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, +1.441.295.1443 (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:  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


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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: 132,984,913
Limited Partnership Units as of December 31, 2013 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.Yes ̈Nox 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 filer ̈
 
 Accelerated
  filer ̈
 
 Non-accelerated
  filerx
 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
 14CAUTIONARY
  STATEMENT REGARDING THE USE OF NON-IFRS MEASURES
 16PART I
 17ITEM 1.
 IDENTITY OF
  DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
 17ITEM 2.
 OFFER STATISTICS
  AND EXPECTED TIMETABLE
 17ITEM 3.
 KEY INFORMATION
 173.A
 SELECTED FINANCIAL
  DATA
 173.B
 CAPITALIZATION AND
  INDEBTEDNESS
 213.C
 REASONS FOR THE
  OFFER AND USE OF PROCEEDS
 213.D
 RISK FACTORS
 21ITEM 4.
 INFORMATION ON THE
  COMPANY
 504.A
 HISTORY AND
  DEVELOPMENT OF THE COMPANY
 504.B
 BUSINESS OVERVIEW
 544.C
 ORGANIZATIONAL
  STRUCTURE
 744.D
 PROPERTY, PLANT AND
  EQUIPMENT
 79ITEM 4A.
 UNRESOLVED STAFF
  COMMENTS
 79ITEM 5.
 OPERATING AND
  FINANCIAL REVIEW AND PROSPECTS
 795.A
 OPERATING RESULTS
 795.B
 LIQUIDITY AND
  CAPITAL RESOURCES
 1205.C
 RESEARCH AND
  DEVELOPMENT, PATENTS AND LICENSES, ETC.
 1205.D
 TREND INFORMATION
 1205.E
 OFF-BALANCE SHEET ARRANGEMENTS
 1205.F
 TABULAR DISCLOSURE
  OF CONTRACTUAL OBLIGATIONS
 120ITEM 6.
 DIRECTORS, SENIOR
  MANAGEMENT AND EMPLOYEES
 1216.A
 DIRECTORS AND
  SENIOR MANAGEMENT
 1216.B
 COMPENSATION
 1296.C
 BOARD PRACTICES
 1416.D
 EMPLOYEES
 1496.E
 SHARE OWNERSHIP
 149ITEM 7.
 MAJOR SHAREHOLDERS
  AND RELATED PARTY TRANSACTIONS
 1497.A
 MAJOR SHAREHOLDERS
 1497.B
 RELATED PARTY
  TRANSACTIONS
 1507.C
 INTEREST OF EXPERTS
  AND COUNSEL
 160ITEM 8.
 FINANCIAL
  INFORMATION
 1608.A
 CONSOLIDATED
  STATEMENTS AND OTHER FINANCIAL INFORMATION
 1608.B
 SIGNIFICANT CHANGES
 161
  Page3


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ITEM 9.
 THE OFFER AND
  LISTING
 1629.A
 OFFER AND LISTING
  DETAILS
 1629.B
 PLAN OF
  DISTRIBUTION
 1639.C
 MARKETS
 1639.D
 SELLING
  SHAREHOLDERS
 1639.E
 DILUTION
 1639.F
 EXPENSES OF THE
  ISSUE
 163ITEM 10.
 ADDITIONAL
  INFORMATION
 16310.A
 SHARE CAPITAL
 16310.B
 MEMORANDUM AND
  ARTICLES OF ASSOCIATION
 16310.C
 MATERIAL CONTRACTS
 20010.D
 EXCHANGE CONTROLS
 20010.E
 TAXATION
 20110.F
 DIVIDENDS AND
  PAYING AGENTS
 22210.G
 STATEMENT OF
  EXPERTS
 22210.H
 DOCUMENTS ON
  DISPLAY
 22210.I
 SUBSIDIARY
  INFORMATION
 222ITEM 11.
 QUANTITATIVE AND
  QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 222ITEM 12.
 DESCRIPTION OF
  SECURITIES OTHER THAN EQUITY SECURITIES
 223PART II
 224ITEM 13.
 DEFAULTS, DIVIDEND
  ARREARAGES AND DELINQUENCIES
 224ITEM 14.
 MATERIAL
  MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
 224ITEM 15.
 CONTROLS AND
  PROCEDURES
 224ITEM 16.
 [RESERVED]
 22416.A
 AUDIT COMMITTEE
  FINANCIAL EXPERT
 22416.B
 CODE OF ETHICS
 22516.C
 PRINCIPAL
  ACCOUNTANT FEES AND SERVICES
 22516.D
 EXEMPTIONS FROM THE
  LISTING STANDARDS FOR AUDIT COMMITTEE
 22516.E
 PURCHASES OF EQUITY
  SECURITIES BY THE ISSUER AND AFFILIATED PURCHASER
 22516.F
 CHANGE IN
  REGISTRANT'S CERTIFYING ACCOUNTANT
 22516.G
 CORPORATE
  GOVERNANCE
 225
  Page4


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PART III
 
 
 225ITEM 17.
 FINANCIAL
  STATEMENTS
 225ITEM 18.
 FINANCIAL
  STATEMENTS
 225ITEM 19.
 EXHIBITS
 225SIGNATURE
 228INDEX 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, 2013. 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” 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” means National Agency for
Electric Energy (Brazil). “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”. “BAM’s Compensation Committee” means
Brookfield Asset Management’s compensation committee. “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. “Bermuda Holdco” means BRP Bermuda
Holdings I Limited. “BIF” means Brookfield Infrastructure
Fund. “BNDES” means the Brazilian National
Bank for Economic Development. “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. Page6


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Table of Contents
 “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. “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 pursuant to the Combination. “BRP Equity” means Brookfield Renewable Power Preferred
Equity Inc. “BRPI” means Brookfield Renewable
Power Inc., a subsidiary of Brookfield Asset Management. “BRPT” means Brookfield Renewable
Power Trust, which held the assets of the Fund prior to the Combination. “BRPT Trustees” means the trustees of
BRPT. “CanHoldco” means Brookfield BRP
Holdings (Canada) Inc. “Carry” has the meaning given to it
under Item 6.B “Compensation — Our Management — Cash Bonus and Long Term
Incentive Plans”. “Cash Bonus” has the meaning given to
it under Item 6.B “Compensation — Our Management — Compensation Elements Paid
by Brookfield”. “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. “Combination” means the strategic
combination of all the assets of the Fund and the Brookfield Renewable Power
Assets into BREP, effected pursuant to a plan of arrangement under
Section 182 of the OBCA, effective November 28, 2011. “Combination Agreement” means the
combination agreement, dated as of September 12, 2011, among Brookfield,
the Fund, BRPT and BREP providing for, among other things, the Combination. “Common Shares” means the common
shares of BRP Equity. “Compensation Committee” means the
compensation committee of the board of directors of the Managing General
Partner, which was dissolved effective November 4, 2013. Page7


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Table of Contents
 “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. “Development Projects Agreement” means
an agreement between CanHoldco and Brookfield for reimbursement of expenses for
projects in Canada and the United States. “DRIP” means BREP’s distribution
reinvestment plan. “DRS Statement” means a Direct
Registration System statement. “DSUs” means deferred share units
issued under the DSUP. “DSU Allotment Price” has the meaning
given to it under Item 6.B “Compensation — Our Management — Cash Bonus and
Long-Term Incentive Plans”. “DSUP” means the Deferred Share Unit
Plan of Brookfield Asset Management. “DTC” means The Depository Trust
Company. “EDGAR” means the Electronic Data-Gathering,
Analysis and Retrieval system administered by the SEC. “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” means the United States
Environmental Protection Agency. “Escrowed Stock Plan” means the
Escrowed Stock Plan of Brookfield Asset Management. “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” means the United States Federal
Energy Regulatory Commission. “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. Refer to
“Cautionary Statement Regarding Use of Non-IFRS Measures”. “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. “GLHA” means Great Lakes Hydro
America, LLC. “GLPL” means Great Lakes Power
Limited. “GP Unitholders” means the general
partner of BREP, which is the holder of the GP Units. Page8


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Table of Contents
 “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. “Guarantors” means, collectively, BREP,
BRELP, CanHoldco and Bermuda Holdco. “GW” means gigawatt. “GWh” means gigawatt hours. “Hold Date” has the meaning given to
it under Item 6.B “Compensation — Our Management — Cash Bonus and Long-Term
Incentive Plans — Restricted Stock Plan”. “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). “Holding Entities” means Bermuda
Holdco, CanHoldco and any direct wholly-owned subsidiary of BRELP created or
acquired after the date of the Amended and Restated Limited Partnership
Agreement of BRELP. “HPI” means Hydro Pontiac Inc. “HSS&E” means health, safety,
security and environment. “IFRS” means the International
Financial Reporting Standards, as issued by the International Accounting
Standards Board. “Income Tax Act” or “Tax Act”
means the CanadianIncome Tax Act, R.S.C. 1985, c. 1. (5th Supp), as
amended, including the regulations promulgated under such Act. “Indirect CFA” has the meaning given
to it under Item 3.D “Risk Factors — Risks Related to Taxation — Canada”. “Investco” has the meaning given to it
under Item 6.B “Compensation — Our Management — Cash Bonus and Long-Term
Incentive Plans — Escrowed Stock Plan”. “Investment Company Act” means the
United States Investment Company Act of 1940, as amended, and the rules and
regulations promulgated under such Act. “IPCC” means Intergovernmental Panel
on Climate Change. “IRS” means the United States Internal
Revenue Service. “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. Page9


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Table of Contents
 “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 amended
and restated master management and administration agreement, dated January 20,
2014, 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. “Minister” means the Minister of
Finance (Canada). “MPT” means the Mississagi Power
Trust. “MRE” means the hydrological balancing
pool administered by the government of Brazil. “MW” means megawatts. “MWh” means megawatt hours. “NEOs” has the meaning given to it
under Item 6.B “Compensation — Our Management”. “NI 52-110” means Canadian National
Instrument 52-110 —Audit Committees. “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”. “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 L.P. 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. “OBCA” means theBusiness
Corporations Act(Ontario),R.S.O. 1990, c. B-16, as amended,
including the regulations promulgated under such Act. “OPA” means the Ontario Power
Authority. “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. “Original Bond Indenture” means 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. “PFIC” means a passive foreign
investment company. “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. Page10


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Table of Contents
 “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. “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. “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. “RIC” means a regulated investment
company. “RPS” means renewable portfolio
standards. “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”. “RSP” means the Restricted Stock Plan
of Brookfield Asset Management. “RSU Allotment Price” has the meaning
given to it under Item 6.B “Compensation — Our Management — Cash Bonus and
Long-Term Incentive Plans”. “RSUP” means the Restricted Share Unit
Plan of Brookfield Asset Management. “RSUs” means restricted share units
issued under the RSUP. “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. Page11


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Table of Contents
 “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. “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 LLC, Brookfield Renewable Energy
Group (Bermuda) Inc. and Brookfield Global Renewable Energy Advisor Limited, 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. Page12


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Table of Contents
 “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”. “TJLP” means BNDES’s long-term
interest rate. “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. Facilities” means all of the
U.S. facilities of BREP. “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. “Western Wind” has the meaning given
to it under Item 4.A “History and Development of our Business — Recent
Developments — Acquisitions and Dispositions”. “White Pine” has the meaning given to
it under Item 4.A “History and Development of our Business — Recent
Developments — Acquisitions and Dispositions”.  Page13


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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: ·our
limited operating history; ·the
risk that we may be deemed an “investment company” under the Investment Company
Act; ·the
fact that we are not subject to the same disclosure requirements as a U.S.
domestic issuer; ·risks
commonly associated with a separation of economic interest from control or the
incurrence of debt at multiple levels within our organizational structure; ·the
risk that the effectiveness of our internal controls over financial reporting
could have a material effect on our business; ·changes
to hydrology at our hydroelectric stations or in wind conditions at our wind
energy facilities; ·the
risk that counterparties to our contracts do not fulfill their obligations, and
as our contracts expire, we may not be 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; ·our
operations are highly regulated and exposed to increased regulation which could
result in additional costs; ·the
risk that our concessions and licenses will not be 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 could be affected by local communities; Page14


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Table of Contents
 ·losses
resulting from fraud, bribery, corruption, other illegal acts, inadequate or
failed internal processes or systems, or from external events; ·risks
related to our reliance on computerized business systems; ·general
industry risks relating to operating in the North American and Brazilian power
market sectors; ·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; ·the
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; ·risks
related to 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; ·risks
associated with the development of our generating facilities and the various
types of 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 will
be 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; ·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 5.A “Operating Results” and Item 4.B “Business Overview”. 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 “$” are to U.S.
dollars. Canadian dollars and Brazilian Reais are identified as “C$” and “R$”,
respectively.  Page15


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Table of Contents
 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. Neither Adjusted EBITDA, funds from operations nor 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. As a result of the
Combination, we have presented the measurements of the 2011 results on apro
formabasis. Reconciliations of each of Adjusted EBITDA, funds from
operations, and adjusted funds from operations to net income on a consolidated
andpro formabasis are presented in Item 5.A “Operating Results —
Financial Review for the Years Ended December 31, 2013 and 2012”, Item 5.A
“Operating Results — Financial Review for the Years Ended December 31, 2012 and
2011”, and Item 5.A “Operating Results — Reconciliation ofPro FormaResults.”  Page16


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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: (i) the audited consolidated financial statements of Brookfield Renewable
as at December 31, 2013 and 2012, and for the years ended December 31, 2013,
2012 and 2011 and related notes, and (ii) the unaudited pro forma condensed
combined statement of (loss) income of Brookfield Renewable for the year ended
December 31, 2011 and related notes, each of which is included elsewhere in
this Form 20-F. We are providing unauditedpro formafinancial results that include the impact of the Combination,
new contracts and contract amendments, management service agreements along with
the tax impacts resulting from the Combination, as if each had occurred as of
January 1, 2011. The unauditedpro formafinancial results have
been prepared based upon currently available information and assumptions considered
appropriate by management. The unauditedpro formafinancial results are
provided for information purposes only and may not be indicative of the results
that would have occurred had the above transactions been effected on the date
indicated. The accounting for certain of the Combination transactions in the
audited consolidated financial statements of Brookfield Renewable for the year
ended December 31, 2011 required the determination of fair value estimates
at the date of the transaction on November 28, 2011 rather than the date
assumed in the determination of thepro formaresults of January 1,
2011. Capacity, long-term average and actual generation include facilities acquired
or commissioned during the respective period ends. Long-term average and actual
generation was calculated from the acquisition date or the commercial operation
date, whichever is later. See Item 5. “Operating and Financial
Review and Prospects,” Item 8. “Financial Information” and Item 18.
“Financial Statements”. Page17


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Table of Contents
 SUMMARY OF HISTORICAL
CONSOLIDATED FINANCIAL AND OTHER INFORMATION (MILLIONS, EXCEPT AS NOTED)
 
 2013
 
 2012
 
 2011
 
 2010
 
 2009Operational information(1):Capacity (MW)
 
 5,849
 
 5,304
 
 4,536
 
 4,309
 
 4,198Long-term average generation (GWh)(2)
 
 21,836
 
 18,202
 
 16,297
 
 15,887
 
 15,529Actual generation (GWh)(2)
 
 22,222
 
 15,942
 
 15,877
 
 14,480
 
 15,833Average revenue ($ per MWh)
 
 77
 
 82
 
 74
 
 72
 
 62Selected Financial Information:Revenues
 $
 1,706
 $
 1,309
 $
 1,169
 $
 1,045
 $
 984Adjusted EBITDA(3)
 
 1,208
 
 852
 
 804
 
 751
 
 743Funds from operations(3)
 
 594
 
 347
 
 332
 
 269
 
 324Adjusted funds from operations(3)
 
 538
 
 295
 
 284
 
 221
 
 276Net income (loss)
 
 215
 
 (95)
 
 (451)
 
 294
 
 (580)Distributions per  sharePreferred equity(4)
 
 1.18
 
 1.27
 
 1.34
 
 1.03
 
 -Limited partners' equity(5)
 
 1.45
 
 1.38
 
 0.34
 
 -
 
 -
  (MILLIONS, EXCEPT AS NOTED)
 
 2013
 
 2012
 
 2011
 
 2010
 
 2009Balance sheet data:
 
 
 Restated(6)Property, plant and equipment, at fair value
 $
 15,741
 $
 15,702
 $
 14,002
 $
 12,260
 $
 12,969Equity-accounted investments
 
 290
 
 344
 
 405
 
 269
 
 283Total assets
 
 16,977
 
 16,925
 
 15,708
 
 13,874
 
 14,836Long-term debt and credit facilities
 
 6,623
 
 6,119
 
 5,519
 
 4,994
 
 4,663Deferred income tax liabilities
 
 2,265
 
 2,349
 
 2,367
 
 2,424
 
 2,773Total liabilities
 
 9,441
 
 9,117
 
 8,524
 
 8,701
 
 9,813Preferred equity
 
 796
 
 500
 
 241
 
 252
 
 -Participating non-controlling interests -in operating subsidiaries
 
 1,303
 
 1,028
 
 629
 
 206
 
 197General partnership interest in a holdingsubsidiary held by Brookfield
 
 54
 
 63
 
 64
 
 34
 
 40Participating non-controlling interests -in a holding  subsidiary - Redeemable/Exchangeable units held by Brookfield
 
 2,657
 
 3,070
 
 3,089
 
 1,643
 
 1,920Limited partners' equity
 
 2,726
 
 3,147
 
 3,161
 
 1,683
 
 1,967Total liabilities and equity
 
 16,977
 
 16,925
 
 15,708
 
 13,874
 
 14,836Debt to total capitalization(7)
 
 41%
 
 38%
 
 37%
 
 40%
 
 40%
 (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.” (4)Represents
the weighted-average distribution to the Series 1, Series 3, Series 5 and
Series 6 Shares. (5)Represents
distributions per share to holders of Redeemable/Exchangeable Units, LP Units
and general partnership interest. (6)Restated
with the adoption of IAS 19R “Employee Benefits”. (7)Total
capitalization is calculated as total debt plus deferred income tax
liabilities, net of deferred income tax assets, and equity. Page18


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Table of Contents
 FINANCIAL REVIEW FOR THE YEARS ENDED DECEMBER 31, 2013 TO 2009 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)
 
 2013
 
 2012
 
 2011
 
 2010
 
 2009Generation (GWh) - LTA
 
 21,836
 
 18,202
 
 16,297
 
 15,887
 
 15,529Generation (GWh) - actual(1)
 
 22,222
 
 15,942
 
 15,877
 
 14,480
 
 15,833Revenues
 $
 1,706
 $
 1,309
 $
 1,169
 $
 1,045
 $
 984Other income
 
 11
 
 16
 
 19
 
 12
 
 9Share of cash earnings fromequity-accounted investments
 
 21
 
 13
 
 23
 
 22
 
 29Direct operating costs
 
 (530)
 
 (486)
 
 (407)
 
 (328)
 
 (279)Adjusted EBITDA(2)
 
 1,208
 
 852
 
 804
 
 751
 
 743Interest expense – borrowings
 
 (410)
 
 (411)
 
 (411)
 
 (404)
 
 (348)Management service costs
 
 (41)
 
 (36)
 
 (1)
 
 -
 
 -Current income taxes
 
 (19)
 
 (14)
 
 (8)
 
 (32)
 
 (23)Less: cash portion of non-controlling
  interestsPreferred equity
 
 (37)
 
 (16)
 
 (13)
 
 (10)
 
 -Participating non-controlling interests -in operating subsidiaries
 
 (107)
 
 (28)
 
 (39)
 
 (36)
 
 (48)Funds from operations(2)
 
 594
 
 347
 
 332
 
 269
 
 324Less: sustaining capital expenditures(3)
 
 (56)
 
 (52)
 
 (48)
 
 (48)
 
 (48)Adjusted funds from operations(2)
 
 538
 
 295
 
 284
 
 221
 
 276Add: cash portion of non-controlling
  interests
 
 144
 
 44
 
 52
 
 46
 
 48Add: sustaining capital expenditures(3)
 
 56
 
 52
 
 48
 
 48
 
 48Other items:Depreciation and amortization(4)
 
 (535)
 
 (483)
 
 (468)
 
 (446)
 
 (321)Unrealized financial instrument gain (loss)
 
 37
 
 (23)
 
 (20)
 
 584
 
 (791)Loss on Fund unit liability
 
 -
 
 -
 
 (376)
 
 (159)
 
 (244)Share of non-cash loss fromequity-accounted investments
 
 (12)
 
 (18)
 
 (13)
 
 (7)
 
 (13)Deferred income tax recovery
 
 18
 
 54
 
 50
 
 3
 
 335Other
 
 (31)
 
 (16)
 
 (8)
 
 4
 
 82Net income (loss)
 $
 215
 $
 (95)
 $
 (451)
 $
 294
 $
 (580)Net income (loss) attributable to:Non-controlling interestsPreferred equity
 $
 37
 $
 16
 $
 13
 $
 10
 $
 -Participating non-controlling interests -in operating subsidiaries
 
 41
 
 (40)
 
 11
 
 25
 
 28General partnership interest in a holdingsubsidiary held by Brookfield
 
 1
 
 (1)
 
 (5)
 
 3
 
 (6)Participating non-controlling interests -
  ina holding subsidiary - Redeemable/Exchangeable units held by Brookfield
 
 67
 
 (35)
 
 (232)
 
 127
 
 (297)Limited partners' equity
 
 69
 
 (35)
 
 (238)
 
 129
 
 (305)Basic and diluted earnings (loss) per LP
  Unit(5)
 $
 0.52
 $
 (0.26)
 $
 (1.79)
 $
 0.97
 $
 (2.29)
 (1)Variations
in generation are described under Item 5.A “Operating Results – Segmented
Disclosures.” (2)Non-IFRS
measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures.” (3)Based
on long-term capital expenditure plans. (4)See
Note 2(f) - Change in accounting estimates in our audited consolidated
financial statements concerning changes in estimates related to depreciation
expense. (5)Average
LP Units outstanding during the year totaled 132.9 million (2012: 132.9 million
and 2011: 132.8 million). Page19


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Table of Contents
 NET INCOME, ADJUSTED
EBITDA, FUNDS FROM OPERATIONS, AND ADJUSTED FUNDS FROM OPERATIONS ON APRO FORMABASIS There are no differences
in capacity, long-term average and actual generation since thepro formaresults reflect the same portfolio of assets as are reflected in the historical
table below. The following table presents unauditedpro formacondensed
combined financial data for Brookfield Renewable giving effect to the
Combination for the year ended December 31, 2011 as if the Combination had
occurred as of January 1, 2011: (MILLIONS, EXCEPT AS NOTED)Generation (GWh) - LTA
 
 16,297Generation (GWh) - actual
 
 15,877Average revenue ($ per MWh)
 
 82Revenues
 $
 1,309Other income
 
 19Share of cash earnings from
  equity-accounted investments
 
 23Direct operating costs
 
 (425)Adjusted EBITDA(1)
 
 926Interest expense - borrowings
 
 (411)Management service costs
 
 (22)Current income taxes
 
 (8)Less: cash portion of non-controlling
  interestsPreferred equity
 
 (13)Participating non-controlling interests -
  in operating subsidiaries
 
 (39)Funds from operations(1)
 
 433Less: sustaining capital expenditures(2)
 
 (48)Adjusted funds from operations(1)
 
 385Add: cash portion of non-controlling
  interests
 
 52Add: sustaining capital expenditures(2)
 
 48Other items:Depreciation and amortization
 
 (464)Share of non-cash loss from equity
  accounted investments
 
 (13)Deferred income tax (expense) recovery
 
 60Other
 
 11Net income
 $
 79Net income attributable to:Non-controlling interestsPreferred equity
 
 13Participating non-controlling interests -
  in operating subsidiaries
 
 11Participating non-controlling interests -
  in a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 
 27Limited partners' equity
 
 28Basic and diluted earnings per LP Unit(3)
 $
 0.21
 (1)Non-IFRS
measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures.” (2)Based
on long-term capital expenditure plans. (3)Average
LP Units outstanding during the year totaled 132.8 million. Page20


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Table of Contents
 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 recently formed partnership with a limited operating history and the
historical and pro forma financial information included in this Form 20-F does
not reflect the financial condition or operating results we would have achieved
during the periods presented, and therefore may not be a reliable indicator of
our future financial performance. BREP,
which was formed on June 27, 2011 and acquired substantially all of its
assets pursuant to the Combination in November 2011, has a limited operating
history. Our lack of operating history will make it difficult for you to assess
our ability to operate profitably and make distributions to LP Unitholders.
Financial information for the periods prior to November 28, 2011 is
presented based on the historical combined financial information for the
contributed operations as previously reported by Brookfield. For the period after
completion of the Combination, the results are based on the actual results of
the new entity, BREP, including the adjustments associated with the Combination
and the execution of several new and amended agreements, including PPAs and
management service agreements. 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. Among other things, such
rules limit or prohibit transactions with affiliates, impose limitations on the
issuance of debt and equity securities and impose certain governance
requirements. BREP has not been and does not intend to become regulated as an
investment company and BREP intends to conduct its activities so it will not be
deemed to be an investment company under the Investment Company Act (and
similar legislation in other jurisdictions). In order to ensure that we are not
deemed to be an investment company, we may be required to materially restrict
or limit the scope of our operations or plans. We will be limited in the types
of acquisitions that we may make, and we may need to modify our organizational
structure or dispose of assets of which we would not otherwise dispose.
Moreover, if anything were to happen, which would potentially cause BREP to be
deemed an investment company under the Investment Company Act, 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. 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. Page21


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Table of Contents
 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 65% 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 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. 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 will be required
to deliver a report that assesses the effectiveness of our internal controls
over financial reporting and our independent registered public accounting firm
will be required to deliver 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 or other deficiencies 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
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 Risks Related to Our Operations and the Renewable Power
Industry Changes
to hydrology at our hydroelectric stations or in wind conditions at our wind
energy facilities 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 and
wind conditions. Hydrology and wind conditions 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 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. 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. 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. 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, as at December 31, 2013
approximately 37% of our annual sales were with Brookfield entities which are
not rated and whose obligations are not guaranteed by Brookfield Asset
Management. If, for any reason, any of the purchasers of power under such 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
portions of our hydroelectric 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
these contracts, or unable to receive 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. Increases
in water rental costs (or similar fees) or changes to the regulation of water
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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. 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. 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 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. In particular, Brazil’s proposed electricity sector measures
adopted in 2012 could have a negative impact on power prices in Brazil. 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 by
the applicable regulatory bodies in each country. However, if these regulatory
bodies do not grant us renewal rights, or if they decide to renew our
concessions and licenses, as the case may be, under conditions which would
impose additional costs, or if additional restrictions such as setting a price
ceiling for energy sales, our profitability and operational activity could be
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 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 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 significant amounts of capital and other
resources. 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
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 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 not adequate 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 costs to comply 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 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 may become involved in various legal
actions that could expose it to significant 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 may be subject to governmental or
regulatory investigations at any given time. Governmental and regulatory
investigations, regardless of their outcome, could be costly, divert management
attention, or damage our reputation. In particular, there has been increasing
global Page26


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 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 unfavourable
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. There can be
no assurance that we will not, from time to time, be subject to inquiries and
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 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, First Nations and other 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, Aboriginal land claims 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 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 and
methodologies 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. There
are general industry risks associated with operating in the North American and
Brazilian power market sectors. We
operate in the North American and Brazilian power market sectors, which are
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
or Brazilian economy or sustained conservation efforts to reduce electricity
consumption could have the effect of reducing demand for electric energy over
time, which, for example, occurred during the recent recession. Advances
in technology could impair or eliminate the competitive advantage of our
projects. 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 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
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 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. Risks
Related to Financing Our
ability to finance our operations is subject to various risks relating to the
state of the capital markets. Brookfield
Renewable has corporate debt and limited recourse project level debt, the
majority of which is non-recourse to BREP, which 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 capital markets flexibility. 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 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. BREP,
BRELP and its subsidiaries are or will in the future be 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 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
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 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 renewable energy sources and the overall growth of the renewable energy
industry are dependent on state or provincial, national and international
policies in support of such development. In particular, Canada and the United
States, two of our principal markets, and 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. 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. 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
providing incentives for renewable energy or increasing emission standards or
other environmental regulation of traditional thermal coal-fired generation
could change at any time in a manner not dissimilar from Canada’s decision to
lower emission reduction targets following withdrawal from the Kyoto Protocol
to the United Nations Framework Convention on Climate Change. Any such change
may impact the 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 authority) and other third party approvals
that are beyond our control and may not be satisfied. If all or some of the
growth initiatives are unable to be completed on the terms agreed, we may need
to delay the acquisitions or terminate the acquisitions altogether. Future
growth of our portfolio may subject us to additional risks and the expected
benefits of our transactions may not materialize. Page30


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 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 the those
contemplated in the growth initiatives, in a timely manner, or at all. In
addition, if the returns are lower than the returns 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, First Nations and other 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. 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, First Nations and other
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
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 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
partnership or consortium. 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
single 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. In addition, such operations may be subject to the risk that the
company 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
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 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.  Page33


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 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 contractual
relationships in such countries, as are afforded to our projects in Canada, the
United States and Brazil, 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
will exercise 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 will be 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 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 will 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 will have 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 or 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 Page34


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 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
role and ownership of Brookfield may change. 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
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 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 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 a base management fee to the Service
Provider equal to $20 million (which amount shall be adjusted for
inflation annually beginning on January 1, 2013, at an inflation factor based
on year over year U.S. consumer price index) plus 1.25% of the amount by which
the Total Capitalization Value (which is generally Page36


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 determined
with reference to the aggregate of the value of all outstanding LP Units,
assuming full conversion of Brookfield’s limited partnership interests in BRELP
into LP Units, and securities of the other Service Recipients that are not held
by Brookfield Renewable, plus all outstanding third party debt with recourse to
BREP, BRELP or a Holding Entity, less all cash held by such entities) of BREP
exceeds an initial reference value determined based on its market
capitalization immediately following the Combination. In the event that the
measured Total Capitalization Value of BREP in a given period is less than the
initial reference value, the Service Provider will receive a base management
fee of $20 million annually (subject to an annual escalation by a specified
inflation factor beginning on January 1, 2013). 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 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 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 will have an
effective economic interest in our business of approximately 65% 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”.  Page37


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 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 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, except that
the Service Provider is also liable for liabilities arising from gross
negligence. 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. Risks
Related to Our LP Units Our
LP Units have limited trading history, are not currently included in major
market indices, and an active and liquid trading market for our LP Units may
not develop. Our
LP Units have only been trading on the TSX since November 30, 2011 and on
the NYSE since June 11, 2013 and are not included in major market indices. We
cannot predict the extent to which investor interest will lead to the development
of an active and liquid trading market for our LP Units or, if such a market
develops, whether it will be maintained. We cannot predict the effects on the
price of our LP Units if a liquid and active trading market for our LP Units
does not develop and if our LP Units continue to not be eligible for inclusion
in trading indices. In addition, if such a market does not develop, relatively
small sales of our LP Units may have a significant negative impact on the price
of 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 will 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.  Page38


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 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
distributions. 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
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 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 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, and Brazil) in
which the Brookfield Renewable entities operate. 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 Page40


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 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 extent reasonably 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,
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 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
Unitholders on a pro rata basis. 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 Page42


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Table of Contents
 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, 2014. 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. 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
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 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. 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 termination 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”.  Page44


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 The U.S. Congress has considered legislation that could,
if enacted, adversely affect BREP’s qualification as a partnership for U.S.
federal tax purposes under the publicly traded partnership rules and subject
certain income and gains to tax at increased rates. If this or similar
legislation were to be enacted and to apply to BREP, then the after-tax income
of BREP, as well as the market price of LP Units, could be reduced. Over
the past several years, a number of legislative proposals have been introduced
in the U.S. Congress which could have had adverse tax consequences for BREP or
BRELP, including the recharacterization of certain items of capital gain income
as ordinary income for U.S. federal income tax purposes. However, such
legislation was not enacted into law. The Obama administration has indicated it
supports such legislation and has proposed that the current law regarding the
treatment of such items of capital gain income be changed to subject such
income to ordinary income tax. For further detail on such proposed legislation,
see Item 10.E. “Taxation — Material U.S. Federal Income Tax Considerations —
Proposed Legislation”. Under
the Foreign Account Tax Compliance provisions of the Hiring Incentives to
Restore Employment Act of 2010 (“FATCA”), certain payments made or received by
BREP on or after July 1, 2014 could be subject to a 30% federal withholding
tax, unless certain requirements are met. Under
FATCA, certain payments of U.S.-source income made on or after July 1, 2014 to
BREP, BRELP, the Holding Entities, or the Operating Entities, or by BREP to an
LP Unitholder (as well as certain payments made on or after January 1, 2017
that are attributable to such income or that constitute gross proceeds from the
disposition of property that could produce U.S.-source dividends or interest) could
be subject to a 30% withholding tax, 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”. In addition, 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 Income Tax Act (Canada),
together with the regulations thereunder (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 Page45


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 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 Act). 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 earn 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
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 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 a 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. 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” as defined in the Tax Act 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, 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 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. Page47


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 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 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”
for purposes of section 150 of the Tax Act 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 Page48


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 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. 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” (as defined in subsection 116(6) of the Tax Act) 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 residents 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 Canada-United States Tax Convention (1980)
(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. Page49


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 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 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 5,849 MW of
installed capacity. The portfolio includes 193 hydroelectric generating
stations on  69 river systems and  11 wind facilities. Our portfolio is
diversified across 12 power markets in Canada, the United States and Brazil,
providing significant geographic and operational diversification. Our objective is to pay a distribution to our
LP Unitholders that is 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 we continue to pursue a long-term
distribution growth rate target in the range of 3% to 5% annually.  We believe
that this distribution rate leaves 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 the 3 – 5% distribution target.  These organic growth initiatives
include the commercialization of our 1,700 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 the majority of our portfolio
(80%) 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 the business with attractive organic upside as power
prices rise as we anticipate they will, and we pursue locking in the 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.  In the
past year, we acquired 567 MW of renewable capacity in North America by
engaging sellers of a strategic, industrial or financial nature, while also
continuing to advance solid acquisition opportunities in Brazil and Europe. 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 have
recently been listed on the NYSE under the symbol “BEP”, which is expected to
enhance our Page50


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 trading liquidity, deepen our investor
base, broaden our access to capital and improve our ability to fund growth globally. 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.  Page51


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 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 the telephone number is
+1.441.295.1443. BREP was established to serve as the primary
vehicle through which Brookfield will acquire renewable power assets on a
global basis. As a result of the Combination completed on November 28,
2011, all of the renewable power assets of the Fund, a publicly traded entity
in Canada, and BRPI were combined and are now indirectly held by BREP through
BRELP and BRELP’s subsidiaries. On completion of the Combination, public
unitholders of the Fund received one LP Unit in exchange for each trust unit of
the Fund held and the Fund was wound up. Prior to the Combination, Brookfield
owned an approximate 34% interest in the Fund on a fully-exchanged basis. On
completion of the Combination, Brookfield owned 73% of BREP on a
fully-exchanged basis. Brookfield now owns 65% of BREP on a fully exchanged
basis and the remaining 35% is held by the public. Recent
Developments The following is a summary of the material
developments affecting our business from January 1, 2013 up to the date of this
Form 20-F. Construction
and Development of New Facilities We
completed construction of two of our hydroelectric facilities in Brazil in
November 2012 and February 2013.  These facilities have a total installed
capacity of 48 MW and are expected to be capable of generating a combined 218
GWh of generation annually. Total construction costs were approximately R$400
million. Brookfield
Renewable is nearing completion of the $200 million, 45 MW hydroelectric
facility in British Columbia which began construction in the second quarter of
2012 and is expected to be fully operational by the second quarter of 2014. The
project is on scope, schedule and budget. Acquisitions
and Dispositions On February 21, 2013, we announced that we
were successful in our bid to purchase, through WWE Equity Holdings Inc., an
indirect wholly-owned subsidiary, approximately 66% of the issued and
outstanding common shares of Western Wind Energy Corp. (“Western Wind”),
a company with 165 MW of wind and solar assets operating in California and
Arizona, for C$2.60 in cash per common share.  In subsequent transactions in
March and May 2013, an additional 27% of common shares were acquired for an
additional cash consideration of $143 million and the remaining 7% of the
common shares were acquired for additional cash consideration of $15 million.
The common shares of Western Wind were delisted from the TSX Venture Exchange
on May 24, 2013. On March 1, 2013, Brookfield Renewable
acquired a portfolio of hydroelectric generating stations in Maine (“White
Pine”) from a subsidiary of NextEra Energy Resources, LLC, for a total
enterprise value of approximately $760 million. The portfolio consists of 19
hydroelectric facilities and eight upstream storage reservoir dams primarily on
the Kennebec, Androscoggin and Saco rivers in Maine, with an aggregate capacity
of 360 MW and expected average annual generation of approximately 1.6 million
MWh.  On September 19, 2013, our institutional partners co-invested 49.9% in
our White Pine assets concurrent with the closing of a private fund sponsored
by Brookfield resulting in Brookfield Renewable retaining a 50.1% interest in
the portfolio. On March 20, 2013, we acquired the remaining
50% interest held by our partner in Powell River Energy Inc. bringing our
interest to 100%. In December 2013, we were identified as part
of a consortium that was named by the Irish Government as the preferred bidder
to acquire state-owned Bord Gáis Energy.  Part of Bord Gáis Energy’s business
includes a portfolio of operating and development wind energy projects in
Ireland and Northern Ireland. It is expected that the purchase and sale
agreement, once concluded, would lead to a formal completion some time in 2014
once regulatory and merger approvals are received. Page52


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 On January 21, 2014,
we acquired, with our institutional partners, a 70 MW hydroelectric portfolio
in Maine consisting of nine facilities on three rivers (“Black Bear”). 
The portfolio is expected to generate approximately 400 GWh annually.
Brookfield Renewable’s interest in the portfolio is approximately 40%. On February 3, 2014, we acquired, with our
institutional partners, the remaining 50% interest in the 30 MW Malacha
hydroelectric project located in northern California, bringing the total
interest held by us and our partners in the project to 100%. Brookfield
Renewable’s interest in the project is approximately 22%. On February 6, 2014, we announced having
entered into an agreement with our institutional partners to acquire a 33%
economic and a 50% voting interest in a 417 MW hydroelectric facility in
Pennsylvania (“Safe Harbor”). The total purchase price for the
transaction is $289 million subject to customary working capital adjustments,
and will be funded from the available liquidity and capital from Brookfield
Renewable and its institutional partners. The transaction is subject to
customary closing conditions and regulatory approvals and is expected to be
completed in the first quarter of 2014. Brookfield Renewable’s share of the
acquired interest is approximately 40%. Project Financings During 2013, the following project financings
were completed for our portfolio: ·In
February 2013, Brookfield Renewable refinanced indebtedness associated with its
Comber Wind facility through a C$450 million broadly marketed private placement
bond financing. The senior bonds are fully amortizing and mature in 2030. ·In
March 2013, approximately 88% of the $575 million in project level notes
outstanding with respect to our newly acquired White Pine portfolio were
tendered and accepted for purchase by an affiliate of Brookfield Renewable
pursuant to a previously announced cash tender offer. The purchase of the
tendered notes was partially funded through a non-recourse, 24-month bridge
loan of $279 million from a syndicate of banks that closed on March 6, 2013 (“White
Pine Bridge Facility”). On May 8, 2013 the same affiliate purchased an
additional $125 million in other holdco level notes pursuant to a previously
announced change of control offer which purchase was partially funded using the
White Pine Bridge Facility. ·In
March 2013, Brookfield Renewable refinanced indebtedness associated with its
Gosfield Wind facility through a C$130 million floating rate credit facility. ·On
January 23, 2014, Brookfield Renewable refinanced its White Pine Bridge
Facility through a $279 million credit facility for a term of 3.5 years. ·On
February 18, 2014, Brookfield Renewable completed a $140 million private
placement bond financing for its Black Bear hydro portfolio. The senior bonds
are non-amortizing and mature in 2024. Corporate
Financings In
2013, we increased the size of our credit facilities to which BREP and certain
of our key holding companies are a party to $1,280 million from $990 million and
extended all maturities to October 2017. In January 2013, BRP Equity, a wholly-owned
subsidiary of BREP, issued 7,000,000 Series 5 Shares at C$25 per share for
gross proceeds of C$175 million. The net proceeds were used to repay
outstanding indebtedness and for general corporate purposes. In May 2013, BRP Equity, a wholly-owned
subsidiary of BREP, issued 7,000,000 Series 6 Shares at C$25 per share for
gross proceeds of C$175 million. The net proceeds were used to repay
outstanding indebtedness and for general corporate purposes. On May 17, 2013, we renewed our base shelf
prospectus in Canada qualifying the additional issuance of up to $2 billion of
LP Units, Class A Preference Shares and Finco Bonds.  Page53


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 Other On March 13, 2013, a wholly-owned subsidiary
of Brookfield sold 8,065,000 LP Units of BREP at an offering price of C$31.00
per LP Unit pursuant to a bought-deal secondary offering with a syndicate of
underwriters. 4.B              BUSINESS
OVERVIEW Our
Operations We
operate our facilities through three regional operating centers in the United States, Canada and Brazil which are designed to maintain and enhance the value of our assets,
while cultivating positive relations with local stakeholders. We own and manage
193 hydroelectric generating stations, 11 wind facilities, and two natural
gas-fired plants. Overall, the assets we own or manage have 5,849 MW of
generating capacity and annual generation of 22,159 GWh based on long-term
averages. The table below outlines our portfolio as at December 31, 2013: River
 Generating
 Generating
 Capacity
 LTA(1)(2)
 StorageSystems
 Facilities
 Units
 (MW)
 (GWh)
 (GWh)Hydroelectric generation(3)United States
 
 28
 
 126
 
 371
 
 2,696
 
 9,951
 
 3,582Canada
 
 18
 
 32
 
 72
 
 1,323
 
 5,062
 
 1,261Brazil
 
 23
 
 35
 
 75
 
 671
 
 3,656
 
 N/A69
 
 193
 
 518
 
 4,690
 
 18,669
 
 4,843Wind energyUnited States
 
 -
 
 8
 
 724
 
 538
 
 1,394
 
 -Canada
 
 -
 
 3
 
 220
 
 406
 
 1,197
 
 --
 
 11
 
 944
 
 944
 
 2,591
 
 -Other
 
 -
 
 2
 
 6
 
 215
 
 899
 
 -69
 
 206
 
 1,468
 
 5,849
 
 22,159
 
 4,843
 (1)Long-term
average (“LTA”) is calculated on an annualized basis from the beginning of the
year, regardless of the acquisition or commercial operation date. (2)Brazilian
hydroelectric assets benefit from a market framework which levelizes generation
risk across producers. (3)Long-term
average 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. In Brazil, assured generation levels are used as a proxy
for long-term average. Page54


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 The following table presents the annualized long-term average
generation of our operating portfolio on a quarterly basis as at December 31,
2013: LTA (GWh)(1)(2)
 
 Q1
 
 Q2
 
 Q3
 
 Q4
 
 TotalHydroelectric generation(3)United States
 
 2,659
 
 2,829
 
 2,013
 
 2,450
 
 9,951Canada
 
 1,196
 
 1,461
 
 1,234
 
 1,171
 
 5,062Brazil
 
 947
 
 892
 
 894
 
 923
 
 3,6564,802
 
 5,182
 
 4,141
 
 4,544
 
 18,669Wind energyUnited States
 
 311
 
 468
 
 341
 
 274
 
 1,394Canada
 
 324
 
 292
 
 238
 
 343
 
 1,197635
 
 760
 
 579
 
 617
 
 2,591Other
 
 222
 
 218
 
 240
 
 219
 
 899Total
 
 5,659
 
 6,160
 
 4,960
 
 5,380
 
 22,159
 (1)Long-term
average (“LTA”) is calculated on an annualized basis from the beginning of the
year, regardless of the acquisition or commercial operation date. (2)Brazilian
hydroelectric assets benefit from a market framework which levelizes generation
risk across producers. (3)Long-term
average 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. In Brazil, assured generation levels are used as a proxy
for long-term average. We have a comprehensive
power operations and development platform located in each of our regional
markets that positions us to maintain and increase the value of our asset base
while competitively positioning us with strong economies of scale for continued
growth. Our business has approximately 1,200 employees throughout North America
and Brazil. See Item 6.D “Employees”. We also maintain a portfolio of
hydroelectric, wind and pumped storage development projects in each of Canada,
the United States and Brazil. See Item 7.B “Related Party Transactions —
Development Projects”. Page55


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 Regional
Operating Platforms  U.S. Business Over 50% of our renewable
business is located in the United States, one of the largest economies and
energy users in the world.  In the U.S., we are strategically focused on the
power markets in the Northeast, Mid-Atlantic), Southeast and California, with
additional operations in Arizona, Minnesota and Louisiana. The majority of our U.S.
capacity is located in New York 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. We have 1,274 MW of operating
hydroelectric capacity in New England, including a 50% joint-venture operating
interest in a 600 MW hydroelectric pumped storage facility located in
Massachusetts. Pumped storage is a unique 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 New Hampshire and California with a combined
installed capacity of 553 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 Los Angeles load. 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 U.S. headquarters are
located just outside of Boston, Massachusetts, along with our U.S. National
System Control Center, which can remotely control and monitor nearly all of our
facilities in the Page56


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 country. We employ approximately 507
people in the United States. Approximately 40% of our employees are covered by
collective agreements. We have experienced positive relations with our
unionized work force in the United States. 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 all
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 market-based rate authority. Canadian Business Canada has a strong
hydropower tradition and continues to be one of the top three hydropower
producers in the world.  Our facilities in Canada are situated in Québec,
Ontario and British Columbia, Canada’s three largest power markets,
representing approximately three-quarters of the Canadian population. Each of
these provinces has 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 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. In addition to our renewable power assets, we own
one combined cycle natural gas-fired facility in Ontario which sells its power
to the Ontario Electricity Financial Corporation under a contract currently expiring
in May 2014 that is in the process of being renegotiated. We have several projects
in various stages of development. One of our more advanced development projects
is the 45 MW Kokish hydroelectric project for which we have secured a 40-year
PPA with BC Hydro. Construction began in the second quarter of 2012 and the
project is expected to be fully operational by the second quarter of 2014, on
scope, schedule and budget. Our Canadian headquarters
are located in Gatineau, Québec, along with our National System Control Center
which allows remote monitoring and control of all of our assets in Canada. Our
platform includes full hydroelectric and wind operating capabilities, as well
as development and construction oversight expertise. We employ approximately 192
people in our Canadian operations and approximately 44% of our employees in
Canadian operations are covered by collective agreements. We have experienced
positive relations with our unionized work force in Canada. 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. Brazilian Business Brookfield has been an
investor and operator in Brazil for over 100 years. 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 671 MW of installed capacity. We own facilities located
in the seven developed states of Brazil located in the south, southeast and
mid-west regions. Such 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 and economies. Page57


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 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. In November 2012,
we completed the construction of and commissioned a 19 MW hydroelectric
facility and in February 2013, we completed construction of a 29 MW
hydroelectric facility. Our Brazilian headquarters
are located in Rio de Janeiro, while our National System Control Center is
located in Curitiba, Paraná from which we centrally control and monitor our
Brazilian hydroelectric power stations. We employ approximately 306 people
across our operations in Brazil and all of our employees are covered by annual
collective agreements. We have experienced positive relations with our work
force in Brazil. Our operating platform has full development, construction
management and operating capability with an integrated power marketing team. 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 segment of
plants below 30 MW of capacity as these sites can be secured directly from
ANEEL, whereas sites for hydroelectric plants above 50 MW can only be granted
by public auction, where developers bid the lowest tariff to win the concession
and a PPA with local utilities. Of our authorizations and concessions, 90% have
terms exceeding 15 years. Generally, concessions and authorizations provide for
an initial term of 30 years and renewal rights for an additional 20-year
period. See Item 3.D “Risk Factors
— Risks Relating 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 Relating to our Operations and the Renewable Power
Industry — There is a risk that our concessions and licenses will not be renewed”. Our
Competitive Strengths BREP is one of the
largest publicly-traded, pure-play renewable power businesses in the
world.  As the owner and operator of a diversified portfolio of high
quality assets that produce electricity from renewable resources, our track
record is strong. Our assets generate
high quality, stable cash flows derived from a highly contracted portfolio. Our
business model is simple: utilize our global reach to identify and acquire high
quality renewable power 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 $17 billion in power
assets, 5,849 MW of installed capacity, and long-term average generation from
operating assets of 22,159 GWh annually. Our portfolio includes 193 hydroelectric
generating stations on 69 river systems and 11 wind facilities, diversified
across 12 power markets in the United States, Canada and Brazil. . .  Page58


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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 32% of their annual generation. Our assets in Brazil
benefit from a framework that exists in the country to levelize generation risk
across hydroelectric producers. This ability to store water and have 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 1,700 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 160 hydroelectric assets totaling
approximately 3,200 MW and 11 wind generating assets totaling approximately 950
MW. In 2013, we acquired or commissioned hydroelectric generating assets that
have an installed capacity of 431 MW and 165 MW of wind generating assets. Our
ability to develop and acquire assets is strengthened by our established
operating and project development teams, strategic relationship with Brookfield
Asset Management, and our strong liquidity and capitalization profile. 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 pursue a
long-term distribution growth rate target in the range of 3% to 5% 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 power assets that sell
electricity under long-term, fixed price contracts with creditworthy
counterparties. Approximately 93% of our 2014 generation output is sold
pursuant to PPAs, to public power authorities, load-serving utilities,
industrial users or to affiliates of Brookfield Asset Management. The PPAs for
our assets have a weighted-average remaining duration of 18 years, providing
long-term cash flow stability. Strong financial profile.With $17 billion of power
assets and a conservative leverage profile, consolidated debt-to-capitalization
is approximately 41%. Our liquidity position remains strong with approximately$1.2billion of cash and unutilized portion of committed bank lines.
Approximately 74% of our borrowings are non-recourse to BREP. Corporate borrowings and subsidiary borrowings have weighted-average terms
of approximately 8 and 12 years, respectively. Page59


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 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 1,400 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 2012. _________________
  Sources: 
  BP Statistical Review of World Energy – June 2013 (for wind, geothermal and
  solar capacity 2000-2012); U.S. Energy Information Administration -
  International Energy Statistics (for hydroelectric capacity 2000-2010); hydro
  capacity for 2011 & 2012 is assumed to increase in line with the growth in
  hydro generation in these years (from the 2013 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 regulators 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 need to be 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. Renewables are 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 Page60


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 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 potentially rising 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 64
countries, including all 27 European Union 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 power purchase contracts 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 a series of four reports every five years to build awareness of
climate change and continues to observe 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
we have observed that universal 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 Our operating platforms in the United States,
Canada and Brazil make us particularly well positioned to continue our growth
in these markets. In addition, due to our relationship with Brookfield, we have
access to Brookfield’s investment platforms in Europe and Australasia, giving
us the capability to source transactions globally. United
States We believe that in the last few years, 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 60,000 MW of installed wind capacity as at the end of
2012. 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. Concurrent with expanding policy supporting
renewables, the environmental regulation of traditional thermal 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) – effective 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 significant 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. In the United States, we are strategically
focused on the power markets in the northeast (New York, New England), the
Pennsylvania-Jersey-Maryland Independent System Operator (PJM ISO) region, Page61


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 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 will be online within
the province by 2025, compared to a year-end 2013 total of approximately 11 GW.
There is currently over 4,500 MW of renewable capacity contracted in Ontario as
the province completes the phase-out or repowering of approximately 3,500 MW of
existing coal 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. 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 power purchase contracts for approximately 2,200 MW. Brazil With the world’s fifth largest population and
seventh largest economy, Brazil offers a rapidly growing market with sound,
investment-grade, macro-economic fundamentals. Electricity demand has grown by
4.4% 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 2021, Brazil’s energy planning agency projects that 66,000 MW of new
supply will be needed, while only approximately 42,000 MW of capacity is currently
under construction. 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 certain regulatory measures adopted in September 2012
affecting concession renewals which had the goal of reducing end-user
electricity costs by an average of 20%, 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 9,000 MW of installed biomass
capacity with another 5,700 MW to be developed until 2021, 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. We believe there are two aspects of the
market in Brazil that make our business particularly compelling. First,
substantially all of our 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 purchase power from generators experiencing above average
conditions at prices based on a marginal production cost formula, or when
producing more than normal generation, sell that power on the same basis.
Secondly, in Brazil, SHPPs under 30MW 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 Page62


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 discount for the use of the distribution system which, in
turn, enables us to capture a portion of this discount through higher prices
with end-use customers. Europe 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 105 GW wind, and approximately 68 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 European Union (“EU”) has committed to cutting
its greenhouse gas emissions to 20% below 1990 levels and to raise the share of
total energy consumed from renewables to 20%.  As of 2012, 14% of energy
consumed in the EU was from renewable sources. The challenge of meeting 2020
targets varies significantly by country: for example in the United Kingdom, 4%
of total energy requirements were supplied by renewables in 2012 against a 2020
target of 15%, while in Germany renewables accounted for 12% of 2012
requirements against an 18% 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 EU
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 EU 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 which provide an additional source
of revenue above market prices. Germany offers a fixed Contract for Differences
payment to renewable sources.  Most support programs are funded by a levy on
retail electricity rates rather than a direct payment from the government.  In
addition, the EU’s CO2 emissions cap-and-trade program (EU ETS) enhances the
competitive position of renewables generators by increasing the operating costs
for fossil fueled generators. European power market fundamentals point to
firmer longer term pricing.  While demand growth is relatively modest in
Northwestern Europe, the outlook in in the Southern and Eastern regions is more
robust (greater than 1%).  Prices are also supported by large-scale power plant
retirements due to EU air emission regulations (LCPD, IED) and by accelerated
nuclear shutdowns in Germany and France. We believe that Europe offers a stable
platform for future expansion with strong policy resolve 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 While we do not currently operate renewable
power assets outside of Canada, the United States and Brazil, Brookfield has
investment platforms in Europe, South America and Australasia, regions which
also offer significant renewable power growth potential. In South 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 Page63


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 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 transaction
environment offers attractive acquisition 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 opportunities: ·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 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. We have been, and believe will continue to
be, a logical acquirer of, or partner in, such projects. Our focus on
acquisitions in this area also gives us a unique perspective on pursuing the
best development-stage opportunities through acquisitions or by building
projects in our own portfolio. ·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 over 25 development
projects in Brazil, Canada and the United States totaling an estimated 1,700 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 in each of
our focus markets as a developer of hydroelectric and wind capacity. We have acquired
and retained the development expertise and capability to advance our renewable
power projects from the development stage to commercial operation, and have
recently consolidated this expertise into a single, global development team. 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. As outlined in the graph below, 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. 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”. . Page64


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  . Counterparties to Brookfield Renewable’s
Power Contracts  
  As at December 31, 2013, Brookfield
Renewable had contracted 93% of 2014 generation at an average price of $82 per
MWh. As at December 31, 2013, over the next three
years Brookfield Renewable has on average approximately  4,005 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 most optimal pricing. The following table presents revenue,
Adjusted EBITDA and funds from operations on a segmented basis for the fiscal
years ended December 31, 2013, 2012, and 2011 by hydroelectric, wind and
other facilities. Hydroelectric and wind information is further segmented by
hydroelectric facilities located in the United States, Canada and Brazil.  Page65


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 Hydroelectric
 
 Wind
  energy
 Co-gen
 Other
 Total(MILLIONS)
 U.S.
 Canada
 Brazil
 U.S.
 CanadaFor the year ended  Dec 31, 2013:Revenues
 $
 677
 $
 399
 $
 301
 $
 125
 $
 133
 $
 71
 $
 -
 $
 1,706Adjusted EBITDA(1)
 
 494
 
 330
 
 221
 
 85
 
 113
 
 23
 
 (58)
 
 1,208Funds from operations(1)
 
 274
 
 266
 
 169
 
 21
 
 69
 
 23
 
 (228)
 
 594For the year ended  Dec 31, 2012:Revenues
 $
 438
 $
 272
 $
 340
 $
 58
 $
 131
 $
 70
 $
 -
 $
 1,309Adjusted EBITDA(1)
 
 294
 
 213
 
 236
 
 31
 
 113
 
 20
 
 (55)
 
 852Funds from operations(1)
 
 148
 
 148
 
 151
 
 2
 
 69
 
 20
 
 (191)
 
 347For the year ended  Dec 31, 2011:Revenues
 $
 467
 $
 237
 $
 335
 $
 -
 $
 70
 $
 60
 $
 -
 $
 1,169Adjusted EBITDA(1)
 
 336
 
 179
 
 269
 
 -
 
 58
 
 25
 
 (63)
 
 804Funds from operations(1)
 
 163
 
 116
 
 147
 
 -
 
 33
 
 25
 
 (152)
 
 332
 (1)Non-IFRS
measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures.” Our Adjusted EBITDA and funds from operations
in 2011 reflect 11 months of earnings from both the Fund and privately held
power assets of Brookfield, without the benefit of contracts in place in
Brookfield Renewable, plus one month of Brookfield Renewable’s results after
completion of the Combination on November 28, 2011. In 2011, our annual pro-forma Adjusted EBITDA
and funds from operations, assuming the combination was completed on
January 1, 2011 and generation was consistent with long-term averages would
have totaled approximately $986 million and $495 million, respectively. 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 measures presented
by other companies. For additional information, see Item 5.A “Operating
Results — Financial Review for the Years Ended December 31, 2013 and 2012”,
Item 5.A “Operating Results — Financial Review for the Years Ended
December 31, 2012 and 2011” and Item 5.A “Operating Results —
Reconciliation ofPro FormaResults.” Our portfolio benefits from significant
hydrology diversification, with assets distributed on  69 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 38% 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 by way of long-term PPAs with
creditworthy counterparties such as government-owned entities or power
authorities (including for example, the Ontario Power Authority, Ontario
Electricity Financial Corporation, Hydro-Québec, BC Hydro and the Long Island
Power Authority), load-serving utilities (such as Entergy Louisiana),
Brookfield and its subsidiaries, 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, there is 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 in respect to output purchased from Brookfield
Renewable (see Item 4.B “Business Overview — The Service Provider — Energy
Marketing”). Brazil.In the Brazilian electricity market,
energy is typically sold under long-term contracts either to regulated
load-serving distribution companies, or “free customers”, which are customers
with more than 0.5 MW of annual demand and who can choose their own electricity
supplier. Both types of customers are required to demonstrate that they have
contracts in place to meet all forecast demand annually. In the regulated
market, Brookfield has typically entered into 20-30 year PPAs with creditworthy
state-owned Page66


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 utilities. In the “free customer” market,
Brookfield has typically entered into three to eight year PPAs with large
industrial and commercial customers, generally engaged in producing essential
services or products such as the telephone, food and pharmaceutical industries.
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 7%
of the portfolio is scheduled to be re-contracted in 2014 and a further 34% is
scheduled to be re-contracted in 2015.  We believe that during this period the
Brazilian power market will experience strong load growth which, combined with
more expensive energy sources in the supply mix, will lead to attractive power
prices. Operating Philosophy We employ a hands-on, operations-oriented,
long-term owner’s approach in the management of our portfolio, which is
designed to ensure that we maintain and, where possible, enhance the value of
our assets while cultivating positive relationships with local stakeholders.
The operation of our generating facilities is largely decentralized through
three regional operating centers covering the United States, Canada and Brazil.
We supplement our regional operating platforms with a strong corporate team
that provides strategic direction, commercial and business development,
oversight of operations and establishes consistent policies in areas such as
compliance, information technology, health, safety and security, human
resources, stakeholder relations and procurement. In addition, we benefit from the expertise of
Brookfield, who provides strategic direction, corporate oversight, commercial
and business development, 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 operations philosophy
are: Strong regional operating platforms.In each of our core
markets, we have built strong regional platforms with full construction
oversight and operational and development capabilities. Each of our regional
platforms has 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. This capability allows us to benefit
from economies of scale by leveraging our operating platform when growing our
business. 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 offsetting the
costs of inflation annually. In addition, the scalability of our platforms
allow us to grow the portfolio with little incremental fixed costs 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
us to be paid 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. A detailed plan
is prepared for each asset by our teams working together with independent
engineering firms, recognized as industry leaders in hydroelectric and wind
energy production and maintenance. We develop and implement our plans by taking
a long-term owner’s perspective and 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 dramatically
over the past century. 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 Page67


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 written 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 the Chief
Executive Officer, President and the Chief Operating Officers of the regional
operations, and require all employees, contractors, agents and others involved
in our operations to comply with our established HSS&E practices. Positive local stakeholder relationships.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. 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. 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
benefit from a proactive and focused business development strategy in each of
our markets and 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 grow our business by pursuing organic
development growth, either by building projects from our approximate 1,700 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 regional 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 United States, Canada and Brazil, where our existing renewable power
operating platforms allow us to efficiently integrate operating or
development-stage renewable power assets and capture economies of scale. Within
each of these countries, 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 operations and growth objectives are focused on the
southern and mid west portion of the country where over 80% of the population
and economic activity is located. 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 operating platforms that we can
grow over time by investing capital at attractive risk-adjusted returns. We
believe current market conditions in Europe offer a particularly unique
opportunity to build a continental operating platform by acquiring renewable
power assets and businesses for value.  We benefit from our Service Provider’s
investment teams in Europe and Australia, that together with our capabilities
in our core markets, give us the ability to transact on a global basis. Page68


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 ·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. 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 also be an
attractive source of baseload renewable power. 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. See Item 5.A “Operating Results — Summary of
Historical Quarterly Results on a Consolidated Basis” for the quarterly
distributions made by BREP subsequent to the Combination. In 2011, the Fund paid
distributions of C$0.975 only in respect of the first three quarters as the
Fund was wound up on November 28, 2011. In December 2011, BREP declared its first
cash distribution of $0.3375 ($1.35 annually) per LP Unit for the fourth
quarter of 2011. The distribution was paid on January 31, 2012 to LP
Unitholders of record on December 31, 2011. BREP increased its regular
quarterly distribution to $0.345 ($1.38 annually) per LP Unit commencing with
the declaration of the first quarter distribution for fiscal 2012. The fourth
quarter distribution was paid on January 31, 2013 to LP Unitholders of record
on December 31, 2012. BREP also declared first quarter distributions for fiscal
2013 in the amount of $0.3625 ($1.45 annually) per LP Unit with the first
increased distribution paid on April 30, 2013.  On February 6, 2014, we
announced an increase of our distributions to our LP Unitholders from $1.45 per
annum to $1.55.  We intend to continue to operate as a growth-oriented entity
with a focus on increasing the amount of cash available for distributions on
each LP Unit. On November 5, 2013, BREP announced a change
to the record dates and payment dates of its quarterly distributions. 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 business day of December, March, June and September of
each year, to LP Unitholders of record on the last day of November, February,
May and August, respectively.  Further, on February 6, 2014, BREP announced
that 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.The amount of any
distribution payable by us is always at the discretion of the board of
directors of the Managing General Partner and 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.
Historically, funds from operations was not Page69


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 used as a
key financial measure for the Fund. However, prior to the Combination the
Fund’s target payout ratio was approximately 80% of distributable cash (funds
from operations less levelized capital expenditures and debt amortization).
This is substantially equivalent to a 60% to 70% target payout ratio based on
funds from operations, which would approximate 80% of distributable cash, as
defined above. We are pursuing a long-term distribution
growth rate target in the range of 3% to 5% annually. The 3% to 5% annual
growth rate target for distributions compares to a historical annualized
distribution growth rate of the Fund of 2.2% per LP Unit from inception in 1999
up to the date of the Combination. The increase from the historical growth rate
of the Fund to the current target of 3% to 5% for BREP reflects the expected
benefits of the Combination, including 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 our 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 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 Page70


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 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 2011, 2012 and 2013. 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 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, and a total dividend of C$1.1625 per share
was paid in 2013. 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. 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. The Service Provider Brookfield Asset Management Brookfield Asset Management is a global
alternative asset manager with more than $175 billion in assets under
management. It has over a 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 Page71


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 distinct
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. Brookfield was the manager and administrator
of the Fund since its inception in 1999 and we continue to benefit from its
global asset management platform and depth of experience in creating LP
Unitholder value. In addition, Brookfield Renewable continues to benefit from
the same management team at Brookfield who created and drove the success of the
Fund. 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
operating platforms in three key areas: ·Executive
oversight of our business:The Service Provider provides leadership to
our operating 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 the preparation of our tax planning and filing of tax returns. Energy Marketing Pursuant to a number of agreements, BEM LP is
responsible for selling and dispatching all energy and energy related products
generated by our assets in Canada and the United States. 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. With approximately 114 employees and 24
hours/day, 365 days/year operations, BEM LP performs transaction execution,
risk management, settlement, information technology, regulatory, legal and
human resource functions. These groups provide valuable market intelligence
regarding pricing dynamics, regulatory regimes and market participants, which
serve to support Brookfield Renewable’s strategy. In 2013, BEM LP was
responsible for the sale and dispatch of over 18,000 GWh of generation in
Canada and the United States. BEM LP and CanHoldco entered into the Energy
Marketing Agreement pursuant to which BEM LP provides energy marketing services
to CanHoldco. See Item 7.B “Related Party Transactions — Energy Marketing
Agreement”. Competition and
Marketing We operate in the North American and
Brazilian power market sectors. 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 operating platforms described in
Item 4.B “Business Overview — Operating Philosophy”. Page72


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 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 Brookfield Renewable does not currently have
any senior executives who carry out management, oversight and other strategic
activities. The personnel that carry out these activities are employees of
Brookfield, and their services are provided to Brookfield Renewable or for our
benefit under our 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 in the United States and Canada. 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. We review each of these claims, 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 claim, we do not believe that the outcome of any claims or potential
claims 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 to the land and 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 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.  Page73


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 Environmental
Protection 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 and “GP
Interest” denotes a general partnership interest and “LP Interest” denotes a
limited partnership interest. Our sole material asset is a 50.1% LP Interest in
BRELP. Brookfield indirectly holds the remaining 48.9% LP Interest in BRELP, a
30.1% LP Interest in BREP and a 0.01% and 1% GP Interest in BREP and BRELP,
respectively, for an aggregate 65% indirect ownership interest in BREP (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”. Page74


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  (1)Pursuant
to a voting agreement, Brookfield has agreed that certain voting rights with
respect to BRELP General Partner, BRELP GP LP, and BRELP will be voted in
accordance with the direction of BREP. (2)Brookfield’s
limited partnership interest in BRELP is redeemable for cash or exchangeable
for LP Units in accordance with the redemption-exchange mechanism contained in
BRELP’s limited partnership agreement, which could result in BRPI eventually
owning 65% of BREP's issued and outstanding LP Units on a fully-exchanged
basis. On a fully-exchanged basis, public holders of LP Units will own
approximately 35% of BREP and Brookfield will not hold any limited partnership
units of BRELP. (3)Brookfield
has provided an aggregate of $5 million of working capital to Bermuda Holdco
through a subscription for shares. In addition, BRPI holds special shares the
redemption price of which is tied to the successful development of projects in
Brazil. (4)Some
of our subsidiaries and operators are owned jointly with some of our partners. (5)Guarantors
of Finco Bonds. (6)Guarantors
of BRP Equity Class A Preferred Shares. Page75


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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
+1.441.295.1443. BREP’s sole material asset is a 50.1% 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 CanHoldco,
Bermuda Holdco and 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 Bermuda Holdco through a subscription for shares of Bermuda
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 Bermuda Holdco and will be redeemable at the option of Bermuda
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”. Page76


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Table of Contents
 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 operations of its own. BRP Equity has C$250 million of
Class A Preference Shares, Series 1 (the “Series 1 Shares”)
outstanding, guaranteed by BREP, BRELP, CanHoldco and Bermuda Holdco
(collectively, the “Guarantors”). The Series 1 Shares are listed on the
TSX under the symbol “BRF.PR.A”. BRP Equity also has C$250 million of Class A
Preference Shares, Series 3 (the “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 also has C$175 million of Class A Preference
Shares, Series 5 (the “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 also has C$175 million of Class A Preference
Shares, Series 6 (the “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 BREP and 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. Page77


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Table of Contents
  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%Bear Swamp Power Company LLC
 
 Delaware
 
 50.0%Brookfield BRP Holdings (Canada) Inc.
 
 Ontario
 
 100.0%Brookfield Energia Comercializadora Ltda
 
 Brazil
 
 100.0%Brookfield Energia Renovável S.A.
 
 Brazil
 
 100.0%Brookfield Power US Holding America Co.
 
 Delaware
 
 100.0%Brookfield Power Wind Prince LP
 
 Ontario
 
 100.0%Brookfield Renewable Energy L.P.
 
 Bermuda
 
 100.0%Brookfield Renewable Energy Partners ULC
 
 Alberta
 
 100.0%Brookfield Renewable Power Preferred Equity
  Inc.
 
 Canada
 
 100.0%Brookfield Smoky Mountain Hydropower LLC
 
 Delaware
 
 100.0% (1)Brookfield White Pine Hydro LLC
 
 Delaware
 
 100.0% (1)BRP Bermuda Holdings I Limited
 
 Bermuda
 
 100.0%Brookfield BRP Canada Corp.
 
 Alberta
 
 100.0%Catalyst Old River Hydroelectric L.P.
 
 Louisiana
 
 75.0% (2)Comber Wind Limited Partnership
 
 Ontario
 
 100.0%Coram California Development L.P.
 
 Delaware
 
 100.0% (1)Erie Boulevard Hydropower L.P.
 
 Delaware
 
 100.0%Gosfield Wind Limited Partnership
 
 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 Energetica S.A.
 
 Brazil
 
 100.0%Kwagis Power Limited
  Partnership
 
 British Columbia
 
 75.0%Lake Superior Power Limited Partnership
 
 Ontario
 
 100.0%Lièvre Power LP
 
 Québec
 
 100.0%Mississagi Power Trust
 
 Québec
 
 100.0%Powell River Energy Inc.
 
 Canada
 
 100.0%Rumford Falls Hydro LLC
 
 Delaware
 
 100.0%Western Wind Energy Corp.
 
 British Columbia
 
 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. Page78


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Table of Contents
 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 50.1% 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. The Combination The Combination does not represent a business combination in
accordance with IFRS 3 Business Combinations (“IFRS 3R”) as it represents a
reorganization of entities under common control of Brookfield Asset Management.
Accordingly, the consolidated financial statements of Brookfield Renewable are
presented to reflect such continuing control and no adjustments were made to
reflect fair values or to recognize any new assets or liabilities, as a result
of the Combination. Brookfield Renewable’s consolidated balance sheets,
statements of income (loss), and statements of cash flows are presented as if
these arrangements had been in place from the time that the operations were
originally acquired by Brookfield Asset Management. For periods prior to
November 28, 2011, the financial information for Brookfield Renewable
represents the combined financial information for the Brookfield Renewable
Power Division, a division of Brookfield Asset Management. Transactions entered
into as part of the Combination are accounted for effective November 28,
2011. Voting Agreements with Affiliates Effective December 2011, Brookfield Renewable entered into voting
arrangements with various affiliates of Brookfield Asset Management, whereby
Brookfield Renewable gained control of the entities that own certain United
States and Brazil renewable power generating operations (the “Voting
Arrangements”). The Voting Arrangements provide Brookfield Renewable with all
of the voting rights to elect the boards of directors of the relevant entities
and therefore provides Brookfield Renewable with control. Accordingly,
Brookfield Renewable consolidates the accounts of these entities. The Combination and the Voting Arrangements do not represent
business combinations in accordance with IFRS 3R, as all combining businesses
are ultimately controlled by Brookfield Asset Management both before and after
the transactions were completed. Brookfield Renewable accounts for these
reorganizations of entities under common control in a manner similar to a
pooling of interest, which requires the presentation of pre-Combination and
Voting Arrangement financial information as if the transactions had always been
in place. Refer to Note 2(o)(ii)—Common
control transactionsin our audited consolidated financial statements for our policy on
accounting for transactions under common control. Page79


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Table of Contents
 PRESENTATION TO PUBLIC STAKEHOLDERS Brookfield Renewable’s consolidated
equity interests include LP Units held by public unitholders and
Redeemable/Exchangeable partnership units in BRELP, a holding subsidiary of
Brookfield Renewable, held by Brookfield (“Participating non-controlling
interests – in a holding subsidiary – Redeemable/Exchangeable units held by
Brookfield”). 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 the LP Units and the
Redeemable/Exchangeable partnership units as separate components of consolidated
equity. This presentation does not impact the total income (loss), per unit or
share information, or total consolidated equity. As at the date of this report, Brookfield Asset Management owns an
approximate 65% limited partnership interest, on a fully-exchanged basis, and
all general partnership units totaling a 0.01% general partnership interest in
Brookfield Renewable, while the remaining 35% 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 GP Unitholders. In addition, our operations are segmented by country
geography and asset type (i.e. Hydroelectric and Wind), as that is how we
review our results, manage operations and allocate resources. Accordingly, we
report our results in accordance with these segments. 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, ii) Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization, iii) Funds From Operations,  and iv) Adjusted Funds from
Operations. We also present these same measurements for our 2011 results on apro
formabasis (since Brookfield Renewable was only formed in November 2011)
as if new contracts and contract amendments, along with the tax implications of
the Combination, had each occurred as of January 1, 2011. 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 for the Years Ended December
31, 2013 and 2012”, “Financial Review for the Years Ended December 31, 2012 and
2011”, and “Reconciliation ofPro FormaResults”. Page80


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Table of Contents
 GENERATION FOR THE YEARS
ENDED DECEMBER 31, 2013 AND 2012 The following tables reflect the actual and LTA
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. 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 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. Accordingly, we present our generation and the
corresponding Adjusted EBITDA and funds from operations on both an actual
generation and a long-term average basis. See “Adjusted EBITDA and Funds from
Operations on aPro formaBasis Assuming Long-term Average”. 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
the first quarter of 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. Page81


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Table of Contents
 FINANCIAL REVIEW FOR THE
YEARS ENDED DECEMBER 31, 2013 AND 2012 The following table reflects Adjusted EBITDA,
funds from operations, adjusted funds from operations, and reconciliation to
net income (loss) and cash flows from operating activities 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: sustaining capital expenditures(2)
 
 (56)
 
 (52)Adjusted funds from operations(1)
 
 538
 
 295Add: cash portion of non-controlling
  interests
 
 144
 
 44Add: 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)Adjustments for non-cash items
 
 514
 
 503Dividends received from equity accounted
  investments
 
 16
 
 12Net change in working capital balances
 
 1
 
 (22)Cash flows from operating activities
 
 746
 
 398Net income (loss) attributable to:Preferred equity
 $
 37
 $
 16Participating non-controlling interests -
  in operating subsidiaries
 
 41
 
 (40)General partnership interest in a holding
  subsidiary held by Brookfield
 
 1
 
 (1)Participating non-controlling interests -
  in a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 
 67
 
 (35)Limited partners' equity
 
 69
 
 (35)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”. (2)Based
on long-term 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). Page82


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Table of Contents
 Net income (loss) is one
important measure of profitability, in particular because it has a standardized
meaning under IFRS. The presentation of net income (loss) on an IFRS basis for
our business will often lead to the recognition of a loss even though the
underlying cash flow generated by the assets is supported by high 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 cash flow generated by our assets and the residual cash flow
retained to fund distributions and growth initiatives. 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. Management service costs reflect a Base Management Fee of $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 attributableto 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). Page83


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Table of Contents
 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
 $
 1,377Other income
 
 -
 
 -
 
 11
 
 11Share of cash earnings from equity-accounted investments
 
 13
 
 4
 
 4
 
 21Direct operating costs
 
 (196)
 
 (73)
 
 (95)
 
 (364)Adjusted EBITDA(3)
 
 494
 
 330
 
 221
 
 1,045Interest expense - borrowings
 
 (148)
 
 (64)
 
 (23)
 
 (235)Current income taxes
 
 (3)
 
 -
 
 (17)
 
 (20)Cash portion of non-controlling interests
 
 (69)
 
 -
 
 (12)
 
 (81)Funds 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
 $
 1,050Other income
 
 1
 
 4
 
 11
 
 16Share of cash earnings from equity-accounted investments
 
 6
 
 2
 
 5
 
 13Direct operating costs
 
 (151)
 
 (65)
 
 (120)
 
 (336)Adjusted EBITDA(3)
 
 294
 
 213
 
 236
 
 743Interest expense - borrowings
 
 (137)
 
 (65)
 
 (58)
 
 (260)Current income taxes
 
 2
 
 -
 
 (16)
 
 (14)Cash portion of non-controlling interests
 
 (11)
 
 -
 
 (11)
 
 (22)Funds 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”. 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 in New York State and in the mid-western United
States resulted in generation levels below long-term average. Page84


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Table of Contents
 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. 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 reference amount of electricity
(assured energy), irrespective of the actual volume of energy generated. The
program reallocates energy, transferring surplus energy from those who
generated in excess of their assured energy to those who generate less than
their assured energy, up to the total generation within the pool. 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. Page85


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Table of Contents
 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
 $
 258Direct operating costs
 
 (40)
 
 (20)
 
 (60)Adjusted EBITDA(3)
 
 85
 
 113
 
 198Interest expense - borrowings
 
 (38)
 
 (44)
 
 (82)Cash portion of non-controlling interests
 
 (26)
 
 -
 
 (26)Funds 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
 $
 189Direct operating costs
 
 (27)
 
 (18)
 
 (45)Adjusted EBITDA(3)
 
 31
 
 113
 
 144Interest expense - borrowings
 
 (23)
 
 (44)
 
 (67)Cash portion of non-controlling interests
 
 (6)
 
 -
 
 (6)Funds 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”. 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 the first quarter of 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, virtually 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. Page86


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Table of Contents
 GENERATION FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 The following tables reflect the actual and LTA generation for the
year ended December 31: Variance of ResultsActual vs.Actual Generation(1)
 LTA Generation(1)
 Actual vs. LTA
 Prior Year(GWh)
 2012
 2011
 2012
 2011
 2012
 2011Hydroelectric generationUnited States
 5,913
 7,150
 7,205
 6,811
 (1,292)
 339
 (1,237)Canada
 3,953
 4,056
 4,972
 5,061
 (1,019)
 (1,005)
 (103)Brazil(2)
 3,470
 3,307
 3,470
 3,307
 -
 -
 16313,336
 14,513
 15,647
 15,179
 (2,311)
 (666)
 (1,177)Wind energyUnited States
 619
 -
 837
 -
 (218)
 -
 619Canada
 1,090
 662
 1,197
 712
 (107)
 (50)
 4281,709
 662
 2,034
 712
 (325)
 (50)
 1,047Other
 897
 702
 521
 406
 376
 296
 195Total generation(3)
 15,942
 15,877
 18,202
 16,297
 (2,260)
 (420)
 65
 (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, 2012 totaled 15,942 GWh, an increase
of 65 GWh as compared to the same period of the prior year. Lower generation in
our North American hydroelectric portfolio was offset by an increase in
generation from our wind assets acquired or commissioned in the last 18 months,
and higher than planned generation from our co-generation facilities. Generation from our hydroelectric portfolio totaled 13,336 GWh, a
decrease of 1,177 GWh, as a result of lower levels of precipitation and warmer
than average temperatures in the northeastern United States and mid-western
United States. The variance in our year-over-year results also reflects the
above average precipitation and record rainfall levels in 2011 resulting from
Hurricane Irene. Generation from our hydroelectric portfolio in Brazil was
positively impacted by the full year’s contribution of a facility acquired in
mid-2011. Generation from our wind portfolio totaled 1,709 GWh, an increase
of 1,047 GWh, as a result of the contributions from facilities acquired or
commissioned in California and New England in early 2012, and the full year’s
contribution from an Eastern Canada facility commissioned in 2011.Results were below long-term
average as a result of lower wind conditions across the portfolio. Page87


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Table of Contents
 FINANCIAL REVIEW FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 The following table reflects Adjusted EBITDA,
funds from operations, adjusted funds from operations, and reconciliation to
net income (loss) and cash flows from operating activities for the year ended
December 31: (MILLIONS, EXCEPT AS NOTED)
 
 2012
 
 2011(1)Revenues
 $
 1,309
 $
 1,169Other income
 
 16
 
 19Share of cash earnings from equity-accounted
  investments
 
 13
 
 23Direct operating costs
 
 (486)
 
 (407)Adjusted EBITDA(2)
 
 852
 
 804Interest expense – borrowings
 
 (411)
 
 (411)Management service costs
 
 (36)
 
 (1)Current income taxes
 
 (14)
 
 (8)Less: cash portion of non-controlling
  interestsPreferred equity
 
 (16)
 
 (13)Participating non-controlling interests -
  in operating subsidiaries
 
 (28)
 
 (39)Funds from operations(2)
 
 347
 
 332Less: sustaining capital expenditures(3)
 
 (52)
 
 (48)Adjusted funds from operations(2)
 
 295
 
 284Add: cash portion of non-controlling
  interests
 
 44
 
 52Add: sustaining capital expenditures
 
 52
 
 48Other items:Depreciation(4)
 
 (483)
 
 (468)Unrealized financial instrument gain (loss)
 
 (23)
 
 (20)Loss on Fund unit liability
 
 -
 
 (376)Share of non-cash loss from
  equity-accounted investments
 
 (18)
 
 (13)Deferred income tax (expense) recovery
 
 54
 
 50Other
 
 (16)
 
 (8)Net income (loss)
 $
 (95)
 $
 (451)Adjustments for non-cash items
 
 503
 
 804Dividends received from equity accounted
  investments
 
 12
 
 8Net change in working capital balances
 
 (22)
 
 (12)Cash flows from operating activities
 
 398
 
 349Net income (loss) attributable to:Preferred equity
 $
 16
 $
 13Participating non-controlling interests -
  in operating subsidiaries
 
 (40)
 
 11General partnership interest in a holding
  subsidiary held by Brookfield
 
 (1)
 
 (5)Participating non-controlling interests -
  in a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 
 (35)
 
 (232)Limited partners' equity
 
 (35)
 
 (238)Basic and diluted earnings (loss) per LP
  Unit(5)
 $
 (0.26)
 $
 (1.79)
 (1)For
periods prior to November 28, 2011, the financial information for
Brookfield Renewable represents the combined financial information for the
Brookfield Renewable Power Division, a division of Brookfield Asset Management.
Transactions entered into as part of the Combination are accounted for
effective November 28, 2011. (2)Non-IFRS
measures.  See “Cautionary Statement Regarding Use of Non-IFRS Measures”. (3)Based
on long-term capital expenditure plans. (4)See
Note 2(f) - Change in accounting estimates in our audited consolidated
financial statements concerning changes in estimates related to depreciation
expense. (5)Average
LP Units outstanding during the period totaled132.9 million (2011:
132.8 million). Page88


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Table of Contents
 Revenues
totaled $1,309 million for the year ended December 31, 2012, representing a
year-over-year increase of $140 million. Approximately $126 million of the
increase in revenues is attributable to generation from facilities acquired or
commissioned in 2012 as well as a full year’s contribution from facilities
acquired or commissioned during 2011. A further $132 million of the increase is
primarily attributable to the amended PPA entered into at the time of the
Combination. Offsetting the increase was $121 million resulting from
reduced generation levels at existing facilities and the appreciation of the
U.S. dollar relative to the Brazilian real. Direct operating costs totaled $486 million for the year ended
December 31, 2012, representing a year-over-year increase of $79 million.New facilitiesacquired or commissionedin the last 18 months
added $38 million to operating costs, consistent with our underwriting
assumptions. Energy marketing costs not included in the prior year’s combined
statements added $18 million, and fuel purchases in excess of the prior year
associated with our co-generation facility in Ontario accounted for $4 million
as we took advantage of lower gas prices during the year. Lastly, lower
allocated energy volumes in Brazil which allow us to purchase power at cost and
re-sell at our contracted rates added $16 million to costs. The added revenues
are included in revenues above. Adjusted EBITDA totaled $852 million for the year ended December
31, 2012, representing a year-over-year increase of $48 million. Adjusted
EBITDA was impacted by increase in revenues partially offset by increase in
direct operating costs. Interest expense totaled $411 million for theyear
ended December 31, 2012,which was consistent with the prior year.  Interest expense
on borrowings reflects the cost related to approximately$4.4billion
of non-recourse asset-specific borrowings and$1.8billion
of corporate borrowings and credit facilities. During the year, we proactively
took advantage of the low interest rate environment to reduce our cost of
capital and increase the duration of borrowings.  We issuedC$400 million of 10-year term corporate notes and successfully financed
subsidiary borrowings related to the growth in our portfolio during the year as
well as construction of new assets. As a result, borrowing costs on our
portfolio decreased on an annualized basis by approximately $30 million. Management service costs, which came into effect as part of the
Combination in 2011, reflect a Base Management Fee of $20 million annually plus
1.25% of the growth in total capitalization value. Our total capitalization
value increased from initial value of $8.1 billion to $10.1 billion as at year
ended December 31, 2012. The growth in total capitalization value during 2012
is primarily due to the increase in fair market value of LP Units, and the
issuance of corporate debt and preferred equity, on an accretive basis. Funds from operations totaled $347 million for the year ended
December 31, 2012, an increase of $15 million year-over-year. Funds from
operations were impacted by the increase in Adjusted EBITDA net of
non-controlling interests and the increase in management service costs. Throughout the year, analyses were performed on the useful lives
of certain components of property, plant and equipment and we have determined
that changes in their estimated service lives will more accurately reflect the
period over which they provide economic benefits. Brookfield Renewable applied
these changes in accounting estimates on a prospective basis effective January
1, 2012 or April 1, 2012 or July 1, 2012 based on timing of completion of the
review. Depreciation expense for the year ended December 31, 2012 was $112
million lower as a result of the changes in estimates. Assetsacquired
or commissionedwithin the past 12 months increased
depreciation expense by $86 million. 2011 results also included a revaluation amount on the Fund unit
liability. In accordance with IFRS, Fund units held by the public, which have a
feature that allows the holder to redeem the units for cash, were presented as
a liability and recorded at fair value, with the change in fair value recorded
in net income. For the year ended December 31, 2011, the Fund unit price
appreciated significantly resulting in a revaluation amount of $376 million. As
a result of the Combination, the Fund units were exchanged for LP Units and the
Fund was dissolved. Thus, for the year ended December 31, 2012, there was no
impact from the valuation on the Fund unit liability. The net loss was $95 million for the year ended December 31, 2012
(2011: $451 million). The net loss reflects the normal course depreciation of
$483 million (2011: $468 million). Page89


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 SEGMENTED DISCLOSURES HYDROELECTRIC The following table reflects the results of
our hydroelectric operations for the year ended December 31: (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
 $
 1,050Other income
 
 1
 
 4
 
 11
 
 16Share of cash earnings from equity-
 
 6
 
 2
 
 5
 
 13accounted investmentsDirect operating costs
 
 (151)
 
 (65)
 
 (120)
 
 (336)Adjusted EBITDA(3)
 
 294
 
 213
 
 236
 
 743Interest expense - borrowings
 
 (137)
 
 (65)
 
 (58)
 
 (260)Current income taxes
 
 2
 
 -
 
 (16)
 
 (14)Cash portion of non-controlling interests
 
 (11)
 
 -
 
 (11)
 
 (22)Funds from operations(3)
 $
 148
 $
 148
 $
 151
 $
 447(MILLIONS, EXCEPT AS NOTED)
 2011United
  States
 Canada
 Brazil
 TotalGeneration (GWh) – LTA(1)(2)
 
 6,811
 
 5,061
 
 3,307
 
 15,179Generation (GWh) – actual(1)(2)
 
 7,150
 
 4,056
 
 3,307
 
 14,513Revenues
 $
 467
 $
 237
 $
 335
 $
 1,039Other income
 
 -
 
 -
 
 19
 
 19Share of cash earnings from equity-
 
 13
 
 4
 
 6
 
 23accounted investmentsDirect operating costs
 
 (144)
 
 (62)
 
 (91)
 
 (297)Adjusted EBITDA(3)
 
 336
 
 179
 
 269
 
 784Interest expense - borrowings
 
 (149)
 
 (68)
 
 (94)
 
 (311)Current income taxes
 
 2
 
 5
 
 (15)
 
 (8)Cash portion of non-controlling interests
 
 (26)
 
 -
 
 (13)
 
 (39)Funds from operations(3)
 $
 163
 $
 116
 $
 147
 $
 426
 (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”. United States Generation from the portfolio was 5,913 GWh for the year ended
December 31, 2012 compared to the long-term average of 7,205 GWh and compared
to the prior year generation of 7,150 GWh. The decrease is attributable to
lower inflows and generation given the warmer temperatures and below average
rainfall in New York State and in the mid-western United States.  The variance
in our year-over-year results also reflects the above average precipitation and
record rainfall levels in 2011, with Hurricane Irene impacting the mid-western
and eastern United States. Revenues totaled $438 million for the year ended December 31, 2012
representing a year-over-year decrease of $29 million. The decrease in
generation affected assets in regions where PPA prices Page90


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Table of Contents
 are
higher than our average, which had a disproportionate impact on our financial
results.  The amended PPAs, executed on the date of the Combination partly
offset the impact of lower generation. Funds from operations totaled $148 million for the year ended
December 31, 2012, representing a year-over-year decrease of $15 million. Funds
from operations were impacted by the decrease in Adjusted EBITDA net of
non-controlling interest and lower interest expense from refinancing of certain
borrowings. Canada Generation
from the portfolio was 3,953 GWh for the year ended December 31, 2012 compared
to the long-term average of 4,972 GWh and compared to the prior year generation
of 4,056 GWh. The decrease in generation is primarily attributable to lower
inflows resulting from drier than usual conditions in Ontario and Québec. Revenues totaled $272 million for the year ended December 31,
2012, representing a year-over-year increase of $35 million. Although
generation had decreased in the period, the amended PPAs, executed on the date
of the Combination more than offset the impact of lower generation. Funds from operations totaled $148 million for the year ended
December 31, 2012, representing a year-over-year increase of $32 million. Funds
from operations were impacted by the increase in revenues. Brazil Generation
from the portfolio was 3,470 GWh for the year ended December 31, 2012 compared
to the prior year generation of 3,307 GWh. Generation was positively impacted
by the addition of three hydroelectric facilities acquired or commissioned
during the last 18 months. Revenues totaled $340 million for the year ended December 31,
2012, representing a year-over-year increase of $5 million. The increase in
revenues is primarily attributable to generation from the new facilities
acquired or commissioned in the last 18 months. Funds from operations totaled $151 million for the year ended
December 31, 2012 representing a year-over-year increase of $4 million. Page91


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 WIND The following table reflects the results of
our wind operations for the year ended December 31: Total
 
 Total(MILLIONS, EXCEPT FOR AS NOTED)
 United
  States
 Canada
 2012
 2011(1)Generation (GWh) – LTA(2)(3)
 
 837
 
 1,197
 
 2,034
 
 712Generation (GWh) – actual(2)(3)
 
 619
 
 1,090
 
 1,709
 
 662Revenues
 $
 58
 $
 131
 $
 189
 $
 70Direct operating costs
 
 (27)
 
 (18)
 
 (45)
 
 (12)Adjusted EBITDA(4)
 
 31
 
 113
 
 144
 
 58Interest expense - borrowings
 
 (23)
 
 (44)
 
 (67)
 
 (25)Cash portion of non-controlling interests
 
 (6)
 
 -
 
 (6)
 
 -Funds from operations(4)
 $
 2
 $
 69
 $
 71
 $
 33
 (1)Results
for 2011 are entirely from Canadian assets. (2)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (3)Includes
100% generation from equity-accounted investments. (4)Non-IFRS
measures. See“Cautionary
Statement Regarding Use of Non-IFRS Measures”. United States Generation from the portfolio was 619 GWh for the year ended
December 31, 2012 compared to the long-term average of 837 GWh. In 2011, we
held no U.S. operating wind assets in our portfolio. In the first quarter of
2012, we acquired or commissioned four facilities in California and the
northeastern United States. Results were below long-term average as a result of
lower wind conditions. Funds from operations totaled $2 million for the year ended
December 31, 2012. Funds from operations were impacted by the shortfall in
revenues resulting from lower generation. Canada Generation from the portfolio was 1,090 GWh for the year ended
December 31, 2012 compared to the long-term average of 1,197 GWh and to the
prior year generation of 662 GWh. The increase in generation from prior year of
396 GWh is primarily attributable to the full year’s contribution from our
Ontario facility commissioned in the fourth quarter of 2011.  Results were
below long-term average for the year due to lower wind conditions. Revenues totaled $131 million for the year ended December 31,
2012, representing a year-over-year increase of $61 million. Approximately $66
million of the increase is attributable to generation from the eastern Canadian
facility commissioned in the fourth quarter of 2011. Funds from operations totaled $69 million for the year ended
December 31, 2012, representing a year-over-year increase of $36 million. The
increase is attributable to the growth of the portfolio. Page92


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 Analysis Of Consolidated Financial Statements and Other
Information Revaluation
of 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.  As a result, certain 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-termPPAsthat are in place where it is determined that thePPAsare 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. Brookfield Renewable elected to change its accounting
policy for the revaluation of property, plant and equipment to include
development assets effective December 31, 2011. We record development assets at
an estimate of fair value based on the value expected on completion, less the
costs remaining to complete the project. Property, plant and equipment, at fair value totaled $15.7 billion
as at December 31, 2013. During the year, 596 MW of hydroelectric and wind
facilities wereacquired or commissionedinto our operating results. These acquisitions and the
development and construction of renewable power generating assets totaled $1.6
billion. The revaluation of property, plant and equipment is also impacted each
year by fluctuations in foreign exchange and market interest rates.
Consequently, the appreciation of the U. S. dollar compared to the Canadian
dollar and Brazilian real decreased fair value by $789 million. In addition, an
increase in the market interest rates during the year resulted in higher
discount rates that were applied in our valuation methodology. This resulted in
a decrease in fair value of $217 million.  Finally, we also recognized
depreciation expense of $535 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.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)
 
 2013
 
 201250 bps increase in discount rates
 $
 (1.1)
 $
 (1.2)50 bps decrease in discount rates
 
 1.3
 
 1.450 bps increase in terminal capitalization rate(1)
 
 (0.3)
 
 (0.4)50 bps decrease in terminal capitalization
  rate(1)
 
 0.3
 
 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,
2013, is 16 years (2012: 17 years). Consequently, there is no terminal value
attributed to the hydroelectric assets in Brazil. Ifan 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
consolidated financial statements. Page93


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Table of Contents
 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, 2013,long-term indebtedness increasedfromDecember 31,2012as a result of the portfolio growth.The debt to capitalization ratio increased
to 41% from 38% at December 31, 2012 primarily due to the increase in
subsidiary borrowings to fund the portfolio growth. Capitalization The
following table summarizes the capitalization using book values as at December
31: (MILLIONS)
 
 2013
 
 2012Credit facilities(1)
 $
 311
 $
 268Corporate borrowings(1)
 
 1,406
 
 1,504Subsidiary borrowings(2)
 
 4,906
 
 4,347Long-term indebtedness
 
 6,623
 
 6,119Deferred income tax liabilities, net of
  deferred income tax assets
 
 2,148
 
 2,268Equity
 
 7,536
 
 7,808Total capitalization
 $
 16,307
 $
 16,195Debt to total capitalization
 
 41%
 
 38%
 (1)Issued
by a subsidiary of Brookfield Renewable and guaranteed by Brookfield Renewable.
The amounts are unsecured. (2)Issued
by a subsidiary of Brookfield Renewable and secured against its assets. The
amounts are not guaranteed. During 2013 we
completed a number of financings associated with the growth in our portfolio. 
Highlights include the following: ·Purchased
88% of the $575 million in operating company notes and 100% of the $125 million
in holding notes outstanding with respect to the acquired hydroelectric
portfolio in Northeastern United States. The purchase of the tendered notes was
partially funded through a non-recourse, 24-month bridge loan of up to $350
million. ·Refinanced
indebtedness on a 166 MW Ontario wind facility and a 51 MW Ontario wind
facility resulting in C$170 million of incremental long term borrowings. ·Issued Series
5 Shares and Series 6 Shares with a fixed, annual yield of 5% resulting in C$350
million in proceeds. ·With
the acquisition ofWestern Wind,subsidiary borrowings increased by $250
million. Page94


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Table of Contents
 Available liquidity We
operate with substantial liquidity, which along with ongoing cash flow from
operations enables us to fund growth initiatives, capital expenditures,
distributions, and to finance the business on an investment grade basis. The
following table summarizes the available liquidity as at December 31: (MILLIONS)
 2013
 2012Cash and cash equivalents
 $
 203
 $
 137Credit facilitiesAuthorized credit facilities
 
 1,480
 
 990Draws on credit facilities
 
 (311)
 
 (268)Issued letters of credit
 
 (212)
 
 (182)Available portion of credit facilities
 
 957
 
 540Available liquidity
 $
 1,160
 $
 677
 Available liquidity is comprised
of cash and the unused portion of credit facilities. As at December 31, 2013,
we had $1,160 million of available liquidity (2012: $677 million) which
provides the flexibility to fund ongoing portfolio growth initiatives and to
protect against short-term fluctuations in generation. During the year ended December 31, 2013, we expanded
our revolving credit facilities from $990 million to $1,280 million and
extended the maturity date to October 31, 2017.Brookfield Asset
Management provided a $200 million committed unsecured revolving credit
facility maturing in December 2014, at LIBOR plus 2%. Long-term
debt and credit facilities The following table
summarizes our principal repayments and maturities as at December 31, 2013: (MILLIONS)
 2014
 2015
 2016
 2017
 2018
 Thereafter
 TotalPrincipal repaymentsSubsidiary borrowings(1)
 $
 517
 $
 501
 $
 259
 $
 576
 $
 278
 $
 2,810
 $
 4,941Corporate borrowings andcredit facilities(1)
 
 -
 
 -
 
 282
 
 311
 
 188
 
 942
 
 1,723Equity-accounted investments
 
 1
 
 34
 
 1
 
 125
 
 1
 
 7
 
 169518
 
 535
 
 542
 
 1,012
 
 467
 
 3,759
 
 6,833Interest payable(2)Subsidiary borrowings
 
 285
 
 261
 
 244
 
 223
 
 193
 
 1,384
 
 2,590Corporate borrowings andcredit facilities
 
 79
 
 79
 
 79
 
 62
 
 58
 
 256
 
 613Equity-accounted investments
 
 7
 
 6
 
 5
 
 2
 
 -
 
 1
 
 21371
 
 346
 
 328
 
 287
 
 251
 
 1,641
 
 3,224$
 889
 $
 881
 $
 870
 $
 1,299
 $
 718
 $
 5,400
 $
 10,057
 (1)Subsidiary
borrowings and corporate borrowings and credit facilities include $52 million
and $11 million of unamortized deferred financing fees and premiums,
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 current rates. Subsidiary borrowings
maturing in 2014 include $125 million on a New England hydroelectric facility
and $250 million on our portfolio of hydroelectric facilities in the
Southeastern United States. All borrowings are expected to be refinanced in the
normal course.In January
2014, the $279 million bridge loan associated with our recently acquired 360 MW
operating hydroelectric portfolio located in Maine was refinanced to 2017 at
LIBOR plus 2.25%. The bridge loan was due to mature in 2015. Page95


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 The overall maturity profile and average interest rates associated
with our borrowings and credit facilities are as follows at December 31: Average
  term (years)
 Average
  interest rate (%)2013
 
 2012
 
 2013
 
 2012Corporate borrowings
 
 7.7
 
 8.7
 5.3
 
 5.3Subsidiary borrowings
 
 11.8
 
 11.8
 6.0
 
 6.4Credit facilities
 
 3.8
 
 3.8
 1.4
 
 2.0
 For the year ended December 31, 2013, we reduced our borrowing
costs and extended the maturity of our subsidiary borrowings and credit
facilities, in an environment where interest rates are near historical lows. Page96


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 CONTRACT PROFILE We have a 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 from existing facilities assuming
long-term average hydrology and wind conditions: FOR THE YEAR ENDED DECEMBER 31
 2014
 
 2015
 
 2016
 
 2017
 
 2018Generation (GWh)Contracted(1)HydroelectricUnited States
 
 7,730
 
 6,863
 
 6,863
 
 6,863
 
 6,863Canada(2)
 
 5,152
 
 5,200
 
 5,200
 
 5,200
 
 5,200Brazil
 
 3,411
 
 2,318
 
 2,051
 
 1,320
 
 1,23716,293
 
 14,381
 
 14,114
 
 13,383
 
 13,300Wind energyUnited States
 
 1,293
 
 1,293
 
 1,292
 
 1,292
 
 1,292Canada
 
 1,197
 
 1,197
 
 1,197
 
 1,197
 
 1,1972,490
 
 2,490
 
 2,489
 
 2,489
 
 2,489Other
 
 134
 
 -
 
 -
 
 -
 
 -18,917
 
 16,871
 
 16,603
 
 15,872
 
 15,789Uncontracted
 
 2,639
 
 4,568
 
 4,809
 
 5,540
 
 5,623Total long-term average
 21,556
 
 21,439
 
 21,412
 
 21,412
 
 21,412Long-term average on a proportionate basis(3)
 17,749
 
 17,621
 
 17,593
 
 17,594
 
 17,594Contracted generation - as at December 31,
  2013% of total generation
 88
 %
 79
 %
 78
 %
 74
 %
 74
 %% of total generation on a proportionate
  basis(3)
 93
 %
 86
 %
 85
 %
 81
 %
 81
 %Price per MWh
 $
 82
 $
 84
 $
 85
 $
 83
 $
 84
 (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)Long-term
average for 2014 to 2018 includes generation from one facility that is
currently under construction with estimated commercial operation date in
mid-2014. (3)Long-term
average on a proportionate basis includes wholly-owned assets, and our share of
partially-owned assets and equity-accounted investments. Page97


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 The majority of the long-term
power sales agreements are with investment-rated or creditworthy counterparties:   Page98


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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)
 2013
 2012Property, plant and equipment, at fair
  value
 $
 15,741
 $
 15,702Equity-accounted investments
 
 290
 
 344Total assets
 
 16,977
 
 16,925Long-term debt and credit facilities
 
 6,623
 
 6,119Deferred income tax liabilities
 
 2,265
 
 2,349Total liabilities
 
 9,441
 
 9,117Preferred equity
 
 796
 
 500Participating non-controlling interests -
  in operating subsidiaries
 
 1,303
 
 1,028General partnership interest in a holding
  subsidiary held by Brookfield
 
 54
 
 63Participating non-controlling interests -
  in a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 
 2,657
 
 3,070Limited partners' equity
 
 2,726
 
 3,147Total liabilities and equity
 
 16,977
 
 16,925
 Contractual obligations Capital expenditures and development and construction Brookfield Renewable categorizes its
capital spending as either sustaining or development and construction
expenditures.Sustaining capital expenditures
relate to maintaining power generating assets, whereas development and
construction expenditures include project costs for new facilities. Total sustaining
capital expenditures for 2014 are expected to be $85 million and of this amount$24 million has beencontractually committed as atDecember 31, 2013 (2012: $11 million). The remaining project costs on the 45 MW hydroelectric project in
British Columbia are expected to be $26 million. The project will be fully
operational by second quarter of 2014. Commitments At the balance sheet date, we had commitments for future minimum
lease payments under non-cancellable leases which fall due as follows: (MILLIONS)
 2014
 2015
 2016
 2017
 2018
 Thereafter
 TotalOperating leases
 $
 17
 $
 17
 $
 17
 $
 13
 $
 13
 $
 124
 $
 201Capital leases
 
 -
 
 -
 
 -
 
 1
 
 1
 
 47
 
 49Total
 $
 17
 $
 17
 $
 17
 $
 14
 $
 14
 $
 171
 $
 250
 Guarantees 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. As
at December 31, 2013 letters of credit issued by subsidiaries of Brookfield
Renewable amounted to $93 million. 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 Page99


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 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 Asset
Management. As discussed in the Significant Accounting
Policies Note 2 (b) -Basis of Presentation in our audited consolidated financial
statements, effective November 28, 2011, Brookfield Asset Management and
Brookfield Renewable completed the Combination agreement. This resulted in the
strategic combination of all the renewable power assets of the Fund and certain
Brookfield Asset Management subsidiaries to create Brookfield Renewable.
Consequently at the date of the Combination, Brookfield Asset Management,
Brookfield Renewable’s ultimate parent, held directly or indirectly,
approximately a 73% limited partnership interest (65% as at the date of this
report) on a fully-exchanged basis and all general partnership units totaling a
0.01% general partnership interest in Brookfield Renewable. Brookfield Renewable sells electricity to
subsidiaries of Brookfield Asset Management through long-term PPAs to provide
stable 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 a subsidiary of Brookfield Asset Management
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 Asset Management have executed other agreements that are fully
described in Note 9 - Related Party Transactions in our audited consolidated
financial statements. In December 2011 and September 2013, Brookfield Renewable entered
into voting agreements with subsidiaries of Brookfield Asset Management whereby
these subsidiaries, as managing members of entities related to Brookfield
Americas Infrastructure Fund and the Brookfield Infrastructure Fund II, in
which Brookfield Renewable holds investments with institutional partners,
agreed to assign to Brookfield Renewable their voting rights to appoint the
directors of such entities. Page100


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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)
 
 2013
 
 2012
 
 2011RevenuesPurchase and revenue support agreements
 $
 456
 $
 376
 $
 254Wind levelization agreement
 
 6
 
 2
 
 7$
 462
 $
 378
 $
 261Direct operating costsEnergy purchases
 $
 (36)
 $
 (40)
 $
 (41)Energy marketing fee
 
 (20)
 
 (18)
 
 (11)Insurance services
 
 (26)
 
 (18)
 
 (18)$
 (82)
 $
 (76)
 $
 (70)Interest expense
 $
 -
 $
 -
 $
 (19)Management service costs
 $
 (41)
 $
 (36)
 $
 (1)
 The following table reflects the related
party agreements and transactions on the consolidated balance sheets as at
December 31: (MILLIONS)
 Related party
 
 2013
 
 2012Current assetsDue from related partiesAmounts due from
 Brookfield Asset Management
 $
 36
 $
 20Equity accounted and other
 
 12
 
 14$
 48
 $
 34Due from related partiesAmounts due from
 Brookfield Asset ManagementBrascan Energetica
 $
 -
 $
 3Note receivable
 Powell River Energy Inc.(1)
 
 -
 
 19$
 -
 $
 22Current liabilitiesDue to related partiesAmount due to
 Brookfield Asset Management
 $
 48
 $
 45Accrued distributions payable on LP unitsand Redeemable/Exchangeablepartnership units
 Brookfield Asset Management
 
 62
 
 61Amount due to
 Equity accounted
 
 -
 
 3$
 110
 $
 109
 (1)Brookfield
Renewable acquired the remaining 50% interest in this entity in 2013 bringing
the total investment to 100%, and its results were fully consolidated. Page101


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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)
 2013
 2012
 2011Cash flow provided by (used in):Operating activities
 $
 746
 $
 398
 $
 349Financing activities
 
 (263)
 
 335
 
 809Investing activities
 
 (408)
 
 (813)
 
 (1,108)Foreign exchange (loss) gain on cash
 
 (9)
 
 (8)
 
 11Increase (decrease) in cash and cash
  equivalents
 $
 66
 $
 (88)
 $
 61
 Cash
and cash equivalents as at December 31, 2013 totaled $203 million, representing
an increase of $66 million since December 31, 2012. Cash and cash equivalents
as at December 31, 2012 totaled $137 million, representing a decrease of $88
million since December 31, 2011. Operating Activities Cash
flows provided by operating activities totaled $746 million for year ended
December 31, 2013, resulting in a year-over-year increase of $348 million. The
increases are primarily attributable to funds from operations. Cash flows
provided by operating activities totaled $398 million for the year ended
December 31, 2012, resulting in a year-over-year increase of $49 million. The
increase was primarily due to a $15 million increase in 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)
 
 2013
 
 2012Trade receivables and other current assets
 $
 47
 $
 (36)Accounts payable and accrued liabilities
 
 (42)
 
 17Other assets and liabilities
 
 (4)
 
 (3)$
 1
 $
 (22)
 Financing
Activities 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 by participating non-controlling interests
– in operating subsidiaries includes the co-investment by a private fund
sponsored by Brookfield Asset Management. For the year ended December 31, 2013
distributions paid to unitholders were $378 million (2012: $362 million). The
distributions paid to preferred shareholders and participating non-controlling
interests - in operating subsidiaries were $157 million (2012: $38 million).
See “Dividends and Distributions” for further details. Cash
flows provided by financing activities totaled $335 million for the year ended
December 31, 2012.  Long-term debt – borrowings increased with issuance of
C$400 million of 10-year term corporate notes, with approximately $500 million
of subsidiary borrowings related to the growth and construction of assets, and
over $300 million in refinancing of certain existing facilities. Repayments
related to subsidiary borrowings were approximately $1.1 billion. The capital
provided by participating non-controlling interests – in operating subsidiaries
relates to the growth of the business, and the capital provided by preferred
equity is from the issuance of C$250 million Class A Preference Shares. Page102


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 For the year ended December 31, 2012, distributions paid to
unitholders were $362 million (2011: $109 million). The distributions paid to
preferred shareholders and participating non-controlling interests - in
operating subsidiaries were $38 million (2011: $39 million). See “Dividends and
Distributions” for further details. Investing Activities Cash flows used in investing
activities for the year ended December 31, 2013 totaled $408 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 renewable power generating assets was $147 million and sustainable capital
expenditures totaled $79 million. Cash flows used in investing
activities for the year ended December 31, 2012 totaled $813 million. Our
investments were with respect to the acquisition of wind facilities in
California, hydroelectric facilities in southern United States and a
hydroelectric facility in Brazil that totaled $775 million. In addition, our
continued investment in sustainable capital expenditures totaled $55 million
and construction of renewable power generating assets amounted to $307 million.
Partly offsetting the cash investments were $209 million in investment tax
credits received pursuant to government incentives to build new renewable wind
facilities, and $172 million from the settlement of certain related party
balances. NON-CONTROLLING INTERESTS Preferred equity In
January 2013 and May 2013, we issued for total proceeds of C$350 million, C$175
million each of Series 5 Shares and Series 6 Shares with fixed, annual,
cumulative dividends yielding 5%. The net proceeds were used to repay
outstanding indebtedness and for general corporate purposes. As at December 31,
2013, no Preference Shares have been redeemed. General partnership interest in a
holding subsidiary held by Brookfield Brookfield, as the owner of the 1% general partnership 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 distributions exceed $0.375 per unit per quarter,
the incentive is 15% of distributions above this threshold. To the extent that
quarterly distributions exceed $0.4225 per unit, the incentive distribution is
equal to 25% of distributions above this threshold. No incentive distributions
have been paid. Participating non-controlling
interests - in a holding subsidiary - Redeemable/Exchangeable units held by
Brookfield BRELP has issued Redeemable/Exchangeable partnership units to
Brookfield Asset Management, 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.  LIMITED PARTNERS’ EQUITY With
the completion of the Combination in November 2011, the number of outstanding
units increased from 104,718,976 to 262,485,747 on a fully-exchanged basis.Thefully-exchanged amounts
assume the exchange of LP Units for the participating non-controlling interests
in BRELP, which may or may not occur since Brookfield can elect to continue to
hold its direct interest in BRELP through Redeemable/Exchangeable partnership
units rather than exchanging this interest for LP Units. Page103


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 Secondary offerings were
completed in 2012 and 2013 in which Brookfield Asset Management sold 13,144,500
and 8,065,000 of its LP Units, respectively, at an offering price of C$26.25
and C$31.00 per LP Unit, respectively. As a result, Brookfield Asset Management
now owns, directly and indirectly,169,685,609LP Units
and Redeemable/Exchangeable partnership units, representing approximately65%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: 2013
 2012Class A Preference SharesSeries 1
 10,000,000
 10,000,000Series 3
 10,000,000
 10,000,000Series 5
 7,000,000
 -Series 6
 7,000,000
 -34,000,000
 20,000,000General partnership units(1)
 2,651,506
 2,651,506Redeemable/Exchangeable units(1)
 129,658,623
 129,658,623LP UnitsBalance, beginning of year
 132,901,916
 132,827,124Distribution reinvestment plan
 82,997
 74,792Balance, end of year
 132,984,913
 132,901,916Brookfield Asset Management
 40,026,986
 48,091,986External LP Unitholders
 92,957,927
 84,809,930132,984,913
 132,901,916LP Units on a fully-exchanged basis
 262,643,536
 262,560,539
 (1)Units
held by Brookfield Asset Management Page104


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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: Accrued
 
 Paid(MILLIONS, EXCEPT AS NOTED)
 
 2013
 
 2012
 
 2011
 
 2013
 
 2012
 
 2011Class A Preference SharesSeries 1
 $
 13
 $
 13
 $
 13
 $
 13
 $
 13
 $
 13Series 3
 
 11
 
 3
 
 -
 
 12
 
 -
 
 -Series 5
 
 8
 
 -
 
 -
 
 6
 
 -
 
 -Series 6
 
 5
 
 -
 
 -
 
 4
 
 -
 
 -$
 37
 $
 16
 $
 13
 $
 35
 $
 13
 $
 13Participating non-controlling interests -
  inoperating subsidiaries
 $
 122
 $
 24
 $
 25
 $
 122
 $
 24
 $
 25General partnership interest in a holdingsubsidiary held by Brookfield
 $
 4
 $
 4
 $
 1
 $
 4
 $
 4
 $
 -Participating non-controlling interests -in a holding subsidiary - Redeemable/Exchangeable units held by Brookfield
 $
 188
 $
 179
 $
 43
 $
 185
 $
 177
 $
 -Limited partners' equityBrookfield Asset Management
 
 58
 
 66
 
 21
 
 56
 
 73
 
 -External LP Unitholders
 
 135
 
 117
 
 24
 
 133
 
 108
 
 -$
 193
 $
 183
 $
 45
 $
 189
 $
 181
 $
 -$
 544
 $
 406
 $
 127
 $
 535
 $
 399
 $
 38
 Page105


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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 virtually 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) - Critical judgments in applying accounting
policies 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 Page106


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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 3R 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 Page107


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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. (vi)Consolidation
of Brookfield Renewable Power Fund Brookfield Renewable held
a 34% investment in the Fund, on a fully-exchanged basis prior to November 28,
2011. As a result, Brookfield Renewable assessed whether it continued to
control the Fund, given its reduced ownership level. In making this assessment,
Brookfield Renewable considered the definition of control and guidance as set
out in IAS 27,Consolidated and Separate Financial Statements(“IAS
27”). Brookfield Renewable concluded that control did exist as it had the power
to govern the financial and operating policies of the Fund under specific
agreements. Effective November 28, 2011, public unitholders of the Fund
received one LP Unit of Brookfield Renewable for each trust unit of the Fund
held, and the Fund was wound up. Future changes in accounting policies (i)      Financial Instruments IFRS 9,Financial
Instruments(“IFRS 9”) was issued by the IASB on October 28, 2010, and will
replace IAS 39. IFRS 9 uses a single approach to determine whether a financial
asset is measured at amortized cost or fair value, replacing the multiple rules
in IAS 39. The approach in IFRS 9 is based on how an entity manages its
financial instruments in the context of its business model and the contractual
cash flow characteristics of the financial assets. Two measurement categories
continue to exist to account for financial liabilities in IFRS 9, fair value
through profit or loss (“FVTPL”) and amortized cost. Financial liabilities held
for trading are measured at FVTPL, and all other financial liabilities are
measured at amortized cost unless the fair value option is applied. The treatment
of embedded derivatives under the new standard is consistent with IAS 39 and is
applied to financial liabilities and non-derivative hosts not Page108


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 within the scope of the standard. IFRS 9 is effective for
annual periods beginning on or after 1 January 2018. Management is currently
evaluating the impact of IFRS 9 on the consolidated financial statements. (ii)      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 is effective for annual periods beginning on or
after January 1, 2014. Management is currently evaluating the impact of
IFRIC 21 on the consolidated financial statements. ADOPTION OF
ACCOUNTING STANDARDS The following new
accounting standards were applied or adopted by Brookfield Renewable during the
year. See Note 2 (p) - New standards, interpretations and amendments adopted by
Brookfield Renewable in our consolidated financial statements for the year
ended December 31, 2013. ·IAS
1,Presentation of Items of Other Comprehensive Income – Amendments to IAS 1, ·IFRS
10,Consolidated Financial Statements, ·IFRS
11,Joint Arrangements, andIAS 28,Investment in Associates
and Joint Ventures, ·IFRS
12,Disclosure of Interests in Other Entities, ·IFRS
13,Fair Value Measurement, ·IAS 19,Employee Benefits(Revised 2011) (IAS 19R), and ·IAS 34,Interim Financial Reporting and Segment Information for Total Assets and Liabilities. Page109


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Table of Contents
 OPERATIONAL REVIEW FOR THE THREE MONTHS ENDED DECEMBER 31, 2013 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)
 2013
 2012
 2013
 2012
 2013
 2012Hydroelectric generationUnited States
 2,226
 1,447
 2,450
 1,869
 (224)
 (422)
 779Canada
 1,401
 954
 1,171
 1,175
 230
 (221)
 447Brazil(2)
 923
 924
 923
 924
 -
 -
 (1)4,550
 3,325
 4,544
 3,968
 6
 (643)
 1,225Wind energyUnited States
 175
 158
 274
 191
 (99)
 (33)
 17Canada
 328
 325
 343
 343
 (15)
 (18)
 3503
 483
 617
 534
 (114)
 (51)
 20Other
 215
 245
 219
 104
 (4)
 141
 (30)Total generation(3)
 5,268
 4,053
 5,380
 4,606
 (112)
 (553)
 1,215
 (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 three months ended December 31, 2013
totaled 5,268 GWh, an increase of 1,215 GWh as compared to the same period of
the prior year. The hydroelectric portfolio
generated 4,550 GWh, consistent with the long-term average of 4,544 GWh, and anincrease
of 1,225 GWh from the same period of the prior year.Generation
from existing hydroelectric assets was 3,895 GWh compared to 3,325 GWh for the
same period in the prior year, as generation returned to more normal levels
relative to the dry conditions that were experienced in the prior year. Acquisitions
during the year and in the fourth quarter of 2012and
assets reaching commercial operations contributed655 GWh
compared to the long-term average of 701 GWh. The wind portfolio generated 503
GWh which was below the long-term average of 617 GWh. Generation increased 20
GWh compared to the same period in the prior year. The facilities recently
acquired in California resulted in generation of 48 GWh compared to the
long-term average of 81 GWh, while generation from existing wind facilities declined
compared to the prior year due to wind conditions across the U.S. portfolio.  Page110


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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: 2013
 2012
 2011(1)(MILLIONS, EXCEPT AS NOTED)
 
 Q4
 
 Q3
 
 Q2
 
 Q1
 
 Q4
 
 Q3
 
 Q2
 
 Q1
 
 Q4
 
 Q3
 
 Q2
 
 Q1Generation (GWh) - LTA(2)(3)
 5,380
 4,960
 6,171
 5,325
 4,606
 4,049
 4,998
 4,549
 4,076
 3,671
 4,488
 4,062Generation (GWh) - actual(2)(3)
 5,268
 5,154
 6,265
 5,535
 4,053
 2,971
 4,101
 4,817
 3,848
 3,614
 4,491
 3,924Revenues
 $
 393
 $
 392
 $
 484
 $
 437
 $
 317
 $
 229
 $
 337
 $
 426
 $
 267
 $
 280
 $
 329
 $
 293Adjusted EBITDA(4)
 
 272
 
 260
 
 357
 
 319
 
 195
 
 118
 
 221
 
 318
 
 154
 
 197
 
 238
 
 215Funds from operations(4)
 
 137
 
 108
 
 187
 
 162
 
 74
 
 11
 
 87
 
 175
 
 34
 
 79
 
 116
 
 103Net (loss) income:Non-controlling interestsPreferred equity
 
 10
 
 10
 
 10
 
 7
 
 6
 
 4
 
 3
 
 3
 
 3
 
 3
 
 4
 
 3Participating non-controllinginterests - in operating subsidiaries
 
 (7)
 
 8
 
 24
 
 16
 
 (14)
 
 (11)
 
 (14)
 
 (1)
 
 1
 
 7
 
 9
 
 (6)General partnership interest in a holdingsubsidiary held by Brookfield
 
 -
 
 -
 
 -
 
 1
 
 (1)
 
 -
 
 -
 
 -
 
 (1)
 
 (3)
 
 -
 
 (1)Participating non-controllinginterests - in a holding subsidiary Redeemable/Exchangeable units held by Brookfield
 
 10
 
 5
 
 22
 
 30
 
 (27)
 
 (26)
 
 4
 
 14
 
 (44)
 
 (123)
 
 (21)
 
 (44)Limited partners' equity
 
 11
 
 5
 
 22
 
 31
 
 (28)
 
 (26)
 
 4
 
 15
 
 (45)
 
 (126)
 
 (22)
 
 (45)24
 
 28
 
 78
 
 85
 
 (64)
 
 (59)
 
 (3)
 
 31
 
 (86)
 
 (242)
 
 (30)
 
 (93)Basic and diluted earnings (loss) income per LP Unit(5)
 
 0.08
 
 0.04
 
 0.17
 
 0.23
 
 (0.20)
 
 (0.20)
 
 0.03
 
 0.11
 
 (0.33)
 
 (0.95)
 
 (0.17)
 
 (0.34)Distributions:Preferred equity
 
 10
 
 10
 
 10
 
 7
 
 6
 
 3
 
 4
 
 3
 
 3
 
 3
 
 4
 
 3General partnership interest in a holdingsubsidiary held by Brookfield
 
 1
 
 1
 
 1
 
 1
 
 1
 
 1
 
 1
 
 1
 
 1
 
 -
 
 -
 
 -Participating non-controlling interests -in a holding subsidiary - Redeemable/Exchangeable units held by Brookfield
 
 47
 
 47
 
 47
 
 47
 
 45
 
 45
 
 45
 
 44
 
 43
 
 -
 
 -
 
 -Limited partners' equity
 
 48
 
 49
 
 48
 
 48
 
 45
 
 46
 
 47
 
 45
 
 45
 
 -
 
 -
 
 -
 (1)Comparative
quarterly consolidated financial information for the year ended December 31,
2011 was revised to reflect adjustments, primarily related to deferred income
tax and foreign currency translation, which were identified through the
completion of the Combination. The adjustments do not impact the comparative
annual consolidated financial information for the year ended December 31,
2011. (2)Includes
100% of 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". (5)Average
LP Units outstanding totaled 132.9 million (2012: 132.9 million and 2011: 132.8
million). Page111


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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) Commodity price risk Commodity
price risk is defined for these purposes as the risk that the fair value or
future cash flows of a financial instrument will fluctuate because of changes
in commodity prices.  Commodity price risk arises from the sale of Brookfield
Renewable’s uncontracted generation and stabilization of the gas purchases. Brookfield
Renewable sells electricity under long-term contracts to secure stable prices
and mitigate its exposure to wholesale markets. As at December 31, 2013, 93% of
our 2014 generation on a proportionate basis was sold pursuant to purchase
price agreements, either to third parties or through entities of Brookfield.
During 2011, certain of the long-term contracts were considered financial instruments,
and were recorded at fair value in the consolidated financial statements. The
change in fair value of long-term contracts was recorded in either income as
“unrealized financial instrument loss” or OCI, as applicable. The
table below summarizes the impact of changes in the market price of electricity
and gas 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 gas and electricity for the year ended December
31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2013
 
 2012
 
 2011
 
 2013
 
 2012
 
 20115% increase
 $
 -
 $
 1
 $
 2
 $
 1
 $
 -
 $
 -5% decrease
 
 -
 
 (1)
 
 (2)
 
 (1)
 
 -
 
 -
 (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 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. 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 $1,515 million (2012:
$1,592 million).  Of this amount, $806 million (2012: $1,102 million) has been
hedged through the use of interest rate swaps.  Brookfield Renewable’s
subsidiaries will enter into agreements designed to minimize the exposure to Page112


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Table of Contents
 interest rate fluctuations on these debts. The fair
values of the recognized liability for these agreements 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 for the year ended December 31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2013
 
 2012
 
 2011
 
 2013
 
 2012
 
 20111% increase
 $
 (7)
 $
 (7)
 $
 (7)
 $
 96
 $
 51
 $
 481% decrease
 
 7
 
 7
 
 7
 
 (96)
 
 (51)
 
 (48)
 (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, 2013, 99% (2012: 99%)of Brookfield Renewable’s trade receivables of $105 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. The maximum credit exposure at December 31 was
as follows: (MILLIONS)
 
 2013
 
 2012Cash and cash equivalents
 $
 203
 $
 137Restricted cash
 
 169
 
 157Trade receivables and other current assets
 
 184
 
 194Financial instrument assets
 
 15
 
 -Other long-term assetsRestricted cash
 
 75
 
 80Other
 
 -
 
 2Due from related parties(1)
 
 48
 
 56$
 694
 $
 626
 (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 and hydrology reserve
facilities. Details of the undrawn credit facilities are included in Note 14 –
Long-term debt and credit facilities in ouraudited
consolidated financial statements.  We
also ensure that we have access to public debt markets by maintaining a strong
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. Page113


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Table of Contents
 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 January 2014, we completed the acquisition of a 70 MW
hydroelectric portfolio in Maine consisting of nine facilities which are
expected to generate approximately 400 GWh annually. In February 2014, $140
million of financing was obtained with a private placement bond that matures in
2024. The acquisition was completed with institutional partners, andBrookfield
Renewableretains an approximate 40% interest in the portfolio. In January 2014, we acquired, with our institutional partners, the
remaining 50% interest in the 30 MW Malacha Hydro facility in California. We
will retain an approximate 22% interest in the facility. In
January 2014, the $279 million bridge loan associated with the recently
acquired 360 MW operating hydroelectric portfolio located in Maine was
refinanced to 2017 at LIBOR plus 2.25%. In February 2014, we announced an
agreement to acquire a 33% economic and 50% voting interest in a 417 MW
hydroelectric facility in Pennsylvania. This facility is expected to
generate approximately 1,100 GWh annually. The acquisition is being pursued
with institutional partners, and Brookfield Renewable’s share of the acquired
interest is approximately 40%. This transaction is subject to regulatory
approvals and other customary closing conditions and is expected to close in
the first quarter of 2014. In February 2014, we announced an
increase in unitholder distributions to $1.55 per unit on an annualized basis,
an increase of ten cents per unit, to take effect with the first quarter
distribution payable in March 2014.  Page114


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Table of Contents
 ADJUSTED EBITDA AND FUNDS
FROM OPERATIONS ON APRO FORMABASIS ASSUMING LONG-TERM AVERAGE Revenues on apro formabasis are computed by using
long-term average generation for each facility, and multiplied by the pricing
in the respective PPAs, where applicable. The majority of direct operating
costs are fixed, regardless of changes in generation levels or revenue, except
for certain items such as water royalty fees which are charged based on
generation or revenues and will vary from time to time. The following table
reflects Adjusted EBITDA and funds from operations, assuming long-term average
generation, for the year ended December 31:  (MILLIONS, EXCEPT AS NOTED)
 
 2013
 
 2012Generation (GWh)(1)
 
 21,836
 
 18,202Revenues
 $
 1,688
 $
 1,520Other income
 
 11
 
 16Share of cash earnings from equity-accounted investments
 
 21
 
 13Direct operating costs
 
 (529)
 
 (496)Adjusted EBITDA(2)
 
 1,191
 
 1,053Interest expense – borrowings
 
 (410)
 
 (411)Management service costs
 
 (41)
 
 (36)Current income taxes
 
 (19)
 
 (14)Less: cash portion of non-controlling interests
 
 (139)
 
 (60)Funds from operations(2)
 $
 582
 $
 532
 (1)For
assets acquired or reaching commercial operation during the year, this figure
is calculated from the acquisition or commercial operation date. (2)Non-IFRS
measures.  See “Cautionary Statement Regarding Use of Non-IFRS Measures”. Page115


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Table of Contents
 pro
formafinancial review FOR THE year ended DECEMBER 31, 2011 We are providingpro formafinancial
results that include the impact of the Combination, new contracts and contract
amendments, management and other service agreements along with the tax impacts
resulting from the Combination, as if each had occurred as of January 1, 2011.
The unauditedpro formafinancial results have been prepared based upon
currently available information and assumptions deemed appropriate by
management. Thepro formafinancial results give effect to the following
transactions: Items
affecting future cash flows: ·amendment and
execution of PPAs; and ·execution of
management and other service agreements.  Items
not affecting cash flows: ·changes in the
fair value of property, plant and equipment due to the change in PPAs and the
resulting change in depreciation expense; ·settlement of
intercompany balances as at the date of the transaction; and ·elimination of the
Fund unit liability and related unrealized gain or loss on remeasurement. For additional information on thepro
formaadjustments see “Summary ofPro FormaAdjustments as They
Relate to the Comparative Financial Results”. The unauditedpro formafinancial
results are provided for information purposes only and may not be indicative of
the results that would have occurred had the above transaction been effected on
the date indicated. The accounting for certain of the Combination transactions
required the determination of fair value estimates as at the date of the
transaction on November 28, 2011 rather than the date assumed in the
determination of thepro formaresults of January 1, 2011. Page116


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Table of Contents
 ADJUSTED EBITDA AND FUNDS FROM OPERATIONS ON APRO FORMABASIS The following table
reflects the Adjusted EBITDA and funds from operations for the year ended
December 31, 2011(1): (MILLIONS, EXCEPT AS NOTED)Generation (GWh)(2)
 
 15,877Revenues
 $
 1,309Other income
 
 19Share of cash earnings from equity-accounted investments
 
 23Direct operating costs
 
 (425)Adjusted EBITDA(3)
 
 926Interest expense – borrowings
 
 (411)Management service costs
 
 (22)Current income taxes
 
 (8)Less: cash portion of non-controlling interests
 
 (52)Funds from operations(3)
 $
 433
 (1)Pro
formaresults reflect new contracts and contract amendments, along with the tax
implications of the Combination, as if each had occurred as of January 1, 2011. (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
measure. See ”Cautionary Statement Regarding Use of Non-IFRS Measures” and
“Reconciliation ofPro FormaResults”. Page117


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Table of Contents
 Reconciliation ofpro formaresults The
following table reconciles Adjusted EBITDA, funds from operations and net loss
on a consolidated basis to Adjusted EBITDA, funds from operations and net
income for the year ended December 31, 2011:  (MILLIONS)
 Notes
 Pro formaBasisAdjusted EBITDA on a consolidated basis
 
 $
 804Change in revenues due to revised PPA
 (i)
 
 140Change in direct operating costs
 (ii)
 
 (18)Adjusted EBITDA on apro formabasis
 
 $
 926Funds from operations on a consolidated basis
 
 $
 332Change in revenues due to revised PPA
 (i)
 
 140Change in direct operating costs
 (ii)
 
 (18)Management service costs
 (ii)
 
 (21)Funds from operations on apro formabasis
 
 $
 433Net loss on a consolidated basis
 
 $
 (451)Change in revenues due to revised PPA
 (i)
 
 140Change in direct operating costs
 (ii)
 
 (18)Management service costs
 (ii)
 
 (21)Elimination of loss on Fund unit liability
 (iii)
 
 376Transfer of revaluation to OCI
 (iv)
 
 20Intercompany settlements
 (v)
 
 19Change in depreciation expense
 (vi)
 
 4Deferred income taxes
 (vii)
 
 10Net income on apro formabasis
 
 $
 79
 Page118


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Table of Contents
 summary ofpro formaadjustments
as they relate to the comparative financial results: (i) Power Purchase
Agreements Pro formanet income reflects the following contract changes that took
effect at the time of the Combination; pursuant an amendment to the PPA between
Brookfield Asset Management and an indirect wholly-owned subsidiary of
Brookfield Renewable (the “GLPL PPA”). Brookfield Asset Management guarantees
the price of electricity generated by facilities owned by Great Lakes Power
Limited, a subsidiary of Brookfield Renewable, at C$82 per MWh. This price is
to be increased annually on January 1 by an amount equal to forty percent (40%)
of the increase in the CPI during the previous calendar year. BEM
LP and MPT, an indirect wholly-owned subsidiary of Brookfield Renewable,
entered into an amendment to the existing Master Power Purchase and Sale
Agreement (the “Mississagi PPA”) to adjust the price of electricity purchased
to C$103 per MWh. This price is to be increased annually by an amount equal to
twenty percent (20%) of the increase in the consumer price index during the
previous calendar year. Additionally, BEM LP and
BPUSHA, an indirect wholly-owned subsidiary of Brookfield Renewable, entered
into an Energy Revenue Agreement under which BEM LP will guarantee the price
for energy delivered by certain facilities in the United States at $75 per MWh.
This price is to be increased annually on January 1 by an amount equal to forty
percent (40%) of the increase in the consumer price index during the previous
calendar year, but not exceeding an increase of three percent (3%) in any
calendar year. The impacts of these
contract price amendments and agreements for the year ended December 31, 2011
are summarized as follows: (MILLIONS, EXCEPT AS NOTED)
 Actual generation (GWh)
 Incremental revenueGLPL  PPA
 964
 $
 13Mississagi PPA
 473
 
 17Energy Revenue Agreement
 3,512
 
 1104,949
 $
 140
 (ii) Management and Other
Service Agreements An
exclusive agreement with Brookfield Asset Management to provide operating,
management and consulting services to Brookfield Renewable provides for a
management service fee to be paid on a quarterly basis and will continue in
perpetuity. The fee 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. For the year ended December 31,
2011pro formaresults for management services costs reflect an expense
of $22 million. Brookfield
Renewable will also pay an annual marketing service fee of $18 million to a
subsidiary of Brookfield Asset Management to reflect an agreement to provide
energy marketing services. The fee will be increased annually on January 1 by
an amount equal to the increase in the U.S. consumer price index during the
previous calendar year.Pro formaresults for the year ended December
31, 2011 reflects an expense of $18 million, included in direct operating
costs. (iii) Transfer of Fund
Units The transfer of the 66% of
the Fund units not previously owned by Brookfield Asset Management was
completed at fair value satisfied by the issuance of LP Units. The result of
this transaction is to reflect the settlement of the Fund unit liability and the
issuance of LP Units to satisfy the transfer as equity of Brookfield Renewable.
As a result of this transaction, the loss on Fund unit liability, related to
the change in fair value of the units and the distributions made for the year
ended December 31, 2011 of $376 million, was eliminated. Page119


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Table of Contents
 (iv) Changes in Fair Value of Financial Instruments During
the year ended December 31, 2011 certain power guarantee agreements between
Brookfield Renewable and Brookfield Asset Management were accounted for as
financial instruments with unrealized losses of $20 million. As
a result of new agreements and changes in existing agreements with Brookfield
Asset Management and its subsidiaries arising from the Combination, the
contracts are not accounted for as financial instruments by Brookfield Renewable.
Thus the unrealized financial instrument losses described above have been
eliminated. (v) Intercompany
Settlements Brookfield Renewable and
its subsidiaries settled certain intercompany loans and transactions with
Brookfield Asset Management upon completion of the Combination. During the year
ended December 31, 2011 $19 million, of interest income was recorded in thepro
formastatement of income to reflect these transactions. (vi) Change in
Depreciation Expense The
reduction in fair value of the power generating assets from Brookfield
Renewable’s statement of income and loss results in a decrease inpro formadepreciation expense for the year ended December 31, 2011 of $4 million. (vii) Deferred Income Tax Net
income on apro formabasis for the year ended December 31 2011,
reflects an increase in deferred taxes by $10 million. 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 60 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: ·“— Generation
for the Years Ended December 31, 2013 and 2012” beginning on page 81
(variability of generation); ·“— Generation
for the Years Ended December 31, 2012 and 2011” beginning on page 87
(variability of generation); ·“— Liquidity
and Capital Resources” beginning on page 94 (funding of growth initiatives,
capital expenditures, distributions and general business purposes); and ·“— Contract
Profile” beginning on page 97 (predictability in 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” Page120


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Table of Contents
 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. The Managing General Partner 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. 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
 
 Executive Chairman of Sigma Real Estate
  Advisors/Sigma Capital CorporationDevonshire, 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. Jeffrey
is the Chair of the board of directors of the Managing General Partner. Jeffrey
is also the 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, Jeffrey was senior partner at a Canadian law firm. Page121


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Table of Contents
 Eleazar
de Carvalho Filho. Eleazar is a Director of the Managing General Partner. Eleazar
was formerly the President and Managing Director of the Brazilian National
Development Bank and has served as the Chief Executive Officer for Unibanco
Investment Bank. He is a founding partner of Virtus BR Partners, an independent
financial advisory firm and also of Sinfonia Consultoria e Participações.  From
2006 to 2011, Eleazar 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. Eleazar is currently a director of FMC Technologies, Inc., a
director of Grupo Pão de Açúcar where he chairs the financial committee, and
the President of the Board of Trustees of the Brazilian Symphony Orchestra. 
Born in Sao Paulo, Eleazar 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. John is
a Director of the Managing General Partner. John 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. John is the past President of Century
Power Corporation, an independent power producer based in Tucson, Arizona. John
is a Certified Public Accountant and received a Bachelor of Science in accounting
in 1972 from Montana State University. Lars
Josefsson. Lars 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. Lars is also a member of the boards of directors of Robert
Bosch GmbH and Holmen AB. He is Chairman of the Board of Green Circle Bioenergy
Inc., and 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. Lars graduated from Chalmers University of Technology in Applied
Physics with a Master of Science in 1973 and in 1986 graduated from IMD,
Lausanne, PED. Lars is an Honorary Professor in Physics, Brandenburg Technical
University, Cottbus, Germany. David Mann. David
is a Director of the Managing General Partner. David 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. David 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
Logistec Corporation and also New Growth Corporation, Acadian Timber Corp., and
Allbanc Split Corp II. David 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. Lou is
a Director of the Managing General Partner. Lou is also a Director of
Brookfield Property Partners L.P. and is the Founder and Chairman of Sigma Real
Estate Advisors/Sigma Capital Corporation, which specializes in international
real estate advisory. Prior to this role, Lou 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. Lou also is on the board of directors and is Chairman of Summit
Industrial Income REIT. Lou 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, Lou was
elected to the position of Fellow of the Royal Institute of Chartered
Surveyors. Patricia Zuccotti.
Patricia is a Director of the Managing General Partner. Patricia served as
Senior Vice President, Chief Accounting Officer and Controller of Expedia, Inc.
from October 2005 to November 2011. Prior to joining Expedia, Patricia was the
Director, Enterprise Risk Services of Deloitte & Touche LLP from June 2003
until October 2005. Patricia 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
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 Additional
Information About Directors and Officers To our knowledge, within
the past ten years, no directors or executive officers of the Managing General
Partner and no employee of the Service Provider who performs an executive
function for BREP have (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 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 and their positions with the Service
Provider as of the date of this Form 20-F. Page123


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  Name
 Years of experience in relevant industry or
  role
 
 Years at Brookfield
 Current Position with the Service ProviderHarry Goldgut
 29
 
 17
 Group ChairmanRichard Legault
 29
 
 26
 President and Chief Executive OfficerSachin Shah
 15
 
 12
 Chief Financial OfficerFelipe Pinel
 23
 
 23
 Chief Operating Officer, Latin AmericaRalf Rank
 13
 
 7
 Chief Executive Officer, Europe
 Each of the members of our core senior
management team has substantial operational and transaction origination and
execution expertise. Members of this team have also been integral in building
and developing Brookfield’s renewable power operations and, although certain
members of the 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 the
renewable power business. Biographical information for each of the members of
this team is included below. Harry Goldgut.Harry is the Group
Chairman of the Service Provider. Harry is also a Senior Managing Partner of
Brookfield Asset Management and the Chairman of Brookfield Renewable Energy
Group, which comprises Brookfield’s renewable power generation (BREP) and
electric utilities businesses. He has been involved in the electric power
industry since 1985. Harry 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. Harry
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.Richard is the
President and Chief Executive Officer of the Service Provider. Richard is also
a Senior Managing Partner of Brookfield Asset Management, Chief Executive
Officer of BRPI and was the Chief Executive Officer of the Fund. Richard
oversees Brookfield Renewable Energy Group, which comprises Brookfield’s
renewable power generation (BREP) and electric utilities businesses. He has led
the growth of Brookfield’s renewable power operations in North and South
America, helping to make Brookfield Renewable one of the largest pure play
renewable power portfolios globally. Richard 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. Richard received a Bachelor of Accounting from the
Université du Québec in Hull and is a member of the Canadian Institute of
Chartered Accountants. Sachin Shah.Sachin is the Chief
Financial Officer of the Service Provider. Sachin is also a Senior Managing
Partner of Brookfield Asset Management and Chief Financial Officer of
Brookfield Renewable Energy Group, which comprises Brookfield’s renewable power
generation (BREP) and electric utilities businesses. He leads all capital
allocation and fundraising initiatives for Brookfield Renewable along with
overall responsibility for financial reporting, treasury, taxation and investor
relations activities. Mr. Shah received a Bachelor of Commerce degree from the
University of Toronto in 1999 and is a member of the Canadian Institute of
Chartered Accountants. Felipe Pinel.Felipe is the Chief
Operating Officer, Latin America of the Service Provider.  He joined Brookfield
23 years ago in Brazil and has since held several positions in legal, finance
and business development in North America. He also is a Managing Partner of
Brookfield Asset Management. Page124


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 He has played a leading
role in the growth of Brookfield Renewable’s power business in Brazil over the
last ten years and was promoted to his current role in 2010. Felipe is a lawyer
and also holds a Masters in Business Administration. Ralf Rank.Ralf is the Chief Executive Officer,
Europe of the Service Provider and a Managing Partner of Brookfield Asset
Management. In this capacity, he provides oversight of Brookfield Renewable’s
activities in Europe, including growth, operations and funding and maintains
responsibility for renewable power investment strategy and business development
across Brookfield’s global platform. As at December 31, 2013, Ralf was the
Chief Investment Officer of the Service Provider. Ralf joined Brookfield in
2007 and prior thereto was Associate Director, Investment Banking, at a leading
Canadian bank with an industry specialization in the infrastructure, power and
utilities group. Ralf has an Honours Bachelor of Applied Science (Mechanical
Engineering) and a Minor in Economics from the University of Waterloo and is
also a holder of the Chartered Financial Analyst designation. See also information contained under
Item 3.D “Risk Factors — Risks Related to Our Relationship with
Brookfield” and Item 7.B “Related Party Transactions”. 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, as 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; ·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; Page125


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 ·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. 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 relevant Governing Body remains responsible for all investment
and divestment decisions made by the Service Recipients. 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 shall be adjusted
for inflation annually beginning 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 (which is generally
determined with reference to the aggregate of the value of all outstanding LP
Units, assuming full conversion of Brookfield’s limited partnership interests
in BRELP into LP units, and securities of the other Service Recipients that are
not held by Brookfield Renewable, plus all outstanding third party debt with
recourse to BREP, BRELP or a Holding Entity, less all cash held by such
entities) of Brookfield Renewable exceeds an initial reference value determined
based on its market capitalization immediately following the Combination. In
the event that the measured Total Capitalization Value of BREP in a given
period is less than the initial reference value, the Service Provider will
receive a Base Management Fee of $20 million annually (subject to an annual
escalation by a specified inflation factor beginning on January 1, 2013).
The Base Management Fee will be calculated and paid on a quarterly basis. Total Capitalization Value as of December 31,
2013 is $9,315,081,212, which against the initial reference value of
$8,093,033,167 and factoring in the annual amount of $20 million (as adjusted
for inflation pursuant to the Master Services Agreement), resulted in a Base
Management Fee payment for the year ended 2013 in the amount of approximately $41 million. The Base
Management Fee payment for the year ended December 31, 2012 and for the period
between the Combination and December 31, 2011 was approximately $35.8
million and $2.2 million, respectively. 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
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
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 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”.  Increase
in Capitalization Value as at December 31, 2013: (MILLIONS, EXCEPT LP UNITS AMOUNTS)
 Initial Value(1)
 December
  31, 2013
 IncreaseFair market value of LP Units(1)
 $
 24.9
 $
 25.9
 $
 0.9Units issued and outstanding(2)
 
 262.5
 
 262.66,545.1
 
 6,797.2
 
 252.1Principal value of corporate borrowings, credit facilities and
  preferred shares
 
 1,552.9
 
 2,523.7
 
 970.8Cash held: Service Recipients
 
 (5)
 
 (6)
 
 (1)Total Capitalization Value
 $
 8,093.0
 $
 9,315.1
 $
 1,222.1
 (1)Initial
capitalization value as calculated on November 28, 2011, the date of the
Combination.  Management fee calculation for the year ended December 31, 2013 (MILLIONS, UNLESS OTHERWISE NOTED)
 
 TotalBase management fee(3)
 
 
 $
 20.4Variable management feeIncrease in average Total Capitalization Value for 2013(4)
 
 1,646Rate
 
 1.25
 %
 20.6Total management fee
 
 
 $
 41.0
 (1)Represents
the five-day volume-weighted average price in Canadian dollars converted to
U.S. dollars. (2)All
outstanding LP Units, assuming full conversion of Brookfield’s limited
partnership interest in BRELP into LP Units. (3)$20
million, annual fee, calculated quarterly in arrears (subject to an annual
escalation by a specified inflation factor beginning January 1, 2013). (4)1.25%
of the increase in the average 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 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. Page127


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 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 would also terminate.
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 Page128


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 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”, are aligned to the long term value
creation of Brookfield by nature of being participants in Brookfield’s various
long term incentive plans, as outlined below. The following individuals performed functions
similar to a chief executive officer and chief financial officer for BREP (only
for the purpose of compliance with applicable securities laws) and the other
individuals are the three most highly paid members of our core senior
management team for the year ended December 31, 2013 (collectively, our “Named
Executive Officers” or “NEOs”): Richard Legault, Chief Executive Officer of
the Service Provider; Sachin Shah, Chief Financial Officer of the Service
Provider; Page129


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 Harry Goldgut, Group
Chairman of the Service Provider; Ralf Rank, Chief Investment Officer of the Service
Provider; and Felipe Pinel, Chief Operating Officer, Latin
America (LATAM) Operations of the Service Provider. Under Canadian securities laws, we are
required to disclose the following executive compensation information relating
to the Named Executive Officers. The compensation philosophy of Brookfield,
which determines the compensation of our senior management, and the
compensation elements paid to them outlined below, are provided for full
disclosure. Compensation
Philosophy of Brookfield Brookfield determines the compensation of its
employees and the executives and senior managers of its subsidiaries, which
includes the NEOs. Brookfield has adopted an approach to compensation that is
intended to foster an entrepreneurial environment that encourages management to
make decisions and take actions that will create long-term sustainable cash flow
growth and will result in improvement in long-term shareholder value. Compensation Elements
Paid by Brookfield The primary elements of total compensation
paid by Brookfield to the NEOs are: base salary, annual management incentive
plan awards (“Cash Bonus”) and participation in long-term incentive
plans. Total annual compensation awarded to senior
executives, including the Named Executive Officers, generally does not change
significantly from year to year. This practice recognizes that rewarding
short-term performance would not necessarily be consistent with Brookfield’s
focus of long-term value creation. A significant amount of annual compensation
for these executives is represented by awards pursuant to long-term share
ownership plans which vest over time, in order for the executives to increase
their ownership interest in Class A Limited Voting Shares of Brookfield
Asset Management (“Class A Limited Voting Shares”). Total compensation for executives who are at
earlier stages in their careers also includes awards pursuant to long-term
share ownership plans but tends to include a larger percentage of their total
compensation in the form of base salary and Cash Bonus awards in recognition of
their personal needs and to be competitive within the financial services
industry. Furthermore, changes in total compensation from year to year may vary
more for these executives as they take on increasing responsibility. As executives progress within Brookfield,
they have the opportunity to reinvest their Cash Bonus into deferred share
units under the Deferred Share Unit Plan (“DSUP”) or restricted shares
under the Restricted Stock Plan of Brookfield, thereby enabling them to
increase their ownership interests. In addition, notwithstanding the fact that
regular total compensation for individuals may not change significantly year
over year, management may request that Brookfield Asset Management’s
compensation committee (“BAM’s Compensation Committee”) grant special
compensation awards to executives who have demonstrated a clear ability to take
on additional responsibilities and have consistently performed at an
exceptional level. These special awards are granted in the form of options to
acquire Class A Limited Voting Shares, restricted shares of Class A
Limited Voting Shares or escrowed shares as described below. BREP has no control over the form or amount
of the compensation paid by Brookfield to the NEOs and participation in
long-term incentive plans is not allocated to or payable by BREP. Base Salaries Base salaries of the NEOs are determined and
approved by Brookfield. Base salaries tend to remain fairly constant from one
year to another unless the scope and responsibility of the position has
changed. Cash Bonus and
Long-Term Incentive Plans Brookfield believes that, for the NEOs, given
their focus on long-term decision making, the impact of which is difficult to
assess in the short term, a formula calculation based on specific operational
or Page130


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 individual targets may not appropriately reflect
their long-term objectives. Accordingly, for the NEOs, the Cash Bonus and
compensation under long-term incentive plans are determined primarily through
an evaluation by Brookfield of the progress in executing Brookfield Renewable’s
strategy and business plan as a whole; no specific weight is given to the
achievement of any individual objective. The Cash Bonuses and compensation under
long-term incentive plans granted to the NEOs by Brookfield are directly
related to the performance and achievements of the NEOs, the performance and
success of Brookfield Renewable, as well as significant contributions to the
business strategy of Brookfield as a whole. The level of Cash Bonus and
long-term incentive compensation granted to each NEO is discretionary, based on
his achievement of specific objectives that are set at the beginning of the
year with Brookfield’s Chief Executive Officer and pertain, in part to the performance
of Brookfield Renewable with respect to its funds from operations, capital
improvement programs, operational expenditures, environment, health and safety
programs, growth of the portfolio of assets, financing activities, as well as
sound management governance practices. The objectives relating to Brookfield
Renewable are driven by Brookfield Renewable’s business plan and are meant to
be aggressive and indicative of the entrepreneurial and opportunistic culture
of the organization. They support the long-term strategy of Brookfield
Renewable by translating into concrete and specific terms various transactions
and initiatives that Brookfield’s and our Service Provider’s management believe
will create shareholder value over the long-term. Brookfield’s long-term incentive plans are
intended to enable participants to create wealth through increases in the value
of Class A Limited Voting Shares. The purpose of these arrangements is to
achieve an alignment of interest between Brookfield’s shareholders and
management and to motivate executives to improve Brookfield’s long-term
financial success, measured in terms of enhanced shareholder wealth over the
long term. Brookfield has five long-term incentive plans
in which NEOs of BREP participate. They are described below in more detail. Management Share Option Plans. The management
share option plans govern the granting to executives of options to purchase
Class A Limited Voting Shares at a fixed price. The options typically vest
as to 20% at the end of each year commencing on the first anniversary of the
date of the award and are exercisable over a ten-year period. The management
share option plans are administered by the board of directors of Brookfield Asset
Management. Options are granted to the NEOs in late February or early March of
each year as part of the annual compensation review. BAM’s Compensation
Committee has a specific written mandate to review and approve executive
compensation. BAM’s Compensation Committee makes recommendations to the board
of directors of Brookfield Asset Management with respect to the proposed
allocation of options to the NEOs based in part upon the recommendations of the
Chief Executive Officer of the Service Provider and the board of directors of
Brookfield Asset Management gives final approval on these compensation matters. The number of options granted to NEOs is
determined based on the scope of their roles, level of responsibilities and
performance against objectives set out for the Brookfield Renewable. In doing
so, consideration is given to the number and value of previous grants of
options. Since the annual option awards are generally made during a blackout
period, the effective grant date for such options is set six business days
after the end of the blackout period. The exercise price for such options is
the volume-weighted average trading price for Class A Limited Voting
Shares on the NYSE for the five business days preceding the effective grant
date. Deferred Share Unit Plan. The DSUP provides
for the issuance of deferred share units (“DSUs”) of Brookfield, the
value of which are equal to the value of a Class A Limited Voting Share.
The DSUP is administered by BAM’s Compensation Committee. DSUs vest over
periods of up to five years, with the exception of DSUs awarded in lieu of a
Cash Bonus which vest immediately. DSUs can only be redeemed for cash upon
cessation of employment through retirement, resignation, termination or death. DSUs are issued based on the value of
Class A Limited Voting Shares at the time of the award (the “DSU
Allotment Price”). In the case of DSUs acquired through the reinvestment of
Cash Bonus awards, the DSU Allotment Price is equal to the exercise price for
options granted at the same time as described above. Holders of DSUs will be
allotted additional DSUs as dividends are paid on Class A Page131


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Table of Contents
 Limited Voting Shares on the same basis as if the
dividends were reinvested pursuant to Brookfield Asset Management’s dividend
reinvestment plan. These additional DSUs are subject to the same vesting
provisions as the DSUs to which they relate (except in the case of dividends on
DSUs acquired through the reinvestment of Cash Bonus awards). The redemption
value of DSUs will be equivalent to the market value of an equivalent number of
Class A Limited Voting Shares on the date employment with Brookfield or
Brookfield Renewable ceases. Restricted Share Unit Plan.The Restricted Share
Unit Plan (the “RSUP”) provides for the issuance of restricted share
units (“RSUs”), the value of which are equal to the increase in market
value of a Class A Limited Voting Share over the market value as at the
date of issuance (the “RSU Allotment Price”). The RSUP is administered
by BAM’s Compensation Committee. RSUs vest over periods of up to five years. RSUs can only be redeemed for cash upon
cessation of employment through retirement, resignation, termination or death. RSUs are not adjusted for regular dividends
paid on Class A Limited Voting Shares. The redemption value of RSUs is
equal to the difference between the market value of an equivalent number of
Class A Limited Voting Shares on the date employment with Brookfield or
Brookfield Renewable ceases and the original RSU Allotment Price for such RSUs. In limited circumstances, senior executives
were awarded RSUs as additional compensation subject to limits approved by
Brookfield Asset Management’s board of directors. No RSUs have been awarded
since February 2005. Restricted Stock Plans.Brookfield Asset
Management has two restricted stock plans: the Restricted Stock Plan and the
Escrowed Stock Plan. These plans were established on February 17, 2011 to
provide Brookfield and its executives with alternatives to Brookfield Asset
Management’s existing plans which allow executives to increase their share
ownership. Restricted shares have the advantage of allowing executives to
become Brookfield Asset Management shareholders, receive dividends, and to have
full ownership of the shares after the restriction period ends. Restricted Stock
Plan.The Restricted Stock Plan (the “RSP”) governs the award to executives of
Class A Limited Voting Shares purchased on the open market. BAM’s
Compensation Committee administers the RSP. Restricted shares vest over periods
of up to five years, except that restricted shares awarded in lieu of a Cash
Bonus vest immediately. Vested and unvested restricted shares must be held
until the fifth anniversary of the award date or another date determined at the
time of the award (the “Hold Date” ). Holders of restricted shares are
entitled to vote their shares and to receive dividends that are paid on the
Class A Limited Voting Shares. Prior to the Hold Date, these dividends are
distributed in the form of additional restricted shares, equivalent in value to
the cash dividends paid on the restricted shares net of required withholding
taxes and subject to the same vesting and hold provisions as the original
restricted shares. Escrowed Stock Plan.The Escrowed Stock
Plan governs the award of non-voting common shares (“escrowed shares”)
of one or more private companies (each an “Investco”) to designated
executives or other individuals designated by BAM’s Compensation Committee.
Each Investco is capitalized with common shares and preferred shares issued to
Brookfield Asset Management for cash proceeds. Each Investco uses its cash
resources to directly and indirectly purchase Class A Limited Voting
Shares on the open market. Dividends paid to each Investco on the Class A
Limited Voting Shares acquired by the Investco will be used to pay dividends on
the preferred shares which are held by Brookfield Asset Management. The
Class A Limited Voting Shares acquired by an Investco will not be voted. Escrowed shares typically vest 20% each year
commencing on the date of the first anniversary of the date of the award and
must be held until the fifth anniversary of the award date. Each holder may
exchange escrowed shares for Class A Limited Voting Shares issued from
treasury of Brookfield Asset Management at a date at least five years from and
no more than 10 years from the award date. BIF Long Term Incentive Plan.Mr. Rank participates
in the BIF Long Term Incentive Plan. The plan is sponsored by Brookfield and
provides payments based on the notional sharing of the carried Page132


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Table of Contents
 interest (the “Carry”). The Carry is substantially
similar to “carried interest” arrangements typically provided in private equity
fund arrangements and effectively provides for a sharing of returns generated
by BIF, provided BIF’s performance exceeds return thresholds. No amounts have
been earned by Mr. Rank under the BIF Long Term Incentive Plan to date. Brookfield believes that, for the NEOs, given
their focus on long term decision making, the impact of which is difficult to
assess in the short term, a formula calculation based on annual operational
targets or individual performance targets may not appropriately reflect the
long term strategy. Accordingly, as a whole, no specific weight is given to the
achievement of any individual objective. For 2013, the Cash Bonuses and compensation
under long-term incentive plans paid to the NEOs by Brookfield were based on
the overall performance of Brookfield Renewable and significant contributions
to the business strategy of Brookfield as a whole. Listed below are several of
the key accomplishments which drove Brookfield Renewable’s strategy and
business plan and which influenced the level of Cash Bonus and long-term
incentives received by each of the NEOs. ·Together
with our institutional partners, we announced the acquisition of nearly 700 MW
of renewable power generating assets.  Approximately 75% of this newly acquired
generating capacity is in the form of hydroelectric stations located in Maine,
with wind and solar facilities in California and Arizona representing the
balance of our acquired capacity. ·We
acquired the remaining 50% interest held by our partner in Powell River Energy,
Inc. bringing our interest to 100%. ·We
continue to make progress in the construction of new hydro facilities. Construction
on the 45 MW hydroelectric project in British Columbia began in the second
quarter of 2012 and we expect it to be fully operational by the second quarter
of 2014 on scope, schedule and budget. Construction on a 29 MW project in
Brazil was completed in February 2013.  ·During
2013, we completed more than $3 billion of financing and capital markets
activity which has funded our growth initiatives and meaningfully lowered our
borrowing costs while increasing the overall terms of our maturities.  We
achieved this by increasing our credit facilities from $990 million to $1,280
million and refinancing existing indebtedness. Further
details on many of our 2013 accomplishments are described under Item 4.A
“History and Development of the Company”. Performance Graph Page133


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Table of Contents
  Jan 1, 2009
 2009
 2010
 2011
 2012
 2013Brookfield Renewable Power Fund /
  Brookfield Renewable Energy Partners L.P.
 100.0
 129.7
 148.4
 206.3
 233.5
 233.5S&P / TSX Composite Index Total Return
 100.0
 134.7
 158.8
 145.0
 155.4
 175.6
 The graph above shows the
performance of our LP Units (and, prior to the Combination, the Fund’s trust
units) as compared to the S&P/TSX Composite Index for the past five years.
The performance of the LP Units is one of the considerations but not a direct
factor in the determination of compensation for NEOs. Summary Compensation Table The NEOs are all employed
by Brookfield and their services are provided to us pursuant to our Master
Services Agreement. We are not responsible for determining or paying their
compensation. For the purpose of full disclosure, the following table presents
the compensation for the NEOs for the period from January 1, 2013 to
December 31, 2013 and for the previous two years (which includes payments
to the NEOs by Brookfield prior to the Combination). With the exception of Mr.
Pinel’s 2013 annual base salary and non-equity incentive plan compensation, the
NEOs are all remunerated in Canadian dollars. However, in order to provide for
comparability with the financial statements, which are reported in U.S.
dollars, all Canadian dollar compensation amounts have been converted to U.S.
dollars at an exchange rate of C$1.00 to US$0.9713, which was the average
Bloomberg mid-market exchange rate for 2013, Page134


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Table of Contents
 unless
otherwise noted. Mr. Pinel’s 2013 base salary and non-equity incentive plan
compensation was paid to him in Brazilian Reais and have been converted into
U.S. dollars at the average Bloomberg mid-market exchange rate for 2013 of R$1.00
to US$0.465. Year
 
 Non-equity
  incentive plan compensation
 Share-based
  Awards
 Options-based
  Awards
 All
  Other Compensation (h)
 Total
  Annual CompensationName and Principal Position
 Annual
  Base Salary
 Annual
  Cash Bonus (a)
 
 Deferred
  Share Units (DSUs) (b)
 Escrowed
  Shares (d)
 Options
  (e),
  (f), (g)($)
 ($)
 ($)
 
 
 ($)
 ($)
 ($)Harry Goldgut
 2013
  (i), (l)
 485,650
 -
 -
 485,650
 1,348,500
 -
 29,803
 2,349,603Group Chairman of the Service Provider
 2012
 485,650
 -
 -
 485,650
 1,198,500
 -
 29,682
 2,199,4822011
 437,085
 -
 -
 437,085
 981,000
 -
 27,985
 1,883,155Richard Legault
 2013
  (j), (l)
 485,650
 242,825
 -
 242,825
 1,348,500
 -
 38,008
 2,357,808Chief Executive Officer of the Service Provider
 2012
 485,650
 242,825
 -
 242,825
 1,598,000
 -
 35,927
 2,605,2272011
 485,650
 485,650
 -
 -
 1,308,000
 -
 40,454
 2,319,754Sachin Shah
 2013 (l)
 364,238
 182,119
 182,119
 -
 -
 1,348,500
 32,318
 2,109,293Chief Financial Officer of the Service Provider
 2012
 339,955
 169,978
 169,978
 -
 -
 1,549,500
 27,926
 2,257,3362011
 291,390
 109,271
 -
 109,271
 -
 457,800
 30,013
 997,746Ralf Rank
 2013
  (k), (m)
 339,955
 128,697
 -
 128,697
 -
 674,250
 22,886
 1,294,485Chief Investment Officer of the Service Provider
 2012
 315,673
 237,969
 -
 -
 -
 671,450
 21,631
 1,246,7222011
 267,108
 267,108
 -
 728,475
 -
 359,700
 18,942
 1,641,332Felipe Pinel
 2013 (m)
 385,252
 232,500
 -
 -
 -
 269,700
 193,269
 1,080,721Chief Operating Officer, LATAM Operations of the Service
  Provider
 2012
 343,196
 162,750
 -
 485,650
 -
 309,900
 203,962
 1,505,4582011
 267,108
 99,558
 99,558
 -
 -
 130,800
 25,681
 622,705
 (a)Some
of the NEOs have elected to reinvest a portion of their annual cash bonus in
Brookfield Asset Management and receive it in share-based awards (DSUs or
restricted shares). (b)The
DSU awards are issued in lieu of a annual cash bonus, at the election of the
individual. Mr. Shah elected to defer 50% of his 2013 annual bonus to DSUs. The
DSU awards in 2013 were granted on February 24, 2014 and were awarded at a
price of US$40.15, which was the volume weighted average price of the Class A
Limited Voting Share on the NYSE for the five trading days preceding the award
date. (c)Includes
restricted share grants and restricted shares granted pursuant to elected annual
cash bonus deferrals. Mr. Goldgut elected to defer 100% of his 2013 annual cash
bonus to restricted shares and Mr. Legault elected to defer 50% of his 2013
annual cash bonus. The restricted shares for 2013 were awarded on February 24,
2014 at a price of C$44.58 per share, the volume weighted average price of the
Class A Limited Voting Shares on the TSX for the 5 trading days preceding the
award date less the value of the required withholding taxes. (d)The
value awarded under the Escrowed Stock Plan is determined by the Board of
Directors of Brookfield Asset Management and considers the stock market price
of the Class A Limited Voting Shares at the time of the award and the potential
increase in value assuming a hold on average of 7.5 years, a volatility of
31.4%, a risk free rate of 2.3% and a dividend growth rate of 3.0%. This value
has been discounted by 25% to reflect the mandatory hold until the fifth
anniversary of the award.  2013 value reflects the grant made on February 24,
2014. (e)The
2013 option awards are based on the grant date fair value of the options issued
on February 24, 2014 of US$8.99 per option calculated, using the Black-Scholes
option pricing model, discounted by 25% to reflect the five-year vesting and
one-year holding provisions of Brookfield Asset Management’s management share
option plans. The options granted on this date are exercisable at a price of
US$40.15. (f)The
2012 option awards are based on the grant date fair value of the options issued
on February 26, 2013 of US$10.33 per option, calculated using the Black-Scholes
option pricing model, discounted by 25% to reflect the five-year vesting and
one-year holding provisions of Brookfield Asset Management's management share
option plans.  The options granted on this date are exercisable at the price of
US$37.82. (g)The
2011 option awards are based on the grant date fair value of the options issued
on February 29, 2012 of US$6.54 per option, calculated using the Black-Scholes
option pricing model, discounted by 25% to reflect the five-year vesting and
one- Page135


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Table of Contents
 year holding provisions of Brookfield Asset
Management's management share option plans. The options granted on this date
are exercisable at the price of US$31.32. (h)These
amounts include annual retirement savings contributions, participation in an
executive group benefits program and vehicle benefits. In late 2011, Mr. Pinel
relocated to Brazil. His expenses in 2012 and 2013 include amounts associated
with his relocation. (i)The
values in this row do not include C$3,910,800 of in-the-money value from
169,375 options which Mr. Goldgut exercised in 2013. (j)The
values in this row do not include C$4,456,376 of in-the-money value from
244,375 options which Mr. Legault exercised in 2013. (k)The
values in this row do not include C$324,437 of in-the-money value from 22,000
options which Mr. Rank exercised in 2013. (l)The
figures in these columns do not include DSUs, restricted shares and cash bonuses
awarded in respect of the establishment of Brookfield Property Partners
("BPY"). On April 15, 2013, Brookfield Asset Management paid a
special dividend of one unit of BPY for every 17.42 Class A Shares held. In
recognition of the result and decrease in the intrinsic value of long term
share ownership awards issued under Brookfield Asset Management's long term
incentive plans, the Board of Directors of Brookfield Asset Management approved
a special cash bonus based on the value of the dividend. Senior executives,
including the Named Executive Officers, received the payment in the form of DSU
based on the five-day volume weighted average price of the Class A Limited
Voting Shares for the period ending March 17, 2013. Participants in the
Restricted Stock Plans, including the Named Executive Officers, received
additional restricted shares to reflect the BPY dividend. The following table
shows the number of DSUs, restricted shares and cash payment made and the total
value of the awards (converted using the 2013 average exchange rates of C$1.00
= US$0.9713). Name
 DSUs (#)
 Restricted Shares
  (#)
 Cash Bonus ($)
 Value ($)Harry Goldgut
 49,909
 2,263
 -
 2,025,847Richard Legault
 69,737
 98
 -
 2,711,693Sachin Shah
 28,887
 204
 -
 1,129,606Ralf Rank
 -
 499
 232,272
 251,645Felipe Pinel
 -
 541
 230,790
 251,782
  The awards and dollar
amounts in the table above have not been included in the Summary Compensation
Table on the basis that these awards are compensation in respect of share-based
awards made in prior years. Page136


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Table of Contents
 Incentive Plan Awards-Outstanding Share-Based Awards and Option Based Awards The following table shows
the options, restricted share awards and unvested DSUs outstanding at
December 31, 2013 Option Awards and
Share-Based Awards at December 31, 2013.  Option
  Awards (a) (b)
 Restricted
  Share Units
 Share-Based
  Awards (a)Vested
  and Unvested
 (RSU)
  Awards (b), (c)
 Restricted
  Shares
 Escrowed
  Shares
 
 Deferred
  Share Units (DSUs)Vested
  and UnvestedNumber
  of Securities Underlying Unexercised Options
 Market Value
  of Unexercised in-the-money Options
 Number
  of Securities Underlying Outstanding RSUs
 Market
  Value of Outstanding in-the-money RSUs
 Number
  of Unvested RSs
 Market
  Value of Unvested RSs (d)
 Market
  Value of Vested RSs (d)
 Number
  of Unvested ESs
 Market
  Value of Unvested ESs (e)
 Market
  Value of Vested ESs (e)
 Number
  of Unvested DSUs
 Market
  Value of Unvested DSUs
 Market
  Value of Vested DSUs (f)(#)
 ($)
 (#)
 ($)
 (#)
 ($)
 ($)
 (#)
 ($)
 ($)
 (#)
 ($)
 ($)Harry Goldgut
 727,500
 12,039,154
 253,125
 7,718,369
 13,035
 505,832
 2,667,214
 420,000
 1,985,700
 225,300
 4,143
 160,864
 8,136,527Richard Legault
 1,250,000
 21,339,907
 253,125
 7,718,369
 -
 -
 149,504
 510,000
 2,336,600
 300,400
 5,696
 221,188
 6,634,137Sachin Shah
 735,200
 9,287,219
 -
 -
 4,061
 157,700
 128,290
 -
 -
 -
 8,726
 338,819
 1,673,998Ralf Rank
 279,125
 2,008,955
 -
 -
 12,184
 473,098
 226,889
 -
 -
 -
 -
 -
 105,250Felipe Pinel
 239,000
 2,526,057
 -
 -
 13,924
 540,306
 -
 -
 -
 -
 -
 -
 136,022
 (a)These
values do not include awards made to the NEOs in 2014. (b)The
market value is the amount by which the value of the Class A Limited Voting
Shares on December 31, 2013 exceeded the exercise price of the options or the
RSU awards. The closing price of Class A Limited Voting Shares on the TSX on
December 31, 2013 was US$38.80 (C$41.22 converted into U.S. dollars at the
Bloomberg mid-market exchange rate on that day of C$1.00 = US$0.9414) and on
the NYSE on December 31, 2013 of US$38.83 as applicable. (c)RSUs
are not redeemable until cessation of employment and have no expiration date. (d)The
market value is calculated as the number of restricted shares multiplied by the
closing price of the Class A Limited Voting Share on December 31, 2013. The
closing price of Class A Limited Voting Shares on the TSX on December 31, 2013
was US$38.80 (C$41.22 converted into U.S. dollars at the Bloomberg mid-market
exchange rate on that day of C$1.00 = US$0.9414) and on the NYSE on December
31, 2013 of US$38.83 as applicable. (e)The
value of the escrowed shares is equal to the value of the Class A Limited
Voting Shares held by Investco less the net liabilities and preferred share
obligations of the Investco. (f)The
market value is calculated as the number of vested DSUs multiplied by the
closing price of the Class A Limited Voting Shares on December 31, 2013. The
closing price of Class A Limited Voting Shares on the TSX on December 31, 2012
was US$38.80 (C$41.22 converted into U.S. dollars at the Bloomberg mid-market
exchange rate on that day of C$1.00 = US$0.9414) and on the NYSE on December
31, 2013 of US$38.83 as applicable. Page137


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Table of Contents
 Incentive Plan Awards -
Outstanding Option Awards and Restricted Share Units at December 31, 2013 The following table shows
the details of each option and restricted share unit outstanding at
December 31, 2013. Option-based Awards
 Restricted Share Units (RSUs)Number of securities underlying
  unexercised options
  (#)
 
 
 
 
 Market value of unexercised
  options at Dec 31, 2013
  ($) (b)
 
 Number of RSUs
  (#)
 
 Market value of RSUs December
  31, 2013
  ($) (b)Name and
  principal position
 Options exercise price
  ($) (a)
 
 Options expiration date
 
 
 Issuance price
  ($) (a), (c )Harry Goldgut
 83,750
 $ 19.22
 
 February 11, 2015
 $
 1,640,094
 
 253,125
 $ 8.31
 $ 7,718,369Group Chairman of the Service Provider
 56,250
 $ 25.70
 
 February 14, 2016
 $
 737,234
 
 -
 -
 -37,500
 $ 36.75
 
 February 13, 2017
 $
 77,195
 
 -
 -
 -50,000
 $ 29.77
 
 February 20, 2018
 $
 451,872
 
 -
 -
 -200,000
 $ 16.62
 
 February 25, 2019
 $
 4,437,760
 
 -
 -
 -300,000
 $ 23.18
 
 March 2, 2020
 $
 4,695,000
 
 -
 -
 -727,500
 
 
 
 $
 12,039,155
 
 253,125
 
 $ 7,718,369Richard Legault
 193,750
 $ 19.22
 
 February 11, 2015
 $
 3,794,247
 
 253,125
 $ 8.31
 $ 7,718,369Chief Executive Officer of the Service Provider
 168,750
 $ 25.70
 
 February 14, 2016
 $
 2,211,702
 
 -
 -
 -37,500
 $ 36.75
 
 February 13, 2017
 $
 77,195
 
 -
 -
 -100,000
 $ 29.77
 
 February 20, 2018
 $
 903,744
 
 -
 -
 -400,000
 $ 16.62
 
 February 25, 2019
 $
 8,875,519
 
 -
 -
 -350,000
 $ 23.18
 
 March 2, 2020
 $
 5,477,500
 
 -
 -
 -1,250,000
 
 
 
 $
 21,339,907
 
 253,125
 
 $ 7,718,369Sachin Shah
 6,750
 $ 19.22
 
 February 11, 2015
 $
 132,187
 
 -
 -
 -Chief Financial Officer of the Service Provider
 11,250
 $ 25.70
 
 February 14, 2016
 $
 147,447
 
 -
 -
 -38,250
 $ 36.75
 
 February 13, 2017
 $
 78,740
 
 -
 -
 -42,250
 $ 29.77
 
 February 20, 2018
 $
 381,832
 
 -
 -
 -256,700
 $ 16.62
 
 February 25, 2019
 $
 5,695,864
 
 -
 -
 -125,000
 $ 23.18
 
 March 2, 2020
 $
 1,956,250
 
 -
 -
 -35,000
 $ 32.61
 
 March 1, 2021
 $
 217,700
 
 -
 -
 -70,000
 $ 31.32
 
 March 1, 2022
 $
 525,700
 
 -
 -
 -150,000
 $ 37.82
 
 February 26, 2023
 $
 151,500
 
 -
 -
 -735,200
 
 
 
 $
 9,287,220
 
 -
 
 $ -Ralf Rank
 15,000
 $ 36.75
 
 February 13, 2017
 $
 30,878
 
 -
 -
 -Chief Investment Officer of the Service Provider
 25,000
 $ 29.77
 
 February 20, 2018
 $
 225,936
 
 -
 -
 -5,000
 $ 16.62
 
 February 25, 2019
 $
 110,944
 
 -
 -
 -48,000
 $ 23.18
 
 March 2, 2020
 $
 751,200
 
 -
 -
 -66,125
 $ 32.61
 
 March 1, 2021
 $
 411,298
 
 -
 -
 -55,000
 $ 31.32
 
 March 1, 2022
 $
 413,050
 
 -
 -
 -65,000
 $ 37.82
 
 February 26, 2023
 $
 65,650
 
 -
 -
 -279,125
 
 
 
 $
 2,008,956
 
 -
 
 $ -Feliipe Pinel
 9,000
 $ 36.74
 
 February 13, 2017
 $
 18,555
 
 -
 -
 -Chief Operating Officer, LATAM Operations
 25,000
 $ 29.77
 
 February 20, 2018
 $
 225,936
 
 -
 -
 -70,000
 $ 16.62
 
 February 25, 2019
 $
 1,553,216
 
 -
 -
 -20,000
 $ 23.18
 
 March 2, 2020
 $
 313,000
 
 -
 -
 -20,000
 $ 32.61
 
 March 1, 2021
 $
 124,400
 
 -
 -
 -30,000
 $ 31.32
 
 March 1, 2022
 $
 225,300
 
 -
 -
 -65,000
 $ 37.82
 
 February 26, 2023
 $
 65,650
 
 -
 -
 -239,000
 
 
 
 $
 2,526,057
 
 -
 
 $ -
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 (a)The
2013 option exercise price and the RSU issuance price are in Canadian dollars
and are presented in the table converted into U.S dollars at the Bloomberg
mid-market exchange rate on December 31, 2013 of C$1.00 = US$0.9414. (b)The
market value of the Class A Limited Voting Shares under option and RSUs is the
amount by which the closing price of Class A Limited Voting Shares on December
31, 2013 exceeded the exercise price of the options and/or the issuance price
of the RSUs. All values are calculated using the closing price of Class A
Limited Voting Shares on December 31, 2013 on the TSX for options issued prior
to March 2, 2010 and on the NYSE for options issued thereafter. The closing
price of the Class A Limited Voting Shares on the TSX on December 31, 2013 was
US$38.80  (C$41.22 converted into U.S. dollars at the Bloomberg mid-market
exchange rate on December 31, 2013 of C$1.00 = US$0.9414.) The closing value of
the Class A Limited Voting Shares on December 31, 2013 on the NYSE was US$38.83. (c)RSUs
are not redeemable until cessation of employment and have no expiration date. Incentive Plan Awards - Value Vested or Earned During the Year The following table shows
the value of all option and share-based awards which vested during 2013. Option and Share-Based
Awards Vested During 2013  Value
  Vested During 2013 (a)
 Non-equity
  incentive plan compensation – Value earned during the yearOptions
 DSUs
 Escrowed
  Shares
 Restricted
  Shares (b),(c)Named Executive Officer
 ($)
 ($)
 ($)
 ($)Harry Goldgut
 1,777,007
 1,744,624
 213,300
 357,859
 -Richard Legault
 2,786,513
 2,441,222
 284,400
 143,732
 242,825Sachin Shah
 1,760,898
 949,036
 -
 41,455
 182,119Ralf Rank
 504,070
 -
 -
 119,680
 128,697Felipe Pinel
 437,738
 -
 -
 -
 232,500
 (a)All
values are calculated using the closing price of a Class A Limited Voting Share
on the vesting date on the TSX and on the NYSE as applicable and converted into
U.S. dollars using the average Bloomberg mid-market exchange rate for 2013 of
C$1.00 = US$0.9713. (b)Values
in this column represent the value of the restricted shares awarded on February
26, 2013 in lieu of the Cash Bonus related to performance in 2012. Pension Plan Page139


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 BREP
sponsors a defined benefit pension plan and a defined contribution pension
plan. The defined benefit pension plan provides its employees, upon their
normal retirement age of 65 years or upon early retirement at the time when age
plus service is equal to or greater than 85 years, with a pension payable for
the retiree’s life and 60% of that pension continuing to the retiree’s spouse
upon the employee’s death. If the employee does not have a spouse at
retirement, the lifetime pension is payable for the retiree’s life with a ten
year guarantee. If the employee retires prior to the age of 65, a temporary
bridge benefit is also payable. The annual pension under the defined benefit
plan at an employee’s normal retirement date is calculated as the product of
(i) 2.0% of the employee’s highest five-year average annual eligible
earnings less 0.5% of the five-year average of Year’s Maximum Pensionable
Earnings under the Canada/Québec Pension Plan, and (ii) the employee’s
years of credited service. Mr. Legault
participated in the defined benefit pension plan until December 31, 2005.
Since January 1, 2006, he has not accrued additional pension credits in
any pension plan sponsored by BREP or its subsidiaries. The annual pension
payable to Mr. Legault under the defined benefit pension plan when he
reaches age 65 or when his age plus service is equal to 85 years is C$69,200. The following table sets
out certain information with respect to Mr. Legault’s accrued benefits in
the defined benefit pension plan in which he participated until
December 31, 2005. Pension Plan Benefit Table Name
 Number
  of years of credited service
 Annual
  benefits payable    ($)
 Accrued
  obligation at start of year ($)
 Compensatory
  change
 Non-compensatory
  change
 Accrued
  obligation at year endAt year
  end
 At age
  65
 ($)
 ($)
 ($)Richard Legault
 16.31
 67,214
 67,214
 886,797
 -
 (6,799)
 879,998President and Chief Executive Officer of the Service Provider
 Note: Amounts have been converted to U.S. dollars at the average Bloomberg
mid-market exchange rate for 2013 of C$1.00 = US$0.9713. Termination and Change of Control Benefits There are no employment
contracts between the NEOs and Brookfield Renewable. None of the NEOs have any
termination, change of control arrangement or other compensatory plan, contract
or arrangement with Brookfield Renewable. While the NEOs participate
in Brookfield’s long-term incentive plans, Brookfield Renewable does not
reimburse the Service Provider for such participation and has no obligations
under these plans to the NEOs in the event of a change of control or a
termination of their employment. Board of Directors of the Managing General Partner The Managing General
Partner pays each of its directors $60,000 per year for serving on its board of
directors and various board committees. 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, within five
years of joining the board of directors, directors of the Managing General
Partner are required to hold sufficient LP Units such that the acquisition cost
is equal to at least two times their annual retainer, as determined by the
Board 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 Page140


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 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, 2013, 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 (or of the Fund or Brookfield or their respective subsidiaries
prior to the Combination), nor any of their associates, has or had any
indebtedness owing to Brookfield Renewable (or to the Fund or Brookfield or
their respective subsidiaries prior to the Combination). 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 may continue 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. Action by the Board
of Directors 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. Page141


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 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
generally 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 Bermuda 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 Page142


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 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
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
the Managing General Partner Mandate
of the Board 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
and each committee are set out in written charters, which are reviewed and
approved annually. Page143


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 These charters are also posted on BREP’s
website, www.brookfieldrenewable.com under “About - Governance”. See also
Item 6.C “Board Practices”. In
fulfilling its mandate, the board 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. Meetings of the Board 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 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 2013, the board of directors of the
Managing General Partner had four regular quarterly meetings as well as five
special meetings. All of the directors were present or could be heard at the
regular quarterly meetings. At the special meeting, held on January 17, 2013,
Mr. Lou Maroun and Ms. Patricia Zuccotti were not in attendance, at the special
meeting, held on September 18, 2013, Mr. David Mann was not in attendance, and
at the special meeting, held on December 11, 2013, Mr. John Van Egmond was not
in attendance. Size
and Composition of the Board 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 Partner of
  Brookfield Asset Management.Eleazar de Carvalho Filho
 
 IndependentJohn Van Egmond
 
 IndependentLars Josefsson
 
 Related
 
 Mr. Josefsson is a consultant to Brookfield
  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 is fully comprised of independent
directors. In addition, special committees of independent directors may be
formed from time to time to review particular matter or transactions. The board
encourages regular open dialogue between the independent directors and the
Chair to discuss matters raised by independent directors. Page144


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 At all quarterly
meetings held since the Combination, the independent directors held meetings
without the presence of management and the directors that are not independent.
The board 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 ·Josefsson:
Holmen AB ·Mann:
Acadian Timber Corp.; New Growth Corp; AllBanc Split Corp. II; Logistec Corp. ·Maroun:
Acadian Timber Corp.; Partners REIT; Summit II REIT; Brookfield Property
Partners L.P. 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, share
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 or
its committees, bring these to the attention of the board or committee chairman
and refrain from voting on such matters. Directors are also expected to submit
their resignations to the Chair of the board if they become unable to attend at
least 75% of the board’s 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 share ownership
requirements is set out under “Board Practices”. Committees of the
Board The Managing General Partner’s board of
directors believes that its committees assist in the effective functioning of
the board and help ensure that the views of independent directors are
effectively represented. The board has two committees: ·the
Audit Committee; and ·the
Nominating and Governance Committee. Page145


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 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 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. Effective November 4, 2013, concurrent with
the dissolution of the Compensation Committee, the Nominating and Governance
Committee assumed the responsibilities of the Compensation Committee.  The
Brookfield Renewable Board of Directors Charter, the Brookfield Renewable
Nominating and Governance Committee Charter and Brookfield Renewable Partners
Limited’s bye-laws were amended in 2013 to remove reference to the Compensation
Committee and to provide for the Compensation Committee responsibilities to be
allocated to the Nominating and Governance Committee.  The Compensation
Committee met once in 2013. 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 2013, the Audit Committee had four regular
quarterly meetings as well as one special meeting. All of the committee members
were present at the meetings. Four regular meetings are scheduled for 2014. 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: Page146


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 ·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
audit outsourcing; and ·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’s operations and its relations with the Service Provider;
to assess the performance of the board, individual directors and the Service
Provider; and to review BREP’s corporate governance practices.  The
Nominating and Governance Committee met twice in 2013. The Nominating and Governance Committee
annually reviews the performance of the board 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. 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. 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. Effective November 4, 2013, the Nominating
and Governance Committee assumed responsibilities from the Compensation
Committee (which was then dissolved) to  review and make recommendations to the
board of directors of the Managing General Partner concerning the remuneration Page147


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 of directors and committee members and supervise 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 the directors will be periodically
assessed by the Nominating and Governance Committee and the board 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. Board, 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 as a whole, its committees and individual directors.
Each year, a survey is sent to directors regarding the effectiveness of the
board 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 as required.
Each director also receives a list of questions for completing a
self-assessment. The Chair of the board holds private interviews with each
director annually to discuss the operations of the board and its committees and
to provide any feedback on the individual director’s contributions. Board and Management
Responsibilities The Managing General Partner’s board of
directors has not developed written position descriptions for the Chair of the
board or the chair of any of the committees of the board. However, each chair
takes responsibility for ensuring the board 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. Employees may report activities which they feel are not consistent
with the spirit and intent of the Code through a hotline set up specifically to
monitor compliance with the Code. 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 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 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
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 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 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 or 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”. However,
through our subsidiaries, we have approximately 1,169 employees involved in the
day-to-day operations of our facilities and the development of our business, of
which 192 operations and 164 corporate employees are located in Canada, 507 are
located in the United States and 306 are located in Brazil. Approximately 593,
or 46% of these employees, are covered by collective agreements expiring
between 2013 and 2018. 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. 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 133,012,391 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 a 65% 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 March 13, 2014 3,300
of our outstanding LP Units were held by holders of record in the United
States, not including LP Units held of record by DTC. As of March 13, 2014, DTC
was the holder of record of 3,568,419 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
 
 65%
 (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
indirect general partnership interests. Page149


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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, 2013, 2012 and 2011, 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 an integrated utility even if a significant component of
such utility’s operations consist of renewable power generation, a
non-renewable power generation operation or development, such as a power
generation operation that uses coal or natural gas, a portfolio of power
operations, if a significant component of such portfolio’s operations consist
of non-renewable power generation, or 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. BREP, BRELP and the Holding Entities also
acknowledge and agree 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 BREP and one or
more members of Brookfield, after taking into consideration the Page150


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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 North and South America 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. 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 equal to
$20 million which amount shall be adjusted for inflation annually beginning 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 (which is generally determined with reference to the
aggregate of the value of all outstanding LP Units and securities of the other
Service Recipients that are not held by Brookfield Renewable, plus all
outstanding third party debt with recourse to BREP, BRELP or a Holding Entity,
less all cash held by such entities) of BREP exceeds an initial reference value
determined based on its market capitalization immediately following the
Combination. In the event that the measured Total Capitalization Value of BREP
in a given period is less than the initial reference value, the Service
Provider will receive a Base Management Fee of $20 million annually (subject to
an annual escalation by a specified inflation factor beginning on
January 1, 2013). The Base Management Fee will be calculated and paid on a
quarterly basis. For a detailed description of our Master Services Agreement,
see Item 6.A “Directors and Senior Management — Our Master Services
Agreement”. Total Capitalization Value as of December 31,
2013 is $9,315,081,212, which against the initial reference value of
$8,093,033,167 and factoring in the annual amount of $20 million (as adjusted
for inflation pursuant to the Master Services Agreement), resulted in a Base
Management Fee payment for the year ended 2013 in the amount of approximately $41 million. The Base
Management Fee payment for the year ended December 31, 2012 and for the period
between the Combination and December 31, 2011 was approximately $35.8
million and $2.2 million, respectively. 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 Page151


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 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”. 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, beginning January 1, 2012, 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 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, Page152


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 Brookfield purchases or provides revenue support for
approximately 37% of Brookfield Renewable’s portfolio as of December 31, 2013. 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.
On the effective date of the Combination, 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. On the completion of the Combination, 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
the Combination 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 issued to the public and the number of
Redeemable/Exchangeable partnership units of BRELP that were issued to
Brookfield on completion of the Combination. 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 at the effective date
of the Combination) subject to an annual adjustment equal to 40% of the
increase in the Canadian consumer price index (“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 at the effective date of the Combination) 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 CPI 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
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 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 CanHoldco entered into an energy
marketing agreement on November 28, 2011 pursuant to which BEM LP has
agreed to provide energy marketing services to CanHoldco (the “Energy
Marketing Agreement”). Under the Energy Marketing Agreement, CanHoldco has
appointed BEM LP to provide the following energy marketing services to
CanHoldco 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
and assisting with compliance with a risk management policy; and ·assisting
with compliance with the terms of any energy marketing agreement between BEM LP
and any subsidiary of CanHoldco holding the power generating facilities. Pursuant to the Energy Marketing Agreement,
CanHoldco 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 beginning 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 CanHoldco 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 CanHoldco. 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 CanHoldco, 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 at the time of the
Combination, the Base Marketing Fee under the Energy Marketing Agreement will
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 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 completion of the Combination. To further align interests and
incentivize continued development success with respect to these specific
projects, Brookfield received no upfront proceeds on closing 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
closing, 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 project, as determined by the Service Provider and the independent
directors of CanHoldco, 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 in
late stage development or construction were transferred for consideration as
part of the Combination 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. Page155


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 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
Agreement 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 in the United States and Canada. 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 Page156


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 Brookfield has
provided an aggregate of $5 million of working capital to Bermuda Holdco
through a subscription for preferred shares of Bermuda 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 Bermuda
Holdco and are redeemable at the option of Bermuda 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 LP Units. 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 to the Operating
Entities 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 Page157


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 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 breach of fiduciary
duty and 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 it is 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 Page158


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 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,
Canadian Multilateral Instrument 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 Page159


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 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
to, Brookfield; ·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 On May 7, 2013, Brookfield Asset Management
provided a $200 million committed unsecured revolving credit facility, expiring
in December 2013, at LIBOR plus 2%, which has been extended to December 2014. 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. Legal Proceedings To our knowledge, there
are no legal proceedings material to BREP or its subsidiaries to which any of BREP
or its subsidiaries is or was a party to or of which any of their respective
properties are the subject matter, nor are there any such proceedings known to
us to be contemplated. To our knowledge, there
were no (i) penalties or sanctions imposed against BREP or its
subsidiaries by a court relating to securities legislation or by a securities
regulatory authority during BREP’s last financial year; (ii) penalties or
sanctions imposed by a court or regulatory body against BREP or its
subsidiaries that would likely be considered important to a reasonable investor
in making an investment decision; or (iii) settlement agreements BREP or
its subsidiaries entered into with a court relating to securities legislation
or with a securities regulatory authority during the last financial year. Page160


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 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”. Page161


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 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: High
 
 LowOctober 1, 2013 to December 31, 2013
 
 
 
 $28.01
 
 $25.33July 1, 2013 to September 30, 2013
 
 
 
 $29.43
 
 $24.69
 The following table sets
forth the monthly high and low prices for our units on the NYSE for the most
recent six months: High
 
 Low2014February
 
 
 
 $31.80
 
 $25.50January
 
 
 
 $26.85
 
 $25.082013December
 
 
 
 $27.07
 
 $25.38November
 
 
 
 $28.01
 
 $26.53October
 
 
 
 $27.69
 
 $25.33September
 
 
 
 $27.88
 
 $25.26
 Our LP Units are
listed on the TSX under the symbol “BEP.UN”. Our LP Units do not have a par
value. Trading commenced on November 30, 2011 following the Combination. On March
14, 2014, S&P Dow Jones Indices LLC announced that BREP will be added to
the S&P/TSX Composite Index after close of trading on March 21, 2014. The
following table sets forth the reported high and low prices of our LP Units on
the TSX for the periods indicated since when issued: High
 
 LowYear ended December 31, 2013
 
 
 
 C$32.02
 
 C$25.69Year ended December 31, 2012
 
 
 
 C$31.38
 
 C$25.50Year 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, 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$28.76October 1, 2012 to December 31, 2012
 
 
 
 C$30.54
 
 C$28.18July 1, 2012 to September 30, 2012
 
 
 
 C$31.38
 
 C$27.25April 1, 2012 to June 30, 2012
 
 
 
 C$28.76
 
 C$25.70January 1, 2012 to March 31, 2012
 
 
 
 C$27.97
 
 C$25.50
 The following table sets
forth the monthly and low prices for our units on the TSX for the most recent
six months: Page162


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 High
 
 Low2014February
 
 
 
 C$31.80
 
 C$28.26January
 
 
 
 C$29.48
 
 C$27.672013December
 
 
 
 C$28.80
 
 C$27.04November
 
 
 
 C$29.42
 
 C$27.75October
 
 
 
 C$28.75
 
 C$26.25September
 
 
 
 C$27.96
 
 C$26.73
 Prior to the Combination,
the Fund’s trust units, which were exchanged for our LP Units on a one-for-one
basis pursuant to the Combination, 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 profile on Page163


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 The System for
Electronic Document Analysis and Retrieval (“SEDAR”) 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
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 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 additional
partnership 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
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 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 amendment to the Amended and
Restated Limited Partnership Agreement of BREP. 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 will have 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
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 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
with respect to such fiscal year. 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 Income 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 CanHoldco by BRELP, will be allocated for Canadian tax purposes firstly, in
respect of any LP Units held by Brookfield or any affiliates of Brookfield
(other than any member of Brookfield Renewable) by BRELP 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 or any affiliates of Brookfield (other than any member
of Brookfield Renewable) 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 or any affiliates of Brookfield (other than any member of Brookfield
Renewable) 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 LP Units owned by Brookfield or any member of the Brookfield
group (other than Brookfield Renewable) immediately after the completion of the
Combination and LP Units acquired by Brookfield or any affiliates of Brookfield
(other than any member of Brookfield Renewable) 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
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 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 Partner Approval”, “— Sale or Other
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: (i)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 (ii)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
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 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
Amended and Restated Limited Partnership Agreement of BREP; ·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 Page169


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 ·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 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
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 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 of BREP that are described below under
“— Withdrawal of the Managing 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
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 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 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 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 Page172


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 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 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 BREP, BRELP, any Holding
Entity, any operating entity or any other holding vehicle established by BREP.
These provisions will not affect any obligation of an indemnified person to
present business or investment opportunities to BREP, BRELP, any Holding
Entity, any operating entity or any other holding vehicle established by BREP
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
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) the liability of such persons
has been limited to the fullest extent permitted by law, except to the extent
that 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 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 Page173


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 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 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”. Page174


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 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 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. In connection with the Combination, 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. Page175


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 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 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 65% 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. Page176


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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 the Combination. Page177


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Table of Contents
  (MILLIONS)
 Q4 2011(1)
 
 Q1 2012
 
 Q2 2012
 
 Q3 2012
 
 Q4 2012Base management fee(2)
 $
 2.4
 
 $
 6.6
 
 $
 7.7
 
 $
 10.3
 
 $
 11.2Incentive distribution
 
 -
 
 
 -
 
 
 -
 
 
 -
 
 
 -Total
 $
 2.4
 
 $
 6.6
 
 $
 7.7
 
 $
 10.3
 
 $
 11.2Q1 2013
 
 Q2 2013
 
 Q3 2013
 
 Q4 2013
 
 TotalBase management fee(2)
 $
 12.0
 
 $
 10.9
 
 $
 9.1
 
 $
 8.9
 
 $
 79.1Incentive distribution
 
 -
 
 
 -
 
 
 -
 
 
 -
 
 
 -Total
 $
 12.0
 
 $
 10.9
 
 $
 9.1
 
 $
 8.9
 
 $
 79.1
 (1)The
Combination was effected on November 28, 2011. 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)Pursuant
to our Master Services Agreement, we pay the Service Provider a fixed base
management fee equal to $20 million (which amount shall be adjusted for
inflation annually beginning 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 (which is generally determined
with reference to the aggregate of the value of all outstanding LP Units,
assuming full conversion of Brookfield’s limited partnership interests in BRELP
into LP Units, and securities of the other Service Recipients that are not held
by Brookfield Renewable, plus all outstanding third party debt with recourse to
BREP, BRELP or a Holding Entity, less all cash held by such entities) of BREP exceeds
an initial reference value determined based on its market capitalization
immediately following the Combination. In the event that the measured Total
Capitalization Value of BREP in a given period is less than the initial
reference value, the Service Provider will receive a base management fee of $20
million annually (subject to an annual escalation by a specified inflation
factor beginning on January 1, 2013). 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. Page178


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Table of Contents
  (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
 $
 26.5
 $
 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 corporate borrowings, credit facilities and
  preferred 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
 $
 2.6
 $
 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 corporate borrowings, credit facilities and
  preferred 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
 $
 1,222(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
 
 
 $
 8.9
 (1)The
Combination was effected on November 28, 2011. 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. 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 Page179


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Table of Contents
 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; ·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 Page180


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Table of Contents
 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 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 BREP, the location of BREP’s registered office or BREP’s
registered agent; Page181


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Table of Contents
 ·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 BREP 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 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 BREP 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 to comply with any rule, regulation, guideline or
requirement of any securities exchange on which the limited partner interests
are or will be listed for trading; Page182


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 ·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 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
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 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. 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 Page184


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 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
the General Partner 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, 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
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 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 to the fullest extent permitted by law, except to the extent
that 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 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 Page186


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 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 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 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
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 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 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 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
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 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 held by such
holder. 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 Page189


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 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
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 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; Page190


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 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 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 Page191


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 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 cancellation the
whole or any 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; Page192


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 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 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 Page193


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 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 on the basis of one Series 3 Share
for each Series 4 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 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, Page194


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 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 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 Page195


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 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 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 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 Page196


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 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 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
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 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 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
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 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 by such holder. 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
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 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. 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 31,2013Medium-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
indenture. 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”), and gives effect to the assumption of the Finco Bonds by
Finco from Brookfield in connection with the Combination. In connection with
the Combination, Finco assumed 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
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 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: ·First
Amendment to Amended and Restated Limited Partnership Agreement of Brookfield
Renewable Energy L.P., dated May 4, 2012 (see Item 10.B “Memorandum
and Articles of Association — Description of the Amended and Restated Limited
Partnership Agreement of BRELP”); ·Guarantee
Indenture, dated October 11, 2012, by and among the Guarantors, Brookfield
Renewable Power Preferred Equity Inc., and Computershare Trust Company of
Canada (Class A Preference Shares, Series 3) (see Item 10.B “Memorandum and
Articles of Association – BRP Equity – Preference Share Guarantees”); ·Guarantee
Indenture, dated October 11, 2012, by and among the Guarantors, Brookfield
Renewable Power Preferred Equity Inc., and Computershare Trust Company of
Canada (Class A Preference Shares, Series 4) (see Item 10.B “Memorandum and
Articles of Association – BRP Equity – Preference Share Guarantees”); ·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”); and ·Amended
and Restated Master Services Agreement, dated January 20, 2014, 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
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 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
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
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 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 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. Proposed Legislation Over the past several years, a number of
legislative and administrative proposals relating to partnership taxation have
been introduced and, in certain cases, have been passed by the U.S. House of
Representatives. On May 28, 2010, the U.S. House of Representatives passed
legislation which, if it had been finally enacted into law and applied to BREP
or to BRELP, could have had adverse consequences, including (i) the
recharacterization of capital gain income as “ordinary income”, (ii) the
potential reclassification of qualified dividend income as “ordinary income”
subject to a higher rate of U.S. income tax, and (iii) potential limitations on
the ability of BREP to meet the Qualifying Income Exception for taxation as a
partnership for U.S. federal income tax purposes. This legislation was not
passed by the U.S. Senate and therefore was not enacted into law. However,
similar legislation was introduced in both the U.S. House of Representatives
and the U.S. Senate in February 2013. The Obama administration has indicated it
supports the adoption of legislation that similarly changes the treatment of
carried interest for U.S. federal income tax purposes. In its published revenue Page203


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 proposals for 2014 the Obama administration proposed
that the current law governing the treatment of carried interest be changed to
subject such income to ordinary income tax. The Obama administration’s
published revenue proposals for previous years contained similar proposals. It remains unclear whether any legislation
related to such revenue proposals or similar to the legislation described above
will be proposed or enacted by the U.S. Congress and, if enacted, whether such
legislation would affect an investment in BREP. Each LP Unitholder should
consult an independent tax adviser as to the potential effect of any proposed
or future legislation on an investment in BREP. The remainder of this
discussion is based on current law without regard to the proposed legislation
or administrative proposals discussed above. 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 partnership agreement if 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
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 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 to under applicable
sections of the U.S. Internal Revenue Code. 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
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 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 independent tax adviser
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
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 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)
adjustments, a determination that BREP’s Section 704(c) allocations are
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
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 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. Recently promulgated U.S. Treasury
Regulations contain special rules for applying the 3.8% Medicare tax (as
described above under “— Medicare Tax”) to non-corporate U.S. Holders making
QEF Elections. Under the special rules, a non-corporate U.S. Holder that has
made a QEF Election with respect to BREP’s interest in a PFIC is permitted to
make a special election to treat such U.S. Holder’s share of the ordinary
earnings and net capital gains of the PFIC as net investment income for
purposes of the 3.8% Medicare tax. A U.S. Holder that does not make this
election may be required to calculate its basis in LP Units for purposes of the
3.8% Medicare tax in a manner that differs from the calculation of basis in LP
Units for U.S. federal income tax purposes generally. 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 include in each year
as ordinary income the 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
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 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,
2014. 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. Recently
enacted U.S. legislation requires each U.S. person who directly or indirectly
owns an interest in a PFIC 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, a special election under the
recently promulgated Treasury Regulations relating to the 3.8% Medicare tax,
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 who transfers LP Units
might 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
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 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 neither BREP nor BRELP will generate 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
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 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
Matters Tax Matters Partner 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
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 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 disposition of LP Units. Taxable Year 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
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 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 The Foreign Account Tax Compliance provisions
of the Hiring Incentives to Restore Employment Act of 2010, commonly known as
“FATCA”, impose a 30% withholding tax on “withholdable payments” made to a
“foreign financial institution” or a “non-financial foreign entity”, unless
such financial institution or entity satisfies certain information reporting or
other requirements. Withholdable payments include certain U.S.-source income
(such as interest, dividends, and other passive income) and gross proceeds from
the sale or disposition of property that can produce U.S.-source interest or
dividends. The withholding tax applies to withholdable payments made on or
after July 1, 2014 (or January 1, 2017 in the Page213


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 case of
gross proceeds). 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, our Managing General
Partner intends to ensure that BREP complies with FATCA, including by entering
into an agreement with the IRS if necessary, so as to ensure that the 30%
withholding tax does not apply to withholdable payments, if any, received by
the Holding Entities or the Operating Entities. If BREP’s organizational structure or the
manner in which it holds its investments is modified in the future, including
for the purpose of facilitating future acquisitions, then LP Unitholders may be
required to properly certify their FATCA status (generally on IRS Form W-8 or
IRS Form W-9, as applicable) and satisfy any other applicable requirements
under FATCA to ensure that the 30% withholding tax does not apply to their
allocable share of any payments made by BREP. In addition, special rules may
apply to LP Unitholders who own LP Units directly and not through a broker.
Such LP Unitholders should consult their own tax advisers regarding the
consequences under FATCA of owning our LP Units in registered form. The foregoing rules remain 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 and the agreement in effect between the United States and
Canada, for cooperation to facilitate the implementation of FATCA, or by future
Treasury Regulations or guidance. LP Unitholders should consult their own tax
advisers regarding the consequences under FATCA of an investment in our 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
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 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
availability or use 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, affect the tax considerations of owning
LP Units, change the character or treatment of portions of BREP’s income, and
adversely affect an investment in LP Units. Such changes could also affect or
cause BREP to change the way it conducts its activities, affect the tax
considerations of an investment in BREP, and otherwise change the character or
treatment of portions of BREP’s income (including changes that recharacterize
certain allocations as potentially non-deductible fees). 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 Page215


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 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
PARTICULAR CIRCUMSTANCES OF 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
and 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 Minister 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
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 This summary does not
address the deductibility of interest on money borrowed to acquire our LP
Units. 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 CanHoldco 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
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 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
purpose of earning income, 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 provisions 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 provisions 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 Page218


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 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 residents 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 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 Page219


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 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 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. Page220


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 Taxation
of Capital Gains and Capital Losses 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. One-half of a capital loss is
deducted as an allowable capital loss 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 a 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” as defined in the Tax Act 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 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 property exists, or (b)
our LP Units are otherwise deemed to be “taxable Canadian property”. Since Page221


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 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 residents of 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 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. 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 Page222


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 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.  Page223


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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 the
chief executive officer and chief financial officer of the Service Provider,
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, persons performing the functions of
principal executive and principal financial officers for us and the Service
Provider have concluded that as of December 31, 2013, 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 persons
performing the functions of principal executive and principal financial
officers, 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. Changes in Internal Control There were no changes in our internal control
over financial reporting identified in management’s evaluation pursuant to
Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by
this Form 20-F that materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting. Management’s Report on Internal Control over Financial Reporting The Form 20-F does not include a report of
management’s assessment regarding internal control over financial reporting or
an attestation report of our independent registered public accounting firm due
to a transition period established by the rules of the SEC for newly public
companies. 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. 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 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. Page224


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 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 August 2013 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: 2013
 
 2012
 
 2011E & Y Fees
 
 E & Y Fees
 
 E & Y Fees
 
 D & T Fees (1)Audit Fees(2)
 6,909,639
 
 6,611,360
 
 4,230,049
 
 2,481,671Audit-related fees(3) (4)
 650,191
 
 1,385,814
 
 474,954
 
 99,029Tax fees(4) (5)
 600,872
 
 608,365
 
 202,807
 
 -
 (1)Excludes
fees paid by the Fund. (2)Audit
fees relate to the fiscal year audit notwithstanding when the fees and expense
were billed or when the services were rendered. (3)Audit-related
fees include services performed in connection with the management information
circular related to the Combination, audits of pension plans and other services
and administrative charges. Audit-related fees also include work performed on
prospectuses issued with regard to the secondary offerings of Brookfield
Renewable's units by Brookfield and preferred shares, as well as work performed
in connection with 20-F and NYSE listing. (4)Includes
fees for services invoiced during the fiscal year notwithstanding when the
services were rendered. (5)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 Brookfield Renewable may
from time-to-time, subject to applicable law, purchase our LP Units for
cancellation in the open market, provided that any necessary approval has been
obtained. Brookfield has also advised our partnership that it may from
time-to-time, subject to applicable law, purchase our LP Units in the market
without making an offer to all LP Unitholders. 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 Page225


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Table of Contents
  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
 
 Amended and Restated Master Services
  Agreement, dated January 20, 2014, 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 Brookfield Renewable Energy
  Partners L.P., Brookfield Renewable Energy L.P., Brookfield BRP Holdings
  (Canada) Inc., BRP Bermuda Holdings I Limited, Brookfield Renewable Power
  Preferred Equity Inc., and Computershare Trust Company of Canada (Class A
  Preference Shares, Series 1).*
  Page226


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Table of Contents
  4.8
 
 Amended and Restated Guarantee Indenture,
  dated November 25, 2011, by and among Brookfield Renewable Energy Partners
  L.P., Brookfield Renewable Energy L.P., Brookfield BRP Holdings (Canada)
  Inc., BRP Bermuda Holdings I Limited, 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 Brookfield Renewable Energy Partners L.P., Brookfield
  Renewable Energy L.P., Brookfield BRP Holdings (Canada) Inc., BRP Bermuda
  Holdings I Limited, 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 Brookfield Renewable Energy Partners L.P., Brookfield
  Renewable Energy L.P., Brookfield BRP Holdings (Canada) Inc., BRP Bermuda
  Holdings I Limited, 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 Brookfield Renewable Energy Partners L.P., Brookfield
  Renewable Energy L.P., Brookfield BRP Holdings (Canada) Inc., BRP Bermuda
  Holdings I Limited, 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 Brookfield Renewable Energy Partners L.P., Brookfield Renewable
  Energy L.P., Brookfield BRP Holdings (Canada) Inc., BRP Bermuda Holdings I
  Limited, Brookfield Renewable Power Preferred Equity Inc., and Computershare
  Trust Company of Canada (Class A Preference Shares, Series 6).*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.***
  Page227


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Table of Contents
  12.2
 
 Certification of Sachin Shah, 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 Sachin Shah, 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 herewith.
 Page228


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Table of Contents
  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: March 17, 2014
 BROOKFIELD RENEWABLE ENERGY PARTNERS L.P.by its
  general partner, Brookfield Renewable Partners LimitedBy:
 /s/ Sachin ShahName:
 Sachin ShahTitle:
 Chief Financial Officer of its Service
  Provider, BRP Energy Group L.P.
 Page229


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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, 2013, and 2012, and for the Years Ended December 31,
  2013, 2012 and 2011
 F-2Unaudited Pro Forma Condensed Combined
  Statements of (Loss) Income for the Year Ended December  31, 2011
 F-73
 F -1


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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
  Chief
  Executive Officer
 Sachin
  Shah
  Chief
  Financial Officer
  March 17, 2014  F -2


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Table of Contents
 INDEPENDENT AUDITORS'
REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM  To the
Partners of Brookfield Renewable Energy Partners L.P.  We have
audited the accompanying consolidated balance sheets of Brookfield Renewable
Energy Partners L.P. (“Brookfield Renewable”) as at December 31, 2013 and 2012,
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, 2013. These consolidated financial statements
are the responsibility of Brookfield Renewable’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on
our audits.  We
conducted our audits 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 the
consolidated financial statements are free from material misstatement. We were
not engaged to perform an audit of Brookfield Renewable’s internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of Brookfield Renewable’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.  In our
opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Brookfield Renewable Energy Partners L.P. at December 31, 2013 and 2012, and
the consolidated results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2013, in conformity with
International Financial Reporting Standards as issued by the International
Accounting Standards Board.  As
discussed in Note 2 (p) to the consolidated financial statements, Brookfield
Renewable has changed its method of accounting for defined benefit plans
resulting from the adoption of the amended International Accounting Standard
19, “Employee Benefits” effective January 1, 2013, which included the
disclosure of a consolidated balance sheet as of January 1, 2012.    Toronto,
Canada March 17, 2014  F -3


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Table of Contents
  BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P.CONSOLIDATED BALANCE SHEETSDec 31
 
 Dec 31
 
 Jan 12013
 
 2012
 
 2012Restated
 Restated(MILLIONS)
 Notes
 
 
 (See Note 2(p))AssetsCurrent assetsCash and cash equivalents
 5
 $
 203
 $
 137
 $
 225Restricted cash
 6
 
 169
 
 157
 
 42Trade receivables and other current assets
 7
 
 184
 
 194
 
 158Due from related parties
 9
 
 48
 
 34
 
 253604
 
 522
 
 678Financial instrument assets
 8
 
 15
 
 -
 
 -Due from related parties
 9
 
 -
 
 22
 
 32Equity-accounted investments
 10
 
 290
 
 344
 
 405Property, plant and equipment, at fair value
 11
 
 15,741
 
 15,702
 
 14,002Deferred income tax assets
 15
 
 117
 
 81
 
 306Other long-term assets
 12
 
 210
 
 254
 
 285$
 16,977
 $
 16,925
 $
 15,708LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities
 13
 $
 209
 $
 207
 $
 190Financial instrument liabilities
 8
 
 62
 
 113
 
 99Due to related parties
 9
 
 110
 
 109
 
 147Current portion of long-term debt
 14
 
 517
 
 532
 
 650898
 
 961
 
 1,086Financial instrument liabilities
 8
 
 9
 
 32
 
 15Long-term debt and credit facilities
 14
 
 6,106
 
 5,587
 
 4,869Deferred income tax liabilities
 15
 
 2,265
 
 2,349
 
 2,367Other long-term liabilities
 16
 
 163
 
 188
 
 1879,441
 
 9,117
 
 8,524EquityNon-controlling interestsPreferred equity
 18
 
 796
 
 500
 
 241Participating non-controlling interests - inoperating subsidiaries
 18
 
 1,303
 
 1,028
 
 629General partnership interest in a holding subsidiaryheld by Brookfield
 18
 
 54
 
 63
 
 64Participating non-controlling interests - in a holdingsubsidiary - Redeemable/Exchangeable unitsheld by Brookfield
 18
 
 2,657
 
 3,070
 
 3,089Limited partners' equity
 19
 
 2,726
 
 3,147
 
 3,1617,536
 
 7,808
 
 7,184$
 16,977
 $
 16,925
 $
 15,708The 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 -4


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Table of Contents
  BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P.CONSOLIDATED STATEMENTS OF INCOME (LOSS)FOR THE YEAR ENDED DECEMBER 31(MILLIONS, EXCEPT PER UNIT AMOUNTS)
 Notes
 
 2013
 
 2012
 
 2011Revenues
 9
 $
 1,706
 $
 1,309
 $
 1,169Other income
 
 
 11
 
 16
 
 19Direct operating costs
 21
 
 (530)
 
 (486)
 
 (407)Management service costs
 9
 
 (41)
 
 (36)
 
 (1)Interest expense – borrowings
 24
 
 (410)
 
 (411)
 
 (411)Share of earnings (loss) from
  equity-accountedinvestments
 10
 
 9
 
 (5)
 
 10Unrealized financial instrument gain (loss)
 8
 
 37
 
 (23)
 
 (20)Depreciation
 11
 
 (535)
 
 (483)
 
 (468)Other
 4
 
 (31)
 
 (16)
 
 (8)Loss on Fund unit liability
 19
 
 -
 
 -
 
 (376)Income (loss) before income taxes
 
 
 216
 
 (135)
 
 (493)Income tax (expense) recoveryCurrent
 15
 
 (19)
 
 (14)
 
 (8)Deferred
 15
 
 18
 
 54
 
 50(1)
 
 40
 
 42Net income (loss)
 
 $
 215
 $
 (95)
 $
 (451)Net income (loss) attributable to:Non-controlling interestsPreferred equity
 18
 $
 37
 $
 16
 $
 13Participating non-controlling interests -
  in operatingsubsidiaries
 18
 
 41
 
 (40)
 
 11General partnership interest in a holding
  subsidiaryheld by Brookfield
 18
 
 1
 
 (1)
 
 (5)Participating non-controlling interests -
  in a holdingsubsidiary - Redeemable/Exchangeable units
  held byBrookfield
 18
 
 67
 
 (35)
 
 (232)Limited partners' equity
 19
 
 69
 
 (35)
 
 (238)$
 215
 $
 (95)
 $
 (451)Basic and diluted earnings (loss) per LP
  Unit
 
 $
 0.52
 $
 (0.26)
 $
 (1.79)The accompanying notes are an integral part
  of these consolidated financial statements.
  F -5


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Table of Contents
  BROOKFIELD
  RENEWABLE ENERGY PARTNERS L.P.CONSOLIDATED STATEMENTS OF COMPREHENSIVE
  INCOME (LOSS)2013
 
 2012
 
 2011FOR THE YEAR ENDED DECEMBER 31
 
 
 Restated
 Restated(MILLIONS)
 Notes
 
 
 
 (See
  Note 2(p))Net income (loss)
 $
 215
 $
 (95)
 $
 (451)Other comprehensive income (loss) that will
  not bereclassified to net income (loss)Revaluations of property, plant and
  equipment
 10,11
 
 (211)
 
 784
 
 1,774Actuarial gains (losses) on defined benefit
  plans
 20
 
 12
 
 (8)
 
 (6)Deferred income taxes on above items
 15
 
 104
 
 (224)
 
 47Total items that will not be reclassified
  to net income (loss)
 
 (95)
 
 552
 
 1,815Other comprehensive income (loss) that may
  bereclassified to net income (loss)Financial instruments designated as
  cash-flow hedgesGains (losses) arising during the year
 8
 
 60
 
 37
 
 (760)Reclassification adjustments for amounts
  recognizedin net income (loss)
 8
 
 (1)
 
 (16)
 
 (14)Foreign currency translation
 
 
 (501)
 
 (145)
 
 (169)Deferred income taxes on above items
 15
 
 (11)
 
 (1)
 
 194Total items that may be reclassified
  subsequently to net income (loss)
 
 (453)
 
 (125)
 
 (749)Other comprehensive (loss) income
 
 
 (548)
 
 427
 
 1,066Comprehensive (loss) income
 
 $
 (333)
 $
 332
 $
 615Comprehensive income (loss) attributable
  to:Non-controlling interestsPreferred equity
 18
 $
 (16)
 $
 23
 $
 7Participating non-controlling interests -
  in operatingsubsidiaries
 18
 
 140
 
 (26)
 
 211General partnership interest in a holding
  subsidiary held byBrookfield
 18
 
 (5)
 
 3
 
 4Participating non-controlling interests -
  in a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 18
 
 (224)
 
 163
 
 194Limited partners' equity
 19
 
 (228)
 
 169
 
 199$
 (333)
 $
 332
 $
 615The accompanying notes are an integral part
  of these consolidated financial statements.
 F -6


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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 agains
 
 
 
 
 
 
 Participating
 interest in
 holding subsidiary(losses) on
 
 
 Total
 
 
 non-controlling
 a holding
 - RedeemableLimited
 Foreign
 
 
 defined
 
 
 limited
 
 
 interests - in
 subsidiary
 /ExchangeableFOR THE YEAR ENDED DECEMBER 31
 partners'
 currency
 Revaluation
 benefit
 Cash flow
 partners'
 Preferred
 operating
 held by
 units held by
 Total(MILLIONS)
 equity
 translation
 surplus
 plans
 hedges
 equity
 equity
 subsidiaries
 Brookfield
 Brookfield
 equityBalance, as at January 1, 2013
 $
 (227)
 $
 125
 $
 3,285
 $
 -
 $
 (25)
 $
 3,158
 $
 500
 $
 1,028
 $
 63
 $
 3,081
 $
 7,830Effect of retrospectively adopting IAS 19R
 
 -
 
 -
 
 -
 
 (11)
 
 -
 
 (11)
 
 -
 
 -
 
 -
 
 (11)
 
 (22)Balance as at January 1, 2013 (restated)
 $
 (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 income (loss)
 
 -
 
 (208)
 
 (111)
 
 4
 
 18
 
 (297)
 
 (53)
 
 99
 
 (6)
 
 (291)
 
 (548)Shares issued
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 349
 
 -
 
 -
 
 -
 
 349Acquisitions (Note 4)
 
 14
 
 -
 
 (14)
 
 -
 
 -
 
 -
 
 -
 
 205
 
 -
 
 -
 
 205Distributions
 
 (193)
 
 -
 
 -
 
 -
 
 -
 
 (193)
 
 (37)
 
 (122)
 
 (4)
 
 (188)
 
 (544)Contributions and other
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 52
 
 -
 
 (1)
 
 51Change in year
 
 (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 January 1, 2012
 $
 (9)
 $
 194
 $
 3,015
 $
 -
 $
 (31)
 $
 3,169
 $
 241
 $
 629
 $
 64
 $
 3,097
 $
 7,200Effect of retrospectively adopting IAS 19R
 
 -
 
 -
 
 -
 
 (8)
 
 -
 
 (8)
 
 -
 
 -
 
 -
 
 (8)
 
 (16)Balance at January 1, 2012 (restated)
 $
 (9)
 $
 194
 $
 3,015
 $
 (8)
 $
 (31)
 $
 3,161
 $
 241
 $
 629
 $
 64
 $
 3,089
 $
 7,184Net (loss) income
 
 (35)
 
 -
 
 -
 
 -
 
 -
 
 (35)
 
 16
 
 (40)
 
 (1)
 
 (35)
 
 (95)Other comprehensive (loss) income
 
 -
 
 (69)
 
 270
 
 (3)
 
 6
 
 204
 
 7
 
 14
 
 4
 
 198
 
 427Shares issued
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 252
 
 -
 
 -
 
 -
 
 252Acquisitions
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 446
 
 -
 
 -
 
 446Distributions
 
 (183)
 
 -
 
 -
 
 -
 
 -
 
 (183)
 
 (16)
 
 (24)
 
 (4)
 
 (179)
 
 (406)Other
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 3
 
 -
 
 (3)
 
 -Change in year
 
 (218)
 
 (69)
 
 270
 
 (3)
 
 6
 
 (14)
 
 259
 
 399
 
 (1)
 
 (19)
 
 624Balance, as at December 31, 2012  (restated)
 $
 (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 -7


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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
 -
  RedeemableLimited
 Foreign
 
 
 defined
 
 
 limited
 
 
 interests
  - in
 subsidiary
 /ExchangeableFOR THE YEAR ENDED DECEMBER 31
 partners'
 currency
 Revaluation
 benefit
 Cash
  flow
 partners'
 Preferred
 operating
 held by
 units
  held by
 Total(MILLIONS)
 equity
 translation
 surplus
 plans
 hedges
 equity
 equity
 subsidiaries
 Brookfield
 Brookfield
 equityBalance, as at January 1, 2011
 $
 (787)
 $
 266
 $
 2,213
 $
 -
 $
 (4)
 $
 1,688
 $
 252
 $
 206
 $
 34
 $
 1,650
 $
 3,830Effect of retrospectively adopting IAS 19R
 
 -
 
 -
 
 -
 
 (6)
 
 -
 
 (6)
 
 -
 
 -
 
 -
 
 (6)
 
 (12)Balance at January 1, 2011 (restated)
 $
 (787)
 $
 266
 $
 2,213
 $
 (6)
 $
 (4)
 $
 1,682
 $
 252
 $
 206
 $
 34
 $
 1,644
 $
 3,818Net (loss) income
 
 (238)
 
 -
 
 -
 
 -
 
 -
 
 (238)
 
 13
 
 11
 
 (5)
 
 (232)
 
 (451)Other comprehensive (loss) income
 
 -
 
 (72)
 
 802
 
 (2)
 
 (291)
 
 437
 
 (6)
 
 200
 
 9
 
 426
 
 1,066Acquisitions
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 223
 
 -
 
 -
 
 223Distributions
 
 (49)
 
 -
 
 -
 
 -
 
 -
 
 (49)
 
 (13)
 
 (25)
 
 (1)
 
 (48)
 
 (136)Adjustments related to the CombinationSettlement of Fund unit liabilities
 
 785
 
 -
 
 -
 
 -
 
 -
 
 785
 
 -
 
 -
 
 16
 
 767
 
 1,568Derivative balances
 
 81
 
 -
 
 -
 
 -
 
 264
 
 345
 
 -
 
 -
 
 7
 
 338
 
 690Settlement of related party balances
 
 175
 
 -
 
 -
 
 -
 
 -
 
 175
 
 -
 
 -
 
 4
 
 171
 
 350Transfer of assets
 
 24
 
 -
 
 -
 
 -
 
 -
 
 24
 
 -
 
 -
 
 -
 
 23
 
 47Other
 
 -
 
 -
 
 -
 
 -
 
 -
 
 -
 
 (5)
 
 14
 
 -
 
 -
 
 9Change in year
 
 778
 
 (72)
 
 802
 
 (2)
 
 (27)
 
 1,479
 
 (11)
 
 423
 
 30
 
 1,445
 
 3,366Balance, as at December 31, 2011 (restated)
 $
 (9)
 $
 194
 $
 3,015
 $
 (8)
 $
 (31)
 $
 3,161
 $
 241
 $
 629
 $
 64
 $
 3,089
 $
 7,184The 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 CASH FLOWSFOR THE YEAR ENDED DECEMBER 31(MILLIONS)
 Notes
 
 2013
 
 2012
 
 2011Operating activitiesNet income (loss)
 
 $
 215
 $
 (95)
 $
 (451)Adjustments for the following non-cash items:Depreciation
 11
 
 535
 
 483
 
 468Unrealized financial instrument (gain) loss
 8
 
 (37)
 
 23
 
 20Share of (earnings) loss from equity accountedinvestments
 10
 
 (9)
 
 5
 
 (10)Deferred income tax recovery
 15
 
 (18)
 
 (54)
 
 (50)Loss on Fund unit liability
 19
 
 -
 
 -
 
 376Other non-cash items
 
 
 43
 
 46
 
 -Dividends received from equity-accounted investments
 10
 
 16
 
 12
 
 8Net change in working capital balances
 22
 
 1
 
 (22)
 
 (12)746
 
 398
 
 349Financing activitiesLong-term debt – borrowings
 14
 
 1,353
 
 1,193
 
 880Long-term debt – repayments
 14
 
 (1,683)
 
 (1,140)
 
 (215)Capital provided by participating non-controlling interests -in operating subsidiaries
 4,18
 
 265
 
 434
 
 186Issuance of preferred equity
 18
 
 337
 
 248
 
 -Contributions from common parent
 
 
 -
 
 -
 
 106Distributions:To participating non-controlling interests - in operating
  subsidiariesand preferred equity
 18
 
 (157)
 
 (38)
 
 (39)To unitholders of Brookfield Renewable or BRELP
 19
 
 (378)
 
 (362)
 
 (109)(263)
 
 335
 
 809Investing activitiesAcquisitions
 4
 
 (241)
 
 (775)
 
 (212)Investment in:Sustaining capital expenditures
 11
 
 (79)
 
 (55)
 
 (66)Development and construction of renewable powergenerating assets
 11
 
 (147)
 
 (307)
 
 (698)Investment tax credits related to renewable power generating
  assets
 11
 
 -
 
 209
 
 -Due to or from related parties
 9
 
 (11)
 
 172
 
 (120)Investment in securities
 
 
 -
 
 (28)
 
 -Restricted cash and other
 
 
 70
 
 (29)
 
 (12)(408)
 
 (813)
 
 (1,108)Foreign exchange gain (loss) on cash
 
 
 (9)
 
 (8)
 
 11Cash and cash equivalentsIncrease (decrease)
 
 
 66
 
 (88)
 
 61Balance, beginning of year
 
 
 137
 
 225
 
 164Balance, end of year
 
 $
 203
 $
 137
 $
 225Supplemental cash flow information:Interest paid
 
 $
 388
 $
 380
 $
 318Interest received
 
 
 11
 
 16
 
 27Income taxes paid
 
 
 29
 
 10
 
 48The accompanying notes are an integral part
  of these consolidated financial statements.
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 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 and Brazil, which prior to November 28, 2011 were held as part
of the power generating operations of Brookfield Renewable Power Inc. (“BRPI”)
and Brookfield Renewable Power Fund (the “Fund”). Brookfield Renewable is a publicly traded limited partnership
established under the laws of Bermuda pursuant to an amended and restated
limited partnership agreement dated November 20, 2011. The registered office of Brookfield Renewable is 73 Front Street,
Fifth Floor, Hamilton HM12, Bermuda. The immediate parent of Brookfield Renewable is its general
partner. The ultimate parent of Brookfield Renewable is Brookfield Asset
Management Inc. (“Brookfield Asset Management”). 2.BASIS OF
PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (a) Statement of compliance The
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, 2013, 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, Brookfield Renewable Partners
Limited, on March 17, 2014. 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
interests in the equity of Brookfield Renewable’s subsidiaries are shown
separately in equity in the consolidated balance sheets. (ii)Strategic combination of the renewable power generating operations On November 28, 2011, upon
completion of the strategic combination (the “Combination”) of the renewable
power assets of BRPI and the Fund, the public unitholders of the Fund received
one non- F -10


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 voting limited partnership unit (“LP Unit”)
of Brookfield Renewable in exchange for each trust unit of the Fund held and
the Fund was wound up. Also as part of the
Combination, Brookfield Renewable entered into a voting agreement with
Brookfield Asset Management and its subsidiaries, 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 (the “Redeemable/Exchangeable
Partnership Units”), to a subsidiary of Brookfield Asset Management, pursuant
to which the holder may at its request require BRELP to redeem the
Redeemable/Exchangeable Partnership Units for cash consideration after a
mandatory two-year holding period from the date of issuance. 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 Brookfield Renewable 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”). At
the date of the Combination, Brookfield Asset Management, held directly or
indirectly, approximately a 73% limited partnership interest on a
fully-exchanged basis and all general partnership units including a 0.01%
general partnership interest in Brookfield Renewable. Brookfield Asset
Management and its subsidiaries, other than Brookfield Renewable, are
collectively referred to as Brookfield in these financial statements. In the
first quarter of 2012 and in the first quarter of 2013, Brookfield sold LP
Units in Brookfield Renewable and Brookfield Asset Management currently holds,
directly or indirectly, approximately a 65% limited partnership interest on a
fully-exchanged basis. On an unexchanged basis, Brookfield Asset Management
holds a 30% direct limited partnership interest in Brookfield Renewable, a 49%
direct interest in BRELP through the ownership of Redeemable/Exchangeable
Partnership Units and a direct 1% general partnership interest in BRELP. Effective
November 30, 2011, Brookfield Renewable’s LP Units traded under the symbol
“BEP.UN” on the Toronto Stock Exchange. Effective December 2011, Brookfield Renewable entered
into voting arrangements with various affiliates of Brookfield Asset
Management, whereby Brookfield Renewable  gained control of  the entities that
own U.S. and Brazil renewable power generating operations (the “Voting
Arrangements”). The Voting Arrangements provide Brookfield Renewable with all
of the voting rights to elect the Boards of Directors of the relevant entities
and therefore provides Brookfield Renewable with control. Accordingly,
Brookfield Renewable consolidates the accounts of these entities. Refer to Note
9 - Related party transactions for further information. The Combination and Voting
Arrangements do not represent business combinations under IFRS 3,Business
Combinations(“IFRS 3R”),as all combining businesses are ultimately
controlled by  Brookfield Asset Management both before and after the
transactions were completed. Brookfield Renewable accounts for these
reorganizations of entities under common control in a manner similar to a
pooling of interest which requires the presentation of pre-Combination and
Voting Arrangement financial information as if the transactions had always been
in place. Refer to Note 2(o) (ii) for Brookfield Renewable’s policy on
accounting for transactions under common control. Financial information for
the periods prior to November 28, 2011 is presented based on the historical
combined financial information for the contributed operations as previously
reported by Brookfield Asset Management.  For the period since completion of
the Combination, the results are based on the actual F -11


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 results
of the new entity, Brookfield Renewable, including the adjustments associated
with the Combination and the execution of several new and amended agreements,
including power purchase agreements and management service agreements.  Refer
to Note 9 - Related party transactions for further information. Effective
June 11, 2013, Brookfield Renewable’s LP Units traded under the symbol “BEP” on
the New York Stock Exchange. (iii)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 proportionate interest in the investee. (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
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 (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. Effective December 31, 2011
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. 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
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 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, 2013, is 16 years (2012: 17 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 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
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 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
financial instrument liabilities, respectively. (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 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 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
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 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 the power 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 neither taxable profit nor accounting profit. Deferred income tax
assets are 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. Current and deferred income taxes
are recorded based on the accounting records of the individual entities that
are included within Brookfield Renewable. No additional allocation was
considered necessary, prior to the Combination. (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 3R 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
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 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
intended use. (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
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 (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 energy facilities, and by bringing those facilities to commercial
operation, coupled with a 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 the renewable energy 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 energy 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) - Critical
judgments in applying accounting policies 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
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 (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 the temporary
difference will reverse. (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 3R 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). 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. F -19


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Table of Contents
 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 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. 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). 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). In applying
this policy, judgments are made in determining the probability of whether
deductions, tax credits and tax losses can be utilized. F -20


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Table of Contents
 (vi)Consolidation
of Brookfield Renewable Power Fund Brookfield Renewable held
a 34% investment in the Fund, on a fully-exchanged basis prior to November 28,
2011. As a result, Brookfield Renewable assessed whether it continued to
control the Fund, given its reduced ownership level. In making this assessment,
Brookfield Renewable considered the definition of control and guidance as set
out in IAS 27,Consolidated and Separate Financial Statements(“IAS
27”). Brookfield Renewable concluded that control did exist as it had the power
to govern the financial and operating policies of the Fund under specific
agreements. Effective November 28, 2011, public unitholders of the Fund
received one LP Unit of Brookfield Renewable for each trust unit of the Fund
held, and the Fund was wound up. (p)New standards, interpretations and
amendments adopted by Brookfield Renewable The following new accounting standards
applied or adopted in the year ended December 31, 2013 had no material impact
on the consolidated financial statements. ·IFRS
10,Consolidated Financial Statements, ·IFRS
11,Joint Arrangements, and IAS 28,Investment in Associates and
Joint Ventures, ·IAS
34,Interim Financial Reporting and Segment Information for Total Assets and
Liabilities. Brookfield Renewable applied, for the
first time, certain standards and amendments that require restatement of
previous financial statements. These include IAS 19 (Revised 2011),Employee
Benefits, and amendments to IAS 1,Presentation of Financial Statements.
The nature and the impact of the new standards or amendments applied or adopted
in the year ended December 31, 2013 are described below: IFRS
12,Disclosure of Interests in Other Entities(IFRS 12) IFRS
12 establishes disclosure requirements for interests in subsidiaries, joint
arrangements, associates, unconsolidated structured entities, special purpose
vehicles and off-balance sheet vehicles. The adoption of IFRS 12 has resulted
in more comprehensive disclosures in the consolidated financial statements that
address the nature of, and risks associated with, an entity’s interest in other
entities (refer to Notes 3, 10 and 18). IFRS
13,Fair Value Measurement(IFRS 13) IFRS 13 was adopted on January 1, 2013.
IFRS 13 establishes a single source of guidance for fair value measurements and
disclosures about fair value measurements. The fair value measurement
requirements of IFRS 13 apply to both financial instrument items and
non-financial instrument items for which other IFRSs require or permit fair
value measurements. The new Standard clarifies that 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. It
also establishes additional disclosures about fair value measurements. It
supersedes the fair value guidance that currently exists in IAS 16 concerning
the use of the revaluation method. In addition specific transitional
provisions were given to entities such that they need not apply the disclosure
requirements set out in the Standard in comparative information provided for
periods before the initial application of the Standard. In accordance with
these transitional provisions, Brookfield Renewable has not made any new
disclosures required by IFRS 13 for the 2012 comparative period. Other than the
additional disclosures, the application of IFRS 13 did not have any material
impact on the amounts recognized in the consolidated financial statements. IAS
1,Presentation of Items of Other Comprehensive Income – Amendments to IAS 1 The amendments to IAS 1 introduced a
grouping of items presented in other comprehensive income (“OCI”). Items that
could be reclassified (or recycled) to profit or loss at a future point in time
(e.g., net F -21


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Table of Contents
 gain on hedge of net investment, exchange
differences on translation of foreign operations, net movement on cash flow
hedges and net loss or gain on available-for-sale financial assets) now have to
be presented separately from items that will never be reclassified (e.g.,
actuarial gains and losses on defined benefit plans and revaluation of power
generating assets). The amendment affected presentation and had no impact on
Brookfield Renewable’s financial position or performance. IAS
19,Employee Benefits(Revised 2011) (IAS 19R) IAS 19R introduced amendments to the
accounting for defined benefit plans, including the treatment of actuarial
gains and losses that are now recognized in OCI and permanently excluded from
profit and loss. Also, expected returns on plan assets are no longer recognized
in profit or loss, instead there is a requirement to recognize interest on the
net defined benefit liability (asset) in profit or loss, calculated using the
discount rate used to measure the defined benefit obligation. Brookfield Renewable assessed its
accounting policy on the recognition of actuarial gains and losses from its
defined benefit plans. Brookfield Renewable previously recognized the net
cumulative unrecognized actuarial gains and losses, which exceeded 10% of the
higher of the defined benefit obligation and the fair value of the plan
assets. F -22


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Table of Contents
 The adoption of
IAS 19R required Brookfield Renewable to retroactively restate its consolidated
financial statements. The following table summarizes these amounts: As at
  December 31, 2012
 
 As at
  January 1, 2012Previously
 
 
 
 
 Previously(MILLIONS)
 presented
 Adjustment
 Restated
 presented
 Adjustment
 RestatedConsolidated Balance Sheets:Other long-term liabilities
 $
 157
 $
 31
 $
 188
 $
 164
 $
 23
 $
 187Deferred income tax liabilities
 
 2,358
 
 (9)
 
 2,349
 
 2,374
 
 (7)
 
 2,367Participating non-controlling interests - in aholding subsidiary - Redeemable/Exchangeableunits held by Brookfield
 
 3,081
 
 (11)
 
 3,070
 
 3,097
 
 (8)
 
 3,089Limited partners' equity
 
 3,158
 
 (11)
 
 3,147
 
 3,169
 
 (8)
 
 3,161Consolidated Statements of Changes in Equity:Actuarial losses on defined benefit plans
 $
 -
 $
 (11)
 $
 (11)
 $
 -
 $
 (8)
 $
 (8)For the
  year ended December 31, 2012
 For the
  year ended December 31, 2011Consolidated Statements of Comprehensive Income (Loss):Actuarial losses on defined benefit plans
 $
 -
 $
 (8)
 $
 (8)
 $
 -
 $
 (6)
 $
 (6)Deferred income taxes on above items, net
 
 (227)
 
 2
 
 (225)
 
 239
 
 2
 
 241
  (q) Future changes in accounting policies (i)      Financial Instruments IFRS 9,Financial Instruments(“IFRS
9”) was issued by the IASB on October 28, 2010, and will replace IAS 39. IFRS 9
uses a single approach to determine whether a financial asset is measured at
amortized cost or fair value, replacing the multiple rules in IAS 39. The
approach in IFRS 9 is based on how an entity manages its financial instruments
in the context of its business model and the contractual cash flow
characteristics of the financial assets. Two measurement categories continue to
exist to account for financial liabilities in IFRS 9, FVTPL and amortized cost.
Financial liabilities held for trading are measured at FVTPL, and all other
financial liabilities are measured at amortized cost unless the fair value
option is applied. The treatment of embedded derivatives under the new standard
is consistent with IAS 39 and is applied to financial liabilities and
non-derivative hosts not within the scope of the standard. IFRS 9 is effective
for annual periods beginning on or after 1 January 2018. Management is
currently evaluating the impact of IFRS 9 on the consolidated financial
statements. (ii)      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 is effective for annual periods beginning on or after January 1,
2014. Management is currently evaluating the impact of IFRIC 21 on the
consolidated financial statements.  F -23


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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, 2013: Percentage
  ofCountry
  of incorporation,
 voting
  securitiesregistration
  or operations
 owned or
  controlled(%)Brookfield Renewable Energy L.P.(1)
 Bermuda
 100BRP Bermuda Holdings I Limited
 Bermuda
 100Brookfield Renewable Power Preferred Equity
  Inc.
 Canada
 100Brookfield Renewable Energy Partners ULC(2)
 Canada
 100Brookfield BRP Canada Corp.
 Canada
 100Great Lakes Power Limited
 Canada
 100Mississagi Power Trust
 Canada
 100Lievre Power L.P.
 Canada
 100BAIF U.S. Renewable Power Holdings LLC(3)
 U.S.
 100BIF II WP Investco I LLC(4)
 U.S.
 100Catalyst Old River Hydroelectric L.P.(5)
 U.S.
 75Erie Boulevard Hydropower L.P.
 U.S.
 100Brookfield Energia Renovavel S.A.
 Brazil
 100Itiquira Energetica S.A.
 Brazil
 100
 (1)Brookfield
Asset Management holds Redeemable/Exchangeable Partnership Units and a general
partnership interest of 49% and 1%, respectively. BRELP is controlled by Brookfield
Renewable through a voting agreement with Brookfield Asset Management. (2)Formerly
BRP Finance ULC. (3)Effective
December 2011, Brookfield Renewable entered into Voting Arrangements with
various affiliates of Brookfield Asset Management, whereby Brookfield Renewable
gained control (as discussed in Note 4 - Business Combinations). (4)Effective
September 2013, Brookfield Renewable entered into a voting arrangement with
various affiliates of Brookfield Asset Management whereby Brookfield Renewable
gained control (as discussed in Note 9 – Related Party Transactions). (5)Non-voting
economic interest held through preferred shares and secured notes. 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 2013 Northeastern United States Hydroelectric Generation Assets In March 2013,
Brookfield Renewable acquired a 100% interest in a 360 MW portfolio of
hydroelectric generation 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 additional
revenue from the acquisition would have been $104 million (unaudited) for the
year ended December 31, 2013. F -24


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Table of Contents
 California Wind Generation
Assets 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. If
the acquisition had taken place at the beginning of the year the additional
revenue from the acquisition would have been $38 million (unaudited) for the
year ended December 31, 2013. Canadian Hydroelectric Generation Asset In March 2013,Brookfield Renewable
acquired the remaining 50% interest, previously held by its partner, in a
hydroelectric generation facility in Canada taking its total investment to 100%
(the “Canadian Hydroelectric Step Acquisition”). The Canadian Hydroelectric 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 Hydroelectric 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. F -25


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Table of Contents
 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
 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 2012 California Wind Generation Assets 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 generation facilities in
California. BAIF U.S. Holdings also acquired the remaining 50% interest in a
wind generation 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. 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 generating facilities are now all in commercial operation. Brazil Hydroelectric Generation Asset In
July 2012, a Brookfield Americas Infrastructure Fund (“BAIF”) entity, in which
Brookfield Renewable holds a 25% controlling interest (“BAIF Brazil”), acquired
a 100% interest in a hydroelectric generation 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. F -26


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Table of Contents
 Southern United States Hydroelectric Generation Assets In
November 2012, BAIF U.S. Holdings acquired a 100% interest in a portfolio of
hydroelectric generation 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. During the year ended December 31, 2013, the purchase price
allocations for the acquisitions in 2012 were finalized. No changes to the
provisional purchase price allocations disclosed in the audited consolidated
financial statements for 2012 had to be considered for acquisitions made in
2012. 5. CASH AND
CASH EQUIVALENTS Brookfield Renewable’s cash and cash equivalents as at December 31
are as follows: (MILLIONS)
 
 2013
 
 2012Cash
 $
 164
 $
 91Short-term deposits
 
 39
 
 46$
 203
 $
 137
 6. RESTRICTED
CASH Brookfield Renewable’s restricted cash as at December 31 is as
follows: (MILLIONS)
 
 2013
 
 2012Development projects
 $
 42
 $
 103Operations
 
 202
 
 134Total
 
 244
 
 237Less: non-current
 
 (75)
 
 (80)Current
 $
 169
 $
 157
 Refer to Note 12 – Other
long-term assets for information on long-term restricted cash. F -27


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Table of Contents
 7. TRADE RECEIVABLES AND OTHER CURRENT ASSETS Brookfield Renewable’strade receivables and other current assetsas at December
31 are as follows: (MILLIONS)
 
 2013
 
 2012Trade receivables
 $
 105
 $
 106Prepaids and other
 
 79
 
 88$
 184
 $
 194
 As at December 31, 2013, 99% (2012: 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, 2013 and 2012 an allowance for doubtful accounts was not deemed
necessary. 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)
Commodity price risk Commodity
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.  Commodity price risk arises
from the sale of Brookfield Renewable’s uncontracted generation and
stabilization of the gas purchases. Brookfield
Renewable sells electricity under long-term contracts to secure stable prices
and mitigate its exposure to wholesale markets. During 2011, certain of the
long-term contracts were considered financial instruments, and were recorded at
fair value in the consolidated financial statements. The change in fair value
of long-term contracts was recorded in either income as “unrealized financial
instrument loss” or OCI, as applicable. The
table below summarizes the impact of changes in the market price of electricity
and gas 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. F -28


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Table of Contents
 Impact of a 5% change in the market price of gas and electricity
for the year ended December 31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2013
 
 2012
 
 2011
 
 2013
 
 2012
 
 20115% increase
 $
 -
 $
 1
 $
 2
 $
 1
 $
 -
 $
 -5% decrease
 
 -
 
 (1)
 
 (2)
 
 (1)
 
 -
 
 -
 (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. 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 $1,515 million (2012: $1,592
million). Of this amount, $806 million (2012: $1,102 million) has been hedged
through the use of interest rate swaps.  Brookfield Renewable’s subsidiaries
will enter into agreements designed to minimize the exposure to interest rate
fluctuations on these debts. The fair values of the recognized liability for
these agreements 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 for the year ended December 31: Effect
  on net income
 Effect
  on OCI(MILLIONS)
 
 2013
 
 2012
 
 2011
 
 2013
 
 2012
 
 20111% increase
 $
 (7)
 $
 (7)
 $
 (7)
 $
 96
 $
 51
 $
 481% decrease
 
 7
 
 7
 
 7
 
 (96)
 
 (51)
 
 (48)
 (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.
As at December 31, 2013, 99% (2012: 99%)of Brookfield Renewable’s trade receivables of $105 million
were current. See Note 7 - Trade receivables and other current assets, for
additional details regarding Brookfield Renewable’s trade receivables balance. F -29


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Table of Contents
 The maximum credit exposure at
December 31 was as follows: (MILLIONS)
 
 2013
 
 2012Cash and cash equivalents
 $
 203
 $
 137Restricted cash
 
 169
 
 157Trade receivables and other current assets
 
 184
 
 194Financial instrument assets
 
 15
 
 -Other long-term assetsRestricted cash
 
 75
 
 80Other
 
 -
 
 2Due from related parties(1)
 
 48
 
 56$
 694
 $
 626
 (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 and hydrology reserve facilities. Details of the undrawn credit
facilities are included in Note 14 – Long-term debt and credit
facilities.  Brookfield Renewable also ensures that it has access to public
debt markets by maintaining a strong 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 -30


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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. Refer to Note 18 – Non-controlling interests for additional details
regarding how liquidity risk is mitigated for the Redeemable/Exchangeable
partnership units.  AS AT DECEMBER 31, 2013(MILLIONS)
 
 < 1
  year
 2-5
  years
 > 5
  years
 TotalAccounts payable and accrued liabilities
 $
 209
 $
 -
 $
 -
 $
 209Financial instrument liabilities(1)(2)
 
 62
 
 9
 
 -
 
 71Due to related parties
 
 110
 
 -
 
 -
 
 110Other long-term liabilities - concession
  payments
 
 1
 
 5
 
 117
 
 123Long-term debt and credit facilities(2)
 
 517
 
 2,395
 
 3,752
 
 6,664Interest payable on long-term debt(3)
 
 364
 
 1,199
 
 1,640
 
 3,203Total
 $
 1,263
 $
 3,608
 $
 5,509
 $
 10,380AS AT DECEMBER 31, 2012(MILLIONS)
 
 < 1
  year
 2-5
  years
 > 5
  years
 TotalAccounts payable and accrued liabilities
 $
 207
 $
 -
 $
 -
 $
 207Financial instrument liabilities(1)(2)
 
 113
 
 30
 
 2
 
 145Due to related parties
 
 109
 
 -
 
 -
 
 109Other long-term liabilities - concession
  payments
 
 8
 
 22
 
 104
 
 134Long-term debt and credit facilities(2)
 
 532
 
 1,902
 
 3,739
 
 6,173Interest payable on long-term debt(3)
 
 284
 
 931
 
 1,331
 
 2,546Total
 $
 1,253
 $
 2,885
 $
 5,176
 $
 9,314
 (1)Financial
instruments liabilities exclude amounts determined to be non-financial
derivatives. (2)Includes
both the current and long-term amounts. (3)Represents
aggregate interest payable expected to be paid over the entire term of the
obligations, if held to maturity. Variable rate interest payments have been
calculated based on current rates. F -31


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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, 2013
 and
 used for
 financial
 non-financial(MILLIONS)
 receivables
 hedging
 liabilities
 liabilities
 TotalCash, cash equivalents andrestricted cash
 $
 372
 $
 -
 $
 -
 $
 -
 $
 372Trade receivables and other current assets(2)
 
 184
 
 -
 
 -
 
 -
 
 184Due from related parties(2)
 
 48
 
 -
 
 -
 
 -
 
 48Financial instrument assets
 
 -
 
 15
 
 -
 
 -
 
 15Equity-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
 $
 700
 $
 15
 $
 -
 $
 16,262
 $
 16,977Accounts payable and accrued liabilities(2)
 $
 -
 $
 -
 $
 209
 $
 -
 $
 209Financial instrument liabilities(3)
 
 -
 
 71
 
 -
 
 -
 
 71Due to related parties(2)
 
 -
 
 -
 
 110
 
 -
 
 110Long-term debt and credit facilities(2)(3)
 
 -
 
 -
 
 6,623
 
 -
 
 6,623Deferred income tax liabilities
 
 -
 
 -
 
 -
 
 2,265
 
 2,265Other long-term liabilities
 
 -
 
 -
 
 163
 
 -
 
 163Total liabilities
 $
 -
 $
 71
 $
 7,105
 $
 2,265
 $
 9,441
 (1)Measured at fair value with
all gains and losses recorded in the consolidated statements 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 -32


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Table of Contents
 Non-financialCash,
  loans
 
 
 Derivatives
 Other
 assets
  andAS AT DECEMBER 31, 2012
 and
 Assets(1)
 used for
 financial
 non-financial(MILLIONS)
 receivables
 liabilities
 hedging
 liabilities
 liabilities
 TotalCash, cash equivalents andrestricted cash
 $
 294
 $
 -
 $
 -
 $
 -
 $
 -
 $
 294Trade receivables and other current assets(2)
 
 194
 
 -
 
 -
 
 -
 
 -
 
 194Due from related parties(2)(3)
 
 56
 
 -
 
 -
 
 -
 
 -
 
 56Equity-accounted investments
 
 -
 
 -
 
 -
 
 -
 
 344
 
 344Property, plant and equipment, at fair
  value
 
 -
 
 -
 
 -
 
 -
 
 15,702
 
 15,702Deferred income tax assets
 
 -
 
 -
 
 -
 
 -
 
 81
 
 81Other long-term assets
 
 100
 
 26
 
 -
 
 -
 
 128
 
 254Total assets
 $
 644
 $
 26
 $
 -
 $
 -
 $
 16,255
 $
 16,925Accounts payable and accrued liabilities(2)
 $
 -
 $
 -
 $
 -
 $
 207
 $
 -
 $
 207Financial instrument liabilities(3)
 
 -
 
 80
 
 65
 
 -
 
 -
 
 145Due to related parties(2)
 
 -
 
 -
 
 -
 
 109
 
 -
 
 109Long-term debt and credit facilities(2)(3)
 
 -
 
 -
 
 -
 
 6,119
 
 -
 
 6,119Deferred income tax liabilities
 
 -
 
 -
 
 -
 
 -
 
 2,349
 
 2,349Other long-term liabilities
 
 -
 
 -
 
 -
 
 188
 
 -
 
 188Total liabilities
 $
 -
 $
 80
 $
 65
 $
 6,623
 $
 2,349
 $
 9,117
 (1)Measured at fair value with
all gains and losses recorded in the consolidated statements 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. 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 takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to
another market participant that would use the asset in its highest and best
use. 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 -33


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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
 2013
 2012Assets measured at fair value:Cash and cash equivalents
 $
 203
 $
 -
 $
 -
 $
 203
 $
 137Restricted cash
 
 169
 
 -
 
 -
 
 169
 
 157Financial instrument assetsInterest rate swaps
 
 -
 
 15
 
 -
 
 15
 
 -Available-for-sale investments(1)
 
 -
 
 -
 
 -
 
 -
 
 26Property, plant and equipment(2)
 
 -
 
 -
 
 15,741
 
 15,741
 
 15,702Liabilities measured at fair value:Financial instrument liabilitiesEnergy derivative contracts
 
 -
 
 (3)
 
 -
 
 (3)
 
 (13)Interest rate swaps
 
 -
 
 (68)
 
 -
 
 (68)
 
 (132)Liabilities for which fair value is disclosed:Long-term debt and credit facilities
 
 -
 
 (7,128)
 
 -
 
 (7,128)
 
 (6,760)Total
 $
 372
 $
 (7,184)
 $
 15,741
 $
 8,929
 $
 9,117
 (1)Available-for-sale
investments represent an investment in securities of Western Wind and were
included in Other long-term assets. (2)Refer to Note 11 -
Property, plant and equipment, at fair value for further information.  There were no transfers between levels
during the year ended December 31, 2013. The aggregate amount of
Brookfield Renewable’s net financial instrument positions as at December 31 are
as follows: 2013
 2012(MILLIONS)
 Assets
 Liabilities
 Net Liabilities
 Net LiabilitiesEnergy derivative contracts
 $
 -
 $
 3
 $
 3
 $
 13Interest rate swaps
 
 15
 
 68
 
 53
 
 132Total
 
 15
 
 71
 
 56
 
 145Less: current portion
 
 -
 
 62
 
 62
 
 113Long-term portion
 $
 15
 $
 9
 $
 (6)
 $
 32
 F -34


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Table of Contents
 The
following table presents the change in Brookfield Renewable’s total net
financial instrument position as at and for the year ended December 31: (MILLIONS)
 Note
 
 2013
 
 2012
 
 2011Balance, beginning of year
 
 $
 145
 $
 114
 $
 246(Decreases) increases in the net financial
  position:Unrealized (gain) loss through income on
  energy derivative contracts
 (a)
 
 (18)
 
 (16)
 
 19Unrealized accounting loss through OCI on
  energy derivativecontracts
 (a)
 
 7
 
 4
 
 708Unrealized (gain) loss through income on
  interest rate swaps
 (b)
 
 (19)
 
 12
 
 1Unrealized (gain) loss through OCI on
  interest rate swaps
 (b)
 
 (65)
 
 (4)
 
 66Reversal of energy derivative contracts
  designated as cash-flowhedges through accumulated OCI and
  non-controlling interests
 
 
 -
 
 -
 
 (704)Reversal of energy derivative contracts
  designated as cash-flowhedges through retained earnings
 
 
 -
 
 -
 
 (222)Acquisitions and other
 
 
 6
 
 35
 
 -Balance, end of year
 
 $
 56
 $
 145
 $
 114Derivative liabilities not designated as
  hedging instruments:Energy derivative contracts
 (a)
 $
 -
 $
 13
 $
 26Interest rate swaps
 (b)
 
 -
 
 67
 
 -Net position
 
 $
 -
 $
 80
 $
 26Derivative liabilities designated as
  hedging instruments:Energy derivative contracts
 (a)
 $
 3
 
 -
 
 -Interest rate swaps
 (b)
 
 68
 $
 65
 $
 88Net positions
 
 $
 71
 $
 65
 $
 88Derivative assets designated as hedging
  instruments:Interest rate swaps
 (b)
 $
 (15)
 $
 -
 $
 -Net positions
 
 $
 (15)
 $
 -
 $
 -
 (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. In the next 12 months, it
is expected that a $3 million loss (2012: $4 million loss) will be settled or
reclassified into income. On April 1, 2011, Brookfield
Renewable designated two significant long-term energy contracts with related
parties as cash-flow hedges.  As a result of new agreements and changes in
existing agreements with Brookfield Asset Management and its subsidiaries
arising from the Combination, these contracts are no longer accounted for as
derivatives by Brookfield Renewable effective November 28, 2011. For the period
from April 1, 2011 to November 28, 2011, Brookfield Renewable recorded
accounting losses of F -35


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Table of Contents
 $708 million related to these
contracts that were recorded in OCI. On formation of Brookfield Renewable, $704
million of unrealized accounting losses were reversed. Since these amendments
arose from the common control reorganization with Brookfield Asset Management
the amounts were adjusted directly into equity. (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, 2013,
agreements with a total notional value of $1,600 million were outstanding
(2012: $1,698 million) including notional values of $nil (2012: $562 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 5.30% (2012: 0.42% to 5.30%). Forthe year ended December 31, 2013, losses
of $1 million, relating to cash flow hedges were realized and reclassified from
OCI to net income (loss) (2012: losses of $16 million). 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. Principal
Agreements Combination
Agreement The
Combination was effected pursuant to a Combination Agreement which contains
covenants, representations and warranties of and from each of BRPI, the Fund,
Brookfield Renewable Power Trust (“BRPT”) and Brookfield Renewable pursuant to
which Brookfield Renewable agreed to acquire all of the assets of the Fund and
all of the other renewable power assets of BRPI pursuant to a court-approved
Plan of Arrangement under Ontario corporate law. 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.
Pursuant to BRELP’s amended and restated limited partnership agreement, BRELP’s
general partner 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
partnership agreement. Relationship
Agreement Brookfield
Asset Management and certain of its subsidiaries entered into an agreement with
Brookfield Renewable pursuant to which Brookfield Asset Management agreed that
Brookfield Renewable will serve as its primary vehicle through which it will
acquire renewable power assets on a global basis. F -36


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Table of Contents
 Master Services Agreement Brookfield
Renewable entered into an exclusive 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). The
Master Services Agreement continues in perpetuity, until terminated in
accordance with its terms. BRELP Voting Agreement Pursuant
to a voting agreement dated November 28, 2011 (the “Voting Agreement”),
between Brookfield Renewable and Brookfield Asset Management, Brookfield
Renewable, through its managing general partner, 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 Two
long-term power purchase agreements on generating assets in Ontario were
amended in 2011 in connection with the Combination to increase the price from
C$68 per MWh to an average of C$88 per MWh on a portfolio basis. The agreements
described below are with respect to generating assets held by the Mississagi
Power Trust (“MPT”), and Great Lakes Power Limited (“GLPL”). In addition, the
term of the Mississagi power purchase agreement has been extended to 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. As
amended, the GLPL power purchase agreement requires a subsidiary of Brookfield
Asset Management 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. As
amended, the MPT power purchase agreement requires a subsidiary of Brookfield
Asset Management 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, subject to the early termination
options described above. Energy Revenue Agreement In
2011, the Energy Revenue Agreement was entered into between a subsidiary of
Brookfield Asset Management and Brookfield Power U.S. Holdings America Co.
(“BPUSHA”) that indirectly owns substantially all of the U.S. facilities of
Brookfield Renewable. The subsidiary of Brookfield Asset Management 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. The Energy Revenue Agreement will have an initial term of 20
years, with automatic renewals for successive 20-year periods with certain
termination provisions. F -37


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Table of Contents
 Other Revenue Agreements Pursuant
to a 20-year power purchase agreement, a subsidiary of Brookfield Asset
Management 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, a subsidiary of Brookfield Asset
Management 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, a subsidiary of Brookfield Asset Management
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, a subsidiary of
Brookfield Asset Management 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 the subsidiary of Brookfield Asset
Management, while a shortfall would result in a payment from a subsidiary of
Brookfield Asset Management to Brookfield Renewable. Power
Services Agreements Power Agency Agreements Certain
Brookfield Renewable subsidiaries have entered into Power Agency Agreements
appointing a subsidiary of Brookfield Asset Management 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, this subsidiary
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, the subsidiary 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 A
subsidiary of Brookfield Asset Management 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). Development Projects Agreement As
part of the Combination, Brookfield Renewable indirectly acquired a number of
development projects in the United States, Canada and Brazil from a subsidiary
of Brookfield Asset Management. This subsidiary received no upfront proceeds on
closing 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 closing, up to 100% of the development costs
that it contributed to each project and 50% of the F -38


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Table of Contents
 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. With respect to the projects
located in the United States and Canada, the Development Projects
Agreement provides for the reimbursement of expenses to a subsidiary of
Brookfield Asset Management for such projects, and a separate royalty agreement
exists to provide royalties on each project. With respect to projects located
in Brazil, a subsidiary of Brookfield Asset Management 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 on projects. Other
Agreements Payment obligations relating to power purchase agreements Pursuant
to a 20-year power purchase agreement guarantee, expiring in 2021, a subsidiary
of Brookfield Asset Management guarantees to Powell River Energy the payment of
obligations of an industrial power purchaser for an annual fee of C$0.5
million. Purchase of natural gas A
subsidiary of Brookfield Asset Management acting as an agent on behalf of
Brookfield Renewable secures the price of natural gas with respect to a gas
plant in Ontario until the end of 2013 for a weighted average price of $6 per
MMbtu. Insurance services In the normal course of
operations, an insurance broker affiliated with Brookfield Asset Management,
entered into transactions with Brookfield Renewable to provide insurance services.
These transactions are measured at exchanged value. Voting
Agreements In December 2011
Brookfield Renewable entered into voting agreements with subsidiaries of
Brookfield Asset Management whereby these subsidiaries, as managing members of
entities related to the Brookfield Americas Infrastructure Fund (the “BAIF
Entities”) in which Brookfield Renewable holds investments with institutional
investors, agreed to assign to Brookfield Renewable their voting rights to
appoint the 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. In
September 2013, Brookfield Renewable entered into a voting agreement with
subsidiaries of Brookfield Asset Management whereby these subsidiaries, as
managing members of entities related to Brookfield Infrastructure Fund II (the
“BIF II Entities”) in which Brookfield Renewable holds investments with
institutional investors, agreed to assign to Brookfield Renewable their voting
rights to appoint the directors of the BIF II Entities. Brookfield
Renewable’s economic interests in the BIF II Entities was 50.1% as at December
31, 2013. F -39


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Table of Contents
 The following table reflects the
related party agreements and transactions on the consolidated statements of
income (loss), for the year ended December 31: (MILLIONS)
 
 2013
 
 2012
 
 2011RevenuesPurchase and revenue support agreements
 $
 456
 $
 376
 $
 254Wind levelization agreement
 
 6
 
 2
 
 7$
 462
 $
 378
 $
 261Direct operating costsEnergy purchases
 $
 (36)
 $
 (40)
 $
 (41)Energy marketing fee
 
 (20)
 
 (18)
 
 (11)Insurance services
 
 (26)
 
 (18)
 
 (18)$
 (82)
 $
 (76)
 $
 (70)Interest expense
 $
 -
 $
 -
 $
 (19)Management service costs
 $
 (41)
 $
 (36)
 $
 (1)
 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
 
 2013
 
 2012Current assetsDue from related partiesAmounts due from
 Brookfield Asset Management
 $
 36
 $
 20Equity accounted and other
 
 12
 
 14$
 48
 $
 34Due from related partiesAmounts due from
 Brookfield Asset ManagementBrascan Energetica
 $
 -
 $
 3Note receivable
 Powell River Energy Inc.(1)
 
 -
 
 19$
 -
 $
 22Current liabilitiesDue to related partiesAmount due to
 Brookfield Asset Management
 $
 48
 $
 45Accrued distributions payable on LP unitsand Redeemable/Exchangeablepartnership units
 Brookfield Asset Management
 
 62
 
 61Amount due to
 Equity accounted
 
 -
 
 3$
 110
 $
 109
 (1)Brookfield
Renewable acquired the remaining 50% interest in this entity in 2013 bringing
the total investment to 100%, and its results were fully consolidated. Current
assets Amounts due from Brookfield Asset Management are
non-interest bearing, unsecured and due on demand. F -40


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Table of Contents
 Amounts
due from related parties Amounts due from Brookfield Asset Management are non-interest bearing,
unsecured and due on demand. Amounts due are not considered impaired based on the credit worthiness of
the related - party counterparties. Accordingly, as at December 31, 2013 and
2012, an allowance for doubtful accounts was not deemed necessary. Current liabilities Amounts due to Brookfield Asset
Management are unsecured, payable on demand and relate to recurring
transactions. 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)
 
 %
 
 2013
 
 2012Bear Swamp Power Co. L.L.C.
 United States
 50
 $
 138
 $
 155Galera Centrais Eletricas S.A.
 Brazil
 50
 
 58
 
 67Pingston Power Inc.
 Canada
 50
 
 51
 
 59Brookfield Americas Infrastructure Fund
  Investees
 United States
 50
 
 40
 
 41Brookfield Infrastructure Fund II Investees
 United States
 14 - 50
 
 3
 
 -Powell River Energy Inc.(1)
 Canada
 
 
 -
 
 22$
 290
 $
 344
 (1)In
2013, Brookfield Renewable acquired the remaining 50% interest in this entity,
bringing the total investment to 100%, and its results were fully consolidated. F -41


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Table of Contents
 The following table
outlines the changes in Brookfield Renewable’s equity-accounted investments for
the year ended December 31: (MILLIONS)
 2013
 2012
 2011Balance, beginning of year
 $
 344
 $
 405
 $
 269Acquisitions
 
 (19)
 
 (63)
 
 20Revaluation recognized through OCI
 
 (15)
 
 16
 
 136Share of OCI
 
 1
 
 -
 
 (7)Share of net income (loss)
 
 9
 
 (5)
 
 10Dividends received
 
 (18)
 
 (12)
 
 (8)Foreign exchange loss
 
 (12)
 
 (5)
 
 (14)Other
 
 -
 
 8
 
 (1)Balance, end of year
 $
 290
 $
 344
 $
 405
 The
following tables summarize certain financial information of equity-accounted
investments: (MILLIONS)
 
 
 
 2013
 
 2012As at December 31:Current assets
 $
 54
 $
 66Property, plant and equipment, at fair
  value
 
 726
 
 1,018Other assets
 
 232
 
 241Current liabilities
 
 27
 
 46Long-term debt
 
 202
 
 320Other liabilities
 
 203
 
 272(MILLIONS)
 
 2013
 
 2012
 
 2011For the year ended December 31:Revenue
 $
 110
 $
 106
 $
 117Net income (loss)
 
 19
 
 (12)
 
 19Share of net income (loss)Cash earnings
 
 21
 
 13
 
 23Non-cash loss
 
 (12)
 
 (18)
 
 (13)
  F -42


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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: (MILLIONS)
 Hydroelectric(1)
 Wind
  energy
 CWIP
 Other(2)
 TotalAs at December 31, 2010
 $
 11,409
 $
 554
 $
 234
 $
 63
 $
 12,260Additions(3)
 
 222
 
 73
 
 716
 
 18
 
 1,029Transfers and other
 
 90
 
 380
 
 (501)
 
 -
 
 (31)Items recognized through OCIChange in fair value
 
 1,181
 
 489
 
 (52)
 
 20
 
 1,638Foreign exchange
 
 (390)
 
 (11)
 
 (11)
 
 (1)
 
 (413)Items recognized through net incomeChange in fair value
 
 (14)
 
 -
 
 -
 
 1
 
 (13)Depreciation(4)
 
 (419)
 
 (35)
 
 -
 
 (14)
 
 (468)As at December 31, 2011
 $
 12,079
 $
 1,450
 $
 386
 $
 87
 $
 14,002Additions(3)
 
 607
 
 385
 
 490
 
 -
 
 1,482Transfers 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(4)
 
 (349)
 
 (113)
 
 -
 
 (21)
 
 (483)As at December 31, 2012
 $
 12,991
 $
 2,249
 $
 392
 $
 70
 $
 15,702Additions(3)
 
 921
 
 430
 
 255
 
 -
 
 1,606Transfers 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(4)
 
 (381)
 
 (142)
 
 -
 
 (12)
 
 (535)As at December 31, 2013
 $
 12,806
 $
 2,448
 $
 441
 $
 46
 $
 15,741
 (1)Includes
$31 million of intangible assets (2012: $44million and 2011: $57million). (2)Included
in “Other” are gas-fired generating (“co-gen”) units. (3)Includes
acquisitions of $1,387 million (2012: $1,374 million and 2011: $234 million) (See
Note 4). (4)Assets
not subject to depreciation include CWIP and land. 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) - Critical
judgments in applying accounting policies. F -43


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Table of Contents
 Discount rates, terminal
capitalization rates and exit dates used in the valuation methodology, are
provided in the following table: United
  States
 
 Canada
 
 Brazil2013
 
 2012
 
 2013
 
 2012
 
 2013
 
 2012Discount rateContracted
 
 5.8%
 
 5.2%
 
 5.1%
 
 4.7%
 
 9.1%
 
 8.6%Uncontracted
 
 7.6%
 
 7.0%
 
 6.9%
 
 6.5%
 
 10.4%
 
 9.9%Terminal capitalization rate(1)
 
 7.1%
 
 7.0%
 
 6.4%
 
 6.5%
 
 N/A
 
 N/AExit date
 
 2033
 
 2032
 
 2033
 
 2032
 
 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)
 
 2013
 
 201250 bps increase in discount rates
 $
 (1.1)
 $
 (1.2)50 bps decrease in discount rates
 
 1.3
 
 1.450 bps increase in terminal capitalization
  rate(1)
 
 (0.3)
 
 (0.4)50 bps decrease in terminal capitalization
  rate(1)
 
 0.3
 
 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, 2013, is
16 years (2012: 17 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
 
 64%
 
 91%
 
 42%11 - 20 years
 
 50%
 
 68%
 
 31%
 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
 $
 89
 C$
 90
 R$
 24011 - 20 years
 $
 104
 C$
 96
 R$
 374
 (1)Assumes nominal prices
based on weighted-average generation. F -44


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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$
 99
 R$
 23911 - 20 years
 $
 119
 C$
 119
 R$
 367
 (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
$400 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 $200
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)
 
 2013
 
 2012Hydroelectric
 $
 5,305
 $
 4,639Wind
 
 1,935
 
 1,652Other(1)
 
 386
 
 357$
 7,626
 $
 6,648
 (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)
 2013
 
 2012Water rights
 $
 100
 $
 (26)
 $
 74
 $
 84Restricted cash
 
 75
 
 -
 
 75
 
 80Available-for-sale investments
 
 -
 
 -
 
 -
 
 26Unamortized financing fees
 
 37
 
 (26)
 
 11
 
 11Other
 
 54
 
 (4)
 
 50
 
 53$
 266
 $
 (56)
 $
 210
 $
 254
 Brookfield Renewable is
required to pay the Brazilian Federal Government for the usage of public assets
(“Water rights”) over the concession terms associated with two of its Brazilian
facilities. Water rights are monetarily adjusted by the Brazilian General
Market Price Index.  As at December 31, 2013, an asset of $74 million (2012:
$84 million) was included in other long-term assets and corresponding liability
of $89 million was recorded within other long-term liabilities (Note 16) (2012:
$101 million). At
December 31, 2013, $75 million of long-term restricted cash (2012: $80 million)
was held to satisfy lease payments and meet debt service obligations. At
December 31, 2012, an investment in securities owned by Brookfield Renewable
was classified as available-for-sale. The investment totaled $26 million and
related to Western Wind. No gains (losses) have been recorded in OCI. F -45


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Table of Contents
 The unamortized fees primarily relate to the sale and leaseback of
a hydroelectric facility. Unamortized fees are amortized on a straight-line
basis over the term of the arrangement to interest expense. 13.  accounts payable and accrued
liabilities Brookfield Renewable’saccounts payable and
accrued liabilitiesas at December 31 are as follows: (MILLIONS)
 
 2013
 
 2012Operating accrued liabilities
 $
 101
 $
 97Interest payable on corporate and
  subsidiary borrowings
 
 49
 
 41Accounts payable
 
 11
 
 23LP Unitholders’ distribution and preferred
  dividends payable
 
 40
 
 34Other
 
 8
 
 12$
 209
 $
 207
 14.LONG-TERM
DEBT AND CREDIT FACILITIES The
composition of debt obligations as at December 31 is presented in the following
table: 2013
 2012Weighted-average
 
 
 Weighted-averageInterest
 Term
 
 
 Interest
 Term(MILLIONS EXCEPT AS NOTED)
 rate (%)
 (years)
 
 rate (%)
 (years)Corporate borrowingsSeries 3 (CDN$200)
 5.3
 4.8
 $
 188
 5.3
 5.8
 $
 202Series 4 (CDN$150)
 5.8
 22.9
 
 141
 5.8
 23.9
 
 151Series 6 (CDN$300)
 6.1
 2.9
 
 282
 6.1
 3.9
 
 302Series 7 (CDN$450)
 5.1
 6.8
 
 424
 5.1
 7.8
 
 454Series 8 (CDN$400)
 4.8
 8.1
 
 377
 4.8
 9.1
 
 4035.3
 7.7
 $
 1,412
 5.3
 8.7
 $
 1,512Subsidiary borrowingsUnited States
 6.0
 9.7
 $
 2,826
 6.4
 11.4
 $
 2,264Canada
 5.8
 15.2
 
 1,877
 5.9
 12.7
 
 1,781Brazil
 7.4
 11.1
 
 238
 8.5
 9.7
 
 3486.0
 11.8
 $
 4,941
 6.4
 11.8
 $
 4,393Credit facilities(1)
 1.4
 3.8
 $
 311
 2.0
 3.8
 $
 268Total debt
 
 
 $
 6,664
 
 
 $
 6,173Add: Unamortized premiums(2)
 
 
 
 11
 
 
 
 -Less: Unamortized financing fees(2)
 
 
 
 (52)
 
 
 
 (54)Less: Current portion
 
 
 
 (517)
 
 
 
 (532)$
 6,106
 
 
 $
 5,587
 (1)Amounts
are unsecured and revolving. Interest rate is at the London Interbank Offered
Rate (“LIBOR”) plus 1.25% (2012: 1.75%). (2)Unamortized
premiums and unamortized financing fees are amortized to interest expense over
the terms of the borrowing. F -46


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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)
 2014
 2015
 2016
 2017
 2018
 Thereafter
 TotalCorporate borrowings(1)
 $
 -
 $
 -
 $
 282
 $
 -
 $
 188
 $
 942
 $
 1,412Subsidiary borrowings(1)United States
 
 442
 
 425
 
 96
 
 505
 
 206
 
 1,152
 
 2,826Canada
 
 48
 
 50
 
 139
 
 47
 
 49
 
 1,544
 
 1,877Brazil
 
 27
 
 26
 
 24
 
 24
 
 23
 
 114
 
 238517
 
 501
 
 541
 
 576
 
 466
 
 3,752
 
 6,353Credit facilities
 
 -
 
 -
 
 -
 
 311
 
 -
 
 -
 
 311$
 517
 $
 501
 $
 541
 $
 887
 $
 466
 $
 3,752
 $
 6,664
 (1)Corporate
borrowings and subsidiary borrowings include $52 million and $11 million of
unamortized deferred financing fees and premiums, respectively. Future maturities of borrowings for subsidiaries accounted for on
an equity-accounted basis for each of the next five years and thereafter are as
follows: (MILLIONS)
 2014
 2015
 2016
 2017
 2018
 Thereafter
 TotalUnited States
 $
 1
 $
 1
 $
 1
 $
 125
 $
 1
 $
 7
 $
 136Canada
 
 -
 
 33
 
 -
 
 -
 
 -
 
 -
 
 33$
 1
 $
 34
 $
 1
 $
 125
 $
 1
 $
 7
 $
 169
 The unamortized financing fees of each debt obligation as at
December 31 are as follows: (MILLIONS)
 
 2013
 
 2012
 
 2011Corporate borrowingsUnamortized financing fees, beginning of
  year
 $
 8
 $
 6
 $
 6Additional financing fees
 
 -
 
 3
 
 -Amortization of financing fees
 
 (2)
 
 (1)
 
 -Unamortized financing fees, end of year
 $
 6
 $
 8
 $
 6Subsidiary borrowingsUnamortized financing fees, beginning of
  year
 $
 46
 $
 49
 $
 44Additional financing fees
 
 17
 
 15
 
 15Amortization of financing fees
 
 (17)
 
 (18)
 
 (10)Unamortized financing fees, end of year
 $
 46
 $
 46
 $
 49Total
 $
 52
 $
 54
 $
 55
  F -47


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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: 2013
 2012(MILLIONS)
 Carrying
  value(1)
 Fair
  value
 Carrying
  value(1)
 Fair
  valueCorporate borrowings
 $
 1,406
 $
 1,535
 $
 1,504
 $
 1,700Subsidiary borrowingsUnited States
 $
 2,804
 $
 2,988
 $
 2,244
 $
 2,440Canada
 
 1,864
 
 2,056
 
 1,755
 
 2,004Brazil
 
 238
 
 238
 
 348
 
 3484,906
 
 5,282
 
 4,347
 
 4,792Credit facilities
 
 311
 
 311
 
 268
 
 268$
 6,623
 $
 7,128
 $
 6,119
 $
 6,760
 (1)Net
of unamortized financing fees and premiums. Corporate borrowings Corporate borrowings are obligations of a finance subsidiary of
Brookfield Renewable (Note23-
Subsidiary public issuers).  The finance subsidiary may redeem some or all of
the borrowings from time to time, pursuant to the terms of the indenture.  The
balance is payable upon maturity, and interest on corporate borrowings is paid
semi-annually. Subsidiary borrowings Subsidiary
borrowings are generally asset-specific, long-term, non-recourse borrowings
denominated in the domestic currency of the subsidiary. Subsidiary
borrowings in the United States and Canada consist of both fixed and floating
interest rate debt.  Brookfield Renewable uses interest rate swap
agreements to minimize its exposure to floating interest rates. 
Subsidiary borrowings in Brazil consist of floating interest rates of TJLP, the
Brazil National Bank for Economic Development’s long-term interest rate, or
Interbank Deposit Certificate rate, plus a margin. In February
2013, Brookfield Renewable refinanced indebtedness associated with a 166 MW
Ontario wind facility through a C$450 million loan for a term of 18 years at
5.1%. In February
2013, a subsidiary of Brookfield Renewable issued a $75 million floating rate
credit facility maturing in 2015. In March 2013,
Brookfield Renewable refinanced indebtedness associated with a 51 MW Ontario
wind facility through a C$130 million loan for a term of 19 years at 5.0%. In March 2013,
Brookfield Renewable purchased 88% of the $575 million in operating company
notes outstanding with respect to the recently acquired, 360 MW hydroelectric
portfolio in Northeastern United States. In May 2013, Brookfield Renewable
purchased 100% of the $125 million of holding level notes with respect to the
same facilities. Brookfield Renewable financed a portion of the tendered notes through
a 24-month, bridge loan of up to $350 million. As part of the
acquisition of wind assets in California, Brookfield Renewable assumed an
aggregate of $250 million in subsidiary borrowings, of which $200 million is
subject to a fixed interest rate of 7.2% and matures in 2032. F -48


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Table of Contents
 With the Canadian Hydroelectric Step Acquisition and the
assumption of the other partners’ portion of the non-recourse debt, Brookfield
Renewable increased subsidiary borrowings by $96 million. The debt matures
in 2016 and bears a fixed interest rate of 6.5%. Net repayments
of $373 million were made during the year ended December 31, 2013. Credit facilities In
2013, Brookfield Renewable expanded its committed unsecured revolving credit
facilities to $1,280 million and extended the maturity date to October 31, 2017.
Thecredit
facilities are used for general working capital purposes. The credit facility
is available by way of advances in either Canadian or U.S. dollars of (i) prime
rate loans (ii) bankers’ acceptance (“BA”) rate loans (iii) LIBOR loans and
(iv) letters of credit. Refer to Note 25 – Commitments, contingencies and
guarantees for further details. The credit facility bears interest at the
applicable BA rate or LIBOR plus an applicable margin. The applicable margin is
tiered on the basis of Brookfield Renewable’s unsecured long-term debt rating.
At December 31, 2013, the margin was 1.25% (2012: 1.75%). Standby fees are
charged on the undrawn balance. Inaddition,Brookfield Asset Management provided a $200 million committed unsecured
revolving credit facility maturing in December 2014, at LIBOR plus 2%. Brookfield Renewable and its subsidiaries issue letters of credit
from its credit facilities for general corporate purposes, which include, but
are not limited to, security deposits, performance bonds and guarantees for
debt service reserve accounts. (MILLIONS)
 
 2013
 
 2012Available revolving credit facilities
 $
 1,480
 $
 990Drawings
 
 (311)
 
 (268)Issued letters of credit
 
 (212)
 
 (182)Unutilized revolving credit facilities
 $
 957
 $
 540
 Net draws of $43
million were made during the year ended December 31, 2013. F -49


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Table of Contents
 15.  Income taxes The major components of income tax (expense) recovery for the year
ended December 31 are as follows: (MILLIONS)
 
 2013
 
 2012
 
 2011Income tax (expense) recovery applicable to:Current taxesAttributed to the current period
 $
 (19)
 $
 (14)
 $
 (8)Deferred taxesIncome taxes - origination and reversal of temporary
  differences
 $
 24
 $
 82
 $
 75Relating to change in tax rates / imposition of new tax laws
 
 14
 
 (5)
 
 (3)Relating to unrecognized temporary differences and tax losses
 
 (20)
 
 (23)
 
 (22)$
 18
 $
 54
 $
 50Total income tax (expense) recovery
 $
 (1)
 $
 40
 $
 42
 The major components of deferred income tax (expense) recovery for
the year ended December 31 recorded directly to OCI are as follows: (MILLIONS)
 
 2013
 
 2012
 
 2011Deferred income taxes attributed to:Financial instruments designated as cash flow hedges
 $
 (11)
 $
 (1)
 $
 194Revaluation surplusOrigination and reversal of temporary differences
 
 98
 
 (218)
 
 (268)Relating to changes in tax rates / imposition of new tax
  laws
 
 6
 
 (6)
 
 315$
 93
 $
 (225)
 $
 241
 F -50


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Table of Contents
 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)
 
 2013
 
 2012
 
 2011Statutory income tax (expense) recovery(1)
 $
 (76)
 $
 47
 $
 173(Reduction) increase resulting from:Increase in tax assets not recognized
 
 (20)
 
 (23)
 
 (21)Deemed profit method differences in Brazil
 
 12
 
 7
 
 11Differences between statutory rate and future tax rate
 
 69
 
 25
 
 15Losses (gains) recorded not taxable to Brookfield Renewable
 
 13
 
 (24)
 
 6Other
 
 1
 
 8
 
 (33)Effective income tax (expense) recovery, before change inFund unit liability
 $
 (1)
 $
 40
 $
 151Change in Fund unit liability
 
 -
 
 -
 
 (109)Effective income tax (expense) recovery
 $
 (1)
 $
 40
 $
 42
 (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 following table details
the expiry date, if applicable, of the unrecognized deferred tax assets as at
December 31: (MILLIONS)
 
 2013
 
 20122014 to 2018
 $
 1
 $
 12019 and thereafter
 
 62
 
 71$
 63
 $
 72
 F -51


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Table of Contents
 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)
 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)Recognizedin NetJan 1,
 income
 Recognized
 Business
 Foreign
 Dec 31,(MILLIONS)
 2011
 (loss)
 in Equity
 Combinations
 Exchange
 2011Non-capital losses
 $
 124
 $
 44
 $
 -
 $
 -
 $
 -
 $
 168Capital losses
 
 5
 
 (5)
 
 -
 
 -
 
 -
 
 -Amount available for futuredeductions
 
 147
 
 (9)
 
 -
 
 -
 
 -
 
 138Difference between tax and carryingvalue
 
 (2,424)
 
 20
 
 241
 
 -
 
 (204)
 
 (2,367)Net deferred tax (liabilities) assets
 $
 (2,148)
 $
 50
 $
 241
 $
 -
 $
 (204)
 $
 (2,061)
 The deferred
income tax liabilities includes $2,283 million (2012: $2,395 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)
 2013
 
 2012Concession payment liability
 $
 89
 $
 101Decommissioning retirement obligations
 
 28
 
 27Pension obligations (Note 20)
 
 33
 
 47Other
 
 13
 
 13$
 163
 $
 188
 At December 31,
2013, Brookfield Renewable recorded a liability associated with a future
obligation relating to concession payments of $89 million (2012: $101
million).  The future obligation is being settled through monthly payments made
over the concession term. In 2013 $1 million (2012: $1 million) of concessions
payments were made to the Brazilian Federal Government. See Note 12 - Other
long-term assets for additional details regarding water rights. 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 $28 million at December 31, 2013 (2012:
$27 million), has been established for wind operation sites in Canada and
United States that are expected to be restored between the years 2031 to 2064. 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 unitholders. Brookfield Renewable’s capital is monitored
through total debt to total debt plus equity 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 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 debt
arrangements are reviewed regularly and controls are in place to maintain
compliance with these covenants. Brookfield Renewable complied with all
financial covenants for the years ended December 31, 2013, 2012 and 2011. F -53


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Table of Contents
 Brookfield Renewable’s
strategy during 2013, which was unchanged from 2012, was to maintain the
measure set out in the following schedule as at December 31: (MILLIONS)
 
 2013
 
 2012Total debtCurrent portion of long-term debt
 $
 517
 $
 532Long-term debt and credit facilities
 
 6,106
 
 5,5876,623
 
 6,119Deferred income tax liability, net(1)
 
 2,148
 
 2,268Preferred equity
 
 796
 
 500Participating non-controlling interests -
  in operating subsidiaries
 
 1,303
 
 1,028General partnership interest in a holding
  subsidiary held byBrookfield
 
 54
 
 63Participating non-controlling interests -
  in a holdingsubsidiary - Redeemable/Exchangeable units
  held by Brookfield
 
 2,657
 
 3,070Limited partners' equity
 
 2,726
 
 3,147Total capitalization(2)
 $
 16,307
 $
 16,195Debt to total capitalization
 
 41%
 
 38%
 (1)Deferred income tax liability minus deferred income tax
asset. (2)Total debt plus deferred income tax liability, net of deferred
income tax assets, non-controlling interests, and limited partners’ equity. 18. Non-controlling interests Brookfield Renewable’s non-controlling interests are comprised of
the following as at December 31: (MILLIONS)
 
 2013
 
 2012Preferred equity
 $
 796
 $
 500Participating non-controlling interests -
  in operating subsidiaries
 
 1,303
 
 1,028General partnership interest in a holding
  subsidiary held by Brookfield
 
 54
 
 63Participating non-controlling interests -
  in a holding subsidiary -Redeemable/Exchangeable units held by
  Brookfield
 
 2,657
 
 3,070Total
 $
 4,810
 $
 4,661
 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
 2013
 2012
 2013
 2012Series 1
 10
 5.25%
 Apr 30,
  2015
 $
 13
 $
 13
 $
 234
 $
 250Series 3
 10
 4.40%
 Jul 31,
  2019
 
 11
 
 3
 
 234
 
 250Series 5
 7
 5.00%
 Apr 30,
  2018
 
 8
 
 -
 
 164
 
 -Series 6
 7
 5.00%
 Jul 31,
  2018
 
 5
 
 -
 
 164
 
 -34
 
 
 $
 37
 $
 16
 $
 796
 $
 500
 The holders of the Series
1 preferred shares are entitled to receive fixed cumulative dividends at an
annual rate of C$1.3125 per share, a yield of 5.25% for the initial period
ending April 30, 2015. The F -54


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Table of Contents
 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%. The
holders of the Series 3 preferred shares are entitled to receive fixed
cumulative dividends at an annual rate of C$1.10 per share, a yield of 4.4% for
the initial period ending July 31, 2019.  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%. In
January 2013 and May 2013, Brookfield Renewable Power Preferred Equity Inc.
(“BRP Equity”) issued 7 million of Series 5 and 7 million of Series 6 perpetual
preferred shares, respectively, at a price of C$25 per share. The holders of
the preferred shares are entitled to receive fixed cumulative dividends at an
annual rate of C$1.25 per share, for a yield of 5%. 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 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, 2013, none of the
issued Class A Preference Shares have been redeemed by BRP Equity. F -55


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Table of Contents
 Participating non-controlling interests – in operating
subsidiaries The net change in participating
non-controlling interests – in operating entities is as follows: BrookfieldAmericas
 BrookfieldInfrastructure
 Infrastructure
 The
  Catalyst
 Brascan(MILLIONS)
 Fund
 Fund
 Group
 Energetica
 Other
 TotalAs at December 31, 2010
 $
 -
 $
 -
 $
 143
 $
 63
 $
 -
 $
 206Net income (loss)
 
 1
 
 -
 
 5
 
 5
 
 -
 
 11OCI
 
 173
 
 -
 
 16
 
 11
 
 -
 
 200Acquisitions
 
 209
 
 -
 
 -
 
 -
 
 14
 
 223Distributions
 
 -
 
 -
 
 (14)
 
 (5)
 
 (6)
 
 (25)Other
 
 (3)
 
 -
 
 17
 
 -
 
 -
 
 14As at December 31, 2011
 $
 380
 $
 -
 $
 167
 $
 74
 $
 8
 $
 629Net income (loss)
 
 (44)
 
 -
 
 2
 
 2
 
 -
 
 (40)OCI
 
 24
 
 -
 
 (28)
 
 (7)
 
 25
 
 14Acquisitions
 
 447
 
 -
 
 -
 
 (9)
 
 8
 
 446Distributions
 
 -
 
 -
 
 (18)
 
 (6)
 
 -
 
 (24)Other
 
 (1)
 
 -
 
 -
 
 4
 
 -
 
 3As at December 31, 2012
 $
 806
 $
 -
 $
 123
 $
 58
 $
 41
 $
 1,028Net income
 
 21
 
 1
 
 18
 
 1
 
 -
 
 41OCI
 
 133
 
 (2)
 
 (26)
 
 (10)
 
 4
 
 99Acquisitions and contributions
 
 51
 
 214
 
 -
 
 -
 
 -
 
 265Distributions
 
 (119)
 
 -
 
 -
 
 (3)
 
 -
 
 (122)Other
 
 (1)
 
 (6)
 
 1
 
 -
 
 (2)
 
 (8)As at December 31, 2013
 $
 891
 $
 207
 $
 116
 $
 46
 $
 43
 $
 1,303Interests held by third parties
 
 75-80%
 
 50%
 
 25%
 
 20-30%
 
 24-50%
  F -56


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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
 Group
 Other
 TotalInterests held by third parties
 
 75-80%
 
 50%
 
 25%
 
 20-50%Place of business
 
 
 
 
 
 
 United
  StatesUnited
  States
 
 
 
 
 BrazilBrazil
 United
  States
 United
  States
 CanadaFor the year ended December 31, 2011:Revenue
 $
 14
 $
 -
 $
 188
 $
 44
 $
 246Net income (loss)
 
 1
 
 -
 
 65
 
 21
 
 87Total comprehensive income
 
 233
 
 -
 
 122
 
 98
 
 453Net income allocated tonon-controlling interests
 
 1
 
 -
 
 5
 
 5
 
 11Carrying value of third party interests
 $
 380
 $
 -
 $
 167
 $
 82
 $
 629For the year ended December 31, 2012:Revenue
 $
 86
 $
 -
 $
 137
 $
 30
 $
 253Net income (loss)
 
 (55)
 
 -
 
 10
 
 6
 
 (39)Total comprehensive (loss) income
 
 (60)
 
 -
 
 (103)
 
 111
 
 (52)Net (loss) income allocated tonon-controlling interests
 
 (44)
 
 -
 
 2
 
 2
 
 (40)As at December 31, 2012:Property, plant and equipment, at fair
  value
 $
 1,756
 $
 -
 $
 1,166
 $
 472
 $
 3,394Total assets
 
 1,919
 
 -
 
 1,242
 
 626
 
 3,787Total borrowings
 
 787
 
 -
 
 630
 
 60
 
 1,477Total liabilities
 
 884
 
 -
 
 646
 
 84
 
 1,614Carrying value of third party interests
 $
 806
 $
 -
 $
 123
 $
 99
 $
 1,028For 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 third party interests
 $
 891
 $
 207
 $
 116
 $
 89
 $
 1,303
 F -57


---



Table of Contents
 General partnership interest in a holding subsidiary held by
Brookfield and Participating non-controlling interests – in a holding
subsidiary -Redeemable/Exchangeable units held
by Brookfield Brookfield, as the owner of the 1% general partnership interest in
BRELP, is entitled to regular distributions plus an incentive distribution
based on the amount by which quarterly distributions exceed specified target
levels. To the extent that distributions exceed $0.375 per unit per quarter,
the incentive is 15% of distributions above this threshold. To the extent that
quarterly distributions exceed $0.4225 per unit, the incentive distribution is
equal to 25% of distributions above this threshold. Consolidated equity includes Redeemable/Exchangeable Partnership
Units issued by BRELP. The Redeemable/Exchangeable Partnership Units are held
100% by Brookfield Asset Management, which at its discretion has the right to
redeem these units for cash consideration. No Redeemable/Exchangeable
Partnership Units have been redeemed for cash consideration. Since this
redemption right is subject to Brookfield Renewable’s right, at its sole
discretion, to satisfy the redemption request with LP Units of Brookfield
Renewable, the Redeemable/Exchangeable Partnership Units are classified as
equity in accordance with IAS 32,Financial Instruments: Presentation. The
Redeemable/Exchangeable Partnership Units are presented as non-controlling
interests since they provide Brookfield the direct economic benefits and
exposures to the underlying performance of BRELP. Both the LP Units issued by
Brookfield Renewable and the Redeemable/Exchangeable Partnership Units issued
by its subsidiary BRELP have the same economic attributes in all respects,
except for the redemption right described above. The Redeemable/Exchangeable
Partnership Units participate in earnings and distributions on a per unit basis
equivalent to the per unit participation of the LP Units of Brookfield
Renewable. Consistent with the basis of presentation for the Combination
(Note 2(b) (ii)), income (loss) attributable to Redeemable/Exchangeable
Partnership Units held by Brookfield Asset Management has been calculated as if
the Redeemable/Exchangeable Partnership Units had always been issued and
outstanding. F -58


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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)
 2013
 2012
 2011For the year ended December 31:Revenue
 $
 1,706
 $
 1,309
 $
 1,169Net income (loss)
 
 215
 
 (95)
 
 (451)Comprehensive (loss) income
 
 (333)
 
 332
 
 615Net income (loss) allocated to(1):General partnership interests held by
  Brookfield
 
 1
 
 (1)
 
 (5)Redeemable/Exchangeable units held by
  Brookfield
 
 67
 
 (35)
 
 (232)As at December 31:Property, plant and equipment, at fair
  value
 $
 15,741
 $
 15,702Total assets
 
 16,977
 
 16,925Total borrowings
 
 6,623
 
 6,119Total liabilities
 
 9,441
 
 9,117Carrying value of(2):General partnership interests held by
  Brookfield
 
 54
 
 63Redeemable/Exchangeable units held by
  Brookfield
 
 2,657
 
 3,070
 (1)Allocated
based on weighted-average General partnership units, Redeemable/Exchangeable
units and LP units of 2.7 million, 129.7 million, and 132.9 million,
respectively (2012: 2.7 million, 129.7 million, and 132.9 million, respectively;
2011: 2.7 million, 129.7 million, and 132.8 million, respectively). (2)Allocated
based on outstanding General partnership units, Redeemable/Exchangeable units
and LP units of 2.7 million, 129.7 million, and 133.0 million, respectively
(2012: 2.7 million, 129.7 million, and 132.9 million, respectively). As at December 31, 2013, General Partnership Units and
Redeemable/Exchangeable Partnership Units outstanding were 2,651,506 (2012:
2,651,506) and 129,658,623 (2012: 129,658,623), respectively. For the year
ended December 31, 2013, BRELP declared $4 million in distributions on the general
partnership interest (2012: $4 million and 2011: $1 million) and no incentive
distributions have been paid since the Combination. For the year ended December
31, 2013, BRELP declared distributions on the Redeemable/Exchangeable
Partnership Units held by Brookfield of $188 million (2012: $179 million and
2011: $43 million). 19.LIMITED
PARTNERS’ EQUITY Limited partners’ equity As at December 31, 2013, LP Units outstanding were 132,984,913 (2012:
132,901,916) including 40,026,986 (2012: 48,091,986) held by Brookfield Asset
Management. General partnership interests represent 0.01% of Brookfield
Renewable. Consistent with the basis of presentation for the Combination
(Note 2(b) (ii)), net loss per LP Unit has been calculated as if the LP Units
had always been issued and outstanding. 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, 2013, 82,997 LP Units
were issued (2012: 74,792 LP Units). 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 -59


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Table of Contents
 For the year ended December 31,
2013, Brookfield Renewable declared distributions on its LP Units of $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)
 
 2013
 
 2012Brookfield Asset Management
 $
 58
 $
 66External LP Unitholders
 
 135
 
 117$
 193
 $
 183
 During 2011, the Fund made distributions of $103 million
consisting of $33 million paid to Brookfield and $70 million paid to the
external unitholders of the Fund. In December 2011, Brookfield Renewable
declared distributions on LP Units of $45 million ($0.3375 per LP Unit) payable
on January 31, 2012, consisting of $21 million payable to Brookfield Asset
Management and $24 million payable to external unitholders of Brookfield
Renewable. Unitholder distributions were increased from $1.35 per unit to
$1.38 per unit in March 2012 and increased further to $1.45 per unit in March
2013, on an annualized basis. Transactions
related to the Combination This note should be read in conjunction with Note 2 (b) - Basis of
presentation. Brookfield Renewable’s consolidated balance sheet was adjusted
for the effects of the following transactions that took place on the effective
date of the Combination: Settlement of the Fund unit liability At December 31, 2010, Brookfield Renewable recorded a $1,355
million liability relating to the Fund unit liability. In 2010, Brookfield
reduced its ownership in the Fund from 50.01% to 34%, on a fully-exchanged
basis. Through various management, administration, agency and PPAs with the
Fund, along with BRPI’s 34% ownership interest, BRPI continued to control the
Fund, and therefore, consolidated its results. As at the date of the
Combination, the Fund units, not previously owned by Brookfield, were
transferred to Brookfield Renewable. The transfer was completed at fair value
and satisfied by the issuance of LP Units of Brookfield Renewable. The result
of this transaction is to reflect the settlement of the Fund unit liability at
the date of the Combination of $1,568 million and the LP Units issued to
satisfy the transfer are treated as equity of Brookfield Renewable.  As a
result of the Combination, $767 million of equity was allocated to the
Redeemable/Exchangeable Partnership Units to reflect the relative interests of
Brookfield Renewable and Brookfield Asset Management in BRELP.  For the year
ended December 31, 2011, and prior to the Combination, Brookfield
Renewable recorded a mark-to-market loss of $306 million and expensed $70
million of distributions to external unitholders of the Fund. Settlement of related party balances Brookfield Renewable settled certain intercompany loans and
transactions with Brookfield. The consolidated balance sheets include the
reduction in amounts due from and amounts due to related parties, as they were
exchanged for LP Units in lieu of a cash settlement. Derivative balance Amendments were made to certain energy revenue agreements with the
related parties which resulted in those agreements no longer meeting the
derivatives definition under the IFRS. Since this change arose from the common
control reorganization with Brookfield Asset Management the amounts were
adjusted directly into equity. F -60


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Table of Contents
 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 December 31, 2010 to January 1, 2013. 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
  plans2013
 2012
 2011(%)
 (%)
 (%)Discount rate(1)
 4.0 -
  5.0
 4.9 -
  5.0
 3.5 -
  4.5
 4.1 -
  4.5
 4.2 -
  5.3
 4.5 -
  5.3Rate of price inflation(1)
 2.0 -
  2.5
 N/A
 2.0 -
  2.8
 N/A
 2.5 -
  2.8
 N/ARate of compensationincreases(1)
 2.5 -
  4.0
 3.0 -
  3.0
 3.0 -
  4.0
 3.0 -
  3.0
 3.5 -
  4.0
 3.5 -
  4.0Health care trend rate(2)
 N/A
 6.5 -
  7.7
 N/A
 6.4 -
  7.8
 N/A
 6.6 -
  7.8
 (1)Determined
on a weighted-average basis. (2)Assumed
immediate trend rate at year end. 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. F -61


---



Table of Contents
 A 50 basis point change in the
assumptions mentioned before, used for the calculation of the benefit
obligations as at December 31, 2013, would result in the following increase
(decrease) of the benefit obligations: Defined
  benefit
 Non-pension(MILLIONS)
 pension
  plans
 benefit
  plansDiscount rate50 basis point increase
 
 (4)
 
 (2)50 basis point decrease
 
 6
 
 2Rate of price inflation and inflation-linked assumptions50 basis point increase
 
 3
 
 N/A50 basis point decrease
 
 (3)
 
 N/AHealth care cost trend rate50 basis point increase
 
 N/A
 
 250 basis point decrease
 
 N/A
 
 (1)
 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. 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)
 
 2013
 
 2012
 
 2011Current service costs
 $
 2
 $
 1
 $
 2
 $
 1
 $
 2
 $
 1Past service costs
 
 1
 
 (1)
 
 -
 
 2
 
 -
 
 -Interest expense
 
 1
 
 1
 
 1
 
 1
 
 1
 
 1Administrative expenses
 
 1
 
 -
 
 1
 
 -
 
 1
 
 -Recognized in consolidatedstatement of income (loss)
 
 5
 
 1
 
 4
 
 4
 
 4
 
 2Remeasurement on the netdefined benefit liability:Return on plan assets
 
 (7)
 
 -
 
 (2)
 
 -
 
 3
 
 -Actuarial changes arisingfrom changes indemographic assumptions
 
 2
 
 -
 
 -
 
 1
 
 -
 
 (2)Actuarial changes arisingfrom changes infinancial assumptions
 
 (4)
 
 (3)
 
 7
 
 2
 
 5
 
 1Experience adjustments
 
 -
 
 -
 
 1
 
 (1)
 
 (1)
 
 -Exchange differencesRecognized in consolidatedstatement of comprehensiveincome (loss)
 
 (9)
 
 (3)
 
 6
 
 2
 
 7
 
 (1)Total
 $
 (4)
 $
 (2)
 $
 10
 $
 6
 $
 11
 $
 1
  F -62


---



Table of Contents
 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)
 
 2013
 
 2012
 
 2011Present value of definedbenefit obligation
 $
 80
 $
 27
 $
 82
 $
 29
 $
 73
 $
 23Fair value of plan assets
 
 (74)
 
 -
 
 (64)
 
 -
 
 (56)
 
 -Net liability
 $
 6
 $
 27
 $
 18
 $
 29
 $
 17
 $
 23
 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)
 
 2013
 
 2012
 
 2011Balance, beginning of year
 $
 82
 $
 29
 $
 73
 $
 23
 $
 66
 $
 23Current service cost
 
 2
 
 1
 
 2
 
 1
 
 2
 
 1Past service cost
 
 1
 
 (1)
 
 -
 
 2
 
 -
 
 -Interest expense
 
 4
 
 1
 
 4
 
 1
 
 4
 
 1Remeasurement losses (gains)Actuarial changes arisingfrom changes indemographic assumptions
 
 2
 
 -
 
 -
 
 1
 
 -
 
 (2)Actuarial changes arisingfrom changes infinancial assumptions
 
 (4)
 
 (3)
 
 7
 
 2
 
 5
 
 1Experience adjustments
 
 -
 
 -
 
 1
 
 (1)
 
 (1)
 
 -Benefits paid
 
 (3)
 
 (1)
 
 (3)
 
 (1)
 
 (2)
 
 (1)Business combination
 
 -
 
 1
 
 (2)
 
 -
 
 -
 
 -Exchange differences
 
 (4)
 
 -
 
 -
 
 1
 
 (1)
 
 -Balance, end of year
 $
 80
 $
 27
 $
 82
 $
 29
 $
 73
 $
 23
 Expected
contributions to the defined pension plans for the year ended December 31, 2014
are $8 million. F -63


---



Table of Contents
 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)
 
 2013
 
 2012
 
 2011Balance, beginning of year
 $
 64
 $
 -
 $
 56
 $
 -
 $
 53
 $
 -Interest income
 
 3
 
 -
 
 3
 
 -
 
 3
 
 -Return on plan assets
 
 7
 
 -
 
 2
 
 -
 
 (3)
 
 -Employer contributions
 
 7
 
 1
 
 7
 
 1
 
 6
 
 1Business combination
 
 -
 
 -
 
 (2)
 
 -
 
 -
 
 -Benefits paid
 
 (3)
 
 (1)
 
 (3)
 
 (1)
 
 (2)
 
 (1)Exchange differences
 
 (4)
 
 -
 
 1
 
 -
 
 (1)
 
 -Balance, end of year
 $
 74
 $
 -
 $
 64
 $
 -
 $
 56
 $
 -
 The composition of plan assets as at December 31 is as follows: 2013
 2012(%)
 (%)Asset category:Equity securities
 69
 66Debt securities
 31
 34100
 100
 21.DIRECT OPERATING COSTS Brookfield Renewable’s direct operating costs for the year ended
December 31 are comprised of the following: (MILLIONS)
 
 2013
 
 2012
 
 2011Operations, maintenance and administration
 $
 331
 $
 292
 $
 254Water royalties, property taxes and other
 
 137
 
 112
 
 97Fuel and power purchases
 
 42
 
 64
 
 44Energy marketing fees (Note 9)
 
 20
 
 18
 
 12Total direct operating costs
 $
 530
 $
 486
 $
 407
 The remuneration of key
management personnel of Brookfield Renewable for the years ended December 31, was
as follows: (MILLIONS)
 
 2013
 
 2012
 
 2011Share-based benefits
 $
 6
 $
 7
 $
 6Salaries and benefits
 
 3
 
 3
 
 3$
 9
 $
 10
 $
 9
 Key management personnel
include those individuals having authority and responsibility for planning,
directing and controlling the activities of Brookfield Renewable, directly or
indirectly. Key management personnel include the Chairman, Chief Executive Officer,
Chief Financial Officer and Chief Operating Officer. Share-based benefits
relate to costs allocated from Brookfield Asset Management. F -64


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Table of Contents
 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)
 
 2013
 
 2012Trade receivables and other current assets
 $
 47
 $
 (36)Accounts payable and accrued liabilities
 
 (42)
 
 17Other assets and liabilities
 
 (4)
 
 (3)$
 1
 $
 (22)
 23. 
subsidiary public issuers As a result of the
Combination, Brookfield Renewable created Brookfield Renewable Energy Partners
ULC (formerly BRP Finance ULC) (“BREP Finance”) to contractually assume BRPI’s
term notes with maturities ranging from 2016 and 2036 with a principal value of
C$1.1 billion. BREP Finance assumed these term notes, including accrued
interest, in exchange for an interest-bearing demand promissory note issued by
another wholly-owned subsidiary of Brookfield Renewable. Subsequently, in
February 2012, BREP Finance issued C$400 million of 10-year term corporate
notes. The term notes payable by BREP Finance are unconditionally guaranteed by
Brookfield Renewable, BRELP and certain other subsidiaries. See Note 14 – Long-term debt and credit
facilities for additional details regarding issuances of mid-term corporate
notes. See Note 18 – Non-controlling interests for additional details regarding
the issuances of Class A Preference Shares.  F -65


---



Table of Contents
 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, 2013:Current assets
 $
 48
 $
 -
 $
 1,429
 $
 610
 $
 (1,483)
 $
 604Long-term assets
 
 2,728
 
 785
 
 -
 
 16,365
 
 (3,505)
 
 16,373Current liabilities
 
 50
 
 10
 
 17
 
 2,256
 
 (1,435)
 
 898Long-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
 
 -
 
 2,657As at December 31, 2012:Current assets
 $
 46
 $
 -
 $
 1,528
 $
 530
 $
 (1,582)
 $
 522Long-term assets
 
 3,153
 
 495
 
 -
 
 16,398
 
 (3,643)
 
 16,403Current liabilities
 
 52
 
 7
 
 16
 
 2,468
 
 (1,582)
 
 961Long-term liabilities
 
 -
 
 -
 
 1,506
 
 7,142
 
 (492)
 
 8,156Preferred equity
 
 -
 
 500
 
 -
 
 -
 
 -
 
 500Participating non-controlling interests -in operating subsidiaries
 
 -
 
 -
 
 -
 
 1,028
 
 -
 
 1,028Participating non-controlling interests -in a holding subsidiary - Redeemable/Exchangeable units held by Brookfield
 
 -
 
 -
 
 -
 
 3,070
 
 -
 
 3,070
 (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. BrookfieldBrookfield
 BRP
 BREP
 Other
 Consolidating
 Renewable(MILLIONS)
 Renewable
 Equity
 Finance
 Subsidiaries(1)
 adjustments(2)
 consolidatedFor 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)For the year ended Dec 31, 2011Revenues
 $
 -
 $
 -
 $
 -
 $
 1,169
 $
 -
 $
 1,169Net (loss) income
 
 (238)
 
 -
 
 2
 
 (453)
 
 238
 
 (451)
 (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. F -66


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Table of Contents
 24.  segmented information Brookfield
Renewable operates renewable power assets, which include conventional
hydroelectric generating assets located in the United States, Canada and
Brazil, wind farms located in the United States and Canada and a pumped storage
hydroelectric facility located in the United States. Brookfield Renewable also
operates two natural gas-fired co-gen facilities. Management evaluates the
business based on the type of power generation (Hydroelectric, Wind and
Co-gen). Hydroelectric and wind are further evaluated by major region (United
States, Canada and Brazil). “Equity-accounted investments” includes Brookfield
Renewable’s interest in certain hydroelectric facilities. The “Other” segment
includes CWIP and corporate costs. In accordance
with IFRS 8,Operating Segments, Brookfield Renewable discloses
information about its reportable segments based upon the measures used by
management in assessing performance. The accounting policies of the reportable
segments are the same as those described in Note 2 of these consolidated
financial statements. Brookfield Renewable analyzes the performance of its
operating segments based on revenues, Adjusted EBITDA and funds from
operations. Adjusted EBITDA means revenues less direct costs (including energy
marketing costs), plus Brookfield Renewable’s share of cash earnings from
equity-accounted investments and other income, before interest, income taxes,
depreciation, management service costs and the cash portion of non-controlling
interests. Funds from operations is defined as Adjusted EBITDA less interest,
current income taxes and management service costs, which is then adjusted for
the cash portion of non-controlling interests. Transactions between the reportable
segments occur at fair value. F -67


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Table of Contents
 Hydroelectric
 
 Wind
  energy
 Co-gen
 Other
 Total(MILLIONS)
 U.S.
 Canada
 Brazil
 U.S.
 CanadaFor the year ended  Dec 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-controlling interests
 
 (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 ended  Dec 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-controlling interests
 
 (11)
 
 -
 
 (11)
 
 (6)
 
 -
 
 -
 
 (16)
 
 (44)Funds from operations
 
 148
 
 148
 
 151
 
 2
 
 69
 
 20
 
 (191)
 
 347Depreciation
 
 (116)
 
 (81)
 
 (152)
 
 (38)
 
 (75)
 
 (21)
 
 -
 
 (483)For the year ended  Dec 31, 2011:Revenues
 $
 467
 $
 237
 $
 335
 $
 -
 $
 70
 $
 60
 $
 -
 $
 1,169Adjusted EBITDA
 
 336
 
 179
 
 269
 
 -
 
 58
 
 25
 
 (63)
 
 804Interest expense - borrowings
 
 (149)
 
 (68)
 
 (94)
 
 -
 
 (25)
 
 -
 
 (75)
 
 (411)Funds from operations prior tonon-controlling interests
 
 189
 
 116
 
 160
 
 -
 
 33
 
 25
 
 (139)
 
 384Cash portion of non-controlling interests
 
 (26)
 
 -
 
 (13)
 
 -
 
 -
 
 -
 
 (13)
 
 (52)Funds from operations
 
 163
 
 116
 
 147
 
 -
 
 33
 
 25
 
 (152)
 
 332Depreciation
 
 (130)
 
 (151)
 
 (138)
 
 -
 
 (35)
 
 (14)
 
 -
 
 (468)
 F -68


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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
 
 2013
 
 2012
 
 2011Revenues
 9
 $
 1,706
 $
 1,309
 $
 1,169Other income
 
 
 11
 
 16
 
 19Share of cash earnings from equity-accounted investments
 10
 
 21
 
 13
 
 23Direct operating costs
 21
 
 (530)
 
 (486)
 
 (407)Adjusted EBITDA
 
 
 1,208
 
 852
 
 804Interest expense - borrowings
 24
 
 (410)
 
 (411)
 
 (411)Management service costs
 9
 
 (41)
 
 (36)
 
 (1)Current income tax (expense) recovery
 15
 
 (19)
 
 (14)
 
 (8)Funds from operations prior to non-controlling interests
 
 
 738
 
 391
 
 384Less: cash portion of non-controlling interestsPreferred equity
 
 
 (37)
 
 (16)
 
 (13)Participating non-controlling interests - in operating
  subsidiaries
 
 
 (107)
 
 (28)
 
 (39)Funds from operations
 
 
 594
 
 347
 
 332Add: cash portion of non-controlling interests
 
 
 144
 
 44
 
 52Depreciation
 11
 
 (535)
 
 (483)
 
 (468)Unrealized financial instruments gain (loss)
 8
 
 37
 
 (23)
 
 (20)Share of non-cash loss from equity-accounted investments
 10
 
 (12)
 
 (18)
 
 (13)Deferred income tax (expense) recovery
 15
 
 18
 
 54
 
 50Other
 4
 
 (31)
 
 (16)
 
 (8)Loss on Fund unit liability
 19
 
 -
 
 -
 
 (376)Net income (loss)
 
 $
 215
 $
 (95)
 $
 (451)
 F -69


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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
 Equity-
 Co-gen
 Other
 Totalaccounted(MILLIONS)
 U.S.
 Canada
 Brazil
 U.S.
 Canada
 investmentsAs 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
 
 6,065
 
 4,947
 
 2,426
 
 1,282
 
 1,297
 
 290
 
 62
 
 608
 
 16,977Total borrowings
 
 2,157
 
 1,143
 
 238
 
 647
 
 721
 
 -
 
 -
 
 1,717
 
 6,623Total liabilities
 
 3,328
 
 2,144
 
 398
 
 720
 
 995
 
 -
 
 4
 
 1,852
 
 9,441For the year endedDecember 31, 2013:Additions to property, plantand equipment
 
 715
 
 206
 
 -
 
 430
 
 -
 
 -
 
 -
 
 255
 
 1,606As at December 31, 2012:Property, plant andequipment, at fair value
 $
 5,244
 $
 5,177
 $
 2,570
 $
 834
 $
 1,415
 $
 -
 $
 70
 $
 392
 $
 15,702Total assets
 
 5,418
 
 5,386
 
 2,805
 
 910
 
 1,452
 
 344
 
 83
 
 527
 
 16,925Total borrowings
 
 1,784
 
 1,126
 
 348
 
 460
 
 629
 
 -
 
 -
 
 1,772
 
 6,119Total liabilities
 
 2,997
 
 2,162
 
 556
 
 531
 
 957
 
 -
 
 15
 
 1,899
 
 9,117For the year endedDecember 31, 2012:Additions to property, plantand equipment
 
 621
 
 85
 
 147
 
 610
 
 14
 
 -
 
 5
 
 -
 
 1,482
 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.
 CanadaAs at December 31, 2013
 $
 181
 $
 51
 $
 58
 $
 -
 $
 -
 $
 -
 $
 -
 $
 290As at December 31, 2012
 $
 196
 $
 81
 $
 67
 $
 -
 $
 -
 $
 -
 $
 -
 $
 344
 F -70


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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 2054. Brookfield
Renewable has recorded decommissioning retirement obligations associated with
its power generating assets. Refer to Note 16 – Other long-term liabilities for
details. The remaining
project costs on the 45 MW hydroelectric project in British Columbia are
expected to be $26 million. At
the balance sheet date, Brookfield Renewable had commitments for future minimum
lease payments under non-cancellable leases which fall due as follows: (MILLIONS)
 2014
 2015
 2016
 2017
 2018
 Thereafter
 TotalOperating leases
 $
 17
 $
 17
 $
 17
 $
 13
 $
 13
 $
 124
 $
 201Capital leases
 
 -
 
 -
 
 -
 
 1
 
 1
 
 47
 
 49Total
 $
 17
 $
 17
 $
 17
 $
 14
 $
 14
 $
 171
 $
 250
 Contingencies Brookfield Renewable and its subsidiaries are subject to various
legal proceedings, arbitrations and actions arising in the normal course of
business. While the final outcome of such legal proceedings and actions cannot
be predicted with certainty, it is the opinion of management that the
resolution of such proceedings and actions will not have a material impact on
Brookfield Renewable’s consolidated financial position or results of
operations. Guarantees Brookfield Renewable, on behalf of Brookfield Renewable’s
subsidiaries, and the subsidiaries themselves have provided letters of credit,
which include, but are not limited to, guarantees for debt service reserves,
capital reserves, construction completion and performance. The activity on the
issued letters of credit by Brookfield Renewable can be found in Note 14 –
Long-term debt and credit facilities. As at December 31, 2013, letters of
credit issued by subsidiaries of Brookfield Renewable amounted to $93 million. In the normal course of operations,
Brookfield Renewable and its subsidiaries execute agreements that provide for
indemnification and guarantees to third parties of transactions such as
business dispositions, capital project purchases, business acquisitions, and
sales and purchases of assets and services.  Brookfield Renewable has also
agreed to indemnify its directors and certain of its officers and employees. 
The nature of substantially all of the indemnification undertakings prevents
Brookfield Renewable from making a reasonable estimate of the maximum potential
amount that Brookfield Renewable could be required to pay third parties as the
agreements do not always specify a maximum amount and the amounts are dependent
upon the outcome of future contingent events, the nature and likelihood of
which cannot be determined at this time. Historically, neither Brookfield
Renewable nor its subsidiaries have made material payments under such
indemnification agreements. F -71


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Table of Contents
 26.  subsequent eventS In January 2014, Brookfield Renewable completed the acquisition of
a 70 MW hydroelectric portfolio in Maine consisting of nine facilities which
are expected to generate approximately 400 GWh annually. In February 2014, $140
million of financing was obtained with a private placement bond that matures in
2024. The acquisition was completed with institutional partners, and Brookfield
Renewable retains an approximate 40% interest in the portfolio. In January 2014, Brookfield Renewable acquired, with institutional
partners, the remaining 50% interest in the 30 MW Malacha Hydro facility in
California. Brookfield Renewable will retain an approximate 22% interest in the
facility. In January 2014, the $279 million bridge loan associated with the
recently acquired 360 MW operating hydroelectric portfolio located in Maine was
refinanced to 2017 at LIBOR plus 2.25%. In February 2014, Brookfield Renewable announced an agreement to
acquire a 33% economic and 50% voting interest in a 417 MW hydroelectric
facility in Pennsylvania. This facility is expected to generate
approximately 1,100 GWh annually. The acquisition is being pursued with
institutional partners, and Brookfield Renewable’s share of the acquired
interest is approximately 40%. This transaction is subject to regulatory
approvals and other customary closing conditions and is expected to close in
the first quarter of 2014. In February 2014, Brookfield Renewable announced an increase in
unitholder distributions to $1.55 per unit on an annualized basis, an increase
of ten cents per unit, to take effect with the first quarter distribution payable
in March 2014.    F -72


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Table of Contents
 UnauditedPro FormaCondensed Combined Statements of (Loss) Income for the Year Ended December 31, 2011 BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. The
unauditedpro formacondensed combined statements of (loss) income of
Brookfield Renewable Energy Partners L.P. (“Brookfield Renewable”) adjusts the
audited consolidated statements of (loss) income of Brookfield Renewable for
the year ended December 31, 2011 to give effect to the following transactions
that occurred on November 28, 2011 as if each occurred as of
January 1, 2011: ·the
transfer of the Brookfield Renewable Power Division (the “Division”) and
related transactions including the assumption of the term notes of Brookfield
Renewable Power Inc. (“BRPI”) and the preferred shares of Brookfield Renewable
Power Preferred Equity Inc. and the issuance by a holding entity of preferred
shares to BRPI; ·the
transfer to Brookfield Renewable of the 66% ownership interest in Brookfield
Renewable Power Fund (the “Fund”) not previously owned by the Division at fair
value satisfied by the issuance of limited partnership units of Brookfield
Renewable (the “LP Units”) and the subsequent dissolution of the Fund into an
indirect, wholly-owned subsidiary of Brookfield Renewable. The result of this
transaction is to reflect the settlement of the Fund unit liability and the
issuance of LP Units as equity and to reflect a reduction in deferred tax
balances of certain subsidiaries due to the dissolution of the Fund; ·the
amendment of the Power Purchase Agreement between BRPI and Brookfield Renewable
Power Trust (“BRPT”) to increase the price paid for energy generated from the
facilities owned by Great Lakes Power Limited (“GLPL”), a subsidiary of BRPT,
from C$68 per megawatt hour (“MWh”) to C$82 per MWh. As a result of this
amendment, energy revenues generated by facilities owned by GLPL will be
increased; ·the
amendment of the Master Power Purchase and Sale Agreement between Brookfield
Energy Marketing LP (“BEM LP”) and Mississagi Power Trust (“MPT”) to increase
the price paid for energy from the facilities from C$68 per MWh to C$103 per
MWh. As a result of this amendment, energy revenues generated by facilities
owned by MPT will be increased; ·the
execution of an Energy Revenue Agreement between BEM LP and Brookfield Power US
Holding America Co. (“BPUSHA”) to support the price for energy delivered by
certain facilities in the United States at $75 per MWh. The contract price
effectively replaces the market prices realized by BPUSHA for generation at
these facilities; ·changes
in the fair value of certain facilities arising from the contract amendments
and new agreement referred to above and changes in the accounting for certain
power purchase agreements between the Division and BRPI; ·the
entry into a Master Services Agreement with Brookfield Asset Management Inc.
(“Brookfield”) and an Energy Marketing Agreement with BEM LP; and ·The
settlement of certain intercompany balances with BRPI and its subsidiaries. The
unauditedpro formacondensed combined statements of (loss) income have
been prepared based upon currently available information and assumptions deemed
appropriate by management. The unauditedpro formacondensed combined
statements of (loss) income are provided for information purposes only and may
not be indicative of the results that would have occurred if the above
transactions had been effected on January 1, 2011. All
financial data in these unauditedpro formacondensed combined
statements of (loss) income is presented in U.S. dollars and has been prepared
in accordance with International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board. F -73


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Table of Contents
  UnauditedPro
  FormaCondensed Combined Statement of (Loss) IncomeFor the Year Ended December 31, 2011(Millions, except as noted)Brookfield Renewable
  Consolidated
 
 Transfer of BRPF Units 4(ii)
 
 Power Purchase Agreements
  4(iii)
 
 Financial Instruments 4(iv)
 
 Change in depreciation expense
  4(v)
 
 Management service agreements
  4(vi)
 
 Intercompany settlements 4(vii)
 
 Income taxes 4(viii)
 
 Pro FormaRevenues
 $
 1,169
 $
 -
 $
 140
 $
 -
 $
 -
 $
 -
 $
 -
 $
 -
 $
 1,309Other income
 
 19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 19Direct operating costs
 
 (407)
 
 
 
 
 
 
 
 
 
 (18)
 
 
 
 
 
 (425)Management service costs
 
 (1)
 
 
 
 
 
 
 
 
 
 (21)
 
 
 
 
 
 (22)Interest expense-borrowings
 
 (411)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (411)Share of earnings from equity-accounted investments
 
 10
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 10Unrealized financial instruments (loss) gain
 
 (20)
 
 
 
 
 
 20
 
 
 
 
 
 
 
 
 
 -Loss on Fund unit liability
 
 (376)
 
 376
 
 
 
 
 
 
 
 
 
 
 
 
 
 -Depreciation and amortization
 
 (468)
 
 
 
 
 
 
 
 4
 
 
 
 
 
 
 
 (464)Other
 
 (8)
 
 
 
 
 
 
 
 
 
 
 
 19
 
 
 
 11Income (loss) before income taxes
 $
 (493)
 $
 376
 $
 140
 $
 20
 $
 4
 $
 (39)
 $
 19
 $
 -
 $
 27(Provision for) recovery of income taxesCurrent income taxes
 
 (8)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (8)Deferred income taxes
 
 50
 
 
 
 
 
 
 
 
 
 
 
 
 
 10
 
 60Net (loss) income
 $
 (451)
 $
 376
 $
 140
 $
 20
 $
 4
 $
 (39)
 $
 19
 $
 10
 $
 79Net (loss) income attributable to:Non-controlling interestsPreferred equity
 
 13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 13Participating non-controlling interests - in operating
  subsidiaries
 
 11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 11General partnership interest in a holding subsidiary held by
  Brookfield
 
 (5)
 
 4
 
 1
 
 
 
 
 
 
 
 
 
 
 
 -Participating non-controlling interests - in a holding
  subsidiary - Redeemable/Exchangeable units held by Brookfield
 
 (232)
 
 184
 
 68
 
 10
 
 2
 
 (19)
 
 9
 
 5
 
 27Limited partners’ equity
 
 (238)
 
 188
 
 71
 
 10
 
 2
 
 (20)
 
 10
 
 5
 
 28$
 (451)
 $
 376
 $
 140
 $
 20
 $
 4
 $
 (39)
 $
 19
 $
 10
 $
 79Basic and diluted earnings (loss) per LP Unit
 $
 (1.79)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 $
 0.21
 F -74


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Table of Contents
 NOTES
TO THE UNAUDITEDPRO FORMACONDENSED COMBINED STATEMENTS OF (LOSS) INCOME 1.  NATURE AND
DESCRIPTION OF BROOKFIELD RENEWABLE Brookfield
Renewable Energy Partners L.P. (“Brookfield Renewable”) was created to
facilitate a corporate reorganization (the “Combination”) of the renewable
power operations of Brookfield Renewable Power Inc. (“BRPI”). BRPI is a
wholly-owned subsidiary of Brookfield Asset Management Inc. (“Brookfield Asset
Management”). The Combination has resulted in Brookfield Renewable’s
acquisition of BRPI’s renewable power operations (including the assumption of
BRPI’s term notes with maturities ranging from 2016 to 2036 (the “BRPI Bonds”)
and the preferred shares of Brookfield Renewable Power Preferred Equity Inc.
(“BRP Equity”), the acquisition of the outstanding fund units of Brookfield
Renewable Power Fund (the “Fund”) not previously owned by BRPI, the dissolution
of the Fund and the execution or amendment of certain agreements described in
Note 4. As a result of the Combination, Brookfield Asset Management held,
directly or indirectly, approximately a 73% limited partnership interest on a
fully exchanged basis and a 0.01% general partnership interest in Brookfield
Renewable. Brookfield
Renewable was formed as a limited partnership established under the laws of
Bermuda, pursuant to a limited partnership agreement dated June 27, 2011.
In connection with the Combination, an amended and restated limited partnership
agreement (the “Partnership Agreement”) dated November 20, 2011 has
replaced the initial limited partnership agreement in its entirety. Brookfield
Renewable and its subsidiaries are collectively referred to as “Brookfield
Renewable Group”. The
registered office of Brookfield Renewable is Canon’s Court, 22 Victoria Street,
Hamilton HM12, Bermuda. 2.   BASIS OF
PRESENTATION Brookfield
Renewable’s unauditedpro formacondensed combined statements of income
(loss) for the year ended December 31, 2011 have been prepared assuming
the transactions described above had each occurred as of January 1, 2011.
Thepro formaadjustments are described in Note 4 and are based upon
currently available information and certain assumptions made. Brookfield
Renewable’s unauditedpro formacondensed combined statements of (loss)
income have been prepared using the audited consolidated financial statements
of Brookfield Renewable for the year ended December 31, 2011. The
unauditedpro formacondensed combined statements of (loss) income have
been prepared for informational purposes only and should be read in conjunction
with the audited consolidated financial statements of Brookfield Renewable for
the year ended December 31, 2011 described above and the related
disclosures used to prepare these statements. The preparation of these
unauditedpro formacondensed combined statements of (loss) income
requires management to make estimates and assumptions deemed appropriate. The
unauditedpro formacondensed combined statements of (loss) income are
not intended to present or be indicative of the results of operations that
would have occurred if the transactions described above had been effected on
the dates indicated. 3.  SIGNIFICANT
ACCOUNTING POLICIES Brookfield
Renewable presents its financial statements in accordance with International
Financial Reporting Standards as issued by the International Accounting
Standards Board (“IFRS”). The accounting policies used in the preparation of
Brookfield Renewable’s unauditedpro formacondensed combined statements
of (loss) income are those that are set out in Brookfield Renewable’s audited
financial statements for the year ended December 31, 2011. 4.PRO FORMAADJUSTMENTS To
give effect to the transactions below resulting from the Combination as if they
had occurred on January 1, 2011, the unauditedpro formacondensed
combined financial statements of (loss) income of Brookfield Renewable for the
year ended December 31, 2011 were adjusted accordingly. The unauditedpro
formacondensed combined statements of (loss) income for the year ended
December 31, 2011 F -75


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Table of Contents
 adjust the consolidated
statements of (loss) income of Brookfield Renewable for the year ended
December 31, 2011 to give effect to the following transactions discussed
in these notes. ·Transfer
of the Brookfield Renewable Power Division (the “Division”) ·Transfer
of Fund units ·Amendment
and execution of power purchase agreements ·Changes
in fair value of property, plant and equipment ·Settlement
of intercompany transactions ·Execution
of management service agreements The
unauditedpro formacondensed combined statements of (loss) income
reflect the deferred tax adjustments arising from the above transactions and
the computation of income per unit based on the units issued in connection with
the transactions described in (i) and (ii) below and the terms of the
Partnership Agreement. The
unauditedpro formacondensed combined statements of income (loss) do
not reflect the impact of potential cost savings and other synergies. (i)Transfer
of the Division Through
a series of transactions, BRPI has transferred the Division to Brookfield
Renewable Energy L.P. (“BRELP”), in return for the issuance of limited
partnership units of Brookfield Renewable (the “LP Units”) and redeemable
partnership units of BRELP (the “Redeemable/Exchangeable partnership units”).
The transfer of the Division includes all of BRPI’s renewable power operations
and the assumption of the BRPI Bonds and the preferred shares of BRP Equity. BRPI
owns the general partner of BRELP (the “BRELP General Partner”). Brookfield
Renewable has entered into a voting agreement with BRPI to provide Brookfield
Renewable with control of the BRELP General Partner and BRELP. Accordingly, Brookfield
Renewable consolidates the accounts of BRELP and its subsidiaries. BRPI
has provided $5 million of working capital funding through a subscription for
preferred shares of a subsidiary of BRELP (“Bermuda Holdco”). The impact of the
preferred share dividends on the unauditedpro formacondensed combined
statements of (loss) income is not material. (ii)Transfer
of Brookfield Renewable Power Fund Units The
transfer of the 66% of the Fund units not previously owned by Brookfield Asset
Management and its subsidiaries (collectively, “Brookfield”) was completed at
fair value satisfied by the issuance of LP Units. The result of this
transaction is to reflect the settlement of the Fund unit liability and the
issuance of LP Units to satisfy the transfer as equity of Brookfield Renewable.
As a result of this transaction, the loss on Fund unit liability of $376
million related to the change in fair value of the units and the distributions
made on such Fund units was eliminated. Subsequent to the transfer of the Fund units,
the Fund was dissolved into a subsidiary of BRELP. (iii)Power
Purchase Agreements Pro
formaincome reflects an amendment to the power purchase agreement between Brookfield
and an indirect wholly-owned subsidiary of Brookfield Renewable (the “GLPL
PPA”). Under the amendment, Brookfield has agreed to guarantee the price of
electricity generated by facilities owned by Great Lakes Power Limited, a
subsidiary of Brookfield Renewable, at C$82 per MWh. This price is to be
increased annually on January 1 by an amount equal to forty percent
(40%) of the increase in the consumer price index during the previous
calendar year. In
a separate transaction, Brookfield Energy Marketing LP (“BEM LP”) and
Mississagi Power Trust (“MPT”), an indirect wholly-owned subsidiary of
Brookfield Renewable, agreed to an amendment to the existing Master Power
Purchase and Sale Agreement (the “Mississagi PPA”) to adjust the price of
electricity purchased to C$103 per MWh. This price is to be increased annually
by an amount equal to twenty percent (20%) of the increase in the consumer
price index during the previous calendar year. Additionally,
BEM LP and Brookfield Power U.S. Holding America Co. (“BPUSHA”), an indirect
wholly-owned subsidiary of Brookfield Renewable, agreed to an Energy Revenue
Agreement under which BEM F -76


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 LP will guarantee the price
for energy delivered by certain facilities in the United States at $75 per MWh.
This price is to be increased annually on January 1 by an amount equal to
forty percent (40%) of the increase in the consumer price index during the
previous calendar year, but not exceeding an increase of three percent
(3%) in any calendar year. In conjunction with the Energy Revenue
Agreement, BEM LP and each of the owners of the facilities entered into power agency
agreements (the “Power Agency Agreements”) under which BEM LP will provide
certain services. BEM LP will be entitled to be reimbursed for any third party
costs incurred and, except in a few cases, receives no additional fee for its
services under the Power Agency Agreements. The impacts of these
contract price amendments and agreements are summarized as follows: (MILLIONS, EXCEPT AS NOTED)
 Actual generation (GWh)
 Incremental revenueGLPL  PPA
 964
 $
 13Mississagi PPA
 473
 
 17Energy Revenue Agreement
 3,512
 
 1104,949
 $
 140
 (iv)Changes in Fair Value
of Property, Plant and Equipment Prior to
November 28, 2011 certain power guarantee agreements between Brookfield
Renewable and Brookfield were accounted for as financial instruments with an
unrealized loss of $20 million. As a result of new
agreements and changes in existing agreements with Brookfield and its
subsidiaries arising from the Combination, the contracts are not accounted for
as financial instruments by Brookfield Renewable. Thus the unrealized financial
instrument gains have been eliminated. The amendments and
agreements discussed in (iii) above and the change in accounting for the
contracts discussed above resulted in changes in the fair value of the related
power generating assets using the revaluation method since the fair value of
such assets are determined using a discounted cash flow model. (v)Change
in Depreciation Expense The reduction in fair
value of the power generating assets discussed in (iv) above results in a
decrease inpro formadepreciation expense of $4 million for the year
ended December 31, 2011. (vi)Management
Service Agreements The unauditedpro
formacondensed combined statements of (loss) income reflect an exclusive
agreement with Brookfield to provide operating, management and consulting
services to Brookfield Renewable Group (the “Master Services Agreement”) for a
management service fee. The fee will be paid on a quarterly basis and will
continue in perpetuity. The fee 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, as defined. Brookfield
Renewable Group is also required to reimburse Brookfield for out-of-pocket
costs incurred to provide required services to Brookfield Renewable Group. For
the year ended December 31, 2011pro formaresults reflect an
expense of $22 million related to the Master Services Agreement. In addition to the
Management Service Agreement, the unauditedpro formacondensed combined
statements of (loss) income reflect an agreement with BEM LP to provide energy
marketing services (the “Energy Marketing Agreement”). Brookfield Renewable
Group will pay an annual marketing service fee of $18 million to BEM LP. The
fee will be increased annually on January 1 by an amount equal to the
increase in the U.S. consumer price index during the previous calendar year.Pro
formaresults for the year ended December 31, 2011 reflect an expense
of $18 million related to the Energy Marketing Agreement. (vii)Intercompany
Settlements Brookfield Renewable
Group and its subsidiaries settled certain intercompany loans and transactions
with Brookfield upon completion of the Combination. During the year ended
December 31, 2011, $19 million of interest expense was recorded in thepro
formastatements of (loss) income to reflect these transactions. F -77


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 (viii)Deferred
Income Taxes The unauditedpro
formacondensed combined statements of (loss) income reflect an increase in
deferred income tax recovery of $10 million for the year ended
December 31, 2011. (ix)Earnings
(loss) per LP Unit Pro formaearnings (loss) per
LP Unit have been calculated based on the average LP Units outstanding of
132.8 million. F -78


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