for hydroelectric capacity 2000-2012); hydro
  capacity for 2013 is assumed to increase in line with the growth in hydro
  generation in this year (from the 2014 BP Statistical Review).
 Global Renewable
Power Drivers We believe that, over
time, strong continued growth in renewable power generation will be driven by
the following: Conventional coal and
nuclear generation face challenges.The continued reliance on large-scale coal
and nuclear facilities is causing concern with power system policy makers and
the general public. Coal plants are increasingly facing legislative pressures
to undertake significant environmental compliance expenditures. This, in turn,
is accelerating the retirement of coal plants, which will need to be Page58


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 replaced by new capacity. Following the Fukushima nuclear
disaster in Japan, and in light of on-going cost uncertainties and concern over
waste disposal, public concern over new nuclear construction and continued life
extension of existing facilities has increased. This, combined with a current
environment of lower natural gas prices, has delayed or halted most new nuclear
development activities in the United States, and has even caused some countries
with significant nuclear generation to legislate the early retirement of
existing capacity. Renewable energy is a
cost effective way of diversifying fuel risk.The abundance of low
cost natural gas in North America presents a unique opportunity to potentially
replace aging coal and nuclear facilities with a domestic fuel source that is
cost effective and has a lower environmental impact. As natural gas gains
further acceptance, we expect the need to diversify exposure to fluctuating
fuel costs will increase the demand for renewable technologies, particularly
hydroelectric and wind energy. In addition, technological developments over the
last decade continue to reduce the costs of renewable technologies enhancing
their position as a cost competitive complement to gas-fired generation and a
means to meeting more stringent environmental standards. Supported by
government policies and incentives.There are various strategies that
governments are using to encourage development of renewable power resources
which generally include renewable portfolio standards (“RPS”) (requiring
electricity distributors to obtain a minimum percentage of their power from
renewable energy resources by specified target dates) and tax incentives or subsidies.
Globally, at least 70 countries, including the Republic of Ireland, the United
Kingdom (including Northern Ireland) and the other 26 E.U. countries, have
national targets for renewable energy supply, and 37 U.S. states, the District
of Columbia, Puerto Rico and nine Canadian provinces have RPS or policy goals
that require load-serving utilities to offer long-term PPAs for new renewable
supply. Widespread acceptance
of climate change.Over the last six years, it has become generally
accepted that the combustion of fossil fuels contributes to global warming. The
Intergovernmental Panel on Climate Change (“IPCC”) releases periodic reports
to build awareness of climate change, highlighting the fact that average
temperatures in the world’s northern hemisphere  are likely the highest in at
least the past 1,300 years. In 2005, atmospheric concentrations of carbon
dioxide exceeded by far the natural range over the last 650,000 years.
According to the IPCC, the ramifications of global warming for society are significant.
As the electricity sector is one of the largest contributors to carbon dioxide
emissions globally, concern about global warming has become a catalyst for
governments to take environmental policy action, often through legislation of
renewable power procurement targets or implementation of feed-in-tariffs. Our Core Markets We have focused on
North America, Latin America and Europe as our core markets and we will
continue to focus on expanding our operations in these markets to meet our
growth objectives. Our established operating platforms in North America and Latin
America, and our new platform in Europe, position us particularly well to achieve
these objectives. In addition, due to our relationship with Brookfield, we have
access to Brookfield’s investment platform in Australasia, as well as
Brookfield’s more established platforms in Latin America and Europe, which
enhance our ability to source transactions globally. North
America United
States We believe that over
the last decade, the United States has offered consistent, broad-based policy
momentum to transition the country’s electricity producers to cleaner
generation and promote increased energy independence. The United States is the
world’s second largest wind market with approximately 65,000 MW of installed wind
capacity as at the end of 2014. One of the most significant drivers of
renewable power growth in the United States has been the adoption of RPSs in 30
states and the District of Columbia with renewable targets set to as high as
33% of the total supply mix by 2020. In addition, growth has been driven by
various government incentive programs supporting investment in new renewables. Page59


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 Concurrent with
expanding policy supporting renewables, the environmental regulation of
traditional thermal, and in particular, coal-fired generation has become
significantly more stringent. In particular, the United States Environmental
Protection Agency’s (the “EPA”) “MATS” rule (Mercury and Air Toxics
Standards) – which comes into effect in 2015 – requires the application of maximum
available control technology emissions standards for hazardous air pollutants
(among others, mercury, metals and acid gases) from coal-fired and oil-fired
electric generating units. Other EPA regulations in force or in preparation –
addressed to other air pollutants as well as to cooling water use and to
disposal of combustion residuals – could impose further significant compliance
capital expenditures for coal-fired facilities. Since over half of this
coal-fired capacity is over 30 years old, and approximately 50% of total U.S.
coal capacity lacks comprehensive emissions control technology, we believe
these regulations will accelerate retirement decisions. This supply will need
to be replaced by new capacity and we believe renewable and gas generation are
complementary solutions to fill this gap. The transition towards zero and
low-emitting fuels was given further policy support in 2014 from the EPA’s
proposed Clean Power Plan, which seeks to cap CO2 emissions from existing power
plants. In the United States,
we are strategically focused on the power markets in the northeast (New York,
New England), the PJM ISO region, and California, with operations in other
states such as Minnesota, Louisiana, Tennessee and North Carolina. Together
these markets cover over 70% of the U.S. population, most of which have strong
RPS targets, aging electricity infrastructure and/or pressure to retire coal
generation, providing a high value market for renewable generation. Canada In Canada, renewable
energy policy is predominantly implemented at the provincial level. We are
currently active in Ontario, Québec and British Columbia, and all of these
jurisdictions have adopted policies to increase the contribution of renewables
in the supply mix which presents attractive opportunities for both project
development and asset acquisition. Ontario’s 2013 Long
Term Energy Plan anticipates that approximately 20 GW of renewable power
generation (excluding hydroelectric power generation) will be online within the
province by 2025, compared to a 2014 year-end total of approximately 5.2
GW.  In 2014, Ontario completed its program to phase-out or re-power all
of its coal-fired generating capacity. Furthermore, approximately half of
Ontario’s nuclear capacity is aging and approaching the end of its useful life
in this decade. The Ontario Government has also announced a $7 billion
transmission expansion plan to facilitate the integration of more renewable
resources as well as a Large Renewable Procurement process for 565 MW of new
renewable generation capacity. In Québec, while most generating capacity is
provincially owned, since 2003, Hydro-Québec Distribution has contracted for
over 3,500 MW of renewable capacity, consisting primarily of wind-power. In British
Columbia, the 2010Clean Energy Actoutlines a vision for “clean energy
leadership” in the province with goals of self-sufficiency in electricity
generation by 2016, while securing over 90% of total generation requirements
from clean or renewable generation sources, leading to the award of PPAs for
approximately 2,200 MW. Latin
America Brazil With the world’s
fifth largest population and seventh largest economy, Brazil offers strong
growth potential with investment-grade macroeconomic fundamentals over the
longer term. Electricity demand has grown by approximately 4% annually over the
last 30 years, a trend we expect will continue in line with rising incomes and
per capita consumption (which today is still less than one-fifth of that in the
United States). As a result, we expect Brazil will require approximately 6,000
MW of new supply annually to meet its growing demand. By 2023, Brazil’s energy
planning agency projects that 71,000 MW of new supply will be needed, while
only approximately 37,000 MW of capacity is currently under contract. Much of
this planned supply growth relies on large-scale hydroelectric, transmission
and thermal generation infrastructure construction, some of which is facing
environmental, permitting and labor challenges. As a result, notwithstanding measures
by the authorities to contain retail electricity rates, we believe supply
constraints will continue to increase prices and give rise to opportunities to
build or acquire new capacity. In addition to a
growing SHPP segment in Brazil, other segments of the renewable power industry
are growing, notably biomass cogeneration and wind power. Brazil has approximately
10,000 MW of Page60


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 installed biomass capacity with another 4,000
MW under development, which for the most part is integrated with existing sugar
or ethanol mills. Brazil is the world’s leading and most efficient producer of
these commodities making this a growing segment of the renewable power industry
and one in which we actively evaluate investment opportunities. The expected
closing of our acquisition of a488 MW multi-technology renewable
portfolio will mark our entry into Brazil’s biomass cogeneration and wind power
markets. We believe there are
two aspects of the market in Brazil that make our business particularly compelling.
First, substantially all of our hydroelectric facilities participate in the MRE
which significantly reduces the impact of hydrology variability on our cash
flows. Through this pool, hydroelectric power generators are paid on the basis
of “assured energy”, or long-term average generation established through
government-approved hydrological studies, rather than actual production.
Participating generators effectively share hydrology risk as generators
experiencing below average generation conditions secure power from generators
experiencing above average conditions, or when producing more than normal
generation, make the excess available on the same basis. Secondly, in Brazil,
SHPPs under 30 MW operate in a special segment of the market that benefit from
certain preferred economic and regulatory rights. Customers that purchase power
from these plants benefit from a special discount for the use of the
distribution system which, in turn, enables generators like us to capture a
portion of this discount through higher prices with end-use customers. Europe Ireland Ireland has among the best onshore wind resources in Europe and
the Republic of Ireland and Northern Ireland are markets with stable and
favorable contractual frameworks for renewables.  Owners of renewable assets in
the Republic of Ireland typically benefit from the REFIT program, which ensures
that generators receive a minimum fixed annual electricity price, indexed by
inflation annually over a contract term of 15 years, providing a revenue stream
that is the higher of market prices or the REFIT tariff. The REFIT payments are
guaranteed under legislation for eligible assets and currently apply to assets
commissioned by 2017. The Irish Department of Communications, Energy and
Natural Resources has recently announced it is considering the design of a
post-2017 renewable procurement mechanism. In Northern Ireland, our facilities
generally receive both the prevailing market electricity price and a renewable
obligation certificate. Other European Jurisdictions Europe’s population
of approximately 600 million is served by a power system with a capacity of
approximately 1,000 GW, generating approximately 3,500 TWh annually. Renewable
generation technologies account for approximately one third of total installed
capacity, including approximately 150 GW hydroelectric, approximately 120 GW
wind, and approximately 80 GW solar, making Europe the largest renewable market
in the world and a significant growth opportunity for Brookfield Renewable. Europe has long been
at the forefront in adopting policies to support renewables development and
address climate change.  For 2020, the E.U. has committed to cutting its
greenhouse gas emissions to 20% below 1990 levels and to raise the share of
total final energy consumed from renewables to 20%.  As of 2012, 14% of final
energy consumed in the E.U. was from renewable sources. The challenge of
meeting 2020 targets varies significantly by country: for example, in the
United Kingdom, 4% of total final energy requirements were supplied by
renewables in 2012 against a 2020 target of 15%. In Germany, renewables
accounted for 12% of 2012 requirements against an 18% target for 2020, while in
Portugal, renewables accounted for 25% of 2012 requirements against a 31%
target for 2020.  In all countries, the power sector has a pivotal role in
meeting renewable energy targets.  Brookfield estimates that approximately
250 GW of additional wind-equivalent power capacity is required in Europe to
achieve the 2020 target.  Longer term, the E.U. has endorsed even more
challenging environmental goals, including further reductions in greenhouse gas
emissions to 80% or more below 1990 levels by 2050. Individual member
states have sought to meet their binding E.U. targets by extensive
implementation of incentive programs supporting renewable power
development.  For example, the United Kingdom requires electricity
suppliers to meet a fixed proportion of their energy requirement from renewable
resources and issues renewable generators with tradable Renewable Obligation
Certificates Page61


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 which provide an additional source of
revenue above market prices. Germany offers a fixed contract for differences
payment to renewable sources, while Portugal offers feed-in tariff contracts
that fix payment terms for the duration of the contract. Most support programs
are funded by a levy on retail electricity rates rather than a direct payment
from the government.  In addition, the E.U.’s CO2 emissions cap-and-trade
program and the United Kingdom’s carbon price floor mechanism enhance the
competitive position of renewables generators by increasing the operating costs
for fossil fueled generators. We believe that
Europe offers a stable platform for continued expansion with strong policy
commitment to renewables and upside potential. Our investment and growth
strategy focuses on larger, low-sovereign risk markets that have both a record
of reliable renewable policies and renewable assets with attractive long-term
fundamental value and scarcity attributes. Other
Markets In Latin America,
Colombia and Peru are investment-grade rated countries that have established
competitive electricity markets and each country needs over 500 MW of new power
supply annually to meet strong economic and natural resource driven demand
growth. These countries benefit from significant undeveloped hydroelectric
potential and power prices remain relatively low on a global scale but should
increase over the long-term as new supply needs to be built to meet demand
growth. Australia is a market
where Brookfield has a significant real estate and infrastructure presence.
More than 60% of the 47 GW of installed capacity in Australia’s National
Electricity Market is coal-fired. Australia has experienced robust economic
growth over the last decade driven by Asian demand for natural resources, and
the topic of the country’s carbon footprint is under active national debate. We
expect support for the development of new renewable power resources over the
next decade as a policy offset to the bias of this export-led growth towards
the conventional energy and commodity sectors. Our Growth
Opportunity We believe that the
current environment offers attractive opportunities to invest in renewable
power acquisitions or developments that we expect will allow us to deploy
capital, on an accretive basis, in the following ways: ·Asset
monetizations and divestitures.Significant renewable power generation
capacity is owned by industrial companies, smaller independent power producers,
private equity investors or foreign companies. These types of owners sell
renewable power assets either because power generation is not their core
business, their investment horizons are shorter, or a particular market ceases
to be strategic.  ·Privatizations.We believe that in
the current fiscal climate, governments will continue to engage the private
sector in providing funding solutions for infrastructure requirements which
could increasingly involve sales of existing assets. Our proven operating track
record, global scale and ability to partner with local pension funds and
institutional investors may better competitively position us to participate in
such opportunities.  ·Development
cycle divestitures.Renewable power assets are often developed or built by
smaller developers or construction companies who, in our experience, seek to
capture development-stage returns. Because of our extensive project development
expertise we are well positioned to evaluate these sort of assets and therefore
we have been, and believe will continue to be, a logical acquirer of, or
partner in, such projects.  ·Brookfield
Renewable’s development project portfolio.In addition to
growing our business through acquisitions, we intend to pursue organic growth
by developing our portfolio of greenfield projects. We indirectly own approximately
25 development projects in North America, Latin America and Europe totaling
an estimated 2,000 MW of potential capacity (see Item 7.B “Related Party
Transactions — Development Projects”). Over the past ten years, Brookfield
has completed or commenced construction on 21 development projects totaling in
aggregate over 1,000 MW of capacity giving us a successful execution track
record as a developer of hydroelectric and wind capacity. We have acquired and
retained the Page62


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 development expertise and capability to
advance our renewable power projects from the development stage to commercial
operation. We also have the necessary expertise to oversee the regulatory,
engineering, construction execution, transmission, permitting, licensing,
environmental and legal activities required for successful project development. Revenue and Cash Flow
Profile We believe that our
portfolio offers high quality cash flows derived from predominantly
hydroelectric assets. Our cash flow profile, which we believe will be highly
stable and predictable, is derived from the combination of long-term, fixed-price
contracts, a unique hydro-focused portfolio with a low cost structure, and a
prudent financing strategy focused on non-recourse debt with an investment
grade balance sheet. Accordingly, we believe that we have a high degree of
predictability in respect of revenue and costs on a per MWh basis. We believe that we
have a predictable pricing profile driven by long-term PPAs with a weighted
average remaining duration of 18 years which, combined with a well-diversified
portfolio that reduces variability in our generation volumes, enhances the
stability of our cash flow profile. See Item 3.D “Risk Factors — Risks
Related to Our Operations and the Renewable Power Industry — Counterparties to
our contracts may not fulfill their obligations and, as our contracts expire,
we may not be able to replace them with agreements on similar terms”. . . Counterparties to Brookfield Renewable’s PPAs 
  As outlined in the
graph above, the majority of our long-term PPAs are with investment-grade rated
or creditworthy counterparties such as government-owned utilities or power
authorities, Brookfield or industrial power users. As at December 31,
2014,
Brookfield Renewable had contracted 91% (on a proportionate basis) of 2015 generation at
an average price of $79 per MWh. As at December 31,
2014,
over the next three years Brookfield Renewable has on average approximately 
4,444  GWh of energy annually which is uncontracted. All of this energy can be
sold into the current wholesale or bilateral market, however we intend to
maintain flexibility in re-contracting to position ourselves to achieve the
optimal pricing. Page63


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 The following table
presents revenue, Adjusted EBITDA and Funds From Operations on a segmented
basis for the fiscal years ended December 31, 2014, 2013, and 2012 by
hydroelectric, wind and other facilities. Hydroelectric and wind information is
further segmented by region.  Hydroelectric
 Wind
  energy
 Co-gen
 Other
 Total(MILLIONS)
 
 U.S.
 Canada
 Brazil
 U.S.
 Canada
 EuropeFor the year ended  Dec 31, 2014:Revenues
 $
 719
 $
 394
 $
 265
 $
 129
 $
 123
 $
 45
 $
 29
 $
 -
 $
 1,704Adjusted EBITDA(1)
 
 520
 
 328
 
 198
 
 90
 
 108
 
 29
 
 11
 
 (68)
 
 1,216Funds From Operations(1)
 
 283
 
 256
 
 149
 
 17
 
 70
 
 18
 
 11
 
 (244)
 
 560For the year ended  Dec 31, 2013:Revenues
 $
 677
 $
 399
 $
 301
 $
 125
 $
 133
 $
 N/A
 $
 71
 $
 -
 $
 1,706Adjusted EBITDA(1)
 
 494
 
 330
 
 221
 
 85
 
 113
 
 N/A
 
 23
 
 (58)
 
 1,208Funds From Operations(1)
 
 274
 
 266
 
 169
 
 21
 
 69
 
 N/A
 
 23
 
 (228)
 
 594For the year ended  Dec 31, 2012:Revenues
 $
 438
 $
 272
 $
 340
 $
 58
 $
 131
 $
 N/A
 $
 70
 $
 -
 $
 1,309Adjusted EBITDA(1)
 
 294
 
 213
 
 236
 
 31
 
 113
 
 N/A
 
 20
 
 (55)
 
 852Funds From Operations(1)
 
 148
 
 148
 
 151
 
 2
 
 69
 
 N/A
 
 20
 
 (191)
 
 347
 (1)Non-IFRS
measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures” and
“Financial Review by Segments for the Year Ended December 31, 2014” and
“Financial Review by Segments for the Year Ended December 31, 2013” As described in
Item 5.A “Operating Results — Performance Measurement”, Adjusted EBITDA
and Funds From Operations do not have any standardized meaning prescribed by
IFRS and therefore are unlikely to be similar to measures presented by other
companies. For additional information, see Item 5.A “Operating Results —
Generation and Financial Review for the Year Ended December 31, 2014” and
Item 5.A “Operating Results — Generation and Financial Review for the Year
Ended December 31, 2013.” Our portfolio
benefits from significant hydrology diversification, with assets distributed on
72 river systems in three countries. Our water storage capabilities and our
access to the hydrological balancing pool administered by the government of
Brazil amount to approximately 36% of annual generation, allowing us to
mitigate hydrological fluctuations, optimize production and minimize losses due
to outages. North America.In North America, we
generate revenues primarily through energy sales secured through long-term PPAs
with creditworthy counterparties such as government-owned entities or power
authorities (including for example, the Independent Electricity System Operator
(formerly the Ontario Power Authority), the Ontario Electricity Financial
Corporation, Hydro-Québec, BC Hydro and the Long Island Power Authority),
load-serving utilities (such as Entergy Louisiana), Brookfield, and in some
cases industrial power users. Currently, our North American portfolio is largely
contracted pursuant to long-term PPAs that are generally structured on a “take
or pay” basis without fixed or minimum volume commitments. As a result, we are
exposed to minimal risk of having to supply power from the market to customers
when we are experiencing low water or wind conditions. Most of our PPAs also
provide for annual escalation of the realized price, typically linked to
inflation. In respect of power sold to Brookfield, Brookfield will, in some
cases, have entered into back-to-back power resale agreements for output
purchased from Brookfield Renewable (see Item 4.B “Business Overview — The
Service Provider — Energy Marketing”). Latin America.Our Latin American
assets are located in Brazil. In the Brazilian electricity market, energy is
typically sold under long-term contracts to either regulated load-serving
distribution companies or “free customers” defined as customers with more than
0.5 MW of annual demand who select their own Page64


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 electricity
supplier. Both customer classes are required to demonstrate annually that they
have contracts in place to meet all forecast demand. In the regulated market,
Brookfield Renewable has typically entered into 20-30 year PPAs with
creditworthy state-owned utilities. In the “free customer” market, Brookfield
Renewable has typically entered into three to eight year PPAs with large
industrial and commercial customers primarily engaged in strong industries,
like telecommunications, food services  and pharmaceuticals. Our PPAs in Brazil
typically provide a fixed price that is fully indexed to inflation annually.
Our Brazilian portfolio has a weighted average remaining contract term of
approximately six and a half years and we believe that it is well positioned to
capitalize on market opportunities in the medium term as 17% of the portfolio
will become uncontracted in 2015 and a further 23% of our portfolio will become
uncontracted in 2016.  We believe that during this period the Brazilian power
market will require more expensive energy sources in the supply mix to adjust
the current supply and demand imbalance in the country, thus leading to
attractive power prices. We expect to be able to capitalize on these changes in
the Brazilian power market by either re-contracting parts of our cost-effective
portfolio at these higher prices or by leaving certain facilities uncontracted
so that they are able to take advantage of expected high spot prices. Europe.Our European assets
are principally located in the Republic of Ireland with some assets also
located in Northern Ireland. In the Republic of Ireland, we generate revenues
primarily through energy sales secured by long-term PPAs under the REFIT
program. In the Republic of Ireland’s electricity market, renewable energy is
typically sold under a 15-year REFIT which allows for the above-market costs of
renewables to be paid directly to guarantors through a Public Service
Obligation levy on final consumer bills. The REFIT tariff also provides
generators with potentially attractive upside to market prices above an
established contract floor, which would allow us to benefit from potential
long-term rising prices of power. Our Irish assets are underpinned by a 10-year
remaining average life contracted revenue stream. To meet its EU renewable
energy commitments, an incremental 3 GW of wind power will be required and
regulators are planning significant upgrades to the Republic of Ireland’s
transmission system over the next decade to facilitate the integration of this
additional wind power. Our Growth Strategy We expect to continue
focusing primarily on long-life renewable power assets that provide stable,
long-term contracted cash flows, or, where uncontracted, are acquired on a
value basis and located in high-value power markets where rising power prices
offer strong prospects to generate growing cashflows and can appreciate in
value over time. We intend to combine our industry, operating, development and
transaction expertise with our ability to commit capital to transactions in
order to secure opportunities at attractive returns for securityholders. To
grow Brookfield Renewable, we maintain a proactive and focused business
development program in each of our markets which is augmented by access to
Brookfield’s global investment platform that may lead to originating attractive
opportunities for investment. We expect that our growth will be focused on the
following: ·Organic
development growth.We intend to continue to grow our business by pursuing
organic development growth, either by building projects from our approximate
2,000 MW development pipeline, or through the acquisition of development-stage
assets. We intend to focus on development-stage acquisition opportunities that
are in high-value sites in our core markets, positioning us to leverage the
technical and operating expertise of our platforms. We expect that a relatively
small portion of our cash flows will be allocated during the early stages of
project development, but that meaningful capital commitments would be made once
a project benefits from sound commercial arrangements that limit construction
risk and secures long-term stable cash flows.  ·Acquisitions
of operating assets within core markets.We expect to continue our growth in
the North America, Latin America and Europe, where our existing renewable power
platforms allow us to efficiently integrate operating or development-stage
renewable power assets and capture economies of scale. Within each of these platforms,
our growth strategy is focused on the higher-value and higher-growth regional
electricity markets. For example, in the United States, our strategy is to
continue our growth in the eastern, southern and western power markets, where
higher electricity prices, load growth and renewable portfolio standards offer
more attractive returns and enhanced long-term value. Similarly, in Brazil, our
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 are focused on the
southern and mid-west portion of the country where over 80% of the population
and economic activity is located. In Europe, where we primarily focus on
countries with stable renewable energy policies, our strategy includes the
acquisition of operating or development-stage assets with a particular emphasis
on securing development projects and/or partnerships with developers that are
facing capital constraints. While most of our portfolio benefits from long-term
contracts, an important part of our strategy in the United States over the last
year has been to acquire uncontracted hydro facilities that due to their low
operating cost position can benefit from a recovery in power prices.  ·Diversification
into new markets.We intend to establish an operating presence in new
markets that offer attractive opportunities to enhance the geographic
diversification of our operations by adding platforms that we can grow over
time by investing capital at attractive risk-adjusted returns. Our new European
platform and London-based management team will allow us to continue expanding into
Europe beyond our existing Irish portfolio. Additionally, our Brazil experience
and team provides an excellent springboard to expand into other Latin American
countries.  We also benefit from Brookfield’s investment teams in Australiasia
and elsewhere that, together with our existing capabilities in North America, Latin
America and our newly established European platform, give us the ability to
transact on a global basis.  ·Diversification
of renewable power technologies.While we intend to maintain our predominantly
hydroelectric focus, we also intend to direct some of our efforts on select
assets utilizing other renewable power technologies that can benefit from the
long-life, high barrier to entry and sustainable competitive cost advantage of
our hydroelectric fleet. For example, in 2014 we announced the acquisition ofbiomass
cogeneration facilities in Brazil with 175 MW of aggregate installed capacity.We have built our
wind business by focusing on building or acquiring projects that are located in
high-value power markets where the underlying renewable power resource has high
scarcity value which is secured through long-term site ownership rights. There
are a number of other renewable power technologies we would consider for
investment. For example, solar is becoming more reliable, proven and cost
effective and is the fastest growing segment of the renewable power industry
globally. Geothermal assets, where operating with a proven steam resource
profile, can be an attractive source of baseload renewable power. Similarly,
biomass generation assets, where operating with a reliable and cost-effective
supply of feedstock, can provide reliable dispatching. Our Distribution Policy We believe our
high-quality assets and PPA portfolio will provide BREP with stable and
predictable annual cash flow to fund our distributions: ·In
December 2011, BREP declared its first cash distribution of $0.3375 ($1.35
annually) per LP Unit for the fourth quarter of 2011.  ·In
2012, BREP increased its regular quarterly distribution to $0.345 ($1.38
annually) per LP Unit commencing with the first quarter distribution of that
year.  ·In
2013, BREP increased its regular quarterly distribution to $0.3625 ($1.45
annually) per LP Unit commencing with the first quarter distribution of that
year.  ·In
2014, BREP increased its regular quarterly distribution to $0.3875 ($1.55
annually) per LP Unit commencing with the first quarter distribution of that
year.  ·On
February 6, 2015, BREP announced an increase in itsregularquarterly
distribution to $0.415 ($1.66 annually) per LP Unit commencing with the first
quarter distribution of 2015. We intend to continue to operate as a
growth-oriented entity with a focus on increasing the amount of cash available
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 The declaration and
payment of distributions are subject to the discretion of the board of
directors of the Managing General Partner. Distributions will be paid quarterly
on the last day of December, March, June and September of each year, to LP
Unitholders of record on the last business day of November, February, May and
August, respectively (the “Record Date”).  In addition, registered and
beneficial LP Unitholders who are resident in Canada or the United States may
opt to receive their distributions in either U.S. dollars or the Canadian
dollar equivalent, based on the Bank of Canada noon exchange rate on the Record
Date or, if the Record Date falls on a weekend or holiday, on the Bank of
Canada noon exchange rate of the preceding business day.Distributions will be
evaluated periodically, and may be revised subject to business circumstances
and expected capital requirements depending on, among other things, our earnings,
financial requirements for our operations, growth opportunities, the
satisfaction of applicable solvency tests for the declaration and payment of
distributions and other conditions existing from time to time (see
Item 10.B “Memorandum and Articles of Association – Description of Our LP
Units and the Amended and Restated Limited Partnership Agreement of BREP —
Distributions”). Our ability to
continue paying or growing cash distributions are impacted by the cash we
generate from our operations. The amount of cash we generate from our
operations will fluctuate from quarter to quarter and will depend on various
factors, several of which are outside our control, including the weather in the
jurisdictions in which we operate, the level of certain operating costs and
prevailing economic conditions. As a result, cash distributions to the LP
Unitholders are not guaranteed. Refer to Item 3.D “Risk Factors — Risks
Related to our LP Units” for a list of the primary risks, whether at previous
levels or higher, that impact our ability to continue paying comparable or
growing cash distributions. We expect to have a
payout ratio of approximately 60 to 70% of Funds From Operations, allowing us
to reinvest surplus cash flow in attractive and accretive opportunities in the
renewable power sector and position us to grow our distributions per LP Unit
over time. In September 2014, we
announced an increase in our long-term distribution growth rate target to 5% to
9% annually. The 5% to 9% annual growth rate target for distributions compares
to a prior annual growth rate target of 3% to 5% and an historical annualized
distribution growth rate of the Fund of 2.2% per LP Unit from inception in 1999
up to November 28, 2011, the date on which its assets were transferred to BREP.
The increase to 5% to 9% reflects, among other things, the expected benefits of
a broader set of growth opportunities from new and expanded geographies,
significantly greater generating assets and capitalization and enhanced access
to capital. Pursuant to the terms
of the Preference Share Guarantees, if the declaration or payment of dividends
on the Series 1 Shares, Series 2 Shares, Series 3 Shares, Series 4 Shares,
Series 5 Shares, Series 6 Shares is in arrears, BREP will not make
distributions on its LP Units. Our Distribution
Reinvestment Plan In February 2012, BREP
adopted a DRIP for LP Unitholders who are residents of Canada. Subject to
regulatory approval and U.S. securities law registration requirements, we may
in the future expand our DRIP to include LP Unitholders resident in the United
States. LP Unitholders who are not residents of Canada or the United States may
participate in our DRIP provided that there are not any laws or governmental
regulations that prohibit them from participating in our DRIP. The following is
a summary description of the principal terms of our DRIP. Pursuant to our DRIP,
Canadian holders of our LP Units are able to elect to have distributions paid
on our LP Units held by them automatically reinvested in additional LP Units to
be held for the account of the LP Unitholder in accordance with the terms of
our DRIP. Distributions due to
DRIP participants will be paid to the plan agent, for the benefit of the DRIP
participants. If a DRIP participant has elected to have his or her distributions
automatically reinvested, or applied, on behalf of such DRIP participant, to
the purchase of additional LP Units, such purchases will be made from BREP on
the distribution date at the Market Price. As soon as reasonably
practicable after each distribution payment date, a statement of account will
be mailed to each participant setting out the amount of the relevant cash
distribution reinvested, the applicable Market Price, the number of LP Units
purchased under our DRIP on the distribution payment date and the total number
of LP Units, computed to four decimal places, held for the account of the Page67


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 participant under our DRIP (or, in the case of CDS
participants, CDS will receive such statement on behalf of beneficial owners
participating in our DRIP). While BREP will not issue fractional LP Units, a
DRIP participant’s entitlement to LP Units purchased under our DRIP may include
a fraction of an LP Unit and such fractional LP Units shall accumulate. A cash adjustment
for any fractional LP Units will be paid by the plan agent upon the termination
by a DRIP participant of his or her participation in our DRIP or upon
termination of our DRIP. A registered holder may, at any time, obtain a Direct
Registration System statement (a “DRS Statement”) for any number of
whole LP Units held for the participant’s account under the DRIP by notifying
the plan agent. DRS Statements for LP Units acquired under our DRIP will not be
issued to participants unless specifically requested. Prior to pledging,
selling or otherwise transferring LP Units held for a participant’s account
(except for a sale of LP Units through the plan agent), a registered holder
must request a DRS Statement be issued. The automatic reinvestment of distributions
under our DRIP will not relieve participants of any income tax obligations
applicable to such distributions. No brokerage commissions will be payable in
connection with the purchase of our LP Units under our DRIP and all
administrative costs will be borne by BREP. LP Unitholders will
be able to terminate their participation in our DRIP by providing, or by
causing to be provided, notice to the plan agent. Such notice, if actually
received by the plan agent no later than five business days prior to a record
date, will have effect in respect of the distribution to be made as of such
date. Thereafter, distributions to such LP Unitholders will be paid directly to
the LP Unitholder. In addition, LP Unitholders may request that all or part of
their LP Units held under the DRIP in cash be sold. When LP Units are sold
through the plan agent, a holder will receive the proceeds less any handling
charges and brokerage trading fees. BREP will be able to terminate our DRIP, in
its sole discretion, upon notice to the DRIP participants and the plan agent,
but such action will have no retroactive effect that would prejudice a
participant’s interest. BREP will also be able to amend, modify or suspend our
DRIP at any time in its sole discretion, provided that the plan agent gives
written notice of that amendment, modification or suspension to our LP
Unitholders, for any amendment, modification or suspension to our DRIP that in BREP’s
opinion may materially prejudice participants. BRELP has a
corresponding distribution reinvestment plan in respect of distributions made
to BREP and Brookfield. BREP does not intend to reinvest distributions it
receives from BRELP in BRELP’s distribution reinvestment plan except to the
extent that holders of our LP Units elect to reinvest distributions pursuant to
our DRIP. Brookfield has advised BREP that it may from time-to-time reinvest
distributions it receives from BREP or BRELP pursuant to our DRIP or BRELP’s
distribution reinvestment plan. The limited partnership units of BRELP to be
issued to Brookfield under the distribution reinvestment plan will become
subject to the Redemption-Exchange Mechanism and may therefore result in
Brookfield acquiring additional LP Units of BREP. See Item 10.B
“Memorandum and Articles of Association – Description of the Amended and
Restated Limited Partnership Agreement of BRELP — Redemption–Exchange
Mechanism”. BRP Equity Distributions to
Preferred Shareholders BRP Equity will pay
dividends to the holders of its Series 1 Shares, Series 3 Shares, Series 5
Shares and Series 6 Shares and, if applicable, Series 2 Shares and Series 4
Shares, as and when declared by the board of directors of BRP Equity. BRP
Equity’s Series 1 Shares, Series 2 Shares, Series 3 Shares, Series 4 Shares,
Series 5 Shares and Series 6 Shares are guaranteed by BREP and the other
Guarantors under the Preference Share Guarantees described under Item 10.B
“Memorandum and Articles of Association – BRP Equity — Class B Preference
Shares — Preference Share Guarantees”. For the initial
five-year period commencing on March 10, 2010 and ending on and including April
30, 2015, the holders of Series 1 Shares are entitled to receive fixed
cumulative preferential cash dividends as and when declared by the board of
directors of BRP Equity, payable quarterly on the last day of January, April,
July and October in each year at an annual rate equal to C$1.3125 per share. A
total dividend of C$1.3125 per share was paid in each of 2011, 2012, 2013 and
2014. For the initial
seven-year period commencing on October 11, 2012 and ending on and including
July 31, 2019, the holders of Series 3 Shares are entitled to receive fixed
cumulative preferential cash dividends as and when declared by the board of
directors of BRP Equity, payable quarterly on the last Page68


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 day
of January, April, July and October in each year at an annual rate equal to
C$1.10 per share. The initial dividend of C$0.3375 per share was paid on
January 31, 2013, a total dividend of C$1.1625 per share was paid in 2013 and a
total dividend of C$1.10 per share was paid in 2014. The holders of Series
5 Shares and Series 6 Shares are entitled to receive fixed cumulative
preferential cash dividends as and when declared by the board of directors of
BRP Equity, payable quarterly on the last day of January, April, July and
October in each year at an annual rate equal to C$1.25 per share. The initial
dividend on the Series 5 Shares of C$0.3116 per share was declared by the board
of directors of BRP Equity on February 6, 2013 and was paid to holders of the
Series 5 Shares on April 30, 2013.  A total dividend of C$0.9366 per share was
paid in 2013, and a total dividend of C$1.25 per share was paid in 2014. The
initial dividend on the Series 6 Shares of C$0.3116 per share was declared by
the board of directors of BRP Equity on May 7, 2013 and was paid to holders of
the Series 6 Shares on July 31, 2013.  A total dividend of C$0.6241 per share
was paid in 2013, and a total dividend of C$1.25 per share was paid in 2014. The Service Provider Brookfield Asset
Management Brookfield is a
global alternative asset manager with more than $200 billion in assets under
management. It has an over 100-year history of owning and operating assets with
a focus on property, renewable power, infrastructure and private equity. It has
a range of public and private investment products and services, which leverage
its expertise and experience and provide it with a competitive advantage in the
markets where it operates. Brookfield Asset Management is listed on the NYSE,
TSX and NYSE Euronext under the symbol “BAM”, “BAM.A” and “BAMA”, respectively. We are Brookfield’s
primary vehicle through which it will acquire renewable power assets on a
global basis and we benefit from its reputation and global platform to grow our
business. The Service Provider
complements our continental platforms in three key areas: ·Executive
oversight of our business:The Service Provider provides leadership to
our continental platforms and oversees the implementation of our annual and
long-term operating plans, capital expenditure plans, and our power marketing
plans to ensure compliance with our performance-based operating objectives and
applicable laws. The Service Provider also oversees the implementation of our
operational policies, and our management, accounting, regulatory reporting,
legal and treasury functions.  ·Growing
our business:We also benefit from the strategic advice, transaction origination capabilities
and corporate development services of the Service Provider to grow our
business. Brookfield Renewable benefits from the Service Provider’s renewable
power acquisition experience focused in our target markets as well as market
research capabilities that support evaluating opportunities to grow our
business in our existing and new power markets.  ·Funding
our business:The Service Provider recommends and oversees the implementation of funding
strategies for our existing business and in connection with our acquisitions or
developments. In doing so, the Service Provider advises upon and assists in the
execution of our equity or debt financings. The Service Provider also arranges
for our tax planning and the filing of our tax returns. Energy Marketing Pursuant to a number
of agreements, BEM LP is responsible for selling all energy and energy related
products generated by our assets in North America. In addition, BEM LP acts as
counterparty to various agreements with us pursuant to which BEM LP purchases,
supports or guarantees the price that we receive for power generation in North
America. With approximately 111
employees and 24 hours/day, 365 days/year operations, BEM LP performs
transaction execution, risk management, settlement, information technology,
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 and human resource functions. These
groups provide us with valuable market intelligence regarding pricing dynamics,
regulatory regimes and market participants. In 2014, BEM LP was responsible for
the sale of over 18,200 GWh of generation in North America. BEM LP and NA Holdco
entered into the Energy Marketing Agreement pursuant to which BEM LP provides
energy marketing services to NA Holdco. See Item 7.B “Related Party
Transactions — Energy Marketing Agreement”. Competition and
Marketing We operate in the
North American, Latin American and European power markets. The nature and
extent of competition we face varies from jurisdiction to jurisdiction. Brookfield
Renewable’s main competition in its electricity markets are coal, nuclear, oil
and natural gas electricity generators as well as other renewable energy
suppliers who use hydro, wind, geothermal and photovoltaic technologies. The
market price of commodities, such as natural gas and coal, are important
drivers of energy pricing and competition in most energy markets, especially in
North America. Our marketing efforts
focus on leveraging our competitive advantages described in Item 4.B
“Business Overview — Our Competitive Strengths” and our world class continental
platforms described in Item 4.B “Business Overview — Operating
Philosophy”. We also leverage our
relationship with Brookfield, which we believe provides a unique competitive
advantage considering Brookfield’s strong reputation in the energy marketing,
asset management, infrastructure and global real estate industries. See
Item 7.B “Related Party Transactions — Licensing Agreement”. Employees Members of Brookfield
Renewable’s core senior management team are all employees of Brookfield, and
their services are provided for the benefit of Brookfield Renewable under the Master
Services Agreement. For a discussion of the individuals from Brookfield’s
management team that are expected to be involved in our business, see
Item 6.A. “Directors and Senior Management — Our Management” and for a
discussion of our employees see Item 6.D “Employees”. Intellectual Property Brookfield Renewable,
as licensee, entered into the Licensing Agreement with Brookfield pursuant to
which Brookfield granted us a non-exclusive, royalty-free license to use the
name “Brookfield” and the Brookfield logo worldwide. Other than under this
limited license, we do not have a legal right to the “Brookfield” name and the
Brookfield logo. Brookfield may terminate the Licensing Agreement immediately
upon termination of our Master Services Agreement and it may be terminated in
the circumstances described under Item 7.B “Related Party
Transactions — Licensing Agreement”. Governmental, Legal
and Arbitration Proceedings We have not been and
are not currently subject to any material governmental, legal or arbitration
proceedings which may have or have had a significant impact on our financial
position or profitability nor are we aware of any such proceedings that are
pending or threatened. We are occasionally
named as a party in various claims and legal proceedings which arise during the
normal course of our business. With respect to claims and proceedings, we
review each of these matters, including the nature of the claim, the amount in
dispute or claimed and the availability of insurance coverage. Although there
can be no assurance as to the resolution of any particular matter, we do not
believe that the outcome of any matters or potential matters of which we are
currently aware will have a material adverse effect on us. Regulation Various activities of
Brookfield Renewable require registrations, permits, licenses, inspections and
approvals from governmental agencies and regulatory authorities and we strive
to comply with all regulations applicable to our operations. Water rights are
generally owned or controlled by governments that reserve the right to control
water levels or may impose water-use requirements. We hold concessions,
licenses and permits to operate our facilities, which generally include rights
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 water required for power generation.
Wholesale market structures or rules provide us with rights to access the power
grid. We are also subject
to various laws and regulations relating to health, safety, security and
environmental matters. These laws and regulations may change and we may become
subject to more stringent laws and regulations in the future. Compliance with
more stringent laws and regulations could have an adverse effect on our
business, financial condition or results of operations. We have established
policies and procedures for environmental management and compliance, and we
have incurred and will continue to incur significant capital and operating
expenditures to comply with health, safety, security and environmental laws and
to obtain and comply with licenses, permits and other approvals and to assess
and manage potential liability exposure. See also information contained under
Item 3.D “Risk Factors — Risks Related to our Operations and the
Renewable Power Industry”. Environmental Protection and Corporate Social
Responsibility We are an owner and
operator of a diversified portfolio of high quality assets that produce
electricity from renewable resources. Our assets are predominantly
hydroelectric and represent one of the most environmentally preferred forms of
power generation. We may benefit from future environmental regulations under
consideration to encourage the use of clean energy technologies and regulate
emissions of greenhouse gases to address climate change. Our goal is to be
responsible stewards of our resources, and good citizens in all that we do. We
have adopted written environmental policies that include frameworks for
oversight, compliance, compliance audits and sharing best practices both within
our operations and the global Brookfield group. We require all employees,
contractors, agents and others involved in our operations to comply with our
established environmental practices. We seek to have transparent and
well-established relationships with local stakeholder groups and the
communities in which we operate, which we believe is a key element of
successfully operating and developing renewable power facilities. We consult
and work proactively with local stakeholders and communities potentially
affected by our operations. We are an active
contributor in the communities where we conduct business. We are proud of the
commitment we have made to corporate social responsibility. The initiatives we
undertake and the investments we make in building our business are guided by
our core set of values around sustainable development, as we create a culture
and organization that can be successful today and in the future. 4.C              ORGANIZATIONAL STRUCTURE Organizational Chart The
simplified chart below presents a summary of our ownership and organizational
structure. Please note that on this chart all interests are 100% unless
otherwise indicated. “GP Interest” denotes a general partnership interest and
“LP Interest” denotes a limited partnership interest. BREP’s sole material
asset is a 52% LP Interest in BRELP. Brookfield indirectly holds the remaining
47% LP Interest in BRELP, a 28% LP Interest in BREP and a 0.01% and 1% GP
Interest in BREP and BRELP, respectively, for an aggregate indirect ownership
interest in BREP of approximately 62% on a fully-exchanged basis. For more
details on the exchange mechanism see Item 10.B “Memorandum and Articles
of Association — Description of the Amended and Restated Limited Partnership
Agreement of BRELP — Redemption-Exchange Mechanism”. Brookfield’s indirect 1%
GP Interest in BRELP entitles it to receive incentive distributions linked to
the growth of BRELP’s distributions. This simplified chart should be read in
conjunction with the explanation of our ownership and organizational structure
below and the information included under Item 6.A “Directors and Senior
Management” and Item 7. “Major Shareholders and Related Party
Transactions”.  Page71


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 Brookfield
Renewable Energy Partners L.P. BREP is a
Bermuda exempted limited partnership that was established on June 27, 2011
under the provisions of theExempted Partnerships Act 1992of Bermuda
and theLimited Partnership Act 1883of Bermuda. Our registered and head
office is 73 Front Street, 5th Floor, Hamilton HM 12, Bermuda, and the
telephone number is 441-295-1443. BREP’s sole material asset is a 52% limited
partnership interest in BRELP. BREP anticipates that the only distributions
that it will receive in respect of its limited partnership interests in BRELP
will consist of amounts that are intended to assist it in making distributions
to LP Unitholders in accordance with its distribution policy and to allow it to
pay expenses as they become due. The declaration and payment of cash
distributions by BREP is at the discretion of the Managing General Partner
which is not required to make such distributions and BREP cannot assure you
that it will make such distributions as intended. See Item 4.B “Business
Overview — Our Distribution Policy”. The Service Provider and Brookfield The
Service Recipients have engaged the Service Provider, an affiliate of
Brookfield, to provide management and administration services pursuant to our
Master Services Agreement. See Item 4.B “Business Overview — The Service
Provider” and Item 6.A “Directors and Senior Management — Our Master
Services Agreement” for more information on Brookfield and these arrangements. The Managing General Partner The
Managing General Partner serves as BREP’s general partner and has sole
authority for the management and control of BREP, which is exercised
exclusively by its board of directors. BREP’s only interest in BRELP consists
of limited partnership interests in BRELP, which by law do not entitle the
holders thereof to participate in partnership decisions. Pursuant to the Voting
Agreement, however, BREP, through the Managing General Partner, has a number of
voting rights, including the right to direct all eligible votes in the election
of the directors of the BRELP General Partner. See Item 10.B “Memorandum
and Articles of Association — Description of Our LP Units and the Amended and
Restated Limited Partnership Agreement of BREP” and Item 7.B “Related
Party Transactions — Voting Agreement”. BRELP and the Holding Entities BREP
indirectly holds its interests in the Operating Entities through BRELP and
through the Holding Entities. BRELP owns all of the common shares of the
Holding Entities. Brookfield has provided an aggregate of $5 million of working
capital to LATAM Holdco through a subscription for shares of LATAM Holdco.
These shares are entitled to receive a cumulative preferential dividend equal
to 6% of their redemption value as and when declared by the board of directors
of LATAM Holdco and will be redeemable at the option of LATAM Holdco, subject
to certain limitations, at any time after the tenth anniversary of their
issuance. The shares are not entitled to vote, except as required by law. BRELP GP LP and the BRELP General Partner The BRELP
GP LP serves as the general partner of BRELP and has sole authority for the
management and control of BRELP. The general partner of BRELP GP LP is the
BRELP General Partner, a corporation owned indirectly by Brookfield but
controlled by BREP, through the Managing General Partner, pursuant to the
Voting Agreement. See Item 7.B “Related Party Transactions — Voting
Agreement”. BRELP GP LP is entitled to receive incentive distributions from
BRELP as a result of its ownership of the general partnership interests of BRELP.
See Item 7.B “Related Party Transactions — Incentive Distributions”. See also
the information contained in this Form 20-F under Item 3.D “Risk Factors —
Risks Related to BREP” and Item 3.D “Risk Factors — Risks Related to our
Relationship with Brookfield”, Item 6.A “Directors and Senior Management”,
Item 7.B “Related Party Transactions” and Item 10.B “Memorandum and
Articles of Association—Description of Our LP Units and the Amended and
Restated Limited Partnership Agreement of BREP”, Item 10.B “Memorandum and
Articles of Association—Description of the Amended and Restated Limited
Partnership Agreement of BRELP”, and Item 7.A “Major Shareholders”. BRP Equity Page73


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 BRP Equity is an indirect wholly-owned subsidiary of BREP
incorporated under the CBCA on February 10, 2010. Other than a receivable
from an indirect wholly-owned subsidiary of BREP, BRP Equity has no significant
assets or liabilities, no subsidiaries and no operations of its own. BRP Equity
has C$250 million Series 1 Shares outstanding, guaranteed by the Guarantors.
The Series 1 Shares are listed on the TSX under the symbol “BRF.PR.A”. BRP
Equity has C$250 million Series 3 Shares outstanding, guaranteed by the
Guarantors. The Series 3 Shares are listed on the TSX under the symbol
“BRF.PR.C”. BRP Equity has C$175 million Series 5 Shares outstanding,
guaranteed by the Guarantors. The Series 5 Shares are listed on the TSX under
the symbol “BRF.PR.E”. BRP Equity has C$175 million Series 6 Shares, which are
guaranteed by the Guarantors and are listed on the TSX under the symbol
“BRF.PR.F”. See Item 10.B “Memorandum and Articles of Association — BRP
Equity”. Finco Finco is
an indirect, wholly-owned subsidiary of BREP incorporated under the ABCA on
September 14, 2011. Other than approximately C$1.5 billion aggregate
principal amount of publicly-issued Finco Bonds and notes receivable from an
indirect wholly-owned subsidiary of BREP, Finco has no significant assets or
liabilities, no subsidiaries and no operations of its own. The Finco Bonds are
guaranteed by the Guarantors. See Item 10.B “Memorandum and Articles of
Association”. Inter-Corporate Relationships The following
table provides the name, the percentage of voting securities owned, or
controlled or directed, directly or indirectly, by us, and the jurisdiction of
incorporation, continuance, formation or organization of our significant
subsidiaries. Page74


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 Jurisdiction of
 
 Percentage ofIncorporation
 Voting SecuritiesName of Subsidiary
 or Organization
 Owned or ControlledAlta Wind VIII LLC
 
 Delaware
 
 100.0% (1)Barra do Braúna Energética S.A.
 
 Brazil
 
 100.0%BIF II Safe Harbor Holdings LLC
 
 Delaware
 
 100.0% (1)Black Bear Hydro Partners, LLC
 
 Delaware
 
 100.0% (1)Brookfield BRP Canada Corp.
 
 Alberta
 
 100.0%Brookfield BRP Holdings (Canada) Inc.
 
 Ontario
 
 100.0%Brookfield Energia Comercializadora Ltda
 
 Brazil
 
 100.0%Brookfield Power US Holding America Co.
 
 Delaware
 
 100.0%Brookfield Power Wind Prince LP
 
 Ontario
 
 100.0%Brookfield Smoky Mountain Hydropower LLC
 
 Delaware
 
 100.0% (1)Brookfield White Pine Hydro LLC
 
 Delaware
 
 100.0% (1)Catalyst Old River Hydroelectric Limited
  Partnership
 
 Louisiana
 
 75.0% (2)Comber Wind Limited Partnership
 
 Ontario
 
 100.0%Coram California Development, L.P.
 
 Delaware
 
 100.0% (1)Energética Campos de Cima da Serra Ltda
 
 Brazil
 
 100.0%Erie Boulevard Hydropower, L.P.
 
 Delaware
 
 100.0%Garracummer Wind Farm Limited
 
 Republic of Ireland
 
 100.0% (1)Gosfield Windfarm Limited
 
 Ontario
 
 100.0%Granite Reliable Power, LLC
 
 Delaware
 
 89.5% (1)Great Lakes Hydro America, LLC
 
 Delaware
 
 100.0%Great Lakes Power Limited
 
 Ontario
 
 100.0%Hawks Nest Hydro LLC
 
 Delaware
 
 100.0%Itiquira Energética S.A.
 
 Brazil
 
 100.0%Knockacummer Wind Farm Limited
 
 Republic of Ireland
 
 100.0% (1)Kwagis Power Limited
  Partnership
 
 British Columbia
 
 75.0%Lièvre Power L.P.
 
 Québec
 
 100.0%Mississagi Power Trust
 
 Québec
 
 100.0%Powell River Energy Inc.
 
 Québec
 
 100.0%Rumford Falls Hydro LLC
 
 Delaware
 
 100.0%Safe Harbor Water Power Corporation
 
 Pennsylvania
 
 100.0% (1)Serra Dos Cavalinhos II Energética S.A.
 
 Brazil
 
 100.0%Windstar Energy, LLC
 
 California
 
 100.0%
 (1)Voting
control held through voting agreements with Brookfield. (2)Non-voting
economic interest held through preferred shares and secured notes. Page75


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 4.D              PROPERTY, PLANT AND
EQUIPMENT BREP’s
registered and head office is 73 Front Street, 5th Floor, Hamilton HM 12,
Bermuda. BREP does not directly own any real property and its sole material
asset is a 52% limited partnership interest in BRELP. See also the information
contained in this Form 20-F under Item 3.D “Risk Factors—Risks Related to
Our Operations and the Renewable Power Industry” and Item 5. “Operating
and Financial Review and Prospects”. ITEM 4A.     UNRESOLVED STAFF COMMENTS Not
applicable. ITEM 5.            OPERATING
AND FINANCIAL REVIEW AND PROSPECTS 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. Certain comparative figures have been reclassified to conform to
the current year’s presentation. Voting Agreements with Affiliates Brookfield Renewable has entered
into voting agreements with Brookfield, whereby Brookfield Renewable gained
control of the entities that own certain United States, Brazil and Europe
renewable power generating operations. 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. The voting agreements do not
represent business combinations in accordance with IFRS 3Business
Combinations(“IFRS 3”), as all combining businesses are ultimately
controlled by Brookfield Asset Management 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 2(o)(ii) –Critical judgments in applying accounting policies - Common
control transactionsin our audited consolidated financial statements for our policy on
accounting for transactions under common control. PRESENTATION
TO PUBLIC STAKEHOLDERS Brookfield
Renewable’s consolidated equity interests include LP Units held by public
unitholders, Redeemable/Exchangeable partnership units in BRELP, a holding
subsidiary of Brookfield Renewable, and a general partnership interest in BRELP
held by Brookfield (“GP interest”). The LP Units and the
Redeemable/Exchangeable partnership units have the same economic attributes in
all respects, except that the Redeemable/Exchangeable partnership units provide
Brookfield the right to request that their units be redeemed for cash
consideration. In the event that Brookfield exercises this right, Brookfield
Renewable has the right, at its sole discretion, to satisfy the redemption
request with LP Units, rather than cash, on a one-for-one basis. Brookfield, as
holder of Redeemable/Exchangeable partnership units, participates in earnings
and distributions on a per unit basis equivalent to the per unit participation
of the LP Units. As Brookfield Renewable, at its sole discretion, has the right
to settle the obligation with LP Units, the Redeemable/Exchangeable partnership
units are classified under equity, and not as a liability. Given the exchange feature referenced above,
we are presenting LP Units, Redeemable/Exchangeable partnership units, and the
GP interest as separate components of Page76


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 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 62% 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 38%
is held by the public. Performance Measurement We present our key
financial metrics based on total results prior to distributions made to LP
Unitholders, the Redeemable/Exchangeable Unitholders and holders of the GP
interest. In addition, our operations are segmented by geography and asset type
(i.e. hydroelectric and wind), as that is how Brookfield Renewable’s President
and Chief Executive Officer and Chief Financial Officer (collectively, the
chief operating decision maker, or “CODM”) review our results, manage
operations and allocate resources. Accordingly, we report our results in
accordance with these segments. Refer to Note 24 – Segmented information in our
audited consolidated financial statements for further details. One of our primary
business objectives is to generate reliable and growing cash flows while
minimizing risk for the benefit of all stakeholders. We monitor our performance
in this regard through four key metrics — i) Net Income (loss), ii) Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted
EBITDA”), iii) Funds From Operations,  and iv) Adjusted Funds From Operations. It is important to highlight that Adjusted
EBITDA, Funds From Operations, and Adjusted 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. We provide
additional information on how we determine Adjusted EBITDA, Funds From
Operations, and Adjusted Funds From Operations, and we provide reconciliations
to net income (loss) and cash flows from operating activities. See “Financial
Review by Segments for the Year Ended December 31, 2014” and “Financial Review
by Segments for the Year Ended December 31, 2013”. Page77


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 GENERATION AND FINANCIAL REVIEW
FOR THE YEAR ENDED DECEMBER 31, 2014 The
following table reflects the actual and long-term average generation for the
year endedDecember 31: Variance of ResultsActual vs.Actual Generation(1)
 LTA Generation(1)
 Actual vs. LTA
 Prior YearGENERATION (GWh)
 2014
 2013
 2014
 2013
 2014
 2013Hydroelectric generationUnited States
 10,293
 10,082
 10,785
 9,681
 (492)
 401
 211Canada
 5,570
 5,494
 5,132
 5,062
 438
 432
 76Brazil
 3,371
 3,656
 3,614
 3,656
 (243)
 -
 (285)19,234
 19,232
 19,531
 18,399
 (297)
 833
 2Wind energyUnited States
 1,170
 1,145
 1,394
 1,341
 (224)
 (196)
 25Canada
 1,042
 1,075
 1,197
 1,197
 (155)
 (122)
 (33)Europe(2)
 891
 -
 826
 -
 65
 -
 8913,103
 2,220
 3,417
 2,538
 (314)
 (318)
 883Other
 211
 770
 348
 899
 (137)
 (129)
 (559)Total(3)
 22,548
 22,222
 23,296
 21,836
 (748)
 386
 326
 (1)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (2)We
completed the acquisition of the wind portfolio in Ireland on June 30,
2014. Pursuant to the terms of the purchase and sale agreement, Brookfield
Renewable acquired an economic interest in the wind portfolio from January 1,
2014. Accordingly, generation from January 1, 2014 to June 30, 2014 was
recorded in the second quarter of 2014. (3)Includes
100% of generation from equity-accounted investments. We compare actual
generation levels against the long-term average to highlight the impact of one
of the important factors that affect the variability of our business results.
In the short-term, we recognize that hydrology and wind 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 a 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, a balanced
amount of electricity, 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. The last three quarters of 2014 was such a period. 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.In anticipation of lower
hydrology, we maintained a lower level of contracted generation, allowing us to
capture the strong power prices. Generation levels during the year
ended December 31, 2014 totaled 22,548 GWh, compared to the long-term average
of 23,296 GWh, and an increase of 326 GWh as compared to the prior year. The hydroelectric portfolio
generated 19,234 GWh, below the long-term average of 19,531 GWh and consistent
with the prior year. Generation from existing facilities was 18,192 GWh,
compared to 19,232 GWh for the prior year. The decrease in generation was
primarily attributable to inflows at our Tennessee and North Carolina
facilities returning to more normal levels compared to the prior year, when
generation was above the long-term average. The impact on financial results was
partly offset by the non-controlling interests. Inflows were strong and
generation levels were above long-term average across the Page78


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 majority
of the Canadian portfolio, consistent with the prior year. As at December 31,
2014, reservoir levels in Canada and the United States were above average. In
Brazil, our participation in the hydrological balancing pool mitigated the
impact of drought-like conditions and resulted ingeneration
being only 8% lower than assured levels.The recent growth in our
portfolio resulted in incremental generation of 821 GWh, and a full year’s
contribution from facilities acquired in 2013 resulted in incremental
generation of 221 GWh. The wind portfolio generated
3,103 GWh, below the long-term average of 3,417 GWh and an increase of 883 GWh compared
to the prior year. The increase is attributable to the recent growth in
our portfolio, which resulted in incremental generation of 891 GWh, and a full
year’s contribution from facilities acquired in 2013 which resulted in
incremental generation of 27 GWh. Our 110 MW natural gas-fired
plant in Ontario had been operating on an uncontracted basis since April 2014.
Since then, the facility has had nominal generation as a result of low power
prices relative to gas market prices. The operations at this facility have
temporarily been suspended but remain available to be restarted should economic
conditions allow. Page79


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 The following table reflects Adjusted EBITDA,
Funds From Operations, Adjusted Funds From Operations, and provides a
reconciliation to net income for the year ended December 31: (MILLIONS, EXCEPT AS NOTED)
 
 
 
 
 2014
 
 2013Revenues
 $
 1,704
 $
 1,706Other income
 
 10
 
 11Share of cash earnings from equity-accounted investments
 
 26
 
 21Direct operating costs
 
 (524)
 
 (530)Adjusted EBITDA(1)
 
 1,216
 
 1,208Fixed earnings adjustment(2)
 
 11
 
 -Interest expense – borrowings
 
 (415)
 
 (410)Management service costs
 
 (51)
 
 (41)Current income taxes
 
 (18)
 
 (19)Less: cash portion of non-controlling interestsPreferred equity
 
 (38)
 
 (37)Participating non-controlling interests - in operating
  subsidiaries
 
 (145)
 
 (107)Funds From Operations(1)
 
 560
 
 594Less: adjusted sustaining capital expenditures(3)
 
 (58)
 
 (56)Adjusted Funds From Operations(1)
 
 502
 
 538Add: cash portion of non-controlling interests
 
 183
 
 144Add: adjusted sustaining capital expenditures
 
 58
 
 56Less: fixed earnings adjustment
 
 (11)
 
 -Other items:Depreciation
 
 (548)
 
 (535)Unrealized financial instruments gain
 
 10
 
 37Share of non-cash loss from equity-accounted investments
 
 (23)
 
 (12)Deferred income tax recovery
 
 29
 
 18Other
 
 3
 
 (31)Net income
 $
 203
 $
 215Basic and diluted earnings per LP Unit(4)
 $
 0.42
 $
 0.52
 (1)Non-IFRS
measures.  See “Cautionary Statement Regarding Use of Non-IFRS Measures”and
“Financial Review by Segments for the Year Ended December 31, 2014”. (2)The
fixed earnings adjustment relates to Brookfield Renewable’s investment in the
acquisition of the wind portfolio in Ireland. Pursuant to the terms of the
purchase and sale agreement, Brookfield Renewable acquired an economic interest
in the wind portfolio from January 1, 2014.The
transaction closed on June 30, 2014, and accordingly under IFRS, the $11
million net Funds From Operations contribution was recorded as part of the
purchase price. (3)Based
on long-term sustaining capital expenditure plans. (4)Average LP Units
outstanding during the period totaled 138.8 million (2013: 132.9 million). Net income is one important
measure of profitability, in particular because it has a standardized meaning
under IFRS. The presentation of net income on an IFRS basis for our business
will often lead to the recognition of a loss or a year-over-year decrease in
income even though the underlying cash flow generated by the assets is
supported by strong margins and stable, long-term contracts. The primary reason
for this is that we recognize a significantly higher level of depreciation for
our assets than we are required to reinvest in the business as sustaining
capital expenditures. As a result, we also measure our financial
results based on Adjusted EBITDA, Funds From Operations, and Adjusted Funds
From Operations to provide readers with an assessment of the operating cash
flow generated by our assets and the residual cash flow retained to fund distributions
and growth initiatives. Revenues totaled$1,704million which represented a year-over-yeardecreaseof$2million.  Strong
merchant pricing and annual escalations in ourPPAspartially offset lower year-over-year Page80


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 generation
from existing U.S. hydroelectric facilities and a contractual decrease in
contract price at our Louisiana facility, the net negative impact of which was
$46 million. While total generation from our
Canada hydroelectric portfolio was consistent with prior year, stronger
performance from facilities with higher relative contract prices contributed an
incremental $9 million to our financial results. In Brazil, revenues declined $14
million year-over-year as the impact of lower generation was partially offset
by our ability to capture strong merchant power pricing by keeping a portion of
our output uncontracted. While contributions from our
existing wind portfolio were consistent with prior year, revenue from our
natural gas-fired plant in Ontario decreased $40 million reflecting limited
operations throughout 2014. The recent growth in our
hydroelectric and wind portfolios and a full year’s contribution from
facilities acquired or commissioned in 2013 resulted in incremental revenues of
$151 million. The average total revenue per MWh
of $77 is consistent with the prior year. Direct operating costs
totaling $524 million represent a year-over-year decrease of $6 million
attributable to the savings achieved from the cost efficiencies at our
operations and the reduction in power purchased in the open market for our
co-generation facilities. The recent growth in our portfolio and a full year’s
costs from facilities acquired or commissioned in 2013 resulted in an
incremental$46million. Pursuant
to the terms of the purchase and sale agreement, our acquisition of the Irish
wind portfolio provided us with the economic benefit as of January 1, 2014,
despite the transaction closing on June 30, 2014. Accordingly, we have included
$11 million in Funds From Operations for the first six months of the year. Interest expense totaling
$415 million represents a year-over-year increase of $5 million. Incremental
interest costs related to financing the growth in our portfolio were $31
million, and $5 million was related to up-financing activities. Repayment of
certain subsidiary borrowings and corporate credit facilities resulted in a $17
million decrease in borrowing costs. Management service costs
totaling $51millionrepresent a year-over-yearincreaseof$10million
primarily attributable to theincrease in the market value of our LP Units
and the issuance of 10.25 million LP Units in the second quarter of 2014. The cash portion of
non-controlling interests totaling $183 million represents a year-over-year
increase of $39 million. An increase of $60 million related to the growth in
our portfolio and the partial sale of hydroelectric facilities in New England
to institutional investors in the third quarter of 2013, was partly offset by
the overall decrease in performance from certain existing assets in our U.S.
hydroelectric portfolio. Funds From Operations
totaling $560 million incorporates growth of $26 million and the net impact of
the appreciation of the U.S. dollar of $24 million. Net
income was $203 million for the year ended December 31, 2014 (2013: Net income
$215 million) resulting in a net income per LP Unit of $0.42 (2013: $0.52). Page81


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 SEGMENTED DISCLOSURES Segmented
information is prepared on the same basis that Brookfield Renewable’s CODM
manages the business, evaluates financial results, and makes key operating
decisions.  See Note 24 - Segmented information in our audited
consolidated financial statements. HYDROELECTRIC The
following table reflects the results of our hydroelectric operations for the year
ended December 31: (MILLIONS, EXCEPT AS NOTED)
 2014United
  States
 Canada
 Brazil
 TotalGeneration (GWh) – LTA(1)(2)
 
 10,785
 
 5,132
 
 3,614
 
 19,531Generation (GWh) – actual(1)(2)
 
 10,293
 
 5,570
 
 3,371
 
 19,234Revenues
 $
 719
 $
 394
 $
 265
 $
 1,378Adjusted EBITDA(3)
 
 520
 
 328
 
 198
 
 1,046Funds From Operations(3)
 $
 283
 $
 256
 $
 149
 $
 688
 (MILLIONS, EXCEPT AS NOTED)
 2013United
  States
 Canada
 Brazil
 TotalGeneration (GWh) – LTA(1)(2)
 
 9,681
 
 5,062
 
 3,656
 
 18,399Generation (GWh) – actual(1)(2)
 
 10,082
 
 5,494
 
 3,656
 
 19,232Revenues
 $
 677
 $
 399
 $
 301
 $
 1,377Adjusted EBITDA(3)
 
 494
 
 330
 
 221
 
 1,045Funds From Operations(3)
 $
 274
 $
 266
 $
 169
 $
 709
 (1)Includes
100% of generation from equity-accounted investments. (2)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (3)Non-IFRS
measures. See“Cautionary
Statement Regarding Use of Non-IFRS Measures”, and “Financial Review By Segments For
the Year Ended December 31, 2014”. United
States Generation from the portfolio was10,293GWh for theyear ended December 31, 2014, below the long-term average of10,785GWh and above prior year generation of10,082GWh. Generation from existing facilities decreased 704 GWh. Inflows
returned to more normal levels at our facilities in Tennessee, North Carolina
and the eastern United States as compared to the prior year, which had
benefited from strong hydrological conditions and above long-term average
generation. However, the impact on results from this variance was reduced by
the non-controlling interest in the Tennessee and North Carolina facilities.
Partly offsetting these decreases were the strong inflows at our New England
facilities. During the year we benefited from the merchant profile on our
recently acquired facilities in New England and Pennsylvania, and captured
strong energy pricing. The recent growth in our portfolio and a full period’s
contribution from facilities acquired in 2013 resulted in incremental
generation of 915 GWh. Revenues
totaling$719million represent a year-over-yearincrease of $42million. Revenues were
reduced by $54 million due tothe decrease in generation from
existing facilities, and a contractual decrease in the price at our Louisiana
facility. Favorable market prices at the uncontracted facilities in our portfolio
and the price escalators inherent in thePPAsfor
certain of our facilities contributed $8 million.The
recent growth in our portfolio and a full period’s contribution from facilities
acquired in 2013 resulted in incremental revenues of$88
million. Funds From Operations
totaling $283 million incorporates growth of $6 million. The increase in
revenues from existing facilities and improved performance from our
equity-accounted investments was partly offset by the cash portion of
non-controlling interests. Page82


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 Canada Generation from the portfolio was 5,570 GWh for the year ended
December 31, 2014, above the long-term average of 5,132 GWh and slightly above
the prior year generation of 5,494 GWh. We experienced strong hydrological
conditions, particularly at our facilities in Ontario. Thefacility in
British Columbia commissioned during the second quarter provided incremental generation
of 68 GWh. Revenues totaling $394 million
represent a year-over-year decrease of $5 million. Stronger performance from
existing facilities with higher relative contract prices contributed an
additional $9 million, and the recently commissioned facility in British
Columbia and a full period’s contribution from facilities acquired in 2013
resulted in incremental revenues of $12 million. Funds From Operations
totaling $256 million represent a year-over-year decrease of $10 million. The decrease
in revenues and higher borrowing costs associated with up-financing initiatives
were partly offset by the cost efficiencies at our operations. The appreciation
of the U.S. dollar impacted revenues by $26 million, but also affected costs
and other expenses resulting in a net decrease in Funds From Operations of $17
million. Brazil Generation from the
portfolio was 3,371 GWhfor theyear
ended December 31, 2014 belowprior year generation of 3,656 GWh and the
long-term average of3,614 GWh. The
decrease is primarily attributable to the drought-like conditions experienced
in the year;however, the impact was mitigated by our participation in the
hydrological balancing pool.The optionality maintained in the portfolio
allowed us to benefit from the strong power pricing environment and help offset
the effects of the lower generation. During the year we secured 3 – 5 year
contracts for 567 GWh at prices ranging from R$190 – R$270 per MWh,
significantly above existing contracts expiring in the near term. A full
period’s contribution from a facility commissioned in 2013 provided an
incremental 59 GWh of generation. Revenues totaling $265
million represent a year-over-year decrease of $36 million. Strong power
pricing was offset by the effects of the lower volumes. Funds From Operations totaling
$149 million represent a year-over-year decrease of $20 million. The
appreciation of the U.S. dollar impacted revenues by $25 million, but also
affected costs and other expenses resulting in a net decrease in Funds From
Operations of $14 million. Page83


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 WIND The
following table reflects the results of our wind operations for the year ended
December 31: (MILLIONS, EXCEPT AS NOTED)
 2014United
  States
 Canada
 Europe
 TotalGeneration (GWh) – LTA(1)(2)
 
 1,394
 
 1,197
 
 826
 
 3,417Generation (GWh) – actual(1)(2)
 
 1,170
 
 1,042
 
 891
 
 3,103Revenues
 $
 129
 $
 123
 $
 45
 $
 297Adjusted EBITDA(3)
 
 90
 
 108
 
 29
 
 227Funds From Operations(3)
 $
 17
 $
 70
 $
 18
 $
 105
 (MILLIONS, EXCEPT AS NOTED)
 2013United
  States
 Canada
 Europe
 TotalGeneration (GWh) – LTA(1)(2)
 
 1,341
 
 1,197
 
 N/A
 
 2,538Generation (GWh) – actual(1)(2)
 
 1,145
 
 1,075
 
 N/A
 
 2,220Revenues
 $
 125
 $
 133
 $
 N/A
 $
 258Adjusted EBITDA(3)
 
 85
 
 113
 
 N/A
 
 198Funds From Operations(3)
 $
 21
 $
 69
 $
 N/A
 $
 90
 (1)Includes
100% of generation from equity-accounted investments. (2)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (3)Non-IFRS
measures. See“Cautionary
Statement Regarding Use of Non-IFRS Measures”, and “Financial Review By Segments For
the Year Ended December 31, 2014”. United States Generation
from the portfolio was1,170GWh for
theyear ended December 31, 2014, belowthe
long-term average of1,394GWh due
to lower wind conditions across the portfolio, and consistent with prior year
generation of1,145GWh. A full period’s contribution from
the facilities acquired in 2013 resulted in incremental generation of 27 GWh. Revenues totaling $129 million
represent a year-over-year increase of $4 million primarily attributable to the
full period’s contribution from the facilities acquired in 2013. Funds From Operations
totaling $17 million represent a year-over-year decrease of $4 million,
primarily attributable to the increase in non-controlling interests. Canada Generation from our Canadian wind portfolio was 1,042 GWh, below
the long-term average of 1,197 GWhandprior
year generation of 1,075 GWh, all attributable tolower
wind conditions. Generation at one of our facilities was curtailed, reducing
generation by 29 GWh, for which we received compensation at the PPA price. Revenues totaling $123 million
represent a year-over-year decrease of $10 million, primarily attributable to
theappreciation of the U.S. dollar. Funds From Operations totaling
$70 million was consistent year-over-year. The decrease in revenues was offset
by cost efficiencies at our operations. Europe Generation from our wind
portfolio in Ireland was 891 GWh for the year ended December 31, 2014. We substantially
completed construction on two Irish wind facilities totaling 125 MW. The
facilities generated 125 GWh in 2014 and received payments under PPAs. These
facilities, which are expected to generate 349 GWh annually, were fully
commissioned in Q1 2015. Page84


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 Revenues totaled
$45 million for theyear ended December 31, 2014and
included a $12 million contribution from the two development projects. Funds From Operations
totaling $18 million includes an $11 million fixed earnings adjustment amount
for the period from January 1, 2014 to June 30, 2014. GENERATION AND FINANCIAL REVIEW FOR THE YEAR
ENDED DECEMBER 31, 2013 The
following table reflects the actual and long-term generation for the year ended
December 31: Variance of ResultsActual vs.Actual Generation(1)
 LTA Generation(1)
 Actual vs. LTA
 Prior YearGENERATION (GWh)
 2013
 2012
 2013
 2012
 2013
 2012Hydroelectric generationUnited States
 10,082
 5,913
 9,681
 7,205
 401
 (1,292)
 4,169Canada
 5,494
 3,953
 5,062
 4,972
 432
 (1,019)
 1,541Brazil(2)
 3,656
 3,470
 3,656
 3,470
 -
 -
 18619,232
 13,336
 18,399
 15,647
 833
 (2,311)
 5,896Wind energyUnited States
 1,145
 619
 1,341
 837
 (196)
 (218)
 526Canada
 1,075
 1,090
 1,197
 1,197
 (122)
 (107)
 (15)2,220
 1,709
 2,538
 2,034
 (318)
 (325)
 511Other
 770
 897
 899
 521
 (129)
 376
 (127)Total generation(3)
 22,222
 15,942
 21,836
 18,202
 386
 (2,260)
 6,280
 (1)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (2)In
Brazil, assured generation levels are used as a proxy for long-term average. (3)Includes
100% of generation from equity-accounted investments. Generation levels during the year
ended December 31, 2013 totaled 22,222 GWh, an increase of 6,280 GWh as
compared to the same period of the prior year. The increase is attributable to
favorable hydrology and wind conditions when compared to the prior year, the
contribution of assets acquired or commissioned during the year in both our
hydroelectric and wind portfolios, and a full year of generation from wind
facilities acquired or commissioned in 2012. Generation from the hydroelectric
portfolio totaled 19,232 GWh, and above the long-term average of 18,399 GWh and
an increase of 5,896 GWh as compared to the prior year. Generation from
existing hydroelectric assets was 15,934 GWh compared to 13,336 GWh in the
prior year, as generation returned to more normal levels relative to the dry
conditions in the prior year. In addition, recent acquisitions and assets
reaching commercial operations increased generation by 3,298 GWh. Generation from the wind
portfolio totaled 2,220 GWh, below the long-term average of 2,538 GWh and an
increase of 511 GWh as compared to the prior year. The increase from prior year
was primarily due to additional generation of 321 GWh from facilities acquired
in California,and more favorable
wind conditions as compared to the prior year. The prior year results do not
reflect a full year of operations for assets acquired or commissioned. Page85


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 The following table reflects Adjusted EBITDA,
Funds From Operations, Adjusted Funds From Operations, and provides a reconciliation
to net income (loss) for the year ended December 31: (MILLIONS, EXCEPT AS NOTED)
 
 
 
 
 2013
 
 2012Revenues
 $
 1,706
 $
 1,309Other income
 
 11
 
 16Share of cash earnings from
  equity-accounted investments
 
 21
 
 13Direct operating costs
 
 (530)
 
 (486)Adjusted EBITDA(1)
 
 1,208
 
 852Interest expense – borrowings
 
 (410)
 
 (411)Management service costs
 
 (41)
 
 (36)Current income taxes
 
 (19)
 
 (14)Less: cash portion of non-controlling
  interestsPreferred equity
 
 (37)
 
 (16)Participating non-controlling interests -
  in operating subsidiaries
 
 (107)
 
 (28)Funds From Operations(1)
 
 594
 
 347Less: adjusted sustaining capital
  expenditures(2)
 
 (56)
 
 (52)Adjusted Funds From Operations(1)
 
 538
 
 295Add: cash portion of non-controlling
  interests
 
 144
 
 44Add: adjusted sustaining capital
  expenditures
 
 56
 
 52Other items:Depreciation(3)
 
 (535)
 
 (483)Unrealized financial instrument gain (loss)
 
 37
 
 (23)Share of non-cash loss from
  equity-accounted investments
 
 (12)
 
 (18)Deferred income tax recovery
 
 18
 
 54Other
 
 (31)
 
 (16)Net income (loss)
 $
 215
 $
 (95)Basic and diluted earnings (loss) per LP
  Unit(4)
 $
 0.52
 $
 (0.26)
 (1)Non-IFRS
measures.  See “Cautionary Statement Regarding Use of Non-IFRS Measures” and
“Financial Review by Segments for the Year Ended December 31, 2013”. (2)Based
on long-term sustaining capital expenditure plans. (3)See
Note 2(f) - Change in accounting estimates in our audited consolidated
financial statements concerning changes in estimates related to depreciation
expense. (4)Average
LP Units outstanding during the period totaled 132.9 million (2012: 132.9
million). Revenues
totaled $1,706 million for the year ended December 31, 2013, representing a
year-over-year increase of $397 million. Approximately $209 million of the
increase was attributable to the return to long-term average generation levels
at existing hydroelectric facilities, while contributions from facilities
acquired or commissioned during the year, and full year of contribution from
assets acquired in 2012 amount to approximately $218 million. The increase
in revenues was partially offset by the appreciation of the U.S. dollar as
compared to the Brazilian real and the Canadian dollar. Direct
operating costs totaled $530 million for the year ended December 31, 2013,
representing a year-over-year increase of $44 million. Of this amount, $62
million was attributable to recently acquired facilities, and the balance from
lower costs with the appreciation of the U.S. dollar relative to the Brazilian
real. Interest
expense totaled $410 million for the year ended December 31, 2013, which was
consistent year-over-year. Lower borrowing costs attributable to the savings
provided by the repayment and refinancing activities, and to changes in foreign
exchange rates in the year, were offset by borrowing costs associated with the
financing related to the growth in our portfolio. With the growth in the
portfolio of renewable energy assets, we increased long-term debt by $504 million.
We also repaid higher cost borrowings and refinanced certain subsidiary
borrowings.  Our weighted average annualized interest rate on subsidiary
borrowings decreased from 6.4% in 2012 to 6.0% in 2013. Page86


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 Management service costs reflect aBase Management Feeof $20 million annually plus 1.25% of the growth in total capitalization
value. Management services costs totaled $41 million for the year ended
December 31, 2013, which was $5 million higher than the same period in the
prior year. The increase is primarily attributable to an increase in the
average fair market value of the LP Units, and the issuance of preferred
equity, on an accretive basis. The cash
portion of non-controlling interests for the year ended December 31, 2013 was
$144 million as compared to $44 million in the prior year. An increase in
operating results from existing facilities and contributions from recently
acquired facilities amounted to $79 million. The completion of two separate issuances
of Class A Preference Shares during the year increased distributions to
preferred shareholders by $21 million. Funds
From Operations totaled $594 million for the year ended December 31, 2013, an
increase of $247 million year-over-year. Depreciation
expense for the year ended December 31, 2013 increased by $72 million due to
recently acquired assets, which was partly offset by a $15 million decrease in
depreciation due to the impact of changes made in the prior year to the
estimated service lives of certain assets. Net
income was $215 million for the year ended December 31, 2013 (2012: Net loss
$95 million). SEGMENTED DISCLOSURES HYDROELECTRIC The
following table reflects the results of our hydroelectric operations for the year
ended December 31: (MILLIONS, EXCEPT AS NOTED)
 2013United
  States
 Canada
 Brazil
 TotalGeneration (GWh) – LTA(1)(2)
 
 9,681
 
 5,062
 
 3,656
 
 18,399Generation (GWh) – actual(1)(2)
 
 10,082
 
 5,494
 
 3,656
 
 19,232Revenues
 $
 677
 $
 399
 $
 301
 $
 1,377Adjusted EBITDA(3)
 
 494
 
 330
 
 221
 
 1,045Funds From Operations(3)
 $
 274
 $
 266
 $
 169
 $
 709
  (MILLIONS, EXCEPT AS NOTED)
 2012United
  States
 Canada
 Brazil
 TotalGeneration (GWh) – LTA(1)(2)
 
 7,205
 
 4,972
 
 3,470
 
 15,647Generation (GWh) – actual(1)(2)
 
 5,913
 
 3,953
 
 3,470
 
 13,336Revenues
 $
 438
 $
 272
 $
 340
 $
 1,050Adjusted EBITDA(3)
 
 294
 
 213
 
 236
 
 743Funds From Operations(3)
 $
 148
 $
 148
 $
 151
 $
 447
 (1)Includes
100% generation from equity-accounted investments. (2)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (3)Non-IFRS
measures. See“Cautionary
Statement Regarding Use of Non-IFRS Measures” and “Financial Review
by Segments for the Year ended December 31, 2013”. United
States Generation from the portfolio was
10,082 GWh for the year ended December 31, 2013 compared to the long-term
average of 9,681 GWh and prior year generation of 5,913 GWh. The increase from
prior year was driven by an additional 3,093 GWh from the recently acquired
assets in Tennessee, North Carolina and Maine, and an increase in generation
from existing assets. In the prior year, dry conditions Page87


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 in
New York State and in the mid-western United States resulted in generation
levels below long-term average. Revenues totaled $677 million for
the year ended December 31, 2013 representing a year-over-year increase of $239
million. Of this amount, $147 million was attributable to generation from
recently acquired facilities, while $92 million was attributable to higher
generation levels at existing facilities. Funds From Operations  totaled
$274 million for the year ended December 31, 2013, an increase of $126 million
resulting primarily from the increase in revenues from higher generation and
the contribution from recently acquired assets. The increase was partially
offset by higher direct operating costs and interest expense associated with
the new facilities, and an increase in the cash portion of non-controlling
interests. Canada Generation from the portfolio was 5,494 GWh for the year ended
December 31, 2013 compared to the long-term average of 5,062 GWh and to prior
year generation of 3,953 GWh. Generation returned to long-term average, with
strong inflows at our eastern Canadian assets. Revenues totaled $399 million for
the year ended December 31, 2013, representing an increase of $127 million,
which was primarily attributable to the increase in generation levels. Funds From Operations totaled
$266 million for the year ended December 31, 2013, representing an increase of
$118 million. Brazil Generation from the portfolio was
3,656 GWh for the year ended December 31, 2013 compared to the prior year
generation of 3,470 GWh. The increase in generation is primarily attributable
to a facility commissioned during the year, and a full year’s contribution from
one facility acquired and one facility commissioned in the second half of 2012. Revenues totaled $301 million for
the year ended December 31, 2013, representing a year-over-year decrease of $39
million. Revenues declined with the appreciation of the U.S. dollar compared to
the Brazilian real by $36 million. In addition, revenues were higher by $12
million due to generation from facilities integrated within the last year and
lower by $15 million due to lower allocated energy volumes. Funds From Operations totaled
$169 million for the year ended December 31, 2013 representing a year-over-year
increase of $18 million. Funds From Operations benefited from the repayment of
higher-yielding subsidiary borrowings in the prior year and resulted in a $37
million decrease in interest expense. Page88


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 WIND The
following table reflects the results of our wind operations for the year ended
December 31: (MILLIONS, EXCEPT FOR AS NOTED)
 2013United
  States
 Canada
 TotalGeneration (GWh) – LTA(1)(2)
 
 1,341
 
 1,197
 
 2,538Generation (GWh) – actual(1)(2)
 
 1,145
 
 1,075
 
 2,220Revenues
 $
 125
 $
 133
 $
 258Adjusted EBITDA(3)
 
 85
 
 113
 
 198Funds From Operations(3)
 $
 21
 $
 69
 $
 90
 2012(MILLIONS, EXCEPT FOR AS NOTED)
 United
  States
 Canada
 TotalGeneration (GWh) – LTA(1)(2)
 
 837
 
 1,197
 
 2,034Generation (GWh) – actual(1)(2)
 
 619
 
 1,090
 
 1,709Revenues
 $
 58
 $
 131
 $
 189Adjusted EBITDA(3)
 
 31
 
 113
 
 144Funds From Operations(3)
 $
 2
 $
 69
 $
 71
 (1)Includes
100% generation from equity-accounted investments. (2)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (3)Non-IFRS
measures. See“Cautionary
Statement Regarding Use of Non-IFRS Measures” and “Financial Review
by Segments for the Year ended December 31, 2013”. United States Generation from the portfolio was
1,145 GWh for the year ended December 31, 2013, and lower than the long-term
average of 1,341 GWh and higher than the prior year generation of 619 GWh. The
increase in generation from prior year is attributable to 321 GWh from
facilities acquired in California during the year, a full year of generation
from four facilities acquired or commissioned in 2012, and stronger wind
conditions at existing facilities. Revenues totaled $125 million for
the year ended December 31, 2013, representing a year-over-year increase of $67
million. Of this amount, $34 million was attributable to generation from the
assets acquired in California during the year. In addition, revenues benefited
from a full year of contribution from assets acquired or commissioned in 2012,
and from stronger wind conditions. Funds From Operations totaled $21
million for the year ended December 31, 2013 compared to $2 million in the
prior year. Canada Generation from the portfolio was
1,075 GWh for the year ended December 31, 2013, substantially unchanged from
the prior year, and below the long-term average of 1,197 GWh due to wind
conditions. Revenues and Funds From
Operations totaled $133 million and $69 million, respectively, for the year
ended December 31, 2013. Page89


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 Analysis Of Consolidated Financial Statements and Other
Information Property, Plant and Equipment In accordance with IFRS, Brookfield Renewable has elected
to revalue its property, plant and equipment at a minimum on an annual basis,
as at December 31st of each year. Substantially all of Brookfield
Renewable’s property, plant and equipment, are carried at fair value as opposed
to historical cost, using a 20-year discounted cash flow model. This model
incorporates future cash flows from long-term PPAs that are in place where it
is determined that the PPAs are linked specifically to the related power
generating assets. The model also includes estimates of future electricity
prices, anticipated long-term average generation, estimated operating and
capital expenditures, and assumptions about future inflation rates and discount
rates by geographical location. For power generating assets acquired through
business combinations during the year, Brookfield Renewable initially measures
the assets at fair value consistent with the policy described in Note 2(l) –
Business combinations in our audited consolidated financial statements.
Accordingly, in the year of acquisition, power generating assets are not
revalued at year-end unless there is an indication that assets are impaired. Property, plant and equipment, at fair value totaled $18.6 billion
as at December 31, 2014 as compared to $15.7 billion as at December 31, 2013.
During the year ended December 31, 2014, the acquisition of 502 MW of
hydroelectric facilities and a 326 MW wind portfolio totaling $2.4 billion were
not revalued at year-end. The development and construction of power generating
assets totaled $214 million. The revaluation of property, plant and equipment
resulted in an increase in fair value of $1.7 billion. Property, plant and
equipment were impacted by foreign currency changes related to the appreciation
of the U.S. dollar in the amount of $910 million. We also recognized
depreciation expense of $548 million which is significantly higher than what we
are required to reinvest in the business as sustaining capital
expenditures. Fair value of property,
plant and equipment can vary with discount and terminal capitalization rates.
Excluding power generating assets acquired during the year ended December 31,
2014, the
following table summarizes the impact of a change in discount rates and
terminal capitalization rates on the fair value of property, plant and
equipment as at December 31: (BILLIONS)
 
 2014
 
 201350 bps increase in discount rates
 $
 (1.3)
 $
 (1.1)50 bps decrease in discount rates
 
 1.5
 
 1.350 bps increase in terminal capitalization
  rate(1)
 
 (0.3)
 
 (0.3)50 bps decrease in terminal capitalization
  rate(1)
 
 0.4
 
 0.3
 (1)The terminal capitalization rate
applies only to hydroelectric assets in the United States and Canada. Terminal values are included in the valuation of
hydroelectric assets in the United States and Canada.  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 without consideration of
potential renewal value. The weighted-average remaining duration at December
31, 2014, was 15 years (2013: 16 years). Consequently, there is no terminal
value attributed to the hydroelectric assets in Brazil. If an additional 20
years of cash flows were included, the fair value of property, plant and
equipment would increase by approximately $1 billion. See Note 11 - Property,
plant and equipment, at fair value in our audited consolidated financial
statements. A 5% change in the estimates of future electricity prices
would increase or decrease the fair value of property, plant and equipment by
approximately $500 million. 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 year 2020. A one year change would increase or decrease the fair value
of property, plant and equipment by approximately $225 million. Page90


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 liquidity
and capital Resources 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.As at December 31, 2014,long-term
indebtedness increasedfromDecember
31,2013as a result of the portfolio growth.The debt
to capitalization ratio decreased marginally from December 31, 2013 and was 40%
as at December 31, 2014. Capitalization The following table summarizes the capitalization using book
values as at December 31: (MILLIONS, EXCEPT AS NOTED)
 
 
 2014
 
 2013Credit facilities(1)
 $
 401
 $
 311Corporate borrowings(1)
 
 1,286
 
 1,406Subsidiary borrowings(2)
 
 5,991
 
 4,906Long-term indebtedness
 
 7,678
 
 6,623Deferred income tax liabilities, net of
  deferred income tax assets
 
 2,495
 
 2,148Equity
 
 8,881
 
 7,536Total capitalization
 $
 19,054
 $
 16,307Debt to total capitalization
 
 40%
 
 41%
 (1)Issued
by a subsidiary of Brookfield Renewable and guaranteed by Brookfield Renewable.
The amounts are unsecured. (2)Issued
by subsidiaries of Brookfield Renewable and secured against their respective
assets. The amounts are not guaranteed. During
the year ended December 31, 2014 we completed the following financings: ·In January 2014, the $279 million bridge loan associated with a
360 MW hydroelectric portfolio located in New England was refinanced to July 2017
at LIBOR plus 2.25%. ·In February 2014, as part of the acquisition of the 70 MW
hydroelectric portfolio in New England, $140 million of financing was obtained through
a bond issuance with a 5.5% interest rate maturing in February 2024. ·In
March 2014, we up-financed indebtedness associated with a 349 MW Ontario
hydroelectric portfolio through the issuance of C$90 million of senior and C$60
million of subordinate bonds with interest rates of  3.8% and 5.0%,
respectively, maturing in June 2023. ·In
June 2014, we refinanced a $125 million debt facility associated with a 167 MW
hydroelectric portfolio in New England through the issuance of 8-year notes
maturing in January 2022 at a fixed rate of 4.59%. ·In June 2014, as part of the acquisition of the 326 MW Irish wind
portfolio, we assumed a €169 million ($232 million) loanwith a fixed interest rate of 4.6%, including the related interest rate
swaps, maturing in December 2026. ·In August 2014, we extended the maturity for $1,280 million in
corporate credit facilities to June 2019 and reduced the applicable margin from
1.25% to 1.20%. The credit facilities now also provide us with an option to
borrow in Euro (€) and British Pound Sterling (£). ·In August 2014, we secured a €160 million ($210 million) term loan
for 153 MW of our wind facilities in Ireland withan
initial fixed rate of 2.9%, including the related interest rate swaps,maturing
in December 2026. ·In October 2014, we secured a $560 million term loan associated
with a 417 MW hydroelectric facility in Pennsylvania. A portion of the proceeds
was used to prepay the high-yielding $65 million bond initially assumed in
connection with the acquisition of the facility. The debt bears interest at
LIBOR plus 1.75%, with the margin increasing 25 basis points annually, and
matures in June 2018. Page91


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 ·In November 2014, we secured an 18-month extension on a $250
million term loan associated with a hydroelectric portfolio in Tennessee and
North Carolina with a fixed interest rate of 3.20%, including the related
interest rate swaps, and maturing in May 2016. ·In
December 2014, we secured a€188 million ($227 million) construction and
term loan for 137 MW of our development projects in Ireland. An amount of €168
million ($203 million) was initially drawn on the loan at a rate of 2.82%,
including the related interest rate swaps, maturing in December 2027. On
June 10, 2014, we completed a bought deal LP Unit offering of 10.25 million LP
Units at a price of C$31.70 per LP Unit for gross proceeds of C$325 million
($297 million). The net proceeds were used to repay outstanding
indebtedness and for general corporate purposes. Available liquidity We operate with sufficient liquidity to
enable us to fund growth initiatives, capital expenditures, distributions,
withstand sudden adverse changes in economic circumstances or short-term
fluctuations in generation, and to finance the business on an investment grade
basis. Principal sources of liquidity are cash flows from operations and access
to public and private capital markets. The following table
summarizes the available liquidity as at December 31: (MILLIONS)
 2014
 2013Cash and cash equivalents
 $
 150
 $
 203Credit facilitiesAuthorized credit facilities
 
 1,480
 
 1,480Draws on credit facilities(1)
 
 (401)
 
 (311)Issued letters of credit
 
 (227)
 
 (212)Available portion of credit facilities
 
 852
 
 957Available liquidity
 $
 1,002
 $
 1,160
 (1)Amounts are unsecured and
revolving. Interest rate is at the LIBOR plus 1.20% (December 31, 2013: 1.25%).  Page92


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 Long-term
debt and credit facilities The following table summarizes our principal repayment obligations
and maturities as at December 31, 2014: (MILLIONS)
 2015
 2016
 2017
 2018
 2019
 Thereafter
 TotalPrincipal repaymentsSubsidiary borrowings(1)United States
 $
 147
 $
 347
 $
 784
 $
 777
 $
 67
 $
 1,346
 $
 3,468Canada
 
 53
 
 135
 
 49
 
 54
 
 52
 
 1,455
 
 1,798Brazil
 
 23
 
 22
 
 21
 
 20
 
 19
 
 84
 
 189Europe
 
 33
 
 36
 
 40
 
 41
 
 44
 
 400
 
 594256
 
 540
 
 894
 
 892
 
 182
 
 3,285
 
 6,049Corporate borrowings andcredit facilities(1)
 
 -
 
 258
 
 -
 
 172
 
 401
 
 861
 
 1,692Equity-accounted investments
 30
 
 -
 
 125
 
 -
 
 -
 
 -
 
 155286
 
 798
 
 1,019
 
 1,064
 
 583
 
 4,146
 
 7,896Interest payable(2)Subsidiary borrowingsUnited States
 
 182
 
 177
 
 173
 
 125
 
 97
 
 626
 
 1,380Canada
 
 101
 
 99
 
 92
 
 89
 
 85
 
 556
 
 1,022Brazil
 
 13
 
 11
 
 10
 
 8
 
 7
 
 22
 
 71Europe
 
 21
 
 19
 
 19
 
 19
 
 17
 
 75
 
 170317
 
 306
 
 294
 
 241
 
 206
 
 1,279
 
 2,643Corporate borrowings andcredit facilities
 
 75
 
 75
 
 59
 
 59
 
 47
 
 189
 
 504Equity-accounted investments
 5
 
 5
 
 2
 
 -
 
 -
 
 -
 
 12397
 
 386
 
 355
 
 300
 
 253
 
 1,468
 
 3,159$
 683
 $
 1,184
 $
 1,374
 $
 1,364
 $
 836
 $
 5,614
 $
 11,055
 (1)Subsidiary
borrowings and corporate borrowings and credit facilities include $8 million
and $71 million of unamortized premiums and deferred financing fees,
respectively. (2)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 2019 on acceptable terms and will do so
opportunistically based on the prevailing interest rate environment. Page93


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 The overall maturity
profile and average interest rates associated with our borrowings and credit
facilities as at December 31 are as follows: Average
  term (years)
 Average
  interest rate (%)2014
 
 2013
 
 2014
 
 2013Corporate borrowings
 
 6.7
 
 7.7
 5.3
 
 5.3Subsidiary borrowings
 
 10.4
 
 11.8
 5.3
 
 6.0Credit facilities
 
 4.5
 
 3.8
 1.4
 
 1.4
 Our Series 3 corporate
medium-term notes advanced one year toward their maturity in 2016. During the
year ended December 31, 2014, we continued to capitalize on the low interest
rate environment and reduced our borrowing costs on subsidiary borrowings from
6.0% to 5.3%. The average term and interest rate of our subsidiary borrowings
decreased during the year primarily due to securing the $560 million term loan
on the 417 MW facility in Pennsylvania. Also during the year, we extended the
maturity date for $1,280 million of our credit facilities to June 30, 2019. Page94


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 CONTRACT PROFILE We have a largely predictable
profile driven by both long-term PPAs with a weighted-average remaining
duration of 18 years combined with a well-diversified portfolio that reduces
variability in our generation volumes. We operate the business on a largely
contracted basis to ensure a high degree of predictability in Funds From
Operations. We do however maintain a long-term view that electricity prices and
the demand for electricity from renewable sources will rise due to a growing
level of acceptance around climate change and the legislated requirements in
some areas to diversify away from fossil fuel based generation. The
following table sets out contracts over the next five years for generation output
assuming long-term average: FOR THE YEAR ENDED DECEMBER 31
 2015
 
 2016
 
 2017
 
 2018
 
 2019Generation (GWh)Contracted(1)HydroelectricUnited States(2)
 
 8,847
 
 9,053
 
 7,018
 
 7,018
 
 7,018Canada
 
 5,185
 
 5,185
 
 5,185
 
 5,185
 
 5,175Brazil
 
 2,888
 
 2,689
 
 1,961
 
 1,736
 
 1,73616,920
 
 16,927
 
 14,164
 
 13,939
 
 13,929Wind energyUnited States
 
 1,292
 
 1,292
 
 1,292
 
 1,292
 
 1,292Canada
 
 1,197
 
 1,197
 
 1,197
 
 1,197
 
 1,197Europe
 
 1,130
 
 1,146
 
 1,146
 
 1,146
 
 1,1463,619
 
 3,635
 
 3,635
 
 3,635
 
 3,63520,539
 
 20,562
 
 17,799
 
 17,574
 
 17,564Uncontracted
 3,548
 
 3,515
 
 6,269
 
 6,494
 
 6,504Total long-term average
 24,087
 
 24,077
 
 24,068
 
 24,068
 
 24,068Long-term average on a proportionate basis(3)
 18,668
 
 18,650
 
 18,642
 
 18,641
 
 18,641Contracted generation - as at December 31,
  2014% of total generation
 85
 %
 85
 %
 74
 %
 73
 %
 73
 %% of total generation on a proportionate
  basis(3)
 91
 %
 90
 %
 83
 %
 82
 %
 82
 %Price per MWh - total generation
 $
 81
 $
 80
 $
 83
 $
 84
 $
 85Price per MWh - total generation on aproportionate basis
 
 79
 
 79
 
 80
 
 81
 
 82
 (1)Assets
under construction are included when long-term average and pricing details are
available and the commercial operation date is established in a definitive
construction contract. (2)Includes
generation of 1,812 GWh for 2015 and 2,035 GWh for 2016 secured under financial
contracts. (3)Long-term
average on a proportionate basis includes wholly-owned assets, and our share of
partially-owned assets and equity-accounted investments. The majority of the long-term PPAs are with investment-rated or
creditworthy counterparties. The composition of our contracted generation under
PPAs for 2015 is comprised of:Brookfield (45%), public power authorities
(23%), industrial users (29%) and distribution companies (3%). Page95


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 SUMMARY CONSOLIDATED
BALANCE SHEETS The following table provides a summary of the key line
items on the consolidated balance sheets as at December 31: (MILLIONS)
 
 2014
 2013Property, plant and equipment, at fair
  value
 $
 18,566
 $
 15,741Equity-accounted investments
 
 273
 
 290Total assets
 
 19,849
 
 16,999Long-term debt and credit facilities
 
 7,678
 
 6,623Deferred income tax liabilities
 
 2,637
 
 2,265Total liabilities
 
 10,968
 
 9,463Preferred equity
 
 728
 
 796Participating non-controlling interests -
  in operating subsidiaries
 
 2,062
 
 1,303General partnership interest in a holding
  subsidiary held by Brookfield
 
 59
 
 54Participating non-controlling interests -
  in a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 
 2,865
 
 2,657Limited partners' equity
 
 3,167
 
 2,726Total liabilities and equity
 
 19,849
 
 16,999
 Contractual obligations Development and construction The remaining development project costs on
the 25 MW hydroelectric project in Brazil and three wind facilities in Ireland
totaling 137 MW of capacity, are expected to be $164 million. As at December
31, 2014, restricted cash in the amount of $56 million was held and reserved
for the purpose of funding the remaining costs. The projects in Ireland are
expected to be fully operational by the end of 2015 and the hydroelectric
facility in Brazil during 2017. Commitments
and contingencies In November 2014, we
entered into an agreement to acquire a 488 MW portfolio in Brazil comprising
hydroelectric, wind, and biomass generating capacity. The portfolio is expected
to generate approximately 2,100 GWh annually. The transaction represents a total
enterprise value of $R2.4 billion ($935 million). The transaction is expected
to close in the first half of 2015, subject to regulatory approvals and closing
conditions. Also in November 2014, we signed an agreement to acquire two
advanced hydroelectric development projects in Brazil totaling 47 MW which,
once fully commissioned, are expected to generate 280 GWh annually. We
completed this acquisition in February 2015; refer to “Subsequent Events”.
These acquisitions are being pursued with our institutional partners, and
Brookfield Renewable will retain an approximate 40% interest. At the balance sheet date,
we had commitments for future minimum lease payments under non-cancellable
leases which fall due as follows: (MILLIONS)
 2015
 2016
 2017
 2018
 2019
 Thereafter
 TotalOperating leases
 $
 21
 $
 22
 $
 19
 $
 18
 $
 17
 $
 151
 $
 248Capital leases
 
 -
 
 -
 
 -
 
 -
 
 1
 
 43
 
 44Total
 $
 21
 $
 22
 $
 19
 $
 18
 $
 18
 $
 194
 $
 292
 Brookfield Renewable, on behalf of its subsidiaries, and
subsidiaries themselves have provided letters of credit, which include, but are
not limited to, guarantees for debt service reserves, capital reserves,
construction completion and performance. See “Liquidity and Capital Resources”
for further details. Page96


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 Brookfield Renewable along
with institutional investors have provided letters of credit, which include,
but are not limited to, guarantees for debt service reserves, capital reserves,
construction completion and performance as it relates to interests in the
Brookfield Americas Infrastructure Fund and the Brookfield Infrastructure Fund
II. As at December 31, 2014, letters of credit issued by Brookfield Renewable
along with institutional investors were $125 million (2013: $93 million). Guarantees In the normal course of operations, we execute agreements that
provide for indemnification and guarantees to third parties in transactions
such as acquisitions, construction projects, capital projects, and purchases of
assets. We have also agreed to indemnify our directors and certain of our
officers and employees. The nature of the indemnifications prevents us from
making a reasonable estimate of the maximum potential amount that could be
required to pay third parties, as many of the agreements do not specify a
maximum amount and the amounts are dependent upon the outcome of future
contingent events, the nature and likelihood of which cannot be determined at
this time. Historically, we have made no significant payments under
indemnification agreements. Off-Balance Sheet Arrangements Brookfield Renewable has no
off-balance sheet financing arrangements. 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. Brookfield
Renewable sells electricity to Brookfield through long-term PPAs to provide contracted
cash flow and reduce Brookfield Renewable’s exposure to electricity prices in
deregulated power markets. Brookfield Renewable also benefits from a wind
levelization agreement with Brookfield which reduces the exposure to the
fluctuation of wind generation at certain facilities and thus improves the
stability of its cash flow. In addition to these agreements,
Brookfield Renewable and Brookfield have executed other agreements that are described
in Note 9 - Related Party Transactions in our audited consolidated financial
statements. Brookfield Renewable has also entered
into a number of voting agreements with Brookfield whereby Brookfield, as
managing member of entities related to Brookfield Americas Infrastructure Fund
and Brookfield Infrastructure Fund II, in which Brookfield Renewable holds investments
in power generating operations with institutional partners, agreed to provide
to Brookfield Renewable the authority to direct the election of the Boards of
Directors of such entities. Page97


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 The following table reflects the related party agreements and
transactions on the consolidated statements of income (loss), for the year
ended December 31: (MILLIONS)
 
 2014
 
 2013
 
 2012RevenuesPower purchase and revenue agreements
 $
 433
 $
 456
 $
 376Wind levelization agreement
 
 6
 
 6
 
 2$
 439
 $
 462
 $
 378Direct operating costsEnergy purchases
 $
 (9)
 $
 (36)
 $
 (40)Energy marketing fee
 
 (21)
 
 (20)
 
 (18)Insurance services
 
 (29)
 
 (26)
 
 (18)$
 (59)
 $
 (82)
 $
 (76)Management service costs
 $
 (51)
 $
 (41)
 $
 (36)
 Revenues from power purchase and
revenue agreements for the year ended December 31, 2014 were lower as compared
to the prior year. This decrease is primarily due to the reduction in the
level of price support and reflects the strong pricing environment which we
benefited from in the first quarter of 2014. Energy purchases for the year
ended December 31, 2014 were lower as compared to the prior year as a result of
the reduction in power purchased for our co-generation facilities. The following table reflects the impact
of the related party agreements and transactions on the consolidated balance
sheets as at December 31: (MILLIONS)
 Related party
 
 2014
 
 2013Current assetsDue from related partiesAmounts due from
 Brookfield
 $
 54
 $
 36Equity accounted investments and other
 
 9
 
 12$
 63
 $
 48Current liabilitiesDue to related partiesAmount due to
 Brookfield
 $
 56
 $
 48Accrued distributions payable on LPUnits and Redeemable/Exchangeablepartnership units
 Brookfield
 
 21
 
 62Amount due to
 Equity accounted investments and other
 
 2
 
 -$
 79
 $
 110
 Page98


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 CONSOLIDATED STATEMENTS OF CASH FLOWS The following table summarizes the key items on the consolidated
statements of cash flows, for the year ended December 31: (MILLIONS)
 2014
 2013
 2012Cash flow provided by (used in):Operating activities
 $
 700
 $
 735
 $
 413Financing activities
 
 1,299
 
 (263)
 
 335Investing activities
 
 (2,037)
 
 (397)
 
 (828)Foreign exchange loss on cash
 
 (15)
 
 (9)
 
 (8)(Decrease) increase in cash and cash
  equivalents
 $
 (53)
 $
 66
 $
 (88)
 Cash
and cash equivalents as at December 31, 2014 totaled $150 million, representing
a decrease of $53 million since December 31, 2013. Operating Activities Cash
flows provided by operating activities totaling $700 million for the year ended
December 31, 2014 represent a year-over-year decrease of $35 million primarily
attributable to the decrease in Funds From Operations. Cash flows provided by
operating activities totaled $735 million for year ended December 31, 2013,
resulting in a year-over-year increase of $322 million. The increases were
primarily attributable to Funds From Operations. Net
change in working capital The
net change in working capital balances shown in the consolidated statements of
cash flows for the year ended December 31 is comprised of the following: (MILLIONS)
 
 2014
 
 2013Trade receivables and other current assets
 $
 20
 $
 47Accounts payable and accrued liabilities
 
 (54)
 
 (42)Other assets and liabilities
 
 14
 
 (4)$
 (20)
 $
 1
 Financing Activities Cash
flows provided by financing activities totaled $1,299 million for the year
ended December 31, 2014. Long-term debt – borrowings were $2,118 million and increased
due to the growth in our portfolio, up-financing indebtedness associated with a
349 MW Ontario hydroelectric portfolio, a $560 million financing associated
with a 417 MW hydroelectric facility in Pennsylvania, and financings totaling 
€328 million ($413 million) associated with the wind facilities and development
projects in Ireland. Long-term debt – repayments related to subsidiary
borrowings and credit facilities were $1,046 million. The issuance of
10,250,000 LP Units at a price of C$31.70 per LP Unit resulted in net proceeds
of $285 million. The capital provided byparticipating non-controlling
interests – in operating subsidiariesrelates to the growth in our
portfolio, and amounted to $610 million. For the year
ended December 31, 2014, distributions paid to LP Unitholders were $480 million
(2013: $378 million). With the change in timing of our quarterly distributions
taking effect in the first quarter of 2014 resulting in a distribution on
January 31, 2014 and on March 31, 2014, the amounts paid in the first quarter
of 2014 included distributions declared in both the fourth quarter of 2013 and
the first quarter of 2014. Distributions paid in the first quarter of 2013 included
only those declared in the preceding quarter. Further, we increased our
distributions to $1.55 per LP Unit, an increase of 10 cents per LP Unit which
took effect in the first quarter of 2014. The distributions paid to preferred
shareholders andparticipating non-controlling interests - in operating
subsidiarieswere $188 million (2013: $157 million). See “Dividends and
Distributions” for further details. Page99


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 Cash flows used in financing activities totaled $263 million for
the year ended December 31, 2013. Repayments related to subsidiary borrowings
and credit facilities were approximately $1.7 billion. Long-term debt increased
by $1.4 billion due to the growth in our portfolio and re-financings at two Ontario
wind facilities. Capital was provided from the issuances of C$175 million each
of the Series 5 Shares and Series 6 Shares. The capital provided byparticipating
non-controlling interests – in operating subsidiariesincludes the
co-investment by a private fund sponsored by Brookfield Asset Management. For the
year ended December 31, 2013 distributions paid to LP Unitholders were $378
million (2012: $362 million). The distributions paid to preferred shareholders
andparticipating non-controlling interests - in operating subsidiarieswere $157 million (2012: $38 million). See “Dividends and Distributions” for
further details. Investing Activities Cash
flows used in investing activities for the year ended December 31, 2014 totaled
$2,037 million. Our investments were with respect to the acquisition of a
hydroelectric facility in Pennsylvania, a wind portfolio in Ireland, a
hydroelectric portfolio in Maine, and the remaining 50% interest previously
held by our partner in hydroelectric facility in California. When combined,
these investments totaled $1,838 million. In addition, our continued investment
in the construction of power generating assets was $78 million and sustainable
capital expenditures totaled $108 million. Cash
flows used in investing activities for the year ended December 31, 2013 totaled
$397 million. Our investments were with respect to the acquisition of
hydroelectric facilities in Maine, the remaining 50% interest previously held
by our partner in a facility located in British Columbia, and a wind portfolio
in California that when combined totaled $241 million. In addition, our
investment in the construction of power generating assets was $147 million and
sustainable capital expenditures totaled $79 million. NON-CONTROLLING INTERESTS Preferred equity In January 2013 and May 2013, we completed issuances which
included 7,000,000 each of Series 5 Shares and Series 6 Shares with fixed,
annual, cumulative dividends yielding 5% at a price of C$25.00 per Class A
Preference Share for gross proceeds of C$350 million ($348 million). Total
transaction costs associated with the issuances were C$11 million ($11
million). The net proceeds were used to repay outstanding indebtedness and for
general corporate purposes. As at December 31, 2014, no Preference Shares have
been redeemed. 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. To the extent that LP Unit distributions exceed
$0.375 per LP Unit per quarter, the incentive is 15% of distributions above
this threshold. To the extent that quarterly distributions exceed $0.4225 per LP
Unit, the incentive distribution is equal to 25% of distributions above this
threshold. Accordingly, incentive distributions of $2 million were made during
the year ended December 31, 2014. Participating
non-controlling interests - in a holding subsidiary - Redeemable/Exchangeable
units held by Brookfield BRELP has issued
Redeemable/Exchangeable partnership units to Brookfield, which may at the
request of the holder, require BRELP to redeem these units for cash
consideration. The right is subject to Brookfield Renewable’s right of first
refusal which entitles it, at its sole discretion, to elect to acquire all of
the units presented to BRELP that are tendered for redemption in exchange for
LP Units. If Brookfield Renewable elects not to exchange the Redeemable/Exchangeable
partnership units for LP Units, the Redeemable/Exchangeable partnership units
are required to be redeemed for cash. As Brookfield Renewable, at its sole
discretion, has the right to settle the obligation with LP Units, the
Redeemable/Exchangeable partnership units are classified as equity, and not as
a liability. Page100


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  LIMITED PARTNERS’ EQUITY On June 10, 2014, Brookfield Renewable
completed a bought deal LP Unit offering which included 10,250,000 LP Units at
a price of C$31.70 per LP Unit for gross proceeds of C$325 million ($297 million). Brookfield
Renewable incurred C$13 million ($12 million) in transaction costs associated
with the offering. Brookfield Asset Management owns, directly
and indirectly,169,685,609LP Units and Redeemable/Exchangeable partnership units,
representing approximately62%of Brookfield Renewable on a
fully-exchanged basis. SHARES AND UNITS OUTSTANDING The shares and units outstanding as at
December 31 are presented in the following table: 2014
 2013Class A Preference SharesSeries 1
 10,000,000
 10,000,000Series 3
 10,000,000
 10,000,000Series 5
 7,000,000
 7,000,000Series 6
 7,000,000
 7,000,00034,000,000
 34,000,000GP interest
 2,651,506
 2,651,506Redeemable/Exchangeable partnership units
 129,658,623
 129,658,623LP UnitsBalance, beginning of year
 132,984,913
 132,901,916Issuance of LP Units
 10,250,000
 -Distribution reinvestment plan
 121,941
 82,997Balance, end of  year
 143,356,854
 132,984,913Total LP Units on a fully-exchanged basis(1)
 273,015,477
 262,643,536LP Units held byBrookfield
 40,026,986
 40,026,986External LP Unitholders
 103,329,868
 92,957,927143,356,854
 132,984,913
 (1)The
fully-exchanged amounts assume the exchange of Redeemable/ Exchangeable
partnership units for LP Units at the beginning of the year. Page101


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 DIVIDENDS
AND DISTRIBUTIONS The composition of the dividends and
distributions for the year ended December 31 are presented in the following
table: Declared
 Paid(MILLIONS, EXCEPT AS NOTED)
 
 2014
 
 2013
 
 2012
 
 2014
 
 2013
 
 2012Class A Preference SharesSeries 1
 $
 12
 $
 13
 $
 13
 $
 12
 $
 13
 $
 13Series 3
 
 10
 
 11
 
 3
 
 11
 
 12
 
 -Series 5
 
 8
 
 8
 
 -
 
 8
 
 6
 
 -Series 6
 
 8
 
 5
 
 -
 
 8
 
 4
 
 -$
 38
 $
 37
 $
 16
 $
 39
 $
 35
 $
 13Participating non-controlling interests -
  inoperating subsidiaries
 $
 149
 $
 122
 $
 24
 $
 149
 $
 122
 $
 24General partnership interest in a holdingsubsidiary held by Brookfield
 $
 4
 $
 4
 $
 4
 $
 4
 $
 4
 $
 4Incentive distribution
 
 2
 
 -
 
 -
 
 2
 
 -
 
 -$
 6
 $
 4
 $
 4
 $
 6
 $
 4
 $
 4Participating non-controlling interests -
  ina holding subsidiary - Redeemable/Exchangeable units held by Brookfield
 $
 201
 $
 188
 $
 179
 $
 231
 $
 185
 $
 177Limited partners' equityBrookfield
 
 62
 
 58
 
 66
 
 71
 
 56
 
 73External LP Unitholders
 
 154
 
 135
 
 117
 
 172
 
 133
 
 108$
 216
 $
 193
 $
 183
 $
 243
 $
 189
 $
 181
 In January 2012, LP
Unitholder distributions were increased to $1.38 per LP Unit on an annualized
basis, an increase of three cents per LP Unit, which took effect with the
distribution payable in April 2012. In January 2013, LP
Unitholder distributions were increased to $1.45 per LP Unit on an annualized
basis, an increase of seven cents per LP Unit, which took effect with the
distribution payable in April 2013. In February 2014, LP
Unitholder distributions were increased to $1.55 per unit on an annualized
basis, an increase of ten cents per LP Unit, which took effect with the
distribution payable in March 2014. Page102


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 Critical ESTIMATES AND CRITICAL JUDGMENTS in applying
accounting policies The consolidated annual 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 2 –Significant
accounting policies in our audited consolidated financial statements are considered
critical accounting estimates as defined in NI 51-102 with the exception of the
estimates related to the valuation of property, plant and equipment and the
related deferred income tax liabilities. These assumptions include estimates of
future electricity prices, discount rates, expected long-term average
generation, inflation rates, terminal year and operating and capital costs, the
amount, the timing and the income tax rates of future income tax provisions.
Estimates also include determination of accruals, purchase price allocations,
useful lives, asset valuations, asset impairment testing, deferred tax
liabilities, decommissioning retirement obligations 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 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 from
renewable sources, anticipated long-term average generation, estimated
operating and capital expenditures, future inflation rates and discount rates,
as described in Note 11 - Property, plant and equipment, at fair value in our
audited 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 2(o)(iii) - Critical
judgments in applying accounting policies – Property, plant and equipment in our
audited 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, long-term average generation, capacity prices, discount
rates and the timing of energy delivery. 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. The
fair value of interest rate swaps is the estimated amount that another party
would receive or pay to terminate Page103


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 the swap agreements
at the reporting date, taking into account current market interest rates. This
valuation technique approximates the net present value of future cash flows. See Note 8 - Risk Management and
Financial Instruments in our audited 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
balance sheet dates. Operating plans and forecasts are used to estimate when
the temporary difference will reverse. 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 what 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 of scope of 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 that
reflects 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 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 2 (f) - Property plant and equipment and
revaluation method in our audited 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. 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 is generally a 20 year discounted cash flow model. Twenty years is
the period considered reasonable as Brookfield Renewable has 20 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
valuation model incorporates future cash flows from long-term PPAs that are in
place where it is determined that the PPAs are linked specifically to the
related power generating assets. With respect to estimated future generation
that does not incorporate long-term PPA 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 power
generating assets not linked to long-term PPAs 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 Page104


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 new renewable on-shore
wind development resources 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 year 2020. This year is
viewed as the point when generators in North America 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 with the
Environmental Protection Agency emission compliance deadlines. Brookfield
Renewable has estimated a discount to these new-build wind prices to determine
renewable electricity prices for hydroelectric facilities. In Brazil, the estimate
of future electricity prices is based on a similar approach as applied in North
America using a forecast of the all-in cost of hydroelectric and wind
development. 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 20 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 2
(i) — Financial instruments in our audited consolidated financial statements.
In applying the policy, judgments are made in applying the criteria set out in
IAS 39,Financial Instruments: Recognition and Measurement(“IAS 39”),
to record financial instruments at fair value through profit and loss, and the
assessments of the effectiveness of hedging relationships. (v)Deferred income
taxes The accounting policy relating to Brookfield
Renewable’s income taxes is described in Note 2 (k) — Income taxes in our
audited 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. Page105


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 Future
changes in accounting policies (i)         Financial Instruments In July
2014, the IASB issued the final version of IFRS 9,Financial Instruments(“IFRS 9”) which reflects all phases of the financial instruments project and
replaces IAS 39,Financial Instruments: Recognition and Measurementand
all previous versions of IFRS 9. The standard introduces new requirements for
classification and measurement, impairment, and hedge accounting. IFRS 9 is
effective for annual periods beginning on or after 1 January 2018, with early
application permitted. Retrospective application is required, but comparative
information is not compulsory. Early application of previous versions of IFRS 9
(2009, 2010 and 2013) is permitted if the date of initial application is before
1 February 2015. Management is currently evaluating the impact of IFRS 9 on the
consolidated financial statements. (ii)         Amendments to IFRS 10 and IAS 28 The
amendments to IFRS 10,Consolidated Financial Statements(“IFRS 10”) and
IAS 28,Investments in Associates and Joint Ventures (2011)(“IAS 28”)
address an acknowledged inconsistency between the requirements in IFRS 10 and
those in IAS 28, in dealing with the sale or contribution of assets between an
investor and its associate or joint venture. The main consequence of the
amendments is that a full gain or loss is recognized when a transaction
involves a business (whether it is housed in a subsidiary or not). A partial
gain or loss is recognized when a transaction involves assets that do not
constitute a business, even if the assets are housed in a subsidiary. The
amendments are effective for transactions occurring in annual periods beginning
on or after 1 January 2016 with earlier application permitted. Management is
currently evaluating the impact of the amendments to IFRS 10 and IAS 28 on the
consolidated financial statements. (iii)     Revenue recognition IFRS 15,Revenue
from Contracts with Customers(“IFRS 15”) was issued by IASB on May 28, 2014. 
IFRS 15 outlines a single comprehensive model to account for revenue arising
from contracts with customers and will replace the majority of existing IFRS
requirements on revenue recognition including IAS 18,Revenue,IAS 11,Construction
Contractsand related interpretations. The core principle of the standard
is to recognize revenue to depict the transfer of goods and services to
customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods and services. The standard
has prescribed a five-step model to apply the principles. The standard also
specifies how to account for the incremental costs of obtaining a contract and
the costs directly related to fulfilling a contract. IFRS 15 is effective for
annual periods beginning on or after January 1, 2017. Management is currently
evaluating the impact of IFRS 15 on the consolidated financial statements. ADOPTION
OF ACCOUNTING STANDARDS IFRIC 21,Levieswas
adopted and applied by Brookfield Renewable onJanuary
1, 2014 and had no material impact on the consolidated financial statements. Page106


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Table of Contents
 OPERATIONAL REVIEW FOR THE THREE
MONTHS ENDED DECEMBER 31, 2014 The
following table reflects the actual and long-term average generation for the
three months ended December 31: Variance of ResultsActual vs.Actual Generation(1)
 LTA Generation(1)
 Actual vs. LTA
 Prior YearGENERATION (GWh)
 2014
 2013
 2014
 2013
 2014
 2013Hydroelectric generationUnited States
 2,434
 2,226
 2,796
 2,450
 (362)
 (224)
 208Canada
 1,714
 1,401
 1,218
 1,171
 496
 230
 313Brazil
 795
 923
 900
 923
 (105)
 -
 (128)4,943
 4,550
 4,914
 4,544
 29
 6
 393Wind energyUnited States
 230
 175
 274
 274
 (44)
 (99)
 55Canada
 311
 328
 343
 343
 (32)
 (15)
 (17)Europe
 299
 -
 235
 -
 64
 -
 299840
 503
 852
 617
 (12)
 (114)
 337Other
 56
 215
 4
 219
 52
 (4)
 (159)Total(2)
 5,839
 5,268
 5,770
 5,380
 69
 (112)
 571
 (1)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (2)Includes
100% of generation from equity-accounted investments. Generation levels during the
three months ended December 31, 2014 totaled 5,839 GWh, compared to the
long-term average of 5,770 GWh, and an increase of 571 GWh as compared to the
prior year. The hydroelectric portfolio
generated 4,943 GWh, consistent with the long-term average of 4,914 GWh and an
increase of 393 GWh from the prior year. Generation from existing
hydroelectric assets was 4,634 GWh compared to 4,550 GWh for the prior
year.  The variance in year-over-year results from existing facilities
reflects strong inflows at our Ontario facilities and improved hydrological
conditions in New England and Louisiana, partly offset by lower inflows at our
facilities in New York, Tennessee and North Carolina. In Brazil, our generation
forthe quarter was below assured levels due to the continued
drought-like conditions; however, the impact was reduced by our participation
in the hydrological balancing pool. Our recently acquired and
commissioned facilities contributed 309 GWh. The wind portfolio generated 840
GWh, compared to the long-term average of 852 GWh and an increase of 337 GWh as
compared to the prior year. Generation from existing assets was higher compared
to the prior year due to improved wind conditions across the United States portfolio,
and the wind portfolio in Ireland contributed 299 GWh. Our 110 MW natural gas-fired
plant in Ontario had been operating on an uncontracted basis since April 2014.
Since then, the facility has had nominal generation as a result of low power
prices relative to gas market prices. The operations at this facility have
temporarily been suspended but remain available to be restarted should economic
conditions allow.    Page107


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Table of Contents
 SUMMARY OF HISTORICAL QUARTERLY RESULTS ON A CONSOLIDATED BASIS The following is a summary of unaudited quarterly financial
information for the last twelve consecutive quarters: 2014
 2013
 2012(MILLIONS, EXCEPT AS NOTED)
 
 Q4
 
 Q3
 
 Q2
 
 Q1
 
 Q4
 
 Q3
 
 Q2
 
 Q1
 
 Q4
 
 Q3
 
 Q2
 
 Q1Generation (GWh) - LTA(1)(2)
 5,770
 5,065
 6,691
 5,770
 5,380
 4,960
 6,171
 5,325
 4,606
 4,049
 4,998
 4,549Generation (GWh) - actual(1)(2)
 5,839
 4,383
 6,615
 5,711
 5,268
 5,154
 6,265
 5,535
 4,053
 2,971
 4,101
 4,817Revenues
 $
 408
 $
 342
 $
 474
 $
 480
 $
 393
 $
 392
 $
 484
 $
 437
 $
 317
 $
 229
 $
 337
 $
 426Adjusted EBITDA(3)
 
 273
 
 223
 
 360
 
 360
 
 272
 
 260
 
 357
 
 319
 
 195
 
 118
 
 221
 
 318Funds From Operations(3)
 
 116
 
 61
 
 198
 
 185
 
 137
 
 108
 
 187
 
 162
 
 74
 
 11
 
 87
 
 175Net income (loss)Non-controlling interestsPreferred equity
 
 9
 
 10
 
 10
 
 9
 
 10
 
 10
 
 10
 
 7
 
 6
 
 4
 
 3
 
 3Participating non-controllinginterests - in operating subsidiaries
 
 (8)
 
 (2)
 
 21
 
 40
 
 (7)
 
 8
 
 24
 
 16
 
 (14)
 
 (11)
 
 (14)
 
 (1)General partnership interest in aholding subsidiary held by Brookfield
 
 -
 
 -
 
 -
 
 1
 
 -
 
 -
 
 -
 
 1
 
 (1)
 
 -
 
 -
 
 -Participating non-controlling interests - in aholding subsidiary - Redeemable/Exchangeableunits held by Brookfield
 
 14
 
 (16)
 
 20
 
 37
 
 10
 
 5
 
 22
 
 30
 
 (27)
 
 (26)
 
 4
 
 14Limited partners' equity
 
 16
 
 (17)
 
 21
 
 38
 
 11
 
 5
 
 22
 
 31
 
 (28)
 
 (26)
 
 4
 
 1531
 
 (25)
 
 72
 
 125
 
 24
 
 28
 
 78
 
 85
 
 (64)
 
 (59)
 
 (3)
 
 31Basic and diluted earnings (loss)per LP Unit
 
 0.11
 
 (0.13)
 
 0.15
 
 0.29
 
 0.08
 
 0.04
 
 0.17
 
 0.23
 
 (0.20)
 
 (0.20)
 
 0.03
 
 0.11Average LP Units outstanding (millions)
 
 143.3
 
 143.3
 
 135.3
 
 133.0
 
 132.9
 
 132.9
 
 132.9
 
 132.9
 
 132.9
 
 132.9
 
 132.9
 
 132.9Distributions:Preferred equity
 
 9
 
 10
 
 10
 
 9
 
 10
 
 10
 
 10
 
 7
 
 6
 
 3
 
 4
 
 3General partnership interest in aholding subsidiary held by Brookfield
 
 1
 
 2
 
 1
 
 2
 
 1
 
 1
 
 1
 
 1
 
 1
 
 1
 
 1
 
 1Participating non-controlling interests - in aholding subsidiary - Redeemable/Exchangeableunits held by Brookfield
 
 50
 
 50
 
 51
 
 50
 
 47
 
 47
 
 47
 
 47
 
 45
 
 45
 
 45
 
 44Limited partners' equity
 
 56
 
 56
 
 53
 
 51
 
 48
 
 49
 
 48
 
 48
 
 45
 
 46
 
 47
 
 45
 (1)Includes
100% of generation from equity-accounted investments. (2)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (3)Non-IFRS
measures. See "Cautionary Statement Regarding Use of Non-IFRS
Measures", “Financial Review by Segments for the Year Ended December 31,
2014” and “Financial Review by Segments for the Year Ended December 31, 2013”. Page108


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Table of Contents
 RISK MANAGEMENT AND FINANCIAL
INSTRUMENTS (a)
Market risk Market risk is defined for these purposes as the risk that the
fair value or future cash flows of a financial instrument held by Brookfield
Renewable will fluctuate because of changes in market prices. Brookfield Renewable faces market risk from foreign currency
assets and liabilities, the impact of changes in interest rates, and floating
rate liabilities.  Market risk is managed by funding assets with financial
liabilities in the same currency and with similar interest rate characteristics
and holding financial contracts, such as interest rate swaps and foreign
exchange contracts, to minimize residual exposures. Financial instruments held
by Brookfield Renewable that are subject to market risk include borrowings and
financial instruments, such as interest rate, currency and commodity contracts.
The categories of financial instruments that can give rise to significant
variability are described below: (i)Electricity price risk Electricity price risk is defined for these purposes as the risk
that the fair value or future cash flows of a financial instrument held by
Brookfield Renewable will fluctuate because of changes in commodity prices.
Electricity price risk arises from the sale of Brookfield Renewable’s
uncontracted generation. Brookfield Renewable aims to sell the majority of its electricity
under long-term contracts to secure stable prices and mitigate its exposure to
wholesale markets. The table below summarizes the impact of changes in the market
price of electricity as at December 31.  The impact is expressed in terms of
the effect on net income and OCI.  The sensitivities are based on the
assumption that the market price changes by five percent with all other
variables held constant. Impact of a 5% change in the market price of electricity, on
outstanding energy derivative contracts, for the year ended December 31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2014
 
 2013
 
 2012
 
 2014
 
 2013
 
 20125% increase
 $
 -
 $
 -
 $
 1
 $
 (9)
 $
 1
 $
 -5% decrease
 
 -
 
 -
 
 (1)
 
 9
 
 (1)
 
 -
 (ii) Foreign currency risk Foreign currency risk is defined for these purposes as the
risk that the fair value of a financial instrument held by Brookfield Renewable
will fluctuate because of changes in foreign currency rates. Brookfield Renewable has exposure to the Canadian dollar,
Brazil real and Euro through its investments in foreign operations.
Consequently, fluctuations in the U.S. dollar exchange rate against these
currencies increase the volatility of net income and other comprehensive
income. Brookfield Renewable holds foreign currency contracts primarily to
mitigate this exposure. The table below summarizes the impact of changes in the
exchange rate as at December 31. The impact is expressed in terms of the effect
on income and OCI. The sensitivities are based on the assumption that the
currency exchange rate changes by five percent with all other variables held
constant. Page109


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Table of Contents
 Impact of a 5% change in U.S. dollar exchange rates, on
outstanding foreign exchange swaps, for the year ended December 31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2014
 
 2013
 
 2012
 
 2014
 
 2013
 
 20125% increase
 $
 12
 $
 -
 $
 -
 $
 19
 $
 -
 $
 -5% decrease
 
 (12)
 
 -
 
 -
 
 (19)
 
 -
 
 -
 (ii) Interest rate risk Interest rate risk is defined for these purposes as the
risk that the fair value or future cash flows of a financial instrument held by
Brookfield Renewable will fluctuate, because of changes in interest rates. Brookfield Renewable’s assets largely consist of long
duration physical assets. Brookfield Renewable’s 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. All
non-derivative financial liabilities are recorded at their amortized cost.
Brookfield Renewable also holds interest rate contracts to lock-in fixed rates
on certain anticipated future debt issuances. Brookfield Renewable will enter into interest rate swaps
designed to minimize the exposure to interest rate fluctuations on its variable
rate debt.  Fluctuations in interest rates could impact Brookfield
Renewable’s cash flows, primarily with respect to the interest payable against
Brookfield Renewable’s variable rate debt, which is limited to certain
subsidiary borrowings with a total principal value of $2,552 million (2013:
$1,515 million). Of this principal value, $1,237 million (2013: $806 million)
has been hedged through the use of interest rate swaps. The fair values of the
recognized liability for the interest rate swaps were calculated using a
valuation model with observable interest rates. The table below summarizes the impact of changes in the
interest rate as at December 31. The impact is expressed in terms of the effect
on income and OCI. The sensitivities are based on the assumption that the
interest rate changes by one percent with all other variables held constant. Impact of a 1%
change in interest rates, on outstanding interest rate swaps and variable rate
debt, for the year ended December 31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2014
 
 2013
 
 2012
 
 2014
 
 2013
 
 20121% increase
 $
 (13)
 $
 (7)
 $
 (7)
 $
 138
 $
 96
 $
 511% decrease
 
 13
 
 7
 
 7
 
 (138)
 
 (96)
 
 (51)
 (b) Credit
risk Credit risk is the risk of loss due to the failure of a
borrower or counterparty to fulfill its contractual obligations. Brookfield
Renewable’s exposure to credit risk in respect of financial instruments relates
primarily to counterparty obligations regarding energy contracts, interest rate
swaps, forward foreign exchange contracts and physical electricity and gas
transactions. Brookfield Renewable minimizes credit risk with
counterparties through the selection, monitoring and diversification of
counterparties, and the use of standard trading contracts, and other credit risk
mitigation techniques.  In addition, Brookfield Renewable’s PPAs are reviewed
regularly and are almost exclusively with customers having long standing credit
histories or investment grade ratings, which limit the risk of non-collection.
As at December 31, 2014, 99% (2013: 99%)of
Brookfield Renewable’s trade receivables of $91 million were current. See Note
7 - Trade receivables and other current assets in our audited consolidated
financial statements for additional details regarding Brookfield Renewable’s
trade receivables balance. Page110


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Table of Contents
 The maximum credit
exposure at December 31 was as follows: (MILLIONS)
 
 2014
 
 2013Cash and cash equivalents
 $
 150
 $
 203Restricted cash(1)
 
 313
 
 244Trade receivables and other short-term
  receivables
 
 131
 
 170Financial instrument assets
 
 66
 
 17Due from related parties
 
 63
 
 48$
 723
 $
 682
 (1)Includes
both the current and long-term amounts. (c) Liquidity
risk Liquidity risk is the risk that we cannot meet a demand for
cash or fund an obligation when due.  Liquidity risk is mitigated by cash and
cash equivalent balances and its access to undrawn credit facilities. Details
of the available portion of credit facilities are included in “Liquidity and
Capital Resources”.  We also ensure that we have access to public capital
markets and maintain a strong investment grade credit rating of BBB (high). We are also subject to the risk associated with debt
financing. This risk is mitigated by the long-term duration of debt instruments
and the diversification in maturity dates over an extended period of time. The sensitivity analysis discussed above reflects only the
risks associated with instruments that we consider are market sensitive and the
potential loss resulting from one or more selected hypothetical changes.
Therefore, the discussion above is not intended to reflect fully the risk
exposure that we may have. Subsequent
eventS In February 2015, we completed the acquisition of two
advanced hydroelectric development projects totaling 47 MW in Brazil. Once
fully commissioned, the projects are expected to generate 280 GWh annually. The
acquisition was completed with institutional partners, and Brookfield Renewable
retains an approximate 40% interest. In February 2015, we entered into an agreement to acquire
twowind facilities in Portugal
with an aggregate capacity of 123 MW. The portfolio is expected to generate 260
GWh annually. The acquisition is being pursued with institutional partners, and
Brookfield Renewable will retain an approximate 40% interest.The transaction is expected to close in 2015, subject to
regulatory approvals and closing conditions. In February 2015, construction on two Irish wind facilities
totaling 125 MW was completed, and the facilities were fully commissioned. The
facilities are expected to generate 349 GWh annually. In February 2015, we up-financed indebtedness associated
with a 45 MW hydroelectric facility in British Columbia by issuing C$90 million
($71 million) of bonds with an interest rate of 2.95%, maturing in May 2023. In February 2015, we secured a 12 month extension on $75
million of holding company-level debt associated with a portfolio of hydroelectric
and wind facilities in the United States held through the Brookfield Americas
Infrastructure Fund. The debt bears interest at LIBOR plus 2.75%, and matures
in February 2016. In February 2015, we announced an increase in LP Unitholder
distributions to $1.66 per LP Unit on an annualized basis, an increase of 11
cents per LP Unit, to take effect with the first quarter distribution payable
in March 2015. Page111


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Table of Contents
 FINANCIAL REVIEW BY SEGMENTS FOR
THE YEAR ENDED DECEMBER 31, 2014 The following table reflects Adjusted
EBITDA, Funds From Operations, Adjusted Funds From Operations, and provides a
reconciliation to net income and cash flows from operating activities for the year
ended December 31: Co-generation(MILLIONS)
 Hydroelectric
 Wind
 and
  Other
 2014
 2013Revenues
 $
 1,378
 $
 297
 $
 29
 $
 1,704
 $
 1,706Other income
 
 10
 
 -
 
 -
 
 10
 
 11Share of cash earnings from equity-accountedinvestments
 
 26
 
 -
 
 -
 
 26
 
 21Direct operating costs
 
 (368)
 
 (70)
 
 (86)
 
 (524)
 
 (530)Adjusted EBITDA(1)
 
 1,046
 
 227
 
 (57)
 
 1,216
 
 1,208Fixed earnings adjustment(2)
 
 -
 
 11
 
 -
 
 11
 
 -Interest expense - borrowings
 
 (242)
 
 (86)
 
 (87)
 
 (415)
 
 (410)Management service costs
 
 -
 
 -
 
 (51)
 
 (51)
 
 (41)Current income taxes
 
 (18)
 
 -
 
 -
 
 (18)
 
 (19)Less: cash portion of non-controlling interestsPreferred equity
 
 -
 
 -
 
 (38)
 
 (38)
 
 (37)Participating non-controlling interests - inoperating subsidiaries
 
 (98)
 
 (47)
 
 -
 
 (145)
 
 (107)Funds From Operations(1)
 $
 688
 $
 105
 $
 (233)
 $
 560
 $
 594Less: adjusted sustaining capital expenditures(3)
 
 
 
 
 
 
 
 (58)
 
 (56)Adjusted Funds From Operations(1)
 
 
 
 
 
 
 
 502
 
 538Add: adjusted sustaining capital expenditures
 
 
 
 
 
 
 
 58
 
 56Add: cash portion of non-controlling interests
 
 
 
 
 
 
 
 183
 
 144Less: fixed earnings adjustment
 
 
 
 
 
 
 
 (11)
 
 -Other items:Depreciation and amortization
 
 
 
 
 
 
 
 (548)
 
 (535)Unrealized financial instruments gain
 
 
 
 
 
 
 
 10
 
 37Share of non-cash loss from equity-accounted investments
 
 
 
 
 
 
 
 (23)
 
 (12)Deferred income tax recovery
 
 
 
 
 
 
 
 29
 
 18Other
 
 
 
 
 
 
 
 3
 
 (31)Net income
 
 
 
 
 
 
 $
 203
 $
 215Adjustments for non-cash items
 
 
 
 
 
 
 
 497
 
 514Dividends received from equity accountedinvestments
 
 
 
 
 
 
 
 30
 
 16Changes in due to or from related parties
 
 
 
 
 
 
 
 (10)
 
 (11)Net change in working capital balances
 
 
 
 
 
 
 
 (20)
 
 1Cash flows from operating activities
 
 
 
 
 
 
 $
 700
 $
 735
 (1)Non-IFRS
measures.  See “Cautionary Statement Regarding Use of Non-IFRS Measures”. (2)The
fixed earnings adjustment relates to Brookfield Renewable’s investment in the
acquisition of the wind portfolio in Ireland. Pursuant to the terms of the
purchase and sale agreement, Brookfield Renewable acquired an economic interest
in the wind portfolio from January 1, 2014.The
transaction closed on June 30, 2014, and accordingly under IFRS, the $11
million net Funds From Operations contribution was recorded as part of the
purchase price. (3)Based
on long-term sustaining capital expenditure plans. Page112


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Table of Contents
 FINANCIAL REVIEW BY SEGMENTS FOR
THE YEAR ENDED DECEMBER 31, 2013 The following table reflects Adjusted
EBITDA, Funds From Operations, Adjusted Funds From Operations, and provides a
reconciliation to net income (loss) and cash flows from operating activities for
the year ended December 31: Co-generation(MILLIONS)
 Hydroelectric
 Wind
 and
  Other
 2013
 2012Revenues
 $
 1,377
 $
 258
 $
 71
 $
 1,706
 $
 1,309Other income
 
 11
 
 -
 
 -
 
 11
 
 16Share of cash earnings from equity-accountedinvestments
 
 21
 
 -
 
 -
 
 21
 
 13Direct operating costs
 
 (364)
 
 (60)
 
 (106)
 
 (530)
 
 (486)Adjusted EBITDA(1)
 
 1,045
 
 198
 
 (35)
 
 1,208
 
 852Interest expense - borrowings
 
 (235)
 
 (82)
 
 (93)
 
 (410)
 
 (411)Management service costs
 
 -
 
 -
 
 (41)
 
 (41)
 
 (36)Current income taxes
 
 (20)
 
 -
 
 1
 
 (19)
 
 (14)Less: cash portion of non-controlling interestsPreferred equity
 
 -
 
 -
 
 (37)
 
 (37)
 
 (16)Participating non-controlling interests - inoperating subsidiaries
 
 (81)
 
 (26)
 
 -
 
 (107)
 
 (28)Funds From Operations(1)
 $
 709
 $
 90
 $
 (205)
 $
 594
 $
 347Less: adjusted sustaining capital expenditures(2)
 
 
 
 
 
 
 
 (56)
 
 (52)Adjusted Funds From Operations(1)
 
 
 
 
 
 
 
 538
 
 295Add: adjusted sustaining capital expenditures
 
 
 
 
 
 
 
 56
 
 52Add: cash portion of non-controlling interests
 
 
 
 
 
 
 
 144
 
 44Other items:Depreciation and amortization(3)
 
 
 
 
 
 
 
 (535)
 
 (483)Unrealized financial instruments gain (loss)
 
 
 
 
 
 
 
 37
 
 (23)Share of non-cash loss from equity-accounted investments
 
 
 
 
 
 
 
 (12)
 
 (18)Deferred income tax recovery
 
 
 
 
 
 
 
 18
 
 54Other
 
 
 
 
 
 
 
 (31)
 
 (16)Net income (loss)
 
 
 
 
 
 
 $
 215
 $
 (95)Adjustments for non-cash items
 
 
 
 
 
 
 
 514
 
 503Dividends received from equity accountedinvestments
 
 
 
 
 
 
 
 16
 
 12Changes in due to or from related parties
 
 
 
 
 
 
 
 (11)
 
 15Net change in working capital balances
 
 
 
 
 
 
 
 1
 
 (22)Cash flows from operating activities
 
 
 
 
 
 
 $
 735
 $
 413
 (1)Non-IFRS
measures.  See “Cautionary Statement Regarding Use of Non-IFRS Measures”. (2)Based
on long-term sustaining capital expenditure plans. (3)See
Note 2(f) - Change in accounting estimates in our audited consolidated
financial statements concerning changes in estimates related to depreciation
expense.  5.B              LIQUIDITY AND CAPITAL RESOURCES See Item
5.A “Operating and Financial Review and Prospects – 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” beginning on page 58
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: Page113


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Table of Contents
 ·“— Generation
and Financial Review for the Year Ended December 31, 2014” (variability of
generation); ·“— Generation and
Financial Review for the Year Ended December 31, 2013” (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              OFF-BALANCE SHEET ARRANGEMENTS We do not
have any off-balance sheet 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 is material to investors. 5.F              TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS See Item
5.B “Liquidity and Capital Resources – Contractual Obligations” ITEM 6.       DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 6.A              DIRECTORS AND SENIOR MANAGEMENT Board of Directors of the Managing General Partner As
required by Bermuda law, the Amended and Restated Limited Partnership Agreement
of BREP provides for the management and control of BREP by a general partner
rather than a board of directors and officers. The Managing General Partner, which
is a wholly-owned subsidiary of Brookfield Asset Management, serves as BREP’s
general partner and has a board of directors. The Managing General Partner has
no executive officers and has sole responsibility and authority for the central
management and control of BREP, which is exercised through its board of
directors. The directors of the Managing General Partner each serve as a
director until a successor is appointed to replace them. The board
of directors of the Managing General Partner is comprised of seven directors,
five of whom are independent pursuant to the NYSE Listed Company Manual and
within the meaning of Canadian National Instrument 58-101 -Disclosure of
Corporate Governance Practices. The following table presents certain
information concerning the current board of directors of the Managing General
Partner as of the date of this Form 20-F. Page114


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Table of Contents
 Name and Residence
 Position
 
 Election Date
 
 Principal OccupationJeffrey Blidner
 Chair
 
 August 2, 2011
 
 Senior Managing Partner of Brookfield Asset
  ManagementOntario, CanadaEleazar de Carvalho Filho(1)
 Director
 
 November 28, 2011
 
 Founder of Virtus BR Partners and
  Corporate Director; Founder of Sinfonia Consultoria e ParticipaçõesSao Paulo, BrazilJohn Van Egmond(2)
 Director
 
 November 28, 2011
 
 Financial Consultant, Ozona CorporationArizona, United StatesLars Josefsson
 Director
 
 October 1, 2012
 
 Managing Director, Contributor ABStockholm, SwedenDavid Mann(1)(2)
 Director
 
 November 28, 2011
 
 Counsel, Cox & PalmerNova Scotia, CanadaLou Maroun(2)
 Director
 
 August 2, 2011
 
 Chairman of Sigma Real Estate
  Advisors/Sigma Capital CorporationWarwick, BermudaPatricia Zuccotti(1)
 Director
 
 November 28, 2011
 
 Corporate DirectorWashington, United States
 (1)Member
of the Audit Committee. (2)Member
of the Nominating and Governance Committee. Biographical
information for each of the directors is included below. Jeffrey
Blidner. Mr. Blidner is the Chair of the board of directors of the
Managing General Partner. Mr. Blidner is also Senior Managing Partner of
Brookfield Asset Management.  In that capacity he is responsible for strategic
planning as well as transaction execution. He is also the Chief Executive
Officer of Brookfield Asset Management’s Private Funds Group, Chairman and a
director of Rouse Properties, Inc. and a director of Brookfield Asset
Management, Brookfield Property Partners L.P. and Brookfield Infrastructure
Partners L.P. Prior to joining Brookfield in 2000, Mr. Blidner was a senior
partner at a Canadian law firm. Eleazar
de Carvalho Filho. Mr. de Carvalho Filho is a director of the Managing General
Partner. Mr. de Carvalho Filho was formerly the President and Managing Director
of the Brazilian National Development Bank and has served as the Chief
Executive Officerfor Unibanco Investment Bank. He is
a founding partner of Virtus BR Partners, an independent advisory company. 
From 2006 to 2011, Mr. de Carvalho Filho served as the non-executive Chairman
of BHP Billiton Brazil. He also served on the board of directors of Petrobras,
Eletrobrás and Vale, among others. Mr. de Carvalho Filho is currently a
director of CnovaN.V., FMC Technologies, Inc.
and Grupo Pão de Açúcar, where he is also a member ofthe audit
committee.  Mr. de Carvalho Filho isthe President of
the Board of Trustees of the Brazilian Symphony Orchestra.Mr. de
Carvalho Filho holds a Master of Arts in International Relations from The Johns
Hopkins University in Washington, D.C. and a Bachelor of Arts with a major in
Economics from New York University. John Van
Egmond. Mr. Van Egmond is a director of the Managing General Partner. Mr.
Van Egmond is presently a financial consultant with Ozona Corporation (a
general consulting company) in Tucson, Arizona. Prior to this role, he was the
acting President and Chief Executive Officer and director of Wilshire
Technologies, Inc. (located in Carlsbad, California) where he was responsible
for all financial, operational, sales and marketing and human resource
functions. Mr. Van Egmond is the past President of Century Power Corporation,
an independent power producer based in Tucson, Arizona. Mr. Van Egmond is a
Certified Public Accountant and received a Bachelor of Science in accounting in
1972 from Montana State University. Page115


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Table of Contents
 Lars
Josefsson. Mr. Josefsson is a director of the Managing General Partner. His
prior positions include President and Chief Executive Officer of Vattenfall AB
(2000-2010), Celsius AB (1997-2000) and various positions with Ericsson over a
24-year period. Mr. Josefsson is also a member of the boards of directors of
Robert Bosch GmbH and Holmen AB. He is Chairman of the board of directors of
Burntisland Fabrication Ltd., as well as Chairman and Managing Partner of
BioElectric Solutions LGJ AB, the founder of Biomass for Electricity Initiative
and Foundation and a member of the board of trustees of Hand in Hand
International. Mr. Josefsson graduated from Chalmers University of Technology
in Applied Physics with a Master of Science in 1973 and in 1986 graduated from
IMD, Lausanne, PED. Mr. Josefsson is an Honorary Professor in Physics,
Brandenburg Technical University, Cottbus, Germany. David
Mann. Mr. Mann is a director of the Managing General Partner. Mr. Mann
formerly served as President and Chief Executive Officer of Nova Scotia Power
Inc. (1996-2004) and Vice Chairman (2004-2005) and President and Chief
Executive Officer (1998-2004) of Emera Inc., TSX-listed energy and services
companies that invest in electrical generation, transmission and distribution. Mr.
Mann currently serves as Counsel at Cox & Palmer (a law firm) and has
over 30 years of experience in the practice of corporate and commercial law,
with a particular emphasis on corporate finance and public utility regulation.
He also serves as Chairman of Logistec Corporation and is the Audit Committee
Chairman of New Growth Corporation, Acadian Timber Corp. and Allbanc Split Corp
II. Mr. Mann holds a Bachelor of Commerce and a Bachelor of Laws from Dalhousie
University and a Master of Laws from the University of London, England. Lou
Maroun. Mr. Maroun is a director of the Managing General Partner. Mr.
Maroun is also a director of Brookfield Property Partners L.P. and is Chairman
of Sigma Real Estate Advisors and Sigma Capital Corporation, which specialize
in international real estate advisory. Prior to this role, Mr. Maroun was the
Executive Chairman of ING Real Estate Canada, and held executive positions in a
number of real estate companies where he was responsible for overseeing
operations, real estate transactions, asset and property management, as well as
many other related functions. Mr. Maroun also is on the board of directors and
is Chairman of Summit Industrial Income REIT. Mr. Maroun graduated from the
University of New Brunswick in 1972 with a Bachelor’s degree, majoring in
psychology, followed by a series of post graduate studies in finance and
mortgage underwriting. In January of 2007, after a long and successful career
in investment real estate, Mr. Maroun was elected to the position of Fellow of
the Royal Institute of Chartered Surveyors. Patricia
Zuccotti. Ms. Zuccotti is a director of the Managing General Partner. Ms.
Zuccotti served as Senior Vice President, Chief Accounting Officer and
Controller of Expedia, Inc. from October 2005 to November 2011. Prior to
joining Expedia, Ms. Zuccotti was the Director, Enterprise Risk Services of
Deloitte & Touche LLP from June 2003 until October 2005. Ms. Zuccotti is a
Certified Public Accountant in the State of Washington and received her Masters
of Business Administration, majoring in accounting and finance, from the
University of Washington and a Bachelor of Arts, majoring in political science,
from Trinity College. Additional Information
About Directors and Officers To our
knowledge, within the past ten years, no director or executive officer of the
Managing General Partner and no employee of the Service Provider who performs
an executive function for BREP has (a) served as a director, chief executive
officer or chief financial officer of any company that was subject to a “cease
trade” or similar order, or an order denying the relevant company access to any
exemption under securities legislation, which remained in effect for more than
30 consecutive days, and that was issued (i) while he or she was acting as
director, chief executive officer or chief financial officer, or (ii) after he
or she ceased to be a director, chief executive officer or chief financial
officer and which resulted from an event that occurred while he or she was a
director, chief executive officer or chief financial officer, (b) served as a
director or executive officer of any company that, while he or she was acting
in that capacity, or within a year after he or she ceased to act in that
capacity, became bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency or was subject to or instituted any proceedings,
arrangement or compromise with creditors or had a receiver, receiver manager or
trustee appointed to hold the company’s assets, except Mr. de Carvalho Filho,
or (c) become bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency, or become subject to or instituted any proceedings,
arrangement or compromise with creditors, or had a receiver, receiver Page116


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 manager or trustee appointed to hold his or her assets.
Mr. de Carvalho Filho was a director of Varig S.A. — Viação Aérea Rio-Grandense
from May 7, 2005 to November 18, 2005. On June 17, 2005, Varig S.A. — Viação
Aérea Rio-Grandense applied for a grant of judicial recovery with a view to
restructuring payments to its creditors. On August 20, 2010, Varig S.A. —
Viação Aérea Rio-Grandense was declared bankrupt. The bankruptcy proceedings
are still underway. To our
knowledge, no director or executive officer of the Managing General Partner and
no employee of the Service Provider who performs an executive function for BREP,
nor any personal holding company thereof owned or controlled by them, (i) has
been subject to any penalties or sanctions imposed by a court relating to
securities legislation or by a securities regulatory authority or has entered
into a settlement agreement with a securities regulatory authority, or (ii) has
been subject to any other penalties or sanctions imposed by a court or
regulatory body that would likely be considered important to a reasonable
investor in making an investment decision. To our
knowledge, within the past ten years, no director or executive officer of our
Managing General Partner and no employee of the Service Provider who performs
an executive function for BREP, nor any personal holding company thereof owned
or controlled by them, has become bankrupt, made a proposal under any
legislation relating to bankruptcy or insolvency, has become subject to or
instituted any proceedings, arrangement or compromise with creditors, or had a
receiver, receiver manager or trustee appointed to hold his or her assets or
the assets of his or her holding company. Our Management The
Managing General Partner does not have any employees. Instead, members of
Brookfield’s senior management and other individuals from Brookfield’s global
affiliates are drawn upon to fulfill the Service Provider’s obligations to
provide us with management services under our Master Services Agreement. The
following table presents certain information concerning our core senior
management team that is principally responsible for our operations as well as their
positions with the Service Provider as of the date of this Form 20-F. In
February 2015, the following changes were made to the senior management team of
the Service Provider: (i)Richard Legault, formerly the President and
Chief Executive Officer,was named Chief Executive Officer; (ii)Sachin
Shah, formerly the Chief Financial Officer, was named President and Chief
Operating Officer; and (iii)Nicholas (Nick) Goodman, formerly the Senior Vice President, Finance,
was named Chief Financial Officer. These changes are not reflected
in the description of, or choice of, officers named in Item 6.B “Compensation –
Our Management” because Item 6.B speaks to our named executive officers as of
December 31, 2014. Name
 Years of experience in relevant industry or
  role
 
 Years at Brookfield
 Current Position with the Service ProviderHarry Goldgut
 30
 
 18
 Group ChairmanRichard Legault
 30
 
 27
 Chief Executive OfficerSachin Shah
 16
 
 13
 President and Chief Operating OfficerNicholas Goodman
 11
 
 4
 Chief Financial OfficerJennifer Mazin
 16
 
 1
 Senior Vice President and General CounselHenrique Martins
 16
 
 6
 Chief Executive Officer, BrazilFelipe Pinel
 24
 
 24
 Chief Executive Officer, North AmericaRalf Rank
 14
 
 8
 Chief Executive Officer, Europe
 Each of the members
of our core senior management team has substantial operational and transaction
origination and execution expertise. Certain members of this team have also
been integral in building and developing Brookfield’s renewable power
operations and, although certain members of the Page117


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 senior
management team are also managing partners of Brookfield or have some
responsibilities in other Brookfield businesses, these members devote
substantially all of their time to the management and development of Brookfield
Renewable. Biographical information for each of the members of this team is
included below. Harry Goldgut.Mr. Goldgut is the
Group Chairman of the Service Provider. Mr. Goldgut is also a Senior Managing
Partner of Brookfield Asset Management and is appointed under the Master
Services Agreement as Group Chairman of BREP. He has been involved in the
electric power industry since 1985. Mr. Goldgut joined Brookfield in 1997 as
Vice President, Power Generation and since then has held various senior positions
in BRPI, becoming its Co-Chairman and Chief Executive Officer in 2000, adding
Chairman in 2005. He has been actively involved in developing and expanding
Brookfield’s power operations and has had primary responsibility for its
acquisitions and its senior regulatory relationships. He has played an active
role in the restructuring of the electricity industry in Ontario as a member of
several governmental and regulatory committees and task forces including the
Market Design Committee, the Minister of Energy’s Advisory Committee, the Clean
Energy Task Force and the Ontario Energy Board Chair’s Advisory Roundtable. Mr.
Goldgut received an LL.B. in 1980 from York University’s Osgoode Hall Law
School in Ontario, and was called to the Ontario Bar in 1982. Richard Legault.Mr. Legault is the Chief
Executive Officer of the Service Provider. Mr. Legault is also a Senior
Managing Partner of Brookfield Asset Management and is appointed under the Master
Services Agreement as Chief Executive Officer of BREP. Since 1999, he has led
the growth of Brookfield’s renewable power operations on a global basis,
helping to make Brookfield Renewable one of the world’s largest pure play
renewable power portfolios. Mr. Legault was Chief Financial Officer of
Brookfield from 2000 to 2001, prior to which he held several senior positions
in operations, finance, and corporate development with Brookfield’s forest
products operations. Mr. Legault received a Bachelor of Accounting from the
Université du Québec in Hull and is a member of the Chartered Professional
Accountants of Canada (CPA, CA). Sachin Shah.Mr. Shah is the
President and Chief Operating Officer of the Service Provider. Mr. Shah is also
a Senior Managing Partner of Brookfield Asset Management and is appointed under
the Master Services Agreement as President and Chief Operating Officer of BREP.
In this capacity, he has oversight for Brookfield Renewable’s growth and
capitalization, on a global basis. Mr. Shah received a Bachelor of Commerce
degree from the University of Toronto in 1999 and is a member of the Chartered
Professional Accountants of Canada (CPA, CA). Nicholas (Nick)
Goodman.Mr. Goodman is Chief Financial Officer of the Service Provider and is appointed
under the Master Services Agreement as Chief Financial Officer of BREP.  In
this capacity, he directs all capital markets activities including accounting,
financial reporting, treasury, taxation, and investor relations, on a global
basis. Mr. Goodman received a Bachelor of Arts in Accounting and Finance from
the University of Strathclyde in Glasgow, Scotland and is a member of the
Institute of Chartered Accountants of Scotland. Jennifer Mazin.Ms. Mazin is Senior
Vice President & General Counsel of the Service Provider and is appointed
under the Master Services Agreement as Senior Vice President & General
Counsel of BREP. She provides oversight for Brookfield Renewable’s legal
matters on a global basis, including transactional matters, corporate
governance and public disclosure. Ms. Mazin received her Bachelor of Arts from
the University of Western Ontario and her law degree from the University of
Toronto. She is called to the bars of the State of New York and the Province of
Ontario. Henrique Martins.Mr. Martins is Chief
Executive Officer, Latin America, of the Service Provider and is appointed
under the Master Services Agreement as Chief Executive Officer, Latin America,
of BREP. He is a Managing Partner of Brookfield Asset Management. Mr. Martins provides
oversight of Brookfield Renewable’s activities in Latin America, including
growth, operations and funding and maintains responsibility for generation and
development, including operations and maintenance, marketing, health and
safety, legal, environmental and procurement activities. Mr. Martins received a
degree in Economics from PUC University and his MBA from the University of
Michigan. Felipe Pinel.Mr. Pinel is Chief
Executive Officer, North America, of the Service Provider and is appointed
under the Master Services Agreement as Chief Executive Officer, North America,
of BREP. He Page118


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 is a Managing Partner of Brookfield Asset
Management. Mr. Pinel provides oversight of Brookfield Renewable’s activities
in North America, including growth, operations and funding and maintains responsibility
for generation and development, including operations and maintenance,
marketing, health and safety, legal, environmental and procurement activities. Mr.
Pinel received his law degree from the Universidade do Estado do Rio de Janeiro
and his MBA from Fundação Getulio Vargas. Ralf Rank.Mr. Rank is Chief
Executive Officer, Europe, of the Service Provider and is appointed under the
Master Services Agreement as Chief Executive Officer, Europe, of BREP. He is a
Managing Partner of Brookfield Asset Management. Mr. Rank provides oversight of
Brookfield Renewable’s activities in Europe, including growth, operations and
funding and maintains responsibility for generation and development, including
operations and maintenance, marketing, health and safety, legal, environmental
and procurement activities. Mr. Rank has an Honours Bachelor of Applied Science
(Mechanical Engineering) and a Minor in Economics from the University of
Waterloo and is a Chartered Financial Analyst. See also information
contained under Item 3.D “Risk Factors — Risks Related to Our
Relationship with Brookfield” and Item 7.B “Related Party Transactions”. Management Diversity At Brookfield
Renewable, hiring and promotion decisions are based on solely on merit, so that
each officer and employee possesses the necessary skills, knowledge and
experience to do his or her job.  Brookfield Renewable and the Service
Provider are committed to workplace diversity, including but not limited to
diversity of gender, culture, geography, and skills.  Brookfield Renewable
appreciates the benefits of leveraging a range of diverse talents and
perspectives and we actively support the development and advancement of a
diverse group of employees capable of achieving management roles, including
executive officer positions.  Neither Brookfield Renewable nor the Service
Provider have targets for the representation of women in executive officer
positions because such targets do not accurately reflect the full range of factors
considered in hiring new executive officers or promotions.  Currently, we
have 5 women in executive positions who constitute 19% of the executive team of
the Service Provider and the senior management team of our business, in the
aggregate. Our Master Services Agreement BREP, BRELP and the
Holding Entities entered into our Master Services Agreement pursuant to which
the Service Provider has agreed to provide oversight of our business and
provide the services of senior management to BREP. In addition, the Service
Provider has agreed to provide services relating to acquisitions or
dispositions, financings, business planning and strategy and oversight and
supervision of various day to day management and administrative activities. The
Operating Entities are not a party to our Master Services Agreement. Under our Master
Services Agreement, the Service Recipients have appointed the Service Provider to
provide or arrange for the provision by an appropriate service provider of the
following services: ·causing
or supervising the carrying out of all day to day management, secretarial,
accounting, banking, treasury, administrative, liaison, representative,
regulatory and reporting functions and obligations; ·providing
overall strategic advice to the Holding Entities including advising with
respect to the expansion of their business into new markets; ·establishing
and maintaining or supervising the establishment and maintenance of books and
records; ·identifying,
evaluating and recommending to the Holding Entities acquisitions or
dispositions from time to time and, where requested to do so, assisting in
negotiating the terms of such acquisitions or dispositions; ·recommending
and, where requested to do so, assisting in the raising of funds whether by way
of debt, equity or otherwise, including the preparation, review or distribution
of any prospectus or offering memorandum in respect thereof and assisting with
communications support in connection therewith; Page119


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 ·causing
or supervising the preparation and implementation of any operating plan,
capital expenditure plan or marketing plan; ·recommending
to the Holding Entities suitable candidates to serve on the Governing Bodies of
the Operating Entities; ·making
recommendations with respect to the exercise of any voting rights to which the
Holding Entities are entitled in respect of the Operating Entities; ·making
recommendations with respect to the payment of dividends by the Holding
Entities or any other distributions by the Service Recipients, including
distributions by us to our LP Unitholders; ·monitoring
and/or oversight of the applicable Service Recipient’s accountants, legal
counsel and other accounting, financial or legal advisers and technical,
commercial, marketing and other independent experts and managing litigation in
which a Service Recipient is sued or commencing litigation after consulting
with, and subject to the approval of, the relevant Governing Body; ·attending
to all matters necessary for any reorganization, bankruptcy proceedings,
dissolution or winding up of a Service Recipient, subject to approval by the
relevant Governing Body; ·supervising
the timely calculation and payment of taxes payable, and the filing of all tax
returns due, by each Service Recipient; ·causing
or supervising the preparation of the Service Recipients’ annual consolidated
financial statements, quarterly interim financial statements and other public
disclosure; ·making
recommendations in relation to and effecting the entry into insurance of each
Service Recipient’s assets, together with other insurances against other risks
including directors and officers insurance, as the relevant service provider
and the relevant Governing Body may from time to time agree; ·arranging
for individuals to carry out the functions of the principal executive,
accounting and financial officers for BREP only for purposes of applicable
securities laws; ·providing
individuals to act as senior officers of Holding Entities as agreed from time
to time, subject to the approval of the relevant Governing Body; ·advising
the Service Recipients regarding the maintenance of compliance with applicable
laws and other obligations; and ·providing
all such other services as may from time to time be agreed with the Service
Recipients that are reasonably related to the Service Recipient’s day to day
operations. Notwithstanding the
forgoing, all Investment Advisor Services (as defined in the Master Services
Agreement) must be provided solely to BRELP. The Service Provider’s activities
are subject to the supervision of the board of directors of the Managing
General Partner and the Governing Bodies of each of the other Service
Recipients, as applicable. The Service Provider has agreed to exercise the
power and discharge the duties conferred under our Master Services Agreement
honestly and in good faith, and will exercise the degree of care, diligence and
skill that a reasonably prudent person would exercise in comparable
circumstances, subject to, and after taking into account, the terms and
conditions of the Relationship Agreement. Management Fee Pursuant to our
Master Services Agreement, we pay an annual base management fee, referred to as
the “Base Management Fee”, to the Service Provider equal to $20 million
(which amount is annually adjusted for inflation, with the first adjustment
having been made on January 1, 2013, at an inflation factor based on
year-over-year United States consumer price index) plus 1.25% of the amount by
which the Total Capitalization Value exceeds an initial reference value
determined based on its market capitalization immediately following the
combination of the assets of the Fund and the Brookfield Power Renewable Assets
into BREP. In the event that the measured Total Capitalization Value in a given
period is less than the initial reference value, the Service Provider will
receive only the Base Management Fee of $20 million annually (subject to an
annual escalation by the specified inflation factor described above). The Base
Management Fee is calculated and paid on a quarterly basis. To the extent that
under any other arrangement we are obligated to pay a base management fee
(directly or indirectly through an equivalent arrangement) to the Service
Provider (or any affiliate) on a Page120


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 portion of our
capital that is comparable to the Base Management Fee, the Base Management Fee
payable for each quarter in respect thereof will be reduced on a dollar for
dollar basis by our proportionate share of the comparable base management fee
(or equivalent amount) under such other arrangement for that quarter. The Base
Management Fee will not be reduced by the amount of any incentive distribution
payable by any Service Recipient or Operating Entity to the Service Provider
(or any other affiliate) (for which there is a separate credit mechanism under
the Amended and Restated Limited Partnership Agreement of BRELP), or any other
fees that are payable by any Operating Entity to Brookfield for financial
advisory, operations and maintenance, development, operations management and
other services. See Item 7.B “Related Party Transactions — Incentive Distributions”
and “—Other Services”. The table below sets
out the quarterly Total Capitalization Value against the initial reference
value of $8,093,033,167, factoring in the quarterly portion of the annual
amount of $20 million (as adjusted for inflation pursuant to the Master
Services Agreement) and the corresponding Base Management Fee paid for each
quarter since November 2011. The Base Management Fee payment for the year ended
2014 was approximately $51
million.
The Base Management Fee payments for the years ended December 31, 2013 and 2012
were approximately $41 million and $35.8 million, respectively.   Page121


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 (MILLIONS,
  EXCEPT
 Initial
 Q4
 Q1
 Q2
 Q3
 Q4LP UNITS AMOUNTS)
 Value
 2011(1)
 Increase
 2012
 Increase
 2012
 Increase
 2012
 Increase
 2012
 IncreaseFair market value of LP Units(2)
 $
 24.94
 $
 26.50
 $
 1.56
 $
 26.01
 $
 1.07
 $
 27.31
 $
 2.37
 $
 29.97
 $
 5.03
 $
 29.63
 $
 4.69Units issued and outstanding(3)
 
 262.5
 
 262.5
 
 262.5
 
 262.5
 
 262.5
 
 262.5
 
 262.5
 
 262.5
 
 262.5
 
 262.6
 
 262.6$
 6,545
 $
 6,955
 $
 410
 $
 6,828
 $
 283
 $
 7,169
 $
 624
 $
 7,868
 $
 1,323
 $
 7,780
 $
 1,235Principal value of corporateborrowings, credit facilities andpreferred shares
 
 1,553
 
 1,573
 
 20
 
 1,783
 
 230
 
 1,779
 
 226
 
 1,915
 
 362
 
 2,283
 
 730Cash held: Service Recipients
 
 (5.0)
 
 (4.9)
 
 0.1
 
 (10.7)
 
 (5.7)
 
 (6.1)
 
 (1.1)
 
 (4.2)
 
 0.8
 
 (1.4)
 
 3.6Total Capitalization Value
 $
 8,093
 $
 8,523
 $
 430
 $
 8,600
 $
 507
 $
 8,942
 $
 849
 $
 9,779
 $
 1,686
 $
 10,062
 $
 1,969Q1
 Q2
 Q3
 Q42013
 Increase
 2013
 Increase
 2013
 Increase
 2013
 IncreaseFair market value of LP Units(2)
 
 
 
 
 
 
 $
 28.91
 $
 3.97
 $
 27.54
 $
 2.60
 $
 26.41
 $
 1.47
 $
 25.88
 $
 0.94Units issued and outstanding(3)
 
 
 
 
 
 
 
 262.6
 
 262.6
 
 262.6
 
 262.6
 
 262.6
 
 262.6
 
 262.6
 
 262.6$
 7,591
 $
 1,046
 $
 7,232
 $
 687
 $
 6,936
 $
 391
 $
 6,797
 $
 252Principal value of corporateborrowings, credit facilities andpreferred shares
 
 
 
 
 
 
 $
 2,707
 
 1,154
 
 2,729
 
 1,176
 
 2,459
 
 906
 
 2,524
 
 971Cash held: Service Recipients
 
 
 
 
 
 
 
 (6.0)
 
 (1.0)
 
 (0.7)
 
 4.3
 
 (4.9)
 
 0.1
 
 (5.8)
 
 (0.8)Total Capitalization Value
 
 
 
 
 
 
 $
 10,292
 $
 2,199
 $
 9,960
 $
 1,867
 $
 9,389
 $
 1,296
 $
 9,315
 $
 1,222Q1
 Q2
 Q3
 Q42014
 Increase
 2014
 Increase
 2014
 Increase
 2014
 IncreaseFair market value of LP Units(2)
 
 
 
 
 
 
 $
 28.80
 $
 3.86
 $
 29.50
 $
 4.56
 $
 30.10
 $
 5.16
 $
 30.50
 $
 5.56Units issued and outstanding(3)
 
 
 
 
 
 
 
 262.7
 
 262.7
 
 273.0
 
 273.0
 
 273.0
 
 273.0
 
 273.0
 
 273.0$
 7,566
 $
 1,021
 $
 8,063
 $
 1,518
 $
 8,228
 $
 1,683
 $
 8,330
 $
 1,785Principal value of corporateborrowings, credit facilities andpreferred shares
 
 
 
 
 
 
 $
 2,416
 
 863
 
 2,501
 
 948
 
 2,611
 
 1,058
 
 2,424
 
 871Cash held: Service Recipients
 
 
 
 
 
 
 
 (7.1)
 
 (2.1)
 
 (5.1)
 
 (0.1)
 
 (7.9)
 
 (2.9)
 
 (2.5)
 
 2.5Total Capitalization Value
 
 
 
 
 
 
 $
 9,975
 $
 1,882
 $
 10,559
 $
 2,466
 $
 10,831
 $
 2,738
 $
 10,751
 $
 2,658(MILLIONS, UNLESS
 
 Q4
 Q1
 Q2
 Q3
 Q4OTHERWISE NOTED)
 
 2011
 Total
 2012
 Total
 2012
 Total
 2012
 Total
 2012
 TotalBase management fee(4)
 
 
 
 
 $
 1.9
 
 
 $
 5.0
 
 
 $
 5.0
 
 
 $
 5.0
 
 
 $
 5.0Variable management feesIncrease in Total Capitalization Value
 
 
 
 430
 
 
 
 507
 
 
 
 849
 
 
 
 1,686
 
 
 
 1,969Rate(5)
 0.3125%
 
 
 
 0.5
 
 
 
 1.6
 
 
 
 2.7
 
 
 
 5.3
 
 
 
 6.2Total management fee
 
 
 
 
 $
 2.4
 
 
 $
 6.6
 
 
 $
 7.7
 
 
 $
 10.3
 
 
 $
 11.2Q1
 Q2
 Q3
 Q42013
 Total
 2013
 Total
 2013
 Total
 2013
 TotalBase management fee(4)
 
 
 
 
 $
 
 
 
 $
 5.1
 
 
 $
 5.1
 
 
 $
 5.1
 
 
 $
 5.1Variable management feesIncrease in Total Capitalization Value
 
 
 
 
 
 
 
 2,199
 
 
 
 1,867
 
 
 
 1,296
 
 
 
 1,222Rate(5)
 0.3125%
 
 
 
 
 
 
 
 6.9
 
 
 
 5.8
 
 
 
 4.1
 
 
 
 3.8Total management fee
 
 
 
 
 $
 -
 
 
 $
 12.0
 
 
 $
 10.9
 
 
 $
 9.2
 
 
 $
 8.9Q1
 Q2
 Q3
 Q42014
 Total
 2014
 Total
 2014
 Total
 2014
 TotalBase management fee(4)
 
 
 
 
 $
 
 
 
 $
 5.2
 
 
 $
 5.2
 
 
 $
 5.2
 
 
 $
 5.2Variable management feesIncrease in Total Capitalization Value
 
 
 
 
 
 
 
 1,882
 
 
 
 2,466
 
 
 
 2,738
 
 
 
 2,658Rate(5)
 0.3125%
 
 
 
 
 
 
 
 5.9
 
 
 
 7.7
 
 
 
 8.6
 
 
 
 8.3Total management fee
 
 
 
 
 $
 -
 
 
 $
 11.1
 
 
 $
 12.9
 
 
 $
 13.8
 
 
 $
 13.5
 (1)November
28, 2011 is the
date of completion of, among other things, the strategic combination of the
renewable power generating assets of Brookfield Renewable Power Inc. and
Brookfield Renewable Power Fund into BREP. The amounts for the fourth quarter of 2011
set forth in the table represent the base management fee and the incentive
distribution for the stub period from such date until December 31, 2011. (2)Represents
the five-day volume-weighted average price in Canadian dollars converted to
U.S. dollars. (3)All
outstanding LP Units, assuming full conversion of Brookfield's limited
partnership interest in BRELP into LP Units. (4)$20
million annual fee, calculated quarterly in arrears (subject to an annual
escalation by a specified inflation factor beginning January 1, 2013). (5)1.25%
of the increase in Total Capitalization Value, calculated at 0.3125% quarterly. Reimbursement of Expenses and Certain Taxes The relevant Service
Recipient will reimburse the Service Provider for all out-of-pocket fees, costs
and expenses incurred in connection with the provision of the services including
those of any third party. Such out-of-pocket fees, costs and expenses include,
among other things, (i) fees, costs and expenses relating to any debt or
equity financing; (ii) fees, costs and expenses incurred in connection
with the general administration of any Service Recipient; (iii) taxes,
licenses and other statutory fees or penalties levied against or in respect of
a Service Recipient; (iv) amounts owed under indemnification, contribution Page122


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 or similar arrangements; (v) fees, costs and
expenses relating to our financial reporting, regulatory filings and investor
relations and the fees, costs and expenses of agents, advisers and other
persons who provide services to or on behalf of a Service Recipient; and
(vi) any other fees, costs and expenses incurred by the Service Provider
that are reasonably necessary for the performance by the Service Provider of
its duties and functions under our Master Services Agreement. However, the
Service Recipients will not be required to reimburse the Service Provider for the
salaries and other remuneration of its management, personnel or support staff
who carry out any services or functions for such Service Recipients or overhead
for such persons. In addition, the
Service Recipients will be required to pay all fees, expenses and costs
incurred in connection with the investigation, acquisition, holding or disposal
of any acquisition that is made or that is proposed to be made by us. Where the
acquisition or proposed acquisition involves a joint acquisition that is made
alongside one or more other persons, the Service Provider will be required to
allocate such fees, costs and expenses in proportion to the notional amount of
the acquisition made (or that would have been made in the case of an
unconsummated acquisition) among all joint investors. Such additional fees,
expenses and costs represent out-of-pocket costs associated with investment
activities that will be undertaken pursuant to our Master Services Agreement. The Service
Recipients will also be required to pay or reimburse the Service Provider for
all sales, use, value added, goods and services, harmonized sales, withholding
or other taxes or customs duties or other governmental charges levied or
imposed by reason of our Master Services Agreement or any agreement it contemplates,
other than income taxes, corporation taxes, capital taxes or other similar
taxes payable by the Service Provider, which are personal to the Service
Provider. Termination Our Master Services
Agreement continues in perpetuity, until terminated in accordance with its
terms. However, the Service Recipients may terminate our Master Services
Agreement effective upon written notice of termination to the Service Provider
if any of the following occurs: ·the
Service Provider defaults in the performance or observance of any material
term, condition or covenant contained in the agreement in a manner that results
in material harm to the Service Recipients and the default continues unremedied
for a period of 60 days after written notice of the breach is given to the Service
Provider; ·the
Service Provider engages in any act of fraud, misappropriation of funds or
embezzlement against any Service Recipient that results in material harm to the
Service Recipients; ·the
Service Provider is grossly negligent in the performance of its duties under
the agreement and such gross negligence results in material harm to the Service
Recipients; or ·certain
events relating to the bankruptcy or insolvency of the Service Provider. The Service
Recipients have no right to terminate for any other reason, including if the Service
Provider or Brookfield experiences a change of control. The Managing General
Partner may only terminate our Master Services Agreement on behalf of BREP with
the prior unanimous approval of the Managing General Partner’s independent
directors. Our Master Services
Agreement expressly provides that the agreement may not be terminated by the
Service Recipients due solely to the poor performance or the underperformance
of any of our operations. The Service Provider may
terminate our Master Services Agreement effective upon written notice of
termination to the Service Recipients if any Service Recipient defaults in the
performance or observance of any material term, condition or covenant contained
in the agreement in a manner that results in material harm to the Service
Provider and the default continues unremedied for a period of 60 days after
written notice of the breach is given to the Service Recipients. The Service
Provider may also terminate our Master Services Agreement upon the occurrence
of certain events relating to the bankruptcy or insolvency of any Service
Recipient. If our Master
Services Agreement is terminated, the Licensing Agreement, the Relationship
Agreement and any of Brookfield’s obligations under the Relationship Agreement
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 See Item 7.B “Related
Party Transactions — Relationship Agreement” and Item 3.D “Risk Factors —
Risks Related to Our Relationship with Brookfield”. Indemnification and Limitations on Liability Under our Master
Services Agreement, the Service Provider has not assumed and will not assume
any responsibility other than to provide or arrange for the provision of the
services called for under such agreement in good faith and will not be
responsible for any action that the Service Recipients take in following or
declining to follow the advice or recommendations of the Service Provider. The Service
Provider has agreed to indemnify each of the Service Recipients and its
affiliates, and its directors, officers, agents, members, partners,
shareholders, employees and other representatives to the fullest extent
permitted by law from and against any claims, liabilities, losses, damages,
costs or expenses (including legal fees) resulting from the Service Provider’s
bad faith, fraud, willful misconduct, gross negligence and, in the case of a
criminal matter, conduct undertaken with the knowledge that the conduct was
unlawful. The maximum amount of the aggregate liability of the Service Provider
and its affiliates, the directors, officers, employees, contractors, agents, advisers
and other representatives of the Service Provider and its affiliates, will be
equal to the amounts previously paid in respect of services pursuant to our
Master Services Agreement or any other agreement or arrangement contemplated by
our Master Services Agreement in the two most recent calendar years by the
Service Recipients. The Service Recipients have also agreed to indemnify each
of the Service Provider, Brookfield and their directors, officers, agents,
subcontractors, delegates, members, partners, shareholders and employees to the
fullest extent permitted by law from and against any claims, liabilities,
losses, damages, costs or expenses (including legal fees) incurred by an
indemnified person or threatened in connection with our respective businesses,
investments and activities or in respect of or arising from our Master Services
Agreement or the services provided by the Service Provider, except to the
extent that the claims, liabilities, losses, damages, costs or expenses are
determined to have resulted from the indemnified person’s bad faith, fraud,
willful misconduct, gross negligence or in the case of a criminal matter,
action that the indemnified person knew to have been unlawful. In addition, under
our Master Services Agreement, the indemnified persons will not be liable to
the Service Recipients to the fullest extent permitted by law, except for
conduct that involved bad faith, fraud, willful misconduct, gross negligence,
or in the case of a criminal matter, conduct that the indemnified person knew
to have been unlawful. Outside Activities Our Master Services
Agreement does not prohibit the Service Provider or its affiliates from
pursuing other business activities or providing services to third parties that
compete directly or indirectly with us. For a description of related aspects of
the relationship between Brookfield and the Service Recipients, see Item 7.B
“Related Party Transactions — Relationship Agreement”. See also information
contained in this Form 20-F under Item 6.C “Board Practices,”
Item 3.D “Risk Factors — Risks Related to our Relationship with
Brookfield” and Item 6.A “Directors and Senior Management”. 6.B              COMPENSATION Our Management The
Managing General Partner does not have any employees. We have entered into our
Master Services Agreement with the Service Provider pursuant to which the Service
Provider and certain other affiliates of Brookfield provide or arrange for
other service providers to provide management services to BREP, BRELP and the
Holding Entities. The fees payable under the Master Services Agreement are set
forth under Item 6.A “Directors and Senior Management — Our Master
Services Agreement — Management Fee”. In addition, Brookfield is entitled to
receive incentive distributions from BRELP described under Item 7.B
“Related Party Transactions — Incentive Distributions”. Pursuant
to our Master Services Agreement, members of Brookfield’s senior management and
other individuals from Brookfield’s global affiliates are drawn upon to fulfill
obligations under our Master Services Agreement. These individuals, including
the Brookfield employees identified in the table above under Item 6.A
“Directors and Senior Management — Our Management”, arenot compensated by BREP or our Managing General Partner; instead
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 Further disclosure required under Canadian securities
laws regarding the compensation of certain members of our core senior
management team for the year ended December 31, 2014 will be separately
filed within 140 days of December 31, 2014. Board of Directors of the Managing General Partner In 2014,
the Managing General Partner paid each of its directors $60,000 per year for
serving on its board of directors and various board committees. In February
2015, the annual retainer for directors of the Managing General Partner was
increased to $100,000 annually. The Managing General Partner pays the
chairperson/lead director of the board of directors an additional $35,000 per
year and each chairperson of the committees of the board of directors an
additional $10,000 ($20,000 for the chairperson of the Audit Committee). Only
those directors who are not employed by Brookfield or its affiliates are
entitled to receive compensation for acting as a director of the Managing
General Partner. We
believe that directors of the Managing General Partner can better represent LP
Unitholders if they have economic exposure to Brookfield Renewable themselves.
Accordingly, on the later of the fifth anniversary of their appointment and two
years following the date of any change in the annual retainer, directors of the
Managing General Partner are required to hold sufficient LP Units such that the
acquisition cost of such units is equal to at least two times their annual
retainer, as determined by the Board of Directors from time to time. We
consider this minimum economic ownership requirement to be consistent with best
practices. The
Nominating and Governance Committee is responsible for reviewing and making
recommendations to the board of directors of the Managing General Partner
concerning the remuneration of directors and committee members. See
Item 6.C “Board Practices — Committees of the Board — Nominating and Governance
Committee”. Indebtedness of Directors and Executive Officers As at the
date of this Form 20-F, and at all times since January 1, 2014, none of
the directors, officers, employees and former directors, officers and employees
of the Managing General Partner, the Service Provider or any of their
respective subsidiaries, nor any of their associates, has or had any indebtedness
owing to Brookfield Renewable.  6.C              BOARD
PRACTICES Board Structure,
Practices and Committees The structure,
practices and committees of the Managing General Partner’s board of directors,
including matters relating to the size, independence and composition of the
board of directors, the election and removal of directors, requirements relating
to board action and the powers delegated to board committees, are governed by
the Managing General Partner’s bye-laws. The Managing General Partner’s board
of directors is responsible for exercising the management, control, power and
authority of the Managing General Partner except as required by applicable law
or the bye-laws of the Managing General Partner. The following is a summary of
certain provisions of those bye-laws that affect BREP’s governance. Size, Independence
and Composition of the Board of Directors The Managing General
Partner’s board of directors is currently set at seven directors. The board may
consist of between three and 11 directors or such other number of directors as
may be determined from time-to-time by a resolution of the Managing General
Partner’s shareholders and subject to its bye-laws. At least three directors
and at least a majority of the directors holding office must be independent of
the Managing General Partner and Brookfield, as determined by the full board of
directors using the standards for independence established under applicable
securities laws. If the death,
resignation or removal of an independent director results in the board of
directors consisting of less than a majority of independent directors, the
vacancy must be filled promptly. Pending the filling of such vacancy, the board
of directors may temporarily consist of less than a majority of independent
directors and those directors who do not meet the standards for independence
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 to hold office. In addition, the
Managing General Partner’s bye-laws provide that not more than 50% of the
directors (as a group) or the independent directors (as a group) may be
residents of any one jurisdiction (other than Bermuda and any other
jurisdiction designated by the board of directors from time to time). Election and Removal
of Directors The Managing General
Partner’s board of directors was appointed by its sole shareholder and each of
its current directors will serve until the close of the next annual meeting of
shareholders of the Managing General Partner or his or her death, resignation
or removal from office, whichever occurs first. Vacancies on the board of
directors may be filled and additional directors may be added by a resolution
of the Managing General Partner’s shareholders or a vote of the directors then
in office. A director may be removed from office by a resolution duly passed by
the Managing General Partner’s shareholders or, if the director has been absent
without leave from three consecutive meetings of the board of directors, by a
written resolution requesting resignation signed by all other directors then
holding office. A director will be automatically removed from the board of
directors if he or she becomes bankrupt, insolvent or suspends payments to his
or her creditors or becomes prohibited by law from acting as a director. Term Limits and Board
Renewal The Nominating and
Governance Committee reviews and assesses the qualifications of candidates
proposed by the Managing General Partner to join the board of directors with
the goal, among other things, of reflecting a balance between the experience
that comes with longevity of service on the board of directors and the need for
renewal and fresh perspectives. The board of
directors does not have a mandatory age for the retirement of directors and
there are no term limits; nor are there any other mechanisms in place that
operate to compel board of directors turnover. While we believe that mandatory
retirement ages, director term limits and other board of directors turnover
mechanisms are overly prescriptive, periodically adding new voices to the board
of directors can help Brookfield Renewable adapt to a changing business
environment. As such, the
Nominating and Governance Committee reviews the composition of the board of
directors on a regular basis in relation to approved director criteria and
skill requirements and recommends changes as appropriate. Given that the board
of directors was formed in 2011, there have not yet been any significant change
to its composition, other than the appointment of one new director in
2012. Board Diversity Policy In February 2015, a
board of directors diversity policy (the “Diversity Policy”) was
approved by the board of directors. The Diversity Policy is informed by
Brookfield Renewable’s deep roots in many global jurisdictions and the belief
that the board of directors should reflect a diversity of backgrounds relevant
to its strategic priorities. This includes such factors as diversity of
business expertise and international experience, in addition to geographic and
gender diversity. All board of director
appointments will be based solely on merit, having due regard for the benefits
of diversity, so that each nominee possesses the necessary skills, knowledge
and experience to serve effectively as a director. Therefore, in the director
identification and selection process, gender diversity influences succession
planning and is one criterion in adding new members to the board of directors.
 Brookfield Renewable appreciates the benefits of leveraging a range of
diverse talents and perspectives and is committed to pursuing the spirit and
letter of the Diversity Policy. The Nominating and Governance Committee is
responsible for overseeing the implementation of the Diversity Policy and for
monitoring progress towards achieving its objectives.  The board of
directors currently has seven directors, five of whom are independent, and one
of whom is female (who is an independent director). Accordingly, approximately
15% of the board of directors is made up of women and women represent 20% of
the independent directors. The Diversity Policy does not set any formal targets
on diversity for directors at this time, because of the current need for
geographic diversity of directors and the emphasis on subject matter expertise. Action by the Board
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 The
Managing General Partner’s board of directors may take action in a duly
convened meeting at which a quorum is present or by a written resolution signed
by all directors then holding office. When action is to be taken at a meeting
of the board of directors, the affirmative vote of a majority of the votes cast
is required for any action to be taken. Transactions
Requiring Approval by Independent Directors The Managing General
Partner’s independent directors approved the Conflicts Policy which addresses
the approval and other requirements for transactions in which there is
potential for a conflict of interest to arise. These transactions include, but
are not limited to: ·the
dissolution of BRELP; ·any
material amendment to our Master Services Agreement, the Amended and Restated
Limited Partnership Agreement of BRELP or the Amended and Restated Limited
Partnership Agreement of BREP; ·any
material service agreement or other arrangement pursuant to which Brookfield
will be paid a fee, or other consideration other than any agreement or
arrangement contemplated by our Master Services Agreement; ·subject
to certain exceptions, acquisitions by us from, and dispositions by us to,
Brookfield; ·subject
to certain exceptions, any other material transaction involving us and
Brookfield; and ·termination
of, or any determinations regarding indemnification under, our Master Services
Agreement. The Conflicts Policy
requires the transactions described above to be approved by a majority of the
Managing General Partner’s independent directors. Pursuant to the Conflicts
Policy, independent directors may grant approvals for any of the transactions
described above in the form of general guidelines, policies or procedures in
which case no further special approval will be required in connection with a
particular transaction or matter permitted thereby. The Conflicts Policy can be
amended at the discretion of the Managing General Partner. See Item 7.B
“Related Party Transactions — Conflicts of Interest and Fiduciary Duties”. Transactions in Which
a Director Has an Interest A director who
directly or indirectly has an interest in a contract, transaction or
arrangement with the Managing General Partner, BREP or certain of our
affiliates is required to disclose the nature of his or her interest to the
full board of directors. Such disclosure may take the form of a general notice
given to the board of directors to the effect that the director has an interest
in a specified company or firm and is to be regarded as interested in any
contract, transaction or arrangement made with that company or firm or its
affiliates after the date of the notice. A director may participate in any
meeting called to discuss or any vote called to approve the transaction in
which the director has an interest and any transaction approved by the board of
directors will not be void or voidable solely because the director was present
at or participated in the meeting in which the approval was given provided that
the board of directors or a board committee authorizes the transaction in good
faith after the director’s interest has been disclosed or the transaction is
fair to the Managing General Partner and BREP at the time it is approved. Service Contracts There are no service
contracts with directors that provide benefit upon termination of office or
services. Indemnification and
Limitations on Liability The Amended and
Restated Limited Partnership Agreement of BREP The laws of Bermuda
permit the partnership agreement of a limited partnership, such as BREP, to
provide for the indemnification of a partner, the officers and directors of a
partner and any other person against any and all claims and demands whatsoever,
except to the extent that the indemnification may be held by the courts of
Bermuda to be contrary to public policy or to the extent that the laws of
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 prohibit indemnification against personal
liability that may be imposed under specific provisions of the laws of Bermuda.
The laws of Bermuda also permit a partnership to pay or reimburse an
indemnified person’s expenses in advance of a final disposition of a proceeding
for which indemnification is sought. See Item 10.B “Memorandum and
Articles of Association — Description of Our LP Units and The Amended and
Restated Limited Partnership Agreement of BREP — Indemnification;
Limitations on Liability” for a description of the indemnification arrangements
in place under the Amended and Restated Limited Partnership Agreement of BREP. The Managing General
Partner’s Bye-laws The laws of Bermuda
permit the bye-laws of an exempted company, such as our Managing General
Partner, to provide for the indemnification of its officers, directors and
shareholders and any other person designated by the company against any and all
claims and demands whatsoever, except to the extent that the indemnification
may be held by the courts of Bermuda to be contrary to public policy or to the
extent that the laws of Bermuda prohibit indemnification against personal
liability that may be imposed under specific provisions of the laws of Bermuda.
Bermuda company law also permits an exempted company to pay or reimburse an
indemnified person’s expenses in advance of a final disposition of a proceeding
for which indemnification is sought. Under the Managing
General Partner’s bye-laws, the Managing General Partner is required to
indemnify, to the fullest extent permitted by law, its affiliates, directors,
officers, resident representative, shareholders and employees, any person who
serves on a Governing Body of BRELP or any of its subsidiaries and certain
others against any and all losses, claims, damages, liabilities, costs or
expenses (including legal fees and expenses), judgments, fines, penalties, interest,
settlements or other amounts arising from any and all claims, demands, actions,
suits or proceedings, incurred by an indemnified person in connection with BREP’s
investments and activities or in respect of or arising from their holding such
positions, except to the extent that the claims, liabilities, losses, damages,
costs or expenses are determined to have resulted from the indemnified person’s
bad faith, fraud or willful misconduct, or in the case of a criminal matter,
action that the indemnified person knew or ought reasonably to have known was
unlawful. In addition, under the Managing General Partner’s bye-laws:
(i) the liability of such persons has been limited to the fullest extent
permitted by law and except to the extent that their conduct involves bad
faith, fraud or willful misconduct, or in the case of a criminal matter, action
that the indemnified person knew or ought reasonably to have known was
unlawful; and (ii) any matter that is approved by the independent
directors will not constitute a breach of any duties stated or implied by law
or equity, including fiduciary duties. The Managing General Partner’s bye-laws
require it to advance funds to pay the expenses of an indemnified person in
connection with a matter in which indemnification may be sought until it is
determined that the indemnified person is not entitled to indemnification. Insurance BREP has obtained
insurance coverage under which the directors of the Managing General Partner
are insured, subject to the limits of the policy, against certain losses
arising from claims made against such directors by reason of any acts or
omissions covered under the policy in their respective capacities as directors
of the Managing General Partner, including certain liabilities under securities
laws. Corporate Governance
Disclosure The Managing General
Partner’s board of directors encourages sound corporate governance practices
designed to promote the well-being and ongoing development of BREP, including
advancing the best interests of BREP. The Managing General
Partner’s board of directors is of the view that its corporate governance
policies and practices, outlined below, are comprehensive and consistent with
the guidelines for corporate governance adopted by Canadian securities
administrators. The board of directors is also of the view that these policies
and practices are consistent with the requirements of the New York Stock
Exchange and the applicable provisions under the Sarbanes-Oxley Act. Board of Directors of
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 The
Managing General Partner’s board of directors oversees the management of
Brookfield Renewable’s affairs directly and through two existing standing
committees. The responsibilities of the board of directors and each committee are
set out in written charters, which are reviewed and approved annually. These
charters are also posted on BREP’s website, www.brookfieldrenewable.com under
“About - Governance”. In fulfilling its mandate, the board of
directors is, among other things, responsible for the following: ·assessing
the principal risks of Brookfield Renewable’s business and reviewing, approving
and monitoring the systems in place to manage these risks; ·reviewing
and approving the reports issued to LP Unitholders, including annual and
interim financial statements; and ·promoting
the effective operation of the board of directors. Meetings of the Board
of Directors The Managing General
Partner’s board of directors meets at least four times each year, with
additional meetings held to consider specific items of business or as deemed
necessary. Meeting frequency and agenda items may change depending on the
opportunities or risks faced by Brookfield Renewable. The board of directors is
responsible for its agenda. Prior to each board meeting, the Chair of the board
discusses agenda items for the meeting with the Service Provider. In 2014, the board of
directors of the Managing General Partner had four regular quarterly meetings
as well as two special meetings. All of the directors were present or could be
heard at the regular quarterly meetings. Size
and Composition of the Board of Directors The Managing General
Partner’s board of directors is currently set at seven directors. See
Item 6.C “Board Practices — Size, Independence and Composition of the
Board of Directors”. Independent
Directors At least three
directors and at least a majority of the directors holding office must be
independent of the Managing General Partner and Brookfield, as determined by
the full board of directors using the standards for independence established
under applicable securities laws. See Item 6.C “Board Practices — Size,
Independence and Composition of the Board of Directors”. The following table
describes the independence status of the directors of the Managing General
Partner. Director
 
 Independence Status
 
 Reason for Related StatusJeffrey Blidner
 
 Related
 
 Mr. Blidner is a Senior Managing Partnerof Brookfield Asset Management.Eleazar de Carvalho Filho
 
 IndependentJohn Van Egmond
 
 IndependentLars Josefsson
 
 Related
 
 Mr. Josefsson is a consultant toBrookfield Asset ManagementDavid Mann
 
 IndependentLou Maroun
 
 IndependentPatricia Zuccotti
 
 Independent
 The Chair of the
Managing General Partner’s board of directors is Jeffrey Blidner, who is not an
independent director. However, each of the committees of the board of directors
is fully comprised of independent directors. In addition, special committees of
independent directors may be formed from time to time to review particular
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 dialogue between the independent directors and the Chair
to discuss matters raised by independent directors. At all quarterly
meetings, the independent directors held meetings without the presence of
management and the directors that are not independent. The board of directors
has also adopted the Conflicts Policy to govern its practices in circumstances
in which conflicts of interest with Brookfield may arise. See Item 6.C
“Board Practices — Transactions Requiring Approval by Independent Directors”
and “— Transactions in Which a Director Has an Interest” and Item 7.B
“Related Party Transactions — Conflicts of Interest and Fiduciary Duties”. Other
Directorships The following
directors of the Managing General Partner are also directors of other reporting
issuers (or the equivalent in foreign jurisdictions). ·Blidner:
Brookfield Asset Management; Brookfield Property Partners L.P.; Brookfield
Infrastructure Partners L.P.; Rouse Properties, Inc. ·de
Carvalho Filho: FMC Technologies, Inc.; Grupo Pão de Açúcar; Cnova N.V. ·Josefsson:
Holmen AB ·Mann:
Acadian Timber Corp.; New Growth Corp; AllBanc Split Corp. II; Logistec Corp. ·Maroun:
Summit II REIT; Brookfield Property Partners L.P.; ThermoCeramix Corp. Director Orientation
and Education New directors of the
Managing General Partner are provided with comprehensive information about BREP
and its affiliates. Arrangements are made for specific briefing sessions from
appropriate senior personnel to help new directors better understand Brookfield
Renewable’s strategies and operations. They also participate in the continuing
education measures discussed below. The Managing General
Partner’s board of directors receives annual operating plans for each of
Brookfield Renewable’s strategic business units and more detailed presentations
on particular strategies. Existing directors are invited to join the
orientation sessions for new directors as a refresher. The directors are also
invited to participate in guided tours of Brookfield Renewable’s various
operational facilities. They have the opportunity to meet and participate in
work sessions with management to obtain insight into the operations of
Brookfield Renewable and its affiliates. Directors are regularly briefed to help
better understand industry related issues such as accounting rule changes,
transaction activity, capital markets initiatives, significant regulatory
developments, as well as trends in corporate governance. Director
Expectations The Managing General
Partner’s board of directors has adopted a Charter of Expectations for
Directors, which sets out the expectations in regard to personal and
professional competencies, LP Unit ownership, meeting attendance, conflicts of
interest, changes of circumstance and resignation events. Directors are
expected to identify in advance any potential conflict of interest regarding a
matter coming before the board of directors or its committees, bring these to
the attention of the board of directors or committee chairman and refrain from
voting on such matters. Directors are also expected to submit their
resignations to the Chair of the board of directors if they become unable to
attend at least 75% of the board of directors’ regularly scheduled meetings or
if they become involved in a legal dispute, regulatory or similar proceedings,
take on new responsibilities or experience other changes in personal or
professional circumstances that could adversely impact Brookfield Renewable or
their ability to serve as director. Further information on director LP Unit
ownership requirements is set out in this Item 6.C and in Item 6.B “Compensation
– Board of Directors of the Managing General Partner”. Committees of the
Boardof Directors The Managing General
Partner’s board of directors believes that its committees assist in the
effective functioning of the board of directors and help ensure that the views
of independent directors are effectively represented. The board of
directors has two committees: ·the
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 ·the
Nominating and Governance Committee. The responsibilities
of these committees are set out in written charters, which are reviewed and
approved annually by the board of directors. The charters of these committees
can be found on our website, www.brookfieldrenewable.com under “About -
Governance”. All members of these committees must be independent directors, as
described above. Special committees may be formed from time to time as required
to review particular matters or transactions. While the board of directors
retains overall responsibility for corporate governance matters, the Audit
Committee and the Nominating and Governance Committee each have specific
responsibilities for certain aspects of corporate governance, in addition to their
other responsibilities as described below. Audit Committee The Managing General
Partner’s board of directors has established an audit committee (the “Audit
Committee”) that operates pursuant to a written charter. The Audit
Committee consists solely of independent directors, each member is financially
literate and there will be at least one member at all times designated as an
audit committee financial expert. Collectively, the Audit Committee has the
education and experience to fulfill the responsibilities outlined in the Audit
Committee Charter. The education and past experience of each Audit Committee
member that is relevant to the performance of his or her responsibilities as an
Audit Committee member can be found in the biographical information about the
applicable member under Item 6.A “Directors and Senior Management”. Audit
Committee members may not serve on more than two other public company audit
committees, except with the prior approval of the Managing General Partner’s
board of directors. Not more than 50% of the Audit Committee members may be
directors who are residents of any one jurisdiction (other than Bermuda and any
other jurisdiction designated by the board of directors from time to time). The Audit Committee
is responsible for assisting and advising the Managing General Partner’s board
of directors with matters relating to: ·our
accounting and financial reporting processes; ·the
integrity and audits of our financial statements; ·our
compliance with legal and regulatory requirements; and ·the
qualifications, performance and independence of our independent accountants. The Audit Committee
is also responsible for engaging our independent auditors, reviewing the plans
and results of each audit engagement with our independent auditors, approving
professional services provided by our independent auditors, considering the
range of audit and non-audit fees charged by our independent auditors and
reviewing the adequacy of our internal accounting controls. As of the date of
this Form 20-F, the Audit Committee was comprised of the following three
directors: Patricia Zuccotti (Chair), David Mann and Eleazar de Carvalho Filho,
all of whom are independent directors. In 2014, the Audit
Committee had four regular quarterly meetings as well as one special meeting. Eleazar
de Carvalho Filho was unable to attend the meeting held on April 30, 2014. Four
regular meetings are scheduled for 2015. The board of
directors of the Managing General Partner, upon the recommendation of the Audit
Committee, have adopted a written policy on auditor independence (the “Pre-Approval
Policy”). Under the Pre-Approval Policy, except in very limited
circumstances, all audit and permitted non-audit services are required to be
pre-approved by the Audit Committee. The Pre-Approval Policy prohibits the
auditors from providing the following types of non-audit services: ·booking
or other services related to Brookfield Renewable’s accounting records or
financial statements; ·appraisal
or valuation services or fairness opinions; ·actuarial
services; ·management
functions or human resources; ·legal
services and expert services unrelated to the audit; ·internal
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 ·financial
information systems design and implementation. The Pre-Approval
Policy permits the auditors to provide other types of non-audit services,
including tax services, but only if approved in advance by the Audit Committee,
subject to limited exceptions. The Pre-Approval
Policy also addresses issues relating to the disclosure of fees paid to the
auditors. See Item 16.C – “Principal Accountant Fees and Services” for a
summary of our external auditor service fees. Nominating
and Governance Committee The Managing General
Partner’s board of directors has established a nominating and governance
committee (the “Nominating and Governance Committee”) that operates
pursuant to a written charter. The Nominating and Governance Committee consists
entirely of independent directors and not more than 50% of the Nominating and
Governance Committee members may be directors who are residents of any one
jurisdiction (other than Bermuda and any other jurisdiction designated by the
board of directors from time to time). The Nominating and
Governance Committee is responsible for approving the appointment by the
sitting directors of a person to the office of director and for recommending a
slate of nominees for election as directors by the Managing General Partner’s
shareholders. The Nominating and Governance Committee is also responsible for
assisting and advising the Managing General Partner’s board of directors with
respect to matters relating to the general operation of the board of directors,
BREP’s governance, the governance of the Managing General Partner and the
performance of its board of directors and individual directors. It is the
responsibility of the Nominating and Governance Committee to assess the size
and composition of the Managing General Partner’s board of directors and its
committees; to review the effectiveness of the board of directors’ operations
and its relations with the Service Provider; to assess the performance of the
board of directors, individual directors and the Service Provider; and to
review BREP’s corporate governance practices.  The Nominating and
Governance Committee met four times in 2014. The Nominating and
Governance Committee annually reviews the performance of the board of directors
and its committees and the individual contribution of directors through a
self-survey. The Nominating and
Governance Committee is also responsible for evaluating candidates put forward
by Brookfield as candidates for nomination to the board of directors. As
Brookfield Asset Management is entitled to elect all of the directors of the
Managing General Partner, the directors of the Managing General Partner consult
with Brookfield to identify and assess the credentials of appropriate
individuals with the skills, knowledge, experience and talents needed to act as
an independent member of the board of directors of the Managing General Partner,
including the need for the board of directors as a whole to have a diversity of
perspectives. Brookfield maintains an “evergreen” list of potential independent
board members to ensure that outstanding candidates with the needed skills can
be quickly identified to fill planned or unplanned vacancies. Candidates from
that list and any other candidates familiar to Brookfield or Brookfield
Renewable are assessed to ensure the Managing General Partner’s board of
directors has the appropriate mix of talent, quality, skills and other requirements
necessary to promote sound governance and board effectiveness. Individuals who
meet those requirements are recommended by Brookfield to the Nominating and
Governance Committee for its review as potential candidates for nomination to
the board of directors. The Nominating and
Governance Committee is also responsible for reviewing and making
recommendations to the board of directors of the Managing General Partner
concerning the remuneration of directors and committee members and for
supervising any changes in the fees to be paid pursuant to our Master Services
Agreement. On recommendation of
the Nominating and Governance Committee, the Managing General Partner’s board
of directors will set compensation of the directors by seeking to ensure that
the compensation reflects the responsibilities and risks involved in being a
director and aligns the interests of the directors with the best interests of Brookfield
Renewable and our LP Unitholders. Compensation of Page132


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 the
directors will be periodically assessed by the Nominating and Governance
Committee and the board of directors to ensure that it is competitive in the
marketplace and fair in relation to the scope of the duties and
responsibilities of the directors. The Managing General
Partner does not have any executive officers. As the Service Provider manages BREP
pursuant to our Master Services Agreement, the compensation of our core senior
management team is determined by Brookfield. Our Nominating and Governance
Committee is responsible for supervising any changes in the fees to be paid
pursuant to our Master Services Agreement. See Item 6.A “Directors and Senior
Management — Our Management” and Item 6.B “Compensation — Our Management”. As
of the date of this Form 20-F, the Nominating and Governance Committee was
comprised of the following three directors: David Mann (Chair), Lou Maroun and
John Van Egmond, all of whom are independent directors. Boardof Directors,
Committees and Director Evaluation The Managing General
Partner’s board of directors believes that a regular and formal process of
evaluation improves the performance of the board of directors as a whole, its
committees and individual directors. Each year, a survey is sent to directors
regarding the effectiveness of the board of directors and its committees,
inviting comments and suggestions on areas for improvement. The results of this
survey are reviewed by the Nominating and Governance Committee, which makes
recommendations to the board of directors as required. Each director also
receives a list of questions for completing a self-assessment. The Chair of the
board of directors holds private interviews with each director annually to
discuss the operations of the board of directors and its committees and to
provide any feedback on the individual director’s contributions. Boardof Directors and
Management Responsibilities The Managing General
Partner’s board of directors has not developed written position descriptions
for the Chair of the board of directors or the chair of any of the committees
of the board of directors. However, each chair takes responsibility for
ensuring the board of directors or committee, as applicable, addresses the
matters within its written charter. The Managing General
Partner’s board of directors has not developed a written position description
for any members of our core senior management team. The services of our core senior
management team are provided by the Service Provider pursuant to our Master
Services Agreement. Code of Business
Conduct and Ethics Brookfield Renewable has
adopted a Code of Business Conduct and Ethics (the “Code”), a copy of
which can be found on BREP’s web site at www.brookfieldrenewable.com or on BREP’s
SEDAR profile at www.sedar.com. The Code provides guidelines to ensure that all
employees, including directors of the Managing General Partner, respect BREP’s
commitment to conducting business relationships with respect, openness and
integrity. Management provides regular instructions and updates to the Code to
our employees, as appropriate, and has provided training and e-learning tools
to support the understanding of the Code throughout the organization. Employees
may report activities which they feel are not consistent with the spirit and
intent of the Code through a hotline on an anonymous basis, or alternatively,
to designated members of management. Monitoring of calls is managed by an independent
third party called The Network. The Audit Committee is to be notified of
significant calls made to this hotline reporting activities that are not
consistent with the Code by Brookfield’s internal auditor. If the Audit
Committee considers it appropriate, it will notify the Nominating and
Governance Committee and/or the board of directors of significant calls. The
board of directors has not granted any waivers of the Code to date. The Managing General
Partner’s board of directors promotes the highest ethical business conduct. The
board of directors has taken measures to ensure directors exercise independent
judgment in considering transactions and agreements in respect of which a
director or our core senior management team has a material interest. Any
director with a material interest in a transaction declares his/her interest
and refrains from voting on such matter. Significant related party
transactions, if any, are reviewed and approved by an independent committee
made up of independent directors who may be advised by independent counsel and
independent advisers. See Item 6.C “Board Practices — Transactions Page133


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 Requiring Approval by Independent Directors” and “—
Transactions in Which a Director Has an Interest” and Item 7.B “Related
Party Transactions — Conflicts of Interest and Fiduciary Duties”. 6.D              EMPLOYEES We do not
employ the individuals who provide management services to us under our Master
Services Agreement, including the individuals who serve as the Managing General
Partner’s Chief Executive Officer and Chief Financial Officer. The personnel
that carry out these activities are employees of Brookfield, and their services
are provided to Brookfield Renewable for our benefit under our Master Services
Agreement. For a discussion of the individuals from Brookfield’s management
team that are involved in our renewable power business, see Item 6.A
“Directors and Senior Management — Our Management”. Through
our subsidiaries, we have approximately 1,500 employees involved in the
day-to-day operations of our facilities and the development of our business, of
which approximately 330 are located in Canada, 570 are located in the United
States, 325 are located in Brazil and 80 are located in the Republic of Ireland
and the United Kingdom. Approximately 630, or 48% of these employees, are
covered by collective agreements expiring between 2015 and 2018. Eight of these
collective agreements are due to be renewed in 2015. We maintain very good
relations with represented and salaried employees across all facilities.
Relationships with the various unions in Canada, the United States and Brazil
have also been positive, without the occurrence of any work disruptions that
would have had a negative impact on the business. Our corporate group also has
approximately 50 employees with non-operational roles who are largely based in
Canada. 6.E              SHARE OWNERSHIP Except as
described below under Item 7.A “Major Shareholders”, as of the date of
this Form 20-F, the directors and officers of the Managing General Partner and
the employees of the Service Provider who perform executive functions for Brookfield
Renewable, and their respective associates, as a group, beneficially owned,
directly or indirectly, or exercised control or direction over, less than 1% of
the outstanding LP Units. ITEM 7.       MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 7.A              MAJOR SHAREHOLDERS As of the
date of this Form 20-F, there are 143,356,854 LP Units outstanding. To our
knowledge, as at the date of this Form 20-F, no person or company, other than
Brookfield, beneficially owns or controls or directs, directly or indirectly,
more than 5% of our LP Units. Brookfield beneficially owns 40,026,986 LP Units
and 129,658,623 Redeemable/Exchangeable partnership units, or an approximately
62% interest in BREP (on a fully-exchanged basis) including its indirect
general partnership interest in the Managing General Partner and the BRELP GP
LP. All LP Units, including those held by Brookfield, are non-voting. See also
the information contained in this Form 20-F under Item 10.B “Memorandum
and Articles of Association — Description of our LP Units and the
Amended and Restated Limited Partnership Agreement of BREP”. As of
February 25, 2015, 426,942 of our outstanding LP Units were held by 12 holders
of record in the United States, not including LP Units held of record by DTC.
As of February 25, 2015, DTC was the holder of record of 10,240,700 LP Units. The
following tables set forth information, as of date of this Form 20-F, regarding
the beneficial ownership of LP Units by each person that is a beneficial owner
of more than 5% of our LP Units. Name
 LP
  Units(1)
 
 Percentage
  of LP Units(2)Brookfield Renewable Power Inc.
 169,685,609
 
 62%
 (1)Includes
129,658,623 Redeemable/Exchangeable partnership units held by Brookfield which
are redeemable for cash or exchangeable for LP Units in accordance with the
Redemption-Exchange Mechanism. All Redeemable/Exchangeable partnership units
and all limited partnership units of BRELP held by BREP are non-voting. For
additional information, see Item 10.B “Memorandum and Articles of
Association —Description of the Amended and Restated Limited Partnership
Agreement of BRELP — Units”. (2)Assuming
the exchange of all Redeemable/Exchangeable partnership units held by
Brookfield Asset Management and including Brookfield Asset Management’s
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 See also the information contained in this Form 20-F under
Item 3.D “Risk Factors—Risks Related to our Relationship with Brookfield”,
Item 6.A “Directors and Senior Management”, Item 6.C “Board
Practices” and Item 7.B “Related Party Transactions”. 7.B              RELATED
PARTY TRANSACTIONS We are an affiliate
of Brookfield. We have entered into a number of agreements and arrangements
with Brookfield in order to enable us to be established as a separate entity
and to pursue our vision of being a leading owner and operator of high-quality
renewable power assets. While we believe that this ongoing relationship with
Brookfield provides us with a strong competitive advantage as well as access to
opportunities that would otherwise not be available to us, we operate as an
independent, stand-alone entity. We describe below these relationships as well
as potential conflicts of interest (and the methods for resolving them) and
other material considerations arising from our relationship with Brookfield. See also the
information contained in this Form 20-F under Item 3.D “Risk Factors — Risks
Related to Our Relationship with Brookfield”, Item 5.A “Operating Results —
Related Party Transactions”, Item 6.A “Directors and Senior Management”, Item
6.C “Board Practices” and Item 7.A “Major Shareholders” and Note 9 to our
audited consolidated financial statements for the year ended December 31, 2014,
2013 and 2012, respectively. Relationship
Agreement Brookfield Asset
Management and certain of its subsidiaries entered into an agreement with BREP,
referred to as the Relationship Agreement that governs aspects of the
relationship among them. Pursuant to the Relationship Agreement, Brookfield
Asset Management has agreed that BREP will serve as its primary vehicle through
which it will acquire renewable power assets on a global basis. See
Item 4.B “Business Overview — The Service Provider” for further details on
Brookfield Asset Management. Each of BREP, BRELP
and the Holding Entities acknowledge and agree that Brookfield Asset Management
is not required under the Relationship Agreement to allocate any minimum level
of dedicated resources for the pursuit of acquisitions of power generation
operations or developments and that Brookfield has established or advised, and
may continue to establish or advise, other entities that rely on the diligence,
skill and business contacts of Brookfield’s professionals and the information
and acquisition opportunities they generate during the normal course of their
activities (including in the power generation sector). Brookfield Asset Management
also agrees that it will not sponsor transactions that are suitable for us in
the renewable power sector unless we are given an opportunity to participate.
Further, Brookfield may, but is not required to, offer Brookfield Renewable the
opportunity to acquire: (i) an integrated utility even if a significant
component of such utility’s operations consist of a non-renewable power
generation operation or development, such as a power generation operation that
uses coal or natural gas, (ii) a portfolio of power operations, even if a
significant component of such portfolio’s operations consist of non-renewable
power generation, or (iii) renewable power generation operations or
developments that comprise part of a broader enterprise, unless the primary purpose
of such acquisition, as determined by Brookfield, acting in good faith, is to
acquire the underlying operation or development. Brookfield Renewable
also acknowledges and agrees that members of Brookfield carry on a diverse
range of businesses worldwide, including the development, ownership and/or
management of power, transmission and other infrastructure assets, and
investing and advising on investing in any of the foregoing or loans, debt
instruments and other securities with underlying infrastructure collateral or
exposure including renewable power generation operations or developments, both
as principal and through other public companies that are affiliates of
Brookfield or through private investment vehicles and accounts established or
managed by affiliates of Brookfield and that except as explicitly provided in
the Relationship Agreement, the Relationship Agreement will not in any way
limit or restrict members of Brookfield from carrying on their respective
business. If we intend to
pursue an acquisition opportunity presented by Brookfield, one or more members
of Brookfield may participate in the acquisition opportunity if we do not have
the financial capacity (as determined by Brookfield) to acquire all of the
opportunity or if Brookfield allocates participation in the opportunity between
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 purpose of the investment opportunity, the
risk/return profile, the source of the investment opportunity and other factors
that Brookfield considers relevant. In the event that we decline an acquisition
opportunity presented by Brookfield, Brookfield may pursue such acquisition
opportunity for its own account, without restriction. Due to the foregoing, we
expect to compete from time-to-time with Brookfield or other third parties for
access to the benefits that we expect to realize from Brookfield Asset
Management’s involvement in our business. See Item 3.D “Risk Factors —
Risks Related to Our Relationship with Brookfield — Brookfield is not
necessarily required to act in the best interests of the Service Recipients,
BREP or our LP Unitholders”. An integral part of
our strategy is to participate with institutional investors in Brookfield
sponsored or co-sponsored consortiums or funds for acquisitions that fit our
strategy. Brookfield has a strong track record of leading such consortiums and
funds and actively manages underlying assets to improve performance. Currently,
Brookfield manages the Brookfield Americas Infrastructure Fund, a $2.7 billion
infrastructure fund focused on the Americas as well as Brookfield
Infrastructure Fund II, a $7 billion global infrastructure fund. Brookfield is
the fund manager and typically invests approximately 25% to 50% of the capital
required for a transaction alongside its institutional investors. It is
currently intended that future renewable power acquisitions identified by
Brookfield may be funded with commitments pursuant to these funds and we would
fund Brookfield’s participation where renewable power investments are made by
Brookfield’s sponsored institutional funds. See Item 3.D “Risk Factors – We do
not have control over all our operations”. In the event of the
termination of our Master Services Agreement, the Relationship Agreement would
also terminate, including Brookfield’s commitments to provide us with
acquisition opportunities, as described above. Master Services
Agreement BREP, BRELP and the
Holding Entities entered into our Master Services Agreement pursuant to which
the Service Provider has agreed to provide oversight of the business and
provide the services of senior officers to Brookfield Renewable. In addition,
the Service Provider has agreed to provide services relating to acquisitions or
dispositions, financings, business planning and strategy and oversight and
supervision of various day to day management and administration activities. In
exchange for providing these services, the Service Provider is entitled to a Base
Management Fee, which for the year ended 2014 was approximately $51 million.
For a detailed description of our Master Services Agreement, see Item 6.A
“Directors and Senior Management – Our Master Services Agreement”. For
components of the management fee, see Item 6.A— “Directors and Senior
Management — Our Master Services Agreement — Management Fee”. Incentive
Distributions BRELP GP LP is
entitled to receive incentive distributions from BRELP as a result of its
ownership of the general partnership interest in BRELP. The incentive
distributions are to be calculated in increments based on the amount by which
quarterly distributions on the limited partnership units of BRELP exceed
specified target levels as set forth in the Amended and Restated Limited
Partnership Agreement of BRELP. See Item 10.B “Memorandum and Articles of
Association — Description of the Amended and Restated Limited Partnership
Agreement of BRELP — Distributions”. BRELP GP LP may, at
its sole discretion, elect to reinvest incentive distributions in exchange for
Redeemable/Exchangeable partnership units. To the extent that
any of the Holding Entities or any operating entity pays to Brookfield any
comparable performance or incentive distribution, the amount of any future
incentive distributions will be reduced in an equitable manner to avoid
duplication of distributions. General Partner
Distributions Pursuant to the
Amended and Restated Limited Partnership Agreement of BREP, the Managing
General Partner is entitled to receive a general partner distribution equal to
0.01% of the total distributions of BREP. See Item 10.B “Memorandum and
Articles of Association — Description of Our LP Units and the Amended and
Restated Limited Partnership Agreement of BREP —Distributions”. Page136


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 Pursuant
to the Amended and Restated Limited Partnership Agreement of BRELP, BRELP GP LP
is entitled to receive a general partner distribution from BRELP equal to a
share of the total distributions of BRELP in proportion to BRELP GP LP’s
percentage interest in BRELP which is equal to 1% of the total distributions of
BRELP. In addition, it is entitled to receive the incentive distributions
described above under “— Incentive Distributions”. See Item 10.B
“Memorandum and Articles of Association — Description of the Amended and
Restated Limited Partnership Agreement of BRELP — Distributions”. Energy Revenue
Agreement On November 23,
2011, BEM LP, a subsidiary of Brookfield, and BPUSHA, a subsidiary of BRELP
that indirectly owns most of our U.S. facilities, entered into an energy
revenue agreement (“Energy Revenue Agreement”) pursuant to which BEM LP
agreed to support the price that BPUSHA receives for the energy generated from
certain of those facilities. BEM LP has agreed to pay BPUSHA each month an
amount equal to the difference between the Fixed Amount and the total revenues
received by BPUSHA from certain of those facilities. The “Fixed Amount”
is calculated as the energy generated by those facilities multiplied by a price
of $75/MWh (subject to an annual adjustment, equal to 40% of the increase in
the U.S. Consumer Price Index during the previous year, but capped at a 3%
increase in the fixed price per year). Should the total revenues received by
these facilities from sales of electricity and all ancillary services, capacity
and green credits for any month be more than the calculated Fixed Amount at the
end of any month, BEM LP will receive from BPUSHA an amount equal to such
excess. In the Energy Revenue
Agreement, BEM LP has agreed that at all times that it does not have a minimum
net worth of $500 million, it will provide a guarantee or other acceptable
security of a person with a minimum net worth of $500 million. Initially this
guarantee is being provided by Brookfield for a period of not less than three
years. The Energy Revenue
Agreement has an initial term of 20 years, with automatic renewals for
successive 20-year periods unless 180 days before the end of the applicable
term (i) both parties agree in writing not to renew the agreement or
(ii) BEM LP provides written notice that the agreement shall terminate
with respect to one or more facilities five years after the end of the
applicable term. The Energy Revenue Agreement is subject to customary
termination provisions in the event of a failure to pay or an insolvency event
of BPUSHA or BEM LP. Other Power
Agreements In addition to the
Energy Revenue Agreement, BREP is a party to a number of commercial agreements
with Brookfield, including (i) PPAs for the sale of power generated from
certain of Brookfield Renewable’s North American facilities to subsidiaries of
Brookfield; and (ii) revenue support agreements under which Brookfield
supports Brookfield Renewable’s revenue from the sale of power generated by
certain of Brookfield Renewable’s North American facilities. Including the
Energy Revenue Agreement, Brookfield purchases or provides revenue support for
approximately 37% of Brookfield Renewable’s portfolio as of December 31, 2014. Details of the
related party power purchase and revenue support agreements are as follows: In December 2009,
Brookfield entered into a 20-year power sales agreement with the Province of
Ontario pursuant to a hydroelectric contracting initiative issued by the
provincial government earlier that year. The power sales agreement, which
matures in 2029, applies to all power produced by hydro assets in Ontario owned
by GLPL and MPT. As of November 28, 2011, PPAs between Brookfield subsidiaries
and GLPL and MPT were amended to increase the price paid by Brookfield to GLPL
and MPT and to extend the term of such contracts. These amendments were
designed to pass through substantially all of the economics of the new power
sales agreement. When the assets of the Fund and the Brookfield Renewable
Power Assets were combined into BREP, Brookfield received aggregate
consideration in respect of such amendments valued at C$292 million, which was
recorded in equity by BREP as part of the adjustments arising from thiscombination,since the
transactions were between entities under the common control of Brookfield. The
GLPL and MPT contract amendments were taken into account in the determination
of the valuation of BREP and, ultimately, in the number of LP Units that were
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 public and the number of
Redeemable/Exchangeable partnership units of BRELP that were issued to
Brookfield. The material terms of the GLPL and MPT contract amendments are
described below. Under a PPA with
GLPL, a subsidiary of Brookfield Asset Management supports the price that GLPL
receives for energy generated by all of GLPL’s facilities in Ontario at a price
of C$82 per MWh (increased from C$68 per MWh by an amendment to the PPA
effective as of November 28, 2011) subject to an annual adjustment equal to 40%
of the increase in CPI) in the previous year. The GLPL PPA has an initial term
ending on December 1, 2029 and automatically renews for successive 20-year
periods, subject to certain termination provisions. After December 1, 2029, the
price under the GLPL PPA will revert back to the original C$68/MWh price (as
escalated in accordance with the original inflation linked price escalation
provisions in such agreement). Under a PPA with MPT,
a subsidiary of Brookfield Asset Management purchases the energy generated by
MPT’s facilities in Ontario at a price of C$103 per MWh (increased from C$68
per MWh by an amendment to the PPA effective as of November 28, 2011) subject
to an annual adjustment equal to 20% of the increase in the CPI in the previous
year. The MPT PPA terminates on December 1, 2029, subject to MPT’s option to
terminate the agreement, on 120 days written notice, at certain times between
2017 and 2024. Pursuant to PPAs with
Great Lakes Hydro America, LLC (“GLHA”), a subsidiary of Brookfield
Asset Management purchases the energy generated by several of GLHA’s power
facilities in Maine and New Hampshire at a price of $37 per MWh, subject to an
annual adjustment equal to 20% of the increase in the United States consumer
price index during the previous year. The GLHA PPA has a 20-year term ending in
2022 and 2023. Pursuant to a PPA
with Lievre Power, a subsidiary of Brookfield Asset Management purchases the
energy generated by Lievre Power’s facilities in Québec (excluding the Rapides
des Cedres facility) at a price of C$68 per MWh, subject to an annual
adjustment equal to the lesser of 40% of the increase in the CPI during the
previous calendar year or 3%. The Lievre Power PPA has a 20-year term ending in
2019. Pursuant to a PPA
with Hydro Pontiac Inc. (“HPI”), a subsidiary of Brookfield Asset
Management has agreed to purchase the energy generated by HPI’s two facilities
in Québec at a price of C$68 per MWh, subject to an annual adjustment beginning
in 2010 equal to 40% of the increase in the CPI during the previous calendar
year. This power guarantee agreement is scheduled to commence in 2019 for one
facility and in 2020 for the other, upon the expiration of existing PPAs. The
HPI PPAs with Brookfield will have an initial term ending in 2029, and
automatically renew for successive 20-year periods. Pursuant to a 10-year
wind levelization agreement expiring in 2019, a subsidiary of Brookfield Asset
Management mitigates any potential wind variation from the expected annual
generation of 506 GWh for our Prince Wind assets in Ontario. Any excess
generation compared to the expected generation results in a payment from BREP
to the subsidiary of Brookfield Asset Management, while a shortfall would
result in a payment from a subsidiary of Brookfield Asset Management to BREP. Pursuant
to a 20-year PPA guarantee, expiring in 2021, Brookfield guarantees to Powell
River the payment obligations of an industrial power purchaser for an annual
fee of $0.5 million. Energy Marketing
Agreement BEM LP and NA Holdco
are party to an energy marketing agreement pursuant to which BEM LP has agreed
to provide energy marketing services to NA Holdco (the “Energy Marketing
Agreement”). Under the Energy Marketing Agreement, NA Holdco has appointed
BEM LP to provide the following energy marketing services to NA Holdco for our
North American power generating facilities: ·preparing
and assisting
with compliance with an annual marketing plan which seeks to maximize annual
generation, taking into account (among other things) (i) the hydrologic or
wind resource available to each power generating facility in a prudent manner
having regard to obligations under applicable regulatory authorizations, and
(ii) the obligation of the Operating Entities to operate and maintain the
power generating facilities in accordance with prudent industry practice and to
protect against harm to human life or property of any person; ·preparing
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 ·assisting
with compliance with the terms of any energy marketing agreement between BEM LP
and any subsidiary of NA Holdco holding the power generating facilities. Pursuant to the
Energy Marketing Agreement, NA Holdco pays an annual marketing fee, referred to
as the “Base Marketing Fee”, to BEM LP equal to $18 million (subject to
increase by a specified inflation factor, with the first such increase having
been made on January 1, 2013), paid in equal monthly installments. To the
extent that any amounts are paid to BEM LP (or one of its affiliates) under
certain other existing energy marketing agreements or PPAs between certain of
the Operating Entities and BEM LP (or one of its affiliates) that BEM LP
determines are comparable to the Base Marketing Fee, the Base Marketing Fee
will be reduced on a dollar for dollar basis by the comparable amounts. The Energy Marketing
Agreement has a term of 20 years. Provided that no event of default relating to
BEM LP has occurred and is continuing, the Energy Marketing Agreement will be
automatically renewed for successive periods of 20 years unless BEM LP provides
NA Holdco with written notice to the contrary at least 180 days prior to the
expiry of the applicable term. The Energy Marketing
Agreement is subject to customary termination provisions in the event of a
failure to pay or an insolvency event of the applicable Operating Entity or BEM
LP. The maximum amount of
the aggregate liability of BEM LP pursuant to the Energy Marketing Agreement is
equal to the fees previously paid pursuant to the Energy Marketing Agreement in
the two most recent calendar years by NA Holdco. The Energy Marketing
Agreement does not prohibit BEM LP or its affiliates from pursuing other
business activities that compete directly or indirectly with us. For a
description of related aspects of the relationship between Brookfield and NA
Holdco, see Item 7.B “Related Party Transactions— Relationship
Agreement”. Power Agency
Agreements BEM LP and the owners
of many of our North American facilities have entered into power agency
agreements (the “Power Agency Agreements”). Under each Power Agency
Agreement, BEM LP is appointed as the exclusive agent of the owner in respect
of the sales of electricity, the procurement of transmission and other
additional services. BEM LP also schedules, dispatches and arranges for
transmission of the power produced and the power supplied to third parties in
accordance with prudent industry practice. Pursuant to each Power Agency Agreement,
BEM LP is entitled to be reimbursed for any third party costs incurred, and in
certain cases, a fee for its services. To the extent that any fee is payable to
BEM LP (or one of its affiliates) under Power Agency Agreements that existed
prior to November 28, 2011, the Base Marketing Fee under the Energy Marketing
Agreement will be reduced on a dollar for dollar basis. The Power Agency
Agreements that relate to the Energy Revenue Agreement have initial terms of 20
years, with automatic renewals for successive 20-year periods unless 180 days
before the end of the applicable term (i) both parties agree in writing
not to renew the agreement or (ii) BEM LP has provided the owner with the
written notice to terminate the Energy Revenue Agreement as it relates to the
particular facility five years after the end of the applicable term. Other
Power Agency Agreements have varying terms, renewal and termination rights but
are generally long-term arrangements. The Power Agency Agreements are subject
to customary termination provisions in the event of a failure to pay or an
insolvency event of the applicable Operating Entity or BEM LP. Development Projects We indirectly
acquired a number of early stage development projects in Brazil, Canada and the
United States from Brookfield on November 28, 2011. To further align interests
and incentivize continued development success with respect to these specific
projects, Brookfield received no upfront proceeds for the transfer of these
projects, but is entitled to receive on commercial operation or sale of the
projects, in each case if developed or sold in the 25 years following the
acquisition, up to 100% of the development costs that it contributed to each
project and 50% of the fair market value of the projects in excess of a priority
return on each party’s invested capital. These amounts will only be payable on
projects upon substantial completion or sale of the project. Fair market value
means our pro rata percentage of the fair market value of a development
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 directors of NA Holdco, on the date on which substantial
completion of the development project has been achieved, or, if earlier, the
date that the project is sold. With respect to the projects located in Canada
and the United States, we entered into the Development Projects Agreement which
provides for the reimbursement of expenses to Brookfield for such projects and
each project entity and Brookfield have entered into a separate royalty
agreement providing for royalties on each project. With respect to our projects
located in Brazil, Brookfield subscribed for special shares which contain a
redemption feature that provides for the reimbursement of expenses as well as
the sharing of the fair market value of a project on projects located in
Brazil. These financial arrangements with Brookfield will not apply to any
future projects. Projects that were in late stages of development or
construction were transferred by Brookfield for considerationinNovember 2011 and are
not part of this mechanism. Voting Agreement Brookfield and BREP
determined that it is advisable for BREP to have control over the BRELP General
Partner, BRELP GP LP and BRELP. Accordingly, BREP and Brookfield entered into
the Voting Agreement that provides BREP, through the Managing General Partner,
a number of rights. Pursuant to the
Voting Agreement, Brookfield has agreed that any voting rights with respect to
the BRELP General Partner, the BRELP GP LP and BRELP will be voted in favor of
the election of directors approved by BREP. For these purposes, BREP may
maintain, from time-to-time, an approved slate of nominees or provide direction
with respect to the approval or rejection of any matter in the form of general
guidelines, policies or procedures in which case no further approval or
direction will be required. Any such general guidelines, policies or procedures
may be modified by BREP in its discretion. In addition, pursuant
to the Voting Agreement, Brookfield has also agreed that any voting rights with
respect to the BRELP General Partner, the BRELP GP LP and BRELP will be voted
in accordance with the direction of BREP with respect to the approval or
rejection of the following matters relating to any such entity, as applicable:
(i) any sale of all or substantially all of its assets, (ii) any
merger, amalgamation, consolidation, business combination or other material
corporate transaction, except in connection with any internal reorganization
that does not result in a change of control, (iii) any plan or proposal
for a complete or partial liquidation or dissolution, or any reorganization or
any case, proceeding or action seeking relief under any existing laws or future
laws relating to bankruptcy or insolvency, (iv) any amendment to the limited
partnership agreement of BRELP GP LP or to the Amended and Restated Limited
Partnership Agreement of BRELP, or (v) any commitment or agreement to do
any of the foregoing. In addition, pursuant
to the Voting Agreement, Brookfield has agreed that it will not exercise its
right under the limited partnership agreement of BRELP GP LP to remove the
BRELP General Partner as the general partner of BRELP GP LP except with the
prior consent of BREP. The Voting Agreement
terminates (i) at such time that Brookfield ceases to own any interest in
BRELP, (ii) at such time that the Managing General Partner (or its
successors or permitted assigns) involuntarily ceases to be the general partner
of BREP, (iii) at such time that the BRELP GP LP (or its successors or permitted
assigns) involuntarily ceases to be the general partner of BRELP, or
(iv) at such time that the BRELP General Partner (or its successors or
permitted assigns) involuntarily ceases to be the general partner of BRELP GP
LP. In addition, we are permitted to terminate the Voting Agreement upon 30
days’ notice. The Voting Agreement
also contains restrictions on transfers of the shares of the BRELP General
Partner, except that Brookfield may transfer shares of the BRELP General
Partner to any of its affiliates. Other Voting
Agreements From
time to time, BREP enters into voting agreements with subsidiaries of
Brookfield Asset Management whereby these subsidiaries, as managing members of
entities in which BREP holds investments with its institutional investors,
assign to BREP their voting rights to appoint the directors of the entities. Registration Rights
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 On
November 28, 2011, Brookfield and BREP entered into a registration rights
agreement (the “Registration Rights Agreement”) pursuant to which BREP
has agreed that, upon the request of Brookfield, BREP will file one or more
registration statements to register for sale under the Securities Act, or one
or more prospectuses to qualify the distribution in Canada of, any LP Units
held by Brookfield (including LP Units acquired pursuant to the
Redemption-Exchange Mechanism). Under the Registration Rights Agreement, BREP
is not required to file a registration statement or a prospectus unless
Brookfield requests that LP Units having a value of at least $50,000,000 be registered
or qualified. In the Registration Rights Agreement, BREP has agreed to pay
expenses in connection with such registration and sales, except for any
underwriting discounts or commissions which will be borne by Brookfield, and
will indemnify Brookfield for material misstatements or omissions in the
registration statement and/or prospectus. Licensing Agreement Pursuant to a
licensing agreement, Brookfield has granted to us a non-exclusive, royalty-free
license to use the name “Brookfield” and the Brookfield logo (the “Licensing
Agreement”). Other than under this limited license, we do not have a legal
right to the “Brookfield” name and the Brookfield logo on a global basis. We will be permitted to terminate the
Licensing Agreement upon 30 days’ prior written notice if Brookfield defaults
in the performance of any material term, condition or agreement contained in
the Licensing Agreement and the default continues for a period of 30 days after
written notice of termination of the breach is given to Brookfield. Brookfield
may terminate the Licensing Agreement effective immediately upon termination of
our Master Services Agreement or with respect to any licensee upon 30 days’
prior written notice of termination if any of the following occurs: ·the
licensee defaults in the performance of any material term, condition or
agreement contained in the Licensing Agreement and the default continues for a
period of 30 days after written notice of termination of the breach is given to
the licensee; ·the
licensee assigns, sublicenses, pledges, mortgages or otherwise encumbers the
intellectual property rights granted to it pursuant to the Licensing Agreement; ·certain
events relating to a bankruptcy or insolvency of the licensee; or ·the
licensee ceases to be an affiliate of Brookfield. Termination of the
Licensing Agreement with respect to one or more licensees will not affect the
validity or enforceability of the Licensing Agreement with respect to any other
licensees. Preferred Shares Brookfield has
provided an aggregate of $5 million of working capital to LATAM Holdco through
a subscription for preferred shares of LATAM Holdco. The preferred shares are
entitled to receive a cumulative preferential dividend equal to 6% of their
redemption value as and when declared by the board of directors of LATAM Holdco
and are redeemable at the option of LATAM Holdco, subject to certain
limitations, at any time after the tenth anniversary of their issuance. The
preferred shares are not entitled to vote, except as required by law. Redemption-Exchange
Mechanism One or more
wholly-owned subsidiaries of Brookfield that hold Redeemable/Exchangeable
partnership units have the right to require BRELP to redeem all or a portion of
the Redeemable/Exchangeable partnership units, subject to BREP’s right of first
refusal, for cash in an amount equal to the market value of one of our LP Units
multiplied by the number of LP Units to be redeemed (subject to certain
adjustments). See Item 10.B “Memorandum and Articles of
Association – Description of the Amended and Restated Limited
Partnership Agreement of BRELP — Redemption-Exchange Mechanism”. Taken
together, the effect of the redemption right and the right of first refusal is
that one or more wholly-owned subsidiaries of Brookfield will receive our LP
Units, or the value of such LP Units, at the election of BREP. Should BREP
determine not to exercise its right of first refusal, cash required to fund a
redemption of limited partnership interests of BRELP held by wholly-owned
subsidiaries of Brookfield will likely be financed by a public offering of our
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 Indemnification
Arrangements Subject to certain
limitations, Brookfield and its directors, officers, agents, members, partners,
shareholders and employees generally benefit from indemnification provisions
and limitations on liability that are included in the Amended and Restated
Limited Partnership Agreement of BREP, Managing General Partner’s bye-laws, the
Amended and Restated Limited Partnership Agreement of BRELP, our Master
Services Agreement and other arrangements with Brookfield. See Item 6.A
“Directors and Senior Management — Our Master Services Agreement”,
Item 10.B “Memorandum and Articles of Association — Description
of Our LP Units and the Amended and Restated Limited Partnership Agreement of
BREP — Indemnification; Limitations on Liability” and “Memorandum and
Articles of Association — Description of the Amended and Restated
Limited Partnership Agreement of BRELP — Indemnification; Limitations on
Liability”. Other Services Brookfield may provide
the Operating Entities with services which are outside the scope of our Master
Services Agreement under arrangements that are on market terms and conditions
and pursuant to which Brookfield will receive fees. The services provided under
these arrangements will include financial advisory, operations management and
other services. Pursuant to our conflict of interest guidelines, those
arrangements may require prior approval by a majority of the independent
directors, which may be granted in the form of general guidelines, policies or
procedures. See Item 7.B “Related Party Transactions— Conflicts of
Interest and Fiduciary Duties”. Conflicts of Interest
and Fiduciary Duties Fiduciary Duties Each of the Managing
General Partner and the BRELP GP LP are required to exercise its powers and
carry out its functions as general partner of BREP and BRELP, respectively,
honestly and in good faith, and exercise the degree of care, diligence and
skill that a reasonably prudent person would exercise in comparable circumstances,
in each case, subject to and after taking into account, the terms and
conditions of the Relationship Agreement, our Master Services Agreement and the
Conflicts Policy. However, the Amended and Restated Limited Partnership
Agreement of BREP and the Amended and Restated Limited Partnership Agreement of
BRELP contain various provisions that modify the fiduciary duties that might
otherwise be owed to us and our LP Unitholders, including when conflicts of
interest arise. These duties include the duties of care and loyalty. The duty
of loyalty, in the absence of provisions in the Amended and Restated Limited
Partnership Agreement of BREP and the Amended and Restated Limited Partnership
Agreement of BRELP to the contrary, would generally prohibit the Managing
General Partner and BRELP General Partner from taking any action or engaging in
any transaction as to which it has a conflict of interest. However, the Amended
and Restated Limited Partnership Agreement of BREP and the Amended and Restated
Limited Partnership Agreement of BRELP provide that the Managing General
Partner, BRELP General Partner and their affiliates will not have any
obligation under the Amended and Restated Limited Partnership Agreement of BREP
and the Amended and Restated Limited Partnership Agreement of BRELP, or as a
result of any duties stated or implied by law or equity, including fiduciary
duties, to present business or investment opportunities to Brookfield
Renewable, BRELP, any Holding Entity or any other holding vehicle established
by Brookfield Renewable. They also allow affiliates of the Managing General
Partner and BRELP General Partner to engage in activities that may compete with
us or our activities, and state that, subject to applicable law, no breach of
the Amended and Restated Limited Partnership Agreement of BREP or the Amended
and Restated Limited Partnership Agreement of BRELP, or a breach of any duty,
including fiduciary duties, may be found for any matter that has been approved
by a majority of the independent directors of the Managing General Partner.
Further, when resolving conflicts of interest, neither the Amended and Restated
Limited Partnership Agreement of BREP nor the Amended and Restated Limited
Partnership Agreement of BRELP impose limitations on the discretion of the
independent directors or the factors which they may consider in resolving any
such conflicts. The independent directors of our Managing General Partner can
therefore take into account the interests of third parties, including
Brookfield, when resolving conflicts of interest. These modifications
to the fiduciary duties may be detrimental to our LP Unitholders because they
restrict the remedies available for actions that might otherwise constitute a
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 permit conflicts of interest
to be resolved in a manner that is not always in the best interests of
Brookfield Renewable or the best interests of our LP Unitholders. We believe
that it was necessary to modify the fiduciary duties that might otherwise be
owed to us and our LP Unitholders, as described above, due to our
organizational and ownership structure and the potential conflicts of interest
created thereby. Without modifying those duties, the ability of the Managing
General Partner and BRELP General Partner to attract and retain experienced and
capable directors and to take actions that we believe will be necessary for the
carrying out of our business would be unduly limited due to their concern about
potential liability. Conflicts of Interest We maintain a
conflicts protocol and guidelines (the “Conflicts Policy”) for
addressing conflicts and potential conflicts and for providing guidelines for
the completion of certain transactions. The Conflicts Policy states that
conflicts be resolved based on the principles of transparency and that
transactions that are carried out, be carried out at an arm’s length basis,
with validation of terms as arm’s length being based upon actual participation
of arm’s length third party participants such as co-investors whenever
possible, or otherwise through objective, independent professional advice or
other satisfactory evidence of market terms. The Conflicts Policy also states
that in circumstances of actual conflict, independent director, or where
required, LP Unitholder approval be obtained. The Conflicts Policy
recognizes the benefit to us of our relationship with Brookfield and our intent
to pursue a strategy that seeks to maximize the benefits from this
relationship. The Conflicts Policy also recognizes that the principal areas of
potential application of the Conflicts Policy on an ongoing basis will be in
connection with our acquisitions and our participation in Brookfield led
sponsored funds, consortia and partnership arrangements, together with any
management or service arrangements entered into in connection therewith or the
ongoing operations of the underlying Operating Entities. The Conflicts Policy
may be amended from time to time at the discretion of the Managing General
Partner. In general, the
Conflicts Policy provides that acquisitions that are carried out jointly by us
and Brookfield, or in the context of a Brookfield led or co-led sponsored fund,
consortium or partnership, be carried out on the basis that the consideration
paid by us be no more, on a per share or proportionate basis, than the
consideration paid by Brookfield or other participants, as applicable. The
Conflicts Policy also provides that any fees or carried interest payable in
respect of our proportionate investment, or in respect of an acquisition made
solely by us, must be credited in the manner contemplated by our Master
Services Agreement and the Amended and Restated Limited Partnership Agreement
of BRELP, where applicable, or that such fees or carried interest must either
have been negotiated with another arm’s-length participant or otherwise
demonstrated to be on market terms. The Conflicts Policy further provides that
if the acquisition involves the purchase by us of an asset from Brookfield, or
the participation in a transaction involving the purchase by us and Brookfield
of different assets, that a fairness opinion or, in some circumstances, a
valuation or appraisal by a qualified expert be obtained, confirming that the
consideration paid by us is fair from a financial point of view. These
requirements provided for in the Conflicts Policy are in addition to any
disclosure, approval and valuation requirements that may arise under applicable
law. With respect to
transactions in which there is greater potential for a conflict of interest to
arise, the Managing General Partner may be required to seek the prior approval
of the independent directors pursuant to the Conflicts Policy guidelines that
have been approved by the independent directors from time to time. These
transactions include (i) the dissolution of BREP or BRELP; (ii) any
material amendment to our Master Services Agreement, the Relationship
Agreement, the Amended and Restated Limited Partnership Agreement of BREP or
the Amended and Restated Limited Partnership Agreement of BRELP; (iii) acquisitions
by us from, and dispositions by us to, Brookfield; (iv) any other material
transaction involving us and Brookfield; and (v) termination of, or any
determinations regarding indemnification under, our Master Services Agreement
or any determinations regarding indemnification under the Amended and Restated
Limited Partnership Agreement of BREP or the Amended and Restated Limited
Partnership Agreement of BRELP. Pursuant to the Conflicts Policy, independent
directors may grant prior approvals for any of these transactions in the form
of general guidelines, policies or procedures in which case no further special
approval will be required in connection with a particular transaction or matter
permitted thereby. In certain circumstances, these transactions may be related
party transactions for the purposes of, and subject to certain requirements of,
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 61-101—Protection
of Minority Securityholders in Special Transactions(“MI 61-101”).
MI 61-101 provides a number of circumstances in which a transaction between an
issuer and a related party may be subject to valuation and minority approval
requirements. An exemption from such requirements is available when the fair
market value of the transaction is not more than 25% of the market capitalization
of the issuer. BREP has been granted exemptive relief from the requirements of
MI 61-101 that, subject to certain conditions, permits it to be exempt from the
minority approval and valuation requirements for transactions that would have a
value of less than 25% of BREP’s market capitalization, if the indirect equity
interest in BREP, which is held in the form of Redeemable/Exchangeable
partnership units, is included in the calculation of BREP’s market
capitalization. As a result, the 25% threshold, above which the minority
approval and valuation requirements apply, is increased to include the
approximately 48.9% indirect interest in BREP held by Brookfield in the form of
Redeemable/Exchangeable partnership units. Our organizational
and ownership structure and strategy involve a number of relationships that may
give rise to conflicts of interest between BREP and our LP Unitholders, on the
one hand, and Brookfield, on the other hand. In particular, conflicts of
interest could arise, among other reasons, because: ·in
originating and recommending acquisition opportunities, Brookfield has
significant discretion to determine the suitability of opportunities for us and
to allocate such opportunities to us or to itself or third parties; ·because
of the scale of typical renewable power acquisitions and because our strategy
includes completing acquisitions through fund, consortium or partnership
arrangements with pension funds and other financial sponsors, we will likely
make co-investments with Brookfield and Brookfield sponsored funds or
Brookfield sponsored or co-sponsored funds, consortiums and partnerships, which
typically will require that Brookfield owe fiduciary duties to the other
partners, investors or consortium members that it does not owe to us; ·there
may be circumstances where Brookfield will determine that an acquisition
opportunity is not suitable for us because of the fit with our acquisition
strategy and/or limits arising due to regulatory or tax considerations and/or
limits on our financial capacity or because of the immaturity of the target
assets and Brookfield is entitled to pursue the acquisition on its own behalf
rather than offering us the opportunity to make the acquisition; ·where
Brookfield has made an acquisition, it may transfer it to us at a later date
after the assets have been developed or we have obtained sufficient financing; ·our
relationship with Brookfield involves a number of arrangements pursuant to
which Brookfield provides various services, access to financing arrangements
and originates acquisition opportunities, and circumstances may arise in which
these arrangements will need to be amended or new arrangements will need to be
entered into; ·under
the Amended and Restated Limited Partnership Agreement of BRELP and the
agreements governing the Operating Entities, Brookfield is generally entitled
to share in the returns generated by our operations, which could create an
incentive for it to assume greater risks when making decisions than it
otherwise would in the absence of such arrangements; ·Brookfield
is permitted to pursue other business activities and provide services to third
parties that compete directly with our business and activities without
providing us with an opportunity to participate, which could result in the
allocation of Brookfield’s resources, personnel and acquisition opportunities
to others who compete with us; ·Brookfield
does not owe Brookfield Renewable or our LP Unitholders any fiduciary duties,
which may limit our recourse against it; ·the
liability of Brookfield is limited under our arrangements with them, and we
have agreed to indemnify Brookfield against claims, liabilities, losses,
damages, costs or expenses which they may face in connection with those
arrangements, which may lead them to assume greater risks when making decisions
than they otherwise would if such decisions were being made solely for their
own account, or may give rise to legal claims for indemnification that are
adverse to the interests of our LP Unitholders; ·Brookfield
or a Brookfield sponsored fund or consortium may want to acquire or dispose of
the same asset as us; ·we
may be, directly or indirectly, purchasing an asset from, or selling an asset
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 ·there
may be circumstances where we are acquiring different assets as part of the same
transaction with Brookfield; and ·other
conflicting transactions involving us and Brookfield. Other Related Party
Transactions The $200 million
committed unsecured revolving credit facility provided by Brookfield Asset
Management, at LIBOR plus 2%, has been extended for one year to December 2015
on the same terms.  7.C              INTEREST OF EXPERTS AND COUNSEL Not
applicable. ITEM 8.       FINANCIAL INFORMATION 8.A              CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION Financial Statements See
Item 18. “Financial Statements”, which contains our audited consolidated financial
statements prepared in accordance with IFRS. Dividend Policy See Item 4.B “Business Operations – Our Distribution
Policy”, which contains information regarding our dividend policy and
historical distributions. Legal Proceedings See Item 18.
“Financial Statements”. 8.B              SIGNIFICANT CHANGES A
discussion of the significant changes in our business can be found under
Item 4. “Information on the Company”, Item 4.A “History and
Development of the Company” and Item 5.A “Operating and Financial Review
and Prospects — Operating Results — Subsequent Events”. ITEM 9.       THE OFFER AND LISTING 9.A              OFFER AND LISTING DETAILS Our LP
Units are listed on the NYSE under the symbol “BEP”. Our LP Units do not have a
par value.Our LP Units began trading on the NYSE on June 11, 2013.  The
following table sets forth the reported high and low prices of our LP Units on
the NYSE for the periods indicated since issued: High
 
 LowYear ended December 31, 2014
 
 
 
 $32.72
 
 $25.08Year ended December 31, 2013
 
 
 
 $30.00
 
 $24.69
 The
following table sets forth the reported high and low prices of our LP Units on
the NYSE for the periods indicated: High
 
 LowOctober 1, 2014 to December 31, 2014
 
 
 
 $32.72
 
 $28.06July 1, 2014 to September 30, 2014
 
 
 
 $31.90
 
 $28.24April 1, 2014 to June 30, 2014
 
 
 
 $30.19
 
 $28.20January 1, 2014 to March 31, 2014
 
 
 
 $29.75
 
 $25.08October 1, 2013 to December 31, 2013
 
 
 
 $28.01
 
 $25.33July 1, 2013 to September 30, 2013
 
 
 
 $29.43
 
 $24.69
 Page145


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 The following table sets forth the monthly high and low prices for
our units on the NYSE for the most recent six months: High
 
 Low2015February (February 1 through to February 25)
 
 
 
 $32.70
 
 $30.40January
 
 
 
 $32.86
 
 $30.192014December
 
 
 
 $31.64
 
 $28.32November
 
 
 
 $32.72
 
 $29.43October
 
 
 
 $32.14
 
 $28.06September
 
 
 
 $31.90
 
 $28.25
 Our LP Units are
listed on the TSX under the symbol “BEP.UN”. Our LP Units do not have a par
value. Trading on the TSX commenced on November 30, 2011. On March 21, 2014, our
LP Units were added to the S&P/TSX Composite Index. The following table
sets forth the reported high and low prices of our LP Units on the TSX for the
periods indicated since issued: High
 
 LowYear ended December 31, 2014
 
 
 
 C$36.84
 
 C$27.67Year ended December 31, 2013
 
 
 
 C$32.02
 
 C$25.69Year ended December 31, 2012
 
 
 
 C$31.38
 
 C$25.65Year ended December 31, 2011
 
 
 
 C$27.39
 
 C$25.30
 The following
table sets forth the quarterly high and low prices for our units on the TSX for
the two most recent full financial years: High
 
 LowOctober 1, 2014 to December 31, 2014
 
 
 
 C$36.84
 
 C$31.80July 1, 2014 to September 30, 2014
 
 
 
 C$34.98
 
 C$30.87April 1, 2014 to June 30, 2014
 
 
 
 C$32.78
 
 C$30.81January 1, 2014 to March 31, 2014
 
 
 
 C$32.86
 
 C$27.67October 1, 2013 to December 31, 2013
 
 
 
 C$29.42
 
 C$26.25July 1, 2013 to September 30, 2013
 
 
 
 C$29.99
 
 C$25.69April 1, 2013 to June 30, 2013
 
 
 
 C$31.79
 
 C$27.61January 1, 2013 to March 31, 2013
 
 
 
 C$32.02
 
 C$28.76
 The
following table sets forth the monthly high and low prices for our units on the
TSX for the most recent six months: Page146


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 High
 
 Low2015February (February 1 through to February
  25)
 
 
 
 C$41.19
 
 C$38.06January
 
 
 
 C$41.43
 
 C$36.002014December
 
 
 
 C$36.20
 
 C$33.00November
 
 
 
 C$36.84
 
 C$33.52October
 
 
 
 C$35.84
 
 C$31.80September
 
 
 
 C$34.98
 
 C$31.26
 Prior to November
2011, the Fund’s trust units, which were exchanged for our LP Units on a
one-for-one basis in November 2011, were listed on the TSX under the symbol
“BRC.UN”. The following table sets forth the reported high and low prices of
the Fund’s trust units on the TSX for the periods indicated: High
 
 LowYear ended December 31, 2011
 
 
 
 C$28.10
 
 C$20.58Year ended December 31, 2010
 
 
 
 C$22.41
 
 C$18.76Year ended December 31, 2009
 
 
 
 C$20.00
 
 C$14.70
 See Item
5.A “Operating Results”, Item 7.B “Related Party Transactions” and Item 10.
“Additional Information”. 9.B              PLAN OF DISTRIBUTION Not
applicable. 9.C              MARKETS See Item
9.A. “Offer and Listing Details”. 9.D              SELLING SHAREHOLDERS Not
applicable. 9.E              DILUTION Not
applicable. 9.F              EXPENSES OF THE ISSUE Not
applicable. ITEM 10.      ADDITIONAL INFORMATION 10.A            SHARE CAPITAL Not applicable. 10.B            MEMORANDUM
AND ARTICLES OF ASSOCIATION Description of our LP Units and the Amended and Restated
Limited Partnership Agreement of BREP The following is a
description of the material terms of our LP Units and the Amended and Restated
Limited Partnership Agreement of BREP. Because this description is only a
summary of the terms of our LP Units and the Amended and Restated Limited
Partnership Agreement of BREP, it does not contain all of the information that
you may find useful and is qualified in its entirety by reference to all of the
provisions of the Amended and Restated Limited Partnership Agreement of BREP.
For more complete information, you should read the Amended and Restated Limited
Partnership Agreement of BREP which is available electronically on the website
of the SEC at www.sec.gov and on our SEDAR Page147


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 profile at
www.sedar.com and will be made available to LP Unitholders as described under
Item 10.C “Material Contracts” and Item 10.H “Documents on Display”. See also the
information contained in this Form 20-F under Item 3.D “Risk Factors—Risks
Related to Our Relationship with Brookfield”, Item 6.A “Directors and
Senior Management”, Item 6.C “Board Practices” and Item 7.B “Related
Party Transactions”. Formation and
Duration BREP is a Bermuda
exempted limited partnership registered under theLimited Partnership Act
1883and theExempted Partnerships Act1992. BREP has a
perpetual existence and will continue as a limited liability partnership unless
it is terminated or dissolved in accordance with the Amended and Restated
Limited Partnership Agreement of BREP. BREP’s interests consist of our LP
Units, which represent limited partnership interests in BREP, and any
additional partnership interests representing limited partnership interests
that we may issue in the future as described below under “— Issuance of
Additional Partnership Interests”. Nature and Purpose Under section 2.2 of
the Amended and Restated Limited Partnership Agreement of BREP, the purpose of BREP
is to: acquire and hold interests in BRELP and, subject to the approval of the
Managing General Partner, any other subsidiary of BREP; engage in any activity
related to the capitalization and financing of Brookfield Renewable’s interests
in such entities; and engage in any other activity that is incidental to or in
furtherance of the foregoing and that is approved by the Managing General
Partner and that lawfully may be conducted by a limited partnership organized
under theLimited Partnership Act1883, theExempted
Partnerships Act 1992and the Amended and Restated Limited Partnership
Agreement of BREP. Management As required by law,
the Amended and Restated Limited Partnership Agreement of BREP provides for the
management and control of BREP by a general partner, the Managing General
Partner. The Managing General Partner will exercise its powers and carry out
its functions honestly and in good faith and the Managing General Partner will
exercise the degree of care, diligence and skill that a reasonably prudent
person would exercise in comparable circumstances, in each case, subject to,
and after taking into account, the terms and conditions of the Relationship
Agreement, our Master Services Agreement and the Conflicts Policy. Except as
set out in the Amended and Restated Limited Partnership Agreement of BREP, the
Managing General Partner has no additional duty to propose or approve any
conduct of BREP, and may decline to propose or approve such conduct free of any
additional duty (including fiduciary duty). The Managing General Partner shall
not be in breach of any duty to BREP if it takes actions permitted by the
Amended and Restated Limited Partnership Agreement of BREP, the Relationship
Agreement, our Master Services Agreement or the Conflicts Policy. Our
LP Units Our LP Units are
limited partnership interests in BREP. Holders of our LP Units are not entitled
to the withdrawal or return of capital contributions in respect of our LP
Units, except to the extent, if any, that distributions are made to such
holders pursuant to the Amended and Restated Limited Partnership Agreement of
BREP or upon the liquidation of BREP as described below under “— Liquidation
and Distribution of Proceeds” or as otherwise required by applicable law. Except to the extent
expressly provided in the Amended and Restated Limited Partnership Agreement of
BREP, a holder of our LP Units does not have priority over any other LP
Unitholder, either as to the return of capital contributions or as to profits,
losses or distributions. Unless otherwise determined by the Managing General
Partner, in its sole discretion, LP Unitholders will not be granted any
pre-emptive or other similar right to acquire additional interests in BREP. In
addition, LP Unitholders do not have any right to have their LP Units redeemed
by BREP. Issuance
of Additional Partnership Interests Subject to any
approval required by applicable law and the approval of any applicable securities
exchange, the Managing General Partner has broad rights to cause BREP to issue
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 interests and may cause BREP
to issue additional partnership interests (including new classes of partnership
interests and options, rights, warrants and appreciation rights relating to
such interests) for any partnership purpose, at any time and on such terms and
conditions as it may determine without the approval of any limited partners.
Any additional partnership interests may be issued in one or more classes, or
one or more series of classes, with such designations, preferences, rights,
powers and duties (which may be senior to existing classes and series of
partnership interests) as may be determined by the Managing General Partner in
its sole discretion, all without approval of our limited partners. Transfers
of LP Units We are not required
to recognize any transfer of our LP Units until certificates, if any,
evidencing such LP Units are surrendered for registration of transfer. Each
person to whom an LP Unit is transferred or issued (including any nominee
holder or an agent or representative acquiring such LP Unit for the account of
another person) shall be admitted to BREP as a partner with respect to the unit
so transferred or issued when any such transfer or issuance is reflected in the
books and records of BREP subject to and in accordance with the terms of the
Amended and Restated Limited Partnership Agreement of BREP. Any transfer of an
LP Unit shall not entitle the transferee to share in the profits and losses of BREP,
to receive distributions, to receive allocations of income, gain, loss,
deduction or credit or any similar item or to any other rights to which the
transferor was entitled until the transferee becomes a partner and a party to
the Amended and Restated Limited Partnership Agreement of BREP. By accepting a unit
for transfer in accordance with the Amended and Restated Limited Partnership
Agreement of BREP, each transferee will be deemed to have: ·executed
the Amended and Restated Limited Partnership Agreement of BREP and become bound
by the terms thereof; ·granted
an irrevocable power of attorney to the Managing General Partner or the
liquidator of BREP and any officer thereof to act as such partner’s agent and
attorney-in-fact to execute, swear to, acknowledge, deliver, file and record in
the appropriate public offices (i) all agreements, certificates, documents
and other instruments relating to the existence or qualification of BREP as an
exempted limited partnership (or a partnership in which the limited partners
have limited liability) in Bermuda and in all jurisdictions in which BREP may
conduct activities and affairs or own property; any amendment, change,
modification or restatement of the Amended and Restated Limited Partnership
Agreement of BREP, subject to the requirements of the Amended and Restated Limited
Partnership Agreement of BREP; the dissolution and liquidation of BREP; the
admission, withdrawal of any partner of BREP or any capital contribution of any
partner of BREP; the determination of the rights, preferences and privileges of
any class or series of units or other partnership interests of BREP; and any
tax election with any limited partner or general partner on our behalf or on
behalf of any limited partner or the general partner, and (ii) subject to
the requirements of the Amended and Restated Limited Partnership Agreement of
BREP, all ballots, consents, approvals, waivers, certificates, documents and
other instruments necessary or appropriate, in the sole discretion of the
Managing General Partner or the liquidator of BREP, to make, evidence, give,
confirm or ratify any voting consent, approval, agreement or other action that
is made or given by BREP’s partners or is consistent with the terms of the
Amended and Restated Limited Partnership Agreement of BREP or to effectuate the
terms or intent of the Amended and Restated Limited Partnership Agreement of
BREP; ·made
the consents and waivers contained in the Amended and Restated Limited
Partnership Agreement of BREP; and ·ratified
and confirmed all contracts, agreements, assignments and instruments entered
into on behalf of BREP in accordance with the Amended and Restated Limited
Partnership Agreement of BREP, including the granting of any charge or security
interest over the assets of BREP and the assumption of any indebtedness in
connection with the affairs of BREP. The transfer of any
unit and/or the admission of any new partner to BREP will not constitute an
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 Book-Based System LP Units may be
represented in the form of one or more fully registered unit certificates held
by, or on behalf of, CDS or DTC, as applicable, as custodian of such
certificates for the participants of CDS or DTC, registered in the name of CDS
or DTC or their respective nominee, and registration of ownership and transfers
of LP Units may be effected through the book-based system administered by CDS
or DTC, as applicable. Investments
in BRELP If and to the extent
that BREP raises funds by way of the issuance of equity or debt securities, or
otherwise, pursuant to a public offering, private placement or otherwise, an
amount equal to the proceeds will be invested in BRELP. Capital
Contributions Brookfield
contributed $1 and the Managing General Partner contributed $100 to the capital
of BREP in order to form BREP. Thereafter, Brookfield contributed to BREP its
interest in various renewable power businesses in exchange for
Redeemable/Exchangeable partnership units and our LP Units. No partner has the
right to withdraw any or all of its capital contribution. Distributions Distributions to
partners of BREP will be made only as determined by the Managing General
Partner in its sole discretion. However, the Managing General Partner will not
be permitted to cause BREP to make a distribution if it does not have
sufficient cash on hand to make the distribution, the distribution would render
it insolvent or if, in the opinion of the Managing General Partner, the
distribution would leave it with insufficient funds to meet any future
contingent obligations, or the distribution would contravene theLimited
Partnership Act1883. The amount of taxes
withheld or paid by BREP or by any member of Brookfield Renewable in respect of
LP Units held by LP Unitholders or the Managing General Partner shall be
treated either as a distribution to such partner or as a general expense of BREP
as determined by the Managing General Partner in its sole discretion. Any distributions
from BREP will be made to the limited partners as to 99.99% and to the Managing
General Partner as to 0.01%. Each limited partner will receive a pro rata share
of distributions made to all limited partners in accordance with the proportion
of all outstanding LP Units held by that limited partner. Except for receiving
0.01% of distributions from BREP, the Managing General Partner shall not be
compensated for its services as Managing General Partner but it shall be
reimbursed for certain expenses. Allocations of Income
and Losses Limited partners will
share in the net profits and net losses of BREP generally in accordance with
their respective percentage interest in BREP. Net income and net
losses for U.S. federal income tax purposes will be allocated for each taxable
year or other relevant period among our partners using a monthly, quarterly or
other permissible convention pro rata on a per unit basis, except to the extent
otherwise required by law or pursuant to tax elections made by BREP. Each item
of income, gain, loss and deduction so allocated to a partner of BREP generally
will have the same source and character as though such partner had realized the
item directly. The income for
Canadian federal income tax purposes of BREP for a given fiscal year of BREP
will be allocated to each partner in an amount calculated by multiplying such
income by a fraction, the numerator of which is the sum of the distributions
received by such partner with respect to such fiscal year and the denominator
of which is the aggregate amount of the distributions made by BREP to partners
with respect to such fiscal year. Generally, the source and character of items
of income so allocated to a partner with respect to a fiscal year of BREP will
be the same source and character as the distributions received by such partner
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 If,
with respect to a given fiscal year, no distribution is made by BREP, or
Brookfield Renewable has a loss for Canadian federal income tax purposes, one
quarter of the income, or loss, as the case may be, for Canadian federal income
tax purposes of BREP for such fiscal year, will be allocated to the partners of
record at the end of each calendar quarter ending in such fiscal year pro rata
to their respective percentage interests in BREP, which in the case of the
Managing General Partner shall mean 0.01%, and in the case of all limited
partners of BREP shall mean in the aggregate 99.99%, which aggregate percentage
interest shall be allocated among the limited partners in the proportion that
the number of LP Units held at each such date by a limited partner is of the
total number of LP Units issued and outstanding at each such date. To such end,
any person who was a partner at any time during such fiscal year but who has
transferred all of such person’s LP Units before the least day of that fiscal
year may be deemed to be a partner on the last day of such fiscal year for the
purposes of subsection 96(1) of the Tax Act. Generally, the source and
character of such income or losses so allocated to a partner at the end of each
calendar quarter will be the same source and character as the income or loss
earned or incurred by BREP in such calendar quarter. However, any gain for
Canadian tax purposes allocated by BRELP to BREP in respect of the disposition
of the common shares of NA Holdco by BRELP, will be allocated for Canadian tax
purposes firstly, in respect of any LP Units held by Brookfield that were
acquired on the exchange of Redeemable/Exchangeable partnership units, such
portion of the gain, if any, that would otherwise have been allocated for
Canadian tax purposes to Brookfield in respect of the Redeemable/Exchangeable
partnership units on the assumption that such units had not been exchanged for
LP Units and remained Redeemable/Exchangeable partnership units, shall be
allocated pro rata to Brookfield in respect of our LP Units acquired on the
exchange of Redeemable/Exchangeable partnership units, and secondly, the
remaining portion of the gain, if any, shall be allocated to LP Unitholders on
a per LP Unit basis excluding: (i) LP Units owned by Brookfield immediately
after November 28, 2011; and (ii) LP Units acquired by Brookfield pursuant to
the Redemption-Exchange Mechanism. The foregoing summary, to the extent it
states matters of Canadian or U.S. tax law or legal conclusions, is qualified
in its entirety by the sections in this Form 20-F under Item 10.E entitled
“Material Canadian Federal Income Tax Considerations” and “Material U.S.
Federal Income Tax Considerations”. Limited
Liability Assuming that a
limited partner does not participate in the control or management of BREP or
conduct the affairs of, sign or execute documents for or otherwise bind BREP
within the meaning of theLimited Partnership Act 1883and otherwise
acts in conformity with the provisions of the Amended and Restated Limited
Partnership Agreement of BREP, such partner’s liability under theLimited
Partnership Act 1883and the Amended and Restated Limited Partnership
Agreement of BREP will be limited to the amount of capital such partner is
obligated to contribute to BREP for its limited partner interest plus its share
of any undistributed profits and assets, except as described below. If it were
determined, however, that a limited partner was participating in the control or
management of BREP or conducting the affairs of, signing or executing documents
for or otherwise binding BREP (or purporting to do any of the foregoing) within
the meaning of theLimited Partnership Act 1883or theExempted
Partnerships Act1992, such limited partner would be liable as if
it were a general partner of BREP in respect of all debts of BREP incurred
while that limited partner was so acting or purporting to act. Neither the
Amended and Restated Limited Partnership Agreement of BREP nor theLimited
Partnership Act 1883specifically provides for legal recourse against the
Managing General Partner if a limited partner were to lose limited liability
through any fault of the Managing General Partner. While this does not mean
that a limited partner could not seek legal recourse, we are not aware of any
precedent for such a claim in Bermuda case law. No
Management or Control BREP’s limited
partners, in their capacities as such, may not take part in the management or
control of the activities and affairs of BREP and do not have any right or
authority to act for or to bind BREP or to take part or interfere in the
conduct or management of BREP. Limited partners are not entitled to vote on
matters relating to BREP, although LP Unitholders are entitled to consent to
certain matters as described under “— Amendments to the Amended and Restated
Limited Partnership Agreement of BREP”, “— Opinion of Counsel and Limited
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 Disposition of
Assets”, and “— Withdrawal of the Managing General Partner” which may be
effected only with the consent of the holders of the percentages of our
outstanding LP Units specified below. Each LP Unit shall entitle the LP
Unitholder to one vote for the purposes of any approvals of LP Unitholders. Meetings The Managing General
Partner may call special meetings of partners at a time and place outside of
Canada determined by the Managing General Partner on a date not less than 10
days nor more than 60 days after the mailing of notice of the meeting. The
limited partners do not have the ability to call a special meeting. Only
holders of record on the date set by the Managing General Partner (which may not
be less than 10 days nor more than 60 days, before the meeting) are entitled to
notice of any meeting. Written consents may
be solicited only by or on behalf of the Managing General Partner. Any such
consent solicitation may specify that any written consents must be returned to BREP
within the time period, which may not be less than 20 days, specified by the
Managing General Partner. For purposes of determining
holders of partnership interests entitled to provide consents to any action
described above, the Managing General Partner may set a record date, which may
be not less than 10 nor more than 60 days before the date by which record
holders are requested in writing by the Managing General Partner to provide
such consents. Only those holders of partnership interests on the record date
established by the Managing General Partner will be entitled to provide
consents with respect to matters as to which a consent right applies. Amendments to the
Amended and Restated Limited Partnership Agreement of BREP Amendments to the
Amended and Restated Limited Partnership Agreement of BREP may only be proposed
by or with the consent of the Managing General Partner. To adopt a proposed
amendment, other than the amendments that do not require limited partner
approval discussed below, the Managing General Partner must seek approval of at
least 66 2/3 % of the voting power of our outstanding LP Units required to
approve the amendment or call a meeting of the limited partners to consider and
vote upon the proposed amendment. Prohibited Amendments No amendment may be
made that would: ·enlarge
the obligations of any limited partner without its consent, except that any
amendment that would have a material adverse effect on the rights or
preferences of any class of partnership interests in relation to other classes
of partnership interests may be approved by at least a majority of the type or
class of partnership interests so affected; or ·enlarge
the obligations of, restrict in any way any action by or rights of, or reduce
in any way the amounts distributable, reimbursable or otherwise payable by BREP
to the Managing General Partner or any of its affiliates without the consent of
the Managing General Partner, which may be given or withheld in its sole
discretion. The provision of the
Amended and Restated Limited Partnership Agreement of BREP preventing the
amendments having the effects described directly above can be amended upon the
approval of the holders of at least 90% of the outstanding LP Units, and in the
case of (ii) above, with the consent of the Managing General Partner,
which may be given or withheld in its sole discretion. No Limited Partner
Approval Subject to applicable
law, the Managing General Partner may generally make amendments to the Amended
and Restated Limited Partnership Agreement of BREP without the approval of any
limited partner to reflect: ·a
change in the name of BREP, the location of BREP’s registered office, or BREP’s
registered agent; ·the
admission, substitution or withdrawal of partners in accordance with the
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 ·a
change that the Managing General Partner determines is reasonable and necessary
or appropriate for BREP to qualify or to continue BREP’s qualification as an
exempted limited partnership under the laws of Bermuda or a partnership in
which the limited partners have limited liability under the laws of any
jurisdiction or is necessary or advisable in the opinion of the Managing
General Partner to ensure that BREP will not be treated as an association
taxable as a corporation or otherwise taxed as an entity for tax purposes; ·an
amendment that the Managing General Partner determines to be necessary or
appropriate to address certain changes in tax regulations, legislation or
interpretation; ·an
amendment that is necessary, in the opinion of our counsel, to prevent BREP or
the Managing General Partner or its directors or officers from in any manner
being subjected to the provisions of the Investment Company Act or similar
legislation in other jurisdictions; ·an
amendment that the Managing General Partner determines in its sole discretion
to be necessary or appropriate for the creation, authorization or issuance of
any class or series of partnership interests or options, rights, warrants or
appreciation rights relating to partnership securities; ·any
amendment expressly permitted in the Amended and Restated Limited Partnership
Agreement of BREP to be made by the Managing General Partner acting alone; ·any
amendment that, in the sole discretion of the Managing General Partner, is
necessary or appropriate to reflect and account for the formation by BREP of,
or its investment in, any partnership, association, body corporate or other
entity, as otherwise permitted by the Amended and Restated Limited Partnership
Agreement of BREP; ·a
change in BREP’s fiscal year and related changes; or ·any
other amendments substantially similar to any of the matters described directly
above. In addition, the
Managing General Partner may make amendments to the Amended and Restated
Limited Partnership Agreement of BREP without the approval of any limited
partner if those amendments, in the discretion of the Managing General Partner: ·do
not adversely affect BREP’s limited partners considered as a whole (including
any particular class of partnership interests as compared to other classes of
partnership interests) in any material respect; ·are
necessary or appropriate to satisfy any requirements, conditions or guidelines
contained in any opinion or binding directive, order, ruling or regulation of
any governmental agency or judicial authority; ·are
necessary or appropriate to facilitate the trading of our LP Units or to comply
with any rule, regulation, guideline or requirement of any securities exchange
on which our LP Units are or will be listed for trading; ·are
necessary or appropriate for any action taken by the Managing General Partner
relating to splits or combinations of LP Units made in accordance with the
provisions of the Amended and Restated Limited Partnership Agreement of BREP;
or ·are
required to effect the intent of the provisions of the Amended and Restated
Limited Partnership Agreement of BREP or are otherwise contemplated by the
Amended and Restated Limited Partnership Agreement of BREP. Opinion of Counsel
and Limited Partner Approval The Managing General
Partner will not be required to obtain an opinion of counsel that an amendment
will not result in a loss of limited liability to the limited partners if one
of the amendments described above under “— No Limited Partner Approval” should
occur. No other amendments to the Amended and Restated Limited Partnership
Agreement of BREP will become effective without the approval of holders of at
least 90% of our LP Units, unless BREP obtains an opinion of counsel to the Page153


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 effect that the amendment will not cause BREP to be
treated as an association taxable as a corporation or otherwise taxable as an
entity for tax purposes (provided that for U.S. tax purposes the Managing
General Partner has not made the election described below under “— Election to
be Treated as a Corporation”) or affect the limited liability under theLimited
Partnership Act 1883of any of BREP’s limited partners. In addition to the
above restrictions, any amendment that would have a material adverse effect on
the rights or preferences of any type or class of partnership interests in
relation to other classes of partnership interests will also require the
approval of the holders of at least a majority of the outstanding partnership
interests of the class so affected. In addition, any
amendment that reduces the voting percentage required to take any action must
be approved by the written consent or affirmative vote of limited partners
whose aggregate outstanding voting units constitute not less than the voting
requirement sought to be reduced. Sale or Other
Disposition of Assets The Amended and
Restated Limited Partnership Agreement of BREP generally prohibits the Managing
General Partner, without the prior approval of the holders of at least 66 2/3 %
of the voting power of our LP Units, from causing BREP to, among other things,
sell, exchange or otherwise dispose of all or substantially all of BREP’s
assets in a single transaction or a series of related transactions, including
by approving on BREP’s behalf the sale, exchange or other disposition of all or
substantially all of the assets of BREP’s subsidiaries. However, the Managing
General Partner, in its sole discretion, may mortgage, pledge, hypothecate or
grant a security interest in all or substantially all of BREP’s assets
(including for the benefit of persons who are not BREP or BREP’s subsidiaries)
without that approval. The Managing General Partner may also sell all or
substantially all of BREP’s assets under any forced sale of any or all of BREP’s
assets pursuant to the foreclosure or other realization upon those encumbrances
without that approval. Take-Over
Bids If, within 120 days
after the date of a take-over bid, as defined in theSecurities Act
(Ontario), the take-over bid is accepted by holders of not less than 90%
of our outstanding LP Units, other than our LP Units held at the date of the
take-over bid by the offeror or any affiliate or associate of the offeror, and
the offeror acquires all of such LP Units deposited or tendered under the
take-over bid, the offeror will be entitled to acquire our LP Units not
deposited under the take-over bid on the same terms as our LP Units acquired
under the take-over bid. Election to be
Treated as a Corporation If the Managing
General Partner determines in its sole discretion that it is no longer in BREP’s
best interests to continue as a partnership for U.S. federal income tax
purposes, the Managing General Partner may elect to treat BREP as an
association or as a publicly traded partnership taxable as a corporation for
U.S. federal (and applicable state) income tax purposes. Termination and
Dissolution BREP will terminate
upon the earlier to occur of (i) the date on which all of BREP’s assets
have been disposed of or otherwise realized by BREP and the proceeds of such
disposals or realizations have been distributed to partners, (ii) the
service of notice by the Managing General Partner, with the special approval of
a majority of its independent directors, that in its opinion the coming into
force of any law, regulation or binding authority has or will render illegal or
impracticable the continuation of BREP, and (iii) at the election of the
Managing General Partner, with the special approval of its independent
directors, if BREP, as determined by the Managing General Partner, based on an
opinion of counsel, is required to register as an “investment company” under
the Investment Company Act or similar legislation in other jurisdictions. BREP will be
dissolved upon the withdrawal of the Managing General Partner as the general
partner of BREP (unless a successor entity becomes the general partner as
described in the following sentence or the withdrawal is effected in compliance
with the provisions of the Amended and Restated Limited Partnership Agreement
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 General Partner”) or the entry by a court of competent
jurisdiction of a decree of judicial dissolution of BREP or an order to wind-up
or liquidate the Managing General Partner without the appointment of a
successor in compliance with the provisions of the Amended and Restated Limited
Partnership Agreement of BREP that are described below under “— Withdrawal of
the Managing General Partner”. BREP will be reconstituted and continue without
dissolution if within 30 days of the date of dissolution (and so long as a
notice of dissolution has not been filed with the Bermuda Monetary Authority),
a successor general partner executes a transfer deed pursuant to which it
becomes the general partner and assumes the rights and undertakes the
obligations of the general partner and BREP receives an opinion of counsel that
the admission of the new general partner will not result in the loss of the
limited liability of any limited partner. Liquidation and
Distribution of Proceeds Upon our dissolution,
unless BREP is continued as a new limited partnership, the liquidator authorized
to wind-up BREP’s affairs will, acting with all of the powers of the Managing
General Partner that the liquidator deems necessary or appropriate in its
judgment, liquidate BREP’s assets and apply the proceeds of the liquidation
first, to discharge BREP’s liabilities as provided in the Amended and Restated
Limited Partnership Agreement of BREP and by law and thereafter to the partners
pro rata according to the percentages of their respective partnership interests
as of a record date selected by the liquidator. The liquidator may defer
liquidation of BREP’s assets for a reasonable period of time or distribute
assets to partners in kind if it determines that an immediate sale or
distribution of all or some of BREP’s assets would be impractical or would cause
undue loss to the partners. Withdrawal of the
Managing General Partner The Managing General
Partner may withdraw as Managing General Partner without first obtaining
approval of our LP Unitholders by giving 180 days’ advance written notice to
the other partners, and that withdrawal will not constitute a violation of the
Amended and Restated Limited Partnership Agreement of BREP. Upon the withdrawal
of the Managing General Partner, the holders of at least 66 2/3 % of the voting
power of our outstanding LP Units may select a successor to that withdrawing
Managing General Partner. If a successor is not elected, or is elected but an
opinion of counsel regarding limited liability, tax matters and the Investment
Company Act (and similar legislation in other jurisdictions) cannot be
obtained, BREP will be dissolved, wound up and liquidated. See “— Termination
and Dissolution” above. In the event of withdrawal
of a general partner where that withdrawal violates the Amended and Restated
Limited Partnership Agreement of BREP, a successor general partner will have
the option to purchase the general partnership interest of the departing
general partner for a cash payment equal to its fair market value. Under all
other circumstances where a general partner withdraws, the departing general
partner will have the option to require the successor general partner to
purchase the general partnership interest of the departing general partner for
a cash payment equal to its fair market value. In each case, this fair market
value will be determined by agreement between the departing general partner and
the successor general partner. If no agreement is reached within 30 days of the
general partner’s departure, an independent investment banking firm or other
independent expert selected by the departing general partner and the successor
general partner will determine the fair market value. If the departing general
partner and the successor general partner cannot agree upon an expert within 45
days of the general partner’s departure, then an expert chosen by agreement of
the experts selected by each of them will determine the fair market value. If the option
described above is not exercised by either the departing general partner or the
successor general partner, the departing general partner’s general partnership
interests will automatically convert into LP Units pursuant to a valuation of
those interests as determined by an investment banking firm or other
independent expert selected in the manner described in the preceding paragraph. Transfer of the
General Partnership Interest The Managing General
Partner may transfer all or any part of its general partnership interest
without first obtaining approval of any LP Unitholder. As a condition of this
transfer, the transferee must (i) be an affiliate of the general partner
of BRELP (or the transfer must be made concurrently with a Page155


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 transfer
of the general partnership units of BRELP to an affiliate of the transferee),
(ii) agree to assume the rights and duties of the Managing General Partner
to whose interest that transferee has succeeded, (iii) agree to be bound
by the provisions of the Amended and Restated Limited Partnership Agreement of
BREP and (iv) furnish an opinion of counsel regarding limited liability
and tax matters. Any transfer of the general partnership interest is subject to
prior notice to and approval of the relevant Bermuda regulatory authorities. At
any time, the shareholder of the Managing General Partner may sell or transfer
all or part of its shares in the Managing General Partner without the approval
of the LP Unitholders. Partnership Name If the Managing
General Partner ceases to be the general partner of BREP and our new general
partner is not an affiliate of Brookfield, BREP will be required by the Amended
and Restated Limited Partnership Agreement of BREP to change the name of BREP to
a name that does not include “Brookfield” and which could not be capable of
confusion in any way with such name. The Amended and Restated Limited
Partnership Agreement of BREP explicitly provides that this obligation shall be
enforceable and waivable by the Managing General Partner notwithstanding that
it may have ceased to be the general partner of BREP. Transactions with
Interested Parties The Managing General
Partner, the Service Provider and their respective partners, members,
shareholders, directors, officers, employees and shareholders, which we refer
to as “interested parties”, may become limited partners or beneficially
interested in limited partners and may hold, dispose of or otherwise deal with
our LP Units with the same rights they would have if the Managing General
Partner was not a party to the Amended and Restated Limited Partnership
Agreement of BREP. An interested party will not be liable to account either to
other interested parties or to BREP, BREP’s partners or any other persons for
any profits or benefits made or derived by or in connection with any such
transaction. The Amended and
Restated Limited Partnership Agreement of BREP permits an interested party to
sell investments to, purchase assets from, vest assets in and enter into any
contract, arrangement or transaction with BREP, BRELP, any of the Holding
Entities, any operating entity or any other holding vehicle established by BREP
and may be interested in any such contract, transaction or arrangement and
shall not be liable to account either to BREP, BRELP, any of the Holding
Entities, any operating entity or any other holding vehicle established by BREP
or any other person in respect of any such contract, transaction or
arrangement, or any benefits or profits made or derived therefrom, by virtue
only of the relationship between the parties concerned, subject to any approval
requirements that are contained in the Conflicts Policy. See Item 7.B
“Related Party Transactions — Conflicts of Interest and Fiduciary Duties”. Outside Activities of
the Managing General Partner; Conflicts of Interest Under the Amended and
Restated Limited Partnership Agreement of BREP, the Managing General Partner is
required to maintain as its sole activity the role of general partner of BREP.
The Managing General Partner is not permitted to engage in any business or activity
or incur or guarantee any debts or liabilities except in connection with or
incidental to its performance as general partner or incurring, guaranteeing,
acquiring, owning or disposing of debt or equity securities of BRELP, a Holding
Entity or any other holding vehicle established by BREP. The Amended and Restated
Limited Partnership Agreement of BREP provides that each person who is entitled
to be indemnified by BREP (other than the Managing General Partner), as
described below under “— Indemnification; Limitations on Liability”, shall have
the right to engage in businesses of every type and description and other
activities for profit, and to engage in and possess interests in business
ventures of any and every type or description, irrespective of whether
(i) such activities are similar to our affairs or activities or
(ii) such affairs and activities directly compete with, or disfavor or
exclude, the Managing General Partner, BREP, BRELP, any Holding Entity, any
operating entity or any other holding vehicle established by BREP. Such
business interests, activities and engagements will be deemed not to constitute
a breach of the Amended and Restated Limited Partnership Agreement of BREP or
any duties stated or implied by law or equity, including fiduciary duties, owed
to any of the Managing General Partner, BREP, BRELP, any Holding Entity, any
operating entity and any other holding vehicle established by BREP (or any of
their respective investors), and shall be deemed not to be a Page156


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 breach of the Managing General Partner’s fiduciary
duties or any other obligation of any type whatsoever of the Managing General
Partner. None of the Managing General Partner, BREP, BRELP, any Holding Entity,
any operating entity, any other holding vehicle established by BREP or any
other person shall have any rights by virtue of the Amended and Restated
Limited Partnership Agreement of BREP or the partnership relationship
established thereby or otherwise in any business ventures of any person who is
entitled to be indemnified by BREP as described below under “— Indemnification;
Limitations on Liability”. The Managing General
Partner and the other indemnified persons described in the preceding paragraph
do not have any obligation under the Amended and Restated Limited Partnership
Agreement of BREP to present business or investment opportunities to Brookfield
Renewable. These provisions will not affect any obligation of an indemnified
person to present business or investment opportunities to Brookfield Renewable
pursuant to the Relationship Agreement or any other separate written agreement
between such persons. Any conflicts of
interest and potential conflicts of interest that are approved by a majority of
the Managing General Partner’s independent directors from time-to-time will be
deemed approved by all partners. Pursuant to the Conflicts Policy, independent
directors may grant approvals for any matters that may give rise to a conflict
of interest or potential conflict of interest in the form of general
guidelines, policies or procedures that are adopted by the Managing General
Partner’s independent directors, and amended from time-to-time with the
approval of a majority of the independent directors of the Managing General
Partner, in which case no further special approval will be required in
connection with a particular transaction or matter permitted thereby other than
any approvals required by law. See Item 7.B “Related Party Transactions —
Conflicts of Interest and Fiduciary Duties”. Indemnification;
Limitations on Liability Under the Amended and
Restated Limited Partnership Agreement of BREP, BREP is required to indemnify
on an after-tax basis out of the assets of BREP to the fullest extent permitted
by law the Managing General Partner, the Service Provider and any of their respective
affiliates (and their respective officers, directors, agents, shareholders,
partners, members and employees), any person who serves on a Governing Body of BREP,
BRELP, a Holding Entity, Operating Entity or any other holding vehicle
established by BREP and any other person designated by the Managing General
Partner as an indemnified person, in each case, against all losses, claims,
damages, liabilities, costs or expenses (including legal fees and expenses),
judgments, fines, penalties, interest, settlements or other amounts arising
from any and all claims, demands, actions, suits or proceedings, incurred by an
indemnified person in connection with our investments and activities or by
reason of their holding such positions, except to the extent that the claims,
liabilities, losses, damages, costs or expenses are determined to have resulted
from the indemnified person’s gross negligence, bad faith, fraud or willful
misconduct, or in the case of a criminal matter, action that the indemnified
person knew to have been unlawful. In addition, under the Amended and Restated
Limited Partnership Agreement of BREP, (i) no such person shall be liable
to BREP, the Managing General Partner or any LP Unitholder for any liabilities
sustained or incurred as a result of any act or omission of such person, except
to the extent there has been a final and non-appealable judgment entered by a
court of competent jurisdiction determining that such liabilities resulted from
such person’s gross negligence, bad faith, fraud, wilful misconduct, or in the
case of a criminal matter, actions with knowledge that the conduct was unlawful
and (ii) subject to applicable law, any matter that is approved by the
independent directors of the Managing General Partner will not constitute a
breach of the Amended and Restated Limited Partnership Agreement of BREP or any
duties stated or implied by law or equity, including fiduciary duties. The
Amended and Restated Limited Partnership Agreement of BREP requires us to
advance funds to pay the expenses of an indemnified person in connection with a
matter in which indemnification may be sought until it is determined that the
indemnified person is not entitled to indemnification. Accounts, Reports and
Other Information Under the Amended and
Restated Limited Partnership Agreement of BREP, the Managing General Partner is
required to prepare financial statements in accordance with IFRS as determined
by the IASB. BREP’s financial statements must be made publicly available
together with a statement of the accounting policies used in their preparation,
such information as may be required by applicable laws and regulations and such
information as the Managing General Partner deems appropriate. BREP’s annual Page157


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 financial statements must be audited by an independent
accounting firm of international standing and made publicly available within
such period of time as is required to comply with applicable laws and
regulations, including any rules of any applicable securities exchange. BREP’s
quarterly financial statements may be unaudited and are made available publicly
as and within the time period required by applicable laws and regulations,
including any rules of any applicable securities exchange. The Managing General
Partner is also required to prepare all other press releases, proxy circulars
and other disclosure documentation as by be required by applicable laws,
including any rules of any applicable securities exchange. The Managing General
Partner is also required to use commercially reasonable efforts to prepare and
send to the limited partners of BREP on an annual basis, additional information
regarding BREP, including Schedule K-1 (or equivalent) and information related
to the passive foreign investment company status of certain non-U.S.
corporations that we control. The Managing General Partner will, where
reasonably possible, prepare and send information required by the non-U.S.
limited partners of BREP for U.S. federal income tax reporting purposes. The
Managing General Partner will also, where reasonably possible and applicable,
prepare and send information required by limited partners of BREP for Canadian
federal income tax purposes. Governing Law;
Submission to Jurisdiction The Amended and
Restated Limited Partnership Agreement of BREP is governed by and will be
construed in accordance with the laws of Bermuda. Under the Amended and
Restated Limited Partnership Agreement of BREP, each of BREP’s partners (other
than governmental entities prohibited from submitting to the jurisdiction of a
particular jurisdiction) will submit to the non-exclusive jurisdiction of any
court in Bermuda in any dispute, suit, action or proceeding arising out of or
relating to the Amended and Restated Limited Partnership Agreement of BREP.
Each partner waives, to the fullest extent permitted by law, any immunity from
jurisdiction of any such court or from any legal process of any such court and
further waives, to the fullest extent permitted by law, any claim of
inconvenient forum, improper venue or that any such court does not have
jurisdiction over the partner. Any final judgment against a partner in any
proceedings brought in a court in Bermuda will be conclusive and binding upon
the partner and may be enforced in the courts of any other jurisdiction of
which the partner is or may be subject, by suit upon such judgment. The
foregoing submission to jurisdiction and waivers will survive the dissolution,
liquidation, winding up and termination of BREP. Description of the
Amended and Restated Limited Partnership Agreement of BRELP The following is a
description of the material terms of the Amended and Restated Limited
Partnership Agreement of BRELP. Holders of LP Units in BREP are not limited
partners of BRELP and do not have any rights under the Amended and Restated
Limited Partnership Agreement of BRELP. Pursuant to the Voting Agreement,
however, BREP, through the Managing General Partner, has the right to direct
all eligible votes in the election of the directors of the BRELP General Partner,
through which BREP participates in the management and activities of BRELP and
the Holding Entities. See Item 7.B “Related Party Transactions—Voting
Agreements”. Because this
description is only a summary of the terms of the agreement, it does not necessarily
contain all of the information that you may find useful. For more complete
information, you should read the Amended and Restated Limited Partnership
Agreement of BRELP which is available electronically on the website of the SEC
at www.sec.gov and on our SEDAR profile at www.sedar.com and will be made
available to LP Unitholders as described under Item 10.C “Material
Contracts” and Item 10.H “Documents on Display”. Formation and
Duration BRELP is a Bermuda
exempted limited partnership registered under theLimited Partnership Act
1883and theExempted Partnerships Act1992. BRELP has a
perpetual existence and will continue as a limited liability partnership unless
BREP is terminated or dissolved in accordance with the Amended and Restated
Limited Partnership Agreement of BRELP. Nature and Purpose Page158


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 Under
the Amended and Restated Limited Partnership Agreement of BRELP, the purpose of
BRELP is to: acquire and hold interests in the Holding Entities and, subject to
the approval of the BRELP GP LP, any other subsidiary of BRELP; engage in any
activity related to the capitalization and financing of BRELP’s interests in
such entities; and engage in any other activity that is incidental to or in
furtherance of the foregoing and that is approved by the BRELP GP LP and that
lawfully may be conducted by a limited partnership organized under theLimited
Partnership Act1883, theExempted Partnerships Act 1992and
the Amended and Restated Limited Partnership Agreement of BRELP. Management As required by law,
the Amended and Restated Limited Partnership Agreement of BRELP provides for
the management and control of BRELP by a general partner, the BRELP GP LP. The
BRELP GP LP will exercise its powers and carry out its functions honestly and
in good faith and the BRELP GP LP will exercise the degree of care, diligence
and skill that a reasonably prudent person would exercise in comparable
circumstances, in each case, subject to, and after taking into account, the
terms and conditions of the Relationship Agreement, our Master Services
Agreement and the Conflicts Policy. Except as set out in the Amended and
Restated Limited Partnership Agreement of BRELP, the BRELP GP LP has no
additional duty to propose or approve any conduct of BRELP, and may decline to
propose or approve such conduct free of any additional duty (including
fiduciary duty). The BRELP GP LP shall not be in breach of any duty to BRELP if
it takes actions permitted by the Amended and Restated Limited Partnership
Agreement of BRELP, the Relationship Agreement, our Master Services Agreement
or the Conflicts Policy. Units BRELP’s units are
limited partnership interests. Holders of units of BRELP are not entitled to
the withdrawal or return of capital contributions in respect of their units,
except to the extent, if any, that distributions are made to such holders
pursuant to the Amended and Restated Limited Partnership Agreement of BRELP or
upon the dissolution of BRELP or as otherwise required by applicable law.
Except to the extent expressly provided in the Amended and Restated Limited
Partnership Agreement of BRELP, a holder of units of BRELP does not have
priority over any other holder of units, either as to the return of capital
contributions or as to profits, losses or distributions. Upon its formation,
BRELP issued two classes of units. The first class of units was issued to
Brookfield and subsequently transferred to BREP and the second class of units,
referred to as the Redeemable/Exchangeable partnership units, were issued to
wholly-owned subsidiaries of Brookfield. Redeemable/Exchangeable partnership
units are identical to the limited partnership units held by BREP, except as
described below under “— Distributions” and “— Withdrawal of the General
Partner” and except that they have the right of redemption described below
under the heading “— Redemption-Exchange Mechanism”. Issuance of
Additional Partnership Interests Subject to any
approval required by applicable law, BRELP may issue additional partnership
interests (including new classes of partnership interests and options, rights,
warrants and appreciation rights relating to such interests) for any
partnership purpose, at any time and from time to time and on such terms and
conditions as its general partner may determine. Any additional partnership
interests authorized to be issued by Amended and Restated Limited Partnership
Agreement of BRELP may be issued in one or more classes, or one or more series
of classes, with such designations, preferences, rights, powers and duties
(which may be senior to existing classes and series of partnership interests)
as its general partner may determine in its sole discretion. Redemption-Exchange
Mechanism At any time, one or
more wholly-owned subsidiaries of Brookfield that hold Redeemable/Exchangeable
partnership units will have the right to require BRELP to redeem for cash all
or a portion of the Redeemable/Exchangeable partnership units held by such
subsidiary, subject to BREP’s right to acquire such Redeemable/Exchangeable
partnership units, as described below, provided that exercise of the right of
redemption or the payment of the redemption amount would not otherwise cause
BRELP to be in breach or violation of any agreement material to BRELP or Brookfield
Renewable Page159


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 or applicable law. Any such redeeming
subsidiary may exercise its right of redemption by delivering a notice of
redemption to BRELP and BREP. After presentation for redemption, such redeeming
subsidiary will receive, subject to BREP’s right to acquire
Redeemable/Exchangeable partnership units, as described below, for each unit
that is presented, cash in an amount equal to the market value of one of our
units multiplied by the number of units to be redeemed (as determined by
reference to the five day volume weighted average of the trading price of our
units and subject to certain customary adjustments). Upon its receipt of the
redemption notice, BREP will have a right to acquire Redeemable/Exchangeable
partnership units entitling it, at its sole discretion, to elect to acquire all
(but not less than all) units described in such notice and presented to BRELP
for redemption in exchange for LP Units on a one for one basis (subject to
certain customary adjustments). Upon a redemption for cash, the holder’s right
to receive distributions with respect to BRELP’s Redeemable/Exchangeable
partnership units so redeemed will cease. Brookfield’s
aggregate interest in BREP, including its interest in the Managing General
Partner and the BRELP GP LP, would be approximately 62% if it exercised its
redemption right in full and BREP exercised its right of first refusal on
BRELP’s Redeemable/Exchangeable partnership units redeemed. Brookfield’s total
percentage interest in BREP would be increased if it participates in BRELP’s
distribution reinvestment plan. Distributions Distributions by
BRELP will be made in the sole discretion of its general partner, the BRELP GP
LP. However, the BRELP GP LP will not be permitted to cause BRELP to make a
distribution if BRELP does not have sufficient cash on hand to make the
distribution, the distribution would render BRELP insolvent or if, in the
opinion of the BRELP GP LP, the distribution would or might leave BRELP with
insufficient funds to meet any future contingent obligations or the
distribution would contravene theLimited Partnership Act1883. Except as set forth
below, prior to the dissolution of BRELP, distributions of available cash (if
any) in any given quarter will be made by BRELP as follows, referred to as the
“Regular Distribution Waterfall”: ·first,
100% of any available cash to BREP until BRELP has distributed an amount equal
to BREP’s expenses and outlays for the quarter properly incurred; ·second,
100% of any available cash then remaining to the owners of BRELP’s partnership
interests, pro rata to their percentage interests, until an amount equal to
$0.375 has been distributed in respect of each limited partnership unit of
BRELP during such quarter, referred to as the “First Distribution Threshold”; ·third,
85% of any available cash then remaining to the owners of BRELP’s partnership
interests, pro rata to their percentage interests, and 15% to its general
partner, until an amount equal to $0.4225 has been distributed in respect of
each limited partnership unit of BRELP during such quarter, referred to as the “Second
Distribution Threshold”; and ·thereafter,
75% of any available cash then remaining to the owners of BRELP’s partnership
interests, pro rata to their percentage interests, and 25% to its general
partner. Set forth below is an
example of how the incentive distributions described above are calculated on a
quarterly and annualized basis. The figures used below are for illustrative
purposes only and are not indicative of BREP’s expectations. Page160


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 Quarterly
 Annually(MILLIONS, EXCEPT PER UNIT AMOUNTS)
 Units
 
 Per Unit
 Total
 Per Unit
 TotalIllustrative distribution
 
 
 $
 0.5000
 
 
 $
 2.00First Distribution Threshold
 
 
 $
 0.3750
 
 
 $
 1.50Total units of BRELP(1)
 265Total first distribution
 
 
 
 
 $
 99.4
 
 
 $
 397.6Distribution in excess of First Distribution Threshold
 
 
 $
 0.0475
 
 
 $
 0.19Total units of BRELP(1)
 265Second distribution to partners
 
 
 
 
 $
 12.6
 
 
 $
 50.415% incentive distribution to general partner
 
 
 
 
 
 2.2
 
 
 
 8.8Total second distribution
 
 
 
 
 $
 14.8
 
 
 $
 59.2Distribution in excess of Second Distribution Threshold
 
 
 $
 0.0775
 
 
 $
 0.31Total units of BRELP(1)
 265Third distribution to partners
 
 
 
 
 $
 20.5
 
 
 $
 8225% incentive distribution to general partner
 
 
 
 
 
 6.8
 
 
 
 27.2Total third distribution
 
 
 
 
 $
 27.3
 
 
 $
 109.2Total distributions to partners (including
  incentive distributions)
 
 
 
 
 $
 141.5
 
 
 $
 566Total incentive distributions to general
  partner
 
 
 
 
 $
 9
 
 
 $
 36
 (1)Includes
(a) class A non-voting limited partnership interests in BRELP held by
Brookfield Renewable, (b) Redeemable/Exchangeable partnership units of BRELP
that are held by Brookfield and that are redeemable for cash or exchangeable
for LP Units in accordance with the Redemption-Exchange Mechanism and
(c) general partnership interests in BRELP. The table
below sets forth, on a quarterly and aggregate basis, all management fees and
incentive distributions that have been earned since Q1 2012. Page161


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 (MILLIONS)
 Q1 2012
 
 Q2 2012
 
 Q3 2012
 
 Q4 2012
 
 Total
  2012Base management fee(1)
 $
 6.6
 
 $
 7.7
 
 $
 10.3
 
 $
 11.2
 
 $
 35.8Incentive distribution
 
 -
 
 
 -
 
 
 -
 
 
 -
 
 
 -Total
 $
 6.6
 
 $
 7.7
 
 $
 10.3
 
 $
 11.2
 
 $
 35.8Q1 2013
 
 Q2 2013
 
 Q3 2013
 
 Q4 2013
 
 Total
  2013Base management fee(1)
 $
 12.0
 
 $
 10.9
 
 $
 9.1
 
 $
 8.9
 
 $
 40.9Incentive distribution
 
 -
 
 
 -
 
 
 -
 
 
 -
 
 
 -Total
 $
 12.0
 
 $
 10.9
 
 $
 9.1
 
 $
 8.9
 
 $
 40.9Q1 2014
 
 Q2 2014
 
 Q3 2014
 
 Q4 2014
 
 Total
  2014Base management fee(1)
 $
 11.1
 
 $
 12.9
 
 $
 13.8
 
 $
 13.5
 
 $
 51.3Incentive distribution
 
 0.6
 
 
 0.6
 
 
 0.6
 
 
 0.6
 
 
 2.4Total
 $
 11.7
 
 $
 13.5
 
 $
 14.4
 
 $
 14.1
 
 $
 53.7
 (1)        Pursuant to our Master
Services Agreement, we pay the Service Provider a fixed base management fee
equal to $20 million amount is annually adjusted for inflation, with the first
adjustment having been made on January 1, 2013, at an inflation factor
based on year-over-year United States consumer price index) plus 1.25% of the
amount by which the Total Capitalization Value exceeds an initial reference
value determined based on its market capitalization immediately following
combination of the assets of the Fund and Brookfield Power Renewable Assets
into BREP. In the event that the measured Total Capitalization Value in a given
period is less than the initial reference value, the Service Provider will
receive only the Base Management Fee of $20 million annually (subject to an
annual escalation by the specified inflation factor described above). The Base
Management Fee is calculated and paid on a quarterly basis. For any quarter in
which the Managing General Partner determines that there is insufficient
available cash to pay the base management fee as well as the next regular
distribution on our LP Units, we may elect to pay all or a portion of the base
management fee in our LP Units or in limited partnership units of BRELP,
subject to certain conditions. If, prior to the
dissolution of BRELP, available cash is deemed by its general partner, in its
sole discretion, to be (i) attributable to sales or other dispositions of
BRELP’s assets and (ii) representative of unrecovered capital, then such
available cash shall be distributed to the partners of BRELP in proportion to
the unrecovered capital attributable to BRELP’s partnership interests held by
the partners until such time as the unrecovered capital attributable to each
such partnership interest is equal to zero. Thereafter, distributions of
available cash made by BRELP (to the extent made prior to dissolution) will be
made in accordance with the Regular Distribution Waterfall. Upon the occurrence
of an event resulting in the dissolution of BRELP, all cash and property of
BRELP in excess of that required to discharge BRELP’s liabilities will be
distributed as follows: (i) to the extent such cash and/or property is
attributable to a realization event occurring prior to the event of
dissolution, such cash and/or property will be distributed in accordance with
the Regular Distribution Waterfall and/or the distribution waterfall applicable
to unrecovered capital; and (ii) all other cash and/or property will be
distributed in the manner set forth below: ·first,
100% to BREP until BREP has received an amount equal to the excess of
(i) the amount of BREP’s outlays and expenses incurred during the term of
BRELP, over (ii) the aggregate amount of distributions received by BREP
pursuant to the first tier of the Regular Distribution Waterfall during the
term of BRELP; Page162


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 ·second,
100% to the partners of BRELP, in proportion to their respective amounts of
unrecovered capital in BRELP; ·third,
100% to the owners of BRELP’s partnership interests, pro rata to their
percentage interests, until an amount has been distributed in respect of each
limited partnership unit of BRELP equal to the excess of (i) the First
Distribution Threshold for each quarter during the term of BRELP (subject to
adjustment upon the subsequent issuance of additional partnership interests in
BRELP), over (ii) the aggregate amount of distributions made in respect of
a BRELP’s limited partnership unit pursuant to the second tier of the Regular
Distribution Waterfall during the term of BRELP (subject to adjustment upon the
subsequent issuance of additional partnership interests in BRELP); ·fourth,
85% to the owners of BRELP’s partnership interests, pro rata to their
percentage interests, and 15% to its general partner, until an amount has been
distributed in respect of each limited partnership unit of BRELP equal to the
excess of (i) the Second Distribution Threshold less the First
Distribution Threshold for each quarter during the term of BRELP (subject to
adjustment upon the subsequent issuance of additional partnership interests in
BRELP), over (ii) the aggregate amount of distributions made in respect of
a limited partnership unit of BRELP pursuant to the third tier of the Regular
Distribution Waterfall during the term of BRELP (subject to adjustment upon the
subsequent issuance of additional partnership interests in BRELP); and ·thereafter,
75% to the owners of BRELP’s partnership interests, pro rata to their
percentage interests, and 25% to its general partner. Each partner’s
percentage interest is determined by the relative portion of all outstanding
partnership interests held by that partner from time to time and is adjusted
upon and reflects the issuance of additional partnership interests of BRELP. In
addition, the unreturned capital attributable to each of the partnership
interests, as well as certain of the distribution thresholds set forth above,
may be adjusted pursuant to the terms of the Amended and Restated Limited
Partnership Agreement of BRELP so as to ensure the uniformity of the economic
rights and entitlements of (i) the previously outstanding partnership
interests of BRELP, and (ii) the subsequently-issued partnership interests
of BRELP. The Amended and
Restated Limited Partnership Agreement of BRELP provides that, to the extent
that any Holding Entity or any operating entity pays to Brookfield any
comparable performance or incentive distribution, the amount of any incentive
distributions paid to the BRELP GP LP in accordance with the distribution
entitlements described above will be reduced in an equitable manner to avoid
duplication of distributions. BRELP GP LP may
elect, at its sole discretion, to reinvest incentive distributions in
Redeemable/Exchangeable partnership units. Sale or Other
Disposition of Assets The Amended and
Restated Limited Partnership Agreement of BRELP generally prohibits the general
partner of BRELP, without the prior approval of the holders of at least 50% of
the voting power of the units of BRELP, from causing BRELP to, among other
things, sell, exchange or otherwise dispose of all or substantially all of
BRELP or Brookfield Renewable’s assets in a single transaction or a series of
related transactions. No Management or
Control BRELP’s limited
partners, in their capacities as such, may not take part in the management or
control of the activities and affairs of BRELP and do not have any right or
authority to act for or to bind BRELP or to take part or interfere in the
conduct or management of BRELP. Limited partners are
not entitled to vote on matters relating to BRELP, although holders of units
are entitled to consent to certain matters as described under “— Amendment of
the Amended and Restated Limited Partnership Agreement of BRELP”, “— Opinion of
Counsel and Limited Partner Approval” and “— Withdrawal of the General Partner”
which may be effected only with the consent of the Page163


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 holders
of the percentages of outstanding units specified below. Each unit shall
entitle the holder thereof to one vote for the purposes of any approvals of
holders of units. In addition, pursuant
to the Voting Agreement, BREP, through the Managing General Partner, has a
number of voting rights, including the right to direct all eligible votes in
the election of the directors of the BRELP General Partner. See Item 7.B
“Related Party Transactions — Voting Agreement”. Meetings Special meetings of
the limited partners of BRELP may be called by its general partner at a time
and place outside of Canada determined by it on a date not less than 10 days
nor more than 60 days after the mailing of notice of the meeting. Special
meetings of the limited partners may also be called by limited partners holding
50% or more of the voting power of the outstanding partnership interests of the
class or classes for which a meeting is proposed. For this purpose, the partnership
interests outstanding do not include partnership interests owned by its general
partner or any of its affiliates other than any member of Brookfield Renewable.
Only holders of partnership interests of BRELP of record on the date set by its
general partner (which may not be less than 10 days nor more than 60 days,
before the meeting) are entitled to notice of any meeting. Amendment of the
Amended and Restated Limited Partnership Agreement of BRELP Amendments to the
Amended and Restated Limited Partnership Agreement of BRELP may only be
proposed by or with the consent of its general partner. To adopt a proposed
amendment, other than the amendments that do not require limited partner
approval discussed below, the general partner must seek approval of at least 66
2/3 % of the voting power of BRELP’s outstanding units required to approve the
amendment or call a meeting of the limited partners to consider and vote upon
the proposed amendment. Prohibited Amendments No amendment may be
made that would: ·enlarge
the obligations of any limited partner without its consent, except that any
amendment that would have a material adverse effect on the rights or
preferences of any class of partnership interests in relation to other classes
of partnership interests may be approved by at least a majority of the type or
class of partnership interests so affected; or ·enlarge
the obligations of, restrict in any way any action by or rights of, or reduce
in any way the amounts distributable, reimbursable or otherwise payable by BRELP
to the BRELP GP LP or any of its affiliates without the consent of the BRELP GP
LP which may be given or withheld in its sole discretion. The provision of the
Amended and Restated Limited Partnership Agreement of BRELP preventing the
amendments having the effects described directly above can be amended upon the
approval of the holders of not less than 90% of the outstanding units. No Limited Partner
Approval Subject to applicable
law, the BRELP GP LP may generally make amendments to the Amended and Restated
Limited Partnership Agreement of BRELP without the approval of any limited
partner to reflect: ·a
change in the name of BRELP, the location of BRELP’s registered office or BRELP’s
registered agent; ·the
admission, substitution or withdrawal or removal of partners in accordance with
the Amended and Restated Limited Partnership Agreement of BRELP; ·a
change that its general partner determines is reasonable and necessary or
appropriate for BRELP to qualify or to continue its qualification as an
exempted limited partnership under the laws of Bermuda or a partnership in
which the limited partners have limited liability under the laws of any
jurisdiction or is necessary or advisable in the opinion of its general partner
to Page164


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 ensure that BRELP will not be treated as an
association taxable as a corporation or otherwise taxed as an entity for tax
purposes; ·an
amendment that the BRELP GP LP determines to be necessary or appropriate to
address certain changes in tax regulations, legislation or interpretation; ·an
amendment that is necessary, in the opinion of counsel, to prevent BRELP or its
general partner or its directors, officers, agents or trustees, from having a
material risk of being in any manner subjected to the provisions of the
Investment Company Act or similar legislation in other jurisdictions; ·an
amendment that its general partner determines in its sole discretion to be
necessary or appropriate for the creation, authorization or issuance of any
class or series of partnership interests or options, rights, warrants or
appreciation rights relating to partnership securities; ·any
amendment expressly permitted in the Amended and Restated Limited Partnership
Agreement of BRELP to be made by its general partner acting alone; ·any
amendment that in the sole discretion of the BRELP GP LP is necessary or
appropriate to reflect and account for the formation by BRELP of, or its
investment in, any person, as otherwise permitted by the Amended and Restated
Limited Partnership Agreement of BRELP; ·a
change in its fiscal year and related changes; ·any
amendment concerning the computation or allocation of specific items of income,
gain, expense or loss among the partners that, in the sole discretion of its
general partner, is necessary or appropriate to (i) comply with the
requirements of applicable law, (ii) reflect the partners’ interests in
BRELP, or (iii) consistently reflect the distributions made by BRELP to
the partners pursuant to the terms of the Amended and Restated Limited
Partnership Agreement of BRELP; ·any
amendment that in the sole discretion of the BRELP GP LP is necessary or
appropriate to address any statute, rule, regulation, notice, or announcement
that affects or could affect the U.S. federal income tax treatment of any
allocation or distribution related to any interest of the BRELP GP LP in the
profits of BRELP; and ·any
other amendments substantially similar to any of the matters described directly
above. In addition,
amendments to the Amended and Restated Limited Partnership Agreement of BRELP
may be made by the BRELP GP LP without the approval of any limited partner if
those amendments, in the discretion of the BRELP GP LP: ·do
not adversely affect BRELP’s limited partners considered as a whole (including
any particular class of partnership interests as compared to other classes of
partnership interests) in any material respect; ·are
necessary or appropriate to satisfy any requirements, conditions or guidelines
contained in any opinion or binding directive, order, ruling or regulation of
any governmental agency or judicial authority; ·are
necessary or appropriate for any action taken by its general partner relating
to splits or combinations of units made in accordance with the provisions of
the Amended and Restated Limited Partnership Agreement of BRELP; or ·are
required to effect the intent of the provisions of the Amended and Restated
Limited Partnership Agreement of BRELP or are otherwise contemplated by the
Amended and Restated Limited Partnership Agreement of BRELP. Opinion of Counsel
and Limited Partner Approval The BRELP GP LP will
not be required to obtain an opinion of counsel that an amendment will not
result in a loss of limited liability to the limited partners if one of the
amendments described above under “— No Limited Partner Approval” should occur.
No other amendments to the Amended and Restated Page165


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 Limited
Partnership Agreement of BRELP will become effective without the approval of
holders of at least 90% of the voting power of BRELP’s units, unless it obtains
an opinion of counsel to the effect that the amendment will not (i) cause
BRELP to be treated as an association taxable as a corporation or otherwise
taxable as an entity for tax purposes (provided that for U.S. tax purposes its
general partner has not made the election described below under “— Election to
be Treated as a Corporation”) or (ii) affect the limited liability under
theLimited Partnership Act 1883of any of BRELP’s limited partners. In addition to the
above restrictions, any amendment that would have a material adverse effect on
the rights or preferences of any type or class of partnership interests in
relation to other classes of partnership interests will also require the
approval of the holders of at least a majority of the outstanding partnership
interests of the class so affected. In addition, any
amendment that reduces the voting percentage required to take any action must
be approved by the affirmative vote of limited partners whose aggregate
outstanding voting units constitute not less than the voting requirement sought
to be reduced. Election to be
Treated as a Corporation If, in the
determination of its general partner, it is no longer in BRELP’s best interests
to continue as a partnership for U.S. federal income tax purposes, the BRELP GP
LP may elect to treat BRELP as an association or as a publicly traded
partnership taxable as a corporation for U.S. federal (and applicable state)
income tax purposes. Dissolution BRELP shall dissolve
and its affairs shall be wound up, upon the earlier of (i) the service of
notice by its general partner, with the approval of a majority of the members
of the independent directors of the Managing General Partner, that, in the
opinion of the general partner, the coming into force of any law, regulation or
binding authority renders illegal or impracticable the continuation of BRELP;
(ii) the election of its general partner, with the approval of its
independent directors, if BRELP, as determined by its general partner, based on
an opinion of counsel, is required to register as an “investment company” under
the Investment Company Act or similar legislation in other jurisdictions;
(iii) the date that its general partner withdraws from the partnership
(unless a successor entity becomes the general partner of BRELP as described
below under “— Withdrawal of the General Partner”); (iv) the date on which
any court of competent jurisdiction enters a decree of judicial dissolution of
BRELP or an order to wind-up or liquidate its general partner without the
appointment of a successor in compliance with the provisions of the Amended and
Restated Limited Partnership Agreement of BRELP that are described below under
“— Withdrawal of the General Partner”; and (v) the date on which its
general partner decides to dispose of, or otherwise realize proceeds in respect
of, all or substantially all of BRELP’s assets in a single transaction or
series of transactions. BRELP will be
reconstituted and continue without dissolution if, within 30 days of the date
of dissolution (and provided that a notice of dissolution with respect to BRELP
has not been filed with the Bermuda Monetary Authority), a successor general
partner executes a transfer deed pursuant to which the new general partner
assumes the rights and undertakes the obligations of the original general
partner, but only if BRELP receives an opinion of counsel that the admission of
the new general partner will not result in the loss of limited liability of any
limited partner of BRELP. Withdrawal of the
General Partner The BRELP GP LP may
withdraw as general partner without first obtaining approval of BRELP’s limited
partners by giving 180 days advance notice, and that withdrawal will not
constitute a violation of the Amended and Restated Limited Partnership
Agreement of BRELP. Upon the withdrawal
of the BRELP GP LP, the holders of at least a majority of the voting power of
the outstanding class of units that are not Redeemable/Exchangeable partnership
units may elect a successor to the BRELP GP LP. If a successor is not selected,
or is elected but an opinion of counsel regarding limited liability, tax
matters and the Investment Company Act (and similar legislation in other
jurisdictions) cannot be obtained, BRELP will be dissolved, wound up and
liquidated. See “— Dissolution” above. Page166


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 The
BRELP GP LP may not be removed unless that removal is approved by the vote of
the holders of at least 66 2/3 % of the outstanding class of units that are not
Redeemable/Exchangeable partnership units and it receives a withdrawal opinion
of counsel regarding limited liability, tax matters and the Investment Company
Act (and similar legislation in other jurisdictions). Any removal of the BRELP
GP LP is also subject to the approval of a successor general partner by the
vote of the holders of a majority of the voting power of its outstanding units
that are not Redeemable/Exchangeable partnership units. In the event of the
removal of the BRELP GP LP under circumstances where cause exists or withdrawal
of the BRELP GP LP where that withdrawal violates the Amended and Restated
Limited Partnership Agreement of BRELP, a successor general partner will have
the option to purchase the general partnership interest of the BRELP GP LP for
a cash payment equal to its fair market value. Under all other circumstances
where the BRELP GP LP withdraws or is removed by the limited partners, BRELP GP
LP will have the option to require the successor general partner to purchase
the general partnership interest of BRELP GP LP for a cash payment equal to its
fair market value. In each case, this fair market value will be determined by
agreement between BRELP GP LP and the successor general partner. If no
agreement is reached within 30 days of BRELP GP LP’s departure, an independent
investment banking firm or other independent expert selected by BRELP GP LP and
the successor general partner will determine the fair market value. If BRELP GP
LP and the successor general partner cannot agree upon an expert within 45 days
of BRELP GP LP’s departure, then an expert chosen by agreement of the experts
selected by each of them will determine the fair market value. If the option
described above is not exercised by either the departing general partner or the
successor general partner, the departing general partner’s general partnership
interests will automatically convert into units pursuant to a valuation of
those interests as determined by an investment banking firm or other
independent expert selected in the manner described in the preceding paragraph. Transfer of the
General Partnership Interest BRELP GP LP may
transfer all or any part of its general partnership interest without first
obtaining approval of any holders of BRELP limited partnership units. As a
condition of this transfer, the transferee must (i) be an affiliate of the
general partner of BREP (or the transfer must be made concurrently with a
transfer of the general partnership units of BREP to an affiliate of the
transferee), (ii) agree to assume the rights and duties of the general
partner to whose interest that transferee has succeeded, (iii) agree to be
bound by the provisions of the Amended and Restated Limited Partnership
Agreement of BRELP and (iv) furnish an opinion of counsel regarding
limited liability and tax matters. Any transfer of the general partnership
interest is subject to prior notice to and approval of the relevant Bermuda
regulatory authority. At any time, the members of the BRELP GP LP may sell or
transfer all or part of their units in the BRELP GP LP without the approval of
the holders of BRELP limited partnership units. Transactions with
Interested Parties The general partner
of BRELP, its affiliates and its respective partners, members, shareholders,
directors, officers, employees and shareholders, which we refer to as
“interested parties”, may become limited partners or beneficially interested in
limited partners and may hold, dispose of or otherwise deal with units of BRELP
with the same rights they would have if the general partner of BRELP were not a
party to the Amended and Restated Limited Partnership Agreement of BRELP. An
interested party will not be liable to account either to other interested
parties or to BRELP, its partners or any other persons for any profits or
benefits made or derived by or in connection with any such transaction. The Amended and
Restated Limited Partnership Agreement of BRELP permits an interested party to
sell investments to, purchase assets from, invest assets in and enter into any
contract, arrangement or transaction with BRELP, any of the Holding Entities,
any operating entity or any other holding vehicle established by BRELP and may
be interested in any such contract, transaction or arrangement and shall not be
liable to account either to BRELP, any of the Holding Entities, any operating
entity or any other holding vehicle established by BRELP or any other person in
respect of any such contract, transaction or arrangement, or any benefits or
profits made or derived therefrom, by virtue only of the relationship between
the parties concerned, subject to the Conflicts Policy. Outside Activities of
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 Under
the Amended and Restated Limited Partnership Agreement of BRELP, the general
partner will be required to maintain as its sole activity the role of the
general partner of BRELP. The general partner will not be permitted to engage
in any activity or incur or guarantee any debts or liabilities except in
connection with or incidental to its performance as general partner or
incurring, guaranteeing, acquiring, owning or disposing of debt or equity
securities of a subsidiary of an Holding Entity or any other holding vehicle
established by BRELP. The Amended and
Restated Limited Partnership Agreement of BRELP provides that each person who
is entitled to be indemnified by BRELP, as described below under “—
Indemnification; Limitations on Liability” (other than the general partner)
will have the right to engage in businesses of every type and description and
other activities for profit, and to engage in and possess interests in business
ventures of any and every type or description, irrespective of whether (i) such
businesses and activities are similar to our activities, or (ii) such
businesses and activities directly compete with, or disfavor or exclude, BRELP,
its general partner, any Holding Entity, operating entity, or any other holding
vehicle established by BRELP. Such business interests, activities and
engagements will be deemed not to constitute a breach of the Amended and
Restated Limited Partnership Agreement of BRELP or any duties stated or implied
by law or equity, including fiduciary duties, owed to any of BRELP, its general
partner, any Holding Entity, operating entity, and any other holding vehicle
established by BRELP (or any of their respective investors), and shall be
deemed not to be a breach of its general partner’s fiduciary duties or any
other obligation of any type whatsoever of the general partner. None of BRELP,
its general partner, any Holding Entity, operating entity, any other holding
vehicle established by BRELP or any other person shall have any rights by
virtue of the Amended and Restated Limited Partnership Agreement of BRELP or
the partnership relationship established thereby or otherwise in any business
ventures of any person who is entitled to be indemnified by BRELP as described
below under “— Indemnification; Limitations on Liability”. The BRELP GP LP and
the other indemnified persons described in the preceding paragraph will not
have any obligation under the Amended and Restated Limited Partnership
Agreement of BRELP to present business or investment opportunities to BRELP,
any Holding Entity, operating entity, or any other holding vehicle established
by BRELP. These provisions will not affect any obligation of such indemnified
person to present business or investment opportunities to BRELP, any Holding
Entity, operating entity or any other holding vehicle established by BRELP
pursuant to the Relationship Agreement or any other separate written agreement
between such persons. Indemnification;
Limitations on Liability Under the Amended and
Restated Limited Partnership Agreement of BRELP, BRELP is required to indemnify
on an after-tax basis out of the assets and to the fullest extent permitted by
law its general partner, the Service Provider and any of their respective
affiliates (and their respective officers, directors, agents, shareholders,
partners, members and employees), any person who serves on a Governing Body of
BRELP, BREP, a Holding Entity, operating entity or any other holding vehicle
established by BREP and any other person designated by its general partner as
an indemnified person, in each case, against all losses, claims, damages,
liabilities, costs or expenses (including legal fees and expenses), judgments,
fines, penalties, interest, settlements and other amounts arising from any and
all claims, demands, actions, suits or proceedings, incurred by an indemnified
person in connection with its business, investments and activities or by reason
of their holding such positions, except to the extent that the claims,
liabilities, losses, damages, costs or expenses are determined to have resulted
from the indemnified person’s gross negligence, bad faith, fraud or willful
misconduct, or in the case of a criminal matter, action that the indemnified
person knew to have been unlawful. In addition, under the Amended and Restated
Limited Partnership Agreement of BRELP, (i) the liability of such persons
has been limited only where their conduct involves gross negligence, bad faith,
fraud or willful misconduct, or in the case of a criminal matter, action that
the indemnified person knew to have been unlawful and (ii) subject to
applicable law, any matter that is approved by the independent directors will
not constitute a breach of any duties stated or implied by law or equity,
including fiduciary duties. The Amended and Restated Limited Partnership
Agreement of BRELP requires it to advance funds to pay the expenses of an
indemnified person in connection with a matter in which indemnification may be
sought until it is determined that the indemnified person is not entitled to
indemnification. In addition, under the Amended and Restated Limited
Partnership Agreement of BRELP, the general partner of BRELP, on behalf of Page168


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 Brookfield, is required under certain circumstances to
indemnify BRELP and BREP for U.S. federal income taxes imposed under Sections
897, 1445, or 1461 of the U.S. Internal Revenue Code of 1986, as amended, on
BRELP or BREP as a result of the exercise of the redemption right or the
exchange right by Brookfield or BREP, as the case may be, pursuant to the
Amended and Restated Limited Partnership Agreement of BRELP. Governing Law The Amended and
Restated Limited Partnership Agreement of BRELP is governed by and will be
construed in accordance with the laws of Bermuda. BRP Equity BRP Equity is an
indirect wholly-owned subsidiary of BREP incorporated under the CBCA on
February 10, 2010. Other than a receivable from an indirect wholly-owned
subsidiary of BREP, BRP Equity has no significant assets or liabilities, no
subsidiaries and no ongoing business operations of its own. BRP Equity’s Series
1 Shares and Series 2 Shares are guaranteed by BREP and the other Guarantors
under the Preference Share Guarantees described under “— Preference Share
Guarantees”. Pursuant to BRP
Equity’s articles of incorporation, BRP Equity is authorized to issue an
unlimited number of common shares (the “Common Shares”), an unlimited
number of Class A Preference Shares (the “Class A Preference Shares”),
issuable in series (which includes the Series 1 Shares, Series 2 Shares, Series
3 Shares, Series 4 Shares, Series 5 Shares and Series 6 Shares), and an
unlimited number of Class B preference shares (the “Class B Preference
Shares”), issuable in series. As of the date of this Form 20-F, one Common
Share held indirectly by BREP was issued and outstanding, and 10 million
Series 1 Shares, 10 million Series 3 Shares, 7 million Series 5 Shares and 7
million Series 6 Shares were issued and trading on the TSX. No series of Class
B Preference Shares have been created to date. The following is a summary of
rights, privileges, restrictions and conditions attached to the Common Shares,
Class A Preference Shares, Series 1 Shares, Series 2 Shares, Series 3
Shares, Series 4 Shares, Series 5 Shares, Series 6 Shares, and the Class B
Preference Shares. Common Shares Holders of Common
Shares are entitled to one vote for each such share held on all votes taken at
meetings of the shareholders of BRP Equity, except meetings at which only the
holders of a specified class or series of shares of BRP Equity are entitled to
vote. Subject to the rights of holders of Class A Preference Shares or any
series thereof, Class B Preference Shares or any series thereof, and other
shares of BRP Equity ranking prior to the Common Shares, the holders of Common
Shares are entitled to dividends as may be declared from time to time by the
board of directors of BRP Equity. Holders of Common Shares may make use of
various shareholder remedies available pursuant to the CBCA. Class A
Preference Shares Issuance
in Series The board of
directors of BRP Equity may from time to time issue Class A Preference
Shares in one or more series, each series to consist of such number of shares
as will before issuance thereof be fixed by the directors who will at the same
time determine the designation, rights, privileges, restrictions and conditions
attaching to that series of Class A Preference Shares. Priority The Class A
Preference Shares rank senior to the Class B Preference Shares, the Common
Shares and all other shares ranking junior to the Class A Preference
Shares with respect to priority in payment of dividends and in the distribution
of assets in the event of the liquidation, dissolution or winding-up of BRP
Equity. Pursuant to the CBCA, each series of Class A Preference Shares
participates rateably with every other series of Class A Preference Shares
in respect of accumulated dividends and return of capital. Voting Subject to applicable
corporate law or unless provision is made in the articles relating to any
series of Class A Preference Shares, the holders of the Class A
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 are not
entitled as holders of that class or series to receive notice of, to attend or
to vote at any meeting of the shareholders of BRP Equity. Approval The approval of the
holders of the Class A Preference Shares of any matters to be approved by
a separate vote of the holders of the Class A Preference Shares may be
given by special resolution in accordance with the share conditions for the
Class A Preference Shares. Each holder of Class A Preference Shares
entitled to vote at a class meeting of holders of Class A Preference
Shares, or at a joint meeting of the holders of two or more series of
Class A Preference Shares, has one vote in respect of each C$25.00 of the
issue price of each Class A Preference Share held by such holder. Specific
Provisions of the Class A Preference Shares, Series 1 Dividends The holders of Series
1 Shares are entitled to receive fixed cumulative preferential cash dividends,
as and when declared by the board of directors of BRP Equity, payable quarterly
on the last day of January, April, July and October in each year, at an annual
rate equal to C$1.3125 per share until April 30, 2015. The annual fixed
dividend rate (the “Annual Fixed Dividend Rate”) for each subsequent
5-year fixed rate period will be payable quarterly on the last day of January,
April, July and October in an amount equal to the sum of the Government of
Canada Yield on the 30th day prior to the first day of such subsequent fixed
rate period plus 2.62%. The annual fixed dividend for each such period will be
equal to the applicable Annual Fixed Dividend Rate multiplied by C$25.00. Series 1 Guarantee The Series 1 Shares
are fully and unconditionally guaranteed by the Guarantors pursuant to
guarantee indentures among each of the Guarantors, BRP Equity and Computershare
Trust Company of Canada (the “Series 1 Guarantee”). See the description
of the Preference Share Guarantees under “— Preference Share Guarantees”. Redemption The Series 1 Shares
will not be redeemable by BRP Equity prior to April 30, 2015. On
April 30, 2015 and on April 30 every five years thereafter, and
subject to certain other restrictions set out under “— Restrictions on
Dividends and Retirement and Issue of Shares”, BRP Equity may, at its option,
redeem all or from time to time any part of the outstanding Series 1 Shares by
payment in cash of a per share sum equal to C$25.00, in each case together with
all accrued and unpaid dividends up to but excluding the date fixed for
redemption (less any tax required to be deducted and withheld by BRP Equity). For so long as the
Series 1 Guarantee remains in full force and effect, if, in contravention of
the Series 1 Guarantee, there is a liquidation, dissolution or winding-up of BREP
(whether voluntary or involuntary) or any other distribution of assets of BREP
to our securityholders for the purpose of winding-up BREP’s affairs, the Series
1 Shares shall be redeemed by BRP Equity by payment in cash of a per share sum
equal to C$25.00, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be
deducted and withheld by BRP Equity). Conversion of Series
1 Shares into Series 2 Shares Subject to applicable
law and the provisions of the Series 1 Shares, holders of the Series 1 Shares
will have the right, at their option, on April 30, 2015 and on
April 30 every five years thereafter, to convert all or any of their
Series 1 Shares into Series 2 Shares on the basis of one Series 2 Share for
each Series 1 Share. Under certain circumstances, the Series 1 Shares
automatically convert into Series 2 Shares on the basis of one Series 2 Share
for each Series 1 Share. Purchase for
Cancellation Subject to applicable
law and to the provisions described under “— Restrictions on Dividends and
Retirement and Issue of Shares”, BRP Equity may at any time purchase for
cancellation the whole or any part of the Series 1 Shares at the lowest price
or prices at which in the opinion of the board of directors of BRP Equity such
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 Rights
on Liquidation In the event of the
liquidation, dissolution or winding-up of BRP Equity or any other distribution
of assets of BRP Equity among its shareholders for the purpose of winding-up
its affairs, the holders of the Series 1 Shares will be entitled to receive
C$25.00 per share, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be
deducted and withheld by BRP Equity), before any amount is paid or any assets
of BRP Equity are distributed to the holders of any shares ranking junior as to
capital to the Series 1 Shares. The holders of the Series 1 Shares will not be
entitled to share in any further distribution of the assets of BRP Equity. The
payment of the amount to be paid to the holders of the Series 1 Shares upon
liquidation, dissolution and winding-up of BRP Equity is fully and
unconditionally guaranteed by the Guarantors. Priority The Series 1 Shares
rank senior to the Class B Preference Shares and the Common Shares of BRP
Equity with respect to priority in the payment of dividends and in the
distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity or in the event of any other distribution of assets of
BRP Equity among its shareholders for the purpose of winding-up its affairs.
The Series 1 Shares rank on a parity with every other series of Class A
Preference Shares with respect to priority in the payment of dividends and in
the distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity or in the event of any other distribution of assets of
BRP Equity among its shareholders for the purpose of winding-up its affairs. Restrictions on
Dividends and Retirement and Issue of Shares So long as any of the
Series 1 Shares are outstanding, BRP Equity will not, without the approval of
the holders of the Series 1 Shares: a.declare, pay or set
apart for payment any dividends (other than stock dividends payable in shares
of BRP Equity ranking as to capital and dividends junior to the Series 1
Shares) on shares of BRP Equity ranking as to dividends junior to the Series 1
Shares; b.except out of the net
cash proceeds of a substantially concurrent issue of shares of BRP Equity
ranking as to return of capital and dividends junior to the Series 1 Shares,
redeem or call for redemption, purchase or otherwise pay off, retire or make
any return of capital in respect of any shares of BRP Equity ranking as to
capital junior to the Series 1 Shares; c.redeem or call for
redemption, purchase or otherwise pay off or retire for value or make any
return of capital in respect of less than all of the Series 1 Shares then
outstanding; or d.except pursuant to
any purchase obligation, sinking fund, retraction privilege or mandatory
redemption provisions attaching thereto, redeem or call for redemption,
purchase or otherwise pay off, retire or make any return of capital in respect
of any Class A Preference Shares, ranking as to the payment of dividends
or return of capital on a parity with the Series 1 Shares; unless, in each case under a. to d. above,
all accrued and unpaid dividends up to and including the dividend payable for
the last completed period for which dividends were payable on the Series 1
Shares and on all other shares of BRP Equity ranking prior to or on a parity
with the Series 1 Shares with respect to the payment of dividends have been
declared and paid or set apart for payment. Shareholder
Approvals In addition to any
other approvals required by law, the approval of all amendments to the rights,
privileges, restrictions and conditions attaching to the Series 1 Shares as a
series and any other approval to be given by the holders of the Series 1 Shares
may be given by a resolution carried by an affirmative vote of at least 66 2/3
% of the votes cast at a meeting at which the holders of a majority of the
outstanding Series 1 Shares are present or represented by proxy or, if no
quorum is present at such meeting, at an adjourned meeting at which the holders
of Series 1 Shares then present would form the necessary quorum. At any meeting
of holders of Series 1 Shares as a series, each such holder shall be entitled
to one vote in respect of each C$25.00 of issue price of the Series 1 Shares
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 Voting
Rights The holders of the
Series 1 Shares will not (except as otherwise provided by law and except for
meetings of the holders of Class A Preference Shares as a class and
meetings of all holders of Series 1 Shares as a series) be entitled to receive
notice of, attend, or vote at, any meeting of shareholders of BRP Equity unless
and until BRP Equity shall have failed to pay eight quarterly dividends on the
Series 1 Shares, whether or not consecutive. In the event of such non-payment,
and for only so long as any such dividends remain in arrears, the holders of
the Series 1 Shares will be entitled to receive notice of and to attend each
meeting of BRP Equity’s shareholders, other than meetings at which only holders
of another specified class or series are entitled to vote, and to one vote in
respect of each C$25.00 of issue price of the Series 1 Shares held by such
holder. Specific
Provisions of the Class A Preference Shares, Series 2 Dividends The holders of Series
2 Shares will be entitled to receive floating rate cumulative preferential cash
dividends, as and when declared by the board of directors of BRP Equity,
payable quarterly on the last day of January, April, July and October, in the
amount per share determined by multiplying the applicable floating quarterly
dividend rate by C$25.00. The floating quarterly dividend rate for each
applicable quarterly period will be calculated on the 30th day prior to the
first day of the period and will be equal to the sum of the average yield
expressed as a percentage per year on three-month Government of Canada Treasury
Bills, as reported by the Bank of Canada, for the most recent treasury bills
auction preceding the applicable calculation date, plus 2.62% calculated on the
basis of the actual number of days elapsed in the period divided by 365. Series 2 Guarantee The Series 2 Shares
are fully and unconditionally guaranteed by the Guarantors pursuant to
guarantee indentures among each of the Guarantors, BRP Equity and Computershare
Trust Company of Canada (the “Series 2 Guarantee”). See the description
of the Preference Share Guarantees under “— Preference Share Guarantees”. Redemption The Series 2 Shares
will not be redeemable by BRP Equity prior to April 30, 2015. Subject to
certain other restrictions set out under “— Restrictions on Dividends and
Retirement and Issue of Shares”, BRP Equity may, at its option, redeem all or
from time to time any part of the outstanding Series 2 Shares by payment in
cash of a per share sum equal to (i) C$25.00 in the case of redemptions on
April 30, 2020 and on April 30 every five years thereafter (each, a “Series
2 Shares Conversion Date”), or (ii) C$25.50 in the case of redemptions
on any date which is not a Series 2 Shares Conversion Date on or after
April 30, 2015, in each case together with all accrued and unpaid
dividends up to but excluding the date fixed for redemption (less any tax
required to be deducted and withheld by BRP Equity). For so long as the
Series 2 Guarantee remains in full force and effect, if, in contravention of
the Series 2 Guarantee, there is a liquidation, dissolution or winding-up of BREP
(whether voluntary or involuntary) or any other distribution of assets of BREP
to our securityholders for the purpose of winding-up BREP’s affairs, the Series
2 Shares shall be redeemed by BRP Equity by payment in cash of a per share sum
equal to C$25.00, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be
deducted and withheld by BRP Equity). Conversion of Series
2 Shares into Series 1 Shares Subject to applicable
law and the provisions of the Series 2 Shares, holders of the Series 2 Shares
will have the right, at their option, on each Series 2 Shares Conversion Date,
to convert all or any of their Series 2 Shares into Series 1 Shares on the
basis of one Series 1 Share for each Series 2 Share. Under certain
circumstances, the Series 2 Shares automatically convert into Series 1 Shares
on the basis of one Series 1 Share for each Series 2 Share. Purchase
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 Subject
to applicable law and to the provisions described under “— Restrictions on
Dividends and Retirement and Issue of Shares”, BRP Equity may at any time
purchase for cancellation the whole or any part of the Series 2 Shares at the lowest
price or prices at which in the opinion of the board of directors of BRP Equity
such shares are obtainable. Rights on Liquidation In the event of the
liquidation, dissolution or winding-up of BRP Equity or any other distribution
of assets of BRP Equity among its shareholders for the purpose of winding-up
its affairs, the holders of the Series 2 Shares will be entitled to receive
C$25.00 per share, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be
deducted and withheld by BRP Equity), before any amount is paid or any assets
of BRP Equity are distributed to the holders of any shares ranking junior as to
capital to the Series 2 Shares. The holders of the Series 2 Shares will not be
entitled to share in any further distribution of the assets of BRP Equity. The
payment of the amount to be paid to the holders of the Series 2 Shares upon
liquidation, dissolution and winding-up of BRP Equity is fully and
unconditionally guaranteed by the Guarantors. Priority The Series 2 Shares
rank senior to the Class B Preference Shares and the Common Shares of BRP
Equity with respect to priority in the payment of dividends and in the
distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity or in the event of any other distribution of assets of
BRP Equity among its shareholders for the purpose of winding-up its affairs.
The Series 2 Shares rank on a parity with every other series of Class A
Preference Shares with respect to priority in the payment of dividends and in
the distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity or in the event of any other distribution of assets of
BRP Equity among its shareholders for the purpose of winding-up its affairs. Restrictions on
Dividends and Retirement and Issue of Shares So long as any of the
Series 2 Shares are outstanding, BRP Equity will not, without the approval of
the holders of the Series 2 Shares: a.declare, pay or set apart
for payment any dividends (other than stock dividends payable in shares of BRP
Equity ranking as to capital and dividends junior to the Series 2 Shares) on
shares of BRP Equity ranking as to dividends junior to the Series 2 Shares; b.except out of the net
cash proceeds of a substantially concurrent issue of shares of BRP Equity
ranking as to return of capital and dividends junior to the Series 2 Shares,
redeem or call for redemption, purchase or otherwise pay off, retire or make
any return of capital in respect of any shares of BRP Equity ranking as to
capital junior to the Series 2 Shares; c.redeem or call for
redemption, purchase or otherwise pay off or retire for value or make any
return of capital in respect of less than all of the Series 2 Shares then
outstanding; or d.except pursuant to
any purchase obligation, sinking fund, retraction privilege or mandatory
redemption provisions attaching thereto, redeem or call for redemption,
purchase or otherwise pay off, retire or make any return of capital in respect
of any Class A Preference Shares, ranking as to the payment of dividends
or return of capital on a parity with the Series 2 Shares; unless, in each case under a. to d. above,
all accrued and unpaid dividends up to and including the dividend payable for
the last completed period for which dividends were payable on the Series 2
Shares and on all other shares of BRP Equity ranking prior to or on a parity
with the Series 2 Shares with respect to the payment of dividends have been
declared and paid or set apart for payment. Shareholder Approvals In addition to any
other approvals required by law, the approval of all amendments to the rights,
privileges, restrictions and conditions attaching to the Series 2 Shares as a
series and any other approval to be given by the holders of the Series 2 Shares
may be given by a resolution carried by an affirmative vote of at least 66 2/3
% of the votes cast at a meeting at which the holders of a majority of the
outstanding Series 2 Shares are present or represented by proxy or, if no
quorum is present at such meeting, at an adjourned meeting at which the holders
of Series 2 Shares then present would form the Page173


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 necessary
quorum. At any meeting of holders of Series 2 Shares as a series, each such
holder shall be entitled to one vote in respect of each C$25.00 of issue price
of the Series 2 Shares held by such holder. Voting
Rights The holders of the
Series 2 Shares will not (except as otherwise provided by law and except for
meetings of the holders of Class A Preference Shares as a class and
meetings of all holders of Series 2 Shares as a series) be entitled to receive
notice of, attend, or vote at, any meeting of shareholders of BRP Equity unless
and until BRP Equity shall have failed to pay eight quarterly dividends on the
Series 2 Shares, whether or not consecutive. In the event of such non-payment,
and for only so long as any such dividends remain in arrears, the holders of
the Series 2 Shares will be entitled to receive notice of and to attend each
meeting of BRP Equity’s shareholders, other than meetings at which only holders
of another specified class or series are entitled to vote, and to one vote in
respect of each C$25.00 of issue price of the Series 2 Shares held by such
holder. Specific
Provisions of the Class A Preference Shares, Series 3 Dividends The holders of Series
3 Shares are entitled to receive fixed cumulative preferential cash dividends,
as and when declared by the board of directors of BRP Equity, payable quarterly
on the last day of January, April, July and October in each year, at an annual
rate equal to C$1.10 per share until July 31, 2019. The annual fixed
dividend rate (the “Series 3 Shares Annual Fixed Dividend Rate”) for
each subsequent 5-year fixed rate period will be payable quarterly on the last
day of January, April, July and October in an amount equal to the sum of the
Government of Canada Yield on the 30th day prior to the first day of such
subsequent fixed rate period plus 2.94%. The annual fixed dividend for each
such period will be equal to the applicable Series 3 Shares Annual Fixed
Dividend Rate multiplied by C$25.00. Series
3 Guarantee The Series 3 Shares
are fully and unconditionally guaranteed by the Guarantors pursuant to
guarantee indentures among each of the Guarantors, BRP Equity and Computershare
Trust Company of Canada (the “Series 3 Guarantee”). See the description
of the Preference Share Guarantees under “— Preference Share Guarantees”. Redemption The Series 3 Shares
will not be redeemable by BRP Equity prior to July 31, 2019. On
July 31, 2019 and on July 31 every five years thereafter, and subject
to certain other restrictions set out under “— Restrictions on Dividends and
Retirement and Issue of Shares”), BRP Equity may, at its option, redeem all or
from time to time any part of the outstanding Series 3 Shares by payment in
cash of a per share sum equal to C$25.00, in each case together with all accrued
and unpaid dividends up to but excluding the date fixed for redemption (less
any tax required to be deducted and withheld by BRP Equity). For so long as the
Series 3 Guarantee remains in full force and effect, if, in contravention of
the Series 3 Guarantee, there is a liquidation, dissolution or winding-up of BREP
(whether voluntary or involuntary) or any other distribution of assets of BREP
to our securityholders for the purpose of winding-up BREP’s affairs, the Series
3 Shares shall be redeemed by BRP Equity by payment in cash of a per share sum
equal to C$25.00, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be
deducted and withheld by BRP Equity). Conversion
of Series 3 Shares into Series 4 Shares Subject to applicable
law and the provisions of the Series 3 Shares, holders of the Series 3 Shares
will have the right, at their option, on July 31, 2019 and on July 31
every five years thereafter, to convert all or any of their Series 3 Shares
into Series 4 Shares on the basis of one Series 4 Share for each Series 3
Share. Under certain circumstances, the Series 3 Shares automatically convert
into Series 4 Shares on the basis of one Series 4 Share for each Series 3
Share. Purchase
for Cancellation Subject to applicable
law and to the provisions described under “— Restrictions on Dividends and
Retirement and Issue of Shares”), BRP Equity may at any time purchase for
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 part of the Series 3
Shares at the lowest price or prices at which in the opinion of the board of
directors of BRP Equity such shares are obtainable. Rights
on Liquidation In the event of the
liquidation, dissolution or winding-up of BRP Equity or any other distribution
of assets of BRP Equity among its shareholders for the purpose of winding-up
its affairs, the holders of the Series 3 Shares will be entitled to receive
C$25.00 per share, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be
deducted and withheld by BRP Equity), before any amount is paid or any assets
of BRP Equity are distributed to the holders of any shares ranking junior as to
capital to the Series 3 Shares. The holders of the Series 3 Shares will not be
entitled to share in any further distribution of the assets of BRP Equity. The
payment of the amount to be paid to the holders of the Series 3 Shares upon
liquidation, dissolution and winding-up of BRP Equity is fully and
unconditionally guaranteed by the Guarantors. Priority The Series 3 Shares
rank senior to the Class B Preference Shares and the Common Shares of BRP
Equity with respect to priority in the payment of dividends and in the
distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity or in the event of any other distribution of assets of
BRP Equity among its shareholders for the purpose of winding-up its affairs.
The Series 3 Shares rank on a parity with every other series of Class A
Preference Shares with respect to priority in the payment of dividends and in
the distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity or in the event of any other distribution of assets of
BRP Equity among its shareholders for the purpose of winding-up its affairs. Restrictions
on Dividends and Retirement and Issue of Shares So long as any of the
Series 3 Shares are outstanding, BRP Equity will not, without the approval of
the holders of the Series 3 Shares: ·declare,
pay or set apart for payment any dividends (other than stock dividends payable
in shares of BRP Equity ranking as to capital and dividends junior to the
Series 3 Shares) on shares of BRP Equity ranking as to dividends junior to the
Series 3 Shares; ·except
out of the net cash proceeds of a substantially concurrent issue of shares of
BRP Equity ranking as to return of capital and dividends junior to the Series 3
Shares, redeem or call for redemption, purchase or otherwise pay off, retire or
make any return of capital in respect of any shares of BRP Equity ranking as to
capital junior to the Series 3 Shares; ·redeem
or call for redemption, purchase or otherwise pay off or retire for value or
make any return of capital in respect of less than all of the Series 3 Shares
then outstanding; or ·except
pursuant to any purchase obligation, sinking fund, retraction privilege or
mandatory redemption provisions attaching thereto, redeem or call for
redemption, purchase or otherwise pay off, retire or make any return of capital
in respect of any Class A Preference Shares, ranking as to the payment of
dividends or return of capital on a parity with the Series 3 Shares; unless, in each case under a. to d. above,
all accrued and unpaid dividends up to and including the dividend payable for
the last completed period for which dividends were payable on the Series 3
Shares and on all other shares of BRP Equity ranking prior to or on a parity
with the Series 3 Shares with respect to the payment of dividends have been
declared and paid or set apart for payment. Shareholder
Approvals In addition to any
other approvals required by law, the approval of all amendments to the rights,
privileges, restrictions and conditions attaching to the Series 3 Shares as a
series and any other approval to be given by the holders of the Series 3 Shares
may be given by a resolution carried by an affirmative vote of at least 66 2/3
% of the votes cast at a meeting at which the holders of a majority of the
outstanding Series 3 Shares are present or represented by proxy or, if no
quorum is present at such meeting, at an adjourned meeting at which the holders
of Series 3 Shares then present would form the Page175


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 necessary
quorum. At any meeting of holders of Series 3 Shares as a series, each such
holder shall be entitled to one vote in respect of each C$25.00 of issue price
of the Series 3 Shares held by such holder. Voting
Rights The holders of the
Series 3 Shares will not (except as otherwise provided by law and except for
meetings of the holders of Class A Preference Shares as a class and
meetings of all holders of Series 3 Shares as a series) be entitled to receive
notice of, attend, or vote at, any meeting of shareholders of BRP Equity unless
and until BRP Equity shall have failed to pay eight quarterly dividends on the
Series 3 Shares, whether or not consecutive. In the event of such non-payment,
and for only so long as any such dividends remain in arrears, the holders of
the Series 3 Shares will be entitled to receive notice of and to attend each
meeting of BRP Equity’s shareholders, other than meetings at which only holders
of another specified class or series are entitled to vote, and to one vote in
respect of each C$25.00 of issue price of the Series 3 Shares held by such
holder. Specific
Provisions of the Class A Preference Shares, Series 4 Dividends The holders of Series
4 Shares will be entitled to receive floating rate cumulative preferential cash
dividends, as and when declared by the board of directors of BRP Equity,
payable quarterly on the last day of January, April, July and October, in the
amount per share determined by multiplying the applicable floating quarterly
dividend rate by C$25.00. The floating quarterly dividend rate for each
applicable quarterly period will be calculated on the 30th day prior to the first
day of the period and will be equal to the sum of the average yield expressed
as a percentage per year on three-month Government of Canada Treasury Bills, as
reported by the Bank of Canada, for the most recent treasury bills auction
preceding the applicable calculation date, plus 2.94% calculated on the basis
of the actual number of days elapsed in the period divided by 365. Series 4 Guarantee The Series 4 Shares
are fully and unconditionally guaranteed by the Guarantors pursuant to
guarantee indentures among each of the Guarantors, BRP Equity and Computershare
Trust Company of Canada (the “Series 4 Guarantee”). See the description
of the Preference Share Guarantees under “— Preference Share Guarantees”. Redemption The Series 4 Shares
will not be redeemable by BRP Equity prior to July 31, 2019. Subject to certain
other restrictions set out under “— Restrictions on Dividends and Retirement
and Issue of Shares”, BRP Equity may, at its option, redeem all or from time to
time any part of the outstanding Series 4 Shares by payment in cash of a per
share sum equal to (i) C$25.00 in the case of redemptions on July 31, 2024
and on July 31 every five years thereafter (each, a “Series 4 Shares
Conversion Date”), or (ii) C$25.50 in the case of redemptions on any
date which is not a Series 4 Shares Conversion Date on or after July 31, 2019,
in each case together with all accrued and unpaid dividends up to but excluding
the date fixed for redemption (less any tax required to be deducted and
withheld by BRP Equity). For so long as the
Series 4 Guarantee remains in full force and effect, if, in contravention of
the Series 4 Guarantee, there is a liquidation, dissolution or winding-up of BREP
(whether voluntary or involuntary) or any other distribution of assets of BREP
to our securityholders for the purpose of winding-up BREP’s affairs, the Series
4 Shares shall be redeemed by BRP Equity by payment in cash of a per share sum
equal to C$25.00, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be
deducted and withheld by BRP Equity). Conversion of Series
4 Shares into Series 3 Shares Subject to applicable
law and the provisions of the Series 4 Shares, holders of the Series 4 Shares
will have the right, at their option, on each Series 4 Shares Conversion Date,
to convert all or any of their Series 4 Shares into Series 3 Shares on the
basis of one Series 3 Share for each Series 4 Share. Under certain
circumstances, the Series 4 Shares automatically convert into Series 3 Shares
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 Purchase
for Cancellation Subject to applicable
law and to the provisions described under “— Restrictions on Dividends and
Retirement and Issue of Shares”, BRP Equity may at any time purchase for
cancellation the whole or any part of the Series 4 Shares at the lowest price
or prices at which in the opinion of the board of directors of BRP Equity such
shares are obtainable. Rights on Liquidation In the event of the liquidation,
dissolution or winding-up of BRP Equity or any other distribution of assets of
BRP Equity among its shareholders for the purpose of winding-up its affairs,
the holders of the Series 4 Shares will be entitled to receive C$25.00 per
share, together with all accrued and unpaid dividends up to but excluding the
date of payment or distribution (less any tax required to be deducted and
withheld by BRP Equity), before any amount is paid or any assets of BRP Equity
are distributed to the holders of any shares ranking junior as to capital to
the Series 4 Shares. The holders of the Series 4 Shares will not be entitled to
share in any further distribution of the assets of BRP Equity. The payment of
the amount to be paid to the holders of the Series 4 Shares upon liquidation,
dissolution and winding-up of BRP Equity is fully and unconditionally
guaranteed by the Guarantors. Priority The Series 4 Shares
rank senior to the Class B Preference Shares and the Common Shares of BRP
Equity with respect to priority in the payment of dividends and in the
distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity or in the event of any other distribution of assets of
BRP Equity among its shareholders for the purpose of winding-up its affairs.
The Series 4 Shares rank on a parity with every other series of Class A
Preference Shares with respect to priority in the payment of dividends and in
the distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity or in the event of any other distribution of assets of
BRP Equity among its shareholders for the purpose of winding-up its affairs. Restrictions on
Dividends and Retirement and Issue of Shares So long as any of the
Series 4 Shares are outstanding, BRP Equity will not, without the approval of
the holders of the Series 4 Shares: a.declare, pay or set
apart for payment any dividends (other than stock dividends payable in shares
of BRP Equity ranking as to capital and dividends junior to the Series 4
Shares) on shares of BRP Equity ranking as to dividends junior to the
Series 4 Shares; b.except out of the net
cash proceeds of a substantially concurrent issue of shares of BRP Equity
ranking as to return of capital and dividends junior to the Series 4 Shares,
redeem or call for redemption, purchase or otherwise pay off, retire or make
any return of capital in respect of any shares of BRP Equity ranking as to
capital junior to the Series 4 Shares; c.redeem or call for
redemption, purchase or otherwise pay off or retire for value or make any
return of capital in respect of less than all of the Series 4 Shares then
outstanding; or d.except pursuant to
any purchase obligation, sinking fund, retraction privilege or mandatory
redemption provisions attaching thereto, redeem or call for redemption,
purchase or otherwise pay off, retire or make any return of capital in respect
of any Class A Preference Shares, ranking as to the payment of dividends
or return of capital on a parity with the Series 4 Shares; unless, in each case under a. to d. above,
all accrued and unpaid dividends up to and including the dividend payable for
the last completed period for which dividends were payable on the Series 4
Shares and on all other shares of BRP Equity ranking prior to or on a parity
with the Series 4 Shares with respect to the payment of dividends have been
declared and paid or set apart for payment. Shareholder Approvals In addition to any
other approvals required by law, the approval of all amendments to the rights,
privileges, restrictions and conditions attaching to the Series 4 Shares as a
series and any other approval to be given by the holders of the Series 4 Shares
may be given by a resolution carried by an affirmative vote of at least 66 2/3
% of the votes cast at a meeting at which the holders of a majority of the Page177


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 outstanding Series 4 Shares are present or represented
by proxy or, if no quorum is present at such meeting, at an adjourned meeting
at which the holders of Series 4 Shares then present would form the necessary
quorum. At any meeting of holders of Series 4 Shares as a series, each such
holder shall be entitled to one vote in respect of each C$25.00 of issue price
of the Series 4 Shares held by such holder. Voting Rights The holders of the
Series 4 Shares will not (except as otherwise provided by law and except for
meetings of the holders of Class A Preference Shares as a class and
meetings of all holders of Series 4 Shares as a series) be entitled to receive
notice of, attend, or vote at, any meeting of shareholders of BRP Equity unless
and until BRP Equity shall have failed to pay eight quarterly dividends on the
Series 4 Shares, whether or not consecutive. In the event of such non-payment,
and for only so long as any such dividends remain in arrears, the holders of
the Series 4 Shares will be entitled to receive notice of and to attend each
meeting of BRP Equity’s shareholders, other than meetings at which only holders
of another specified class or series are entitled to vote, and to one vote in
respect of each C$25.00 of issue price of the Series 4 Shares held by such
holder. Specific
Provisions of the Class A Preference Shares, Series 5 Dividends The holders of Series
5 Shares are entitled to receive fixed cumulative preferential cash dividends,
as and when declared by the board of directors of BRP Equity, payable quarterly
on the last day of January, April, July and October in each year, at an annual
rate equal to C$1.25 per share. Series 5 Guarantee The Series 5 Shares
are fully and unconditionally guaranteed by the Guarantors pursuant to a
guarantee indenture among each of the Guarantors, BRP Equity and Computershare
Trust Company of Canada (the “Series 5 Guarantee”). See the description
of the Preference Share Guarantees under “— Preference Share Guarantees”. Redemption The Series 5 Shares
will not be redeemable by BRP Equity prior to April 30, 2018. On and after
April 30, 2018, BRP Equity may, at its option upon not less than 30 days and
not more than 60 days prior notice, redeem for cash the Series 5 Shares, in
whole at any time or in part from time to time, at C$26.00 per share if
redeemed before April 30, 2019, C$25.75 per share if redeemed on or after April
30, 2019 but before April 30, 2020, C$25.50 per share if redeemed on or after
April 30, 2020 but before April 30, 2021, C$25.25 per share if redeemed on or
after April 30, 2021 but before April 30, 2022, and C$25.00 per share if
redeemed on or after April 30, 2022, in each case together with all accrued and
unpaid dividends up to but excluding the date fixed for redemption (less any
tax required to be deducted and withheld by BRP Equity). For so long as the
Series 5 Guarantee remains in full force and effect, if, in contravention of
the Series 5 Guarantee, there is a liquidation, dissolution or winding-up of BREP
(whether voluntary or involuntary) or any other distribution of assets of BREP
to our securityholders for the purpose of winding-up BREP’s affairs, the Series
5 Shares shall be redeemed by BRP Equity by payment in cash of a per share sum
equal to C$25.00, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be
deducted and withheld by BRP Equity). Purchase for
Cancellation Subject to applicable
law and to the provisions described under “— Restrictions on Dividends and
Retirement and Issue of Shares”, BRP Equity may at any time purchase for
cancellation the whole or any part of the Series 5 Shares at the lowest price
or prices at which in the opinion of the board of directors of BRP Equity such
shares are obtainable. Rights on Liquidation In the event of the
liquidation, dissolution or winding-up of BRP Equity or any other distribution
of assets of BRP Equity among its shareholders for the purpose of winding-up
its affairs, the holders of the Series 5 Shares will be entitled to receive
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 dividends
up to but excluding the date of payment or distribution (less any tax required
to be deducted and withheld by BRP Equity), before any amount is paid or any
assets of BRP Equity are distributed to the holders of any shares ranking
junior as to capital to the Series 5 Shares. Upon payment of such amounts, the
holders of the Series 5 Shares will not be entitled to share in any further
distribution of the assets of BRP Equity. Priority The Series 5 Shares
rank senior to the Class B Preference Shares, the Common Shares and all other
shares of BRP Equity ranking junior to the Class A Preference Shares with
respect to priority in the payment of dividends and in the distribution of
assets in the event of the liquidation, dissolution or winding-up of BRP
Equity, whether voluntary or involuntary or in the event of any other
distribution of assets of BRP Equity among its shareholders for the purpose of
winding-up its affairs. The Series 5 Shares rank on a parity with every other
series of Class A Preference Shares with respect to priority in the
payment of dividends and in the distribution of assets in the event of the
liquidation, dissolution or winding-up of BRP Equity, whether voluntarily or
involuntarily, or in the event of any other distribution of assets of BRP
Equity among its shareholders for the purpose of winding-up its affairs. Restrictions on
Dividends and Retirement and Issue of Shares So long as any of the
Series 5 Shares are outstanding, BRP Equity will not, without the approval of
the holders of the Series 5 Shares: a.declare, pay or set
apart for payment any dividends (other than stock dividends payable in shares
of BRP Equity ranking as to capital and dividends junior to the Series 5
Shares) on shares of BRP Equity ranking as to dividends junior to the
Series 5 Shares; b.except out of the net
cash proceeds of a substantially concurrent issue of shares of BRP Equity
ranking as to return of capital and dividends junior to the Series 5 Shares,
redeem or call for redemption, purchase or otherwise pay off, retire or make
any return of capital in respect of any shares of BRP Equity ranking as to
capital junior to the Series 5 Shares; c.redeem or call for redemption,
purchase or otherwise pay off or retire for value or make any return of capital
in respect of less than all of the Series 5 Shares then outstanding; or d.except pursuant to
any purchase obligation, sinking fund, retraction privilege or mandatory redemption
provisions attaching thereto, redeem or call for redemption, purchase or
otherwise pay off, retire or make any return of capital in respect of any
Class A Preference Shares, ranking as to the payment of dividends or
return of capital on a parity with the Series 5 Shares; unless, in each case under a. to d. above,
all accrued and unpaid dividends up to and including the dividend payable for
the last completed period for which dividends were payable on the Series 5
Shares and on all other shares of BRP Equity ranking prior to or on a parity
with the Series 5 Shares with respect to the payment of dividends have been
declared and paid or set apart for payment. Shareholder Approvals In addition to any
other approvals required by law, the approval of all amendments to the rights,
privileges, restrictions and conditions attaching to the Series 5 Shares as a
series and any other approval to be given by the holders of the Series 5 Shares
may be given by a resolution carried by an affirmative vote of at least 66 2/3
% of the votes cast at a meeting at which the holders of at least 25% of the
outstanding Series 5 Shares are present or represented by proxy or, if no
quorum is present at such meeting, at an adjourned meeting at which the holders
of Series 5 Shares then present would form the necessary quorum. At any meeting
of holders of Series 5 Shares as a series, each such holder shall be entitled
to one vote in respect of each Series 5 Share held. Voting Rights The holders of the
Series 5 Shares will not (except as otherwise provided by law and except for
meetings of the holders of Class A Preference Shares as a class and
meetings of all holders of Series 5 Shares as a series) be entitled to receive
notice of, attend, or vote at, any meeting of shareholders of BRP Equity unless
and until BRP Equity shall have failed to pay eight quarterly dividends on the
Series 5 Shares, whether or not consecutive and whether or not such dividends
have been declared and whether Page179


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 or not there are any
monies of BRP Equity properly applicable to the payment of dividends. In the
event of such non-payment, and for only so long as any such dividends remain in
arrears, the holders of the Series 5 Shares will be entitled to receive notice
of and to attend each meeting of BRP Equity’s shareholders, other than meetings
at which only holders of another specified class or series are entitled to
vote, and to one vote in respect of each C$25.00 of issue price of the Series 5
Shares held by such holder. Specific
Provisions of the Class A Preference Shares, Series 6 Dividends The holders of Series
6 Shares are entitled to receive fixed cumulative preferential cash dividends,
as and when declared by the board of directors of BRP Equity, payable quarterly
on the last day of January, April, July and October in each year, at an annual
rate equal to C$1.25 per share. Series 6 Guarantee The Series 6 Shares
are fully and unconditionally guaranteed by the Guarantors pursuant to a
guarantee indenture among each of the Guarantors, BRP Equity and Computershare
Trust Company of Canada (the “Series 6 Guarantee” and collectively with
the Series 1 Guarantee, the Series 2 Guarantee, the Series 3 Guarantee, the
Series 4 Guarantee and the Series 5 Guarantee, the “Preference Share
Guarantees” ). See the description of the Preference Share Guarantees under
“— Preference Share Guarantees”. Redemption The Series 6 Shares
will not be redeemable by BRP Equity prior to July 31, 2018. On and after
July 31, 2018, BRP Equity may, at its option upon not less than 30 days
and not more than 60 days prior notice, redeem for cash the Series 6 Shares, in
whole at any time or in part from time to time, at C$26.00 per share if
redeemed before July 31, 2019, C$25.75 per share if redeemed on or after
July 31, 2019 but before July 31, 2020, C$25.50 per share if redeemed
on or after July 31, 2020 but before July 31, 2021, C$25.25 per share
if redeemed on or after July 31, 2021 but before July 31, 2022, and
C$25.00 per share if redeemed on or after July 31, 2022, in each case
together with all accrued and unpaid dividends up to but excluding the date
fixed for redemption (less any tax required to be deducted and withheld by BRP
Equity). For so long as the
Series 6 Guarantee remains in full force and effect, if, in contravention of
the Series 6 Guarantee, there is a liquidation, dissolution or winding-up of BREP
(whether voluntary or involuntary) or any other distribution of assets of BREP
to our securityholders for the purpose of winding-up BREP’s affairs, the Series
6 Shares shall be redeemed by BRP Equity by payment in cash of a per share sum
equal to C$25.00, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be
deducted and withheld by BRP Equity). Purchase for
Cancellation Subject to applicable
law and to the provisions described under “— Restrictions on Dividends and
Retirement and Issue of Shares”, BRP Equity may at any time purchase for
cancellation the whole or any part of the Series 6 Shares at the lowest price
or prices at which in the opinion of the board of directors of BRP Equity such
shares are obtainable. Rights on Liquidation In the event of the
liquidation, dissolution or winding-up of BRP Equity or any other distribution
of assets of BRP Equity among its shareholders for the purpose of winding-up
its affairs, the holders of the Series 6 Shares will be entitled to receive
C$25.00 per share, together with all accrued and unpaid dividends up to but
excluding the date of payment or distribution (less any tax required to be deducted
and withheld by BRP Equity), before any amount is paid or any assets of BRP
Equity are distributed to the holders of any shares ranking junior as to
capital to the Series 6 Shares. Upon payment of such amounts, the holders of
the Series 6 Shares will not be entitled to share in any further distribution
of the assets of BRP Equity. Priority Page180


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 The
Series 6 Shares rank senior to the Class B Preference Shares, the Common Shares
and all other shares of BRP Equity ranking junior to the Class A Preference
Shares with respect to priority in the payment of dividends and in the
distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity, whether voluntary or involuntary or in the event of
any other distribution of assets of BRP Equity among its shareholders for the
purpose of winding-up its affairs. The Series 6 Shares rank on a parity with
every other series of Class A Preference Shares with respect to priority
in the payment of dividends and in the distribution of assets in the event of
the liquidation, dissolution or winding-up of BRP Equity, whether voluntarily
or involuntarily, or in the event of any other distribution of assets of BRP
Equity among its shareholders for the purpose of winding-up its affairs. Restrictions on Dividends
and Retirement and Issue of Shares So long as any of the
Series 6 Shares are outstanding, BRP Equity will not, without the approval of
the holders of the Series 6 Shares: a.declare, pay or set
apart for payment any dividends (other than stock dividends payable in shares
of BRP Equity ranking as to capital and dividends junior to the Series 6
Shares) on shares of BRP Equity ranking as to dividends junior to the
Series 6 Shares; b.except out of the net
cash proceeds of a substantially concurrent issue of shares of BRP Equity
ranking as to return of capital and dividends junior to the Series 6 Shares,
redeem or call for redemption, purchase or otherwise pay off, retire or make
any return of capital in respect of any shares of BRP Equity ranking as to capital
junior to the Series 6 Shares; c.redeem or call for
redemption, purchase or otherwise pay off or retire for value or make any
return of capital in respect of less than all of the Series 6 Shares then
outstanding; or d.except pursuant to
any purchase obligation, sinking fund, retraction privilege or mandatory
redemption provisions attaching thereto, redeem or call for redemption,
purchase or otherwise pay off, retire or make any return of capital in respect
of any Class A Preference Shares, ranking as to the payment of dividends
or return of capital on a parity with the Series 6 Shares; unless, in each case under a. to d. above,
all accrued and unpaid dividends up to and including the dividend payable for
the last completed period for which dividends were payable on the Series 6
Shares and on all other shares of BRP Equity ranking prior to or on a parity
with the Series 6 Shares with respect to the payment of dividends have been
declared and paid or set apart for payment. Shareholder Approvals In addition to any
other approvals required by law, the approval of all amendments to the rights,
privileges, restrictions and conditions attaching to the Series 6 Shares as a
series and any other approval to be given by the holders of the Series 6 Shares
may be given by a resolution carried by an affirmative vote of at least 66 2/3
% of the votes cast at a meeting at which the holders of at least 25% of the
outstanding Series 6 Shares are present or represented by proxy or, if no
quorum is present at such meeting, at an adjourned meeting at which the holders
of Series 6 Shares then present would form the necessary quorum. At any meeting
of holders of Series 6 Shares as a series, each such holder shall be entitled
to one vote in respect of each Series 6 Share held. Voting Rights The holders of the
Series 6 Shares will not (except as otherwise provided by law and except for
meetings of the holders of Class A Preference Shares as a class and
meetings of all holders of Series 6 Shares as a series) be entitled to receive
notice of, attend, or vote at, any meeting of shareholders of BRP Equity unless
and until BRP Equity shall have failed to pay eight quarterly dividends on the
Series 6 Shares, whether or not consecutive and whether or not such dividends
have been declared and whether or not there are any monies of BRP Equity
properly applicable to the payment of dividends. In the event of such
non-payment, and for only so long as any such dividends remain in arrears, the
holders of the Series 6 Shares will be entitled to receive notice of and to
attend each meeting of BRP Equity’s shareholders, other than meetings at which
only holders of another specified class or series are entitled to vote, and to
one vote in respect of each C$25.00 of issue price of the Series 6 Shares held
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 Class B Preference Shares Issuance
in Series The board of
directors of BRP Equity may from time to time issue Class B Preference Shares
in one or more series, each series to consist of such number of shares as will
before issuance thereof be fixed by the directors who will at the same time
determine the designation, rights, privileges, restrictions and conditions
attaching to that series of Class B Preference Shares. Priority The Class B
Preference Shares rank junior to the Class A Preference Shares and senior
to the Common Shares and all other shares ranking junior to the Class B
Preference Shares with respect to priority in payment of dividends and in the
distribution of assets in the event of the liquidation, dissolution or
winding-up of BRP Equity. Pursuant to the CBCA, each series of Class B
Preference Shares participates rateably with every other series of Class B
Preference Shares in respect of accumulated dividends and return of capital. Voting Subject to applicable
corporate law or unless provision is made in the articles relating to any
series of Class B Preference Shares, the holders of the Class B Preference
Shares or of a series thereof are not entitled as holders of that class or
series to receive notice of, to attend or to vote at any meeting of the
shareholders of BRP Equity. Approval The approval of the
holders of the Class B Preference Shares of any matters to be approved by a
separate vote of the holders of the Class B Preference Shares may be given by
special resolution in accordance with the share conditions for the Class B
Preference Shares. Each holder of Class B Preference Shares entitled to vote at
a class meeting of holders of Class B Preference Shares, or at a joint meeting
of the holders of two or more series of Class B Preference Shares, has one vote
in respect of each C$25.00 of the issue price of each Class B Preference Share
held by such holder. Preference
Share Guarantees The
Preference Share Guarantees provide that the Series 1 Shares, Series 2 Shares,
Series 3 Shares, Series 4 Shares, Series 5 Shares and Series 6 Shares will be
fully and unconditionally guaranteed by BREP and the other Guarantors as to
(i) payment of dividends, as and when declared, (ii) payment of
amounts due on redemption of the Series 1 Shares, Series 2 Shares, Series 3
Shares, Series 4 Shares, Series 5 Shares and Series 6 Shares, and
(iii) payment of amounts due on the liquidation, dissolution or winding up
of BRP Equity. As long as the declaration or payments of dividends on the Series
1 Shares, Series 2 Shares, Series 3 Shares, Series 4 Shares, Series 5 Shares
and Series 6 Shares are in arrears, BREP will not make any distributions on our
LP Units nor will any other Guarantor make any distributions or pay any
dividends on equity securities of such Guarantor. The Preference Share
Guarantees by the Guarantors will be subordinated to all of their respective
senior and subordinated debt and will rank senior to the LP Units. The
Preference Share Guarantees will rank on a pro rata and pari passu basis with
each other. The rights, obligations and liabilities of a Guarantor pursuant to
the Preference Share Guarantees will terminate upon the conveyance,
distribution, transfer or lease of all or substantially all of its properties,
securities and assets to another Guarantor. A Guarantor may not otherwise
convey, distribute, transfer or lease all or substantially all of its
properties, securities and assets to another person, unless the person which
acquires the properties, securities and assets of such Guarantor assumes such
Guarantor’s obligations under the Preference Share Guarantees. Finco Finco is an indirect
wholly-owned subsidiary of BREP incorporated under the ABCA on
September 14, 2011. Other than approximately C$1.5 billion aggregate principal
amount of publicly-issued Finco Bonds and notes receivable from an indirect
wholly-owned subsidiary of BREP. Finco has no significant assets or
liabilities, no subsidiaries and no operations of its own. Page182


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 Pursuant to
Finco’s articles of incorporation, Finco is authorized to issue an unlimited
number of common shares. As of the date of this Form 20-F, one common share
held indirectly by BREP was issued and outstanding. Holders of common shares
are entitled to one vote for each such share held on all votes taken at
meetings of the shareholders of Finco, except meetings at which only the
holders of a specified class or series of shares of Finco are entitled to vote.
Subject to the rights of holders of any shares of Finco ranking prior to the
common shares, the holders of common shares are entitled to dividends as may be
declared from time to time by the board of directors of Finco. Holders of
common shares may make use of various shareholder remedies available pursuant
to the ABCA. The Finco Bonds are
governed under the Bond Indenture and guaranteed by BREP and the other
Guarantors as described under “— Bond Indenture and Guarantees”. The Finco
Bonds consist of the following fixed rate medium term notes: Principal Amount asat
  December 31,2014Medium-term notes
 
 Maturity
 
 Interest Rate
 
 (in
  millions)Series 3 (C$200 million)
 
 2018
 
 5.25%
 
 C$200 millionSeries 4 (C$150 million)
 
 2036
 
 5.84%
 
 C$150 millionSeries 6 (C$300 million)
 
 2016
 
 6.13%
 
 C$300 millionSeries 7 (C$450 million)
 
 2020
 
 5.14%
 
 C$450 millionSeries 8 (C$400 million)
 
 2022
 
 4.79%
 
 C$400 million
 Bond Indenture and Guarantees The Bond
Indenture provides for the issuance of one or more series of unsecured
debentures or notes of Finco, a wholly-owned subsidiary of BREP, by way of
supplemental indentures. The Bond Indenture amends and restates the trust
indenture dated as of December 16, 2004, as amended, supplemented or
restated, between Brookfield, Bank of New York Mellon and BNY Trust Company of
Canada (the “Original Bond Indenture”). Finco then assumed Brookfield’s
obligations in respect of the Series 3, Series 4, Series 6 and Series 7 notes
issued under supplemental indentures to the Original Bond Indenture. The
Amended and Restated Second Supplemental Indenture to the Original Bond
Indenture, dated October 27, 2006, provides for the issue of C$200 million
aggregate principal amount of Series 3 medium term notes and C$150 million
aggregate principal amount of Series 4 medium term notes. The Amended and
Restated Fourth Supplemental Indenture to the Original Bond Indenture, dated
November 27, 2009, provides for the issue of C$300 million aggregate principal
amount of Series 6 notes. The Fifth Supplemental Indenture to the Original Bond
Indenture, dated November 27, 2009, provides for the issue of C$450
million aggregate principal amount of Series 7 notes. The Seventh Supplemental
Indenture dated February 7, 2012, provides for the issue of C$400 million
aggregate principal amount of the Series 8 Notes. The Finco Bonds are
unconditionally guaranteed by BREP and the other Guarantors as to payment of
the principal of, premium, if any, and interest on all debentures issued by
Finco under the Bond Indenture from time to time and all other obligations and
liabilities owing by Finco to the trustee under the Bond Indenture. Pursuant to
the guarantees, each of the Guarantors has agreed to not enter into any
transaction whereby all or substantially all of the undertaking, property and
assets of the Guarantor would become the property of any other person unless
the other person assumed the obligations of the Guarantor under the guarantee
and certain other conditions are met or unless the transaction is between or
among any one or more of Finco, the Guarantor, another Guarantor and/or any
subsidiary of any of them. The rights, obligations and liabilities of a
Guarantor will terminate in the event that it transfers all or substantially
all of its assets to another Guarantor. 10.C            MATERIAL
CONTRACTS The following are the
only material contracts, other than contracts entered into in the ordinary
course of business, to which we have been a party within the past two years: Page183


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 ·Guarantee
Indenture, dated January 29, 2013, by and among the Guarantors, Brookfield
Renewable Power Preferred Equity Inc., and Computershare Trust Company of
Canada (Class A Preference Shares, Series 5) (see Item 10.B “Memorandum and
Articles of Association – BRP Equity – Preference Share Guarantees”); ·Guarantee
Indenture, dated May 1, 2013, by and among the Guarantors, Brookfield
Renewable Power Preferred Equity Inc., and Computershare Trust Company of
Canada (Class A Preference Shares, Series 6) (see Item 10.B
“Memorandum and Articles of Association – BRP Equity – Preference Share
Guarantees”); ·Guarantee
by Euro Holdco, dated October 7, 2014, in favour of and BNY Trust Company of
Canada (see Item 10.B “Memorandum and Articles of Association – Finco – Bond
Indenture and Guarantees”); ·Guarantee
by Investco, dated February 26, 2015 in favour of and BNY Trust Company of
Canada (see Item 10.B “Memorandum and Articles of Association – Finco – Bond
Indenture and Guarantees”); and ·Second
Amended and Restated Master Services Agreement, dated February 26, 2015, by and
among Brookfield Asset Management Inc., Brookfield Renewable Energy Partners
L.P., Brookfield Renewable Energy L.P., and others (see Item 6.A “Directors and
Senior Management – Our Master Services Agreement”). Copies of the
agreements noted above will be made available, free of charge, by the Managing
General Partner and are available electronically on the website of the SEC at
www.sec.gov and on our SEDAR profile at www.sedar.com. Written requests for
such documents should be directed to our Corporate Secretary at 73 Front
Street, 5 th Floor, Hamilton, HM 12, Bermuda, +1.441.295.1443. 10.D            EXCHANGE CONTROLS There are
currently no governmental laws, decrees, regulations or other legislation of
Bermuda or the United States which restrict the import or export of capital,
including the availability of cash and cash equivalents for use by BREP and its
subsidiaries, or the remittance of distributions, interest or other payments to
non-residents of Bermuda or the United States holding our LP Units. 10.E            TAXATION The following summary
discusses the material United States, Canadian and Bermudian tax considerations
related to the holding and disposition of our LP Units as of the date of this
Form 20-F. Holders of our LP Units are advised to consult their own tax advisers
concerning the consequences under the tax laws of the country of which they are
resident or in which they are otherwise subject to tax of making an investment
in our LP Units. Material U.S. Federal
Income Tax Considerations This summary
discusses the material United States federal income tax considerations for LP
Unitholders relating to the ownership and disposition of LP Units as of the
date hereof. This summary is based on provisions of the U.S. Internal Revenue
Code on the regulations promulgated under the U.S. Internal Revenue Code, and
on published administrative rulings, judicial decisions, and other applicable
authorities, all as in effect on the date hereof and all of which are subject
to change at any time, possibly with retroactive effect. This summary is
necessarily general and may not apply to all categories of investors, some of
whom may be subject to special rules, including, without limitation, persons
that own (directly or indirectly, applying certain attribution rules) 5% or
more of our LP Units, dealers in securities or currencies, financial
institutions or financial services entities, mutual funds, life insurance
companies, persons that hold LP Units as part of a straddle, hedge,
constructive sale or conversion transaction with other investments, persons
whose LP Units are loaned to a short seller to cover a short sale of LP Units,
persons whose functional currency is not the U.S. dollar, persons who have
elected mark-to-market accounting, persons who hold LP Units through a
partnership or other entity treated as a pass-through entity for U.S. federal
income tax purposes, persons for whom LP Units are not a capital asset, persons
who are liable for the alternative minimum tax and certain U.S. expatriates or
former long-term residents of the United States. Tax-exempt organizations are
addressed separately below. The actual tax Page184


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 consequences
of the ownership and disposition of LP Units will vary depending on an LP
Unitholder’s individual circumstances. For purposes of this
discussion, a “U.S. Holder” is a beneficial owner of LP Units who is for
U.S. federal tax purposes: (i) an individual citizen or resident of the United
States; (ii) a corporation (or other entity treated as a corporation for U.S.
federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia; (iii) an estate
the income of which is subject to U.S. federal income taxation regardless of
its source; or (iv) a trust (a) the primary supervision of which is subject to
a court within the United States and all substantial decisions of which one or
more U.S. persons have the authority to control or (b) that has a valid
election in effect under applicable Treasury Regulations to be treated as a
U.S. person. A “Non-U.S. Holder”
is a beneficial owner of LP Units, other than a U.S. Holder or an entity
classified as a partnership or other fiscally transparent entity for U.S.
federal tax purposes. If a partnership holds LP Units, the tax
treatment of a partner of such partnership generally will depend upon the
status of the partner and the activities of the partnership. Partners of
partnerships that hold LP Units should consult an independent tax adviser. This discussion does
not constitute tax advice and is not intended to be a substitute for tax
planning. Each LP Unitholder should consult an independent tax adviser
concerning the U.S. federal, state and local income tax consequences particular
to the ownership and disposition of LP Units, as well as any tax consequences
under the laws of any other taxing jurisdiction. Partnership Status of BREP and BRELP Each of BREP and
BRELP has made a protective election to be classified as a partnership for U.S.
federal tax purposes. An entity that is treated as a partnership for U.S.
federal tax purposes incurs no U.S. federal income tax liability. Instead, each
partner is required to take into account its allocable share of items of
income, gain, loss, deduction, or credit of the partnership in computing its
U.S. federal income tax liability, regardless of whether cash distributions are
made. Distributions of cash by a partnership to a partner generally are not
taxable unless the amount of cash distributed to a partner is in excess of the
partner’s adjusted basis in its partnership interest. An entity that would
otherwise be classified as a partnership for U.S. federal income tax purposes
may nonetheless be taxable as a corporation if it is a “publicly traded
partnership”, unless an exception applies. BREP will be publicly traded.
However, an exception, referred to as the “Qualifying Income Exception”,
exists with respect to a publicly traded partnership if (i) at least 90% of
such partnership’s gross income for every taxable year consists of “qualifying
income” and (ii) the partnership would not be required to register under the
Investment Company Act if it were a U.S. corporation. Qualifying income
includes certain interest income, dividends, real property rents, gains from
the sale or other disposition of real property, and any gain from the sale or
disposition of a capital asset or other property held for the production of
income that otherwise constitutes qualifying income. The Managing General
Partner and the BRELP General Partner intend to manage the affairs of BREP and
BRELP, respectively, so that BREP will meet the Qualifying Income Exception in
each taxable year. Accordingly, the Managing General Partner believes that BREP
will be treated as a partnership and not as a corporation for U.S. federal
income tax purposes. If BREP fails to meet
the Qualifying Income Exception, other than a failure which is determined by
the IRS to be inadvertent and which is cured within a reasonable time after
discovery, or if BREP is required to register under the Investment Company Act,
BREP will be treated as if it had transferred all of its assets, subject to
liabilities, to a newly formed corporation, on the first day of the year in
which BREP fails to meet the Qualifying Income Exception, in return for stock
in such corporation, and then distributed the stock to our LP Unitholders in
liquidation. This deemed contribution and liquidation generally would be
tax-free to a U.S. Holder, unless BREP were to have liabilities in excess of
the tax basis of its assets at such time. Thereafter, BREP would be treated as
a corporation for U.S. federal income tax purposes. If BREP were treated
as a corporation in any taxable year, either as a result of a failure to meet
the Qualifying Income Exception, an election by the Managing General Partner or
otherwise, BREP’s items of income, gain, loss, deduction, or credit would be
reflected only on BREP’s tax return rather than Page185


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 being
passed through to LP Unitholders, and BREP would be subject to U.S. corporate
income tax and potentially branch profits tax with respect to its income, if
any, effectively connected with a U.S. trade or business. Moreover, under
certain circumstances, BREP might be classified as a PFIC for U.S. federal
income tax purposes, and a U.S. Holder would be subject to the rules applicable
to PFICs discussed below. See “— Consequences to U.S. Holders — Passive Foreign
Investment Companies”. Subject to the PFIC rules, distributions made to U.S.
Holders would be treated as taxable dividend income to the extent of BREP’s
current or accumulated earnings and profits. Any distribution in excess of
current and accumulated earnings and profits would first be treated as a
tax-free return of capital to the extent of a U.S. Holder’s adjusted tax basis
in its LP Units. Thereafter, to the extent such distribution were to exceed a
U.S. Holder’s adjusted tax basis in its LP Units, the distribution would be
treated as gain from the sale or exchange of such LP Units. The amount of a
distribution treated as a dividend could be eligible for reduced rates of
taxation, provided certain conditions are met. Based on the foregoing
consequences, the treatment of BREP as a corporation could materially reduce a
holder’s after-tax return and therefore could result in a substantial reduction
of the value of LP Units. If BRELP were to be treated as a corporation for U.S.
federal income tax purposes, consequences similar to those described above
would apply to BREP’s interests in BRELP. The remainder of this
summary assumes that BREP and BRELP will be treated as partnerships for U.S.
federal tax purposes. BREP expects that a substantial portion of the items of
income, gain, deduction, loss, or credit realized by BREP will be realized in
the first instance by BRELP and allocated to BREP for reallocation to LP
Unitholders. Unless otherwise specified, references in this section to
realization of BREP’s items of income, gain, loss, deduction, or credit include
a realization of such items by BRELP and the allocation of such items to BREP. Consequences to U.S. Holders Holding of LP Units Income and loss.Each U.S. Holder
must take into account, as described below, its allocable share of BREP’s items
of income, gain, loss, deduction, and credit for each of BREP’s taxable years
ending with or within such U.S. Holder’s taxable year. Each item generally will
have the same character and source as though such holder had realized the item
directly. Each U.S. Holder must report such items without regard to whether any
distribution has been or will be received from BREP. Although not required by
the Amended and Restated Limited Partnership Agreement of BREP, BREP intends to
make cash distributions to all LP Unitholders on a quarterly basis in amounts
generally expected to be sufficient to permit U.S. Holders to fund their
estimated U.S. tax obligations (including U.S. federal, state, and local income
taxes) with respect to their allocable shares of BREP’s net income or gain.
However, based upon a U.S. Holder’s particular tax situation and simplifying
assumptions that BREP will make in determining the amount of such
distributions, and depending upon whether a U.S. Holder elects to reinvest such
distributions pursuant to the distribution reinvestment plan, if available, a
U.S. Holder’s tax liability might exceed cash distributions made by BREP, in
which case any tax liabilities arising from the ownership of LP Units would
need to be satisfied from such U.S. Holder’s own funds. With respect to U.S.
Holders who are individuals, certain dividends paid by a corporation (including
certain qualified foreign corporations) to BREP and that are allocable to such
U.S. Holders may qualify for reduced rates of taxation. A qualified foreign
corporation includes a foreign corporation that is eligible for the benefits of
specified income tax treaties with the United States. In addition, a foreign
corporation is treated as a qualified corporation with respect to its shares
that are readily tradable on an established securities market in the United
States. Among other exceptions, U.S. Holders who are individuals will not be
eligible for reduced rates of taxation on any dividends if the payer is a PFIC
for the taxable year in which such dividends are paid or for the preceding
taxable year. Dividends received by non-corporate U.S. Holders may be subject
to an additional Medicare tax on unearned income of 3.8% (see “— Medicare Tax”
below). U.S. Holders that are corporations generally will not be entitled to a
“dividends received deduction” in respect of dividends paid by non-U.S.
corporations in which BREP (through BRELP) owns stock. Each U.S. Holder should
consult an independent tax adviser regarding the application of the foregoing
rules in light of its particular circumstances. For U.S. federal
income tax purposes, a U.S. Holder’s allocable share of BREP’s items of income,
gain, loss, deduction, or credit will be governed by the BREP limited
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 such allocations have
“substantial economic effect” or are determined to be in accordance with such
U.S. Holder’s interest in BREP. Similarly, BREP’s allocable share of items of
income, gain, loss, deduction, or credit of BRELP will be governed by the BRELP
limited partnership agreement if such allocations have “substantial economic
effect” or are determined to be in accordance with BREP’s interest in BRELP.
The Managing General Partner and the BRELP General Partner believe that, for
U.S. federal income tax purposes, such allocations should be given effect, and
the Managing General Partner and the BRELP General Partner intend to prepare
and file tax returns based on such allocations. If the IRS were to successfully
challenge the allocations made pursuant to either the BREP limited partnership
agreement or the BRELP limited partnership agreement, the resulting allocations
for U.S. federal income tax purposes might be less favorable than the
allocations set forth in such agreements. Basis.Each U.S. Holder
will have an initial tax basis in its LP Units equal to the amount of cash paid
for such LP Units, increased by such holder’s share of BREP’s liabilities, if
any. That basis will be increased by such U.S. Holder’s share of BREP’s income
and by increases in such U.S. Holder’s share of BREP’s liabilities, if any.
That basis will be decreased, but not below zero, by distributions a U.S.
Holder receives from BREP, by such U.S. Holder’s share of BREP’s losses, and by
any decrease in such U.S. Holder’s share of BREP’s liabilities. The IRS has
ruled that a partner in a partnership, unlike a stockholder of a corporation,
has a single, or “unitary”, tax basis in his or her partnership interest. As a
result, any amount a U.S. Holder pays to acquire additional LP Units (including
through the distribution reinvestment plan, if available) will be averaged with
the adjusted tax basis of LP Units owned by such holder prior to the
acquisition of such additional LP Units. The Managing General Partner and the
BRELP General Partner express no opinion regarding the appropriate methodology
to be used in making this determination. For purposes of the
foregoing rules, the rules discussed immediately below, and the rules
applicable to a sale or exchange of LP Units, BREP’s liabilities generally will
include BREP’s share of any liabilities of BRELP. Limits on deductions
for losses and expenses.A U.S. Holder’s deduction of its allocable share of
BREP’s losses will be limited to such U.S. Holder’s tax basis in LP Units and,
if the holder is an individual or a corporate holder that is subject to the “at
risk” rules, to the amount for which the holder is considered to be “at risk” with
respect to BREP’s activities, if that is less than such U.S. Holder’s tax
basis. In general, a U.S. Holder will be at risk to the extent of such holder’s
tax basis in LP Units, reduced by (i) the portion of that basis attributable to
such U.S. Holder’s share of BREP’s liabilities for which the holder will not be
personally liable (excluding certain qualified non-recourse financing) and (ii)
any amount of money the U.S. Holder borrows to acquire or hold LP Units, if the
lender of those borrowed funds owns an interest in BREP, is related to the U.S.
Holder, or can look only to LP Units for repayment. A U.S. Holder’s at-risk
amount generally will increase by such U.S. Holder’s allocable share of BREP’s
income and gain and decrease by distributions received from BREP and such U.S.
Holder’s allocable share of losses and deductions. A U.S. Holder must recapture
losses deducted in previous years to the extent that distributions cause such
U.S. Holder’s at-risk amount to be less than zero at the end of any taxable
year. Losses disallowed or recaptured as a result of these limitations will
carry forward and will be allowable to the extent that such U.S. Holder’s tax
basis or at-risk amount, whichever is the limiting factor, subsequently
increases. Upon the taxable disposition of LP Units, any gain recognized by a
U.S. Holder can be offset by losses that were previously suspended by the
at-risk limitation, but may not be offset by losses suspended by the basis
limitation. Any excess loss above the gain previously suspended by the at-risk
or basis limitations may no longer be used. Each U.S. Holder should consult an
independent tax adviser as to the effects of the at-risk rules. The Managing General
Partner and the BRELP General Partner do not expect to generate income or
losses from “passive activities” for purposes of Section 469 of the U.S.
Internal Revenue Code. Accordingly, income allocated to a U.S. Holder may not
be offset by such holder’s Section 469 passive losses, and losses allocated to
a U.S. Holder may not be used to offset such holder’s Section 469 passive
income. Each U.S. Holder should consult an independent tax adviser regarding
the limitations on the deductibility of losses that such holder may be subject
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 Limitations on
deductibility of organizational expenses and syndication fees.In general, neither
BREP nor any U.S. Holder may deduct organizational or syndication expenses.
Similar rules apply to organizational or syndication expenses incurred by
BRELP. Syndication fees (which would include any sales or placement fees or
commissions) must be capitalized and cannot be amortized or otherwise deducted. Limitations on
interest deductions.A U.S. Holder’s share of BREP’s interest expense is likely to be treated as
“investment interest” expense. For a non-corporate U.S. Holder, the
deductibility of “investment interest” expense generally is limited to the
amount of such holder’s “net investment income”. A U.S. Holder’s share of
BREP’s dividend and interest income will be treated as investment income,
although “qualified dividend income” subject to reduced rates of tax in the
hands of an individual will only be treated as investment income if such
individual elects to treat such dividend as ordinary income not subject to
reduced rates of tax. In addition, state and local tax laws may disallow
deductions for a U.S. Holder’s share of BREP’s interest expense. Net investment income
includes gross income from property held for investment and amounts treated as
portfolio income under the passive loss rules, less deductible expenses, other
than interest, directly connected with the production of investment income, but
generally does not include gains attributable to the disposition of property
held for investment. Deductibility of
partnership investment expenditures by individual partners and by trusts and
estates.Subject to certain exceptions, all miscellaneous itemized deductions of an
individual taxpayer, and certain of such deductions of an estate or trust, are
deductible only to the extent that such deductions exceed 2% of the taxpayer’s
adjusted gross income. Moreover, the otherwise allowable itemized deductions of
individuals whose gross income exceeds an applicable threshold amount are
subject to reduction by an amount equal to the lesser of (i) 3% of the excess
of the individual’s adjusted gross income over the threshold amount, and (ii)
80% of the amount of the individual’s itemized deductions. The operating
expenses of BREP, including BREP’s allocable share of any management fees, may
be treated as miscellaneous itemized deductions subject to the foregoing rule.
Accordingly, a non-corporate U.S. Holder should consult an independent tax
adviser regarding the application of these limitations. Treatment of
Distributions Distributions of cash
by BREP generally will not be taxable to a U.S. Holder to the extent of such
holder’s adjusted tax basis (described above) in LP Units. Any cash
distributions in excess of a U.S. Holder’s adjusted tax basis generally will be
considered to be gain from the sale or exchange of LP Units (described below).
Such gain generally will be treated as capital gain and will be long-term
capital gain if a U.S. Holder’s holding period for LP Units exceeds one year. A
reduction in a U.S. Holder’s allocable share of BREP liabilities, and certain
distributions of marketable securities by BREP, if any, will be treated similar
to cash distributions for U.S. federal income tax purposes. Sale or Exchange of
LP Units A U.S. Holder will
recognize gain or loss on the sale or taxable exchange of LP Units equal to the
difference, if any, between the amount realized and such U.S. Holder’s tax
basis in LP Units sold or exchanged. A U.S. Holder’s amount realized will be
measured by the sum of the cash or the fair market value of other property
received plus such U.S. Holder’s share of BREP’s liabilities, if any. Gain or loss
recognized by a U.S. Holder upon the sale or exchange of LP Units generally
will be taxable as capital gain or loss and will be long-term capital gain or
loss if the U.S. Holder held our LP Units for more than one year on the date of
such sale or exchange. Assuming a U.S. Holder has not elected to treat its
share of BREP’s investment in any PFIC as a “qualified electing fund”, gain
attributable to such investment in a PFIC would be taxable in the manner
described below in “— Passive Foreign Investment Companies”. In addition,
certain gain attributable to “unrealized receivables” or “inventory items”
could be characterized as ordinary income rather than capital gain. For
example, if BREP were to hold debt acquired at a market discount, accrued
market discount on such debt would be treated as “unrealized receivables”. The
deductibility of capital losses is subject to limitations. Each U.S. Holder who
acquires LP Units at different times and intends to sell all or a portion of
our LP Units within a year of the most recent purchase is urged to consult an
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 regarding the application of
certain “split holding period” rules to such sale and the treatment of any gain
or loss as long-term or short-term capital gain or loss. Medicare Tax U.S. Holders that are
individuals, estates, or trusts may be required to pay a 3.8% Medicare tax on
the lesser of (i) the excess of such U.S. Holders’ “modified adjusted gross
income” (or “adjusted gross income” in the case of estates and trusts) over
certain thresholds and (ii) such U.S. Holders’ “net investment income” (or
“undistributed net investment income” in the case of estates and trusts). Net
investment income generally is expected to include an LP Unitholder’s allocable
share of BREP’s income, as well as gain realized by an LP Unitholder from a
sale of LP Units. Foreign Tax Credit
Limitations Each U.S. Holder
generally will be entitled to a foreign tax credit with respect to such U.S.
Holder’s allocable share of creditable foreign taxes paid on BREP’s income and
gains. Complex rules may, depending on such U.S. Holder’s particular
circumstances, limit the availability or use of foreign tax credits. Gain from
the sale of BREP’s investments may be treated as U.S.-source gain.
Consequently, a U.S. Holder may not be able to use the foreign tax credit
arising from any foreign taxes imposed on such gains unless the credit can be
applied (subject to applicable limitations) against U.S. tax due on other
income treated as derived from foreign sources. Certain losses that BREP incurs
may be treated as foreign-source losses, which could reduce the amount of
foreign tax credits otherwise available. Section 754 Election BREP and BRELP have
each made the election permitted by Section 754 of the U.S. Internal Revenue
Code, or the Section 754 Election. The Section 754 Election cannot be revoked
without the consent of the IRS. The Section 754 Election generally requires
BREP to adjust the tax basis in its assets, or inside basis, attributable to a
transferee of LP Units under Section 743(b) of the U.S. Internal Revenue Code
to reflect the purchase price paid by the transferee for LP Units. This election
does not apply to a person who purchases LP Units directly from BREP. For
purposes of this discussion, a transferee’s inside basis in BREP’s assets will
be considered to have two components: (i) the transferee’s share of BREP’s tax
basis in BREP’s assets, or common basis, and (ii) the adjustment under Section
743(b) of the U.S. Internal Revenue Code to that basis. The foregoing rules
would also apply to BRELP. Generally, a Section
754 Election would be advantageous to a transferee U.S. Holder if such U.S. Holder’s
tax basis in its LP Units were higher than such LP Units’ share of the
aggregate tax basis of BREP’s assets immediately prior to the transfer. In that
case, as a result of the Section 754 Election, the transferee U.S. Holder would
have a higher tax basis in its share of BREP’s assets for purposes of
calculating, among other items, such holder’s share of any gain or loss on a
sale of BREP’s assets. Conversely, a Section 754 Election would be
disadvantageous to a transferee U.S. Holder if such U.S. Holder’s tax basis in
its LP Units were lower than such LP Units’ share of the aggregate tax basis of
BREP’s assets immediately prior to the transfer. Thus, the fair market value of
LP Units may be affected either favorably or adversely by the election. Without regard to
whether the Section 754 Election is made, if LP Units are transferred at a time
when BREP has a “substantial built-in loss” in its assets, BREP will be
obligated to reduce the tax basis in the portion of such assets attributable to
such LP Units. The calculations
involved in the Section 754 Election are complex, and the Managing General
Partner and the BRELP General Partner advise that each will make such
calculations on the basis of assumptions as to the value of BREP assets and
other matters. Each U.S. Holder should consult an independent tax adviser as to
the effects of the Section 754 Election. Uniformity of LP
Units Because BREP cannot
match transferors and transferees of LP Units, BREP must maintain uniformity of
the economic and tax characteristics of LP Units to a purchaser of LP Units. In
the absence of uniformity, BREP may be unable to comply fully with a number of
U.S. federal income tax requirements. A lack of uniformity can result from a
literal application of certain Treasury Regulations to BREP’s Section 743(b)
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 unreasonable, or other reasons. Section 704(c)
allocations would be intended to reduce or eliminate the disparity between tax
basis and the value of BREP’s assets in certain circumstances, including on the
issuance of additional LP Units. In order to maintain the fungibility of all LP
Units at all times, BREP will seek to achieve the uniformity of U.S. tax
treatment for all purchasers of LP Units which are acquired at the same time
and price (irrespective of the identity of the particular seller of LP Units or
the time when LP Units are issued), through the application of certain tax
accounting principles that the Managing General Partner believes are reasonable
for BREP. However, the IRS may disagree with BREP and may successfully
challenge its application of such tax accounting principles. Any non-uniformity
could have a negative impact on the value of LP Units. Foreign Currency Gain or Loss BREP’s functional
currency is the U.S. dollar, and BREP’s income or loss is calculated in U.S.
dollars. It is likely that BREP will recognize “foreign currency” gain or loss
with respect to transactions involving non-U.S. dollar currencies. In general,
foreign currency gain or loss is treated as ordinary income or loss. Each U.S.
Holder should consult an independent tax adviser regarding the tax treatment of
foreign currency gain or loss. Passive Foreign Investment Companies U.S. Holders may be
subject to special rules applicable to indirect investments in foreign
corporations, including an investment through BREP in a PFIC. A PFIC is defined
as any foreign corporation with respect to which (after applying certain
look-through rules) either (i) 75% or more of its gross income for a taxable
year is “passive income” or (ii) 50% or more of its assets in any taxable year
(generally based on the quarterly average of the value of its assets) produce
or are held for the production of “passive income”. There are no minimum stock
ownership requirements for PFICs. If a U.S. Holder holds an interest in a
foreign corporation for any taxable year during which the corporation is
classified as a PFIC with respect to such holder, then the corporation will
continue to be classified as a PFIC with respect to that U.S. Holder for any
subsequent taxable year during which the U.S. Holder continues to hold an
interest in the corporation, even if the corporation’s income or assets would
not cause it to be a PFIC in such subsequent taxable year, unless an exception
applies. Subject to certain
elections described below, any gain on the disposition of stock of a PFIC owned
by a U.S. Holder indirectly through BREP, as well as income realized on certain
“excess distributions” by such PFIC, would be treated as though realized
ratably over the shorter of such U.S. Holder’s holding period of LP Units or
BREP’s holding period for the PFIC. Such gain or income generally would be
taxable as ordinary income and dividends paid by the PFIC would not be eligible
for the preferential tax rates for dividends paid to non-corporate U.S.
Holders. In addition, an interest charge would apply, based on the tax deemed
deferred from prior years. If a U.S. Holder were
to make an election to treat such U.S. Holder’s share of BREP’s interest in a
PFIC as a “qualified electing fund”, such election a “ QEF Election ”, for the
first year such holder were treated as holding such interest, then in lieu of
the tax consequences described in the paragraph immediately above, the U.S. Holder
would be required to include in income each year a portion of the ordinary
earnings and net capital gains of the PFIC, even if not distributed to BREP or
to the holder. A QEF Election must be made by a U.S. Holder on an
entity-by-entity basis. To make a QEF Election, a U.S. Holder must, among other
things, (i) obtain a PFIC annual information statement (through an intermediary
statement supplied by BREP) and (ii) prepare and submit IRS Form 8621 with such
U.S. Holder’s annual income tax return. To the extent reasonably practicable,
BREP intends to timely provide U.S. Holders with the information necessary to
make a QEF Election with respect to any BREP entity that the Managing General
Partner and the BRELP General Partner believe is a PFIC with respect to a U.S.
Holder. Any such election should be made for the first year BREP holds an
interest in such entity or for the first year in which a U.S. Holder holds LP
Units, if later. Non-corporate U.S. Holders making QEF Elections are also
subject to special rules for determining their taxable income and basis in LP
Units for purposes of the 3.8% Medicare tax (as described above under “—
Medicare Tax”). In the case of a PFIC
that is a publicly traded foreign company, and in lieu of making a QEF
Election, an election may be made to “mark to market” the stock of such foreign
company on an annual basis. Pursuant to such an election, a U.S. Holder would
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 excess,
if any, of the fair market value of such stock over its adjusted basis at the
end of the taxable year. However, none of the existing BREP entities are
expected to be publicly traded, although BREP may in the future acquire
interests in PFICs which are publicly traded foreign companies. Thus the
mark-to-market election is not expected to be available to any U.S. Holder in
respect of its indirect ownership interest in any foreign corporation owned by
BREP. Based on the
organizational structure of BREP, as well as BREP’s expected income and assets,
the Managing General Partner and the BRELP General Partner currently believe
that a U.S. Holder is unlikely to be regarded as owning an interest in a PFIC
solely by reason of owning LP Units during the taxable year ending December 31,
2015. However, there can be no assurance that an existing BREP entity or a
future entity in which BREP acquires an interest will not be classified as a
PFIC with respect to a U.S. Holder, because PFIC status is a factual
determination that depends on the assets and income of a given entity and must
be made on an annual basis. Moreover, in order to ensure that it satisfies the
Qualifying Income Exception, BREP may decide to hold an existing or future
Operating Entity through a Holding Entity that would be classified as a PFIC.
See “— Investment Structure” below. A U.S. person who directly or
indirectly owns an interest in a PFIC may be required to file an annual report
with the IRS, and the failure to file such report could result in the
imposition of penalties on such U.S. person and in the extension of the statute
of limitations with respect to federal income tax returns filed by such U.S.
person. Each U.S. Holder should consult an independent tax adviser regarding
the PFIC rules, including the potential effect of this legislation on such U.S.
Holder’s filing requirements and the advisability of making a QEF Election or,
if applicable, a mark-to-market election, with respect to any PFIC in which
such holder is treated as owning an interest through BREP. Investment Structure To ensure that it
meets the Qualifying Income Exception for publicly traded partnerships
(discussed above) and complies with certain requirements in its limited
partnership agreement, BREP may structure certain investments through an entity
classified as a corporation for U.S. federal income tax purposes. Such
investments will be structured as determined in the sole discretion of the
Managing General Partner and the BRELP General Partner generally to be
efficient for LP Unitholders. However, because LP Unitholders will be located
in numerous taxing jurisdictions, no assurance can be given that any such
investment structure will benefit all LP Unitholders to the same extent, and
such an investment structure might even result in additional tax burdens on
some LP Unitholders. As discussed above, if any such entity were a non-U.S.
corporation, it might be considered a PFIC. If any such entity were a U.S.
corporation, it would be subject to U.S. federal net income tax on its income,
including any gain recognized on the disposition of its investments. In
addition, if the investment were to involve U.S. real property, gain recognized
on the disposition of the investment by a corporation generally would be
subject to corporate-level tax, whether the corporation were a U.S. or a
non-U.S. corporation. Taxes in Other
Jurisdictions In addition to U.S.
federal income tax consequences, an investment in BREP could subject a U.S.
Holder to U.S. state and local taxes in the U.S. state or locality in which
such holder is a resident for tax purposes. A U.S. Holder could also be subject
to tax return filing obligations and income, franchise, or other taxes,
including withholding taxes, in non-U.S. jurisdictions in which BREP invests.
BREP will attempt, to the extent reasonably practicable, to structure its
operations and investments so as to avoid income tax filing obligations by U.S.
Holders in non-U.S. jurisdictions. However, there may be circumstances in which
BREP is unable to do so. Income or gain from investments held by BREP may be
subject to withholding or other taxes in jurisdictions outside the U.S., except
to the extent an income tax treaty applies. A U.S. Holder who wishes to claim
the benefit of an applicable income tax treaty might be required to submit
information to tax authorities in such jurisdictions. Each U.S. Holder should
consult an independent tax adviser regarding the U.S. state, local, and
non-U.S. tax consequences of an investment in BREP. Transferor/Transferee
Allocations BREP may allocate
items of income, gain, loss, and deduction using a monthly or other convention,
whereby any such items recognized in a given month by BREP are allocated to our
LP Unitholders as of a specified date of such month. As a result, a U.S. Holder
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 be allocated income,
gain, loss, and deduction realized by BREP after the date of the transfer.
Similarly, if a U.S. Holder acquires additional LP Units, such holder may be
allocated income, gain, loss, and deduction realized by BREP prior to such U.S.
Holder’s ownership of such LP Units. Although Section 706
of the U.S. Internal Revenue Code generally governs allocations of items of
partnership income and deductions between transferors and transferees of
partnership interests, it is not clear that BREP’s allocation method complies
with the requirements. If BREP’s convention were not permitted, the IRS might
contend that BREP’s taxable income or losses must be reallocated among LP
Unitholders. If such a contention were sustained, a U.S. Holder’s tax
liabilities might be adjusted to such holder’s detriment. The Managing General
Partner is authorized to revise BREP’s method of allocation between transferors
and transferees (as well as among investors whose interests otherwise vary
during a taxable period). U.S. Federal Estate
Tax Consequences If LP Units are
included in the gross estate of a U.S. citizen or resident for U.S. federal
estate tax purposes, then a U.S. federal estate tax might be payable in
connection with the death of such person. Individual U.S. Holders should
consult an independent tax adviser concerning the potential U.S. federal estate
tax consequences with respect to LP Units. Certain Reporting
Requirements A U.S. Holder who
invests more than $100,000 in BREP may be required to file IRS Form 8865
reporting the investment with such U.S. Holder’s U.S. federal income tax return
for the year that includes the date of the investment. A U.S. Holder may be
subject to substantial penalties if it fails to comply with this and other
information reporting requirements with respect to an investment in LP Units.
Each U.S. Holder should consult an independent tax adviser regarding such
reporting requirements. U.S. Taxation of
Tax-Exempt U.S. Holders of LP Units Income recognized by
a U.S. tax-exempt organization is exempt from U.S. federal income tax except to
the extent of the organization’s UBTI. UBTI is defined generally as any gross
income derived by a tax-exempt organization from an unrelated trade or business
that it regularly carries on, less the deductions directly connected with that
trade or business. In addition, income arising from a partnership (or other
entity treated as a partnership for U.S. federal income tax purposes) that
holds operating assets or is otherwise engaged in a trade or business generally
will constitute UBTI. Notwithstanding the foregoing, UBTI generally does not
include any dividend income, interest income, certain other categories of
passive income, or capital gains realized by a tax-exempt organization, so long
as such income is not “debt-financed”, as discussed below. The Managing General
Partner believes that BREP should not be regarded as engaged in a trade or
business, and anticipates that any operating assets held by BREP will be held
through entities that are treated as corporations for U.S. federal income tax
purposes. The exclusion from
UBTI does not apply to income from “debt-financed property”, which is treated
as UBTI to the extent of the percentage of such income that the average
acquisition indebtedness with respect to the property bears to the average tax
basis of the property for the taxable year. If an entity treated as a
partnership for U.S. federal income tax purposes incurs acquisition
indebtedness, a tax-exempt partner in such partnership will be deemed to have
acquisition indebtedness equal to its allocable portion of such acquisition
indebtedness. If any such indebtedness were used by BREP or by BRELP to acquire
property, such property generally would constitute debt-financed property, and
any income from or gain from the disposition of such debt-financed property
allocated to a tax-exempt organization generally would constitute UBTI to such
tax-exempt organization. In addition, even if such indebtedness were not used
either by BREP or by BRELP to acquire property but were instead used to fund
distributions to LP Unitholders, if a tax-exempt organization subject to
taxation in the United States were to use such proceeds to make an investment
outside BREP, the IRS might assert that such investment constitutes
debt-financed property to such LP Unitholder with the consequences noted above.
BREP and BRELP currently do not have any outstanding indebtedness used to
acquire property, and the Managing General Partner and the BRELP General
Partner do not believe that BREP or BRELP will generate UBTI attributable to
debt-financed property in the future. However, neither BREP nor BRELP is
prohibited from incurring indebtedness, and no assurance can be provided that
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 UBTI
attributable to debt-financed property in the future. Tax-exempt U.S. Holders
should consult an independent tax adviser regarding the tax consequences of an
investment in LP Units. Consequences to
Non-U.S. Holders Holding of LP Units
and Other Considerations The Managing General
Partner and the BRELP General Partner intend to use commercially reasonable
efforts to structure the activities of BREP and BRELP, respectively, to avoid
the realization by BREP and BRELP of income treated as effectively connected
with a U.S. trade or business, including effectively connected income
attributable to the sale of a “United States real property interest”, as
defined in the U.S. Internal Revenue Code. Specifically, BREP intends not to
make an investment, whether directly or through an entity which would be
treated as a partnership for U.S. federal income tax purposes, if the Managing
General Partner believes at the time of such investment that such investment
would generate income treated as effectively connected with a U.S. trade or
business. If, as anticipated, BREP is not treated as engaged in a U.S. trade or
business or as deriving income which is treated as effectively connected with a
U.S. trade or business, and provided that a Non-U.S. Holder is not itself
engaged in a U.S. trade or business, then such Non-U.S. Holder generally will
not be subject to U.S. tax return filing requirements solely as a result of
owning LP Units and generally will not be subject to U.S. federal income tax on
its allocable share of BREP’s interest and dividends from non-U.S. sources or gain
from the sale or other disposition of securities or real property located
outside of the United States. However, there can be
no assurance that the law will not change or that the IRS will not deem BREP to
be engaged in a U.S. trade or business. If, contrary to the Managing General
Partner’s expectations, BREP is treated as engaged in a U.S. trade or business,
then a Non-U.S. Holder generally would be required to file a U.S. federal
income tax return, even if no effectively connected income were allocable to
it. If BREP were to have income treated as effectively connected with a U.S.
trade or business, then a Non-U.S. Holder would be required to report that
income and would be subject to U.S. federal income tax at the regular graduated
rates. In addition, BREP generally would be required to withhold U.S. federal
income tax on such Non-U.S. Holder’s distributive share of such income. A
corporate Non-U.S. Holder might also be subject to branch profits tax at a rate
of 30%, or at a lower treaty rate, if applicable. In general, even if
BREP is not engaged in a U.S. trade or business, and assuming a Non-U.S. Holder
is not otherwise engaged in a U.S. trade or business, such holder will
nonetheless be subject to a federal withholding tax equal to 30% of the gross
amount of its allocable share of certain U.S.-source income (such as dividends
and interest) which is not effectively connected with a U.S. trade or business.
However, the Managing General Partner does not expect BREP to earn any such
U.S.-source income. Accordingly, the 30% withholding tax is not expected to
apply. If, contrary to expectation, BREP were to earn such income, then a
Non-U.S. Holder’s allocable share of distributions of such income generally
would be subject to U.S. withholding tax at a rate of 30%, or at a lower treaty
rate, if applicable. A Non-U.S. Holder might be required to take additional
steps to receive a credit or refund of any excess withholding tax paid on such
holder’s account, which could include the filing of a non-resident U.S. income
tax return with the IRS, unless such holder were not subject to U.S. tax based
on its tax status or were otherwise eligible for a reduced rate of U.S.
withholding under an applicable income tax treaty. Each Non-U.S. Holder should
consult an independent tax adviser regarding the potential for the 30%
withholding tax to apply to its allocable share of income of BREP. Special rules may
apply in the case of a Non-U.S. Holder subject to special rules, including,
without limitation, any Non-U.S. Holder (i) that has an office or fixed place
of business in the United States; (ii) that is present in the United States for
183 days or more in a taxable year; or (iii) that is (a) a former citizen or
long-term resident of the United States, (b) a foreign insurance company that
is treated as holding a partnership interest in BREP in connection with its
U.S. business, (c) a PFIC, or (d) a corporation that accumulates earnings to
avoid U.S. federal income tax. Each Non-U.S. Holder should consult an
independent tax adviser regarding the application of these special rules. Administrative
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 The Managing General
Partner will act as BREP’s “tax matters partner”. As the tax matters partner,
the Managing General Partner will have the authority, subject to certain
restrictions, to act on behalf of BREP in connection with any administrative or
judicial review of BREP’s items of income, gain, loss, deduction, or credit. Information Returns BREP has agreed to
use commercially reasonable efforts to provide U.S. tax information on its
website (including IRS Schedule K-1 information needed to determine an LP
Unitholder’s allocable share of BREP’s income, gain, losses, and deductions) no
later than 90 days after the end of BREP’s taxable year. In addition, BREP will
provide an IRS Schedule K-1 to any LP Unitholder that furnishes BREP or its
agents with certain basic information regarding such holder’s LP Units. To
assist each LP Unitholder in this regard, BREP maintains a website in respect
of 2012 and subsequent taxation years. However, providing this U.S. tax
information to LP Unitholders will be subject to delay in the event of, among
other reasons, the late receipt of any necessary tax information from
lower-tier entities. It is therefore possible that, in any taxable year, an LP
Unitholder will need to apply for an extension of time to file such LP
Unitholder’s tax returns. In preparing this
U.S. tax information, BREP will use various accounting and reporting
conventions, some of which have been mentioned in the previous discussion, to
determine an LP Unitholder’s share of income, gain, loss, and deduction. The
IRS may successfully contend that certain of these reporting conventions are
impermissible, which could result in an adjustment to an LP Unitholder’s income
or loss. BREP may be audited
by the IRS. Adjustments resulting from an IRS audit could require an LP
Unitholder to adjust a prior year’s tax liability and result in an audit of
such holder’s own tax return. Any audit of an LP Unitholder’s tax return could
result in adjustments not related to BREP’s tax returns, as well as those
related to BREP’s tax returns.  Tax Shelter
Regulations and Related Reporting Requirements If BREP were to
engage in a “reportable transaction”, BREP (and possibly LP Unitholders) would
be required to make a detailed disclosure of the transaction to the IRS in
accordance with regulations governing tax shelters and other potentially
tax-motivated transactions. A transaction may be a reportable transaction based
upon any of several factors, including the fact that it is a type of tax
avoidance transaction publicly identified by the IRS as a “listed transaction”
or “transaction of interest”, or that it produces certain kinds of losses equal
to or exceeding $2 million (or, in the case of certain foreign currency
transactions, losses equal to or exceeding $50,000). An investment in BREP may
be considered a “reportable transaction” if, for example, BREP were to
recognize certain significant losses in the future. In certain circumstances,
an LP Unitholder who disposes of an interest in a transaction resulting in the
recognition by such holder of significant losses in excess of certain threshold
amounts may be obligated to disclose its participation in such transaction.
Certain of these rules are unclear, and the scope of reportable transactions
can change retroactively. Therefore, it is possible that the rules may apply to
transactions other than significant loss transactions. Moreover, if BREP
were to participate in a reportable transaction with a significant purpose to
avoid or evade tax, or in any listed transaction, an LP Unitholder might be
subject to significant accuracy-related penalties with a broad scope, for those
persons otherwise entitled to deduct interest on federal tax deficiencies,
non-deductibility of interest on any resulting tax liability, and in the case
of a listed transaction, an extended statute of limitations. BREP does not
intend to participate in any reportable transaction with a significant purpose
to avoid or evade tax, nor does BREP intend to participate in any listed
transactions. However, no assurance can be provided that the IRS will not
assert that BREP has participated in such a transaction. Each LP Unitholder
should consult an independent tax adviser concerning any possible disclosure
obligation under the regulations governing tax shelters with respect to the
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 BREP currently uses
the calendar year as its taxable year for U.S. federal income tax purposes.
Under certain circumstances which BREP currently believes are unlikely to
apply, a taxable year other than the calendar year may be required for such
purposes. Constructive
Termination Subject to the
electing large partnership rules described below, BREP will be considered to
have been terminated for U.S. federal income tax purposes if there is a sale or
exchange of 50% or more of our LP Units within a 12-month period. A constructive
termination of BREP would result in the close of its taxable year for all LP
Unitholders. If an LP Unitholder reports on a taxable year other than a fiscal
year ending on BREP’s year-end, and the LP Unitholder is otherwise subject to
U.S. federal income tax, the closing of BREP’s taxable year may result in more
than 12 months of BREP’s taxable income or loss being includable in such LP
Unitholder’s taxable income for the year of the termination. BREP would be
required to make new tax elections after a termination, including a new Section
754 Election. A constructive termination could also result in penalties and
other adverse tax consequences if BREP were unable to determine that the
termination had occurred. Moreover, a constructive termination might either
accelerate the application of, or subject BREP to, any tax legislation enacted
before the termination. Elective Procedures
for Large Partnerships The U.S. Internal
Revenue Code allows large partnerships to elect streamlined procedures for
income tax reporting. This election would reduce the number of items that must
be separately stated on the IRS Schedules K-1 that are issued to our LP
Unitholders, and such IRS Schedules K-1 would have to be provided to holders on
or before the first March 15 following the close of each taxable year. In
addition, this election would prevent BREP from suffering a “technical
termination” (which would close BREP’s taxable year and require that BREP make
a new Section 754 Election) if, within a 12-month period, there were a sale or
exchange of 50% or more of BREP’s total LP Units. Despite the foregoing
benefits, there are also costs and administrative burdens associated with such
an election. Consequently, as of this time, BREP has not elected to be subject
to the reporting procedures applicable to large partnerships. Backup Withholding For each calendar
year, BREP may be required to report to each LP Unitholder and to the IRS the
amount of distributions that BREP pays, and the amount of tax (if any) that
BREP withholds on these distributions. Under the backup withholding rules, an
LP Unitholder may be subject to backup withholding tax with respect to
distributions paid unless such holder: (i) is an exempt recipient and
demonstrates this fact when required; or (ii) provides a taxpayer
identification number, certifies as to no loss of exemption from backup
withholding tax, and otherwise complies with the applicable requirements of the
backup withholding tax rules. A U.S. Holder that is exempt should certify such
status on a properly completed IRS Form W-9. A Non-U.S. Holder may qualify as
an exempt recipient by submitting a properly completed IRS Form W-8. Backup
withholding is not an additional tax. The amount of any backup withholding from
a payment to an LP Unitholder will be allowed as a credit against such LP
Unitholder’s U.S. federal income tax liability and may entitle such LP
Unitholder to a refund from the IRS, provided the LP Unitholder supplies the
required information to the IRS in a timely manner. If an LP Unitholder
does not timely provide BREP, or the applicable nominee, broker, clearing
agent, or other intermediary, with IRS Form W-9 or IRS Form W-8, as applicable,
or such form is not properly completed, then BREP may become subject to U.S.
backup withholding taxes in excess of what would have been imposed had BREP or
the applicable intermediary received properly completed forms from all LP
Unitholders. For administrative reasons, and in order to maintain the
fungibility of our LP Units, such excess U.S. backup withholding taxes may be
treated by BREP as an expense that will be borne indirectly by all LP
Unitholders on a pro rata basis (e.g., since it may be impractical for BREP to
allocate any such excess withholding tax cost to our LP Unitholders that failed
to timely provide the proper U.S. tax forms). Foreign Account Tax
Compliance FATCA
imposes a 30% withholding tax on “withholdable payments” made to a “foreign
financial institution” or a “non-financial foreign entity”, unless such
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 information
reporting or other requirements. Withholdable payments include certain
U.S.-source income, such as interest, dividends, and other passive income.
Beginning January 1, 2017, withholdable payments also include gross proceeds
from the sale or disposition of property that can produce U.S.-source interest
or dividends. Based on the organizational structure of BREP, as well as BREP’s
expected income and assets, our Managing General Partner currently believes
that BREP is unlikely to receive or to make any such “withholdable payments”
subject to 30% withholding tax under FATCA. Moreover, we intend to comply with
FATCA so as to ensure that the 30% withholding tax does not apply to
withholdable payments, if any, received by BREP, BRELP, the Holding Entities or
the Operating Entities. Nonetheless, the 30% withholding tax may apply to an LP
Unitholder’s allocable share of distributions attributable to withholdable
payments, if any, unless such LP Unitholder properly certifies its FATCA status
on IRS Form W-8 or IRS Form W-9 (as applicable) and satisfies any additional
requirements under FATCA. In
compliance with FATCA, information regarding certain LP Unitholders’ ownership
of LP Units may be reported to the IRS or to a non-U.S. governmental authority.
FATCA remains subject to modification by an applicable intergovernmental
agreement between the United States and another country, such as the agreement
in effect between the United States and Bermuda for cooperation to facilitate
the implementation of FATCA, or by future Treasury Regulations or guidance.
Each LP Unitholder should consult its own tax adviser regarding the
consequences under FATCA of an investment in LP Units. Information Reporting
with Respect to Foreign Financial Assets Under Treasury
Regulations, U.S. individuals that own “specified foreign financial assets”
with an aggregate fair market value exceeding either $50,000 on the last day of
the taxable year or $75,000 at any time during the taxable year generally are
required to file an information report with respect to such assets with their
tax returns. Significant penalties may apply to persons who fail to comply with
these rules. Specified foreign financial assets include not only financial
accounts maintained in foreign financial institutions, but also, unless held in
accounts maintained by a financial institution, any stock or security issued by
a non-U.S. person, any financial instrument or contract held for investment
that has an issuer or counterparty other than a U.S. person, and any interest
in a foreign entity. Upon the issuance of future Treasury Regulations, these
information reporting requirements may apply to certain U.S. entities that own
specified foreign financial assets. The failure to report information required
under the current regulations could result in substantial penalties and in the
extension of the statute of limitations with respect to federal income tax
returns filed by an LP Unitholder. Each LP Unitholder should consult an
independent tax adviser regarding the possible implications of these Treasury
Regulations for an investment in LP Units. Certain Effects of a
Transfer of LP Units BREP may allocate
items of income, gain, loss, deduction, and credit using a monthly or other
convention, whereby any such items recognized in a given month by BREP are
allocated to LP Unitholders as of a specified date of such month. BRELP may
invest in debt obligations or other securities for which the accrual of
interest or income thereon is not matched by a contemporaneous receipt of cash.
Any such accrued interest or other income would be allocated pursuant to such
monthly or other convention. Consequently, LP Unitholders may recognize income
in excess of cash distributions received from BREP, and any income so included
by an LP Unitholder would increase the basis such LP Unitholder has in LP Units
and would offset any gain (or increase the amount of loss) realized by such LP
Unitholder on a subsequent disposition of its LP Units. BRELP has invested
and will continue to invest in certain Holding Entities and Operating Entities
organized in non-U.S. jurisdictions, and income and gain from such investments
may be subject to withholding and other taxes in such jurisdictions. If any
such non-U.S. taxes were imposed on income allocable to an LP Unitholder, and such
LP Unitholder were thereafter to dispose of its LP Units prior to the date
distributions were made in respect of such income, under applicable provisions
of the U.S. Internal Revenue Code and Treasury Regulations, the LP Unitholder
to whom such income was allocated (and not the LP Unitholder to whom
distributions were ultimately made) would, subject to other applicable
limitations, be the party permitted to claim a credit for such non-U.S. taxes
for U.S. federal income tax purposes. Thus an LP Unitholder may be affected
either favorably or adversely by the foregoing rules. Complex rules may,
depending on an LP Unitholder’s particular circumstances, limit the
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 of foreign tax credits, and LP
Unitholders are urged to consult an independent tax adviser regarding all
aspects of foreign tax credits. Nominee Reporting Persons
who hold an interest in BREP as a nominee for another person may be required to
furnish to BREP: (i)the
name, address and taxpayer identification number of the beneficial owner and
the nominee;  (ii)whether
the beneficial owner is (a) a person that is not a U.S. person, (b) a foreign
government, an international organization, or any wholly-owned agency or
instrumentality of either of the foregoing, or (c) a tax-exempt entity;  (iii)the
amount and description of LP Units held, acquired, or transferred for the
beneficial owner; and  (iv)specific
information including the dates of acquisitions and transfers, means of
acquisitions and transfers, and acquisition cost for purchases, as well as the
amount of net proceeds from sales. Brokers and financial
institutions may be required to furnish additional information, including
whether they are U.S. persons and specific information on LP Units they
acquire, hold, or transfer for their own account. A penalty of $100 per
failure, up to a maximum of $1,500,000 per calendar year, generally is imposed
by the U.S. Internal Revenue Code for the failure to report such information to
BREP. The nominee is required to supply the beneficial owner of LP Units with
the information furnished to BREP. New Legislation or
Administrative or Judicial Action The U.S. federal
income tax treatment of LP Unitholders depends, in some instances, on
determinations of fact and interpretations of complex provisions of U.S. federal
income tax law for which no clear precedent or authority may be available. LP
Unitholders should be aware that the U.S. federal income tax rules,
particularly those applicable to partnerships, are constantly under review
(including currently) by the Congressional tax-writing committees and other
persons involved in the legislative process, the IRS, the U.S. Treasury
Department and the courts, frequently resulting in revised interpretations of
established concepts, statutory changes, revisions to regulations and other
modifications and interpretations, any of which could adversely affect the
value of LP Units and be effective on a retroactive basis. For example, changes
to the U.S. federal tax laws and interpretations thereof could make it more
difficult or impossible for BREP to be treated as a partnership that is not
taxable as a corporation for U.S. federal income tax purposes, change the
character or treatment of portions of BREP’s income (including changes that
recharacterize certain allocations as potentially non-deductible fees), reduce
the net amount of distributions available to LP Unitholders, or otherwise
affect the tax considerations of owning LP Units. Such changes could also
affect or cause BREP to change the way it conducts its activities and adversely
affect the value of LP Units. BREP’s organizational
documents and agreements permit the Managing General Partner to modify the
limited partnership agreement of BREP from time to time, without the consent of
our LP Unitholders, to elect to treat BREP as a corporation for U.S. federal
tax purposes, or to address certain changes in U.S. federal income tax
regulations, legislation or interpretation. In some circumstances, such
revisions could have a material adverse impact on some or all LP Unitholders. THE FOREGOING DISCUSSION IS NOT INTENDED AS A
SUBSTITUTE FOR CAREFUL TAX PLANNING. THE TAX MATTERS RELATING TO BREP AND LP
UNITHOLDERS ARE COMPLEX AND ARE SUBJECT TO VARYING INTERPRETATIONS. MOREOVER,
THE EFFECT OF EXISTING INCOME TAX LAWS, THE MEANING AND IMPACT OF WHICH IS
UNCERTAIN, AND OF PROPOSED CHANGES IN INCOME TAX LAWS WILL VARY WITH THE
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 EACH LP UNITHOLDER, AND
IN REVIEWING THIS FORM 20-F THESE MATTERS SHOULD BE CONSIDERED. EACH LP
UNITHOLDER SHOULD CONSULT AN INDEPENDENT TAX ADVISER WITH RESPECT TO THE U.S.
FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES OF ANY INVESTMENT IN LP
UNITS. Material Canadian
Federal Income Tax Considerations The following is an
accurate summary of the material Canadian federal income tax consequences under
the Tax Act of the holding and disposition of our LP Units generally applicable
to an LP Unitholder who, for the purposes of the Tax Act and at all relevant
times, holds our LP Units as capital property, deals at arm’s length and is not
affiliated with BREP, BRELP, the Managing General Partner, the BRELP General
Partner, the BRELP GP LP or their respective affiliates (a “Holder”).
Generally, our LP Units will be considered to be capital property to a Holder,
provided that the Holder does not use or hold our LP Units in the course of
carrying on a business of trading or dealing in securities, and has not
acquired them in one or more transactions considered to be an adventure or
concern in the nature of trade. This summary is not
applicable to a Holder (i)  that is a “financial institution” (as defined in
the Tax Act) for the purpose of the “mark-to-market” rules, (ii)  that is a
“specified financial institution” (as defined in the Tax Act), (iii)  who makes
or has made a functional currency reporting election pursuant to section 261 of
the Tax Act, (iv)  an interest in which would be a “tax shelter investment” (as
defined in the Tax Act) or  who acquires an LP Unit as a “tax shelter investment”
(and this summary assumes that no such persons hold our LP Units), (v) that
has, directly or indirectly, a “significant interest” (as defined in subsection
34.2(1) of the Tax Act) in BREP, or (vi)  to whom any affiliate of BRELP is a
“foreign affiliate” (as defined in the Tax Act). Any such Holders should
consult their own tax advisers with respect to an investment in our LP Units. This summary is based
on the current provisions of the Tax Act, all specific proposals to amend the
Tax Act publicly announced by or on behalf of the Canadian Minister of Finance
prior to the date hereof (the “Tax Proposals”) and the current published
administrative and assessing policies and practices of the CRA. This summary
assumes that all Tax Proposals will be enacted in the form proposed but no
assurance can be given that the Tax Proposals will be enacted in the form
proposed or at all. This summary does not
otherwise take into account or anticipate any changes in law, whether by
judicial, administrative or legislative action or decision, or changes in the
CRA’s administrative and assessing policies and practices, nor does it take
into account provincial, territorial or foreign income tax legislation or
considerations, which may differ significantly from those described herein. A
Holder should consult their own tax advisers in respect of the provincial,
territorial or foreign income tax consequences to them of holding and disposing
of our LP Units. This summary assumes
that neither BREP nor BRELP will be considered to carry on business in Canada.
The Managing General Partner and the BRELP General Partner intend to organize
and conduct the affairs of each of these entities, to the extent possible, so
that neither of these entities should be considered to carry on business in
Canada for purposes of the Tax Act. However, no assurance can be given in this
regard. If BREP or BRELP carry on business in Canada, the tax implications to
BREP or BRELP and to Holders may be materially and adversely different than as
set out in this Form 20-F. This summary also assumes that except for
corporations that are organized in and resident in Canada, no subsidiary of
BREP or BRELP will invest in any property in Canada or receive dividends,
rents, interest or royalties from any Canadian resident person. However, no
assurance can be given in this regard. This summary also
assumes that neither BREP nor BRELP is a “tax shelter” (as defined in the Tax
Act) or “tax shelter investment”. However, no assurance can be given in this
regard. This summary also
assumes that neither BREP nor BRELP will be a “SIFT partnership” at any
relevant time for the purposes of SIFT Rules on the basis that neither BREP nor
BRELP will be a “Canadian resident partnership” at any relevant time. However,
there can be no assurance that the SIFT Rules will not be revised or amended
such that the SIFT Rules will apply. This summary does not
address the deductibility of interest on money borrowed to acquire our LP
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 This summary is of a
general nature only and is not intended to be, nor should it be construed to
be, legal or tax advice to any particular Holder, and no representation with
respect to the Canadian federal income tax consequences to any particular
Holder is made. Consequently, Holders are advised to consult their own tax
advisers with respect to their particular circumstances. See also Item 3.D
“Risk Factors — Risks Related to Taxation — Canada”. For purposes of the
Tax Act, all amounts relating to the acquisition, holding or disposition of our
LP Units must be expressed in Canadian dollars including any distributions,
adjusted cost base and proceeds of disposition. For purposes of the Tax Act,
amounts denominated in a currency other than the Canadian dollar generally must
be converted into Canadian dollars using the rate of exchange quoted by the
Bank of Canada at noon on the date such amounts arose, or such other rate of
exchange as is acceptable to the CRA. Holders Resident in
Canada The following portion
of the summary is generally applicable to a Holder who, for purposes of the Tax
Act and at all relevant times, is or is deemed to be resident in Canada (a “Resident
Holder”). Computation of Income
or Loss Each Resident Holder
is required to include (or, subject to the “at-risk rules” discussed below,
entitled to deduct) in computing his or her income for a particular taxation
year, the Resident Holder’s pro rata share of BREP’s income (or loss) for its
fiscal year ending in, or coincidentally with, the Resident Holder’s taxation
year end, whether or not any of that income is distributed to the Resident
Holder in the taxation year and regardless of whether our LP Units were held
throughout such year. BREP will not itself
be a taxable entity and is not expected to be required to file an income tax
return in Canada for any taxation year. However, BREP’s income (or loss) for a
fiscal period for purposes of the Tax Act will be computed as if BREP were a
separate person resident in Canada and the partners will be allocated a share
of that income (or loss) in accordance with the Amended and Restated Limited
Partnership Agreement of BREP. BREP’s income (or loss) will include its share
of the income (or loss) of BRELP for a fiscal year determined in accordance
with the Amended and Restated Limited Partnership Agreement of BRELP. For this
purpose, BREP’s fiscal year end and that of BRELP will be December 31. BREP’s income for tax
purposes for a given fiscal year will be allocated to each Resident Holder in
an amount calculated by multiplying such income that is allocable to LP Unitholders
by a fraction, the numerator of which is the sum of the distributions received
by such Resident Holder with respect to such fiscal year and the denominator of
which is the aggregate amount of the distributions made by BREP to all LP
Unitholders with respect to such fiscal year. If, with respect to a
given fiscal year, no distribution is made by BREP to LP Unitholders or BREP
has a loss for tax purposes, one quarter of its income, or loss, as the case
may be, for tax purposes for such fiscal year that is allocable to our LP
Unitholders will be allocated to the LP Unitholders of record at the end of
each calendar quarter ending in such fiscal year in the proportion that the
number of our LP Units held at each such date by an LP Unitholder is of the total
number of our LP Units that are issued and outstanding at each such date. BREP’s income as
determined for purposes of the Tax Act may differ from its income as determined
for accounting purposes and may not be matched by cash distributions. The above
allocations of income for Canadian tax purposes are subject to a special
allocation of income for Canadian tax purposes, that would allocate to
Brookfield or certain of its affiliates for Canadian income tax purposes only,
a portion of certain gains recognized in respect of a disposition of shares of
NA Holdco which will reduce, to the extent provided in the relevant partnership
agreement, the income for Canadian tax purposes, if any, allocated to LP
Unitholders associated with such gains, if any. In addition, for purposes of
the Tax Act, all income (or losses) of BREP and BRELP must be calculated in
Canadian currency. Where BREP (or BRELP) holds investments denominated in U.S.
dollars or other foreign currencies, gains and losses may be realized by BREP as
a consequence of fluctuations in the relative values of the Canadian and
foreign currencies. In computing BREP’s
income (or loss), deductions may be claimed in respect of reasonable
administrative costs, interest and other expenses incurred by BREP for the
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 subject to the relevant
provisions of the Tax Act. BREP may also deduct from its income for the year a
portion of the reasonable expenses, if any, incurred by BREP to issue our LP
Units. The portion of such issue expenses deductible by BREP in a taxation year
is 20% of such issue expenses, pro-rated where BREP’s taxation year is less
than 365 days. BREP and BRELP may be required to withhold and remit Canadian
federal withholding tax on any management or administration fees or charges
paid or credited to a non-resident person, to the extent that such management
or administration fees or charges are deductible in computing BREP’s or BRELP’s
income from a source in Canada. In general, a
Resident Holder’s share of BREP’s income (or loss) from a particular source
will be treated as if it were income (or loss) of the Resident Holder from that
source, and any provisions of the Tax Act applicable to that type of income (or
loss) will apply to the Resident Holder. BREP will invest in limited
partnership units of BRELP. In computing BREP’s income (or loss) under the Tax
Act, BRELP will itself be deemed to be a separate person resident in Canada
which computes its income (or loss) and allocates to its partners their
respective share of such income (or loss). Accordingly, the source and
character of amounts included in (or deducted from) the income of Resident
Holders on account of income (or loss) earned by BRELP generally will be
determined by reference to the source and character of such amounts when earned
by BRELP. The characterization
by the CRA of gains realized by BREP or BRELP on the disposition of investments
as either capital gains or income gains will depend largely on factual
considerations, and no conclusions are expressed in this Form 20-F. A Resident Holder’s share of
taxable dividends received or considered to be received by BREP in a fiscal
year from a corporation resident in Canada will be treated as a dividend
received by the Resident Holder and will be subject to the normal rules in the
Tax Act applicable to such dividends, including the enhanced gross-up and
dividend tax credit for “eligible dividends” (as defined in the Tax Act) when
the dividend received by BRELP is designated as an “eligible dividend”. Foreign taxes paid by
BREP or BRELP and taxes withheld at source on amounts paid or credited to BREP
or BRELP (other than for the account of a particular partner) will be allocated
pursuant to the governing partnership agreement. Each Resident Holder’s share
of the “business-income tax” and “non-business-income tax” paid to the
government of a foreign country for a year will be creditable against its
Canadian federal income tax liability to the extent permitted by the detailed
foreign tax credit rules contained in the Tax Act. Although the foreign tax
credit rules are designed to avoid double taxation, the maximum credit is
limited. Because of this, and because of timing differences in recognition of
expenses and income and other factors, the foreign tax credit rules may not provide
a full foreign tax credit for the “business-income tax” and
“non-business-income tax” paid by BREP or BRELP to the government of a foreign
country. Under the Foreign Tax Credit Generator Rules, the foreign
“business-income tax” or “non-business-income tax” allocated to a Resident
Holder for the purpose of determining such Resident Holder’s foreign tax credit
for any taxation year may be limited in certain circumstances, including where
a Resident Holder’s share of BREP’s income under the income tax laws of any
country (other than Canada) under whose laws any income of BREP is subject to
income taxation (the “Relevant Foreign Tax Law”) is less than the
Resident Holder’s share of such income for purposes of the Tax Act. For this
purpose, a Resident Holder is not considered to have a lesser direct or
indirect share of the income of BREP or BRELP under the Relevant Foreign Tax
Law than for the purposes of the Tax Act solely because, among other reasons,
of a difference between the Relevant Foreign Tax Law and the Tax Act in the
manner of computing the income of BREP or BRELP or in the manner of allocating
the income of BREP or BRELP because of the admission or withdrawal of a
partner. No assurance can be given that the Foreign Tax Credit Generator Rules
will not apply to any Resident Holder. If the Foreign Tax Credit Generator
Rules apply, the allocation to a Resident Holder of foreign “business-income
tax” or “non-business-income tax” paid by BREP or BRELP, and therefore such
Resident Holder’s foreign tax credits, will be limited. BREP and BRELP will
be deemed to be a non-resident person in respect of certain amounts paid or
credited or deemed to be paid or credited to them by a person resident or
deemed to be resident in Canada, including dividends or interest. Dividends or
interest (other than interest exempt from Canadian federal withholding tax)
paid or deemed to be paid by a person resident or deemed to be resident in
Canada to BRELP will be subject to withholding tax under Part XIII of the Tax
Act at the rate of 25%. However, the CRA’s administrative practice in similar
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 federal
withholding tax applicable to such payments to be computed by looking through
the partnership and taking into account the residency of the partners
(including partners who are resident in Canada) and any reduced rates of
Canadian federal withholding tax that any non-resident partners may be entitled
to under an applicable income tax treaty or convention, provided that the
residency status and entitlement to the treaty benefits can be established. In
determining the rate of Canadian federal withholding tax applicable to amounts
paid by the Holding Entities to BRELP, the Managing General Partner and the
BRELP General Partner expect the Holding Entities to look-through BRELP and
BREP to the residency of BREP’s partners (including partners who are resident
in Canada) and to take into account any reduced rates of Canadian federal
withholding tax that non-resident partners may be entitled to under an
applicable income tax treaty or convention in order to determine the
appropriate amount of Canadian federal withholding tax to withhold from
dividends or interest paid to BRELP. However, there can be no assurance that
the CRA would apply its administrative practice in this context. Under the
Treaty, a Canadian-resident payer is required in certain circumstances to
look-through fiscally transparent partnerships, such as BREP and BRELP, to the
residency and Treaty entitlements of their partners and to take into account
the reduced rates of Canadian federal withholding tax that such partners may be
entitled to under the Treaty. Under the Amended and Restated Limited
Partnership Agreement of BREP, the amount of any taxes withheld or paid by
BREP, BRELP or the Holding Entities in respect of our LP Units may be treated
either as a distribution to our LP Unitholders or as a general expense of BREP,
as determined by the Managing General Partner in its sole discretion. However,
the Managing General Partner’s current intention is to treat all such amounts
as a distribution to our LP Unitholders. If BREP incurs losses
for tax purposes, each Resident Holder will be entitled to deduct in the
computation of income for tax purposes the Resident Holder’spro ratashare of any net losses for tax purposes of BREP for its fiscal year to the
extent that the Resident Holder’s investment is “at-risk” within the meaning of
the Tax Act. The Tax Act contains “at-risk rules” which may, in certain
circumstances, restrict the deduction of a limited partner’s share of any
losses of a limited partnership. The Managing General Partner and the BRELP
General Partner do not anticipate that BREP or BRELP will incur losses but no
assurance can be given in this regard. Accordingly, Resident Holders should
consult their own tax advisers for specific advice with respect to the
potential application of the “at-risk rules”. Section 94.1 of the Tax Act
contains rules relating to investments by a taxpayer in Non-Resident Entities
that could, in certain circumstances, cause income to be imputed to Resident
Holders, either directly or by way of allocation of such income imputed to BREP
or BRELP. These rules would apply if it is reasonable to conclude, having
regard to all the circumstances, that one of the main reasons for the Resident
Holder, BREP or BRELP acquiring, holding or having an investment in a
Non-Resident Entity is to derive a benefit from portfolio investments in
certain assets from which the Non-Resident Entity may reasonably be considered
to derive its value in such a manner that taxes under the Tax Act on income,
profits and gains from such assets for any year are significantly less than
they would have been if such income, profits and gains had been earned
directly. In determining whether this is the case, section 94.1 of the Tax Act
provides that consideration must be given to, among other factors, the extent
to which the income, profits and gains for any fiscal period are distributed in
that or the immediately following fiscal period. No assurance can be given that
section 94.1 of the Tax Act will not apply to a Resident Holder, BREP or BRELP.
If these rules apply to a Resident Holder, BREP or BRELP, income, determined by
reference to a prescribed rate of interest plus two percent applied to the
“designated cost”, as defined in section 94.1 of the Tax Act, of the interest
in the Non-Resident Entity, will be imputed directly to the Resident Holder or
to BREP or BRELP and allocated to the Resident Holder in accordance with the rules
in section 94.1 of the Tax Act. The rules in section 94.1 of the Tax Act are
complex and Resident Holders should consult their own tax advisers regarding
the application of these rules to them in their particular circumstances. Any Non-Resident
Subsidiaries in which BRELP directly invests are expected to be CFAs of BRELP.
Dividends paid to BRELP by a CFA of BRELP will be included in computing the
income of BRELP. To the extent that any CFA of BRELP or any Indirect CFA earns
income that is characterized as FAPI in a particular taxation year of the CFA
or Indirect CFA, the FAPI allocable to BRELP under the rules in the Tax Act
must be included in computing the income of BRELP for Canadian federal income
tax purposes for the fiscal period of BRELP in which the taxation year of that
CFA or Indirect CFA ends, whether or not BRELP actually receives a distribution
of that FAPI. BREP will include its share of such Page201


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 FAPI
of BRELP in computing its income for Canadian federal income tax purposes and
Resident Holders will be required to include their proportionate share of such
FAPI allocated from BREP in computing their income for Canadian federal income
tax purposes. As a result, Resident Holders may be required to include amounts
in their income even though they have not and may not receive an actual cash
distribution of such amounts. If an amount of FAPI is included in computing the
income of BRELP for Canadian federal income tax purposes, an amount may be
deductible in respect of the “foreign accrual tax” applicable to the FAPI. Any
amount of FAPI included in income net of the amount of any deduction in respect
of “foreign accrual tax” will increase the adjusted cost base to BRELP of its
shares of the particular CFA in respect of which the FAPI was included. At such
time as BRELP receives a dividend of this type of income that was previously
included in BRELP’s income as FAPI, such dividend will effectively not be
included in computing the income of BRELP and there will be a corresponding
reduction in the adjusted cost base to BRELP of the particular “foreign
affiliate” shares. Under the Foreign Tax Credit Generator Rules, the “foreign
accrual tax” applicable to a particular amount of FAPI included in BRELP’s
income in respect of a particular CFA of BRELP may be limited in certain
specified circumstances, including where the direct or indirect share of the
income of any member of BRELP (which is deemed for this purpose to include a
Resident Holder) that is a person resident in Canada or a “foreign affiliate”
of such a person is, under a Relevant Foreign Tax Law, less than such member’s
share of such income for purposes of the Tax Act. No assurance can be given
that the Foreign Tax Credit Generator Rules will not apply to BRELP. For this
purpose, a Resident Holder is not considered to have a lesser direct or
indirect share of the income of BRELP under the Relevant Foreign Tax Law than
for purposes of the Tax Act solely because, among other reasons, of a
difference between the Relevant Foreign Tax Law and the Tax Act in the manner
of computing the income of BRELP or in the manner of allocating the income of
BRELP because of the admission or withdrawal of a partner. If the Foreign Tax
Credit Generator Rules apply, the “foreign accrual tax” applicable to a
particular amount of FAPI included in BRELP’s income in respect of a particular
“foreign affiliate” of BRELP will be limited. Disposition of LP
Units The disposition by a
Resident Holder of an LP Unit will result in the realization of a capital gain
(or capital loss) by such Resident Holder in the amount, if any, by which the
proceeds of disposition of our LP Unit, less any reasonable costs of
disposition, exceed (or are exceeded by) the adjusted cost base of such LP
Unit. In general, the adjusted cost base of a Resident Holder’s LP Units will
be equal to: (i) the actual cost of our LP Units (excluding any portion thereof
financed with limited recourse indebtedness); plus (ii) the pro rata share of
BREP’s income allocated to the Resident Holder for BREP’s fiscal years ending before
the relevant time; less (iii) the aggregate of the pro rata share of BREP’s
losses allocated to the Resident Holder (other than losses which cannot be
deducted because they exceed the Resident Holder’s “at-risk” amount) for BREP’s
fiscal years ending before the relevant time; and less (iv) the Resident
Holder’s distributions received from BREP before the relevant time. The
adjusted cost base of each of our LP Units will be subject to the averaging
provisions contained in the Tax Act. Where a Resident Holder
disposes of all of its LP Units, it will no longer be a partner of BREP. If,
however, a Resident Holder is entitled to receive a distribution from BREP
after the disposition of all such LP Units, then the Resident Holder will be
deemed to dispose of our LP Units at the later of: (i) the end of BREP’s fiscal
year during which the disposition occurred; and (ii) the date of the last
distribution made by BREP to which the Resident Holder was entitled. The pro
rata share of BREP’s income (or loss) for tax purposes for a particular fiscal
year which is allocated to a Resident Holder who has ceased to be a partner
will generally be added (or deducted) in the computation of the adjusted cost
base of the Resident Holder’s LP Units immediately prior to the time of the
disposition. These rules are complex and Resident Holders should consult their
own tax advisers for advice with respect to the specific tax consequences to
them of disposing of our LP Units. A Resident Holder
will realize a deemed capital gain if, and to the extent that, the adjusted
cost base of the Resident Holder’s LP Units is negative at the end of any
fiscal year of BREP. In such a case, the adjusted cost base of the Resident
Holder’s LP Units will be nil at the beginning of BREP’s next fiscal year. Taxation of Capital
Gains and Capital Losses Page202


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 In
general, one-half of a capital gain realized by a Resident Holder must be
included in computing such Resident Holder’s income as a “taxable capital gain”
(as defined in the Tax Act). One-half of a capital loss is deducted as an
“allowable capital loss” (as defined in the Tax Act) against taxable capital
gains realized in the year and any remainder may be deducted against net
“taxable capital gains” in any of the three years preceding the year or any year
following the year to the extent and under the circumstances described in the
Tax Act. Special rules in the Tax Act may apply to disallow the one-half
treatment on all or a portion of a capital gain realized on a disposition of
our LP Units to a tax-exempt person or a non-resident person. Resident Holders
contemplating such a disposition should consult their own tax advisers in this
regard. A Resident Holder
that is throughout the relevant taxation year a “Canadian-controlled private
corporation” (as defined in the Tax Act) may be liable to pay an additional
refundable tax of 6  2/3 % on its “aggregate investment income” (as
defined in the Tax Act) for the year, which is defined to include taxable
capital gains. Eligibility for
Investment Provided that our LP
Units are listed on a “designated stock exchange”, which currently includes the
TSX and the NYSE, our LP Units will be “qualified investments” under the Tax
Act for a trust governed by an RRSP, deferred profit sharing plan, RRIF,
registered education savings plan, registered disability savings plan, and
TFSA. However, there can be no assurance that tax laws relating to “qualified
investments" will not change. Taxes may be imposed in respect of the
acquisition or holding of non-qualified investments by such registered plans
and certain other taxpayers and with respect to the acquisition or holding of
“prohibited investments” by a TFSA or an RRSP or RRIF. Notwithstanding the
foregoing, a holder of a TFSA or an annuitant under an RRSP or RRIF, as the
case may be, will be subject to a penalty tax if our LP Units held in the TFSA,
RRSP or RRIF are a “prohibited investment” for the TFSA, RRSP or RRIF, as the
case may be. Generally, our LP Units will not be a “prohibited investment” if
the holder of the TFSA or the annuitant under the RRSP or RRIF, as applicable,
deals at arm’s length with BREP for purposes of the Tax Act and does not have a
“significant interest” (as defined in the Tax Act for purposes of the
prohibited investment rules) in BREP. Prospective holders who intend to hold
our LP Units in a TFSA, RRSP or RRIF should consult with their own tax advisers
regarding the application of the foregoing prohibited investment rules having
regard to their particular circumstances. Alternative Minimum
Tax Resident Holders that
are individuals or trusts may be subject to the alternative minimum tax rules.
Such Resident Holders should consult their own tax advisers. Holders Not Resident
in Canada The following portion
of the summary is generally applicable to a Holder who, for purposes of the Tax
Act and at all relevant times, is not, and is not deemed to be, resident in
Canada and who does not use or hold and is not deemed to use or hold its LP
Units in connection with a business carried on in Canada (a “Non-Resident Holder”). The following portion of the
summary assumes that (i) our LP Units are not and will not, at any relevant
time, constitute “taxable Canadian property” of any Non-Resident Holder and
(ii) BREP and BRELP will not dispose of property that is “taxable Canadian
property”. “Taxable Canadian property” includes, but is not limited to,
property that is used or held in a business carried on in Canada and shares of
corporations that are not listed on a “designated stock exchange” if more than
50% of the fair market value of the shares is derived from certain Canadian
properties during the 60-month period immediately preceding the particular
time. In general, our LP Units will not constitute “taxable Canadian property”
of any Non-Resident Holder at a particular time, unless (a) at any time during
the 60-month period immediately preceding the particular time, more than 50% of
the fair market value of our LP Units was derived, directly or indirectly
(excluding through a corporation, partnership or trust, the shares or interests
in which were not themselves “taxable Canadian property”), from one or any
combination of (i) real or immovable property situated in Canada,
(ii) “Canadian resource property”, (iii) “timber resource property”, and
(iv) options in respect of, or interests in, or for civil law rights in, such
property, whether or not such Page203


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 property exists, or (b)
our LP Units are otherwise deemed to be “taxable Canadian property”. Since
BREP’s assets will consist principally of units of BRELP, our LP Units would
generally be “taxable Canadian property” at a particular time if the units of
BRELP held by BREP derived, directly or indirectly (excluding through a
corporation, partnership or trust, the shares or interests in which were not
themselves “taxable Canadian property”), more than 50% of their fair market
value from properties described in (i) to (iv) above, at any time in the
60-month period preceding the particular time. The Managing General Partner and
the BRELP General Partner do not expect our LP Units to be “taxable Canadian
property” of any Non-Resident Holder and they do not expect BREP or BRELP to
dispose of “taxable Canadian property”. However, no assurance can be given in
these regards. See Item 3.D “Risk Factors — Risks Related to Taxation — Canada”. Special rules, which
are not discussed in this summary, may apply to a Non-Resident Holder that is
an insurer carrying on business in Canada and elsewhere. Taxation of Income or
Loss A Non-Resident Holder
will not be subject to Canadian federal income tax under Part I of the Tax Act
on its share of income from a business carried on by BREP (or BRELP) outside
Canada or the non-business income earned by BREP (or BRELP) from sources in
Canada. However, a Non-Resident Holder may be subject to Canadian federal
withholding tax under Part XIII of the Tax Act, as described below. The
Managing General Partner and the BRELP General Partner intend to organize and
conduct the affairs of BREP and BRELP, to the extent possible, such that
Non-Resident Holders should not be considered to be carrying on business in
Canada solely by virtue of holding our LP Units. However, no assurance can be
given in this regard. BREP and BRELP will
be deemed to be a non-resident person in respect of certain amounts paid or
credited or deemed to be paid or credited to them by a person resident or
deemed to be resident in Canada, including dividends or interest. Dividends or
interest (other than interest exempt from Canadian federal withholding tax)
paid or deemed to be paid by a person resident or deemed to be resident in
Canada to BRELP will be subject to withholding tax under Part XIII of the Tax
Act at the rate of 25%. However, the CRA’s administrative practice in similar
circumstances is to permit the rate of Canadian federal withholding tax
applicable to such payments to be computed by looking through the partnership
and taking into account the residency of the partners (including partners who
are resident in Canada) and any reduced rates of Canadian federal withholding
tax that any non-resident partners may be entitled to under an applicable
income tax treaty or convention, provided that the residency status and
entitlement to the treaty benefits can be established. In determining the rate
of Canadian federal withholding tax applicable to amounts paid by the Holding
Entities to BRELP, the Managing General Partner and the BRELP General Partner
expect the Holding Entities to look-through BRELP and BREP to the residency of
BREP’s partners (including partners who are resident in Canada) and to take
into account any reduced rates of Canadian federal withholding tax that
non-resident partners may be entitled to under an applicable income tax treaty
or convention in order to determine the appropriate amount of Canadian federal
withholding tax to withhold from dividends or interest paid to BRELP. However,
there can be no assurance that the CRA would apply its administrative practice
in this context. Under the Treaty, a Canadian-resident payer is required in
certain circumstances to look through fiscally transparent partnerships, such
as BREP and BRELP, to the residency and Treaty entitlements of their partners
and to take into account the reduced rates of Canadian federal withholding tax
that such partners may be entitled to under the Treaty. Under the Amended and
Restated Limited Partnership Agreement of BREP, the amount of any taxes
withheld or paid by BREP, BRELP or the Holding Entities in respect of our LP
Units may be treated either as a distribution to our LP Unitholders or as a
general expense of BREP, as determined by the Managing General Partner in its
sole discretion. However, the Managing General Partner’s current intention is
to treat all such amounts as a distribution to our LP Unitholders. Bermuda Tax
Considerations As a Bermuda exempted
limited partnership and under current Bermuda law, neither BREP nor BRELP is
subject to tax on profits, income or dividends, nor is there any capital gains
tax, estate duty or death duty in Bermuda. Page204


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 Furthermore,
each of BREP and BRELP has received an assurance from the Minister of Finance
of Bermuda under the Exempted Undertakings Tax Protection Act 1966 (as
amended), that in the event that Bermuda enacts any legislation imposing tax
computed on profits, income, any capital asset, gain or appreciation or any tax
in the nature of estate duty or inheritance tax, each of BREP and BRELP and
none of its operations or its shares, debentures or other obligations shall be
exempt from the imposition of such tax until 31 March 2035, provided that
such exemption shall not prevent the application of any tax payable in
accordance with the provisions of the Land Tax Act, 1967 or otherwise payable
in relation to land in Bermuda leased to BREP or BRELP. 10.F             DIVIDENDS AND PAYING AGENTS Not
applicable. 10.G            STATEMENT OF EXPERTS Not applicable. 10.H            DOCUMENTS ON DISPLAY Any
statement in this Form 20-F about any of our contracts or other documents is
not necessarily complete. If the contract or document is filed as an exhibit to
this Form 20-F the contract or document is deemed to modify the description
contained in this Form 20-F. You must review the exhibits themselves for a
complete description of the contract or document. Brookfield
Asset Management is subject to the information filing requirements of the
Exchange Act, and accordingly is required to file periodic reports and other
information with the SEC. As a foreign private issuer under the SEC’s
regulations, we will file annual reports on a Form 20-F and other reports on
Form 6-K. The information disclosed in our reports may be less extensive than
that required to be disclosed in annual and quarterly reports on Forms 10-K and
10-Q required to be filed with the SEC by U.S. issuers. Moreover, as a foreign
private issuer, we will not be subject to the proxy requirements under
Section 14 of the Exchange Act, and our directors and principal
shareholders are not subject to the insider short swing profit reporting and
recovery rules under Section 16 of the Exchange Act. The
contracts and other documents referred to in this Form 20-F, and our and
Brookfield Asset Management’s SEC filings are and will be available at the
SEC’s website at www.sec.gov, respectively. You may also read and copy any
document Brookfield Renewable or Brookfield Asset Management files with the SEC
at the public reference facilities maintained by the SEC at SEC Headquarters,
Public Reference Section, 100 F Street, N.E., Washington D.C. 20549. You may
obtain information on the operation of the SEC’s public reference facilities by
calling the SEC at 1-800-SEC-0330. In
addition, Brookfield Renewable and Brookfield Asset Management are required to
file documents required by Canadian securities laws electronically with
Canadian securities regulatory authorities and these filings are available on
Brookfield Renewable’s or Brookfield Asset Management’s SEDAR profile at www.sedar.com.
Written requests for such documents should be directed to our Corporate
Secretary at 73 Front Street, 5 th Floor, Hamilton, HM 12, Bermuda. 10.I              SUBSIDIARY INFORMATION Not
applicable. ITEM 11.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK See the
information contained in this Form 20-F under Item 5.A “Operating Results
— Risk Management and Financial Instruments”. ITEM 12.      DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES Not
applicable.  Page205


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 PART II ITEM 13.      DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES None. ITEM 14.      MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
USE OF PROCEEDS None. ITEM 15.      CONTROLS
AND PROCEDURES Evaluation of Disclosure Controls
and Procedures Our
management, with the participation of our Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period
covered by this Form 20-F. Based on such evaluation, our Chief Executive Officer
and Chief Financial Officer have concluded that as of December 31, 2014, our
disclosure controls and procedures are designed at a reasonable assurance level
and are effective to provide reasonable assurance that material information we
are required to disclose in reports that we file or submit under the Exchange
Act is recorded, processed, summarized, and reported within the time periods
specified in the rules and forms of the Securities and Exchange Commission, and
that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. While
disclosure controls and procedures and internal controls over financial
reporting were adequate and effective we continue to implement certain measures
to strengthen control processes and procedures. Management’s Annual Report on
Internal Control over Financial Reporting Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rule 13a-15(f)
under the Exchange Act. Under the supervision and with the participation of our
management, including persons performing the functions of principal executive
and principal financial officers for us, we conducted an evaluation of the
effectiveness of our internal control over financial reporting as of December
31, 2014, based on the criteria set forth inInternal Control—Integrated
Framework (2013)issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on evaluation under the Framework in Internal
Control—Integrated Framework, our management concluded that our internal
control over financial reporting was effective as of December 31, 2014. Internal
control systems, no matter how well designed, have inherent limitations.
Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate. Report of Independent Registered
Public Accounting Firm The
effectiveness of our internal control over financial reporting as of December
31, 2014  has been audited by Ernst & Young, Chartered Professional
Accountants, Chartered Accountants, who have also audited our consolidated financial
statements, as stated in their reports which are included herein. Limitations on Effectiveness of
Controls and Procedures In
designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired
control objectives. In addition, the design of disclosure controls and
procedures must reflect the fact that there are resource constraints and that
management is required to apply judgment in evaluating the benefits of possible
controls and procedures relative to their costs. Changes in Internal Control Page206


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 There was no change in our internal control over
financial reporting during the year ended December 31, 2014, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting. ITEM 16.      [RESERVED] 16.A            AUDIT COMMITTEE FINANCIAL EXPERT Our
Managing General Partner’s board of directors has determined that Patricia
Zuccotti possesses specific accounting and financial management expertise and
that she is the audit committee financial expert as defined by the SEC, and that
she is independent within the meaning of the rules of the NYSE. Our Managing
General Partner’s board of directors has also determined that other members of
the Audit Committee have sufficient experience and ability in finance and
compliance matters to enable them to adequately discharge their responsibilities. 16.B            CODE OF ETHICS Brookfield
Renewable has adopted a Code of Business Conduct and Ethics (‘‘Code’’)
that applies to the members of the board of directors of our Managing General
Partner, our partnership and any officers or employees of our Managing General
Partner. The Code has been updated as of October 2014 and we have posted a copy
of the current Code on our website at www.brookfieldrenewable.com/about/governance. 16.C            PRINCIPAL ACCOUNTANT FEES AND SERVICES Our
Managing General Partner has retained Ernst & Young LLP to act as our
partnership’s independent registered chartered accountants. The table
below summarizes the fees for professional services rendered by Ernst &
Young LLP: 2014
 
 2013
 
 2012Audit Fees(1)
 9,862,878
 
 6,909,639
 
 6,611,360Audit-related fees(2) (3)
 1,676,862
 
 650,191
 
 1,385,814Tax fees(3) (4)
 380,700
 
 600,872
 
 608,365
 (1)Audit
fees relate to the fiscal year audit notwithstanding when the fees and expense
were billed or when the services were rendered. (2)Audit-related
fees relate primarily to services pertaining to financial due diligence,
Sarbanes-Oxley readiness activities, capital market transactions, Form 20-F,
NYSE listing and other securities related matters. Audit-related fees also include
other services. (3)Includes
fees for services invoiced during the fiscal year notwithstanding when the
services were rendered. (4)Includes
professional services related to tax compliance, tax advice and tax planning in
connection with domestic and foreign operations and corresponding tax
implications. The audit
committee of our Managing General Partner pre-approves all audit and non-audit
services provided to our partnership by Ernst & Young LLP. 16.D            EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEE None. 16.E            PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASER BREP may from
time-to-time, subject to applicable law, purchase LP Units for cancellation in
the open market, provided that any necessary approval has been obtained. In
December 2014, the TSX accepted a notice of BREP’s intention to commence a
normal course issuer bid, which permits BREP to repurchase up to 7,100,000
issued and outstanding LP Units. The price to be paid for our LP Units under
the normal course issuer bid will be the market price at the time of purchase.
The actual number of LP Units to be purchased and the timing of such purchases
will be determined by BREP, and all purchases will be made through the
facilities of the TSX or the NYSE. Repurchases were authorized to commence on
December 29, 2014 and will terminate on December 28, 2015 or earlier should
BREP complete its repurchases prior to such date.  In addition, Brookfield has
indicated that it may from time-to-time, subject to applicable law, purchase LP
Units in the market without making an offer to all LP Unitholders.  Page207


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 Issuer PurchasesofEquitySecurities  Period
 (a)Total
  Number
  ofLPUnitsPurchased
 (b)
  AveragePricePaidperLPUnit
 (c)TotalNumberofLPUnitsPurchasedasPartofPubliclyAnnouncedPlansor Programs
 (d)MaximumNumber(orApproximateDollarValue)ofLPUnitsthatMayYetBePurchased UnderthePlansorProgramsMonth #1
  December 29 to
  December 31
 Nil
 Nil
 Nil
 7,100,000
  issued and
  outstanding
  LP UnitsMonth #2
  January 1 to
  January 31
 Nil
 Nil
 Nil
 7,100,000
  issued and
  outstanding
  LP UnitsMonth #3
  February 1 to
  February 27
 Nil
 Nil
 Nil
 7,100,000
  issued and
  outstanding
  LP Units
 16.F             CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT None. 16.G            CORPORATE GOVERNANCE Our
corporate practices are not materially different from those required of domestic
limited partnerships under the NYSE listing standards. PART III ITEM 17.      FINANCIAL STATEMENTS Not
applicable. ITEM 18.      FINANCIAL STATEMENTS See the
list of financial statements on page F-1, which are filed as part of this Form
20-F. ITEM 19.      EXHIBITS Page208


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 Number
 
 Description1.1
 
 Certificate of Registration of Brookfield
  Renewable Energy Partners L.P., dated June 29, 2011.*1.2
 
 Certificate of Deposit of Supplementary
  Certificate of Brookfield Renewable Energy Partners L.P., dated August 29,
  2011.*1.3
 
 Certificate of Deposit of Supplementary
  Certificate of Brookfield Renewable Energy Partners L.P. dated
  December 21, 2011.*1.4
 
 Certificate of Deposit of Supplementary
  Certificate of Brookfield Renewable Energy Partners L.P., dated May 11, 2012.*1.5
 
 Certificate of Deposit of Memorandum of
  Increase of Share Capital, dated November 23, 2011.*1.6
 
 Amended and Restated Limited Partnership
  Agreement of Brookfield Renewable Energy Partners L.P., dated
  November 20, 2011.*1.7
 
 Articles of Incorporation of Brookfield
  Renewable Partners Limited.*1.8
 
 Form 13 Amending the Registered Office of
  Brookfield Renewable Partners Limited.*1.9
 
 Bye-laws of Brookfield Renewable Partners
  Limited.***4.1
 
 Amended and Restated Limited Partnership
  Agreement of Brookfield Renewable Energy L.P., dated November 20, 2011.*4.2
 
 Second Amended and Restated Master Services
  Agreement, dated February 26, 2015, by and among Brookfield Asset Management
  Inc., Brookfield Renewable Energy Partners L.P., Brookfield Renewable Energy
  L.P., and others.****4.3
 
 Relationship Agreement, dated
  November 28, 2011, by and among Brookfield Renewable Energy Partners
  L.P., Brookfield Renewable Energy L.P., the Service Provider,Brookfield Asset
  Management Inc., and others.*4.4
 
 Registration Rights Agreement, dated
  November 28, 2011, between Brookfield Renewable Energy Partners L.P. and
  Brookfield Asset Management Inc.*4.5
 
 Combination Agreement, dated September 12,
  2011, by and among Brookfield Renewable Power Inc., Brookfield Renewable
  Power Fund, Brookfield Renewable Power Trust and Brookfield Renewable Energy
  Partners L.P.*4.6
 
 Amended and Restated Indenture, dated as of
  November 23, 2011, among Brookfield Renewable Energy Partners ULC
  (formerly BRP Finance ULC), BNY Trust Company of Canada and The Bank of New
  York Mellon.*4.7
 
 Amended and Restated Guarantee Indenture,
  dated November 25, 2011, by and among the Guarantors from time to time
  party thereto, Brookfield Renewable Power Preferred Equity Inc., and
  Computershare Trust Company of Canada (Class A Preference Shares, Series 1).*
 4.8
 
 Amended and Restated Guarantee Indenture,
  dated November 25, 2011, by and among the Guarantors from time to time party
  thereto, Brookfield Renewable Power Preferred Equity Inc., and Computershare
  Trust Company of Canada (Class A Preference Shares, Series 2).*4.9
 
 Guarantee, dated November 23, 2011, by
  Brookfield Renewable Energy L.P. and BNY Trust Company of Canada.*4.10
 
 Guarantee, dated November 23, 2011, by
  Brookfield Renewable Energy Partners L.P. and BNY Trust Company of Canada.*4.11
 
 Guarantee, dated November 23, 2011, by BRP
  Bermuda Holdings I Limited and BNY Trust Company of Canada.*4.12
 
 Guarantee, dated November 23, 2011, by
  Brookfield BRP Holdings (Canada) Inc. and BNY Trust Company of Canada.*4.13
 
 First Amendment to Amended and Restated
  Limited Partnership Agreement of Brookfield Renewable Energy L.P., dated
  May 4, 2012.*4.14
 
 Energy Revenue Agreement, dated
  November 23, 2011, between Brookfield Energy Marketing LP and Brookfield
  Power US Holding America Co.*4.15
 
 Guarantee Indenture, dated October 11,
  2012, by and among the Guarantors from time to time party thereto, Brookfield
  Renewable Power Preferred Equity Inc. and Computershare Trust Company of
  Canada (Class A Preference Shares, Series 3).*4.16
 
 Guarantee Indenture, dated October 11,
  2012, by and among the Guarantors from time to time party thereto, Brookfield
  Renewable Power Preferred Equity Inc., and Computershare Trust Company of
  Canada (Class A Preference Shares, Series 4).*4.17
 
 Guarantee Indenture, dated January 29,
  2013, by and among the Guarantors from time to time party thereto, Brookfield
  Renewable Power Preferred Equity Inc., and Computershare Trust Company of
  Canada (Class A Preference Shares, Series 5).*4.18
 
 Guarantee Indenture, dated May 1, 2013, by
  and among the Guarantors from time to time party thereto, Brookfield
  Renewable Power Preferred Equity Inc., and Computershare Trust Company of
  Canada (Class A Preference Shares, Series 6).*4.19
 
 Guarantee, dated October 7, 2014, by
  Brookfield BRP Europe Holdings (Bermuda) Limited and BNY Trust Company of
  Canada.****4.20
 
 Guarantee, dated February 26, 2015, by
  Brookfield Renewable Investments Limited and BNY Trust Company of Canada.****4.21
 
 Code of Business Conduct and Ethics,
  updated as of October 2014.****8.1
 
 List of all significant subsidiaries (as
  defined in §210-1.02(w) of Regulation S-X) of Brookfield Renewable Energy
  Partners L.P. (incorporated by reference to Item 4.C “Organizational
  Structure”).12.1
 
 Certification of Richard Legault, Chief
  Executive Officer of BRP Energy Group L.P., the Service Provider of
  Brookfield Renewable Energy Partners L.P., pursuant to Section 302 of the
  Sarbanes-Oxley Act of 2002.****
 Page209


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 12.2
 
 Certification of Nicholas Goodman, Chief
  Financial Officer of BRP Energy Group L.P., the Service Provider of
  Brookfield Renewable Energy Partners L.P., pursuant to Section 302 of the
  Sarbanes-Oxley Act of 2002.****13.1
 
 Certification of Richard Legault, Chief
  Executive Officer of BRP Energy Group L.P., the Service Provider of
  Brookfield Renewable Energy Partners L.P., pursuant to 18 U.S.C. Section
  1350, as adopted to Section 906 of the Sarbanes Oxley Act of 2002.****13.2
 
 Certification of Nicholas Goodman, Chief
  Financial Officer of BRP Energy Group L.P., the Service Provider of
  Brookfield Renewable Energy Partners L.P., pursuant to 18 U.S.C. Section
  1350, as adopted to Section 906 of the Sarbanes Oxley Act of 2002.****15.1
 
 Board of Directors Charter of the Managing
  General Partner of Brookfield Renewable Energy Partners L.P.****15.2
 
 Audit Committee Charter of the Managing
  General Partner of Brookfield Renewable Energy Partners L.P.****15.3
 
 Consent of Ernst & Young LLP.*****
 Filed as an exhibit to Amendment No. 6 to Registration
  Statement on Form 20-F on May 16, 2013, and incorporated herein by reference.**
 Filed as an exhibit to form 6-K on February
  13, 2014, and incorporated herein by reference.***
 Filed as an exhibit to our 2013 form 20-F
  as filed in March 2014.****
 Filed herewith
 Page210


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  SIGNATURE The registrant hereby certifies that it meets all of the
requirements for filing this Form 20-F and that it has duly caused and
authorized the undersigned to sign this Form 20-F on its behalf.  Dated: February 27, 2015
 BROOKFIELD RENEWABLE ENERGY PARTNERS L.P.by its
  general partner, Brookfield Renewable Partners LimitedBy:
 /s/ Nicholas GoodmanName:
 Nicholas GoodmanTitle:
 Chief Financial Officer of its Service
  Provider, BRP Energy Group L.P.
 Page211


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Table of Contents
  BROOKFIELD RENEWABLE
ENERGY PARTNERS L.P. INDEX
TO FINANCIAL STATEMENTS   PageAudited Consolidated Financial Statements
  as at December  31, 2014, and 2013, and for the
 F-2Years Ended December 31, 2014, 2013 and
  2012
 Page212


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Table of Contents
 MANAGEMENT’S
RESPONSIBILITY  Management’s
Responsibility for Financial Statements The accompanying consolidated
financial statements have been prepared by the Brookfield Renewable Energy
Partners L.P. (“Brookfield Renewable”) management which is responsible for
their integrity, consistency, objectivity and reliability. To fulfill this
responsibility, Brookfield Renewable maintains policies, procedures and systems
of internal control to ensure that its reporting practices and accounting and
administrative procedures are appropriate to provide a high degree of assurance
that relevant and reliable financial information is produced and assets are
safeguarded. These controls include the careful selection and training of
employees, the establishment of well-defined areas of responsibility and
accountability for performance, and the communication of policies and code of
conduct throughout the company. These consolidated financial
statements have been prepared in conformity with International Financial Reporting
Standards as issued by the International Accounting Standards Board and, where
appropriate, reflect estimates based on management’s judgment. Ernst & Young LLP, the
Independent Registered Chartered Accountants appointed by the directors of the
general partner of Brookfield Renewable, have audited the consolidated
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States) to enable them to express to the
partners their opinion on the consolidated financial statements. Their report
outlines the scope of their examination and opinion on the consolidated
financial statements. The consolidated financial
statements have been further reviewed and approved by the Board of Directors of
the general partner of Brookfield Renewable acting through its Audit Committee,
which is comprised of directors who are not officers or employees of Brookfield
Renewable. The Audit Committee, which meets with the auditors and management to
review the activities of each and reports to the Board of Directors, oversees
management’s responsibilities for the financial reporting and internal control
systems. The auditors have full and direct access to the Audit Committee and
meet periodically with the committee both with and without management present
to discuss their audit and related findings. 
     Richard Legault                                                            
                                   Nicholas Goodman Chief Executive OfficerChief
Financial Officer  February 27, 2015    F -1


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Table of Contents
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Partners of Brookfield Renewable
Energy Partners L.P. We have audited the accompanying consolidated
financial statements ofBrookfield
Renewable Energy Partners L.P. (“Brookfield Renewable”), which comprise theconsolidated balance sheets as at December
31, 2014 and 2013, and the related consolidated statements of income (loss),
comprehensive income (loss), changes in equity and cash flows for each of the
years in the three-year period ended December 31, 2014, and a summary of
significant accounting policies and other explanatory information. Management’s Responsibility for Consolidated
Financial Statements Management is responsible for the preparation
and fair presentation of these consolidated financial statements in accordance
with International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or
error. Auditors’ Responsibility Our responsibility is to express an opinion
on these consolidated financial statements based on our audits. We conducted
our audits in accordance with Canadian generally accepted auditing standards
and the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement. An audit involves performing procedures to
obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the consolidated financial statements in
order to design audit procedures that are appropriate in the circumstances. An
audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have
obtained in our audits is sufficient and appropriate to provide a basis for our
audit opinion. Opinion In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position ofBrookfield Renewable Energy Partners L.P.as at December 31, 2014 and 2013 and its financial performance
and their cash flows for each of the years in the three-year period ended December
31, 2014, in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board.        F -2


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Table of Contents
 Other Matter We have also audited, in accordance with the
standards of the Public Company Accounting Oversight Board (United States), Brookfield
Renewable’s internal control over financial reporting as of December 31, 2014,
based on the criteria established inInternal Control—Integrated Frameworkissued
by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework) and our report dated February 27, 2015 expressed an unqualified
opinion on Brookfield Renewable’s internal control over financial reporting.    Toronto, Canada February 27, 2015 F -3


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Table of Contents
 INTERNAL
CONTROL OVER FINANCIAL REPORTING MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING  Management of Brookfield Renewable
Energy Partners, L.P. (“Brookfield Renewable”) is responsible for establishing
and maintaining adequate internal control over financial reporting. Internal
control over financial reporting is a process designed by, or under the
supervision of, the Chief Executive Officer and the Chief Financial Officer and
effected by the Board of Directors, management and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board as defined in Regulation 240.13a–15(f) or
240.15d–15(f). Management assessed the
effectiveness of Brookfield Renewable’s internal control over financial
reporting as of December 31, 2014, based on the criteria set forth in Internal
Control – Integrated Framework (2013 framework) issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this assessment,
management concludes that, as of December 31, 2014, Brookfield Renewable’s
internal control over financial reporting is effective. Management excluded
from its design and assessment of internal control over financial reporting the
internal controls of the Maine Hydroelectric Generation Portfolio, Pennsylvania
Hydroelectric Generation Facility and Ireland Wind Portfolio, whose total
assets, net assets, total revenues and net income on a combined basis
constitute approximately 12%, 10%, 6% and 1%, respectively, of the consolidated
financial statement amounts as of and for the year ended December 31, 2014. Brookfield Renewable’s internal
control over financial reporting as of December 31, 2014, has been audited by
Ernst & Young LLP, the Independent Registered Public Accounting Firm, who
also audited Brookfield Renewable’s consolidated financial statements for the
year ended December 31, 2014. As stated in the Report of Independent Registered
Public Accounting Firm, Ernst & Young LLP expressed an unqualified opinion
on the effectiveness of Brookfield Renewable’s internal control over financial
reporting as of December 31, 2014. 
 Richard Legault                                                            
                                   Nicholas Goodman Chief Executive OfficerChief
Financial Officer  February 27, 2015    F -4


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Table of Contents
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Board of Directors and Partners of Brookfield Renewable
Energy Partners L.P.  We have audited Brookfield
Renewable Energy Partners L.P. (“Brookfield Renewable”)’s internal control over
financial reporting as at December 31, 2014, based on the criteria established
inInternal Control—Integrated Frameworkissued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO
criteria). Brookfield Renewable’s management is responsible for maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control over Financial Reporting.
Our responsibility is to express an opinion on the Brookfield Renewable’s
internal control over financial reporting based on our audit. We conducted our audit in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit included
obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, testing and evaluating the
design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion. A company’s internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with International
Financial Reporting Standards as issued by the International Accounting
Standards Board. A company’s internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with International Financial Reporting Standards as issued
by the International Accounting Standards Board, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements. Because of the inherent
limitations of internal control over financial reporting, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of the effectiveness ofthe internal control over
financial reporting to future periods are subject to the risk that the controls
may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate. As indicated in the accompanying
Management’s Report on Internal Control over Financial Reporting, management’s
assessment of and conclusion on the effectiveness of internal control over
financial reporting did not include the internal controls of the Maine
Hydroelectric Generation Portfolio, Pennsylvania Hydroelectric Generation
Facility and Ireland Wind Portfolio, which are included in the 2014
consolidated financial statements of Brookfield Renewable and constituted
approximately 12% and 10% of total and net assets, respectively, as of December
31, 2014 and 6% and 1% of revenues and net income, respectively, for the year
then ended. Our audit of internal control over financial reporting of
Brookfield also did not include an evaluation of the internal control over
financial reporting of the Maine Hydroelectric Generation Portfolio,
Pennsylvania Hydroelectric Generation Facility and Ireland Wind Portfolio. F -5


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Table of Contents
 In our
opinion, Brookfield Renewable maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2014, based on the
COSO criteria. We have also audited, in accordance with Canadian generally
accepted auditing standards and the standards of the Public Company Accounting
Oversight Board (United States), the 2014 consolidated financial statements of
Brookfield Renewable and our reportdated February 27, 2015 expressed an unqualified  opinion on those
financial statements.    Toronto, Canada February 27, 2015 F -6


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Table of Contents
 BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P.CONSOLIDATED BALANCE SHEETSAS AT DECEMBER 31(MILLIONS)
 Notes
 
 2014
 
 2013AssetsCurrent assetsCash and cash equivalents
 5
 $
 150
 $
 203Restricted cash
 6
 
 232
 
 169Trade receivables and other current assets
 7
 
 201
 
 204Financial instrument assets
 8
 
 48
 
 2Due from related parties
 9
 
 63
 
 48694
 
 626Financial instrument assets
 8
 
 18
 
 15Equity-accounted investments
 10
 
 273
 
 290Property, plant and equipment, at fair value
 11
 
 18,566
 
 15,741Deferred income tax assets
 15
 
 142
 
 117Other long-term assets
 12
 
 156
 
 210$
 19,849
 $
 16,999LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities
 13
 $
 253
 $
 229Financial instrument liabilities
 8
 
 99
 
 64Due to related parties
 9
 
 79
 
 110Current portion of long-term debt
 14
 
 256
 
 517687
 
 920Financial instrument liabilities
 8
 
 75
 
 9Long-term debt and credit facilities
 14
 
 7,422
 
 6,106Deferred income tax liabilities
 15
 
 2,637
 
 2,265Other long-term liabilities
 16
 
 147
 
 16310,968
 
 9,463EquityNon-controlling interestsPreferred equity
 18
 
 728
 
 796Participating non-controlling interests - in operatingsubsidiaries
 18
 
 2,062
 
 1,303General partnership interest in a holding subsidiaryheld by Brookfield
 18
 
 59
 
 54Participating non-controlling interests - in a holding
  subsidiary- Redeemable/Exchangeable units held by Brookfield
 18
 
 2,865
 
 2,657Limited partners' equity
 19
 
 3,167
 
 2,7268,881
 
 7,536$
 19,849
 $
 16,999The accompanying notes are an integral part of these
  consolidated financial statements.
 Approved on behalf of Brookfield Renewable
Energy Partners L.P.:  Patricia Zuccotti
  Director
 David Mann
  Director
  F -7


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Table of Contents
 BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P.CONSOLIDATED STATEMENTS OF INCOME (LOSS)FOR THE YEAR ENDED DECEMBER 31
 Notes
 2014
 2013
 2012(MILLIONS, EXCEPT AS NOTED)Revenues
 9
 $
 1,704
 $
 1,706
 $
 1,309Other income
 
 
 10
 
 11
 
 16Direct operating costs
 21
 
 (524)
 
 (530)
 
 (486)Management service costs
 9
 
 (51)
 
 (41)
 
 (36)Interest expense – borrowings
 14
 
 (415)
 
 (410)
 
 (411)Share of earnings from equity-accounted
  investments
 10
 
 3
 
 9
 
 (5)Unrealized financial instruments gain
  (loss)
 8
 
 10
 
 37
 
 (23)Depreciation
 11
 
 (548)
 
 (535)
 
 (483)Other
 11
 
 3
 
 (31)
 
 (16)Income (loss) before income taxes
 
 
 192
 
 216
 
 (135)Income tax recovery (expense)Current
 15
 
 (18)
 
 (19)
 
 (14)Deferred
 15
 
 29
 
 18
 
 5411
 
 (1)
 
 40Net income (loss)
 
 $
 203
 $
 215
 $
 (95)Net income (loss) attributable to:Non-controlling interestsPreferred equity
 18
 $
 38
 $
 37
 $
 16Participating non-controlling interests -
  inoperating subsidiaries
 18
 
 51
 
 41
 
 (40)General partnership interest in a holdingsubsidiary held by Brookfield
 18
 
 1
 
 1
 
 (1)Participating non-controlling interests -
  in aholding subsidiary - Redeemable/Exchangeable units held by Brookfield
 18
 
 55
 
 67
 
 (35)Limited partners' equity
 19
 
 58
 
 69
 
 (35)$
 203
 $
 215
 $
 (95)Basic and diluted earnings (loss) per LP
  Unit
 
 $
 0.42
 $
 0.52
 $
 (0.26)The accompanying notes are an integral part
  of these consolidated financial statements.
  F -8


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Table of Contents
 BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P.CONSOLIDATED STATEMENTS OF COMPREHENSIVE
  INCOME (LOSS)FOR THE YEAR ENDED DECEMBER 31
 Notes
 2014
 2013
 2012(MILLIONS)Net income (loss)
 
 $
 203
 $
 215
 $
 (95)Other comprehensive income (loss) that will
  not bereclassified to net income (loss)Revaluations of property, plant and
  equipment
 10,11
 
 1,700
 
 (211)
 
 784Actuarial (losses) gains on defined benefit
  plans
 20
 
 (8)
 
 12
 
 (8)Deferred income taxes on above items
 15
 
 (369)
 
 104
 
 (224)Total items that will not be reclassified
  to net income (loss)
 
 
 1,323
 
 (95)
 
 552Other comprehensive income (loss) that may
  be reclassified tonet income (loss)Financial instruments designated as
  cash-flow hedges(Losses) gains arising during the year
 8
 
 (60)
 
 60
 
 37Reclassification adjustments for amounts
  recognized innet income (loss)
 8
 
 -
 
 (1)
 
 (16)Foreign currency translation
 
 
 (398)
 
 (501)
 
 (145)Deferred income taxes on above items
 15
 
 3
 
 (11)
 
 (1)Total items that may be reclassified
  subsequently to net income (loss)
 
 (455)
 
 (453)
 
 (125)Other comprehensive income (loss)
 
 
 868
 
 (548)
 
 427Comprehensive income (loss)
 
 $
 1,071
 $
 (333)
 $
 332Comprehensive income (loss) attributable
  to:Non-controlling interestsPreferred equity
 18
 $
 (31)
 $
 (16)
 $
 23Participating non-controlling interests -
  in operating subsidiaries
 18
 
 310
 
 140
 
 (26)General partnership interest in a holding
  subsidiary held byBrookfield
 18
 
 8
 
 (5)
 
 3Participating non-controlling interests -
  in a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 18
 
 379
 
 (224)
 
 163Limited partners' equity
 19
 
 405
 
 (228)
 
 169$
 1,071
 $
 (333)
 $
 332The accompanying notes are an integral part
  of these consolidated financial statements.
 F -9


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Table of Contents
 BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P.CONSOLIDATED STATEMENTS OF CHANGES IN
  EQUITYAccumulated
  other comprehensive income
 
 
 
 
 
 
 
 ParticipatingGeneral
 non-controllingpartnership
 interests
  - in aActuarial
 
 
 
 
 
 
 Participating
 interest
  in
 holding
  subsidiarylosses
  on
 
 
 Total
 
 
 non-controlling
 a
  holding
 -
  RedeemableFOR THE YEAR ENDED DECEMBER 31
 Limited
 Foreign
 
 
 defined
 
 
 limited
 
 
 interests
  - in
 subsidiary
 /Exchangeablepartners'
 currency
 Revaluation
 benefit
 Cash
  flow
 partners'
 Preferred
 operating
 held by
 units
  held by
 Total(MILLIONS)
 equity
 translation
 surplus
 plans
 hedges
 equity
 equity
 subsidiaries
 Brookfield
 Brookfield
 equityBalance, as at December 31, 2011
 $
 (9)
 $
 194
 $
 3,015
 $
 (8)
 $
 (31)
 $
 3,161
 $
 241
 $
 629
 $
 64
 $
 3,089
 $
 7,184Net income
 
 (35)
 
 -
 
 -
 
 -
 
 -
 
 (35)
 
 16
 
 (40)
 
 (1)
 
 (35)
 
 (95)Other comprehensive (loss) income
 
 -
 
 (69)
 
 270
 
 (3)
 
 6
 
 204
 
 7
 
 14
 
 4
 
 198
 
 427Preferred shares issued
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 252
 
 -
 
 -
 
 -
 
 252Capital contributions (Note 18)
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 455
 
 -
 
 -
 
 455Distributions or dividends declared
 
 (183)
 
 -
 
 -
 
 -
 
 -
 
 (183)
 
 (16)
 
 (24)
 
 (4)
 
 (179)
 
 (406)Other
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 (6)
 
 -
 
 (3)
 
 (9)Change in period
 
 (218)
 
 (69)
 
 270
 
 (3)
 
 6
 
 (14)
 
 259
 
 399
 
 (1)
 
 (19)
 
 624Balance, as at December 31, 2012
 $
 (227)
 $
 125
 $
 3,285
 $
 (11)
 $
 (25)
 $
 3,147
 $
 500
 $
 1,028
 $
 63
 $
 3,070
 $
 7,808The accompanying notes are an integral part
  of these consolidated financial statements.
 F -10


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Table of Contents
 BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P.CONSOLIDATED STATEMENTS OF CHANGES IN
  EQUITYAccumulated
  other comprehensive income
 
 
 
 
 
 
 
 ParticipatingGeneral
 non-controllingActuarial
 
 
 
 
 
 
 
 
 partnership
 interests
  - in a(losses)
 
 
 
 
 
 
 Participating
 interest
  in
 holding
  subsidiarygains on
 
 
 Total
 
 
 non-controlling
 a
  holding
 -
  RedeemableFOR THE YEAR ENDED DECEMBER 31
 Limited
 Foreign
 
 
 defined
 
 
 limited
 
 
 interests
  - in
 subsidiary
 /Exchangeablepartners'
 currency
 Revaluation
 benefit
 Cash
  flow
 partners'
 Preferred
 operating
 held by
 units
  held by
 Total(MILLIONS)
 
 equity
 translation
 surplus
 plans
 hedges
 equity
 equity
 subsidiaries
 Brookfield
 Brookfield
 equityBalance, as at December 31, 2012
 $
 (227)
 $
 125
 $
 3,285
 $
 (11)
 $
 (25)
 $
 3,147
 $
 500
 $
 1,028
 $
 63
 $
 3,070
 $
 7,808Net income
 
 69
 
 -
 
 -
 
 -
 
 -
 
 69
 
 37
 
 41
 
 1
 
 67
 
 215Other comprehensive (loss) income
 
 -
 
 (208)
 
 (111)
 
 4
 
 18
 
 (297)
 
 (53)
 
 99
 
 (6)
 
 (291)
 
 (548)Preferred shares issued
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 349
 
 -
 
 -
 
 -
 
 349Capital contributions (Note 18)
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 265
 
 -
 
 -
 
 265Distributions or dividends declared
 
 (193)
 
 -
 
 -
 
 -
 
 -
 
 (193)
 
 (37)
 
 (122)
 
 (4)
 
 (188)
 
 (544)Distribution reinvestment plan
 
 2
 
 -
 
 -
 
 -
 
 -
 
 2
 
 -
 
 -
 
 -
 
 -
 
 2Other
 
 12
 
 -
 
 (14)
 
 -
 
 -
 
 (2)
 
 -
 
 (8)
 
 -
 
 (1)
 
 (11)Change in period
 
 (110)
 
 (208)
 
 (125)
 
 4
 
 18
 
 (421)
 
 296
 
 275
 
 (9)
 
 (413)
 
 (272)Balance, as at December 31, 2013
 $
 (337)
 $
 (83)
 $
 3,160
 $
 (7)
 $
 (7)
 $
 2,726
 $
 796
 $
 1,303
 $
 54
 $
 2,657
 $
 7,536Balance, as at December 31, 2013
 $
 (337)
 $
 (83)
 $
 3,160
 $
 (7)
 $
 (7)
 $
 2,726
 $
 796
 $
 1,303
 $
 54
 $
 2,657
 $
 7,536Net income
 
 58
 
 -
 
 -
 
 -
 
 -
 
 58
 
 38
 
 51
 
 1
 
 55
 
 203Other comprehensive income (loss)
 
 -
 
 (158)
 
 527
 
 (2)
 
 (20)
 
 347
 
 (69)
 
 259
 
 7
 
 324
 
 868Issuance of LP Units (Note 18)Net proceeds
 
 285
 
 -
 
 -
 
 -
 
 -
 
 285
 
 -
 
 -
 
 -
 
 -
 
 285Adjustment
 
 (38)
 
 -
 
 -
 
 -
 
 -
 
 (38)
 
 -
 
 -
 
 1
 
 37
 
 -Capital contributions (Note 18)
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 610
 
 -
 
 -
 
 610Distributions or dividends declared
 
 (216)
 
 -
 
 -
 
 -
 
 -
 
 (216)
 
 (38)
 
 (149)
 
 (6)
 
 (201)
 
 (610)Distribution reinvestment plan
 
 3
 
 -
 
 -
 
 -
 
 -
 
 3
 
 -
 
 -
 
 -
 
 -
 
 3Other
 
 4
 
 -
 
 (2)
 
 -
 
 -
 
 2
 
 1
 
 (12)
 
 2
 
 (7)
 
 (14)Change in period
 
 96
 
 (158)
 
 525
 
 (2)
 
 (20)
 
 441
 
 (68)
 
 759
 
 5
 
 208
 
 1,345Balance, as at December 31, 2014
 $
 (241)
 $
 (241)
 $
 3,685
 $
 (9)
 $
 (27)
 $
 3,167
 $
 728
 $
 2,062
 $
 59
 $
 2,865
 $
 8,881The accompanying notes are an integral part
  of these consolidated financial statements.
 F -11


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Table of Contents
 BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P.CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED DECEMBER 31
 Notes
 
 2014
 
 2013
 
 2012(MILLIONS)Operating activitiesNet income (loss)
 
 $
 203
 $
 215
 $
 (95)Adjustments for the following non-cash items:Depreciation
 11
 
 548
 
 535
 
 483Unrealized financial instrument (gain) loss
 8
 
 (10)
 
 (37)
 
 23Share of earnings from equity accounted investments
 10
 
 (3)
 
 (9)
 
 5Deferred income tax recovery
 15
 
 (29)
 
 (18)
 
 (54)Other non-cash items
 
 
 (9)
 
 43
 
 46Dividends received from equity-accounted investments
 10
 
 30
 
 16
 
 12Changes in due to or from related parties
 
 
 (10)
 
 (11)
 
 15Net change in working capital balances
 22
 
 (20)
 
 1
 
 (22)700
 
 735
 
 413Financing activitiesLong-term debt - borrowings
 14
 
 2,118
 
 1,353
 
 1,193Long-term debt - repayments
 14
 
 (1,046)
 
 (1,683)
 
 (1,140)Capital contributions from participating non-controlling
  interests -in operating subsidiaries
 18
 
 610
 
 265
 
 434Issuance of preferred shares
 18
 
 -
 
 337
 
 248Issuance of LP Units
 18
 
 285
 
 -
 
 -Distributions paid:To participating non-controlling interests - in operatingsubsidiaries and preferred equity
 18
 
 (188)
 
 (157)
 
 (38)To unitholders of Brookfield Renewable or BRELP
 19
 
 (480)
 
 (378)
 
 (362)1,299
 
 (263)
 
 335Investing activitiesAcquisitions
 4
 
 (1,838)
 
 (241)
 
 (775)Investment in:Sustaining capital expenditures
 11
 
 (108)
 
 (79)
 
 (55)Development and construction of renewable powergenerating assets
 11
 
 (78)
 
 (147)
 
 (307)Investment tax credits related to renewable power generating
  assets
 11
 
 23
 
 -
 
 209Due to or from related parties
 
 
 -
 
 -
 
 157Investment in securities
 
 
 (25)
 
 -
 
 (28)Restricted cash and other
 
 
 (11)
 
 70
 
 (29)(2,037)
 
 (397)
 
 (828)Foreign exchange loss on cash
 
 
 (15)
 
 (9)
 
 (8)Cash and cash equivalents(Decrease) increase
 
 
 (53)
 
 66
 
 (88)Balance, beginning of  year
 
 
 203
 
 137
 
 225Balance, end of  year
 
 $
 150
 $
 203
 $
 137Supplemental cash flow information:Interest paid
 
 $
 406
 $
 388
 $
 380Interest received
 
 
 10
 
 11
 
 16Income taxes paid
 
 
 33
 
 29
 
 10The accompanying notes are an integral part
  of these consolidated financial statements.
 F -12


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Table of Contents
 brookfield renewable energy partners l.p. notes
to the consolidated financial statements 1.  organization and description of the
business The
business activities of Brookfield Renewable Energy Partners L.P. (“Brookfield
Renewable”) consist of owning a portfolio of renewable power generating
facilities in the United States, Canada, Brazil and Europe. Brookfield Renewable is a
publicly traded limited partnership established under the laws of Bermuda
pursuant to an amended and restated limited partnership agreement dated
November 20, 2011. The registered office of
Brookfield Renewable is 73 Front Street, Fifth Floor, Hamilton HM12, Bermuda. The immediate parent of
Brookfield Renewable is its general partner, Brookfield Renewable Partners
Limited (“BRPL”). The
ultimate parent of Brookfield Renewable is Brookfield Asset Management Inc.
(“Brookfield Asset Management”). Brookfield Asset Management and its
subsidiaries, other than Brookfield Renewable, are also individually and
collectively referred to as Brookfield in these financial statements. Brookfield Renewable’s non-voting
limited partnership units (“LP Units”) are traded under the symbol “BEP” on the
New York Stock Exchange and under the symbol “BEP.UN” on the Toronto Stock
Exchange. 2.BASIS OF PREPARATION AND SIGNIFICANT
ACCOUNTING POLICIES (a) Statement of compliance The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (“IFRS”) as issued
by the International Accounting Standards Board (“IASB”).  The accounting
policies used in the consolidated financial statements are based on the IFRS
applicable as at December 31, 2014, and encompasses individual IFRS,
International Accounting Standards (“IAS”), and interpretations made by the
International Financial Reporting Interpretations Committee (“IFRIC”) and the
Standing Interpretations Committee (“SIC”). The policies set out below are
consistently applied to all periods presented, unless otherwise noted. These consolidated financial statements have been authorized for
issuance by the Board of Directors of its general partner, BRPL, on February
27, 2015. Certain comparative figures have been reclassified to conform to
the current year’s presentation. All figures are presented in millions of United States (“U.S.”)
dollars unless otherwise noted. (b) Basis of preparation The
consolidated financial statements have been prepared on the basis of historical
cost, except for the revaluation of property, plant and equipment and certain
assets and liabilities which have been measured at fair value.  Cost is
recorded based on the fair value of the consideration given in exchange for
assets. (i)Consolidation These
consolidated financial statements include the accounts of Brookfield Renewable
and its subsidiaries, which are the entities over which Brookfield Renewable
has control. An investor controls an investee when it is exposed, or has
rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. Non-controlling
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 equity of Brookfield Renewable’s
subsidiaries are shown separately in equity in the consolidated balance sheets. Brookfield
Renewable has entered into a voting agreement with Brookfield, which provides
Brookfield Renewable with control of the general partner of Brookfield
Renewable Energy L.P. (“BRELP”), a holding subsidiary.  Accordingly, Brookfield
Renewable consolidates the accounts of BRELP and its subsidiaries. In addition,
BRELP issued redeemable-exchangeable partnership units to Brookfield
(“Redeemable/Exchangeable partnership units”), pursuant to which the holder may
at its request require BRELP to redeem the Redeemable/Exchangeable partnership
units for cash consideration. This right is subject to Brookfield Renewable’s
right of first refusal which entitles it, at its sole discretion, to elect to
acquire all of the Redeemable/Exchangeable partnership units so presented to
BRELP that are tendered for redemption in exchange for LP Units.  As Brookfield
Renewable, at its sole discretion, has the right to settle the obligation with
LP Units, the Redeemable/Exchangeable partnership units are classified as
equity of Brookfield Renewable (“Participating non-controlling interests – in a
holding subsidiary – Redeemable/Exchangeable units held by Brookfield”). Brookfield Renewable has
entered into voting agreements with Brookfield, whereby Brookfield Renewable
gained control of the entities that own certain U.S., Brazil and Europe
renewable power generating operations. These 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. Refer to Note 9 - Related party
transactions for further information. The voting agreements do
not represent business combinations in accordance with IFRS 3,Business
Combinations(“IFRS 3”),as all combining businesses are ultimately
controlled by Brookfield Asset Management 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 2(o)(ii) - Critical judgments in applying accounting policies - Common
control transactions for Brookfield Renewable’s policy on accounting for
transactions under common control. (ii)Equity-accounted investments and joint ventures Equity-accounted
investments are entities over which Brookfield Renewable has significant
influence or joint arrangements representing joint ventures. Significant
influence is the ability to participate in the financial and operating policy
decisions of the investee, but it has no control or joint control over those
investees. Such investments are accounted for using the equity method. A
joint venture is a type of joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of the joint
venture. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control. Brookfield Renewable
accounts for its interests in joint ventures using the equity method. Under
the equity method, the carrying value of an interest in an investee is
initially recognized at cost and adjusted for Brookfield Renewable’s share of
net income, other comprehensive income (“OCI”), distributions by the
equity-accounted investment and other adjustments to Brookfield Renewable’s
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 (c) Foreign currency translation All figures reported in the
consolidated financial statements and tabular disclosures to the consolidated
financial statements are reflected in millions of U.S. dollars, which is the
functional currency of Brookfield Renewable. Each of the foreign operations
included in these consolidated financial statements determines its own
functional currency, and items included in the financial statements of each
subsidiary are measured using that functional currency. Assets and liabilities of foreign
operations having a functional currency other than the U.S. dollar are
translated at the rate of exchange prevailing at the reporting date and
revenues and expenses at the rate of exchange prevailing at the dates of the
transactions during the period. Gains or losses on translation of foreign
subsidiaries are included in OCI. Gains or losses on foreign currency
denominated balances and transactions that are designated as hedges of net
investments in these operations are reported in the same manner. In preparing the consolidated
financial statements of Brookfield Renewable, foreign currency denominated
monetary assets and liabilities are translated into the functional currency
using the closing rate at the applicable consolidated balance sheet dates.
Non-monetary assets and liabilities, denominated in a foreign currency and
measured at fair value, are translated at the rate of exchange prevailing at
the date when the fair value was determined and non-monetary assets measured at
historical cost are translated at the historical rate. Revenues and expenses
are measured in the functional currency at the rates of exchange prevailing at
the dates of the transactions with gains or losses included in income. (d) Cash and cash equivalents Cash and cash equivalents include
cash, term deposits and money market instruments with original maturities of
less than 90 days. (e) Restricted cash Restricted cash includes cash and
cash equivalents, where the availability of funds is restricted by credit
agreements. (f) Property, plant and equipment and revaluation
method Power generating assets are
classified as property, plant and equipment and are accounted for using the
revaluation method under IAS 16,Property, Plant and Equipment(“IAS
16”). Property, plant and equipment are initially measured at cost and
subsequently carried at their revalued amount, being the fair value at the date
of the revaluation, less any subsequent accumulated depreciation and any
subsequent accumulated impairment losses. Brookfield Renewable generally
determines the fair value of its property, plant and equipment by using a
20-year discounted cash flow model. This 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. The model also includes estimates of future
electricity prices, anticipated long-term average generation, estimated
operating and capital expenditures, and assumptions about future inflation
rates and discount rates by geographical location. Construction
work-in-progress (“CWIP”) is revalued when sufficient information exists to
determine fair value using the discounted cash flow method. Revaluations are
made on an annual basis as at December 31 to ensure that the carrying amount
does not differ significantly from fair value. For power generating assets
acquired through business combinations during the year, Brookfield Renewable
initially measures the assets at fair value consistent with the policy
described in Note 2(l) – Business combinations. F -15


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 Accordingly,
in the year of acquisition, power generating assets are not revalued at
year-end unless there is an indication that assets are impaired. Where the carrying amount of an
asset increased as a result of a revaluation, the increase is recognized in
income to the extent the increase reverses a previously recognized decrease
recorded through income, with the remainder of the increase recognized in OCI
and accumulated in equity under revaluation surplus and non-controlling
interest. Where the carrying amount of an asset decreased, the decrease is
recognized in OCI to the extent that a balance exists in revaluation surplus
with respect to the asset, with the remainder of the decrease recognized in
income. Depreciation
on power generating assets is calculated on a straight-line basis over the
estimated service lives of the assets, which are as follows: Estimated service livesDams
 Up to 115 yearsPenstocks
 Up to 60 yearsPowerhouses
 Up to 115 yearsHydroelectric
  generating units
 Up to 115 yearsWind generating
  units
 Up to 22 yearsGas-fired
  co-generating units
 Up to 40 yearsOther assets
 Up to 60 years
 Costs are allocated to significant
components of property, plant and equipment.  When items of property, plant and
equipment have different useful lives, they are accounted for as separate items
(significant components) and depreciated separately. To ensure the accuracy of
useful lives and residual values, a review is conducted annually. Depreciation is calculated based on
the cost of the asset less its residual value. Depreciation commences when the
asset is in the location and conditions necessary for it to be capable of
operating in the manner intended by management. It ceases at the earlier of the
date the asset is classified as held-for-sale and the date the asset is
derecognized. An item of property, plant and equipment and any significant
component is derecognized upon disposal or when no future economic benefits are
expected from its use. Other assets include equipment, buildings and leasehold
improvements. Buildings, furniture and fixtures, leasehold improvements and
office equipment are recorded at historical cost, less accumulated
depreciation. Land and CWIP are not subject to depreciation. The depreciation of property, plant
and equipment in Brazil is based on the duration of the authorization or the
useful life of a concession asset. The weighted-average remaining duration at
December 31, 2014 is 15 years (2013: 16 years). Since land rights are part of
the concession or authorization, this cost is also subject to depreciation. Any accumulated depreciation at the
date of revaluation is eliminated against the gross carrying amount of the
asset, and the net amount is applied to the revalued amount of the asset. Gains and losses on disposal of an
item of property, plant and equipment are recognized in ‘Other’ in the
consolidated statements of income (loss). The revaluation surplus is
reclassified within the respective components of equity and not reclassified to
net income (loss) when the assets are disposed. Change in accounting estimates In 2012, Brookfield Renewable retained third party engineers to review
the estimated useful lives of certain assets. As a result, Brookfield Renewable
revised the estimated remaining useful life of certain assets to more
accurately reflect the period over which they provide economic benefits.
Brookfield F -16


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 Renewable accounted for these changes in
accordance with IAS 8,Accounting Policies, Changes in Accounting Estimates
and Errors(“IAS 8”), which requires a change in an accounting estimate to
be applied prospectively from the date of the change based on timing of
completion of the review. The effective dates of changes were January 1, 2012,
April 1, 2012 or July 1, 2012 based on the timing of completion of the review.
The consolidated statements of income (loss) reflect a decrease in depreciation
of $112 million for the year ended December 31, 2012 as a result of the changes
in accounting estimate. (g) Asset impairment At each balance sheet date,
management assesses whether there is any indication that assets are impaired.
For non-financial tangible and intangible assets (including equity-accounted
investments), an impairment is recognized if the recoverable amount, determined
as the greater of the estimated fair value, less costs to sell, and the
discounted future cash flows generated from use and eventual disposal of an
asset or cash-generating unit, is less than its carrying value. The projections
of future cash flows take into account the relevant operating plans and
management’s best estimate of the most probable set of conditions anticipated
to prevail. Should an impairment loss subsequently reverse, the carrying amount
of the asset is increased to the lesser of the revised estimate of the
recoverable amount, and the carrying amount that would have been recorded had
no impairment loss been recognized previously. (h) Trade receivables and other current assets Trade receivables and other current
assets are recognized initially at fair value, and subsequently measured at
amortized cost using the effective interest method, less any allowance for
uncollectability. (i) Financial instruments All financial
instruments are classified into one of the following categories: assets and
liabilities at fair value through profit or loss (“FVTPL”), cash, loans and
receivables, financial instruments used for hedging, and other financial
liabilities.  All financial instruments are recorded at fair value at
recognition. Subsequent to initial recognition, financial assets classified as
loans and receivables, and other financial liabilities are measured at
amortized cost using the effective interest method.  Financial assets and
financial liabilities classified as financial instruments used for cash-flow
hedging continue to be recognized at fair value through OCI. Other financial
assets and financial liabilities and non-hedging financial instruments are
recorded at fair value through profit and loss. Brookfield Renewable presents the
liability and equity components separately upon recognition of such financial
instruments. The amount of accretion relating to the liability component is
recognized in profit or loss; and the amount of consideration relating to the
equity component is recognized in equity. Brookfield Renewable selectively
utilizes derivative financial instruments to manage financial risks, including
interest rate, commodity and foreign exchange risks. A derivative is a
financial instrument, which requires little or no initial investment, settles
at a future date, and has a value that changes in response to the change in a
specified variable such as an interest rate, financial instrument price,
commodity price, foreign exchange rate, index of prices or rates, credit rating
or credit index. Hedge accounting is applied when the derivative is designated
as a hedge of a specific exposure, and it is highly probable that it will
continue to be effective as a hedge based on an expectation of offsetting cash
flows or fair value. Hedge accounting is discontinued prospectively when the
derivative no longer qualifies as a hedge or the hedging relationship is
terminated. Once discontinued, the cumulative change in fair value of a
derivative that was previously recorded in equity by the application of hedge
accounting is recognized in income over the remaining term of the original
hedging relationship, unless the originally forecasted transaction is no longer
expected to occur, at which point it is released to income. The fair values of
derivative financial instruments are included in financial instrument assets or
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 (i)Items qualifying as hedges Cash flow hedge The effective
portion of unrealized gains and losses on interest rate forward and swap
contracts designated as hedges of future interest rate payments are included in
equity as cash flow hedges when the interest rate risk relates to an
anticipated interest payment. The periodic exchanges of payments on interest
rate swap contracts designated as hedges of debt are recorded on an accrual
basis as an adjustment to interest expense. The periodic exchanges of payments
on interest rate contracts designated as hedges of future interest payments are
recorded in income over the term of the corresponding interest payments. Net investment hedge Realized and
unrealized gains and losses on foreign exchange forward contracts designated as
hedges of currency risks are included in equity when the currency risk relates
to a net investment in a subsidiary with a functional currency other than the
U.S. dollar and are included in income in the period in which the subsidiary is
disposed. (ii)Items not qualifying as hedges Upon initial recognition
of a derivative financial instrument that is not designated as a hedge, a
derivative asset or liability is recorded with an offsetting deferred liability
or asset, respectively. Gains or losses arising from changes in fair value of
the derivative asset or liability are recognized in income through fair value
gains or losses in the period the changes occur. The deferred liability or
asset is amortized through income, on a straight-line basis, over the life of
the derivative financial instrument. (iii)Available-for-sale investments Investments in
publicly quoted equity and debt securities are categorized as
available-for-sale when it is not Brookfield Renewable’s strategic intent
to sell the securities and the securities were not acquired principally for
their near-term sale.  Available-for-sale equity and debt investments are
recorded at fair value with unrealized gains and losses recorded in OCI.
Realized gains and losses are recorded in income when investments are sold and
are calculated using the average carrying amount of securities sold.  If
the fair value of an investment declines below the carrying amount, qualitative
and quantitative assessments of whether the impairment is either
significant or prolonged is undertaken. All relevant facts and circumstances
in this assessment are undertaken to determine, particularly the length of time
and extent to which fair value has been less than the carrying amount. (j) Revenue and expense recognition Revenue from the sale of
electricity is recorded when it is delivered. The revenue must be considered
collectible and the costs incurred to provide the electricity to be measurable
before recognizing the related revenue. Costs related to the purchases of power
or fuel are recorded upon delivery. All other costs are recorded as incurred. (k) Income taxes Current income tax assets and
liabilities are measured at the amount expected to be paid to tax authorities,
net of recoveries, based on the tax rates and laws enacted or substantively
enacted at the balance sheet dates. Current income tax assets and liabilities
are included in trade receivables and other current assets and accounts payable
and accrued liabilities, respectively. Deferred tax is recognized on
taxable temporary differences between the tax bases and the carrying amounts of
assets and liabilities. Deferred tax is not recognized if the temporary
difference arises from goodwill or from initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that affects
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 recognized for all deductible temporary differences,
carry forwards of unused tax credits and unused tax losses, to the extent that
it is probable that deductions, tax credits and tax losses can be utilized. The
carrying amount of deferred income tax assets is reviewed at each balance sheet
date and reduced to the extent it is no longer probable that the income tax
assets will be recovered. Deferred income tax assets and liabilities are
measured at the tax rates that are expected to apply to the year when the
assets are realized or the liabilities settled, using the tax rates and laws
enacted or substantively enacted at the balance sheet dates. Current and deferred income taxes relating
to items recognized directly in OCI are also recognized directly in OCI. (l) Business combinations The acquisition of a business is
accounted for using the acquisition method.  The consideration for an
acquisition is measured at the aggregate of the fair values, at the date of
exchange, of the assets transferred, the liabilities incurred to former owners
of the acquired business, and equity instruments issued by the acquirer in
exchange for control of the acquired business. The acquired business’ identifiable
assets, liabilities and contingent liabilities that meet the conditions for
recognition under IFRS 3 are recognized at their fair values at the acquisition
date, except for income taxes which are measured in accordance with IAS 12,Income
Taxes,share-based payments which are measured in accordance with IFRS 2,Share-based
Paymentand non-current assets that are classified as held-for-sale which
are measured at fair value less costs to sell in accordance with IFRS 5,Non-Current
Assets Held for Sale and Discontinued Operations. The non-controlling
interest in the acquiree is initially measured at the non-controlling
interest’s proportion of the net fair value of the identifiable assets,
liabilities and contingent liabilities recognized. To the extent that the aggregate of
the fair value of consideration paid, the amount of any non-controlling
interest and the fair value of any previously held interest in the acquiree
exceeds the fair value of the net identifiable tangible and intangible assets, goodwill
is recognized. To the extent that this difference is negative, the amount is
recognized as a gain in income. When a business combination is
achieved in stages, previously held interests in the acquired entity are
re-measured to fair value at the acquisition date, which is the date control is
obtained, and the resulting gain or loss, if any, is recognized in income.
Amounts arising from interests in the acquired business prior to the
acquisition date that have previously been recognized in OCI are reclassified
to income.  Upon disposal or loss of control of a subsidiary, the carrying
amount of the net assets of the subsidiary (including any OCI relating to the
subsidiary) are derecognized with the difference between any proceeds received
and the carrying amount of the net assets recognized as a gain or loss in
income. (m) Other items (i)Capitalized costs Capitalized costs
related to CWIP include all eligible expenditures incurred in connection with
the development and construction of the power generating asset. The
expenditures consist of cost of materials, direct labor and any other costs
directly attributable to bringing the asset to a working condition for its
intended use, and the costs of dismantling and removing the items and restoring
the site on which they are located. Interest and borrowings costs are
capitalized when activities that are necessary to prepare the asset for its
intended use or sale are in progress, expenditures for the asset have been
incurred and funds have been used or borrowed to fund the construction or
development. Capitalization of costs ceases when the asset is ready for its
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 (ii)Pension and employee future benefits Pension and employee future benefits are recognized in
the consolidated financial statements in respect of employees of the operating
entities within Brookfield Renewable. The costs of retirement benefits for
defined benefit plans and post-employment benefits are recognized as the
benefits are earned by employees. The project unit credit method, using the
length of service and management’s best estimate assumptions, is used to value
its pension and other retirement benefits. Assets are valued at fair value for
purposes of calculating the expected return on plan assets. All actuarial gains
and losses are recognized immediately through OCI in order for the net pension
asset or liability recognized in the consolidated balance sheets to reflect the
full value of the plan deficit or surplus. Net interest is calculated by
applying the discount rate to the net defined benefit asset or liability.
Changes in the net defined benefit obligation related to service costs
(comprising of current service costs, past services costs, gains and losses on
curtailments and non-routine settlements), and net interest expense or income
are recognized in the consolidated statements of income (loss). Re-measurements, comprising of actuarial gains or losses,
the effect of the asset ceiling, and the return on plan assets (excluding net
interest), are recognized immediately in the consolidated balance sheets with a
corresponding debit or credit to retained earnings through OCI in the period in
which they occur. Re-measurements are not reclassified to profit or loss in
subsequent periods. For defined contribution plans, amounts are expensed based
on employee entitlement. (iii)Decommissioning, restoration and environmental liabilities Legal and
constructive obligations associated with the retirement of property, plant and
equipment are recorded as liabilities when those obligations are incurred and
are measured at the present value of the expected costs to settle the
liability, discounted at a current credit-adjusted pre-tax rate specific to the
liability. The liability is accreted up to the date the liability will be
incurred with a corresponding charge to operating expenses. The carrying amount
of decommissioning, restoration and environmental liabilities is reviewed
annually with changes in the estimates of timing or amount of cash flows added
to or deducted from the cost of the related asset. (iv)Interest
and borrowing costs Interest and
borrowing costs are capitalized when such costs are directly attributable to
the acquisition, construction or production of a qualifying asset.  A
qualifying asset is an asset that takes a substantial period of time to prepare
for its intended use. (v)Provisions A
provision is a liability of uncertain timing or amount. A provision is
recognized if Brookfield Renewable has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation and the amount can be
reliably estimated. Provisions are not recognized for future operating losses.
The provision is measured at the present value of the best estimate of the
expenditures expected to be required to settle the obligation using a discount
rate that reflects the current market assessments of the time value of money
and the risks specific to the obligation. Provisions are re-measured at each
balance sheet date using the current discount rate. The increase in the
provision due to the passage of time is recognized as interest expense. (vi)Interest
income Interest
income is earned with the passage of time and is recorded on an accrual basis. (vii)Government
grants Brookfield
Renewable becomes eligible for government grants by constructing or purchasing
renewable power generating assets, and by bringing those assets to commercial
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 successful application to
the applicable program or agency. The assessment of whether or not a project
has complied with the conditions and that there is reasonable assurance the
grants will be received will be undertaken on a case by case basis. Brookfield
Renewable reduces the cost of the asset by the amount of the grant.  The grant
amounts are recognized in income on a systematic basis as a reduction of
depreciation over the periods, and in the proportions, in which depreciation on
those assets is charged. With respect to
grants related to income, the government assistance (in the form of the
difference between market price and guaranteed fixed price) typically becomes
payable once electricity is produced and delivered to the relevant grid. It is
at this point that the receipt of the grant becomes reasonably assured, and
therefore the grant is recognized as revenue in the month that delivery of the
electricity occurs. (n) 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 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 from
renewable sources, anticipated long-term average generation, estimated
operating and capital expenditures, future inflation rates and discount rates,
as described in Note 11 - Property, plant and equipment, at fair value.
Judgment is involved in determining the appropriate estimates and assumptions
in the valuation of Brookfield Renewable’s property, plant and equipment. See
Note 2(o)(iii) - Critical judgments in applying accounting policies - Property,
plant and equipment for further details. Estimates
of useful lives and residual values are used in determining depreciation and
amortization. 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, long-term average generation, capacity prices, discount
rates and the timing of energy delivery. 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. The fair value of interest rate
swaps is the estimated amount that another party would receive or pay to
terminate the swap agreements at the reporting date, taking into account
current market interest rates. This valuation technique approximates the
net present value of future cash flows. See Note 8 - Risk management and
financial instruments 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
balance sheet dates. Operating plans and forecasts are used to estimate when
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 (o)
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 what 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 of scope of IFRS 3 and
as such management has used its judgment to determine an appropriate policy to
account for these transactions, considering other relevant accounting guidance
that is within the framework of principles in IFRS and that reflects the
economic reality of the transactions, in accordance with IAS 8. As a result,
the consolidated financial statements account for assets 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 2(f) - Property, plant and equipment and
revaluation method. 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. 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 is generally a 20-year discounted cash flow model. Twenty years is
the period considered reasonable as Brookfield Renewable has 20-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
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 power generating assets 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 new renewable on-shore wind development resources
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 year 2020. This year is
viewed as the point when generators in North America must build additional
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 adequate
level of reserve generation with the retirement of older coal-fired plants and
with the Environmental Protection Agency emission compliance deadlines.
Brookfield Renewable has estimated a discount to these new-build wind prices to
determine renewable electricity prices for hydroelectric facilities. In Brazil,
the estimate of future electricity prices is based on a similar approach as
applied in North America using a forecast of the all-in cost of hydroelectric
and wind development. Terminal
values are included in the valuation of hydroelectric assets in the United
States and Canada.  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 without consideration of potential renewal value. 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
20-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 2(i) - Financial instruments. In applying the policy,
judgments are made in applying the criteria set out in IAS 39,Financial
Instruments: Recognition and Measurement(“IAS 39”), to record financial
instruments at fair value through profit and loss, and the assessments of the
effectiveness of hedging relationships. (v)Deferred
income taxes The accounting
policy relating to Brookfield Renewable’s income taxes is described in Note
2(k) - Income taxes. In applying this policy, judgments are made in determining
the probability of whether deductions, tax credits and tax losses can be
utilized. (p) New
interpretation adopted by Brookfield Renewable (i)      Levies Imposed by Governments IFRIC 21,Levies(“IFRIC 21”) provides guidance on when to
recognize a liability for a levy imposed by a government, both for levies that
are accounted for in accordance with IAS 37,Provisions, Contingent
Liabilities and Contingent Assets, and those where the timing and amount of
the levy is certain. IFRIC 21 identifies the obligating event for the
recognition of a liability as the activity that triggers the payment of the
levy in accordance with the relevant legislation. A liability is
recognized progressively if the obligating event occurs over a period of time
or, if an obligation is triggered on reaching a minimum threshold, the
liability is recognized when that minimum threshold is reached. IFRIC 21 was adopted and applied by Brookfield Renewable onJanuary 1, 2014, which had no material impact on the consolidated
financial statements. (q) Future changes in accounting policies (i)         Financial Instruments In July 2014, the IASB issued the final version of IFRS 9,Financial
Instruments(“IFRS 9”) which reflects all phases of the financial
instruments project and replaces IAS 39,Financial Instruments: Recognition
and Measurementand all previous versions of IFRS 9. The standard
introduces new requirements for F -23


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Table of Contents
 classification and
measurement, impairment, and hedge accounting. IFRS 9 is effective for annual
periods beginning on or after 1 January 2018, with early application permitted.
Retrospective application is required, but comparative information is not
compulsory. Early application of previous versions of IFRS 9 (2009, 2010 and
2013) is permitted if the date of initial application is before 1 February
2015. Management is currently evaluating the impact of IFRS 9 on the
consolidated financial statements. (ii)         Amendments to IFRS 10 and IAS 28 The amendments to IFRS 10,Consolidated Financial Statements(“IFRS
10”) and IAS 28,Investments in Associates and Joint Ventures (2011)(“IAS 28”) address an acknowledged inconsistency between the requirements in
IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets
between an investor and its associate or joint venture. The main consequence of
the amendments is that a full gain or loss is recognized when a transaction
involves a business (whether it is housed in a subsidiary or not). A partial
gain or loss is recognized when a transaction involves assets that do not
constitute a business, even if the assets are housed in a subsidiary. The
amendments are effective for transactions occurring in annual periods beginning
on or after 1 January 2016 with earlier application permitted. Management is
currently evaluating the impact of the amendments to IFRS 10 and IAS 28 on the
consolidated financial statements. (iii)       Revenue recognition IFRS 15,Revenue from Contracts with Customers(“IFRS 15”)was issued by the IASB on May 28, 2014. IFRS 15 outlines a single
comprehensive model to account for revenue arising from contracts with
customers and will replace the majority of existing IFRS requirements on
revenue recognition including IAS 18,Revenue,IAS 11,Construction
Contractsand related interpretations. The core principle of the standard
is to recognize revenue to depict the transfer of goods and services to
customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods and services. The standard
has prescribed a five-step model to apply the principles. The standard also
specifies how to account for the incremental costs of obtaining a contract and
the costs directly related to fulfilling a contract. IFRS 15 is effective for annual
periods beginning on or after January 1, 2017. Management is currently
evaluating the impact of IFRS 15 on the consolidated financial statements. F -24


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Table of Contents
 3. PRINCIPAL SUBSIDIARIES The following table lists
the subsidiaries of Brookfield Renewable which, in the opinion of management,
significantly affects its financial position and results of operations as at
December 31, 2014: Jurisdiction
  of
 Percentage
  ofIncorporation
 voting
  securitiesor
  Organization
 owned or
  controlled(%)Alta Wind VIII LLC(1)
 
 Delaware
 100Barra do Braúna Energética S.A.
 
 Brazil
 100BIF II Safe Harbor Holdings LLC(1)
 
 Delaware
 100Black Bear Hydro Partners, LLC(1)
 
 Delaware
 100Brookfield BRP Canada Corp.
 
 Alberta
 100Brookfield BRP Holdings (Canada) Inc.
 
 Ontario
 100Brookfield Energia Comercializadora Ltda
 
 Brazil
 100Brookfield Power US Holding America Co.
 
 Delaware
 100Brookfield Power Wind Prince LP
 
 Ontario
 100Brookfield Smoky Mountain Hydropower LLC(1)
 
 Delaware
 100Brookfield White Pine Hydro LLC(1)
 
 Delaware
 100Catalyst Old River Hydroelectric Limited
  Partnership(2)
 Louisiana
 75Comber Wind Limited Partnership
 
 Ontario
 100Coram California Development, L.P.(1)
 
 Delaware
 100Energética Campos de Cima da Serra Ltda
 
 Brazil
 100Erie Boulevard Hydropower, L.P.
 
 Delaware
 100Garracummer Wind Farm Limited(1)
 
 Republic
  of Ireland
 100Gosfield Wind Limited Partnership
 
 Ontario
 100Granite Reliable Power, LLC(1)
 
 Delaware
 89.5Great Lakes Hydro America, LLC
 
 Delaware
 100Great Lakes Power Limited
 
 Ontario
 100Hawks Nest Hydro LLC
 
 Delaware
 100Itiquira Energética S.A.
 
 Brazil
 100Knockacummer Wind Farm Limited(1)
 
 Republic
  of Ireland
 100Kwagis Power Limited
  Partnership
 
 British
  Columbia
 75Lièvre Power L.P.
 
 Québec
 100Mississagi Power Trust
 
 Québec
 100Powell River Energy Inc.
 
 Québec
 100Rumford Falls Hydro LLC
 
 Delaware
 100Safe Harbor Water Power Corporation(1)
 
 Pennsylvania
 100Serra Dos Cavalinhos II Energética S.A.
 
 Brazil
 100Windstar Energy, LLC
 
 California
 100
 (1)Voting
control held through voting agreements with Brookfield. (2)Non-voting
economic interest held through preferred shares and secured notes. F -25


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Table of Contents
 4. 
BUSINESS COMBINATIONS The
following investments were accounted for using the acquisition method, and the
results of operations have been included in the consolidated financial
statements since the respective dates of acquisition. Completed During 2014 Maine Hydroelectric Generation Portfolio In January 2014, Brookfield Renewable acquired a 70 MW portfolio
of hydroelectric facilities that are expected to generate 372 GWh annually
(“Maine Hydro”). The acquisition was completed with institutional partners, and
Brookfield Renewable retains an approximate 40% controlling interest in the
portfolio. Total cash consideration was $244 million. The acquisition costs of
$2 million were expensed as incurred. If the acquisition had taken place at the beginning of the year
the revenue from the acquisition would have been $21 million (unaudited) for
the year ended December 31, 2014. California Hydroelectric Generation
Facility In February 2014, Brookfield Renewable acquired the remaining 50%
interest in a 30 MW hydroelectric facility in California (the “California Hydro
Step Acquisition”). The total cash consideration was $11 million. The acquisition
was completed with institutional partners, and Brookfield Renewable retains an
approximate 22% controlling interest in the facility. If the acquisition had taken place at the beginning of the year
the revenue from the acquisition would have been $1 million (unaudited) for the
year ended December 31, 2014. Pennsylvania Hydroelectric Generation
Facility In March 2014, Brookfield Renewable acquired a 33% economic and
50% voting interest in a 417 MW hydroelectric facility in Pennsylvania
(“Pennsylvania Hydro”) which is expected to generate 1,129 GWh annually. Total
cash consideration was $295 million.  Brookfield Renewable accounted for its
acquired 33% economic interest using the equity method. In August 2014, Brookfield Renewable acquired the remaining 67%
economic and 50% voting interest in Pennsylvania Hydro (the “Pennsylvania Hydro
Step Acquisition”) for additional cash consideration of $614 million, and began
consolidating the operating results, cash flows and net assets of Pennsylvania
Hydro. Prior to the Pennsylvania Hydro Step Acquisition, Brookfield Renewable
re-measured its previously held 33% economic interest to fair value, and the
net impact of this re-measurement was not material. The Pennsylvania Hydro Step
Acquisition was completed with institutional partners, and Brookfield Renewable
retains an approximate 40% controlling interest. Total acquisition costs of $2 million
relating to both the Pennsylvania Hydro and Pennsylvania Hydro Step Acquisition
were expensed as incurred. If the acquisition had taken place at the beginning of the year
the additional revenue from the acquisition would have been $99 million
(unaudited) for the year ended December 31, 2014. Ireland Wind Portfolio In June 2014, Brookfield
Renewable acquired the wind portfolio of Bord Gáis Energy comprising 326 MW of
operating wind capacity across 17 wind projects inIreland which is expected to
generate 837 GWh annually. The acquisition was completed with institutional
partners, and Brookfield Renewable retains an approximate 40% controlling
interest. Total consideration of €524 million ($718 million) included €521 million
($713 million) in cash increased for post-closing adjustments. The acquisition
costs of $12 million were expensed as incurred. If the acquisition had taken place at the beginning of the year
the revenue from the acquisition would have been $92 million (unaudited) for
the year ended December 31, 2014. F -26


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Table of Contents
 Preliminary price
allocations, at fair values, with respect to the acquisitions were as follows: (MILLIONS)
 Maine
 California
 Pennsylvania
 Ireland
 TotalCash and cash equivalents
 $
 7
 $
 4
 $
 15
 $
 35
 $
 61Restricted cash
 
 -
 
 -
 
 -
 
 12
 
 12Trade receivables and other current assets
 
 13
 
 -
 
 11
 
 10
 
 34Property, plant and equipment, at fair
  value
 
 220
 
 81
 
 1,040
 
 1,075
 
 2,416Other long-term assets
 
 6
 
 -
 
 -
 
 -
 
 6Current liabilities
 
 (1)
 
 -
 
 (4)
 
 (75)
 
 (80)Long-term debt
 
 -
 
 (13)
 
 (77)
 
 (232)
 
 (322)Other long-term liabilities
 
 (1)
 
 (5)
 
 (76)
 
 (107)
 
 (189)Net assets acquired
 $
 244
 $
 67
 $
 909
 $
 718
 $
 1,938
 The estimated fair values of the assets acquired and liabilities assumed
are expected to be finalized within 12 months of the acquisition date. Completed During 2013 Northeastern United States Hydroelectric Generation Portfolio In
March 2013, Brookfield Renewable acquired a 100% interest in a 360 MW portfolio
of hydroelectric facilities.  Total consideration was paid as follows: $57
million that included $55 million in cash and $2 million related to the
pre-closing payments and working capital adjustments; holding and project level
notes, with a face value of $700 million, were also assumed. The
acquisition costs of $8 million were expensed as incurred. In September
2013, upon the closing of a private fund sponsored by Brookfield Asset
Management, institutional partners co-invested 49.9% in these facilities for
$205 million. If the acquisition had taken place at the beginning of the year
the revenue from the acquisition would have been $104 million (unaudited) for
the year ended December 31, 2013. California Wind Generation Portfolio In
August 2012, Brookfield Renewable acquired 16% of the outstanding common shares
of Western Wind Energy Corp. (“Western Wind”) for a total cash consideration of
$25 million. On
November 26, 2012, Brookfield Renewable launched an offer to purchase, through
an indirect wholly-owned subsidiary, all of the issued and outstanding common
shares of Western Wind (excluding those Brookfield Renewable already owns) for
C$2.50 in cash per common share. This offer was subsequently increased to C$2.60
per common share. On February 21, 2013, Brookfield Renewable announced that it
was successful in its bid for Western Wind and following take up of the
tendered shares, would own 66.1% of the issued and outstanding common shares. On
March 1, 2013, the Board of Directors were replaced by directors appointed by
Brookfield Renewable and, as a resultBrookfield Renewablebegan consolidating the operating results, cash flows and net
assets of Western Wind. Further, Brookfield Renewable was required to
re-measure its previously held 16% interest to fair value, and the net
impact of this re-measurement was not material. On
March 7, 2013, Brookfield Renewable increased its ownership to 93% of the
outstanding common shares for additional cash consideration of $143
million.  As Brookfield Renewable held more than 90% of the common shares,
on May 21, 2013, it acquired all of the remaining common shares on the same
terms that the common shares were acquired under the offer, for additional cash
consideration of $15 million.  The common shares of Western Wind were delisted
from the TSX Venture Exchange on May 24, 2013. F -27


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Table of Contents
 If the acquisition had
taken place at the beginning of the year the revenue from the acquisition would
have been $38 million (unaudited) for the year ended December 31, 2013. Canadian Hydroelectric Generation Facility In March 2013,Brookfield Renewable acquired the remaining 50% interest,
previously held by its partner, in a hydroelectric facility in Canada taking
its total investment to 100% (the “Canadian Hydro Step Acquisition”). The Canadian Hydro Step Acquisition included cash consideration of
$32 million and the assumption of the partner’s portion of the non-recourse
debt.  Prior to the Canadian Hydro Step Acquisition, Brookfield
Renewable’s financial interest amounted to $22 million.  Brookfield
Renewable re-measured its previously held 50% interest to fair value and
reversed any amounts previously recorded in OCI.  In addition, $30 million
related to revaluation surplus on the initial 50% interest was reclassified
within equity of which $14 million related to limited partners’ equity. If the acquisition had taken place at the beginning of the year
the revenue would have been $22 million (unaudited) for the year ended December
31, 2013. Purchase price
allocations, at fair values, with respect to the acquisitions were as follows: Northeastern(MILLIONS)
 United
  States
 California
 Canada
 TotalCash and cash equivalents
 $
 -
 $
 2
 $
 6
 $
 8Restricted cash
 
 32
 
 8
 
 -
 
 40Other current assets
 
 12
 
 9
 
 9
 
 30Property, plant and equipment, at fair
  value
 
 721
 
 453
 
 213
 
 1,387Other long-term assets
 
 22
 
 30
 
 -
 
 52Current liabilities
 
 (10)
 
 (23)
 
 (29)
 
 (62)Long-term debt
 
 (720)
 
 (250)
 
 (105)
 
 (1,075)Other long-term liabilities
 
 -
 
 (43)
 
 (39)
 
 (82)Non-controlling interests
 
 -
 
 (68)
 
 -
 
 (68)Net assets acquired
 $
 57
 $
 118
 $
 55
 $
 230
 During the years ended December 31, 2014 and 2013, the purchase
price allocations for the acquisitions in 2013 and 2012, respectively, were
finalized. No material changes to the provisional purchase price allocations
disclosed in the audited consolidated financial statements for 2013 and 2012
had to be considered for acquisitions made in the respective years. Completed During 2012 California Wind Generation Portfolio In March 2012, the following investments were made by Brookfield
Renewable and certain institutional partners through BAIF U.S. Renewable Power
Holdings LLC (“BAIF U.S. Holdings”), in which Brookfield Renewable holds a 22%
controlling interest. The investments were accounted for using the acquisition
method, and the results of operations have been included in the audited
consolidated financial statements since the respective dates of acquisition. BAIF U.S. Holdings acquired 100% interests in two wind facilities
in California. BAIF U.S. Holdings also acquired the remaining 50% interest in a
wind facility, bringing Brookfield Renewable’s total investment to 100% (the
“California Wind Step Acquisition”). Total consideration paid of $206 million
for these interests included $180 million in cash and the settlement of certain
liabilities. F -28


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Table of Contents
 The California Wind Step
Acquisition required Brookfield Renewable to re-measure its previously held 50%
interest to fair value of $63 million and to reverse any amounts previously
recorded in OCI related to the initial 50% interest. Net income for year ended
December 31, 2012 reflects an expense of $11 million related to the reclassification
from OCI on financial instruments designated as cash flow hedges prior to the
California Wind Step Acquisition. In addition, $5 million related to
revaluation surplus on the initial 50% interest was reclassified within equity. Acquisition costs of $2 million related to the above acquisitions
were expensed as incurred. These wind facilities are now all in commercial operation. Brazil Hydroelectric Generation Facility In July 2012, a Brookfield Americas Infrastructure Fund (“BAIF”)
entity, in which Brookfield Renewable holds a 25% controlling interest,
acquired a 100% interest in a hydroelectric facility in Brazil for cash
consideration of $14 million. A bargain purchase gain of $12 million was recognized,
from the excess fair value of the assets acquired over the consideration paid.
The bargain purchase gain was recorded in Other, and acquisition costs were
expensed at the acquisition date. Southern United States Hydroelectric Generation Portfolio In November 2012, BAIF U.S. Holdings acquired a 100% interest in a
portfolio of hydroelectric facilities, located in Tennessee and North Carolina
in the southern region of the United States, for cash consideration of $597
million. The acquisition costs of $7 million were expensed as incurred.If the acquisition had
taken place at the beginning of the year, assuming long-term average
generation, revenue would have increased by $56 million (unaudited) for the
year ended December 31, 2012. Purchase price
allocations, at fair values, with respect to the acquisitions in 2012 were as
follows: Southern(MILLIONS)
 California
 Brazil
 United States
 TotalCurrent assets(1)
 $
 50
 $
 -
 $
 4
 $
 54Property, plant and equipment, at fair value
 
 748
 
 32
 
 594
 
 1,374Other long-term assets
 
 9
 
 -
 
 -
 
 9Current liabilities
 
 (102)
 
 -
 
 (1)
 
 (103)Long-term debt
 
 (436)
 
 (6)
 
 -
 
 (442)Net assets acquired
 $
 269
 $
 26
 $
 597
 $
 892
 (1)Includes
$49 million of cash and cash equivalents. F -29


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Table of Contents
 5. CASH AND CASH EQUIVALENTS Brookfield Renewable’s cash and cash equivalents as at December 31
are as follows: (MILLIONS)
 
 2014
 
 2013Cash
 $
 128
 $
 164Short-term deposits
 
 22
 
 39$
 150
 $
 203
 6. RESTRICTED
CASH Brookfield Renewable’s restricted cash as at December 31 is as
follows: (MILLIONS)
 
 2014
 
 2013Development projects
 $
 75
 $
 42Operations
 
 238
 
 202Total
 
 313
 
 244Less: non-current
 
 (81)
 
 (75)Current
 $
 232
 $
 169
 Refer to Note 12 – Other long-term assets for
information on long-term restricted cash. 7. TRADE
RECEIVABLES AND OTHER CURRENT ASSETS Brookfield Renewable’strade receivables and other current assetsas at December
31 are as follows: (MILLIONS)
 
 2014
 
 2013Trade receivables
 $
 91
 $
 105Other short-term receivables
 
 40
 
 65Prepaids and others
 
 70
 
 34$
 201
 $
 204
 As at December 31, 2014, 99% (2013: 99%) of trade receivables were
current. Trade receivables are generally on 30-day terms and credit limits are
assigned and monitored for all counterparties. In determining the
recoverability of trade receivables, management performs a risk analysis
considering the type and age of the outstanding receivables and the credit
worthiness of the counterparties.  Management also reviews trade receivable
balances on an ongoing basis. Bad debt expense related to trade receivables is
recognized at the time an account is deemed uncollectible. Accordingly, as at
December 31, 2014 and 2013 an allowance for doubtful accounts was not deemed
necessary. F -30


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Table of Contents
 8.  risk
management and financial instruments RISK MANAGEMENT Brookfield Renewable’s activities expose it to a variety of
financial risks, including market risk (i.e., commodity price risk, interest
rate risk, and foreign currency risk), credit risk and liquidity risk.  Brookfield
Renewable uses financial instruments primarily to manage these risks. (a) Market risk Market risk is defined for these purposes as the risk that the
fair value or future cash flows of a financial instrument held by Brookfield
Renewable will fluctuate because of changes in market prices. Brookfield Renewable faces market risk from foreign currency
assets and liabilities, the impact of changes in interest rates, and floating
rate liabilities.  Market risk is managed by funding assets with financial
liabilities in the same currency and with similar interest rate characteristics
and holding financial contracts, such as interest rate swaps and foreign
exchange contracts, to minimize residual exposures. Financial instruments held
by Brookfield Renewable that are subject to market risk include borrowings and
financial instruments, such as interest rate, currency and commodity contracts.
The categories of financial instruments that can give rise to significant
variability are described below: (i)Electricity price risk Electricity price risk is defined for these purposes as the risk
that the fair value or future cash flows of a financial instrument held by
Brookfield Renewable will fluctuate because of changes in commodity prices. 
Electricity price risk arises from the sale of Brookfield Renewable’s
uncontracted generation. Brookfield Renewable aims to sell electricity under
long-term contracts to secure stable prices and mitigate its exposure to
wholesale markets. The table below summarizes the impact of changes in the market
price of electricity as at December 31.  The impact is expressed in terms of
the effect on net income and OCI.  The sensitivities are based on the
assumption that the market price changes by five percent with all other
variables held constant. Impact of a 5% change in the market price of electricity, on
outstanding energy derivative contracts, for the year ended December 31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2014
 
 2013
 
 2012
 
 2014
 
 2013
 
 20125% increase
 $
 -
 $
 -
 $
 1
 $
 (9)
 $
 1
 $
 -5% decrease
 
 -
 
 -
 
 (1)
 
 9
 
 (1)
 
 -
 (ii) Foreign currency risk Foreign currency risk is defined for these purposes as the
risk that the fair value of a financial instrument held by Brookfield Renewable
will fluctuate because of changes in foreign currency rates. Brookfield Renewable has exposure to the Canadian dollar, Brazil real and
Euro through its investments in foreign operations. Consequently, fluctuations
in the U.S. dollar exchange rate against these currencies increase the
volatility of net income and other comprehensive income. Brookfield Renewable
holds foreign currency contracts primarily to mitigate this exposure. The table below summarizes the impact of changes in the exchange rate as
at December 31. The impact is expressed in terms of the effect on income and
OCI. The sensitivities are based on the assumption that the currency exchange
rate changes by five percent with all other variables held constant. F -31


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Table of Contents
 Impact of a 5% change in U.S. dollar exchange rates, on
outstanding foreign exchange swaps, for the year ended December 31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2014
 
 2013
 
 2012
 
 2014
 
 2013
 
 20125% increase
 $
 12
 $
 -
 $
 -
 $
 19
 $
 -
 $
 -5% decrease
 
 (12)
 
 -
 
 -
 
 (19)
 
 -
 
 -
 (iii) Interest rate risk Interest rate risk is defined for these purposes as the
risk that the fair value or future cash flows of a financial instrument held by
Brookfield Renewable will fluctuate, because of changes in interest rates. Brookfield Renewable’s assets largely consist of long duration physical
assets. Brookfield Renewable’s 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. All non-derivative financial
liabilities are recorded at their amortized cost. Brookfield Renewable also
holds interest rate contracts to lock-in fixed rates on certain anticipated
future debt issuances. Brookfield Renewable will enter into interest rate swaps designed to
minimize the exposure to interest rate fluctuations on its variable rate debt.
 Fluctuations in interest rates could impact Brookfield Renewable’s cash
flows, primarily with respect to the interest payable against Brookfield
Renewable’s variable rate debt, which is limited to certain subsidiary
borrowings with a total principal value of $2,552 million (2013: $1,515
million). Of this principal value, $1,237 million (2013: $806 million) has been
hedged through the use of interest rate swaps. The fair values of the
recognized liability for the interest rate swaps were calculated using a valuation
model with observable interest rates. The table below summarizes the impact of changes in the interest rate as
at December 31. The impact is expressed in terms of the effect on income and
OCI. The sensitivities are based on the assumption that the interest rate
changes by one percent with all other variables held constant. Impact of a 1%
change in interest rates, on outstanding interest rate swaps and variable rate
debt, for the year ended December 31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2014
 
 2013
 
 2012
 
 2014
 
 2013
 
 20121% increase
 $
 (13)
 $
 (7)
 $
 (7)
 $
 138
 $
 96
 $
 511% decrease
 
 13
 
 7
 
 7
 
 (138)
 
 (96)
 
 (51)
 (b) Credit risk Credit risk is the risk of loss due to the failure of a borrower or
counterparty to fulfill its contractual obligations. Brookfield Renewable’s exposure
to credit risk in respect of financial instruments relates primarily to
counterparty obligations regarding energy contracts, interest rate swaps,
forward foreign exchange contracts and physical electricity and gas
transactions. Brookfield Renewable minimizes credit risk with counterparties through
the selection, monitoring and diversification of counterparties, and the use of
standard trading contracts, and other credit risk mitigation techniques.  In
addition, Brookfield Renewable’s power purchase agreements are reviewed
regularly and are almost exclusively with customers having long standing credit
histories or investment grade ratings, which limit the risk of non-collection.
See Note 7 - Trade receivables and other current assets, for additional details
regarding Brookfield Renewable’s trade receivables balance. F -32


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Table of Contents
 The maximum credit exposure at
December 31 was as follows: (MILLIONS)
 
 2014
 
 2013Cash and cash equivalents
 $
 150
 $
 203Restricted cash(1)
 
 313
 
 244Trade receivables and other short-term
  receivables
 
 131
 
 170Financial instrument assets
 
 66
 
 17Due from related parties
 
 63
 
 48$
 723
 $
 682
 (1)Includes
both the current and long-term amounts. (c)
Liquidity risk Liquidity risk is the risk that Brookfield Renewable cannot meet a demand
for cash or fund an obligation when due.  Liquidity risk is mitigated by
Brookfield Renewable’s cash and cash equivalent balances and its access to
undrawn credit facilities. Details of the available portion of credit
facilities are included in Note 14 – Long-term debt and credit
facilities.  Brookfield Renewable also ensures that it has access to
public capital markets and maintains a strong investment grade credit rating of
BBB (high). Brookfield Renewable is also subject to the risk associated with debt
financing. This risk is mitigated by the long-term duration of debt instruments
and the diversification in maturity dates over an extended period of time. The sensitivity analysis discussed above reflects the risks associated
with instruments that Brookfield Renewable considers are market sensitive and
the potential loss resulting from one or more selected hypothetical changes.
Therefore, the discussion above is not intended to reflect fully Brookfield
Renewable’s risk exposure. F -33


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Table of Contents
 CASH OBLIGATIONS The table below classifies the
cash obligations related to Brookfield Renewable’s liabilities into relevant
maturity groupings based on the remaining period from the balance sheet dates
to the contractual maturity date.  As the amounts are the contractual
undiscounted cash flows (gross of unamortized financing fees and accumulated
amortization, where applicable), they may not agree with the amounts disclosed
in the consolidated balance sheets. AS AT DECEMBER 31, 2014(MILLIONS)
 
 < 1
  year
 2-5
  years
 > 5
  years
 TotalAccounts payable and accrued liabilities
 $
 253
 $
 -
 $
 -
 $
 253Financial instrument liabilities(1)
 
 99
 
 68
 
 7
 
 174Due to related parties
 
 79
 
 -
 
 -
 
 79Other long-term liabilities - concession
  payments
 
 1
 
 5
 
 13
 
 19Long-term debt and credit facilities(1)
 
 256
 
 3,339
 
 4,146
 
 7,741Interest payable on long-term debt(2)
 
 392
 
 1,287
 
 1,468
 
 3,147Total
 $
 1,080
 $
 4,699
 $
 5,634
 $
 11,413AS AT DECEMBER 31, 2013(MILLIONS)
 
 < 1
  year
 2-5
  years
 > 5
  years
 TotalAccounts payable and accrued liabilities
 $
 229
 $
 -
 $
 -
 $
 229Financial instrument liabilities(1)
 
 64
 
 9
 
 -
 
 73Due to related parties
 
 110
 
 -
 
 -
 
 110Other long-term liabilities - concession
  payments
 
 1
 
 5
 
 117
 
 123Long-term debt and credit facilities(1)
 
 517
 
 2,395
 
 3,752
 
 6,664Interest payable on long-term debt(2)
 
 364
 
 1,199
 
 1,640
 
 3,203Total
 $
 1,285
 $
 3,608
 $
 5,509
 $
 10,402
 (1)Includes
both the current and long-term amounts. (2)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. F -34


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Table of Contents
 Brookfield Renewable
classifies its assets and liabilities as outlined below: Non-financialCash,
  loans
 
 Derivatives
 Other
 assets
  andAS AT DECEMBER 31, 2014
 and
 Assets
 used for
 financial
 non-financial(MILLIONS)
 
 receivables
 (liabilities)(1)
 hedging
 liabilities
 liabilities
 TotalCash and cash equivalents
 $
 150
 $
 -
 $
 -
 $
 -
 $
 -
 $
 150Restricted cash
 
 232
 -
 -
 -
 -
 -
 -
 -
 -
 -
 232Trade receivables and other current assets(2)
 
 201
 
 -
 
 -
 
 -
 
 -
 
 201Due from related parties(2)
 
 63
 
 -
 
 -
 
 -
 
 -
 
 63Financial instrument assets(3)
 
 -
 
 14
 
 52
 
 -
 
 -
 
 66Equity-accounted investments
 
 -
 
 -
 
 -
 
 -
 
 273
 
 273Property, plant and equipment, at fair
  value
 
 -
 
 -
 
 -
 
 -
 
 18,566
 
 18,566Deferred income tax assets
 
 -
 
 -
 
 -
 
 -
 
 142
 
 142Other long-term assets
 
 
 92
 
 31
 
 -
 
 -
 
 33
 
 156Total assets
 
 $
 738
 $
 45
 $
 52
 $
 -
 $
 19,014
 $
 19,849Accounts payable and accrued liabilities(2)
 $
 -
 $
 -
 $
 -
 $
 253
 $
 -
 $
 253Financial instrument liabilities(3)
 
 -
 
 -
 
 174
 
 -
 
 -
 
 174Due to related parties(2)
 
 -
 
 -
 
 -
 
 79
 
 -
 
 79Long-term debt and credit facilities(2)(3)
 
 -
 
 -
 
 -
 
 7,678
 
 -
 
 7,678Deferred income tax liabilities
 
 -
 
 -
 
 -
 
 -
 
 2,637
 
 2,637Other long-term liabilities
 
 -
 
 -
 
 -
 
 147
 
 -
 
 147Total liabilities
 $
 -
 $
 -
 $
 174
 $
 8,157
 $
 2,637
 $
 10,968
 (1)Measured at fair value with
all gains and losses recorded in the consolidated statement of income (loss). (2)Measured at fair value at
inception and subsequently recorded at amortized cost using the effective
interest rate method. (3)Includes both the current and
long-term amounts. F -35


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Table of Contents
 Non-financialCash,
  loans
 Derivatives
 Other
 assets
  andAS AT DECEMBER 31, 2013
 and
 used for
 financial
 non-financial(MILLIONS)
 
 receivables
 hedging
 liabilities
 liabilities
 TotalCash and cash equivalents
 $
 203
 $
 -
 $
 -
 $
 -
 $
 203Restricted cash
 
 169
 
 -
 
 -
 
 -
 
 169Trade receivables and other current assets(1)
 
 204
 
 -
 
 -
 
 -
 
 204Due from related parties(1)(2)
 
 48
 
 -
 
 -
 
 -
 
 48Financial instrument assets(2)
 
 -
 
 17
 
 -
 
 -
 
 17Equity-accounted investments
 
 -
 
 -
 
 -
 
 290
 
 290Property, plant and equipment, at fair
  value
 
 -
 
 -
 
 -
 
 15,741
 
 15,741Deferred income tax assets
 
 -
 
 -
 
 -
 
 117
 
 117Other long-term assets
 
 
 96
 
 -
 
 -
 
 114
 
 210Total assets
 
 $
 720
 $
 17
 $
 -
 $
 16,262
 $
 16,999Accounts payable and accrued liabilities(1)
 $
 -
 $
 -
 $
 229
 $
 -
 $
 229Financial instrument liabilities(2)
 
 -
 
 73
 
 -
 
 -
 
 73Due to related parties(1)
 
 -
 
 -
 
 110
 
 -
 
 110Long-term debt and credit facilities(1)(2)
 
 -
 
 -
 
 6,623
 
 -
 
 6,623Deferred income tax liabilities
 
 -
 
 -
 
 -
 
 2,265
 
 2,265Other long-term liabilities
 
 -
 
 -
 
 163
 
 -
 
 163Total liabilities
 $
 -
 $
 73
 $
 7,125
 $
 2,265
 $
 9,463
 (1)Measured at fair value at
inception and subsequently recorded at amortized cost using the effective
interest rate method. (2)Includes both the current and
long-term amounts. Fair value is the price that
would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. Fair
values determined using valuation models require the use of assumptions
concerning the amount and timing of estimated future cash flows and discount
rates. In determining those assumptions, management looks primarily to external
readily observable market inputs such as interest rate yield curves, currency
rates, and price, as applicable.  The fair value of interest rate swap
contracts, which form part of financing arrangements, is calculated by way of
discounted cash flows, using market interest rates and applicable credit
spreads. A fair
value measurement of a non-financial asset is the consideration that would be
received in an orderly transaction between market participants, considering the
highest and best use of the asset. Assets
and liabilitiesmeasured
at fair value are categorized into one of three hierarchy levels, described
below.  Each level is based on the transparency of the inputs used to measure
the fair values of assets and liabilities. Level 1 –inputs are based on unadjusted quoted prices
in active markets for identical assets and liabilities; Level 2 –
inputs, other than quoted prices in Level 1, that are observable for the asset
or liability, either directly or indirectly; and Level 3 – inputs
for the asset or liability that are not based on observable market data. F -36


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Table of Contents
 The following table presents Brookfield Renewable’s assets and
liabilities measured and disclosed at fair value classified by the fair value
hierarchy as at December 31: (MILLIONS)
 Level 1
 Level 2
 Level 3
 2014
 2013Assets measured at fair value:Cash and cash equivalents
 $
 150
 $
 -
 $
 -
 $
 150
 $
 203Restricted cash(1)
 
 313
 
 -
 
 -
 
 313
 
 244Financial instrument assets(1)Energy derivative contracts
 
 -
 
 31
 
 -
 
 31
 
 -Interest rate swaps
 
 -
 
 -
 
 -
 
 -
 
 17Foreign exchange swaps
 
 -
 
 35
 
 -
 
 35
 
 -Available-for-sale investments(2)
 
 31
 
 -
 
 -
 
 31
 
 -Property, plant and equipment
 
 -
 
 -
 
 18,566
 
 18,566
 
 15,741Liabilities measured at fair value:Financial instrument liabilities(1)Energy derivative contracts
 
 -
 
 -
 
 -
 
 -
 
 (3)Interest rate swaps
 
 -
 
 (170)
 
 -
 
 (170)
 
 (70)Foreign exchange swaps
 
 -
 
 (4)
 
 -
 
 (4)
 
 -Liabilities for which fair value is
  disclosed:Long-term debt and credit facilities
 
 -
 
 (8,434)
 
 -
 
 (8,434)
 
 (7,128)Total
 $
 494
 $
 (8,542)
 $
 18,566
 $
 10,518
 $
 9,004
 (1)Includes both the
current and long-term amounts. (2)Available-for-sale
investments represent investment in securities (see Note 12 – Other long-term
assets).  There were no
transfers between levels during the year ended December 31, 2014. The aggregate amount of Brookfield
Renewable’s net financial instrument positions as at December 31 are as
follows: 2014
 2013Net (Assets)(MILLIONS)
 Assets
 Liabilities
 Liabilities
 Net LiabilitiesEnergy derivative contracts
 $
 31
 $
 -
 $
 (31)
 $
 3Interest rate swaps
 
 -
 
 170
 
 170
 
 53Foreign exchange swaps
 
 35
 
 4
 
 (31)
 
 -Total
 
 66
 
 174
 
 108
 
 56Less: current portion
 
 48
 
 99
 
 51
 
 62Long-term portion
 $
 18
 $
 75
 $
 57
 $
 (6)
 F -37


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Table of Contents
 The following table presents
the change in Brookfield Renewable’s total net financial instrument liability
position as at and for the year ended December 31: (MILLIONS)
 Note
 
 2014
 
 2013
 
 2012Balance, beginning of year
 
 $
 56
 $
 145
 $
 114Increases (decreases) in the net financial
  instrument liability position:Unrealized loss (gain) through income on
  energy derivative contracts
 (a)
 
 3
 
 (18)
 
 (16)Unrealized (gain) loss through OCI on
  energy derivativecontracts
 (a)
 
 (37)
 
 7
 
 4Unrealized (gain) loss through income on
  interest rate swaps
 (b)
 
 -
 
 (19)
 
 12Unrealized loss (gain) through OCI on
  interest rate swaps
 (b)
 
 93
 
 (65)
 
 (4)Unrealized (gain) through income on foreign
  exchange swaps
 (c)
 
 (13)
 
 -
 
 -Unrealized (gain) through OCI on foreign
  exchange swaps
 (c)
 
 (65)
 
 -
 
 -Acquisitions, settlements and other
 
 
 
 71
 
 6
 
 35Balance, end of year
 
 
 $
 108
 $
 56
 $
 145Derivative liabilities not designated as
  hedging instruments:Energy derivative contracts
 (a)
 $
 -
 $
 -
 $
 13Interest rate swaps
 
 (b)
 
 -
 
 -
 
 67Net positions
 
 
 $
 -
 $
 -
 $
 80Derivative liabilities designated as
  hedging instruments:Energy derivative contracts
 (a)
 $
 -
 $
 3
 $
 -Interest rate swaps
 (b)
 
 170
 
 68
 
 65Foreign exchange swaps
 
 (c)
 $
 4
 $
 -
 $
 -Net positions
 
 
 $
 174
 $
 71
 $
 65Derivative assets not designated as hedging
  instruments:Foreign exchange swaps
 
 (c)
 $
 (14)
 $
 -
 $
 -Net positions
 
 
 $
 (14)
 $
 -
 $
 -Derivative assets designated as hedging
  instruments:Energy derivative contracts
 (a)
 $
 (31)
 $
 -
 $
 -Interest rate swaps
 (b)
 
 -
 
 (15)
 
 -Foreign exchange swaps
 
 (c)
 
 (21)
 
 -
 
 -Net positions
 
 
 $
 (52)
 $
 (15)
 $
 -Total net positions
 
 $
 108
 $
 56
 $
 145
 (a)Energy derivative contracts Brookfield Renewable has entered into long-term energy derivative
contracts primarily to stabilize the price of gas purchases or eliminate the
price risk on the sale of certain future power generation. Certain energy
contracts are recorded in Brookfield Renewable’s consolidated financial
statements at an amount equal to fair value, using quoted market prices or, in
their absence, a valuation model using both internal and third-party evidence
and forecasts. Forthe year ended December 31, 2014, gains
of $4 million, relating to energy derivative contracts were realized and
reclassified from OCI to net income (loss) (2013 and 2012: $nil). F -38


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Table of Contents
 Based on market prices as of December
31, 2014, unrealized gains of $18 million (2013: $3 million loss and 2012: $4
million loss) recorded in accumulated other comprehensive income (“AOCI”) on
energy derivative contracts are expected to be settled or reclassified into
income in the next twelve months. The actual amount reclassified from AOCI,
however, could vary due to future changes in market prices. (b)Interest rate swaps Brookfield Renewable has entered into interest rate swap contracts
primarily to minimize exposure to interest rate fluctuations on its variable
rate debt or to lock in interest rates on future debt refinancing.  All
interest rate swap contracts are recorded in the consolidated financial
statements at an amount equal to fair value. At
December 31, 2014, agreements with a total notional value of $2,119 million
were outstanding (2013: $1,600 million) including notional values of $9 million
(2013: $10 million) associated with agreements that are not formally designated
as hedging instruments. The fixed interest rates resulting from these
agreements range from 0.38% to 5.54% (2013: 0.38% to 5.30%). Forthe year ended December 31, 2014, losses
of $4 million, relating to cash flow hedges were realized and reclassified from
OCI to net income (loss) (2013: losses of $1 million and 2012:$16
million loss). Based
on market prices as of December 31, 2014, unrealized losses of $95 million
(2013: $ 59 million loss and 2012: $109 million loss) recorded in AOCI on
interest rate swaps are expected to be settled or reclassified into income in
the next twelve months. The actual amount reclassified from AOCI, however,
could vary due to future changes in market rates. (c)Foreign exchange swaps Brookfield Renewable has entered into foreign exchange
swaps to minimize its exposure to currency fluctuations impacting its
investments in foreign operations, and to fix the exchange rate on certain
anticipated transactions denominated in foreign currencies. At December 31, 2014, agreements with a total notional value of $656 million
were outstanding (2013: $nil) including $254 million (2013: $nil) associated
with agreements that are not formally designated as hedging instruments. Based
on market prices as of December 31, 2014, unrealized gains of $26 million (2013
and 2012: $nil) recorded in AOCI on foreign exchange swaps are expected to be
settled or reclassified into income in the next twelve months. The actual
amount reclassified from AOCI, however, could vary due to future changes in
market rates. 9.  related party transactions Brookfield Renewable’s related
party transactions are recorded at the exchange amount.  Brookfield Renewable’s
related party transactions are primarily with Brookfield Asset Management and
its subsidiaries. Brookfield Renewable and Brookfield had entered into, or
amended, the following material agreements: Principal Agreements Limited Partnership Agreements Each of the amended and
restated limited partnership agreements of Brookfield Renewable and BRELP
outline the key terms of the partnerships, including provisions relating to
management, protections for limited partners, capital contributions,
distributions and allocation of income and losses. BRELP’s general partner is
entitled to receive incentive distributions from BRELP as a result of its
ownership of the general F -39


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Table of Contents
 partnership interest in
BRELP. The incentive distributions are to be calculated in increments based on
the amount by which quarterly distributions on the limited partnership units of
BRELP exceed specified target levels as set forth in the amended and restated
partnership agreement. Master
Services Agreement Brookfield Renewable entered into an agreement with Brookfield
Asset Management pursuant to which Brookfield Asset Management has agreed to
provide oversight of the business and provide the services of senior officers
to Brookfield Renewable for a management service fee.  The fee is paid on a
quarterly basis and has a fixed quarterly component of $5 million and a
variable component calculated as a percentage of the increase in the total
capitalization value of Brookfield Renewable over an initial reference value
(subject to an annual escalation by a specified inflation factor beginning on
January 1, 2013). Total capitalization value as of December 31, 2014 is $11
billion, which against the initial reference value of $8 billion and factoring
in the annual amount of $20 million (as adjusted for inflation), resulted in a
management service fee payment for the year ended December 31, 2014 of $51
million (2013: $41 million, 2012: $36 million). BRELP
Voting Agreement In 2011, we entered into a voting agreement with Brookfield
pursuant to which Brookfield Renewable, through BRPL, has a number of voting
rights, including the right to direct all eligible votes in the election of the
directors of BRELP’s general partner. Revenue Agreements Contract Amendments In 2011, two long-term power purchase agreements associated with
the generating assets in Ontario held by the Mississagi Power Trust (“MPT”),
and Great Lakes Power Limited (“GLPL”) were amended. The amended GLPL power purchase agreement requires Brookfield to
support the price that GLPL receives for energy generated by certain facilities
in Canada at a price of C$82 per MWh subject to an annual adjustment equal to
40% of the Consumer Price Index (“CPI”) in the previous year.  The GLPL
agreement has an initial term to 2029, and the contract automatically renews
for successive 20-year periods with certain termination provisions.  If the
contract is not terminated prior to 2029, the price under this agreement
reverts back to the original C$68 per MWh subject to an annual adjustment equal
to 40% of the CPI for each year. The amended MPT power purchase agreement requires Brookfield to
purchase the energy generated at a price of C$103 per MWh subject to an annual
adjustment equal to 20% of the CPI in the previous year.  The MPT contract
terminates on December 1, 2029 and MPT has been granted the unilateral option
to terminate the agreement, on 120 days written notice, at certain times
between 2017 and 2024. Energy Revenue Agreement In 2011, an agreement was entered into between Brookfield and
Brookfield Power U.S. Holdings America Co. (“BPUSHA”) that indirectly owns
substantially all of the U.S. facilities of Brookfield Renewable. Brookfield
will support the price that BPUSHA receives for energy generated by certain
facilities in the United States at a price $75 per MWh. This price is to be
increased annually on January 1 by an amount equal to 40% of the increase in
the CPI during the previous calendar year, but not exceeding an increase of 3%
in any calendar year. This agreement will have an initial term of 20 years,
with automatic renewals for successive 20-year periods with certain termination
provisions. F -40


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Table of Contents
 Other Revenue Agreements Pursuant to a 20-year power purchase agreement, Brookfield
purchases all energy from several power facilities in Maine and New Hampshire
held by Great Lakes Holding America (“GLHA”) at $37 per MWh.  The energy rates
are subject to an annual adjustment equal to 20% of the increase in the CPI
during the previous year. Pursuant to a 20-year power purchase agreement, Brookfield
purchases all energy from Lievre Power in Quebec at C$68 per MWh.  The energy
rates are subject to an annual adjustment equal to the lesser of 40% of the
increase in the CPI during the previous calendar year or 3%. Pursuant to a power guarantee agreement, Brookfield will purchase
all energy from the two facilities of Hydro Pontiac Inc. at a price of C$68 per
MWh, to be increased annually each calendar year beginning in 2010 by an amount
equal to 40% of the increase in the CPI during the previous calendar year. 
This power guarantee agreement is scheduled to commence in 2019 for one
facility and in 2020 for the other, upon the expiration of existing power
agreements.  This agreement has an initial term to 2029 and automatically
renews for successive 20-year period with certain termination provisions. Pursuant to a 10-year Wind Levelization agreement expiring in
2019, Brookfield mitigates any potential wind variation from the expected
annual generation of 506 GWh with regards to the Prince Wind assets in
Ontario.  Any excess generation compared to the expected generation results in
a payment from Brookfield Renewable to Brookfield, while a shortfall would
result in a payment from Brookfield to Brookfield Renewable. Power Services Agreements Power Agency Agreements Certain Brookfield Renewable subsidiaries have entered into Power
Agency Agreements appointing Brookfield as the exclusive agent of the owner in
respect of the sales of electricity, including the procurement of transmission
and other additional services.  In addition, Brookfield will schedule, dispatch
and arrange for transmission of the power produced and the power supplied to
third-parties in accordance with prudent industry practice. Pursuant to each
Agreement, Brookfield will be entitled to be reimbursed for any third-party
costs incurred, and, in certain cases, receives an additional fee for its
services in connection with the sale of power and for providing the other
services. Energy Marketing Agreement Brookfield has agreed to provide energy marketing services to
Brookfield Renewable’s North American businesses. Under this Agreement,Brookfield Renewable pays
an annual energy marketing fee of $18 million per year (subject to increase by
a specified inflation factor beginning on January 1, 2013). See Note 21 -
Direct operating costs. Voting
Agreements Brookfield
Renewable entered into voting agreements with Brookfield whereby Brookfield, as
managing member of entities related to the Brookfield Americas Infrastructure
Fund (the “BAIF Entities”) in which Brookfield Renewable holds investments in
certain United States and Brazil power generating operations with institutional
investors, agreed to assign to Brookfield Renewable their voting rights to
elect the Boards of Directors of the BAIF Entities. Brookfield Renewable’s
economic interests in the BAIF Entities in the United States and Brazil are 22%
and 25%, respectively. Brookfield Renewable entered into voting agreements with certain
Brookfield subsidiaries whereby these subsidiaries, as managing members of
entities related to Brookfield Infrastructure Fund II (the “BIF II Entities”)
in which Brookfield Renewable holds investments in certain United States and
Europe power F -41


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Table of Contents
 generating operations with institutional
investors, agreed to provide to Brookfield Renewable the authority to direct
the election of the Boards of Directors of the BIF II Entities. Brookfield
Renewable’s economic interests in the BIF II Entities are between 40% and
50.1%. The following table reflects the
related party agreements and transactions on the consolidated statements of
income (loss), for the year ended December 31: (MILLIONS)
 
 2014
 
 2013
 
 2012RevenuesPower purchase and revenue agreements
 $
 433
 $
 456
 $
 376Wind levelization agreement
 
 6
 
 6
 
 2$
 439
 $
 462
 $
 378Direct operating costsEnergy purchases
 $
 (9)
 $
 (36)
 $
 (40)Energy marketing fee
 
 (21)
 
 (20)
 
 (18)Insurance services
 
 (29)
 
 (26)
 
 (18)$
 (59)
 $
 (82)
 $
 (76)Management service costs
 $
 (51)
 $
 (41)
 $
 (36)
 The following table reflects the impact of the related party agreements
and transactions on the consolidated balance sheets as at December 31: (MILLIONS)
 Related party
 
 2014
 
 2013Current assetsDue from related partiesAmounts due from
 Brookfield
 $
 54
 $
 36Equity accounted investments and other
 
 9
 
 12$
 63
 $
 48Current liabilitiesDue to related partiesAmount due to
 Brookfield
 $
 56
 $
 48Accrued distributions payable on LPUnits and Redeemable/Exchangeablepartnership units
 Brookfield
 
 21
 
 62Amount due to
 Equity accounted investments and other
 
 2
 
 -$
 79
 $
 110
 Current
assets Amounts due from Brookfield are non-interest bearing, unsecured and due
on demand. Current liabilities Amounts due to Brookfield are unsecured, payable on demand and relate to
recurring transactions. With the change in timing of the quarterly distributions that took effect
in the first quarter of 2014, the distribution payable as at December 31, 2014
represents distributions declared with respect to one month in the fourth
quarter of 2014. Distributions payable as at December 31, 2013 represented the
distribution declared for the fourth quarter of 2013. F -42


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Table of Contents
 10. EQUITY-ACCOUNTED
INVESTMENTS The following are
Brookfield Renewable’s equity-accounted investments as at December 31: Principal place
 Ownership
 Carrying
  valueof business
 interest(MILLIONS)
 
 %
 
 2014
 
 2013Bear Swamp Power Co. L.L.C.
 United States
 50
 $
 177
 $
 138Galera Centrais Eletricas S.A.
 Brazil
 50
 
 38
 
 58Pingston Power Inc.
 Canada
 50
 
 56
 
 51Brookfield Americas Infrastructure Fund
  Investees
 United States
 
 
 -
 
 40Brookfield Infrastructure Fund II Investees
 United States,Europe
 14 - 50
 
 2
 
 3$
 273
 $
 290
 The following table outlines the changes in Brookfield Renewable’s
equity-accounted investments for the year ended December 31: (MILLIONS)
 2014
 2013
 2012Balance, beginning of year
 $
 290
 $
 344
 $
 405Acquisitions (see Note 4):California Wind Step Acquisition
 
 -
 
 -
 
 (63)California Hydro Step Acquisition
 
 (39)
 
 -
 
 -Canada Hydro Step Acquisition
 
 -
 
 (19)
 
 -Revaluation recognized through OCI
 
 56
 
 (15)
 
 16Share of OCI
 
 1
 
 1
 
 -Share of net income (loss)
 
 3
 
 9
 
 (5)Dividends declared
 
 (27)
 
 (18)
 
 (12)Foreign exchange loss
 
 (11)
 
 (12)
 
 (5)Other
 
 -
 
 -
 
 8Balance, end of year
 $
 273
 $
 290
 $
 344
 The following tables summarize certain financial information of
equity-accounted investments: (MILLIONS)
 
 
 
 
 2014
 
 2013As at December 31:Current assets
 
 
 $
 42
 $
 54Property, plant and equipment, at fair
  value
 
 
 
 708
 
 726Other assets
 
 
 
 74
 
 93Current liabilities
 
 
 
 27
 
 27Long-term debt
 
 
 
 184
 
 202Other liabilities
 
 
 
 70
 
 64(MILLIONS)
 
 2014
 
 2013
 
 2012For the year ended December 31Revenue
 $
 109
 $
 110
 $
 106Net income (loss)
 
 6
 
 19
 
 (12)Share of net income (loss)Cash earnings
 
 26
 
 21
 
 13Non-cash loss
 
 (23)
 
 (12)
 
 (18)
  F -43


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Table of Contents
 11.PROPERTY, PLANT AND EQUIPMENT, AT FAIR
VALUE The following table presents a reconciliation
of property, plant and equipment at fair value: Co-(MILLIONS)
 Hydroelectric(1)
 Wind
  energy
 CWIP
 generation
 TotalAs at December 31, 2011
 $
 12,079
 $
 1,450
 $
 386
 $
 87
 $
 14,002Additions
 
 2
 
 -
 
 315
 
 -
 
 317Acquisitions through business combinations
 
 618
 
 581
 
 175
 
 -
 
 1,374Investment tax credit
 
 (13)
 
 (196)
 
 -
 
 -
 
 (209)Transfers and other
 
 107
 
 429
 
 (558)
 
 4
 
 (18)Items recognized through OCIChange in fair value
 
 637
 
 62
 
 82
 
 (13)
 
 768Foreign exchange
 
 (70)
 
 40
 
 (8)
 
 2
 
 (36)Items recognized through net incomeChange in fair value
 
 (20)
 
 (4)
 
 -
 
 11
 
 (13)Depreciation
 
 (349)
 
 (113)
 
 -
 
 (21)
 
 (483)As at December 31, 2012
 $
 12,991
 $
 2,249
 $
 392
 $
 70
 $
 15,702Additions
 
 18
 
 -
 
 225
 
 -
 
 243Acquisitions through business combinations
 
 927
 
 430
 
 30
 
 -
 
 1,387Investment tax credit
 
 (24)
 
 -
 
 -
 
 -
 
 (24)Transfers and other
 
 183
 
 (4)
 
 (205)
 
 -
 
 (26)Items recognized through OCIChange in fair value
 
 (215)
 
 8
 
 24
 
 (19)
 
 (202)Foreign exchange
 
 (672)
 
 (90)
 
 (25)
 
 (2)
 
 (789)Items recognized through net incomeChange in fair value
 
 (21)
 
 (3)
 
 -
 
 9
 
 (15)Depreciation
 
 (381)
 
 (142)
 
 -
 
 (12)
 
 (535)As at December 31, 2013
 $
 12,806
 $
 2,448
 $
 441
 $
 46
 $
 15,741Additions
 
 7
 
 34
 
 173
 
 -
 
 214Acquisitions through business combinations
 
 1,325
 
 1,057
 
 34
 
 -
 
 2,416Transfers and other
 
 377
 
 31
 
 (423)
 
 -
 
 (15)Items recognized through OCIChange in fair value
 
 1,587
 
 57
 
 -
 
 -
 
 1,644Foreign exchange
 
 (671)
 
 (222)
 
 (15)
 
 (2)
 
 (910)Items recognized through net incomeChange in fair value
 
 22
 
 1
 
 -
 
 1
 
 24Depreciation
 
 (384)
 
 (160)
 
 -
 
 (4)
 
 (548)As at December 31, 2014
 $
 15,069
 $
 3,246
 $
 210
 $
 41
 $
 18,566
 (1)Includes intangible
assets, the value of which is not material. The fair value of Brookfield Renewable’s property, plant and equipment is
calculated as described in Notes 2(f) - Property, plant and equipment and
revaluation method and 2(n) - Critical estimates. Judgment is involved in
determining the appropriate estimates and assumptions in the valuation of
Brookfield Renewable’s property, plant and equipment. See Note 2(o)(iii) -
Critical judgments in applying F -44


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Table of Contents
 accounting policies –
Property, plant and equipment.Brookfield
Renewable has classified it’s property, plant and equipment under level 3 of
the fair value hierarchy. Discount rates, terminal
capitalization rates and exit dates used in the valuation methodology, are
provided in the following table: United
  States
 
 Canada
 
 Brazil2014
 
 2013
 
 2014
 
 2013
 
 2014
 
 2013Discount rateContracted
 
 5.2%
 
 5.8%
 
 4.8%
 
 5.1%
 
 8.4%
 
 9.1%Uncontracted
 
 7.1%
 
 7.6%
 
 6.7%
 
 6.9%
 
 9.7%
 
 10.4%Terminal capitalization rate(1)
 
 7.1%
 
 7.1%
 
 6.5%
 
 6.4%
 
 N/A
 
 N/AExit date
 
 2034
 
 2033
 
 2034
 
 2033
 
 2029
 
 2029
 (1)The terminal
capitalization rate applies only to hydroelectric assets in the United States
and Canada. The following table summarizes the impact of
a change in discount rates and terminal capitalization rates on the fair value
of property, plant and equipment: (BILLIONS)
 
 2014
 
 201350 bps increase in discount rates
 $
 (1.3)
 $
 (1.1)50 bps decrease in discount rates
 
 1.5
 
 1.350 bps increase in terminal capitalization
  rate(1)
 
 (0.3)
 
 (0.3)50 bps decrease in terminal capitalization
  rate(1)
 
 0.4
 
 0.3
 (1)The terminal capitalization rate
applies only to hydroelectric assets in the United States and Canada. Terminal values are included in the valuation of hydroelectric
assets in the United States and Canada.  For thehydroelectric
assets in Brazil, cash flows have been included based on the duration of the
authorization or useful life of a concession asset without consideration of
potential renewal value.The weighted-average remaining
duration at December 31, 2014, is 15 years (2013: 16 years). Consequently,
there is no terminal value attributed to the hydroelectric assets in Brazil. The
following table summarizes the percentage of total generation contracted under
power purchase agreements: United
  States
 Canada
 Brazil1 - 10 years
 
 55%
 
 88%
 
 48%11 - 20 years
 
 43%
 
 66%
 
 38%
 The
following table summarizes power prices from long-term power purchase
agreements that are linked specifically to the related power generating assets: Per MWh(1)
 United
  States
 Canada
 Brazil1 - 10 years
 $
 90
 C$
 91
 R$
 24711 - 20 years
 $
 103
 C$
 96
 R$
 361
 (1)Assumes nominal prices
based on weighted-average generation. F -45


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Table of Contents
 The following table summarizes the estimates of future electricity
prices: Per MWh(1)
 United
  States
 Canada
 Brazil1 - 10 years
 $
 74
 C$
 105
 R$
 26111 - 20 years
 $
 120
 C$
 134
 R$
 382
 (1)Assumes nominal prices
based on weighted-average generation. A 5% change in the estimates of future electricity prices would increase
or decrease the fair value of property, plant and equipment by approximately
$500 million. 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 year
2020.A one year change would increase or
decrease the fair value of property, plant and equipment by approximately $225
million. Had Brookfield Renewable’s revalued property, plant and
equipment been measured on a historical cost basis, the carrying amounts, net
of accumulated depreciation would have been as follows at December 31: (MILLIONS)
 
 2014
 
 2013Hydroelectric
 $
 6,435
 $
 5,305Wind
 
 2,729
 
 1,935Other(1)
 
 267
 
 386$
 9,431
 $
 7,626
 (1)Included within the
“Other” category are gas-fired generating units and CWIP. 12.  OTHER LONG-TERM ASSETS The composition
of Brookfield Renewable’s other long-term assets as at December 31 is presented
in the following table: AccumulatedCost
 Amortization
 Net Book
  Value
 Net book
  value(MILLIONS)
 2014
 
 2013Water rights
 $
 -
 $
 -
 $
 -
 $
 74Restricted cash
 
 81
 
 -
 
 81
 
 75Available-for-sale investments
 
 31
 
 -
 
 31
 
 -Unamortized financing fees
 
 37
 
 (28)
 
 9
 
 11Other
 
 39
 
 (4)
 
 35
 
 50$
 188
 $
 (32)
 $
 156
 $
 210
 Brookfield
Renewable is required to pay the Brazilian Federal Government for the usage of
public assets (“Water rights”) over the concession terms associated with
certain of its Brazilian facilities. Water rights are monetarily adjusted by
the Brazilian General Market Price Index. During the year ended December 31,
2014, the concession agreement associated with a facility was terminated, and
accordingly, as at December 31, 2014, an asset of $nil million (2013: $74
million) was included in other long-term assets and corresponding liability of
$13 million associated with another of the facilities was recorded within other
long-term liabilities (Note 16) (2013: $89 million). At December 31, 2014, $81 million of restricted cash (2013: $75
million) was held to satisfy lease payments and credit agreements. F -46


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Table of Contents
 13.  accounts payable and accrued
liabilities Brookfield
Renewable’saccounts
payable and accrued liabilities as at December 31are as follows: (MILLIONS)
 
 2014
 
 2013Operating accrued liabilities
 $
 131
 $
 101Interest payable on corporate and
  subsidiary borrowings
 
 44
 
 49Accounts payable
 
 29
 
 31LP Unitholders’ distribution and preferred
  dividends payable(1)
 
 19
 
 40Other
 
 30
 
 8$
 253
 $
 229
 (1)Includes amounts
payable only to external LP Unitholders. Amounts payable to Brookfield are
included in due to related parties. Refer to Note 9 - Related party
transactions. 14.LONG-TERM
DEBT AND CREDIT FACILITIES The
composition of debt obligations as at December 31 is presented in the following
table: 2014
 2013Weighted-average
 
 
 Weighted-averageInterest
 Term
 
 
 Interest
 Term(MILLIONS EXCEPT AS NOTED)
 rate (%)
 (years)
 
 rate (%)
 (years)Corporate borrowingsSeries 3 (CDN$200)
 5.3
 3.8
 $
 172
 5.3
 4.8
 $
 188Series 4 (CDN$150)
 5.8
 21.9
 
 129
 5.8
 22.9
 
 141Series 6 (CDN$300)
 6.1
 1.9
 
 258
 6.1
 2.9
 
 282Series 7 (CDN$450)
 5.1
 5.8
 
 388
 5.1
 6.8
 
 424Series 8 (CDN$400)
 4.8
 7.1
 
 344
 4.8
 8.1
 
 3775.3
 6.7
 $
 1,291
 5.3
 7.7
 $
 1,412Subsidiary borrowingsUnited States
 5.3
 8.3
 $
 3,468
 6.0
 9.7
 $
 2,826Canada
 5.7
 13.8
 
 1,798
 5.8
 15.2
 
 1,877Brazil
 7.3
 10.4
 
 189
 7.4
 11.1
 
 238Europe
 3.5
 12.5
 
 594
 -
 -
 
 -5.3
 10.4
 $
 6,049
 6.0
 11.8
 $
 4,941Credit facilities
 1.4
 4.5
 $
 401
 1.4
 3.8
 $
 311Total debt
 
 
 $
 7,741
 
 
 $
 6,664Add: Unamortized premiums(1)
 
 
 
 8
 
 
 
 11Less: Unamortized financing fees(1)
 
 
 
 (71)
 
 
 
 (52)Less: Current portion
 
 
 
 (256)
 
 
 
 (517)$
 7,422
 
 
 $
 6,106
 (1)Unamortized
premiums and unamortized financing fees are amortized to interest expense over
the terms of the borrowing. F -47


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Table of Contents
 Future maturities of Brookfield Renewable’s
debt obligations, for each of the next five years and thereafter are as
follows: (MILLIONS)
 2015
 2016
 2017
 2018
 2019
 Thereafter
 TotalCorporate borrowings(1)
 $
 -
 $
 258
 $
 -
 $
 172
 $
 -
 $
 861
 $
 1,291Subsidiary borrowings(1)United States
 
 147
 
 347
 
 784
 
 777
 
 67
 
 1,346
 
 3,468Canada
 
 53
 
 135
 
 49
 
 54
 
 52
 
 1,455
 
 1,798Brazil
 
 23
 
 22
 
 21
 
 20
 
 19
 
 84
 
 189Europe
 
 33
 
 36
 
 40
 
 41
 
 44
 
 400
 
 594256
 
 798
 
 894
 
 1,064
 
 182
 
 4,146
 
 7,340Credit facilities
 
 -
 
 -
 
 -
 
 -
 
 401
 
 -
 
 401$
 256
 $
 798
 $
 894
 $
 1,064
 $
 583
 $
 4,146
 $
 7,741
 (1)Subsidiary
borrowings and corporate borrowings include $8 million and $71 million of
unamortized premiums and deferred financing fees, respectively. Future maturities of borrowings for interests
accounted for on an equity-accounted basis for each of the next five years and
thereafter are as follows: (MILLIONS)
 2015
 2016
 2017
 2018
 2019
 Thereafter
 TotalUnited States
 $
 -
 $
 -
 $
 125
 $
 -
 $
 -
 $
 -
 $
 125Canada
 
 30
 
 -
 
 -
 
 -
 
 -
 
 -
 
 30$
 30
 $
 -
 $
 125
 $
 -
 $
 -
 $
 -
 $
 155
 The unamortized financing fees of each debt
obligation as at December 31 are as follows: (MILLIONS)
 
 2014
 
 2013
 
 2012Corporate borrowingsUnamortized financing fees, beginning of
  year
 $
 6
 $
 8
 $
 6Additional financing fees
 
 -
 
 -
 
 3Amortization of financing fees
 
 (1)
 
 (2)
 
 (1)Unamortized financing fees, end of year
 $
 5
 $
 6
 $
 8Subsidiary borrowingsUnamortized financing fees, beginning of
  year
 $
 46
 $
 46
 $
 49Additional financing fees
 
 39
 
 17
 
 15Amortization of financing fees
 
 (13)
 
 (17)
 
 (18)Other
 
 (6)
 
 -
 
 -Unamortized financing fees, end of year
 $
 66
 $
 46
 $
 46Total
 $
 71
 $
 52
 $
 54
  F -48


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Table of Contents
 Long-term debt
and credit facilities are recorded at amortized cost. The following
table provides information about management’s best estimate of the fair value
of long-term debt and credit facilities as at December 31: 2014
 2013(MILLIONS)
 Carrying
  value(1)
 Fair
  value
 Carrying
  value(1)
 Fair
  valueCorporate borrowings
 $
 1,286
 $
 1,428
 $
 1,406
 $
 1,535Subsidiary borrowingsUnited States
 $
 3,435
 $
 3,769
 $
 2,804
 $
 2,988Canada
 
 1,784
 
 2,013
 
 1,864
 
 2,056Brazil
 
 189
 
 189
 
 238
 
 238Europe
 
 583
 
 634
 
 -
 
 -5,991
 
 6,605
 
 4,906
 
 5,282Credit facilities
 
 401
 
 401
 
 311
 
 311$
 7,678
 $
 8,434
 $
 6,623
 $
 7,128
 (1)Net
of unamortized financing fees and premium. Corporate borrowings Corporate borrowings are
obligations of a finance subsidiary of Brookfield Renewable, Brookfield
Renewable Energy Partners ULC (“BREP Finance”) (Note23- Subsidiary public issuers). BREP Finance may redeem some
or all of the borrowings from time to time, pursuant to the terms of the indenture.
The balance is payable upon maturity, and interest on corporate borrowings is
paid semi-annually. The term notes payable by BREP Finance are unconditionally
guaranteed by Brookfield Renewable, BRELP and certain other subsidiaries. Subsidiary borrowings Subsidiary borrowings are generally asset-specific, long-term,
non-recourse borrowings denominated in the domestic currency of the
subsidiary. Subsidiary borrowings in the United States, Canada and Europe consist
of both fixed and floating interest rate debt.  Brookfield Renewable uses
interest rate swap agreements to minimize its exposure to floating interest
rates.  Subsidiary borrowings in Brazil consist of floating interest rates
of Taxa de Juros de Longo Prazo, the Brazil National Bank for Economic Development’s
long-term interest rate, or Interbank Deposit Certificate rate, plus a margin. During the year ended December 31, 2014, Brookfield Renewable
completed the following financings: In January 2014, the $279 million bridge loan associated with a
360 MW operating hydroelectric portfolio located in New England was refinanced
to July 2017 at LIBOR plus 2.25%. In February 2014, as part of theMaine
Hydroacquisition, $140 million of
financing was obtained through a bond issuance with a 5.5% interest rate
maturing in February 2024. In March 2014, Brookfield Renewable up-financed indebtedness
associated with a 349 MW Ontario hydroelectric portfolio through the issuance
of C$90 million of senior and C$60 million of subordinate bonds with interest
rates of 3.8% and 5.0%, respectively, maturing in June 2023. In June 2014, Brookfield Renewable refinanced a $125 million debt
facility associated with a 167 MW hydroelectric portfolio in New England
through the issuance of 8-year notes maturing in January 2022 at a fixed rate
of 4.59%. F -49


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Table of Contents
 In June
2014, as part of the acquisition of the 326 MW Irish wind portfolio,
Brookfield Renewable assumed a €169 million ($232 million) loanwith a fixed interest rate of 4.6%, including the related interest
rate swaps, maturing in December 2026. In August
2014, Brookfield Renewable secured a €160 million ($210 million) term loan for
153 MW of its wind facilities in Ireland with an initial fixed interest rate of
2.9%, including the related interest rate swaps, maturing in December 2026. In October 2014,Brookfield Renewablesecured a $560
million term loan associated with Pennsylvania Hydro. A portion of the proceeds
was used primarily to prepay the high-yielding $65 million bond initially
assumed in connection with the Pennsylvania Hydro Step Acquisition. The debt
bears interest at LIBOR plus 1.75%, with the margin increasing 25 basis points
annually, and matures in June 2018. In November 2014, Brookfield Renewablesecured an 18-month extension on a $250 million term loan
associated with a hydroelectric portfolio in Tennessee and North Carolina with
a fixed interest rate of 3.20%, including the related interest rate swaps, and
maturing in May 2016. In December 2014, Brookfield Renewable
secured a €188 million ($227 million) construction and term loan for 137 MW of
its development projects in Ireland. An amount of €168 million ($203 million)
was initially drawn on the loan at a rate of 2.82%, maturing in December 2027. Credit facilities In August 2014, Brookfield Renewable extended the maturity for
$1,280 million of its corporate credit facilities to June 2019 and reduced the
applicable margin by five basis points from 1.25% to 1.20%. The credit
facilities are used for general working capital purposes. The credit facility
is available by way of advances in Canadian dollars, U.S. dollars, Euro (€) or
British Pound Sterling (£) in the form of (i) Canadian prime rate loans (ii)
U.S. base rate loans (iii) bankers’ acceptance (“BA”) rate loans (iv) LIBOR
loans (v) EURIBOR loans and (vi) letters of credit. Refer to Note 25 –
Commitments, contingencies and guarantees for further details. The credit
facility bears interest at the applicable BA rate, LIBOR or EURIBOR plus an
applicable margin. The applicable margin is tiered on the basis of Brookfield
Renewable’s unsecured long-term debt rating. Standby fees are charged on the
undrawn balance. In addition, Brookfield
Asset Management provided a $200 million committed unsecured revolving credit
facility maturing in December 2015, at LIBOR plus 2%. Brookfield Renewable and its
subsidiaries issue letters of credit from some of its credit facilities for
general corporate purposes which include, but are not limited to, security
deposits, performance bonds and guarantees for debt service reserve accounts. The following table
summarizes the available portion of credit facilities as at December 31: (MILLIONS)
 
 2014
 
 2013Authorized credit facilities
 $
 1,480
 $
 1,480Draws on credit facilities(1)
 
 (401)
 
 (311)Issued letters of credit
 
 (227)
 
 (212)Available portion of credit facilities
 $
 852
 $
 957
 (1)Amounts are unsecured and
revolving. Interest rate is at the LIBOR plus 1.20% (December 31, 2013: 1.25%). F -50


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Table of Contents
 15.  Income taxes The major components of income tax recovery
(expense) for the year ended December 31 are as follows: (MILLIONS)
 
 2014
 
 2013
 
 2012Income tax recovery (expense) applicable to:Current taxesAttributed to the current period
 $
 (18)
 $
 (19)
 $
 (14)Deferred taxesIncome taxes - origination and reversal of temporary
  differences
 $
 30
 $
 24
 $
 82Relating to change in tax rates / imposition of new tax laws
 
 15
 
 14
 
 (5)Relating to unrecognized temporary differences and tax losses
 
 (16)
 
 (20)
 
 (23)$
 29
 $
 18
 $
 54Total income tax recovery (expense)
 $
 11
 $
 (1)
 $
 40
 The major components of deferred income tax
recovery (expense) for the year ended December 31 recorded directly to OCI are
as follows: (MILLIONS)
 
 2014
 
 2013
 
 2012Deferred income taxes attributed to:Financial instruments designated as cash flow hedges
 $
 12
 $
 (11)
 $
 (1)Other
 
 (8)
 
 -
 
 -Revaluation surplusOrigination and reversal of temporary differences
 
 (408)
 
 98
 
 (218)Relating to changes in tax rates / imposition of new tax
  laws
 
 38
 
 6
 
 (6)$
 (366)
 $
 93
 $
 (225)
 Brookfield Renewable’s effective income tax
(expense) recovery for the year ended December 31 is different from its
recovery at its statutory income tax rate due to the differences below: (MILLIONS)
 
 2014
 
 2013
 
 2012Statutory income tax (expense) recovery(1)
 $
 (66)
 $
 (76)
 $
 47(Reduction) increase resulting from:Increase in tax assets not recognized
 
 (16)
 
 (20)
 
 (23)Deemed profit method differences in Brazil
 
 8
 
 12
 
 7Differences between statutory rate and future tax rate
 
 65
 
 69
 
 25Losses (gains) recorded not taxable to Brookfield Renewable
 
 11
 
 13
 
 (24)Other
 
 9
 
 1
 
 8Effective income tax recovery (expense)
 $
 11
 $
 (1)
 $
 40
 (1)Statutory income tax (expense) recovery is
calculated at the domestic rates applicable to the profits in the country
concerned. The above
reconciliation has been prepared by aggregating the information for all of
Brookfield  Renewable’s subsidiaries using the domestic rate in each tax
jurisdiction. The
taxable temporary difference attributable to the Brookfield Renewable’s
interest in its subsidiaries, associates, and joint ventures is $376 million. Brookfield
Renewable’s effective income tax rate was 5.76% for the year ended December 31,
2014 (2013: 0.46%). The effective tax rate is less than the statutory rate
primarily due to rate differentials and non-controlling interests income not
subject to tax. F -51


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Table of Contents
 The following table details the expiry date, if applicable, of the
unrecognized deferred tax assets as at December 31: (MILLIONS)
 
 2014
 
 20132015 to 2019
 $
 1
 $
 12020 and thereafter
 
 77
 
 62$
 78
 $
 63
 The deferred tax assets and liabilities of the following temporary
differences have been recognized in the consolidated financial statements for
the year ended December 31: Recognizedin NetJan 1,
 income
 Recognized
 Business
 Foreign
 Dec 31,(MILLIONS)
 2014
 (loss)
 in Equity
 Combinations
 Exchange
 2014Non-capital losses
 $
 341
 $
 46
 $
 15
 $
 10
 $
 (9)
 $
 403Amount available for futuredeductions
 
 110
 
 (12)
 
 -
 
 -
 
 (10)
 
 88Difference between tax and carryingvalue
 
 (2,599)
 
 (5)
 
 (366)
 
 (130)
 
 114
 
 (2,986)Net deferred tax (liabilities) assets
 $
 (2,148)
 $
 29
 $
 (351)
 $
 (120)
 $
 95
 $
 (2,495)Recognizedin NetJan 1,
 income
 Recognized
 Business
 Foreign
 Dec 31,(MILLIONS)
 2013
 (loss)
 in Equity
 Combinations
 Exchange
 2013Non-capital losses
 $
 270
 $
 32
 $
 7
 $
 41
 $
 (9)
 $
 341Amount available for futuredeductions
 
 131
 
 (13)
 
 -
 
 -
 
 (8)
 
 110Difference between tax and carryingvalue
 
 (2,669)
 
 (1)
 
 97
 
 (123)
 
 97
 
 (2,599)Net deferred tax (liabilities) assets
 $
 (2,268)
 $
 18
 $
 104
 $
 (82)
 $
 80
 $
 (2,148)Recognizedin NetJan 1,
 income
 Recognized
 Business
 Foreign
 Dec 31,(MILLIONS)
 2012
 (loss)
 in Equity
 Combinations
 Exchange
 2012Non-capital losses
 $
 168
 $
 97
 $
 -
 $
 -
 $
 5
 $
 270Amount available for futuredeductions
 
 138
 
 (14)
 
 -
 
 -
 
 7
 
 131Difference between tax and carryingvalue
 
 (2,367)
 
 (29)
 
 (225)
 
 (2)
 
 (46)
 
 (2,669)Net deferred tax (liabilities) assets
 $
 (2,061)
 $
 54
 $
 (225)
 $
 (2)
 $
 (34)
 $
 (2,268)
 The deferred income tax liabilities includes $2,650 million (2013:
$2,283 million) of liabilities which relate to property, plant and equipment
revaluations included in equity. F -52


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Table of Contents
 16.  OTHER
LONG-TERM liabilities Brookfield Renewable’s
other long-term liabilities as at December 31 are comprised of the following: (MILLIONS)
 2014
 
 2013Concession payment liability
 $
 13
 $
 89Decommissioning retirement obligations
 
 48
 
 28Pension obligations (Note 20)
 
 63
 
 33Other
 
 23
 
 13$
 147
 $
 163
 At December 31, 2014, Brookfield Renewable recorded a liability
associated with a future obligation relating to concession payments of $13
million (2013: $89 million). During the year ended December 31, 2014, the
concession agreement associated with one of the facilities in Brazil was terminated.
The future obligation is being settled through monthly payments made over the
concession term. Brookfield Renewable has
recorded decommissioning retirement obligations associated with certain power
generating assets. The estimated cost of decommissioning activities is based on
a third party assessment. The decommissioning retirement obligation of $48
million at December 31, 2014 (2013: $28 million) has been established for
hydroelectric and wind operation sites in Canada and United States that are
expected to be restored between the years 2031 to 2138. 17. CAPITAL MANAGEMENT Brookfield Renewable’s primary capital management objectives are
to ensure the sustainability of its capital to support continuing operations,
meet its financial obligations, allow for growth opportunities and provide
stable distributions to its LP Unitholders. Brookfield Renewable’s capital is
monitored through total debt to capitalization which is defined as the total
long-term debt and credit facilities divided by total long-term debt and credit
facilities plus equity. Brookfield Renewable has provided covenants to certain of its
lenders for its corporate borrowings and credit facilities. The covenants
require Brookfield Renewable to meet minimum debt to capitalization ratios. 
Subsidiaries of Brookfield Renewable have provided covenants to certain of
their lenders for their property-specific borrowings. These covenants vary from
one credit agreement to another and include ratios that address debt service
coverage. Certain lenders have also put in place requirements that oblige
Brookfield Renewable and its subsidiaries to maintain debt and capital expenditure
reserve accounts. The consequences to the subsidiaries as a result of failure
to comply with their covenants could include a limitation of distributions from
the subsidiaries to Brookfield Renewable, as well as repayment of outstanding
debt. Brookfield Renewable is dependent on the distributions made by its
subsidiaries to service its debt. Financial covenants associated with Brookfield Renewable’s various
banking and credit arrangements are reviewed regularly and controls are in
place to maintain compliance with these covenants. Brookfield Renewable
complied with all material financial covenants for the years ended December 31,
2014, 2013 and 2012. F -53


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Table of Contents
 Brookfield Renewable’s strategy during 2014, which was unchanged
from 2013, was to maintain the measure set out in the following schedule as at
December 31: (MILLIONS)
 
 2014
 
 2013Total debtCurrent portion of long-term debt
 $
 256
 $
 517Long-term debt and credit facilities
 
 7,422
 
 6,1067,678
 
 6,623Deferred income tax liabilities, net(1)
 
 2,495
 
 2,148Preferred equity
 
 728
 
 796Participating non-controlling interests -
  in operating subsidiaries
 
 2,062
 
 1,303General partnership interest in a holding
  subsidiary held byBrookfield
 
 59
 
 54Participating non-controlling interests -
  in a holdingsubsidiary - Redeemable/Exchangeable units
  held by Brookfield
 
 2,865
 
 2,657Limited partners' equity
 
 3,167
 
 2,726Total capitalization
 $
 19,054
 $
 16,307Debt to total capitalization
 
 40%
 
 41%
 (1)Deferred income tax liabilities minus deferred income tax
asset. 18. Non-controlling interests Brookfield Renewable’s non-controlling
interests are comprised of the following as at December 31: (MILLIONS)
 
 2014
 
 2013Preferred equity
 $
 728
 $
 796Participating non-controlling interests -
  in operating subsidiaries
 
 2,062
 
 1,303General partnership interest in a holding
  subsidiary held by Brookfield
 
 59
 
 54Participating non-controlling interests -
  in a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 
 2,865
 
 2,657Total
 $
 5,714
 $
 4,810
 Preferred equity Brookfield Renewable’s
preferred equity as at December 31 consists of Class A Preference Shares as
follows: EarliestCumulative
 permitted
 Dividends
  declaredShares
 dividend
 redemption
 For the
  year ended(MILLIONS)
 outstanding
 rate
 date
 2014
 2013
 2014
 2013Series 1 (CDN$250)
 10
 5.25%
 Apr 30,
  2015
 $
 12
 $
 13
 $
 214
 $
 234Series 3 (CDN$250)
 10
 4.40%
 Jul 31,
  2019
 
 10
 
 11
 
 214
 
 234Series 5 (CDN$175)
 7
 5.00%
 Apr 30,
  2018
 
 8
 
 8
 
 150
 
 164Series 6 (CDN$175)
 7
 5.00%
 Jul 31,
  2018
 
 8
 
 5
 
 150
 
 16434
 
 
 $
 38
 $
 37
 $
 728
 $
 796
 The
holders of the Series 1 preferred shares are entitled to receive fixed
cumulative dividends. The dividend rate will reset on April 30, 2015 and every
five years thereafter at a rate equal to the then five-year Government of
Canada Bond yield plus 2.62%. F -54


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Table of Contents
 The holders of the Series
3 preferred shares are entitled to receive fixed cumulative dividends.  The
dividend will reset on July 31, 2019 and every five years thereafter at a rate
equal to the then five year Government of Canada Bond yield plus 2.94%. The
holders of Series 1 and Series 3 preferred shares will have the right, at their
option, to convert their shares into Class A preferred shares, Series 2 and
Series 4, respectively, on a one-for-one basis on the earliest permitted
redemption date and every five years thereafter. The holders of the Series 2
and Series 4 preferred shares will be entitled to receive floating rate
cumulative preferential cash dividends, equal to the T-Bill Rate plus 2.62% and
T-Bill Rate plus 2.94%, respectively. The holders of the Series 5 and 6 preferred shares are entitled to
receive fixed cumulative dividends. Brookfield Renewable, BRELP and certain holding company
subsidiaries fully and unconditionally guarantee the payment of dividends on
all of the Class A Preference Shares, the amount due on redemption, and the
amounts due on the liquidation, dissolution or winding-up of Brookfield
Renewable Power Preferred Equity Inc. (“BRP Equity”). The Class A Preference Shares do not have a fixed maturity date
and are not redeemable at the option of the holders. As at December 31, 2014,
none of the issued Class A Preference Shares have ever been redeemed by BRP
Equity. Participating non-controlling interests – in operating
subsidiaries The net change in participating non-controlling interests – in
operating entities is as follows: BrookfieldAmericas
 Brookfield
 
 
 BrookfieldInfrastructure
 Infrastructure
 The
  Catalyst
 Energia(MILLIONS)
 
 Fund
 Fund II
 Group
 Renovável
 Other
 TotalAs at December 31, 2011
 $
 380
 $
 -
 $
 167
 $
 74
 $
 8
 $
 629Net income
 
 (44)
 
 -
 
 2
 
 2
 
 -
 
 (40)OCI
 
 24
 
 -
 
 (28)
 
 (7)
 
 25
 
 14Capital contributions(1)
 
 447
 
 -
 
 -
 
 -
 
 8
 
 455Distributions
 
 -
 
 -
 
 (18)
 
 (6)
 
 -
 
 (24)Other
 
 
 (1)
 
 -
 
 -
 
 (5)
 
 -
 
 (6)As at December 31, 2012
 $
 806
 $
 -
 $
 123
 $
 58
 $
 41
 $
 1,028Net income
 
 21
 
 1
 
 18
 
 1
 
 -
 
 41OCI
 
 133
 
 (2)
 
 (26)
 
 (10)
 
 4
 
 99Capital contributions(1)
 
 51
 
 214
 
 -
 
 -
 
 -
 
 265Distributions
 
 (119)
 
 -
 
 -
 
 (3)
 
 -
 
 (122)Other
 
 
 (1)
 
 (6)
 
 1
 
 -
 
 (2)
 
 (8)As at December 31, 2013
 $
 891
 $
 207
 $
 116
 $
 46
 $
 43
 $
 1,303Net income
 
 14
 
 22
 
 14
 
 -
 
 1
 
 51OCI
 
 54
 
 187
 
 8
 
 -
 
 10
 
 259Capital contributions(1)
 
 -
 
 610
 
 -
 
 -
 
 -
 
 610Distributions
 
 (45)
 
 (89)
 
 (12)
 
 (3)
 
 -
 
 (149)Other
 
 -
 
 -
 
 -
 
 (11)
 
 (1)
 
 (12)As at December 31, 2014
 $
 914
 $
 937
 $
 126
 $
 32
 $
 53
 $
 2,062Interests held by third parties
 
 75-80%
 
 50-60%
 
 25%
 
 24-30%
 
 23-50%
 (1)Capital
contributions from non-controlling interests are for the purposes of
acquisitions and fund expenses of Brookfield Americas Infrastructure Fund and
Brookfield infrastructure Fund II.  F -55


---

Table of Contents
 The following tables summarize
certain financial information of operating subsidiaries that have
non-controlling interests that are material to Brookfield Renewable: BrookfieldAmericas
 BrookfieldInfrastructure
 Infrastructure
 The
  Catalyst(MILLIONS)
 
 Fund
 Fund II
 Group
 Other
 TotalInterests held by third parties
 
 
 75-80%
 
 50-60%
 
 25%
 
 23-50%Place of business
 
 
 
 
 
 
 United
  StatesUnited
  States
 United
  States
 
 
 BrazilBrazil
 Europe
 United
  States
 CanadaFor the year ended December 31, 2012:Revenue
 $
 86
 $
 -
 $
 137
 $
 30
 $
 253Net (loss) income
 
 (55)
 
 -
 
 10
 
 6
 
 (39)Total comprehensive (loss) income
 
 (60)
 
 -
 
 (103)
 
 111
 
 (52)Net (loss) income allocated tonon-controlling interests
 
 (44)
 
 -
 
 2
 
 2
 
 (40)For the year ended December 31, 2013:Revenue
 $
 195
 $
 74
 $
 188
 $
 25
 $
 482Net income
 
 23
 
 2
 
 72
 
 2
 
 99Total comprehensive income (loss)
 
 258
 
 (1)
 
 (15)
 
 2
 
 244Net income allocated tonon-controlling interests
 
 21
 
 1
 
 18
 
 1
 
 41As at December 31, 2013:Property, plant and equipment, at fair
  value
 $
 1,841
 $
 735
 $
 1,039
 $
 520
 $
 4,135Total assets
 
 1,973
 
 794
 
 1,161
 
 575
 
 4,503Total borrowings
 
 784
 
 349
 
 578
 
 56
 
 1,767Total liabilities
 
 830
 
 379
 
 597
 
 80
 
 1,886Carrying value of non-controlling interests
 $
 891
 $
 207
 $
 116
 $
 89
 $
 1,303For the year ended December 31, 2014:Revenue
 $
 164
 $
 211
 $
 162
 $
 31
 $
 568Net income
 
 18
 
 46
 
 56
 
 3
 
 123Total comprehensive income
 
 85
 
 422
 
 87
 
 45
 
 639Net income allocated tonon-controlling interests
 
 14
 
 22
 
 14
 
 1
 
 51As at December 31, 2014:Property, plant and equipment, at fair
  value
 $
 1,959
 $
 3,316
 $
 1,049
 $
 494
 $
 6,818Total assets
 
 2,021
 
 3,572
 
 1,159
 
 529
 
 7,281Total borrowings
 
 777
 
 1,617
 
 539
 
 53
 
 2,986Total liabilities
 
 853
 
 1,946
 
 556
 
 73
 
 3,428Carrying value of non-controlling interests
 $
 914
 $
 937
 $
 126
 $
 85
 $
 2,062
 F -56


---

Table of Contents
 The following table summarizes certain financial information regardingGeneral partnership interest in a holding subsidiary held by BrookfieldandParticipating non-controlling interests – in a holding subsidiary -Redeemable/Exchangeable units held by Brookfield: (MILLIONS)
 2014
 2013
 2012For the year ended December 31:Revenue
 $
 1,704
 $
 1,706
 $
 1,309Net income (loss)
 
 203
 
 215
 
 (95)Comprehensive income (loss)
 
 1,071
 
 (333)
 
 332Net income (loss) allocated to(1):GP interest
 
 1
 
 1
 
 (1)Redeemable/Exchangeable partnership units
 
 55
 
 67
 
 (35)As at December 31:Property, plant and equipment, at fair
  value
 $
 18,566
 $
 15,741Total assets
 
 19,849
 
 16,999Total borrowings
 
 7,678
 
 6,623Total liabilities
 
 10,968
 
 9,463Carrying value of(2):GP interest
 
 59
 
 54Redeemable/Exchangeable partnership units
 
 2,865
 
 2,657
 (1)Allocated
based on weighted-average GP interest, Redeemable/Exchangeable partnership units
and LP Units of 2.7 million, 129.7 million, and 138.8 million, respectively
(2013 and 2012: 2.7 million, 129.7 million, and 132.9 million, respectively). (2)Allocated
based on outstanding GP interest, Redeemable/Exchangeable partnership units and
LP Units of 2.7 million, 129.7 million, and 143.4 million, respectively (2013:
2.7 million, 129.7 million, and 133.0 million, respectively).  As at December 31, 2014, general partnership units,
representing the 1% general partnership interest in BRELP held by Brookfield
(“GP interest”), and Redeemable/Exchangeable partnership units outstanding were
2,651,506 (December 31, 2013: 2,651,506) and 129,658,623 (December 31, 2013:
129,658,623), respectively. Distributions The composition of the distributions for the year ended
December 31 is presented in the following table: (MILLIONS, EXCEPT AS NOTED)
 
 2014
 
 2013General partnership interest in a holding
  subsidiary held by Brookfield
 $
 4
 $
 4Incentive distribution
 
 2
 
 -$
 6
 $
 4Participating non-controlling interests -
  in  a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 $
 201
 $
 188$
 207
 $
 192
 General partnership interest
in a holding subsidiary held by Brookfield and Participating non-controlling
interests – in a holding subsidiary - Redeemable/Exchangeable partnership units
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 distributions exceed
specified target levels. To the extent that LP Unit distributions exceed $0.375
per LP Unit per quarter, the incentive is 15% of distributions above this
threshold. To the extent that quarterly LP Unit distributions exceed $0.4225
per LP Unit, the incentive distribution is equal to 25% of distributions above
this threshold. F -57


---

Table of Contents
 Consolidated
equity includes Redeemable/Exchangeable partnership units and the GP interest.
The Redeemable/Exchangeable partnership units are held 100% by Brookfield,
which at its discretion has the right to redeem these units for cash
consideration. No Redeemable/Exchangeable partnership units have been redeemed
for cash consideration. Since this redemption right is subject to Brookfield
Renewable’s right, at its sole discretion, to satisfy the redemption request
with LP Units of Brookfield Renewable, the Redeemable/Exchangeable partnership
units are classified as equity in accordance with IAS 32,Financial
Instruments: Presentation. The Redeemable/Exchangeable partnership units and
GP interest are presented as non-controlling interests since they provide
Brookfield the direct economic benefits and exposures to the underlying
performance of BRELP. The LP Units issued by Brookfield Renewable and  the
Redeemable/Exchangeable partnership units issued by its subsidiary BRELP have
the same economic attributes in all respects, except for the redemption right
described above. The Redeemable/Exchangeable partnership units and the GP
interest participate in earnings and distributions on a per unit basis
equivalent to the per unit participation of the LP Units of Brookfield
Renewable. Issuance of LP
Units On June 10, 2014, Brookfield
Renewable completed a bought deal LP Unit offering which included 10,250,000 LP
Units at a price of C$31.70 per LP Unit for gross proceeds of C$325 million
($297 million) (the “Offering”).  Brookfield Renewable incurred C$13
million ($12 million) in transaction costs associated with the Offering. Proceeds
from the Offering were used to purchase additional limited partnership units of
BRELP. The excess of the consideration paid over the carrying value of the
additional limited partnership units of BRELP purchased by Brookfield Renewable
resulted in adjustments to theGeneral partnership interest in a holding
subsidiary held by BrookfieldandParticipating non-controlling
interests – in a holding subsidiary - Redeemable/Exchangeable partnership units
held by Brookfieldof $1 million and $37 million, respectively. BRELP
ultimately used the net proceeds to repay outstanding indebtedness and for
general corporate purposes. 19.LIMITED
PARTNERS’ EQUITY Limited
partners’ equity As at December 31, 2014, LP Units outstanding
were 143,356,854 (December 31, 2013: 132,984,913) including 40,026,986
(December 31, 2013: 40,026,986) held by Brookfield. Brookfield owns all general
partnership interests in Brookfield Renewable representing a 0.01% interest. During 2012, a distribution
re-investment plan was implemented, allowing holders of LP Units who are
resident in Canada to acquire additional LP Units by reinvesting all or a
portion of their cash distributions without paying commissions. During the year
ended December 31, 2014, 121,941 LP Units (2013: 82,997 LP Units) were issued. As a result of the Offering (Note
18), Brookfield’s direct and indirect interest of  169,685,609 LP Units and
Redeemable/Exchangeable partnership units, now represents  approximately 62% 
of Brookfield Renewable on a fully-exchanged basis. On an unexchanged basis,
Brookfield holds a 28% direct limited partnership interest in Brookfield
Renewable, a 47% direct interest in BRELP through the ownership of
Redeemable/Exchangeable partnership units and a direct 1% GP interest in BRELP. Distributions Distributions may be made by the
general partner of Brookfield Renewable with the exception of instances that
there is insufficient cash available, payment rends Brookfield Renewable unable
to pay its debt or payment of which might leave Brookfield Renewable unable to
meet any future contingent obligations. F -58


---

Table of Contents
 For the
year ended December 31, 2014, Brookfield Renewable declared distributions on
its LP Units of $216 million or $1.55 per LP Unit (2013: $193 million or $1.45
per LP Unit; 2012: $183 million or $1.38 per LP Unit). The
composition of the distribution is presented in the following table: (MILLIONS)
 
 2014
 
 2013Brookfield
 $
 62
 $
 58External LP Unitholders
 
 154
 
 135$
 216
 $
 193
 20. PENSION AND EMPLOYEE FUTURE BENEFITS Brookfield Renewable offers a number of pension plans to its
employees, as well as certain health care, dental care, life insurance and
other benefits to certain retired employees pursuant to Brookfield Renewable’s
policy.  The plans are funded by contributions from Brookfield Renewable and
from plan members.  Pension benefits are based on length of service and final
average earnings and some plans are indexed for inflation after retirement. The
pension plans relating to employees of Brookfield Renewable have been included
in the consolidated financial statements. The Brookfield Renewable Pension Governance Committee (BRGC) is
responsible for the implementation of strategic decisions and monitoring of the
administration of Brookfield Renewable’s defined benefit pension plans. 
Specifically, the BRGC will establish the investment strategies, approve the
funding policies as well as assess that Brookfield Renewable has complied with
all applicable law, fiduciary, reporting and disclosure requirements. Actuarial valuations for Brookfield Renewable’s pension plans are
required as per governing provincial or federal regulations. For Québec
and the United States registered plans, actuarial valuations are required
annually. For Ontario registered plans, actuarial valuations are required on a
triennial basis if the funding level of the plan is above a certain threshold.
Currently, all Ontario registered plans are on a triennial schedule. The
dates of the most recent actuarial valuations for Brookfield Renewable’s
pension and non-pension benefit plans range from November 1, 2013 to July 1,
2014. Brookfield Renewable measures its accrued benefit obligations and
the fair value of plan assets for accounting purposes as at December 31 of each
year. The benefit liabilities represent the amount of pension and other
employee future benefits that Brookfield Renewable’s employees and retirees
have earned at year-end. The benefit obligation under these plans is determined
through periodic actuarial reports which were based on the assumptions
indicated in the following table. Actuarial assumptions as
at December 31: Defined
  benefit
 Non-pension
 Defined
  benefit
 Non-pension
 Defined
  benefit
 Non-pensionpension
  plans
 benefit
  plans
 pension
  plans
 benefit
  plans
 pension
  plans
 benefit
  plans2014
 2013
 2012(%)
 (%)
 (%)Discount rate
 2.6 -
  4.2
 4.0 -
  4.3
 4.0 -
  5.0
 4.9 -
  5.0
 3.5 -
  4.5
 4.1 -
  4.5Rate of price inflation
 2.0 -
  2.5
 N/A
 2.0 -
  2.5
 N/A
 2.0 -
  2.8
 N/ARate of compensationincreases
 2.5 -
  4.0
 3.0 -
  4.0
 2.5 -
  4.0
 3.0 -
  3.0
 3.0 -
  4.0
 3.0 -
  3.0Health care trend rate(1)
 N/A
 6.5 -
  7.2
 N/A
 6.5 -
  7.7
 N/A
 6.4 -
  7.8
 (1)Assumed
immediate trend rate at year end. F -59


---

Table of Contents
 Plan obligations and the annual pension expense are
determined on an actuarial basis and are affected by numerous assumptions and
estimates including the market value of plan assets, estimates of the long-term
rate of return on plan assets, discount rates, rate of compensation increases
and other assumptions. The discount rate, rate of price inflation and
inflation-linked assumptions and health care cost trend rate are the
assumptions that generally have the most significant impact on the benefit
obligations. The discount rate for benefit obligation purposes is the
rate at which the pension obligation could be effectively settled. Rate of
compensation increases reflect the best estimate of merit increases to be
provided, consistent with assumed inflation rates. A 50 basis point change in the assumptions mentioned
before, used for the calculation of the benefit obligations as at December 31,
2014, would result in the following increase (decrease) of the benefit
obligations: Defined
  benefit
 Non-pension(MILLIONS)
 pension
  plans
 benefit
  plansDiscount rate50 basis point increase
 
 (8)
 
 (3)50 basis point decrease
 
 9
 
 4Rate of price inflation and inflation-linked assumptions50 basis point increase
 
 4
 
 N/A50 basis point decrease
 
 (3)
 
 N/AHealth care cost trend rate50 basis point increase
 
 N/A
 
 350 basis point decrease
 
 N/A
 
 (3)
 The sensitivity analysis presented above may not be representative of the
actual change in the defined benefit obligation as it is unlikely that the
change in assumptions would occur in isolation of one another as some of the
assumptions may be correlated. F -60


---

Table of Contents
 Expense
recognized in the consolidated statements of income (loss) and consolidated
statements of comprehensive income (loss) for the year ended December 31: Defined
  benefit
 Non-pension
 Defined
  benefit
 Non-pension
 Defined
  benefit
 Non-pensionpension
  plans
 benefit
  plans
 pension
  plans
 benefit
  plans
 pension
  plans
 benefit
  plans(MILLIONS)
 
 2014
 
 2013
 
 2012Current service costs
 $
 3
 $
 1
 $
 2
 $
 1
 $
 2
 $
 1Past service costs
 
 1
 
 2
 
 1
 
 (1)
 
 -
 
 2Interest expense
 
 -
 
 1
 
 1
 
 1
 
 1
 
 1Administrative expenses
 
 1
 
 -
 
 1
 
 -
 
 1
 
 -Recognized in consolidatedstatement of income (loss)
 
 5
 
 4
 
 5
 
 1
 
 4
 
 4Remeasurement of the netdefined benefit liability:Return on plan assets
 
 (4)
 
 -
 
 (7)
 
 -
 
 (2)
 
 -Actuarial changes arisingfrom changes indemographic assumptions
 
 1
 
 2
 
 2
 
 -
 
 -
 
 1Actuarial changes arisingfrom changes infinancial assumptions
 
 8
 
 3
 
 (4)
 
 (3)
 
 7
 
 2Experience adjustments
 
 (2)
 
 -
 
 -
 
 -
 
 1
 
 (1)Recognized in consolidatedstatement of comprehensiveincome (loss)
 
 3
 
 5
 
 (9)
 
 (3)
 
 6
 
 2Total
 $
 8
 $
 9
 $
 (4)
 $
 (2)
 $
 10
 $
 6
 The
amounts included in the consolidated balance sheets arising from Brookfield
Renewable’s obligations in respect of its defined benefit plans are as follows: Defined
  benefit
 Non-pension
 Defined
  benefit
 Non-pension
 Defined
  benefit
 Non-pensionpension
  plans
 benefit
  plans
 pension
  plans
 benefit
  plans
 pension
  plans
 benefit
  plans(MILLIONS)
 
 2014
 
 2013
 
 2012Present value of definedbenefit obligation
 $
 128
 $
 43
 $
 80
 $
 27
 $
 82
 $
 29Fair value of plan assets
 
 (108)
 
 -
 
 (74)
 
 -
 
 (64)
 
 -Net liability
 $
 20
 $
 43
 $
 6
 $
 27
 $
 18
 $
 29
 F -61


---

Table of Contents
 Defined benefit obligations The movement in
the defined benefit obligation for the year ended December 31 is as follows: Defined
  benefit
 Non-pension
 Defined
  benefit
 Non-pension
 Defined
  benefit
 Non-pensionpension
  plans
 benefit
  plans
 pension
  plans
 benefit
  plans
 pension
  plans
 benefit plans(MILLIONS)
 
 2014
 
 2013
 
 2012Balance, beginning of year
 $
 80
 $
 27
 $
 82
 $
 29
 $
 73
 $
 23Current service cost
 
 3
 
 1
 
 2
 
 1
 
 2
 
 1Past service cost
 
 1
 
 2
 
 1
 
 (1)
 
 -
 
 2Interest expense
 
 4
 
 1
 
 4
 
 1
 
 4
 
 1Remeasurement losses (gains)Actuarial changes arisingfrom changes indemographic assumptions
 
 1
 
 2
 
 2
 
 -
 
 -
 
 1Actuarial changes arisingfrom changes infinancial assumptions
 
 8
 
 3
 
 (4)
 
 (3)
 
 7
 
 2Experience adjustments
 
 (2)
 
 -
 
 -
 
 -
 
 1
 
 (1)Benefits paid
 
 (4)
 
 (1)
 
 (3)
 
 (1)
 
 (3)
 
 (1)Business combination
 
 42
 
 10
 
 -
 
 1
 
 (2)
 
 -Exchange differences
 
 (5)
 
 (2)
 
 (4)
 
 -
 
 -
 
 1Balance, end of year
 $
 128
 $
 43
 $
 80
 $
 27
 $
 82
 $
 29
 Expected employer’s contributions to the defined benefit plans for
the year ended December 31, 2015 are $8 million. Fair value of
plan assets The movement in
the fair value of plan assets for the year ended December 31 is as follows: Defined benefit
 Non-pension
 Defined benefit
 Non-pension
 Defined benefit
 Non-pensionpension plans
 benefit plans
 pension plans
 benefit plans
 pension plans
 benefit plans(MILLIONS)
 
 2014
 
 2013
 
 2012Balance, beginning of year
 $
 74
 $
 -
 $
 64
 $
 -
 $
 56
 $
 -Interest income
 
 4
 
 -
 
 3
 
 -
 
 3
 
 -Return on plan assets
 
 4
 
 -
 
 7
 
 -
 
 2
 
 -Employer contributions
 
 8
 
 1
 
 7
 
 1
 
 7
 
 1Business combination
 
 28
 
 -
 
 -
 
 -
 
 (2)
 
 -Benefits paid
 
 (4)
 
 (1)
 
 (3)
 
 (1)
 
 (3)
 
 (1)Exchange differences
 
 (6)
 
 -
 
 (4)
 
 -
 
 1
 
 -Balance, end of year
 $
 108
 $
 -
 $
 74
 $
 -
 $
 64
 $
 -
 F -62


---

Table of Contents
 The composition
of plan assets as at December 31 is as follows: 2014
 2013(%)
 (%)Asset category:Equity securities
 49
 69Debt securities
 36
 31Mutual funds
 15
 -100
 100
 21.DIRECT OPERATING COSTS Brookfield Renewable’s
direct operating costs for the year ended December 31 are comprised of the
following: (MILLIONS)
 
 2014
 
 2013
 
 2012Operations, maintenance and administration
 $
 353
 $
 331
 $
 292Water royalties, property taxes and other
 
 130
 
 137
 
 112Fuel and power purchases
 
 20
 
 42
 
 64Energy marketing fees (Note 9)
 
 21
 
 20
 
 18Total direct operating costs
 $
 524
 $
 530
 $
 486
 The remuneration of key management personnel of Brookfield
Renewable for the years ended December 31, was as follows: (MILLIONS)
 
 2014
 
 2013
 
 2012Share-based benefits
 $
 12
 $
 6
 $
 7Salaries and benefits
 
 4
 
 3
 
 3$
 16
 $
 9
 $
 10
 Key
management personnel include those individuals having authority and
responsibility for planning, directing and controlling the activities of
Brookfield Renewable, directly or indirectly. Share-based benefits relate to
costs allocated from Brookfield Asset Management. 22. SUPPLEMENTAL
INFORMATION The net change in working
capital balances for the year ended December 31 shown in the consolidated
statements of cash flows is comprised of the following: (MILLIONS)
 
 2014
 
 2013Trade receivables and other current assets
 $
 20
 $
 47Accounts payable and accrued liabilities
 
 (54)
 
 (42)Other assets and liabilities
 
 14
 
 (4)$
 (20)
 $
 1
 F -63


---

Table of Contents
 23.  subsidiary public issuers The following tables provide consolidated
summary financial information for Brookfield Renewable, BRP Equity, and BREP
Finance: BrookfieldBrookfield
 BRP
 BREP
 Other
 Consolidating
 Renewable(MILLIONS)
 
 Renewable
 Equity
 Finance
 Subsidiaries(1)
 adjustments(2)
 consolidatedAs at December 31, 2014:Current assets
 $
 21
 $
 -
 $
 1,307
 $
 697
 $
 (1,331)
 $
 694Long-term assets
 
 3,166
 
 717
 
 -
 
 19,148
 
 (3,876)
 
 19,155Current liabilities
 
 20
 
 9
 
 16
 
 1,954
 
 (1,312)
 
 687Long-term liabilities
 
 -
 
 -
 
 1,286
 
 9,706
 
 (711)
 
 10,281Preferred equity
 
 -
 
 728
 
 -
 
 -
 
 -
 
 728Participating non-controlling interests -in operating subsidiaries
 
 -
 
 -
 
 -
 
 2,062
 
 -
 
 2,062Participating non-controlling interests -in a holding subsidiary - Redeemable/Exchangeable units held by Brookfield
 
 -
 
 -
 
 -
 
 2,865
 
 -
 
 2,865As at December 31, 2013:Current assets
 $
 48
 $
 -
 $
 1,429
 $
 632
 $
 (1,483)
 $
 626Long-term assets
 
 2,728
 
 785
 
 -
 
 16,365
 
 (3,505)
 
 16,373Current liabilities
 
 50
 
 10
 
 17
 
 2,278
 
 (1,435)
 
 920Long-term liabilities
 
 -
 
 -
 
 1,406
 
 7,914
 
 (777)
 
 8,543Preferred equity
 
 -
 
 796
 
 -
 
 -
 
 -
 
 796Participating non-controlling interests -in operating subsidiaries
 
 -
 
 -
 
 -
 
 1,303
 
 -
 
 1,303Participating non-controlling interests -in a holding subsidiary - Redeemable/Exchangeable units held by Brookfield
 
 -
 
 -
 
 -
 
 2,657
 
 -
 
 2,657
 (1)Includes
subsidiaries of Brookfield Renewable, other than BRP Equity and BREP Finance. (2)Includes
elimination of intercompany transactions and balances necessary to present
Brookfield Renewable on a consolidated basis. F -64


---

Table of Contents
 BrookfieldBrookfield
 BRP
 BREP
 Other
 Consolidating
 Renewable(MILLIONS)
 Renewable
 Equity
 Finance
 Subsidiaries(1)
 adjustments(2)
 consolidatedFor the year ended Dec 31, 2014Revenues
 $
 -
 $
 -
 $
 -
 $
 1,704
 $
 -
 $
 1,704Net income (loss)
 
 58
 
 -
 
 (1)
 
 204
 
 (58)
 
 203For the year ended Dec 31, 2013Revenues
 $
 -
 $
 -
 $
 -
 $
 1,706
 $
 -
 $
 1,706Net income (loss)
 
 69
 
 -
 
 -
 
 215
 
 (69)
 
 215For the year ended Dec 31, 2012Revenues
 $
 -
 $
 -
 $
 -
 $
 1,309
 $
 -
 $
 1,309Net (loss) income
 
 (35)
 
 -
 
 (2)
 
 (93)
 
 35
 
 (95)
 (1)Includes
subsidiaries of Brookfield Renewable, other than BRP Equity and BREP Finance, general partnership
interest in a holding subsidiary held by Brookfield and participating
non-controlling interests - in a holding subsidiary - Redeemable/Exchangeable
units held by Brookfield (2)Includes
elimination of intercompany transactions and balances necessary to present
Brookfield Renewable on a consolidated basis. See
Note 14 – Long-term debt and credit facilities for additional details regarding
the mid-term corporate notes issued by BREP Finance. See Note 18 –
Non-controlling interests for additional details regarding Class A Preference
Shares issued by BRP Equity.  F -65


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Table of Contents
 24.  segmented information Brookfield Renewable operates renewable power generating assets,
which include conventional hydroelectric facilities located in the United
States, Canada and Brazil, and wind facilities located in the United States,
Canada and Europe. Brookfield Renewable also operates two co-generation
(“Co-gen”) facilities. Brookfield Renewable’s President and Chief Executive
Officer and Chief Financial Officer (collectively, the chief operating decision
maker or “CODM”) evaluates the business based on the type of power generation
(Hydroelectric, Wind and Co-gen). Hydroelectric and Wind are further evaluated
by geography (United States, Canada, Brazil and Europe). The “Other” segment
includes CWIP and corporate. In accordance with IFRS 8,Operating Segments, Brookfield
Renewable discloses information about its reportable segments based upon the
measures used by the CODM in assessing performance. The accounting policies of
the reportable segments are the same as those described in Note 2 – Basis of
presentation and significant accounting policies. Brookfield Renewable analyzes
the performance of its operating segments based on revenues, Adjusted EBITDA,
and Funds From Operations. Adjusted EBITDA means revenues less direct costs (including energy
marketing costs), plus Brookfield Renewable’s share of cash earnings from
equity-accounted investments and other income, before interest, income taxes,
depreciation, management service costs and the cash portion of non-controlling
interests. Funds From Operations is defined as Adjusted EBITDA less interest,
current income taxes and management service costs, which is then adjusted for
the cash portion of non-controlling interests. For the year ended December 31,
2014, Funds From Operations include the earnings received from the wind
portfolio Brookfield Renewable acquired in Ireland, reflecting its economic
interest from January 1, 2014 to June 30, 2014. This amount represents an
acquisition price adjustment under IFRS 3 (see Note 4 - Business combinations)
but is included in Funds From Operations for purposes of reporting operating
results to Brookfield Renewable’s CODM. Transactions between the reportable segments occur at fair value. Effective January 1, 2015, the geographies by which the CODM
evaluates the business has changed. While the CODM continues to evaluate the
business based on the type of power generation (Hydroelectric, Wind, and
Co-gen), it further evaluates by geography and so the United States and Canada
segments have been combined into the “North America” segment, while the “Latin
America” segment includes the former Brazil segment. The “Europe”, “Co-Gen” and
“Other” segments were not affected as a result of these changes. These changes will
allow the CODM to more effectively evaluate the business in a manner aligned
with the continental operating platforms. In February 2015, Brookfield Renewable announced the appointment
of a President and Chief Operating Officer. The President and Chief Operating
Officer will join the Chief Executive Officer and Chief Financial Officer in
evaluating Brookfield Renewable’s results, managing its operations and
allocating its resources by segment, and accordingly beginning on the date of
the appointment the CODM will collectively include all three aforementioned
members of senior management.   F -66


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Table of Contents
 The following
segmented information is regularly reported to our CODM. Hydroelectric
 Wind
  energy
 Co-gen
 Other
 Total(MILLIONS)
 U.S.
 Canada
 Brazil
 U.S.
 Canada
 EuropeFor the year endedDecember 31, 2014:Revenues
 $
 719
 $
 394
 $
 265
 $
 129
 $
 123
 $
 45
 $
 29
 $
 -
 $
 1,704Adjusted EBITDA
 
 520
 
 328
 
 198
 
 90
 
 108
 
 29
 
 11
 
 (68)
 
 1,216Interest expense - borrowings
 
 (153)
 
 (70)
 
 (19)
 
 (39)
 
 (38)
 
 (9)
 
 -
 
 (87)
 
 (415)Funds From Operations prior tonon-controlling interests
 
 366
 
 258
 
 162
 
 51
 
 70
 
 31
 
 11
 
 (206)
 
 743Cash portion of non-controllinginterests
 
 (83)
 
 (2)
 
 (13)
 
 (34)
 
 -
 
 (13)
 
 -
 
 (38)
 
 (183)Funds From Operations
 
 283
 
 256
 
 149
 
 17
 
 70
 
 18
 
 11
 
 (244)
 
 560Depreciation
 
 (159)
 
 (82)
 
 (143)
 
 (63)
 
 (72)
 
 (25)
 
 (4)
 
 -
 
 (548)For the year endedDecember 31, 2013:Revenues
 $
 677
 $
 399
 $
 301
 $
 125
 $
 133
 $
 -
 $
 71
 $
 -
 $
 1,706Adjusted EBITDA
 
 494
 
 330
 
 221
 
 85
 
 113
 
 -
 
 23
 
 (58)
 
 1,208Interest expense - borrowings
 
 (148)
 
 (64)
 
 (23)
 
 (38)
 
 (44)
 
 -
 
 -
 
 (93)
 
 (410)Funds From Operations prior tonon-controlling interests
 
 343
 
 266
 
 181
 
 47
 
 69
 
 -
 
 23
 
 (191)
 
 738Cash portion of non-controllinginterests
 
 (69)
 
 -
 
 (12)
 
 (26)
 
 -
 
 -
 
 -
 
 (37)
 
 (144)Funds From Operations
 
 274
 
 266
 
 169
 
 21
 
 69
 
 -
 
 23
 
 (228)
 
 594Depreciation
 
 (140)
 
 (85)
 
 (156)
 
 (65)
 
 (77)
 
 -
 
 (12)
 
 -
 
 (535)For the year endedDecember 31, 2012:Revenues
 $
 438
 $
 272
 $
 340
 $
 58
 $
 131
 $
 -
 $
 70
 $
 -
 $
 1,309Adjusted EBITDA
 
 294
 
 213
 
 236
 
 31
 
 113
 
 -
 
 20
 
 (55)
 
 852Interest expense - borrowings
 
 (137)
 
 (65)
 
 (58)
 
 (23)
 
 (44)
 
 -
 
 -
 
 (84)
 
 (411)Funds From Operations prior tonon-controlling interests
 
 159
 
 148
 
 162
 
 8
 
 69
 
 -
 
 20
 
 (175)
 
 391Cash portion of non-controllinginterests
 
 (11)
 
 -
 
 (11)
 
 (6)
 
 -
 
 -
 
 -
 
 (16)
 
 (44)Funds From Operations
 
 148
 
 148
 
 151
 
 2
 
 69
 
 -
 
 20
 
 (191)
 
 347Depreciation
 
 (116)
 
 (81)
 
 (152)
 
 (38)
 
 (75)
 
 -
 
 (21)
 
 -
 
 (483)
 F -67


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Table of Contents
 The following table
reconciles Adjusted EBITDA and Funds From Operations, presented in the above
tables, to net income (loss) as presented in the consolidated statements of
income (loss), for the year ended December 31: (MILLIONS)
 
 
 
 Notes
 
 2014
 
 2013
 
 2012Revenues
 9
 $
 1,704
 $
 1,706
 $
 1,309Other income
 
 
 10
 
 11
 
 16Share of cash earnings from equity-accounted investments
 10
 
 26
 
 21
 
 13Direct operating costs
 
 
 
 21
 
 (524)
 
 (530)
 
 (486)Adjusted EBITDA
 
 
 1,216
 
 1,208
 
 852Fixed earnings adjustment(1)
 
 
 11
 
 -
 
 -Interest expense - borrowings
 14
 
 (415)
 
 (410)
 
 (411)Management service costs
 9
 
 (51)
 
 (41)
 
 (36)Current income tax expense
 15
 
 (18)
 
 (19)
 
 (14)Funds From Operations prior to non-controlling interests
 
 
 743
 
 738
 
 391Less: cash portion of non-controlling interestsPreferred equity
 18
 
 (38)
 
 (37)
 
 (16)Participating non-controlling interests - in operatingsubsidiaries
 18
 
 (145)
 
 (107)
 
 (28)Funds From Operations
 
 
 560
 
 594
 
 347Add: cash portion of non-controlling interests
 18
 
 183
 
 144
 
 44Less: fixed earnings adjustment
 
 
 (11)
 
 -
 
 -Depreciation
 11
 
 (548)
 
 (535)
 
 (483)Unrealized financial instruments gain (loss)
 8
 
 10
 
 37
 
 (23)Share of non-cash loss from equity-accounted investments
 10
 
 (23)
 
 (12)
 
 (18)Deferred income tax recovery
 15
 
 29
 
 18
 
 54Other
 4
 
 3
 
 (31)
 
 (16)Net income (loss)
 
 $
 203
 $
 215
 $
 (95)
 (1)The
fixed earnings adjustment relates to Brookfield Renewable’s investment in the
acquisition of the wind portfolio in Ireland. Pursuant to the terms of the
purchase and sale agreement, Brookfield Renewable acquired an economic interest
in the wind portfolio from January 1, 2014.The transaction closed on June 30, 2014, and
accordingly under IFRS, the $11 million net Funds From Operations contribution
was recorded as part of the purchase price. F -68


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Table of Contents
 The following table presents information
about Brookfield Renewable’s certain balance sheet items on a segmented basis: Hydroelectric
 Wind
  energy
 
 Co-gen
 Other(1)
 Total(MILLIONS)
 U.S.
 Canada
 Brazil
 U.S.
 Canada
 EuropeAs at December 31, 2014:Property, plant andequipment, at fair value
 $
 7,835
 $
 5,144
 $
 2,090
 $
 1,176
 $
 1,118
 $
 952
 $
 41
 $
 210
 $
 18,566Total assets
 
 8,376
 
 5,262
 
 2,257
 
 1,265
 
 1,145
 
 1,085
 
 43
 
 416
 
 19,849Total borrowings
 
 2,814
 
 1,155
 
 189
 
 621
 
 629
 
 583
 
 -
 
 1,687
 
 7,678Total liabilities
 
 4,345
 
 2,214
 
 300
 
 706
 
 865
 
 747
 
 1
 
 1,790
 
 10,968For the year endedDecember 31, 2014:Additions to property, plantand equipment
 
 1,330
 
 2
 
 -
 
 5
 
 15
 
 1,071
 
 -
 
 207
 
 2,630As at December 31, 2013:Property, plant andequipment, at fair value
 $
 5,771
 $
 4,830
 $
 2,205
 $
 1,198
 $
 1,250
 $
 -
 $
 46
 $
 441
 $
 15,741Total assets
 
 6,248
 
 4,998
 
 2,492
 
 1,282
 
 1,297
 
 -
 
 62
 
 620
 
 16,999Total borrowings
 
 2,157
 
 1,143
 
 238
 
 647
 
 721
 
 -
 
 -
 
 1,717
 
 6,623Total liabilities
 
 3,330
 
 2,144
 
 406
 
 720
 
 995
 
 -
 
 4
 
 1,864
 
 9,463For the year endedDecember 31, 2013:Additions to property, plantand equipment
 
 715
 
 206
 
 -
 
 430
 
 -
 
 -
 
 -
 
 255
 
 1,606
 (1)Includes
CWIP and corporate. The following
information is about Brookfield Renewable’s equity accounted investments: Hydroelectric
 Wind
  energy
 
 
 Co-gen
 Other
 Total(MILLIONS)
 U.S.
 Canada
 Brazil
 U.S.
 Canada
 EuropeAs at December 31, 2014
 $
 177
 $
 56
 $
 38
 $
 -
 $
 -
 $
 2
 $
 -
 $
 -
 $
 273As at December 31, 2013
 $
 181
 $
 51
 $
 58
 $
 -
 $
 -
 $
 -
 $
 -
 $
 -
 $
 290
 F -69


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Table of Contents
 25.  Commitments, contingencies and guarantees Commitments In the course of its operations,
Brookfield Renewable and its subsidiaries have entered into agreements for the
use of water, land and dams. Payment under those agreements varies with the
amount of power generated. The various agreements are renewable and extend up
to 2091. Brookfield Renewable has recorded decommissioning retirement
obligations associated with its power generating assets. Refer to Note 16 –
Other long-term liabilities for details. In November 2014, Brookfield Renewable entered into an agreement
to acquire a 488 MW portfolio in Brazil comprising hydroelectric, wind, and
biomass generating capacity. The portfolio is expected to generate 2,100 GWh
annually. The transaction is expected to close in the first half of 2015,
subject to regulatory approvals and closing conditions. Also in November 2014,
Brookfield Renewable signed an agreement to acquire two advanced hydroelectric
development projects in Brazil totaling 47 MW which, once fully commissioned,
are expected to generate 280 GWh annually. Brookfield Renewable completed this
acquisition in February 2015; refer to Note 26 – Subsequent events. These acquisitions
are being pursued with our institutional partners, and Brookfield Renewable
will retain an approximate 40% interest. The remaining development project costs on the 25 MW hydroelectric
project in Brazil and three wind facilities in Ireland totaling 137 MW of
capacity, are expected to be $164 million. As at December 31, 2014, restricted
cash in the amount of $56 million was held and reserved for the purpose of
funding the remaining costs. The project in Brazil is expected to be fully
operational in 2017 and the wind facilities in Ireland during 2015. At the balance sheet date, Brookfield Renewable had commitments
for future minimum lease payments under non-cancellable leases which fall due
as follows: (MILLIONS)
 2015
 2016
 2017
 2018
 2019
 Thereafter
 TotalOperating leases
 $
 21
 $
 22
 $
 19
 $
 18
 $
 17
 $
 151
 $
 248Capital leases
 
 -
 
 -
 
 -
 
 -
 
 1
 
 43
 
 44Total
 $
 21
 $
 22
 $
 19
 $
 18
 $
 18
 $
 194
 $
 292
 Contingencies Brookfield Renewable and its
subsidiaries are subject to various legal proceedings, arbitrations and actions
arising in the normal course of business. While the final outcome of such legal
proceedings and actions cannot be predicted with certainty, it is the opinion
of management that the resolution of such proceedings and actions will not have
a material impact on Brookfield Renewable’s consolidated financial position or
results of operations. Brookfield Renewable, on behalf of Brookfield Renewable’s
subsidiaries, and the subsidiaries themselves have provided letters of credit,
which include, but are not limited to, guarantees for debt service reserves,
capital reserves, construction completion and performance. The activity on the
issued letters of credit by Brookfield Renewable can be found in Note 14 –
Long-term debt and credit facilities. Brookfield Renewable along with institutional investors have
provided letters of credit, which include, but are not limited to, guarantees
for debt service reserves, capital reserves, construction completion and
performance as it relates to interests in the Brookfield Americas
Infrastructure Fund and the Brookfield Infrastructure Fund II. As at December
31, 2014, letters of credit issued by Brookfield Renewable along with institutional
investors were $125 million (2013: $93 million). F -70


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Table of Contents
 Guarantees In the normal
course of operations, Brookfield Renewable and its subsidiaries execute
agreements that provide for indemnification and guarantees to third parties of
transactions such as business dispositions, capital project purchases, business
acquisitions, and sales and purchases of assets and services. Brookfield
Renewable has also agreed to indemnify its directors and certain of its officers
and employees. The nature of substantially all of the indemnification
undertakings prevents Brookfield Renewable from making a reasonable estimate of
the maximum potential amount that Brookfield Renewable could be required to pay
third parties as the agreements do not always specify a maximum amount and the
amounts are dependent upon the outcome of future contingent events, the nature
and likelihood of which cannot be determined at this time. Historically,
neither Brookfield Renewable nor its subsidiaries have made material payments
under such indemnification agreements. 26.  subsequent eventS In February 2015, we completed
the acquisition of two advanced hydroelectric development projects totaling 47
MW in Brazil. Once fully commissioned, the projects are expected to generate
280 GWh annually. The acquisition was completed with institutional partners,
and Brookfield Renewable retains an approximate 40% interest. In February 2015, we entered into
an agreement to acquire two wind facilities in Portugal with an aggregate
capacity of 123 MW. The portfolio is expected to generate 260 GWh annually. The
acquisition is being pursued with institutional partners, and Brookfield
Renewable will retain an approximate 40% interest. The transaction is expected
to close in 2015, subject to regulatory approvals and closing conditions. In February 2015, construction on
two Irish wind facilities totaling 125 MW was completed, and the facilities
were fully commissioned. The facilities are expected to generate 349 GWh
annually. In February 2015, we up-financed
indebtedness associated with a 45 MW hydroelectric facility in British Columbia
by issuing C$90 million ($71 million) of bonds with an interest rate of 2.95%,
maturing in May 2023. In February 2015, we secured a 12
month extension on $75 million of holding company-level debt associated with a
portfolio of hydroelectric and wind facilities in the United States held through
the Brookfield Americas Infrastructure Fund. The debt bears interest at LIBOR
plus 2.75%, and matures in February 2016. In February 2015, we announced an
increase in LP Unitholder distributions to $1.66 per LP Unit on an annualized
basis, an increase of 11 cents per LP Unit, to take effect with the first
quarter distribution payable in March 2015.    F -71


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