Brookfield Renewable A Stock

Good day, and thank you for standing by. Welcome to the Brookfield Renewable Second Quarter 2026 Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Connor Teskey, Chief Executive Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for our second quarter 2026 conference call. Before we begin, we would like to remind you that a copy of our news release and investor supplement can be found on our website. We also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially. For more information, you are encouraged to review our regulatory filings available on SEDAR+, EDGAR and on our website.

On today's call, we will review our results for the second quarter and discuss how we continue to enhance our leadership position to capitalize on the significant growth opportunities in the current environment and continue creating long-term value for our investors. We will then turn the call over to Jeh Vevaina, our Chief Investment Officer, who will discuss how we are further enhancing our capabilities in battery storage and strengthening our position as the energy partner of choice to both corporates and sovereigns. Patrick will conclude the call with a review of our operating and financial results, our balance sheet and funding activities and an update on our recently announced plan to simplify our structure into a single listed corporate entity. Following our comments, we look forward to taking your questions.

Turning to our results. In the first half of the year, we delivered record financial results, robust capital deployment and the highest levels of development and asset recycling in our history. We also further strengthened our balance sheet, ending the quarter with strong liquidity and positioning the business to capitalize on the growing opportunity set in the current market.

In the second quarter, we delivered FFO of $421 million, up 13% year-over-year or $0.62 per unit, up 11% on a per unit basis. In the last 12 months, we delivered FFO of $1.444 billion or $2.14 per unit, up 14% and 11%, respectively, compared to the prior year period. We continue to scale our development activities, commissioning 1.3 gigawatts of new capacity in the quarter and advancing our contracting initiatives, signing power purchase agreements for 2.6 gigawatts from our advanced development pipeline. We deployed or committed $5 billion into growth, or $760 million net to BEP, highlighted by our recently announced acquisition of Aypa. In addition, we continue to scale our capital recycling program, agreeing to or closing sales that will generate approximately $2.2 billion of proceeds or $630 million net to BEP at strong results at or above our target returns.

Our strong execution came at the same time as the fundamentals supporting our business continue to strengthen. Global electricity demand is accelerating, and there is simply not enough new capacity coming online to keep up. This supply/demand imbalance is compounded by grid infrastructure that has not kept pace with the growing need for electricity and is not being developed quickly enough to accommodate new demand. As a result, customers are increasingly balancing their needs for speed to power, scale, cost and security of supply while seeking partners that can deliver integrated energy solutions across multiple geographies on time and on budget. This is reinforcing the value of our global business, our broad capabilities across various mature technologies and our scale capital.

Our business today is uniquely positioned to meet our customers' evolving power needs through our global platform. We're one of the largest developers of low-cost, fast-to-market solar and wind projects. This is complemented by one of the world's largest hydro portfolios, which provides clean, dispatchable baseload power and is further enhanced by an expanding battery storage business that is increasingly critical to improving grid reliability and enabling greater renewable power penetration.

Beyond these capabilities, we have what we believe is one of the most differentiated businesses in the global power sector. Through Westinghouse, we own the world's leading nuclear technology provider. Nuclear power provides a unique combination of reliability, scale, energy security and carbon-free baseload generation, making it an increasingly important and essential component of the global energy mix. Existing reactors represent highly strategic long-life infrastructure that is difficult to replicate and the value of these assets continue to grow in the current energy market. This is being recognized globally as the sector pursues reactor life extensions, restarts and new build programs.

Westinghouse is exceptionally well positioned to benefit from this growth through its market-leading fuel, services and maintenance businesses, which service approximately half the current global fleet. And going forward, we believe the most significant opportunity lies in helping deliver a new fleet of large reactors at scale, supporting the revitalization of the global nuclear industry.

During the quarter, we achieved another milestone towards that objective. The U.S. Department of Energy issued a commitment for up to $17.5 billion in loan facilities to support the procurement of long-lead equipment for the deployment of up to 10 Westinghouse AP1000 reactors in the United States. This builds on our previously announced partnership with the U.S. government to support the deployment of approximately $80 billion to build new Westinghouse reactors across the country.

The financing program is expected to accelerate deployment time lines by up to 3 years by enabling procurement of long-lead time items in advance of final investment decisions. It also helps to catalyze investment in the nuclear supply chain, improving future project execution, reducing costs and shortening deployment time lines for projects.

Our focus has now shifted from establishing the financing framework for long lead orders to advancing individual projects. As the next step in deploying AP1000 reactors, we are actively engaged with 7 utility partners that have identified project sites and are working with them towards executing long-lead equipment orders. At the same time, we continue to work with utilities, power customers and other stakeholders to establish commercial frameworks that will support the next wave of nuclear development in the United States.

While much of our immediate focus is on advancing these projects in the U.S., we continue to see the opportunity for Westinghouse to expand in other regions as well. The recent announcement of a nuclear cooperation agreement between the United States and the Kingdom of Saudi Arabia, reinforces the significant global opportunity we see for new nuclear development. Westinghouse is uniquely positioned to benefit given its market-leading technology and will compete for reactor deployments not only in Saudi Arabia but across a growing number of markets around the world.

Taken together, our access to capital, combined with our differentiated operating platform and expertise across the critical technologies needed to meet accelerating energy demand, positions us to participate in one of the largest periods of capital investment in energy infrastructure in history. Our ability to deliver integrated power solutions to the world's largest buyers of electricity will enable us to capture this growing demand and continue creating significant long-term value for our unitholders.

With that, we will turn the call over to Jeh, to discuss how we are further enhancing our capabilities in energy storage, strengthening our position as the energy partner of choice.

Thank you, Connor, and good morning, everyone. As Connor discussed, the largest buyers of power and sovereigns are increasingly looking for partners that can deliver reliable integrated power solutions at scale. As a result, one of our key priorities is to continue expanding our capabilities across the technologies and markets where we see the strongest long-term demand and feel we can leverage our competencies to generate value for our investors.

One of the most compelling opportunities we see today is in battery storage. Storage is becoming an increasingly critical component of the energy mix, expanding the hours during which renewable generation can meet demand while providing flexibility and improving overall grid reliability. This is particularly important as hyperscalers and governments increasingly require reliable, dispatchable power alongside low-cost, fast-to-market renewable generation to support rapidly growing electricity demand.

Our recently announced acquisition of Aypa is a direct reflection of this opportunity. The acquisition of the largest stand-alone battery storage platform in North America for $3 billion or approximately $420 million net to BEP. Aypa's leading position across many of the fastest-growing power markets in the United States complements our large existing business and further expands our battery storage capabilities. The platform includes approximately 3 gigawatts of highly contracted operating and under construction assets, an additional 3.5 gigawatts of contracted projects and a further pipeline of more than 20 gigawatts of assets, providing meaningful runway for development to meet the growing demands of our customers and create value.

With the acquisition, we are doubling our operating and under construction battery capacity to approximately 6 gigawatts and expanding our development pipeline by over 30% to more than 80 gigawatts. Aypa, alongside our acquisition of Neoen at the end of 2024, establishes Brookfield Renewable as the leading global battery storage platform with the scale, operating and development capabilities and customer relationships to capitalize on the growing demand for storage. The acquisition is immediately accretive, reflecting our disciplined investment approach that continues to guide our capital allocation decisions, and we see meaningful opportunities to create additional value over time by accelerating development, optimizing the capital structure and commercial strategy and implementing an asset recycling program.

In addition, by adding Aypa to our existing portfolio, we further strengthened our ability to provide customers with comprehensive energy solutions across hydro, solar, wind, storage and nuclear. We believe this differentiated offering continues to position Brookfield Renewable as the partner of choice for many of the world's largest corporate and sovereign buyers of power.

With that, I'll turn the call over to Patrick to discuss our operating results, financial position and capital recycling activities in more detail.

Thank you, Jeh, and good morning, everyone, on the call. We delivered another record quarter, generating FFO of $421 million or $0.62 per unit, up 13% or 11% per unit year-over-year. Our results this quarter benefited from strong performance across the business, contributions from assets commissioned over the last 12 months and continued execution of our capital recycling program.

Turning to our segment results. Our hydroelectric business generated $336 million of FFO, with results benefiting from strong generation across our Canadian fleet and continued strong performance from our Colombian business, where favorable market fundamentals and our increased ownership in Isagen continue to support earnings growth. Colombia remains one of the most structurally attractive power markets in our portfolio, and we are well positioned to benefit going forward given our asset base and development pipeline in the country. Results also included realized gains from the sale of a further 25% interest in a non-core hydro portfolio in Maine, which offset weaker hydrology at our U.S. operations.

Within our solar and wind businesses, we generated $166 million of FFO, benefiting from contributions from projects commissioned over the last 12 months and realized gains from asset sales completed during the quarter. Lastly, our distributed energy, storage and sustainable solutions businesses contributed $84 million of FFO.

Results continue to benefit from strong development activity across the portfolio and performance of our nuclear services business, Westinghouse, where FFO was up over 60% compared to the prior year, excluding a large new reactor licensing fee earned in Q2 last year. Increasing global demand for nuclear power continues to support growth across Westinghouse's core fuel and maintenance services business, while increased energy -- engineering and design activity associated with new reactor construction is also contributing to these strong results.

Turning to our balance sheet. We continue to have a best-in-class balance sheet and our financial flexibility and access to diverse sources of scale, long-duration capital continues to be a competitive advantage. During the quarter, we completed approximately $12 billion of financings across the business and ended the period with over $5.1 billion of available liquidity across our platforms, providing significant capacity to fund development and invest in attractive growth opportunities.

The quarter included the largest private placement financing in Brookfield Renewable's history, with the refinancing of our Safe Harbor hydro portfolio on the back of signing a 20-year contract with Google last year, securing approximately $1.2 billion of attractive long-term capital, resulting in an aggregate $700 million in up financing or $200 million net to BEP.

Across our broader platform, Neoen completed a EUR 650 million bond issuance, further demonstrating our ability to efficiently access capital across multiple regions and operating platforms. At the corporate level, we also completed a CAD 200 million preferred unit issuance that was upsized in the response to strong investor demand and priced at the second lowest reset spread ever for this type of instrument. In addition, we are advancing contracting of our hydro portfolio in Ontario under a program run by the provincial system operator that we expect to enable meaningful up financings over the next few quarters.

With respect to capital recycling, we continue to execute our programmatic monetization strategy, generating record proceeds during the first half of the year while consistently achieving at or above our target returns. Capital recycling remains one of the competitive advantages of our business as we bring online contracted cash-flowing infrastructure assets that are in strong demand, allowing us to consistently crystallize value created through development and operational improvements and redeploy capital into higher returning growth opportunities.

During the quarter, we agreed to sell a 570-megawatt portfolio of operating solar and wind assets from our European development businesses to a newly formed European renewable power platform. Similar to the model we successfully launched earlier this year through Northview Energy, the transaction establishes a framework to continue recycling assets into this platform over time. In addition, we closed 2/3 of the sale of 2.1 gigawatts of assets to the Northview Energy platform and closed the remaining 1/3 subsequent to quarter end. We also completed the sale of an additional 25% interest in our non-core hydro portfolio in Maine with the balance expected to close during the third quarter. Lastly, we agreed to sell a portfolio of solar assets that we developed and small non-core hydro assets from our Isagen business in Colombia. The sales are in line with our business plans and crystallizes the value we've created through operational improvements, contract optimization and development across the platform.

Turning now to our recently announced corporate simplification. As announced last week, we are moving forward with the proposed transaction, which, subject to shareholder and unitholder approvals, will combine BEP and BEPC into a single publicly traded corporation. We expect the simplification to be tax deferred for Canadian and U.S. investors and benefit all security holders by improving trading liquidity, increasing demand for index funds and ETFs, simplifying investor analysis, broadening access to investors who prefer a more traditional corporate structure and enhancing governance. For BEP unitholders, the simplification will also eliminate partnership tax reporting forms, while also providing preferential dividend tax rates for many Canadian and U.S. taxable investors. Importantly, there will be no changes to our dividends going forward or Brookfield's ownership management fees, or to BEP's preferred units or public debt, all of which will remain outstanding. There will also be no meaningful cost to the business as a result of the simplification.

In closing, we believe Brookfield Renewable is exceptionally well positioned to continue delivering attractive, long-term returns and cash flow growth. Our diversified global platform continues to generate growing and resilient cash flows, our balance sheet and liquidity position are strong, and our disciplined approach to capital allocation, development and capital recycling continues to drive significant value creation. We look forward to seeing many of you at our Investor Day on September 29 in Toronto. We will provide an update on our strategic priorities, long-term growth outlook and the opportunities we see across our business at that time. On behalf of the Board and the management team, thank you for your continued support and investment in Brookfield Renewable.

That concludes our prepared remarks. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of Sean Steuart with TD Securities.

A couple of questions. Patrick, I wanted to start with the other income of $175 million in the hydro segment. And I get that this is associated with the asset sales down to Northview and the Maine portfolio, the portion there. Can you give us a little more context on the basis for that other income. We used to think of what was being included in FFO as gains on development potential or recontracting potential. It feels like this is transitioning more to just booking gains on asset sales, maybe I'm wrong there. But just as other income comprises a larger percentage of FFO going forward, what are the best ways we can think about gauging the scale quarter-to-quarter as this becomes more programmatic for you?

Yes, Sean, in terms of how we think about it, you're correct in saying that predominantly, we expect that, that really represents gains from assets which we have developed ourselves over time. Increasingly as well, we are finding opportunities as a supplement to that, to dispose of assets that we consider to be non-core in nature. And so you are seeing some of that come through other income in the quarter. But we really think of it as asset gains that we've had associated with developed assets alongside certain assets that are non-core in nature and definitely not all sale gains that might come through our results in a given period, Sean.

Okay. Second question is on batteries, 30% of your current advanced development pipeline that will grow once you close on Aypa. I'm wondering if you can give some updated perspective on how many different suppliers you're procuring from to mitigate risk? And appreciating that LCOE for batteries has dropped substantially over the last 5, 6 years. What's your expectation for the LCOE trajectory going forward in the next few years?

Thanks, Sean. Make no mistake, batteries are the fastest-growing technology within Brookfield Renewable today. And we are looking to invest in and develop batteries alongside new wind and solar on a stand-alone basis and retroactively on existing wind and solar. And therefore, the opportunity set is very large. And we think now with the combination of Neoen, largely in Europe and Australia and now Aypa in North America, we have the leading battery storage providers in the most attractive battery markets around the world.

Given the scale of our battery development activities, I don't think it's a stretch to say we are one of, if not the largest procurer of utility-scale energy storage equipment in the world. And therefore, we have relationships with all the major producers, both the domestic ones and the international ones. And we -- not dissimilar to what we do on wind and solar, we leverage those relationships to manage around supply chain issues, taxation, subsidies, tariffs to ensure that we can procure that equipment on time, on budget and cheaper than anyone else.

And perhaps the last comment I would make is not dissimilar to how we entered into large-scale framework agreements with the biggest suppliers of wind and solar equipment in recent years. We are now actively entering into large-scale global framework agreements with the largest producers of battery equipment around the world as well. Again, just increasing our flexibility and our differentiation in developing this asset class.

Sean, sorry. I left one thing out just on the LCOEs. They've come down very, very dramatically in the last, call it, 24 months. There are some short-term dynamics at play in terms of input costs into batteries that can cause short-term variations in those LCOEs. But we're still in the very early days of the supply chain scaling up and the technology improving. So long term, we expect LCOEs continue to go down, albeit there could be some short-term noise just dependent on input costs.

[Operator Instructions] Our next question comes from the line of Christine Cho with Barclays.

This is Liam on for Christine. With regards to the share consolidation, could you provide some details about the shareholder vote? I think I saw that the completion of the deal is not conditional on BEPC shareholder vote, but for both BEP and BEPC, Brookfield and affiliates own a large ownership stake. Can you remind us what that stake is and if those shares are going to be included in the vote? And is it a simple majority or 2/3 needed to approve?

Liam, it's Patrick here. So you're correct in saying that the simplification transaction is going to involve shareholder approvals at both the Brookfield Renewable Partners level as well as at the Brookfield Renewable Corporation level. There will be individual votes for the shareholders and the unitholders. It would require at both levels, a 2/3 of the vote actually saying yes to pass. In one of the entities, that vote would be for all outstanding shareholders and in another, it will be for all of those who vote. But 2/3 as a general rule of thumb should be your thought process with respect to passing those resolutions to do the simplification.

Brookfield Renewable is held on a look-through basis, 47% by Brookfield holders. And so you can imagine a significant amount of the holdings with respect to the Brookfield Renewable Partners votes will be done by Brookfield Corporation and voted in favor. Secondarily, at the Brookfield Renewable Corporation level, there is a stake of roughly 10% that's held by Brookfield holders, which again, would be broadly supportive of the transaction.

So 2 votes, which we will be going to vote sometime in October this year. The expectation is, to the extent both shareholders approve, we would look to close the transaction by the end of the year. An important point is the transaction will go forward to the extent that BEP unitholders approve the transaction, that is a requirement. However, in the event that only BEP unitholders approve and not BEPC, we would continue to go through with the transaction. The transaction is not contingent on BEPC shareholders approving it.

I would now like to hand the call back over to Connor Teskey for closing remarks.

Great. Thank you, everyone, for your interest in Brookfield Renewable and our results this quarter. We thank you for your continued support. We look forward to seeing you at our Investor Day in September, and then updating you at the end of next quarter with our Q3 results. Thank you, and have a great day.

This concludes today's conference. Thank you for your participation. You may now disconnect.

Jeff, we are ready to commence the meeting.

Thank you, Jen, and good morning, everyone. Now 9:00 a.m. and time to begin the Annual Meeting of Shareholders of Brookfield Renewable Corporation. My name is Jeffrey Blidner, as Chair of the Board, my pleasure to chair today's meeting. On behalf of the Board and its management team, I'd like to extend a warm welcome to everyone joining us today. The first order of business, I would like to ask Jen, our Co-President, General Counsel and Corporate Secretary and today's moderator, to set up the voting procedures for the meeting and the process to submit questions.

[indiscernible] during this process. For each matter being voted on [indiscernible] throughout the formal portion of the meeting. This will allow you to choose to vote on each resolution immediately or to wait until conclusion of discussion on each resolution prior to casting your vote. If you voted in advance of the meeting and do not wish to change your vote, then you do not need to do anything. By voting at the virtual meeting on any matter, your previously submitted votes in respect of such matter will be automatically revoked. To vote on a poll, click the Voting tab at the left of your screen. The items to be voted on will appear in a column, and you can make your selections for each.

A confirmation message will appear directly above the item once a vote is cast. We welcome questions from our shareholders, which may be submitted by typing the question into the virtual meeting platform using the questions tab on the left of the page. Please indicate whether your question is of a general nature or if it relates to a motion being considered as part of the meeting's formal business. Please click the send button once you have finished typing your question. I will read out the question and ask a member of management to respond to it. If we receive many questions that are similar, we will read one of the questions and indicate that we have received many similar questions. Only registered shareholders or proxy holders are able to submit questions at this meeting. We will endeavor to answer all questions submitted during the allotted time. We recommend that you submit any questions relating to the motions being tabled as soon as possible as it may take time for the virtual meeting platform to process them.

Thank you, Jen. I now call the meeting to order and ask Computershare Investor Services, Inc. and its representative, Louise Waltenbury, to act as scrutineer. I also ask Jen to act as Secretary of the meeting. In the unlikely event of a technological failure that prevents the meeting from continuing, the meeting will be rescheduled and you will be appropriately notified. Now my pleasure to introduce Patrick Taylor, our Chief Financial Officer.

Thank you, Jeff. And on behalf of Connor and the rest of the management team, we thank everyone for joining our Annual General Meeting. Once we get through the formal part of the meeting, I will give a brief presentation, and then we'll be happy to answer any questions that you might have. Connor and our team look forward to providing more details on our strategy and outlook at our Investor Day in September.

Thank you, Patrick. There are 3 items of business to be considered today as part of the formal meeting. And I will ask Jen to outline them for you.

First, to receive the consolidated financial statements of the corporation for the fiscal year ended December 31, 2025, including the external auditor's report. Second, to elect directors who will serve until the next Annual Meeting of Shareholders. And third, to appoint the external auditor and authorize the directors to set its remuneration. As mentioned, in connection with the business to be dealt with today, all voting will be conducted online through the virtual meeting platform. Voting is now open on all resolutions.

In order to expedite the formal part of today's meeting, the Chair has asked Patrick Taylor as proxy holder to move various resolutions. Although this procedure will assist in the handling of the formal matters, it is not intended to discourage anyone from submitting questions in reference to any resolution after it has been proposed. Mr. Chair, please be advised that the notice calling this meeting and the management information circular were disseminated to voting shareholders in accordance with all applicable laws. As Secretary of the meeting, I will keep a copy of the notice and proof of mailing with the minutes of this meeting. Based upon the scrutineer's preliminary report on attendance, I confirm that there is a quorum.

I therefore declare the meeting properly constituted for the transaction of the business for which it has been called. Turning now to the first item of formal business. I will table the Corporation's consolidated financial statements for the fiscal year ended December 31, 2025, together with the external auditor's report. Copies of our annual financial statements have been mailed to shareholders who have requested them and are also available on our website. Before moving forward, are there any questions?

Mr. Chair, we have not received any questions or comments submitted in connection with the financial statements.

Thank you, Jen. The second item of business at our meeting today is to elect directors who will serve until our next Annual Meeting of Shareholders. Jen, would you please read the names of the proposed nominees?

The 8 proposed nominees for election by the holders of the Corporation's Class A shares and Class B shares are: Jeffrey Blidner, Patricia Zuccotti, Eleazar de Carvalho Filho, Nancy Dorn, Stephen Westwell, Lou Maroun, Sara Deasley and Randy MacEwen. Information on all 8 director nominees is set out in our management information circular, which was posted on our website and is available from the company upon request. Mr. Chair, we have not received any questions or comments with respect to the nomination of directors.

We invite shareholders and proxy holders to submit their vote online, if they have not already done so. As a reminder, if you have already voted or sent in your proxy, there's no need to do anything unless you wish to change your vote.

Mr. Chair, I nominate for election as directors the 8 nominees named in the management information circular dated May 1, 2026.

Thank you, Patrick. I declare the nominations closed. Management has received proxies representing a majority of the Corporation's Class A shares, 100% of the Class B shares. These proxies direct management to vote a majority of the Class A shares and all the Class B shares in favor of the resolution. I now declare those nominated have been duly elected as directors of the corporation. The third and final item of business today is the appointment of the Corporation's external auditor and authorizing the directors to set their remuneration. As stated in the management information circular, the Audit Committee of our Board of Directors has recommended that Ernst & Young LLP be reappointed as the Corporation's external auditor.

Mr. Chair, I move that Ernst & Young LLP be appointed the external auditor of the corporation until the next annual meeting and that the directors be authorized to set the remuneration.

Thank you, Patrick. Resolution has now been moved and the motion is before the meeting for discussion.

Mr. Chair, we have not received any questions or comments submitted in connection with the appointment of auditors.

Management has received proxies representing a majority of the corporation's Class A shares, 100% of the Class B shares. These proxies direct management to vote a majority of the Class A shares and all the Class B shares in favor of the resolution. Voting is now closed on all resolutions. I'm advised that we have the results of the resolutions based on the tabulation of votes cast in advance of the meeting.

Thank you, Jeff. On the appointment of the Corporation's external auditor and authorization of directors to set their remuneration, I am pleased to declare the motion carried. The final voting results will be available after the meeting and posted to SEDAR at www.sedarplus.ca.

Ladies and gentlemen, that completes the formal business of today's meeting. Since there is no other business, this concludes our meeting. Now that the formal meeting has concluded, our CFO, Patrick, will make a presentation on behalf of the management team. At the end of the presentation, he will be available to respond to any questions or comments you may have submitted. Please note that in responding to questions and in talking about our new initiatives and our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks. Future results may differ materially. Finally, we would like to ensure that all shareholders who are interested in asking a question have the opportunity to do so. We'll make every effort to address questions during the allotted question-and-answer period. Over to you, Patrick.

Thank you, Mr. Chair. Today, I'll provide an update on the outlook for our business, highlight our accomplishments and performance over the past year and outline how we are well positioned to continue delivering long-term cash flow growth and value creation. The fundamentals for our business have never been stronger. Following decades of modest electricity demand growth, we are now seeing a dramatic shift in demand being supported by 3 significant and durable trends. Broad-based electrification and accelerating reindustrialization are driving sustained growth in energy consumption, and those trends are being further amplified by digitalization and AI.

Together, these trends are creating an unprecedented demand for power. As a result, there is a significant opportunity ahead for those with scale, capabilities and the access to capital required to deliver reliable, secure and scale energy solutions. Meeting this demand will require an any and all approach to energy supply. The scale of future power requirements is simply too large for any single technology to satisfy it on its own. With that said, renewables are expected to play a major role in the energy solution because they are the lowest cost and quickest to deploy technologies available today. And in an environment where energy security is increasingly important, they continue to win on that criteria as well.

Brookfield Renewable is exceptionally well positioned to capitalize on the significant demand growth and requirements of the grid going forward. Today, we are one of the largest renewable operators and developers globally. Our business benefits from global scale, leadership across major technologies, deep operating and development expertise, and investment-grade balance sheet and one of the most experienced teams in the sector.

Turning now to our results over the past year. 2025 was another record year for our business, building on our long-term track record of value creation. We generated record FFO of $2.01 per unit and commissioned more new capacity than ever before, bringing online 8 gigawatts. We generated a record $4.5 billion of asset recycling proceeds and committed or deployed $8.8 billion into new investments, all while maintaining our BBB+ credit rating and best-in-class balance sheet. We also entered into several important strategic partnerships, including agreements with Google and the U.S. government, further demonstrating our ability to provide large-scale solutions to some of the world's most sophisticated counterparties and setting us up for our business to have continued growth.

This recent performance continues to build on our long-term track record. Since 2012, we have delivered 11% annual growth in FFO and 8% annual growth in FFO per unit, while increasing distributions per unit by 5% annually. Importantly, as the demand backdrop for our business has strengthened, we have seen our growth continue to accelerate. Over the last 12 months, our scale, diversification and differentiated operating and development capabilities have helped us deliver 13% growth on a total basis in FFO and 12% from an FFO per unit growth perspective, all while supporting another 5% increase in distributions.

As we look ahead, we continue to see significant opportunities to grow through both development and strategic M&A. On the development side, we are positioned to deliver at a run rate of 10 gigawatts annually by 2027. At the same time, we continue to identify and execute on attractive acquisition opportunities where we can acquire high-quality platforms, strengthen our market positions and create value through our operating capabilities. Recently, we announced our acquisition of Boralex, a leading renewable power platform with strong positions in strategic markets, including Quebec and France and a large development pipeline in key growth markets that aligns well with our long-term growth strategy.

We also increased our stake in [ Isagen ], our Colombian renewable platform with a large hydro portfolio where we see significant opportunities to create value through further contracting of our hydros and development of wind and solar assets. Another way we are helping secure our growth is through our partnerships with large corporate customers and governments who increasingly require solutions that combine scale, reliability and execution certainty. Building on our landmark renewable energy framework agreement that we signed with Microsoft in 2024, this past year, we signed a first-of-its-kind hydro framework agreement with Google, where we will deliver up to 3 gigawatts of hydro capacity by 2032. We also entered into a strategic partnership with the U.S. government through Westinghouse to support the deployment of at least $80 billion into the development of new nuclear generation across the United States.

Alongside increased development and growing M&A, we have been scaling our capital recycling activities, which has become an increasingly important component of our strategy. In 2025 alone, we generated a record $4.5 billion of proceeds through a combination of platform sales, minority interest sales, direct asset sales and the launch of a private renewable vehicle. These activities strengthen our funding model, enhance returns and provide a recurring source of capital to support future accretive growth. Throughout our significant growth, we have remained disciplined in how we finance the business, providing us flexibility to invest through cycles and capitalize on attractive opportunities.

We maintain a sector-leading BBB+ investment-grade balance sheet and ended the most recent quarter with approximately $4.7 billion of available liquidity. We are financed primarily with fixed rate nonrecourse debt and the average tenor of our corporate debt is now at 14 years, the longest duration in our history. Before we conclude our prepared remarks, we wanted to comment on our structure. As our business and the broader capital markets continue to evolve, we continuously evaluate opportunities to enhance shareholder value. To that end, we announced with our Q1 2026 results that we are undertaking a formal evaluation of the potential simplification of our corporate structure through the combination of BEP and BEPC into a single publicly traded corporate entity.

Potential benefits could include improved trading liquidity, increased index demand and a simplified reporting framework. In closing, we believe the opportunities ahead for our business have never been greater, with demand for power continuing to accelerate, driven by durable long-term trends. We delivered record operating and financial results in 2025 and believe we are positioning the business for a period of outsized earnings growth while remaining well placed to achieve our long-term objectives of generating 12% to 15% total returns and 5% to 9% annual distribution growth over the long term for our investors.

We look forward to providing an update on our strategy, growth outlook and opportunities ahead at Brookfield Renewable's Annual Investor Day on September 29, 2026. With that, we would like to thank everyone for dialing in as that now concludes our prepared remarks. We would now be pleased to answer any questions. Jennifer, would you please announce our first question?

Patrick, Mr. Chair, there are no questions to be addressed.

Ladies and gentlemen, as there are no further questions or comments, I'd like to thank you all for taking the time to join us today.

Thank you for standing by, and welcome to the First Quarter 2026 Brookfield Renewable Earnings Results and Webcast. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Connor Teskey. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining us for our first quarter 2026 conference call. Before we begin, we would like to remind you that a copy of our news release and investor supplement can be found on our website. We also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially. For more information, you are encouraged to review our regulatory filings available on SEDAR+, EDGAR and on our website.

On today's call, we will review our first quarter 2026 performance and discuss what we are seeing today in the broader energy market and what this means for our business. We will then turn the call over to Jehangir Vevaina, our Chief Investment Officer, to discuss our approach to growth through M&A and our recently announced agreement to acquire Boralex. Patrick will then conclude the call with a discussion of our operating results, financial position and funding activities, along with the potential simplification of our structure to a single listed corporate entity. Following our comments, we look forward to taking your questions.

We had a very strong start to the year, delivering record financial results, advancing key strategic initiatives, and further strengthening our balance sheet. We generated FFO of $375 million, up 19% year-over-year and 15% on a per unit basis, equating to $0.55 per unit. We deployed our committed $2.2 billion into growth or $550 million net to BEP highlighted by the privatization of Boralex, a leading global renewable platform with a significant operating base and a large and derisked development pipeline.

From a development perspective, we brought online 1.8 gigawatts of new capacity in the quarter and contracted 1.7 gigawatts of development projects from our advanced development pipeline. In addition, we continue to scale our capital recycling program selling assets that will generate nearly $3 billion of proceeds or over $800 million net to BEP at returns in line with our targets.

This includes the launch of Northview Energy which represents a new and recurring way, we are monetizing our derisked assets in North America to some of the world's largest and most sophisticated private investors. We did all of this while continuing to strengthen our balance sheet, opportunistically executing almost $4 billion of financings and ending the quarter with over $4.7 billion of available liquidity.

Now taking a step back and looking at the global energy market today, this past quarter, we saw the disruption with the outbreak of the conflict in the Middle East. First and foremost, the safety and well-being of our employees and our customers in the region remains our highest priority. We are happy to report that our teams are safe and our limited investments in the region today have not been directly impacted and are all continuing to perform. While some markets are experiencing higher energy prices as a result of the conflict, our business is largely contracted, and therefore, we do not expect a material impact on our cash flows in the near term.

What the conflict has done is put a renewed spotlight on the importance of energy security. Reliable power is the essential foundation for economic growth and without a secure, consistent and affordable supply corporations and governments cannot confidently commit to large-scale capital investments that underpin broader economic development. This is leading to governments and corporates to increasingly prioritize energy security and domestic supply, reinforcing investments in renewables, which are the lowest cost form of generation to meet demand today and do not rely on an imported fuel and nuclear, which can meet the growing need for large-scale baseload generation while offering a high degree of energy security with the ability to store significant amounts of fuel on site.

Against this backdrop of accelerating energy demand and an increased focus on energy security, we are bringing on more new renewable generation capacity than ever before. In the last 12 months alone, we commissioned over 9 gigawatts of new capacity which is nearly double the capacity we delivered just 2 years ago, and we remain on track to increase our annual commissioning run rate to approximately 10 gigawatts per year in 2027. Another great example of how accelerating energy demand is helping drive growth in our business is with our recently announced partnership with the U.S. government to accelerate the build-out of new Westinghouse large-scale nuclear reactors in the United States.

During the quarter, we made good progress advancing the development of new utility scale reactors in the U.S. with a focus on progressing key work streams, including the ordering of long lead time equipment for Westinghouse's proprietary AP1000 technology. In summary, the current environment is defined by the convergence of accelerating energy demand driven by electrification, reindustrialization and digitalization and an increased focus on energy security. Together, these dynamics are driving the need for an any-and-all approach to energy supply and creating one of the strongest backdrops we have seen for the sector and in turn, our business.

Those with operating assets and scale development capabilities stand to benefit the most. And we believe we are a leader on both fronts. Importantly, capturing this opportunity also requires significant access to capital, which has always been a key differentiator for our business. And in this regard, we believe we are stronger today than at any point in our history. As a result, we remain well positioned to deliver outsized earnings growth in the near term and more importantly, we are better positioned than ever to generate significant value for our investors over the long term.

With that, we will turn the call over to Jay to discuss our approach to growth and our recently announced agreement to acquire Boralex.

Thank you, Connor, and good morning, everyone. In the current environment, characterized by accelerating power demand and an increased focus on energy security, we're seeing some of the most compelling investment opportunities for our franchise to date both through continued execution of our 80 gigawatt advanced stage development pipeline and M&A.

And while the opportunity set is better than ever, our proven M&A playbook and disciplined approach to investing has not changed. Our competitive advantage from an M&A perspective stems from the fact that we are able to invest at scale globally across both public and private markets, acquire or invest in assets and businesses spanning the development life cycle and have deep commercial and operational know-how to drive value that others cannot. Broadening our opportunity set and allowing us to be highly selective in when and where we deploy capital.

Our first step in identifying potential opportunities is focusing on scale platforms and businesses in attractive markets with strong and growing demand for power. We look for businesses led by experienced management teams with large portfolios of assets and expertise in mature, proven technologies. Once we have identified a potential investment opportunity, we then evaluate the quality and durability of the business' cash flows ensuring highly contracted revenues with high credit quality counterparties that can underpin our investment returns.

Lastly, we assess how we can enhance the value of the platform by leveraging our access to scale capital and differentiated capabilities through the value chain. With clearly defined initiatives in our business plan to drive sustainable growth and strong long-term returns. Some of the key initiatives we can usually execute on to help drive our returns, including leveraging our commercial relationships with the largest buyers of power including integrating newly acquired platforms into our existing frameworks, such as our Microsoft and Google agreements.

We are also able to leverage our global supplier relationships to enhance procurement and deliver economies of scale as well as optimize the capital structure and provide financing for growth, supported by our strong relationships with financial institutions, significant liquidity and robust funding sources. Taken together, these initiatives and capabilities enable us to accelerate growth across our business and support the delivery of stronger return than others can deliver over the long term.

Our recently announced privatization of Boralex alongside La Caisse is a great example of our disciplined, repeatable and consistent approach to value creation through M&A. Similar to our recent successful acquisitions of Neoen in France and Australia, OnPath in the U.K. and acquisitions in the U.S. of Geronimo, Deriva, Scout and Urban Grid, where we were able to acquire excellent businesses that meet our investment criteria and execute on our value-enhancing initiatives. We're now adding a leading Canadian-based platform where we can execute our proven playbook.

Boralex's strong base in its core markets, including Canada, complement our current business and give us an opportunity to do more in this highly attractive and growing market. Under the terms of the transaction, La Caisse will increase its ownership from 15% to 30%, while BEP alongside institutional partners will acquire the remaining 70% of the business at an implied enterprise value of $6.5 billion. The transaction is subject to shareholder and normal course regulatory approvals and is expected to close later this year.

Our acquisition of Boralex is expected to contribute positively to our financial results on close, and we see significant opportunity to enhance value over time by accelerating growth and through the execution of our business plan to deliver outsized returns. We expect to add value following our acquisition by leveraging our access to capital and commercial and supplier relationships to accelerate development across the platform.

We also see an opportunity to enhance Boralex's leading position in its core markets by expanding its capabilities across technologies and delivering differentiated energy solutions, including incorporating battery storage. We expect to be able to drive efficiencies within Boralex through the sharing of best practices across Brookfield's global businesses and create value by establishing an asset recycling program within the platform, drawing on Brookfield's experience to scale asset recycling alongside development, supporting a growth model of recycling capital into higher-returning opportunities at the business.

Boralex has a strong and experienced management team, and we're looking forward to supporting them with the additional resources and flexibility that come from being part of Brookfield Renewable as we work together to grow and enhance the value of the business. Going forward, we will continue to employ a disciplined approach to capital deployment in a market where we're seeing more attractive opportunities than ever for players such as ourselves. We have the capabilities and capital to unlock value through M&A and execute development of our large project pipeline.

With that, I will pass it on to Patrick to discuss our operating results in more detail our financial position and funding activities and the potential simplification of our structure to a single listed corporate entity.

Thanks, Jay, and good morning to everyone on the call. We delivered record financial results this quarter, generating FFO of $375 million or $0.55 per unit, up 19% or 15% per unit year-over-year. In the last 12 months, we delivered $1.394 billion of FFO or $2.08 per unit, up 13% or 12% on a per unit basis compared to the prior year period. Our results reflect the strength of our diversified global platform and the continued execution of our strategy. Our hydroelectric segment generated $210 million of FFO, up almost 30% year-over-year, supported by strong generation across our Canadian and Colombian fleets and a realized gain on the sale of our 25% interest in a noncore hydro portfolio in the U.S. all of which offset weaker hydrology at our U.S. operations.

Our wind and solar segments delivered a combined $245 million of FFO, up over 60% year-over-year. benefiting from contributions from development, acquisitions and accretive capital recycling across several of our platforms. Lastly, our distributed energy storage and Sustainable Solutions businesses contributed $58 million of FFO, reflecting strong development activity and continued growth at Westinghouse, driven by new reactor design and engineering work. And organic growth within its core fuel and maintenance services business.

Turning to our balance sheet. We continue to strengthen our financial position. completing almost $4 billion of financings across the platform in the first 3 months of the year alone, extending maturities and optimizing our capital structure, while ending the quarter with over $4.7 billion of available liquidity. The quarter was highlighted by the issuance of CAD 500 million of 30-year notes, priced at the tightest spread we have ever achieved. With this issuance, we now have an average maturity on our corporate level debt of approximately 14 years, representing the longest average corporate maturity in our history.

Put simply, during a period of significant growth and value creation, our business has the most durable and stable capital structure in its history. In addition to recent successful financings, we are also progressing recontracting initiatives on a scale portfolio of hydro assets in Ontario during the quarter, which once signed, will support significant up financings that we plan to execute over the course of the year, providing additional capital to deploy into growth.

We also had a very strong start to the year from a capital recycling perspective. Closing or agreeing to sell assets expected to generate approximately $2.8 billion or $820 million net to BEP. Recently, we agreed to sell our remaining 50% interest in a portfolio of noncore U.S. hydro assets, crystallizing significant value we created under our ownership. We also completed the IPO of CleanMax in India, selling approximately half of our interest. With the IPO, we have returned all of our original invested capital while continuing to maintain exposure to the platform's long-term growth trajectory and generated a 25% IRR to date.

We also closed a previously announced sale of a portfolio of operating solar assets in the U.S. from our Deriva platform. Our asset recycling in the quarter was also highlighted by the creation of a new private renewable vehicle focused on operating renewable assets in North America, Northview Energy, which is a partnership between BCI, Norges Bank Investment Management and a Brookfield Fund. The creation of Northview Energy is in response to the strong demand we are seeing from our institutional partners for high-quality derisked infrastructure-like assets with long-term contracted and durable cash flows. We seeded the vehicle through the sale of 22 operating onshore wind and utility scale solar assets, generating total proceeds of $1.3 billion or $315 million net to BEP. Beyond the initial seed assets sold into the platform, the arrangement with BCI and Norges also established a framework to sell additionally new developed assets from our pipeline into the vehicle with a framework to acquire assets generating up to an additional $1.5 billion of incremental gross proceeds over time.

While Northview is the first vehicle of its kind, we have launched, we continue to progress similar initiatives of meaningful scale across our global platform. During the quarter, we also launched our at-the-market equity issuance program for BEPC which we paired with the buying of BEP LP units under our normal course issuer bid. In the first quarter, we issued 2.8 million BEPC shares with proceeds from the issuance used to repurchase the same number of BEP units, resulting in approximately $27 million of realized cash gains.

Lastly, as our business in the broader market continues to evolve, we remain focused on ensuring that our structure is aligned with the best interest of our shareholders. We are currently exploring whether a single combined corporate structure would better serve our investors going forward with the goal to determine if on a tax-free basis, we can create a single corporate security to enhance liquidity, increase index inclusion and create value for our investors. We expect to have more details to provide later in the year as we begin our work and look forward to updating you on our progress.

In closing, we remain focused on delivering 12% to 15% long-term total returns for our investors, supported by our strong operating platform disciplined capital allocation and our growing capital recycling program. On behalf of the Board and management, we thank all our unitholders and shareholders for their ongoing support. We are excited about Brookfield Renewable's future and look forward to sharing further updates on our progress over the course of the year. That concludes our formal remarks for today's call. Thank you for joining us this morning.

And with that, I'll pass it back to our operator for questions.

Certainly. And our first question comes from the line of Sean Steuart from TD Cowen.

I want to start with asset recycling. You guys have a lot on the go there. The magnitude is accelerating, I guess, in tandem with an expanding organic pipeline as well.

Can you give us updated perspective on the cadence and magnitude of overall asset recycling plans over the next year? And you referenced the CleanMax IRR, but broader perspective on returns you're crystallizing through those initiatives.

Thanks for the question, Sean. Three things perhaps it's worth saying about capital recycling. First, the growth in our asset recycling activities is a very natural expansion of our business that is tied on a slightly lagged basis to the growth in our organic and development activities. And as we have been building more and more wind, solar and other assets in-house, we increasingly are looking to sell those down to lower cost of capital buyers capture our development margin and redeploy that capital into accretive growth.

And while it has been growing incrementally in recent years, we do expect it to grow on a similar trajectory going forward. And it's increasingly becoming a very normal course and part of our business. In terms of targets for size and scale and amount of capital recycling, we're going to continue to be entirely driven by the values we see in the market. And if we see opportunities to sell assets at values above where we think they will produce within our portfolio, we will sell them for cash and redeploy that cash.

And therefore, we're not working to a consistent target. But perhaps to give you some direction or steer. At our Investor Day last year, we spoke about a $9 billion to $10 billion deployment of equity into growth over a 5-year period. and we would expect at least 1/3 of that capital over a 5-year period to come from asset recycling and perhaps more if we see strong values in the market. And this largely brings us to the last point where we do have a fairly robust capital recycling program ahead of us in 2026. And this is purely a result of the strong bids we are seeing for both platforms as well as stabilized assets in the current market. And therefore, I would say, on balance, the returns that we are generating through this capital recycling program, we are consistently seeing at the high end or maybe even above the high end of our target range.

Second question is with respect to the M&A opportunity set. The previous quarter's commentary was public equities offered a more compelling opportunity than private M&A opportunities, and that's consistent with the Boralex deal. Do you still see that gap in place? And post Boralex, can you qualify your continued M&A appetite?

So we continue to see both. Undoubtedly, for all the same reasons we mentioned last quarter, we continue to see opportunities in the public market. Those opportunities didn't stop and end with Boralex. The opportunities in the public market continue to exist. And similar to last quarter, it is because some companies in the public market are more constrained for capital, and therefore, not able to capture the tremendous demand environment that we're currently operating in.

We continue to see an environment where public companies with access to capital are -- that they can use to capitalize on the really attractive demand environment are performing well. and companies that don't have the right access to capital are struggling in the public markets. And therefore, we do continue to see opportunities in the public markets, but I would highlight we're seeing a pretty robust pipeline across both private and public for the remainder of the year.

And our next question comes from the line of Mark Jarvi from CIBC.

Connor, can you just clarify the comments you made about progress on the U.S. government with Westinghouse in terms of long lead items. Have those long lead items been actually signed right now and you're starting to get the support from the U.S. government at this point? If not, when does that come?

Mark, this is a very live discussion, and we hope to be in a position to announce some significant progress, not only in 2026, but in the near term. Since our announcement in Q4 of last year, we continue to see tremendous demand from nuclear both around the world, but in particularly in the United States from both the government as well as the utilities.

And that demand is coming from, I would say, all stakeholders across the environment. It's coming from offtakers, it's coming from the utilities. It's coming from the government. We continue to make significant progress on establishing frameworks under which initial orders can be made. And we hope to make some announcements in that regard...

Did that answer your question?

Yes. Sorry, just my [ catching ] broke for a second there. Next question, just -- I think there was a commentary earlier in the call, you said something about outsized ability to drive growth here. in the near term. Is the expectation then that you can exceed the 10% FFO per unit growth in the next couple of years? And if so, the primary drivers of that right now?

In the current environment, we do feel that we are well positioned to exceed our long-term target of 10%. This is driven by a number of things. Obviously, M&A in our business, the significant addition of new capacity that's coming online from organic growth.

And then lastly, our ability to recycle assets at very attractive values in the current environment. There could obviously be some timing variables on each of those things. But based on the underlying fundamentals of those 3 drivers, we feel that for both the short and short to medium term, we are well positioned to exceed that 10% per year target.

And so just to follow up on that. So obviously, asset sale gains would be a component of that. But if you put those aside, would you say the ability to drive FFO growth from the organic development and M&A side is stronger today ex asset sale gain?

Yes, we would. We would absolutely say that the operating fundamentals of our business and the organic growth profile of our business is as strong as it's ever been. And the ability to generate gains on sale above and beyond that and to recycle that capital accretively into even further growth would be upside.

And our next question comes from the line of Baltej Sidhu from National Bank of Canada.

Just on Northview Energy, how should we think about the cadence of future drop-downs and the potential mix of assets into this vehicle? And -- should we think about this as more of a steady-state annual funding lever or something that could scale more opportunistically depending on market conditions?

Thank you. From BEP's perspective, it's important to recognize that we have the option, but not the obligation to sell assets into Northview Energy. And the assets that fit that pool of capital are high credit contracted long-duration wind and solar assets in North America at prices and go-forward returns, which are very consistent with what we have seen and expect to achieve in our asset sales to third parties outside of this vehicle.

This is critical and we think immensely additive to our business because the structure helps us in derisking our development and enabling us to fund further high-margin growth. In terms of the drop-downs and the cadence of them, we'll really make 2 comments. One, the additional capital for future drop-downs we expect that to be utilized, we would say, over a 2- to 3-, 2- to 4-year period among asset sales to third parties outside of Northview.

At the end of the consumption of that initial allotment of capital, we will consider what to do next. We -- and that is a discussion for the future, we could potentially expand this vehicle, create new vehicles. But for now, we are just focused on consuming that initial commitment, which we expect will take 2 to 3 or 2 to 4 years.

Very good. And just one more for me. Just on the prevailing hyperscaler agreements that we have in place. Could you provide an update on how those agreements are progressing forward and what the potential pipeline looks and how conversations with such parties are evolving?

So there's probably 2 things that characterize our activity with the hyperscalers in the context of those agreements and more broadly. One, is the demand -- and we apologize for sounding like a broken record call after call, but demand continues to go up. It is higher today than it was last quarter. It's higher today than it was last year, and we expect it to be higher next year than it is today.

The demand for energy, particularly from the hyperscalers, particularly in their core markets, continue to increase at paces, we would say, significantly above previous market expectations. The other thing we are seeing in terms of our activities with the hyperscalers within those frameworks is our activities continue to broaden and evolve. I'll give the example of the first framework agreement we did was with Microsoft, and it was really focused on wind and solar assets. We continue to contract more and more wind and solar assets with Microsoft under that arrangement. But last quarter, we also contracted some hydros under a long-term contract with them.

And we're now to meet their evolving demands increasingly looking at including battery storage, either with the projects that we're contracting with them or as part of the broader arrangement with them. So the 2 points we would make is the demand and the activity continues to grow and accelerate, but it also continues to broaden. And we feel it's the second point where our scale and diversity continues to differentiate us in our ability to serve the largest corporate consumers of electricity.

[Operator Instructions] Next question comes from the line of Christine Cho from Barclays.

I just wanted to ask about this single combined corporate structure. You guys have been trying to increase the liquidity of Pezzi for a while. So this seems sort of like a natural progression. But can you walk through what led you to evaluate this and what's on the table other than the tax rate part of this, could you talk about other things that need to be considered in trying to do this? And would this change how you view your distribution policy?

Christine, it's Patrick. There isn't much more that we can say other than what we have already said sort of in our opening remarks as well as in our press release. But what I will say is our focus in beginning our work is really looking at, can we achieve a simplified structure while achieving a rollover on a tax-free basis for our investors and also try to capture some of the potential benefits around broader index inclusion enhanced trading liquidity that we are observing amongst corporate securities relative to partnerships.

And then lastly, just focusing on can this broadly create value for the entire investor base. But we can't really say much more than what we've already said in our opening remarks, Christine.

Okay. I appreciate that. And then are there any regions or technologies where execution risk has increased a little more than you would have thought, especially with the current administration, the surge in demand for power from hyperscalers and just general pushback from communities that we're seeing, whether it's on like permitting, interconnection and supply chain that we should be more mindful of?

Christine, I'll take the second one. Maybe just so it doesn't get missed on your previous question. We would not expect any change to the corporate structure to adjust our dividend policy. I'll just make sure we didn't gloss over that point.

In terms of what we are seeing in terms of opportunity and dynamics around different types of projects and different types of development. There's probably 2 things worth noting across our business. One -- maybe 3, I apologize. One is, this is pick your tagline any and all in all of the above type solutions. The demand for energy is going to require all types of sources. We are seeing the greatest growth in renewables because they are quick to deploy, and they are cheap, but we are going to see demand across all types of energy in terms of additions to meet the demand forecast going forward.

The second thing that's worth noting is undoubtedly the fastest-growing technology across Brookfield Renewable today is batteries and energy storage. We are seeing that within all of our existing development platforms. We are increasingly looking at stand-alone energy storage opportunities. And the rationale for this is very simple. They remove grid congestion. They don't add to it. So they solve that problem, and they are very quick to deploy.

Further, this has been -- this opportunity has been driven by the fact that CapEx for batteries and energy storage has come down 65% to 70% over the last 24 months, making these investments very economic and financially attractive. The third point, and this is probably the most insightful in terms of hitting your question head on. We are seeing a dramatic increase in interest and growth in behind-the-meter solutions.

The reality is the demand trajectory ahead of us is greater than the pace at which grids can expand. And therefore, we are going to see significant expansion of electricity demand on grids, but we're increasingly seeing demand for behind-the-meter solutions. It's important to recognize that while behind the meter solutions are perhaps growing faster on a relative basis, they are coming off a very, very low base and the vast majority of demand growth is still going to go through grids the way it has in the past, but we are seeing increasing demand for behind-the-meter solutions.

And our next question comes from the line of Nelson Ng from RBC Capital Markets.

Connor, you previously talked about how battery storage is a pretty big opportunity. When you look at your like current solar and wind portfolio, is it economic to add batteries to existing sites? And I know many of those assets are contracted. So are you seeing offtakers willing to pay that extra amount to firm up their power?

Absolutely, in no uncertain terms, yes. The value proposition for batteries in today's market is very compelling for offtakers in terms of giving them a load profile that better matches their 24/7 curve. And we're seeing it, therefore, alongside existing projects in new developments and on a stand-alone basis?

Okay. And then switching gears a bit. So in South America, I know the environment isn't great for renewable development and interest rates are really high. And you're not that active on the development front. But on the M&A side, you recently increased your stake in Isagen, but can you just talk about whether there are like M&A opportunities you're seeing in South America?

Certainly. In South America

[Audio Gap]

we will [indiscernible] there when we can do so at compelling risk-adjusted returns. Our more modest activity in South America, I would say, over the last 2 or 3 years outside of the Isagen transaction, I would say, is simply episodic. A lot of it was driven by very high hydrology and rapid build-out in Brazil. that pushed prices down and made new build in that country, a little less compelling for a period of time. We're seeing demand recover. We're seeing hydrology normalize and that market strengthen again. We continue to do significant growth in Colombia, but we do it within the Isagen platform.

So it doesn't show up as a new discrete M&A transaction. And then we've continued to do smaller transactions in other regions or other countries in the region, whether it be Chile, Central America. So it is a compelling market. It is one where the value of

[Audio Gap]

It continues to be a market we focus on. And we'll be -- continue to be a portion of our business going forward, albeit smaller than our core markets in North America and Western Europe.

And our next question comes from the line of Anthony Crowdell from Mizuho.

Just 2 quick ones, if I could squeeze in. One is a follow-up from Christine's question earlier. Is there just a time line of when you hope to have a decision made on the corporate consolidation? Is it a quarter or by year-end? And then I have a follow-up on nuclear.

Anthony, it's Patrick. We have just begun our assessment, and so we can't really give any indicative time line at this moment or really add much more at this time.

Great. And then on the nuclear, you talked about the success and the momentum going on with the AP1000 and the U.S. government. I'm just curious, where do you see the bottleneck right now before we get an announcement, is it on the utility side? Is it on the government side, regulatory side. What's the bottleneck before we get an announcement?

Perhaps this is putting a positive spin on this, but I wouldn't almost look at it as a bottleneck. The potential for new build nuclear reactors in the United States, is an immense step change to what has been done over the past 10 or 20 years. We are talking about additions that exceed 10 announcing in 1 shot additions that exceed 10x what has been done over the last 15 years.

And therefore, this simply requires obtaining alignment from all the stakeholders for that scale of a build-out. That includes the government. That includes the nuclear eligible utility operators. That includes the offtakes and that includes the financing parties. we candidly would suggest that the momentum and the traction that has been made over the last 6 or 9 months is incredibly significant and reflective of the demand for growth in the asset class because what we're looking to do in the course of 6 or 12 months far exceeds what's been done in the last 10 to 15 years. So I wouldn't say it's a bottleneck. It's just getting alignment from all the appropriate groups. And at this point, the interest and support for getting this done is pretty overwhelming.

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

Thank you, everyone, for joining our earnings call this quarter. We deeply appreciate your continued support and interest in Brookfield Renewable and we look forward to updating you following our Q2 results. Thank you, and have a great day.

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

Good day, and thank you for standing by. Welcome to the Brookfield Renewable Partners Fourth Quarter and Full Year 2025 Results. [Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to hand the conference over to your speaker today, Connor Teskey, Chief Executive Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for our fourth quarter 2025 conference call.

Before we begin, we would like to remind you that a copy of our news release and investor supplement can be found on our website. We also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially. For more information, you are encouraged to review our regulatory filings available on SEDAR+, EDGAR and on our website.

On today's call, we will provide a review of our 2025 performance, share our perspectives on the energy market today and provide an update on the growth outlook for our business. We will then turn the call over to Patrick, who will discuss our operating results and strong financial position, as well as outline how our increasingly differentiated access to capital is providing a clear advantage for our franchise today. He will then conclude our remarks with an update on our growing asset recycling program. Following our comments, we look forward to taking your questions.

2025 was another excellent year for our business. We delivered strong financial results, strengthened our balance sheet, and most importantly, further positioned the business to continue delivering strong growth and value creation for our unitholders going forward. This past year, we delivered $2.01 of FFO per unit, up 10% year-over-year and in line with our long-term growth target on the back of solid operating performance, expanded development activities, accretive acquisitions and growing capital recycling.

We deployed or committed a record $8.9 billion or $1.9 billion in growth net to BEP, highlighted by the privatization of Neoen, our carve-out of Geronimo Power in the United States and our increased investment in Isagen, one of our strongest performing businesses over the last decade. We were successful in advancing our various commercial priorities, signing contracts on over 9 gigawatts of generation capacity. We also continue to scale our development activities bringing online over 8 gigawatts of new capacity globally, a record for our business. We delivered on our asset recycling targets, reaching agreements to sell assets generating $4.5 billion of proceeds or $1.3 billion net to BEP at returns above the high end of our targets. And we accomplished this all the while strengthening our balance sheet, ending the year with $4.6 billion in available liquidity.

Stepping back and looking at the broader market today. It is now clear that power is a strategic priority around the world and is the bottleneck to growth for both governments and corporates. Investment in new generation capacity over the past several years was largely about replacing carbon-intensive generation in a world of modest or even flat electricity demand growth. Today, that backdrop has fundamentally shifted. Energy demand is rising at a pace not seen in decades, driven by the multi-decade trends of electrification and renewed industrial activity. This demand growth is being further amplified by AI and the unprecedented investment in energy consumption from some of the largest companies in the world.

As a result, we are not only transitioning the grid, but adding substantial net new generation for the first time in decades. Said another way, we have shifted from a period focused on energy transition to a period focused on energy addition. This shift is driving a move from incremental grid upgrades to large-scale expansion, prioritizing fast to deploy renewables, scale base load generation and capacity to ensure reliability. Meeting this demand will require a mix of all the scale and efficient technologies over time.

Solar and onshore wind will play a critical role, given their speed to market and low cost. Hydro and nuclear are important for their baseload and scale, natural gas for its flexibility, and battery solutions will be critical for ensuring the reliability of grids going forward. In this evolving environment, we have deliberately positioned our business at the epicenter of many of these technologies, allowing us to capitalize on the rapidly expanding opportunity set given our operating and development capabilities, strong partnerships and significant access to capital.

First, we are scaling our development of low-cost fast-to-market solar and onshore wind to meet the accelerating demand for power in the near term. Over the past year, we commissioned a record amount of new solar and onshore wind capacity and are on track to reach a run rate of delivering roughly 10 gigawatts of new capacity per year by 2027, all while maintaining our disciplined approach to development. Second, against the backdrop of growing demand for reliable baseload power, we are well positioned in the current market through our operating hydro assets and our ownership of Westinghouse. As power systems require more scale baseload generation, flexibility and enhanced reliability, the value of hydro is being recognized more than ever before. This has been highlighted by the execution of 3 20-year power purchase agreements at strong pricing with hyperscalers, a first for our business, as well as the signing of the framework agreement with Google to deliver up to 3 gigawatts of hydro generation in the United States.

With respect to nuclear, only slightly more than 2 years ago, we invested in Westinghouse, gaining exposure to this critical technology for current and future electricity grids, given its scale and baseload characteristics. Our investment was underpinned by Westinghouse's highly contracted infrastructure-like cash flows from its fuel and maintenance business, its strong market share and its leading and proven technology for large-scale nuclear power reactors. The current energy demand environment has reinvigorated the nuclear sector with increasing recognition of the role nuclear can play to enable economic growth and provide energy security.

Perhaps the most impactful development for the sector is the recently announced landmark agreement with the U.S. government to deliver new nuclear reactors utilizing Westinghouse technology in the United States. This agreement delivers significant economic value to Westinghouse and BEP via the development of multiple reactors and then through the long-term provision of fuel and maintenance services over the 80-plus year life of those reactors. A commitment of this scale provides long-term demand certainty, helping unlock supply chain investment and positions Westinghouse to expand deployment well beyond this initial program to both corporates and governments in the U.S. and internationally. Since signing this agreement, all parties have been working to progress the sites to construction as quickly as possible, largely focusing on site selection and the ordering of long lead time items.

Against this backdrop and the known development time line for nuclear, the limited new hydro capacity available and the growing backlog for natural gas plants, we are seeing batteries play an increasingly important role in the near term, with their importance set to grow over time as additional low-cost renewables come online. Battery costs have declined by an astonishing 95% since 2010, following a trajectory similar to solar panels a decade ago. And we see a growing opportunity to deploy this technology on a contracted basis at strong risk-adjusted returns.

Our recent acquisition of Neoen significantly expanded our operating footprint, capabilities and development pipeline in battery technology, and we expect to quadruple our battery storage capacity over the next 3 years to over 10 gigawatts. This growth is highlighted by one of the largest stand-alone battery storage projects globally, totaling over 1 gigawatt, which we are currently advancing through Neoen in partnership with a sovereign wealth fund.

Taken together, rising energy demand across global markets is driving the need for rapid additions of renewable capacity, large-scale baseload power and battery storage. Backed by long-term partnerships with the world's largest corporate buyers of power and governments, we are delivering more generation than ever before. By being positioned in markets with accelerating demand, combined with our global scale, significant access to capital and our operating and development capabilities across key technologies, we are best positioned to deliver comprehensive energy solutions across all markets at scale and are entering into a period of outsized earnings growth, generating significant value for our unitholders over the long term.

And with that, I'll pass it on to Patrick to discuss our operating results, our diverse sources of scale capital, our balance sheet, as well as our recent capital recycling initiatives.

Thanks, Connor, and good morning to everyone on the call. As Connor noted at the outset of his remarks, 2025 was a strong year across almost every metric, with the business delivering 10% FFO per unit growth, achieving our target while maintaining our best-in-class balance sheet and further positioning ourselves to generate significant growth and value going forward.

In the fourth quarter, we delivered FFO of $346 million, up 14% year-over-year, or $0.51 per unit. On a full year basis, we delivered FFO of $1.334 billion or $2.01 per unit, up 10% year-on-year. Results were driven by the strength of our contracted inflation-linked cash flows across our diversified global operating fleet, growth from development activities, accretive acquisitions and scaling capital recycling.

Looking across our segments, our hydroelectric segment delivered strong results this year with FFO of $607 million, up 19% from the prior year, benefiting from solid generation across our Canadian and Colombian fleets, higher revenues from commercial initiatives and gains from the sale of a noncore hydro portfolio, all of which offset weaker hydrology in the U.S. Our wind and solar segments generated a combined $648 million of FFO, supported by contributions from the acquisitions of Neoen and Geronimo Power, as well as our investment in a portfolio of contracted offshore wind assets in the U.K. This growth was offset by gains on sales recorded in last year's results, which included the sale of Saeta and the partial disposition of Shepherds Flat.

In our distributed energy storage and sustainable Solutions segments, we generated record results of $614 million, up almost 90% from the prior year, driven by growth through development, the acquisition of Neoen and strong performance at Westinghouse on the back of continued momentum in the nuclear sector. In addition to the strong results, a continued focus of ours has and will always be to maintain balance sheet strength and financial flexibility. This enables us to be opportunistic when it comes to deploying capital into growth and protecting us against downside risks.

We ended 2025 with $4.6 billion of liquidity. And over the past year, we reaffirmed our BBB+ investment credit -- investment-grade credit rating, which we remain firmly committed to maintaining going forward. Our rating, significant liquidity and strong financial position enable us to be very opportunistic with respect to our financing activities, which further strengthens our balance sheet.

In 2025, we executed over $37 billion in financings, a record for our franchise. These financings were highlighted by the completion of $2.2 billion in investment-grade up financings, primarily at our hydro assets, where we are seeing strong lender demand for these assets and are leveraging the benefits of newly signed long-term contracts at strong pricing. In March of this past year, we issued CAD 450 million of 10-year notes at what was our lowest spread in almost 20 years at the time. We then more recently topped this, issuing CAD 500 million of 30-year notes this January at our lowest spread ever, reflecting the strong demand for our credit and our ability to be nimble and take advantage of a favorable spread environment.

In November this past year, we also executed a $650 million bought deal equity raise in concurrent private placement. We were successful deploying capital ahead of our targets in the 12 months prior to the equity raise, and this financing provides capital to invest even further in the expanding opportunity set in areas where we have a differentiated ability to deploy capital, such as hydro, nuclear and battery storage.

Our strong balance sheet is further enhanced by the fact that we deploy our capital alongside a large pool of third-party funds raised by Brookfield Asset Management. In 2025, Brookfield successfully completed fundraising of over $20 billion for its second vintage of its Global Transition Fund. This capital will support large-scale investments alongside BEP that few others can make, further enhancing our access to large, high-quality M&A opportunities that help us achieve strong and consistent growth.

In addition to our financing activities across the business, we are continuing to scale our capital recycling program, which is increasingly providing significant liquidity to support our growth and crystallize value creation within our business. We continue to see robust demand from private investors for derisked infrastructure-like cash flowing operating assets. At the same time, with our scaling development activities, we have a growing portfolio of assets and platforms that we are selling on an annual basis. The size of our portfolio and our flexibility to sell whole platforms, stand-alone assets or minority stakes is enabling us to be active in the market, consistently selling at prices that deliver on our target returns.

This past year, we generated record proceeds of $4.5 billion or $1.3 billion net to BEP from asset recycling alone. This year, our asset rotation activities were highlighted by the sale of a major North American distributed energy platform, a 50% interest in a portfolio of noncore hydro assets in the U.S. and the establishment of an asset rotation program at Neoen that was successful in executing the sale of $1 billion of enterprise value of assets in our first year of ownership alone. Looking ahead, we are focusing on continuing to scale our capital recycling program and generating proceeds from sales in a more recurring manner.

In January this year, we agreed to sell a 2/3 stake in a large portfolio of recently built operating and solar asset -- wind and solar assets in North America, generating proceeds of $860 million or $210 million net to BEP, and are actively progressing the sale of the remaining interest. In conjunction with this sale, we are also establishing a framework for the future sale of select assets that meet certain criteria to the same buyers. This framework, which proposes the sale of up to $1.5 billion of additional assets, further derisks our development platforms and provides a scalable source of capital to fund future growth. We're exploring similar initiatives in other regions across our global platforms and look forward to providing updates on our progress throughout the year.

We also wanted to note that after the quarter end, we announced a fully discretionary $400 million at-the-market equity issuance program for our BEPC shares. We expect to use the proceeds to repurchase BEP LP units on a one-for-one basis under our existing NCIB. The purpose of the program is to increase BEPC's float and liquidity in a non-dilutive manner, while also allowing us to capture value from the persistent premium at which those shares trade, providing incremental cash to deploy into growth or buy back even more shares.

Lastly, with our record results and in conjunction with our strong liquidity and robust outlook for our business, we are pleased to announce an over 5% increase to our annual distribution to $1.468 per unit. Since Brookfield Renewable was listed in 2011, we have now delivered 15 consecutive years of annual distribution growth of at least 5% each year.

In closing, we remain focused on delivering 12% to 15% long-term total returns for our investors while remaining disciplined allocators of capital, leveraging our scale and operational capabilities to enhance and derisk our business. On behalf of the Board and management, we thank all of our unitholders and shareholders for their ongoing support.

That concludes our formal remarks for today's call. Thank you for joining us this morning. And with that, I'll pass it back to our operator for questions.

[Operator Instructions] Our first question comes from Sean Steuart with TD Cowen.

A couple of questions to start with. Connor, 2026 would be the first year where you start to feed projects into the Microsoft framework agreement. Can you give us an update on progress there and the expected cadence of capacity into that deal through 2030? How is that advancing at this point?

I would make this comment more broadly on a wholesale basis beyond, very simply, our strong relationship with Microsoft. The demand we are seeing from corporates and in particular, the large hyperscalers is at an all-time high. And I recognize that we've been saying that for a number of years, but that demand just continues to accelerate and continues to grow. And we're seeing that in terms of the projects and the execution that we are doing with counterparties such as Microsoft on an ongoing basis.

When we launched that program, we had a defined set of projects in our pipeline that we thought would fill the 10.5 gigawatts that was initially outlined. I would say since we announced that agreement in 2025, we are seeing counterparties such as Microsoft look for power in a broader spectrum of regions and markets, particularly across the United States, and even a broader spectrum of technologies to meet their power demand. So we will see growth in 2026, and we expect to see that growth do nothing but accelerate from 2026 through the rest of the decade.

Okay. Thanks for that perspective. And then Patrick, a question on the balance sheet. You guys were busy with financing initiatives in the fourth quarter asset recycling. When I look at the ratio of available liquidity versus the scale of the secured development pipeline versus the installed asset base, those ratios have moderated a little bit in the last 1.5 years. I guess, any commentary on broader comfort with the liquidity position? I appreciate you're going to be busy recycling assets. But are there ratios you're focused on to sort of sustain a comfort level with available liquidity relative to an expanding growth opportunity set?

Yes, absolutely, Sean. And I would say we're very comfortable, first of all. And when we think about our available liquidity and the business obviously having grown over the last several years, we're very focused on sort of maintaining a minimum level in and around that $4 billion mark. We're pretty fairly focused on it. It's not a hard line by any means, but we have been at or around that or above that, I should say, for the last several years at this point. It's a level given the scope of our business today that we feel quite comfortable being at.

And to your point, as the development pipeline continues grow, we're complementing that by scaling our capital recycling as well. So that allows us to be in and around that $4 billion mark and be very comfortable with our funding availability of our liquidity, I should say.

Okay. But when you think about $4 billion, I mean, you've been there for a while now. Your organic growth pipeline has expanded really rapidly. Is that -- I would imagine there's sort of like a dynamic element to this is the velocity of capital deployment changes for you guys. As the organic pipeline grows, is there other thoughts to that?

No, I think it's fair that as the organic pipeline continues to grow, there will be an element where we may look to increase that over time. But we're at a level right now where as we look out over the next several years, we're quite comfortable at these levels. And part of it is just because of that visibility we see on accelerating recycling.

Our next question comes from Nelson Ng with RBC Capital Markets.

So quick question. In terms of the 8 gigawatts commissioned this year, I think about 2.5 were in North America. But obviously, there's a lot in the U.S. So when you look at developing projects in the U.S., are you still seeing any like headwinds or bottlenecks from the federal government from a permitting perspective for onshore wind and solar? Obviously, it's a different story for offshore wind, but you're doing onshore, but are you seeing any headwinds there?

Nelson, thank you for the question. We really put this in 2 buckets. What we would say is when it comes to solar, which is the broadest component of our pipeline, solar and batteries in the U.S., we are seeing no slowdown. We are seeing an acceleration. And this is driven by solar is quick to deploy. It's cheap. It's the lowest cost form of production. And quite frankly, the corporates need the power as quick as possible. So on solar, we are seeing no change, if anything, an acceleration. And we're trying to pull projects forward as fast as possible.

On wind, onshore wind, there has been some slowdown in permitting from the federal government, but projects are still getting done. And we've taken that into account into our development and execution process. That's reflected in the pipeline that we present. I would say that wind is progressing slower than onshore solar in the U.S. market, but both are still getting done.

Got it. And then just switching topics a bit. So obviously, we're hearing a lot about the elevated power prices in the U.S. and the fact that you are signing more long-term hydro contracts. But when I look at your realized power prices for the U.S. hydro segment in the supplemental document, I think the realized hydro price has been flat year-over-year at about $83. I'm just wondering whether that's just due to the generation mix, given that it was below average in the past year? And should we be seeing an increase going forward?

You should see an increase going forward. And there's a lot of different dynamics that flow through those numbers. But the overarching point to be made is the scarcity value of hydroelectric power is at an all-time high right now. And it perhaps gets glossed over in the breadth of our broader business. But the 3 contracts, 3 20-year take-or-pay PPAs inflation linked with some of the largest corporates around the world from our perpetual hydro assets, we have never seen demand of that scale at the prices we have seen in, I'd say, the last year, but in particular, in the last 6 months. And as those contracts get layered in, some of those contracts don't start immediately. They start in a couple of years when the existing contracts roll off. You will begin to see higher achieved contracted power prices across our hydro portfolio.

Great. And I'll try to squeeze in one more question. In terms of capital recycling, you guys mentioned that you have a, I guess, a potential framework to sell an additional $1.5 billion to some buyers -- to some existing buyers. So when you look at recycling assets, are -- like how much of your customers or how much of the buyers are essentially repeat customers? And should that streamline your asset recycling process going forward?

Short answer, yes, but let me provide a little bit more color. Since we started to grow our development business, I would say, in 2019 or 2020, our capital recycling activities have understandably grown on a similar trajectory, but probably on a 3-ish year lagged basis, the time it takes to pull a project out of the ground. As a result, over the past 2 or 3 years, our asset recycling proceeds have become a very consistent, recurring, predictable source of both funding and earnings for our business. And given the trajectory of our development activities and the visibility of our pipeline today, we would expect this activity to continue going forward, with 2026 being no different.

Then when it comes to the recent we will call them frameworks we've set up in terms of asset recycling, similar to in the past, how we have raised capital to facilitate a greater level of deployment into growth, we think about this as raising capital to facilitate a greater amount of capital recycling in the business. And we're pretty excited about what we've designed and executed here because what these frameworks -- and we've executed 1 and we're pursuing others in different regions around the world that we would hope to execute in the near term -- what we have done is we would say we have created almost a framework or a program to recycle newly built assets at scale, quickly on a recurring basis. And the impact to our business is it significantly derisks our development platforms around the world and the business plans we're seeking to execute, and it significantly derisks our capital recycling and funding plans for our business for the next several years.

I will go out on a limb and say I think this is going to be a huge differentiator for our franchise. Yes, we've signed 1 since the end of the year focused on North America, but we expect to sign others in the near term here. And these are very significant in terms of scale. And not only are they going to provide an accretive source of funding for our business, they significantly derisk our development activities that continue to grow.

Our next question comes from Robert Hope with Scotiabank.

So at the recent Investor Day, you spoke quite bullishly about the battery outlook. And I believe you commented that it could be 7 gigs in a couple of years, and today, you're saying it could be 10 gigs. Is the accelerating development pipeline here or an increasingly bullish outlook here in part due to the fact that you're seeing larger opportunities? The 1-gigawatt battery project for the sovereign wealth fund, is this indicative of where you think development is going, larger projects to ensure reliability for the grid?

Yes. And -- hi, Rob. The short answer is yes. Make no mistake, batteries are the fastest-growing part of our platform today, and we expect that to continue. But what this is really driven by is the simple fact that battery costs have come down so dramatically over the last decade they've come down more than 60% over the last 24 months. And as a result, they are becoming an increasingly economic solution in more and more markets around the world. This dynamic continues. Costs continue to go down, technology advances continue to be made. And therefore, we are seeing batteries as a potential solution in more and more of our projects and in more and more of our markets.

The other thing we would highlight is we do all think at Brookfield Renewable, think about battery development probably a little bit different than generation development because it can be executed faster. Much of the equipment shows up pre-built on site. And because batteries and energy storage reduce grid congestion as opposed to add to it, there is significant incentive from grids to bring batteries online faster. Therefore, yes, we have accelerated or increased our outlook for batteries, but it's very simply just a reflection of what we're seeing across our business and what we're doing with our sovereign wealth fund partner. We would expect to do other similar projects like that going forward.

All right. Appreciate that. And then maybe turning over to the M&A environment. You've been very successful monetizing assets. But on the other side, acquiring assets, what does that environment look like in a rising price environment as well as the power addition environment?

So perhaps I'll almost tie this back to Patrick's answer on funding a little bit. We've always been very opportunistic in terms of funding our business. And right now, we see scale capital as an increasing competitive advantage in today's market. And we see a very constructive market for deployment into growth. This is why we took the decision earlier this year to strengthen our already very strong capital and balance sheet position because we do believe we are at the start of a period of very attractive deployment into growth and M&A and very simply, a broader consolidation of our space where we think we can play a very significant role.

Next question comes from the line of Baltej Sidhu with National Bank of Canada.

So Connor, just given that renewable infrastructure valuations remain compressed, and you've noted the largely U.S.-based development pipeline, where are you seeing the most attractive risk-adjusted opportunities today, the operating assets, late-stage development or [ usage ] platforms? And how do you think that mix will evolve at the end of 2026?

The opportunities we are seeing are pretty broad-based around the world. But perhaps to focus on a few themes that we are seeing right now, I would perhaps highlight 3 where we're seeing the greatest volume of opportunities that we view as attractive. Absolutely, yes, public companies. That would be #1 in the current environment.

The second point we would highlight would be carve-outs from broader utilities or energy businesses. Because there are such significant capital needs across the industry, market participants are needing to choose where they will allocate their capital budgets. And -- to put it bluntly, some market participants can't fund 100% of the opportunities they have at their disposal, and therefore, they may look to sell divisions that they don't expect to fund all the growth opportunities in, and that could be an opportunity with us given our robust capital position.

The last point we would make is we are seeing a unique dynamic in the developer market where we are seeing a bifurcation between what we would call high-quality developers and maybe less high-quality developers. High-quality developers price at an absolute premium in today's environment given the growth trajectory of electricity demand and the value of projects that can be pulled out of the ground. However, developers that maybe don't have scale capabilities to navigate the current environment but do have large pipelines of projects. We are seeing more attractive pricing at that end of the market and would expect to be active there in order to add projects to our pipeline that we can then contract with the demand we're seeing from our customers.

Just one more for me. Just on the [ CSV hires ] that you have alluded to and speaking towards your Google HSA, which can see you potentially acquiring additional hydro to facilitate the entirety of the 3 gigawatt. What are you seeing in the market? And how are you thinking about it, just looking forward in that regard?

Sure. What we would say when it comes to hydro is it very much depends on location. As mentioned, we've seen really strong demand for our hydros and premium valuations, both in contracts and in assets in markets in the U.S. like PJM and [ MISO ]. And our activities in 2025 reflect that. However, what I would say is what we are seeing is the offtakers of these hydro assets increasingly looking now beyond those 2 markets, which have really been their focus, I would say, for the last 2 years.

Therefore, when we look to potentially acquire assets, we're probably looking for assets in these markets that have been viewed as noncore in the past, where we can acquire assets, execute operational improvement programs and recontract them under our framework agreements. But the biggest point I would say is it's very location specific.

Our next question comes from Benjamin Pham with BMO.

I wanted to ask a couple of questions. You mentioned the battery storage opportunity. I'm curious, a couple of things. Is the plan mostly greenfield development that you picked up a couple of -- actually, quite a number of megawatts from Neoen? Are there opportunities to also do M&A? And I'm also secondly curious, the revenue model with storage for you specifically. Is that -- do you expect to be mostly contract? Or is there an element of merchant arbitrage in there?

Great question. So in terms of batteries, we view ourselves to be in quite a fortunate position because we do have a very large organic development pipeline. A lot of that did come through the acquisition of Neoen. Candidly, Neoen was the largest acquisition in the history of Brookfield Renewable. We recognize that perhaps a lot of people knew Neoen as a leading global renewable power developer. We obviously saw that and the value of that, but we thought what was underappreciated in their business is the fact that they're the leading global energy storage developer as well. And what you've seen in our first year of ownership is us really accelerating the growth in the business, but particularly on the energy storage side. We are also looking at M&A opportunities in the battery space, but we've positioned ourselves that we can be quite discerning and balance the returns we're seeing in M&A versus the returns we're seeing in organic development.

To your question about contracting, we're very excited about the evolution of what we've seen in the energy storage space, where only perhaps 2, maybe 3 years ago, a lot of the revenue models were arbitrage or merchant related. Increasingly, what we are seeing is long-term tolling or almost take-or-pay capacity contracts on newly built battery assets. And very simply, as an example of the large project that Neoen is pursuing, that would be on a 100% contracted basis for the entire life of those assets. So a development and revenue profile very much in line with or potentially even stronger than what we do all day, every day on the wind and solar side.

Okay. Understood. And then can I also ask on the offshore wind side, you had previous comments, you didn't like it for a while, maybe 7, 10 years, you got maybe more open to the data deal Ørsted. Where does Brookfield stand today then on offshore wind?

Understandably, it would be very market-specific. But we are seeing some markets -- we won't bury the lead here. Europe, in particular, increasingly more constructive from an offshore wind perspective. And we are evaluating opportunities in the space there. That being said, as with everything, we will compare the investment profile and the risk return we see in those opportunities versus what we see elsewhere in the portfolio and only pursue them if we think we're being appropriately compensated.

Okay. If I may follow up on that. There's been maybe a trend of offshore wind assets in Europe [ has a recent of ] contract [ like to ] become more merchant like? Is that something that maybe Brookfield could opportunistic take advantage of?

Certainly. And in particular, if we could bring our contracting to bear, such that we could acquire those assets based on a merchant profile but bring our power marketing capabilities to quickly derisk them through a new long-term contract. Yes, that's absolutely something we would look at. We would be clear that we've seen a couple of those opportunities, but it's not the largest opportunity set in the world today.

Our next question comes from Anthony Crowdell with Mizuho.

Just a quick one, a follow-up maybe on the previous question or two questions on PJM. Just several weeks ago, the Trump administration created that backstop auction which is very light on details. I'm just curious if you think that plays maybe or pushes hyperscalers to focus more on Brookfield Renewables' development side where you're bringing new generation in or the company could be opportunistic with some repricing, some existing generation?

The activity and the announcements around PJM, we very much see this as simply a reflection of the demand for energy and quite frankly, how tight the system has become in particular, in markets with the highest levels of energy demand growth. We've been saying for years that the supply/demand imbalance has been growing materially. And this inevitable evolution leads to the immediate need for large-scale capacity to be added to grids around the world in different markets in the United States.

So from our perspective, one of the most constructive outcomes of this discussion is that it should create a dialogue to facilitate an acceleration of new capacity coming online over the long term. That's obviously incredible for the market, and it's incredible for our business given our large pipeline of development opportunities. All that being said, we've already contracted our hydro fleet in the PJM region with the recent Google agreement, which really insulates us from any near-term market impacts depending on how these discussions and announcements related to PJM evolve in the coming weeks.

But as an existing generator with contracted assets today and a development pipeline focused on meeting the growing and incremental demand, we view this as a step towards addressing the underlying supply/demand imbalance for our business and -- sorry, addressing the underlying supply/demand imbalance in that market, and we view that as very positive for our business.

That concludes today's question-and-answer session. I'd like to turn the call back to Connor Teskey for closing remarks.

Great. Well, thank you, everyone, for joining our Q4 conference call. We appreciate your continued support and interest in Brookfield Renewable, and we look forward to providing an update after Q1. Thank you, and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Hello, and welcome to the BEP Third Quarter 2025 Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

It is now my pleasure to introduce CEO, Connor Teskey.

Thank you, operator. Good morning, everyone, and thank you for joining us for our third quarter 2025 conference call.

Before we begin, we would like to remind you that a copy of our news release and investor supplement can be found on our website. We also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially. For more information, you are encouraged to review our regulatory filings available on SEDAR, EDGAR and on our website.

On today's call, we will provide a review of our third quarter performance, then Jen Mazin, Co-President and General Counsel, will discuss the recently announced partnership between Westinghouse and the U.S. government and how we expect this partnership to benefit our business for years to come. And lastly, Patrick will conclude our remarks by discussing our operating results and financial position. Following our comments, we look forward to taking your questions.

We had another strong quarter, delivering solid financial results and advancing our strategic initiatives across the business. We generated $302 million of FFO during the quarter or $0.46 per unit, up 10% year-over-year, and we continue to expect to deliver on our 10%-plus FFO per unit growth target for 2025.

We were successful advancing our commercial priorities, signing contracts to deliver another 4,000 gigawatt hours per year of generation, and continue to deliver on our growth initiatives, commissioning 1,800 megawatts of new projects in the quarter. We also made strategic investments across our key markets in critical technologies to support both energy demand and grid reliability.

We continue to see accelerating demand for power across nearly all the markets in which we operate. This growth is being driven by the same 3 key themes we have highlighted in recent quarters: Ongoing electrification; reindustrialization across our operating regions; and the extraordinary demand for energy from hyperscalers. The hyperscalers continue to ramp up their CapEx spend on data centers to support the rapid expansion of cloud computing and artificial intelligence. And what is clear to us is that the scale and pace of investment into AI is not slowing down.

At the same time, offtakers are seeking long-term access to reliable and sustainable energy sources to power this growth. With this, it is becoming increasingly apparent that meeting the surging demand for electricity will require an any-and-all solution leveraging solar, wind, hydro, gas, nuclear and other technologies to ensure sufficient load and consistent delivery of electrons. As a result of this demand and the required any-and-all solution, the opportunity to deploy capital has noticeably accelerated in the past few months and is reflected in the pipeline of opportunities we are executing on today.

In particular, we are seeing growing opportunities in nuclear, where we are exceptionally well positioned to play a leading role in the sector's expansion in both the United States and globally, given our ownership of Westinghouse, the U.S. nuclear champion. In October, we announced a strategic partnership with the U.S. government with the intention of achieving the objectives of reinvigorating the nuclear power industrial base, as set out in President Trump's executive orders.

Under the partnership, the U.S. government will support Westinghouse by, among other things, arranging financing and ordering new Westinghouse nuclear power reactors to be built in the United States with an aggregate investment value of at least $80 billion. This transformational agreement, which Jen will speak to in more detail shortly, positions nuclear energy deployment as a cornerstone of America's strategy to sustain global leadership in both artificial intelligence and advanced nuclear power technology and will drive a step change in the growth of nuclear power generation, helping to kickstart scale deployment of new Westinghouse reactors in the U.S. and around the world.

Separate from our partnership with the U.S. government. This past month, Brookfield signed a letter of intent to conduct 6 weeks of early-stage diligence on the potential development of 2 [ BC summer ] nuclear reactors. The reactors are Westinghouse AP1000s and were partially constructed until development was paused in 2017. And while we are early in our diligence process, we are encouraged by our initial feedback from potential partners and hyperscaler offtakers. The development of these reactors represent another growth opportunity for Westinghouse. As well, as potentially for Brookfield Renewable to enhance its position as a leading supplier of scale electricity to utilities and hyperscalers to support accelerating energy demand via nuclear power. But we will only do so if the appropriate downside protections and risk-adjusted returns are available to us.

Another example of how accelerating demand from the hyperscalers is impacting our business is that these players are increasingly looking to our hydro capacity as a source of power, given its scale, baseload and clean characteristics. While hyperscalers have traditionally focused on contracting our wind and solar generation and continue to do so for its low-cost additionality and speed-to-market benefits, the scale of current demand means we are also seeing a greater opportunity to contract our hydro fleet to these offtakers. And as the largest private owners and operators of hydro assets in the United States, with approximately 5 terawatt hours of generation coming up for recontracting, we are well positioned to capture the increasing demand, which will both lift our cash flows in the form of higher pricing and also enable us to up-finance these assets, providing additional capital to deploy into growth. We have seen this play out with the Hydro Framework Agreement we signed in July with Google and the immediate subsequent contracting of 2 facilities.

And then more recently, we also signed a new 20-year contract with Microsoft at another one of our hydro assets in PJM as part of our Renewable Energy Framework with that counterparty. We also continue to evaluate the opportunity to acquire hydros which would fit well within our portfolio. In this quarter, we closed our previously announced incremental investment into Isagen, increasing our stake in a world-class hydro business with a strong growth outlook.

Another area of growth for our business driven by rising electricity demand, clear peak loads and greater renewables penetration is battery storage. Costs continue to come down, decreasing more than 50% in the past 12 months, and we are seeing a notable increase in counterparties willing to execute long-term capacity contracts, a key attribute of our derisked approach to development. This past quarter, we advanced our global battery development strategy, highlighted by the delivery of a 340-megawatt battery in Australia, which, combined with the first phase of this project, is now the largest operating battery solution in the country.

We continue to see scale opportunities for partnerships with governments and corporates to help deliver energy solutions utilizing battery storage. Now while we are deploying significant capital into batteries and hydro and evaluating further deployment into nuclear, our core wind and solar business also continues to grow at an accelerating pace as a result of its position as the lowest cost, fastest market form of bulk power available in most major markets around the world. To date, we have a global operating fleet and scale pipeline of over 200 gigawatts, which complements our battery, hydro and nuclear capabilities and furthers our position as the partner of choice to the largest buyers of power who are prioritizing low-cost, readily available power solutions.

In fact, we feel the ability to provide baseload power, and energy storage solutions enhances the value of our wind and solar development pipeline as these technologies can be used to complement each other to meet the needs of customers. These combined capabilities across renewable technologies, including our baseload power capabilities, our relationships with the largest technology players and our access to scale capital enable us to act quickly in environments like these, positioning us well to accelerate our growth over the next several years. As a result, we have never felt stronger about the growth prospects of our business.

And with that, we will now turn it over to Jen to speak in more detail to the recently announced partnership between Westinghouse and the U.S. government.

Thank you, Connor, and good morning, everyone. As Connor mentioned, in October, we announced a strategic partnership between the U.S. government and Westinghouse, where the U.S. government will order new Westinghouse nuclear reactors to be built in the United States with an aggregate investment value of at least $80 billion. The agreement supports the government's goal of having 10 large-scale reactors with completed designs under construction by 2030 and aligns the U.S. government with the owners of Westinghouse to dramatically enhance the value of the business by providing for an opportunity for profit sharing in certain circumstances.

Westinghouse, which we and Cameco acquired in 2023, is a leading provider of mission-critical technology, services and products to the nuclear power industry. Westinghouse is the U.S. nuclear champion, currently servicing over 50% of the global nuclear fleet. Over 2/3 of operating nuclear reactors in the world are derived from Westinghouse technology.

Westinghouse operates through 3 main business segments. Today, it's operating plant services and nuclear fuel businesses together generate roughly 85% of the company's earnings, driven by long-term contracts with a global fleet of operating reactors. These segments generate stable infrastructure-like cash flows anchored by Westinghouse's position as the leading nuclear service provider.

As the nuclear industry grows globally through greater usage, life extensions and new reactors, Westinghouse's core business of operating plant services and nuclear fuel will continue to grow alongside the broader nuclear market. This leading position and the stable growing cash flows from these 2 businesses formed the foundation of our original investment thesis. Westinghouse also owns the intellectual property for the world's leading utility scale reactor, the AP1000, as well as the AP300, its small modular reactor version.

Through its third main business segment, the Energy Systems business, Westinghouse provides design, engineering and procurement services for new nuclear power plants without assuming construction risk or operating liabilities. While we have always had strong conviction in the long-term role nuclear energy will play and the potential of this Energy Systems segment, at the time of our acquisition, we assigned only modest growth expectations to the Energy Systems business, reflecting the broader market conditions at that time. Since then, in light of factors including a greater focus on energy security and the insatiable demand for baseload power to support the build-out of data centers, global sentiment around new build nuclear has changed significantly, as we have seen with new reactor build announced primarily in Europe and also restarts in the United States.

And now the recently announced partnership with the U.S. government represents a significant catalyst for the trajectory of growth at Westinghouse. Under the agreement, the U.S. government plans to invest at least $80 billion into new build nuclear facilities in the United States that will use Westinghouse reactors. The U.S. government has also agreed to support Westinghouse by, among other things, arranging financing, facilitating permits and the approvals required to accommodate the near-term build-out of new nuclear plants in the United States.

Westinghouse will continue to undertake the same activities it has since our ownership, focused on the design, engineering and procurement services for these new build reactors. And once the plants are operating, we would expect to provide fuel and maintenance services for the lives of these new nuclear facilities, which is on average between 60 and 80 years each.

The partnership creates significant value for Westinghouse and Brookfield Renewable in 3 main ways. First, this scale investment should contribute significant earnings growth over time at Westinghouse as the reactors are constructed. Second, we expect that these orders will provide long-term recurring cash flows to the business, with Westinghouse delivering fuel and maintenance services over the course of the reactors [ lives ] once constructed. Third, and perhaps most importantly, orders of this magnitude should provide both a catalyst and enhanced certainty to the sector that should enable investment in the supply chain for Westinghouse and the nuclear industry more broadly, resulting in greater assurances for future investment in new build reactors and lower costs going forward as the supply chain scales. This should have the added benefit of helping Westinghouse further deploy its technology both in the United States and globally, far beyond this initial order of reactors.

Interestingly, even since the announcement less than 2 weeks ago, inbounds for new build Westinghouse reactors have increased. It is also important to note that the terms of the strategic partnership align us with the U.S. government to create significant near-term value at Westinghouse while maintaining the current governance structure of the business. Under our agreement, provided that the U.S. government has made a final investment decision and entered into definitive orders to invest at least $80 billion in the construction of new Westinghouse nuclear reactors in the United States before January 2029, the U.S. government will receive 20% of distributions from Westinghouse, but only after the current shareholders have first received $17.5 billion in distribution.

In summary, the partnership and near-term development of new nuclear reactors are expected to deliver significant value for Westinghouse over the long term through reactor construction, development of the supply chain to enable further global deployment and associated servicing and fuel contracts. With our co-owner Cameco's expertise across the nuclear fuel supply chain, Westinghouse's leadership in mission-critical technology and services and our access to capital and deep commercial relationships with the largest buyers of electricity, the business is exceptionally well positioned to build on its leadership in the sector. This strategic partnership marks a strong start to what we believe will be a meaningful runway of growth for the business, positioning Westinghouse to far exceed our original underwriting expectations and deliver significant value for our shareholders and stakeholders over the long term.

With that, I will pass it on to Patrick to discuss our operating results and financial position.

Thanks, Jen, and good morning to everyone on the call. Our business performed well this quarter, delivering funds from operations of $302 million or $0.46 per unit, an increase of 10% year-over-year, driven by contracted inflation-linked cash flows from our diverse global operating fleet, commercial and operational execution and contributions from recent M&A activity and project development.

Our hydroelectric segment delivered another strong quarter, generating FFO of $119 million, up over 20% from the prior year on the back of solid generation from our Canadian and Colombian fleets, higher pricing across our U.S. operations and increased earnings from commercial and operational activities. The performance of this segment reflects growing demand for scale baseload power and our ability to capture improved pricing in the current environment.

Our wind and solar segments generated a combined $177 million of FFO, supported by contributions from our acquisitions of Neoen, Geronimo Power and the portfolio of offshore wind assets in the U.K. that we invested in last year. The benefits of this growth and our organic development were offset by the impact of the sale of wind assets in the U.S., Spain and Portugal since Q3 last year. Our distributed energy storage and sustainable solutions segments delivered a solid quarter, generating FFO of $127 million, up from the prior year. Results were supported by growth from the Neoen acquisition and strong performance at Westinghouse.

Now turning to our financial position. During the quarter, we were successful in deploying significant capital into growth while maintaining strong liquidity of $4.7 billion and a sector-leading balance sheet, reaffirming our BBB+ investment-grade rating from 3 major rating agencies. We continue to differentiate our franchise with our access to scale capital. In the current environment where there is increasing demand for energy and opportunities for those with the right mix of capabilities and development expertise, access to capital is becoming even more crucial.

During the quarter, we executed $7.7 billion in financings, bringing our total financings over the last 12 months alone to $38 billion. This includes $1.1 billion in up-financings across the business in the third quarter alone. We executed up-financings at our [ Holtwood ] and safe harbor hydro assets recently, following the first contracts under our framework agreement with Google that we signed earlier in the year. And we completed an innovative up-financing at our [ Smoky Mountain ] hydro asset. These financings, sized to investment grade, attracted strong investor demand, and were over 5x oversubscribed at the tightest spreads we have seen for these types of financings in the past 5 years, reflecting the strength of the demand to lend to our high-quality assets.

As Connor mentioned earlier, we were also successful in the quarter advancing our commercial initiatives, signing contracts to deliver approximately 4,000 gigawatt hours per year. This includes signing a 20-year contract with Microsoft at one of our hydro facilities in the PJM market in the U.S. On the back of this contract, we expect to execute another significant up-financing in the fourth quarter.

Also during the quarter, we were very active on the capital recycling front, closing sales and signing agreements that are expected to generate $2.8 billion or $900 million net to Brookfield Renewable. This includes reaching an agreement to sell a stake in a leading North American distributed generation business while retaining almost half the development business and its pipeline, maintaining exposure to growth of this platform going forward. We also sold a portfolio of derisked operating assets within one of our U.S. platforms, something we expect to increasingly do more of as we build out our capital recycling capabilities in all of our businesses and continue to bring long-life infrastructure assets into production, which today are in very strong demand from low cost of capital buyers.

We also signed and closed the sales of solar, wind and battery assets in Australia that we acquired within Neoen earlier this year. Since our acquisition of Neoen, we have implemented an asset recycling program and sold assets of worth $1.1 billion of enterprise value in less than 1 year of ownership. This is up effectively from a run rate of 0 before we acquired the business.

As we look ahead, we anticipate an acceleration of opportunities to deploy capital through M&A and within our existing businesses. And in this environment, our approach will not waver. We will remain focused on ensuring we maintain high levels of liquidity and access to capital so that we are well positioned to deploy scale capital when compelling opportunities arise.

In closing, we remain focused on delivering 12% to 15% long-term total returns for our investors while remaining disciplined allocators of capital. On behalf of the Board and management, we thank all our unitholders and shareholders for their ongoing support.

That concludes our formal remarks for today's call. Thank you for joining us this morning. With that, I'll pass it back to the operator for questions.

[Operator Instructions] And our first question comes from the line of Nelson Ng with RBC Capital Markets.

Quick question. So just in the U.S., obviously, there's better visibility on tax credits, which is great. But can you talk about whether you're seeing any improvements in the pace of permitting, whether at the state or federal level? And are you seeing any changes being made to speed up the pace of power deployment? I know we're hearing a lot about a need for power. But are you seeing any other changes take place?

Good morning, Nelson, and thanks for the question. You're right. The biggest dynamic that has spoken about greatly in the United States is just the increased demand for power. In terms of are we seeing things move faster on the ground, we would say incrementally, but not dramatically, if we're being candid. Given the size of our platform, that means we are bringing significant amounts of megawatts through into operations on an ongoing basis.

But the bottleneck to growth is not capital, it's not demand, it's execution on the ground level. The one thing we would highlight -- and this is consistent across the United States and I would say markets around the world -- is there is a very clear level of intent from all stakeholders to remedy the situation to accelerate permitting to fast-track approvals. The intent is there. Progress to date limited, but we are confident that it can only get better from here.

And then just on data centers. Obviously, the U.S. is a big focus, but given your global platform, can you just talk about regions outside of the U.S. in terms of where you're having discussions about adding additional power for data centers?

We wouldn't want to give you an oversimplified answer, but I would say it is almost everywhere. But let's go a little deeper on that. Clearly, the largest concentration of data center build-out is in the United States. Following the United States, it would be Western Europe. So we are seeing a heightened number of conversations there.

But this does extend to almost every market around the world. We are seeing more conversations around power to data centers in Australia, in India, even in South America. So it is a very consistent topic globally. But to layer a size dynamic on top of that, because of the concentration of build-out, that is largely in the United States, and then Western Europe. That is where we are having the greatest number of those conversations.

And maybe just to go a layer deeper on one of the things you said. What's interesting is, clearly, the biggest opportunity is building data centers for hyperscalers, the largest corporates around the world. There is also a secondary opportunity of very meaningful scale, which is to build data centers for countries. Sovereign compute is increasingly a growing source of demand and something we feel we're equally well positioned to support the same way we support data center demand from corporates.

Our next question comes from the line of Sean Steuart with TD Cowen.

First question for Connor or Jen. Can you give us an expected time line, the U.S. build-out associated with the Westinghouse agreement? Just trying to gauge the time line of expected FFO contribution for [indiscernible]. And I guess the question is in the context of the U.S. has some ambitious time lines for this build-out. How would that compare, what's typical for AP1000 factors in terms of the time frame?

Sure. So thanks for the question, Sean. Maybe just to take a step back, what has the U.S. government looked to do here? And typically, to pull a nuclear reactor out of the ground, you need to work to get alignment and buy-in from a large number of stakeholders, and that takes a large period of time before you can start development and construction. Essentially, what the U.S. government has done and our partnership is a big part of this effort is to say we will backstop all of that. We want to get shovels in the ground as quickly as possible. We will facilitate permits, we will facilitate financing. We will facilitate the use of federal lands.

So when do we start seeing these reactors begin to be developed and constructed? Almost immediately. We expect the first reactors, the first projects to begin their development process, I would say, in the next quarter or 2. Nobody has taken a breath. We worked from trying to close the agreement to immediately turning our attention to what can we do to pull the first project out of the ground.

So we would expect contributions out of this agreement relatively quickly because as soon as that development process starts, Westinghouse does begin to generate revenues. But now let's put some context around that. In the Energy Systems division of Westinghouse that Jen described, which is how Westinghouse generates profits from new build reactors, the way to think about it is essentially in the reactor life, there's 3 stages. For the first 3 to 4 years, it's a development stage where Westinghouse does generate revenues and profits, but they are, I would say, candidly, a little bit more modest.

Once the reactor starts construction, which we would say is probably in year 3, there is a period of heightened profitability for the Energy Systems division of Westinghouse. And that lasts anywhere from 3 to 6 years, the time it takes for the plant to be constructed, and that is a very profitable high-margin period for Westinghouse. And then the reactor turns on, and Westinghouse gets an 80-year almost annuity on fuel supply, fuel fabrication and supply and then operating plant maintenance and services contracts. So we do expect revenues from this contract -- this partnership with the U.S. government to start as quickly as the next couple of quarters, but it will really ramp up I would say, in the 3- to 4-year time frame.

Thanks for that detail, Connor. Second question is with respect to the Santee Cooper project [indiscernible]. If Brookfield invests directly, how do you hedge the basis risk around cost overruns or delays in those risks at the BEP level?

Certainly. So maybe just for everyone's benefit, the timing of the U.S. Westinghouse partnership in the Santee Cooper announcement was entirely coincidental. They came a day or two apart. These are separate and distinct processes and opportunities that we are looking at. And with Santee Cooper, we see an opportunity where Brookfield is potentially very well positioned. Obviously, the construction of this facility was started with Westinghouse technology, so it has to finish with Westinghouse technology. So we're well positioned there. But then importantly, our ability to bring both capital and offtake to the project, consistent with what we do across our broader business, differentiated us and allowed us to be positioned in preferred bidder status, which is where we're at today.

In terms of us investing in the actual build-out and ownership of nuclear reactors, we are only going to do so if we can get the appropriate protections around cost overrun and key nuclear risks and generate the appropriate risk-adjusted returns for this type of activity. And as such, if we pursue an opportunity like Santee Cooper, we would look to structure our investment to ensure that we have appropriate protections around those key risks, particularly cost overrun risk, and that's something that absolutely is part of our current thinking in terms of that opportunity.

And our next question comes from the line of Robert Hope with Scotiabank.

Maybe to follow up on Sean's question. When you think about the build-out of the next phase of nuclear with the partnership with the U.S. government, could Brookfield and BEP potentially be a source of capital there? And under kind of what a framework or protections would you look to be a potential buyer of, we'll call it, backstopped reactors on the U.S. government?

Rob, thank you for the question. Perhaps to break it into 2 parts. We feel that Brookfield Renewable is extremely well positioned to play a major and significant growth role in the growth of nuclear power, both in the United States and around the world. And that comes from a couple of factors, but maybe to name a few of them. One, our ownership of Westinghouse. We own the global nuclear champion. As Jen mentioned, 60% of reactors around the world run on Westinghouse technology. Westinghouse already services more than half the global nuclear reactor fleet today. We are very much in the flow of almost every nuclear power generation facility around the world.

Secondly, our relationships with the largest off-takers and consumers of power and our ability to source offtake for these projects, our access to capital and ability to potentially fund these build-outs and then Brookfield's long-established history as a disciplined developer and constructor of large infrastructure and power projects. What we would say today is we are -- we do feel that we are well positioned to pursue opportunities in this space.

When it comes to our partnership with the U.S. government, as previously mentioned, the U.S. government is essentially taking the position that they will backstop everything to get these projects started. But we do think, over time, these facilities probably do find a path to landing in the hands of more natural owners, whether that be utilities or IPPs in the market.

In terms of Brookfield's ability to invest and get the protections that we would need in order to be comfortable investing in nuclear power, there's a number of ways that we can do this. You can share cost overrun burdens with the offtakers, i.e., they pay out higher PPA price if the facility overruns. You can share cost overrun burdens with the technology and construction suppliers, and you can also arrange financing that provides incremental liquidity in the event of cost overruns. So those are the types of levers that we're looking at when considering are we comfortable investing in the construction and ownership of nuclear, again, ensuring we're only going to do this if we think we can get the right protections. But based on what we're seeing in the market, we do think there will be considerable opportunities for us in this space.

All right. Appreciate that. And then maybe pivoting over to the Microsoft Renewable Energy Framework. Can you walk us through the factors that led to contracting the existing hydro asset versus building new wind and solar? And could we see some additional hydro deals with Microsoft?

So our Microsoft framework agreement from a couple of years ago always considered the inclusion of hydro. So this does not feel overly unnatural. And could more hydro be introduced in the future? Absolutely.

What we think it speaks more to is just the broader dynamic we're seeing around demand for our hydro generation, whether it be through our hydro-specific framework agreement with Google, or the recent contracting of a contract -- a hydro facility in PJM directly with Microsoft. So our framework agreement always included other technologies, including hydro, and we could see more of it in the future, absolutely.

Our next question comes from the line of Mark Jarvi with CIBC.

Connor, you mentioned having the U.S. government backstop the new builds. So would they be all the cost overruns? And I guess since that framework has been identified, have you had engagement with other stakeholders like EPC firms, utilities and off-takers to say whether or not they're on board with that framework agreement to get moving ahead?

So I think we need to separate out two things there. In the situation under the U.S. government partnership, Westinghouse is not an owner of those facilities. We are simply the provider of the engineering, design and technology services. We are essentially the critical component provider to the build-out of those facilities. And the cost overrun risk in the financing responsibilities of those facilities fits entirely with the U.S. government. And that is the construct of the facility.

Could that create opportunities in the future, should the U.S. government look to bring partners into specific projects? Perhaps. But that has not been discussed or agreed at this point. It's only in context of something like Santee Cooper, which is a live opportunity outside the construct of our partnership with the U.S. government, where we're considering ways to socialize cost overruns to get the protections that we are seeking that would get us comfortable for investment.

And in that regard, in terms of conversations with construction companies, technology suppliers, off-takers, financing providers, yes, there has been a very warm reception to this idea of everyone participating to reduce the burden, but create a large growth opportunity for a large set of market participants.

No, I wasn't inferring that you would take the risk, but there's been hesitancy by other participants to maybe get involved because they don't want to shoulder the risk. I'm just curious if the U.S. government has alleviated all the concerns for other stakeholders potentially?

I wouldn't say it's our job to speak on behalf of the U.S. government, but maybe to be a little bit more helpful, we are obviously very central to a lot of the discussions around new nuclear in the United States right now, given our position with Westinghouse. And we would see the tone from construction providers, technology providers, offtake providers and even capital providers, including Department of Energy and Loan Program Office of the U.S. government, all have been very constructive and positive of the idea of participating in the build-out of new nuclear with some socialization of cost overrun protections. And we -- obviously, nothing has been signed, and we're early stages on these opportunities, but the demand and willingness from the necessary stakeholders is very robust.

And then in terms of moving from the term sheet to buy in agreement, is that something that could be done by year-end? Or is that sort of mid- to late first quarter of 2026?

So -- perhaps just to be clear, are you speaking about the U.S. government opportunity?

Yes. Yes. Yes, the government opportunity.

Yes, sure. So we expect that to be done within 90 days of the signing of the announcement 2 weeks ago. So I guess that positions us to right around year-end.

And our next question comes from the line of Mark Strouse with JPMorgan.

Connor, I appreciate you don't want to speak on behalf of the U.S. government. But to the extent that you're able to share this, do you think the government is more committed to the $80 billion back -- are they more committed to the 10 reactors? Basically, I appreciate that you're not taking the risk of the overruns or probably, that potential cost overruns. But to the extent that there are overruns, would the $80 billion be kind of a fixed number, but there would just be fewer reactors that get built?

So our agreement is around $80 billion of reactor contracts, that would be the initial order prior to any cost overruns. But maybe to take a step back and here, again, it's not our position to speak on behalf of the U.S. government. But I think we can say with confidence, this government is very committed to catalyzing the growth of nuclear power generation and the supply chain that supports it in the United States.

They are not -- I would be extremely confident in saying they are not focused on a specific number of reactors. They are not overly focused on is it $80 billion or $82 billion or $78 billion. What they want to see is the U.S. be the leading provider of nuclear power generation in the world, and [ Natlee ] is going to lead to a build-out of both domestic supply chain and domestic nuclear power generation reactors and also a very meaningful increase in the export of U.S. nuclear technology to other regions around the world.

One thing -- and apologies for being redundant -- that we feel we cannot stress enough about our partnership with the U.S. government is, yes, the $80 billion of reactor orders is very beneficial to Westinghouse. We're thrilled with that part of the agreement. But what this really does is kickstart the flywheel of nuclear power generation growth, both in the United States and around the world. And we expect it will lead to the development of a significant number of reactors outside of this partnership with the U.S. government, with Westinghouse beating the leading technology provider of those new build reactors on a global basis. And that's in Europe, that's around the world in addition to the $80 billion of reactors from the U.S. government.

Got it. And then if I can ask a follow-up. Just -- I appreciate what you said earlier about the revenue during the different 3 stages. Can you talk about how we should be thinking about the margin during each of those stages, either on EBITDA or FFO?

Sure. So Westinghouse, the way to think about it is the Energy Systems division of Westinghouse typically operates at least a 20% margin during the development and construction period of a facility. That may fluctuate year-to-year. But over the life of this facility, about 20% margins historically in the Energy Systems division. We expect those margins to go up with economies of scale on the back of an order of this size. But historically, it's been about 20% margins, and we would expect that to almost be the floor going forward.

And our next question comes from the line of Baltej Sidhu with National Bank of Canada.

Connor, have there been any changes in your perspective regarding the eligibility of projects in your U.S. development pipeline through 2029 for federal tax credits?

Certainly. So two key points there. Obviously, there has been greater clarity around safe harboring. And as we mentioned, I believe, on our previous call, we have safe harbored the entirety of our U.S. development pipeline out to 2029. We feel very comfortable about our position there.

The second consideration there is obviously in and around [ FEOC ]. There really isn't much more clarity at this time around the specifics of the FEOC definitions. We continue to monitor. We do expect, as those definitions are released and in the event that those definitions do become stricter similar to other regulatory changes, those changes will likely favor large players such as ourselves who are well positioned with our global supply chains, our centralized procurement functions and our relationships with domestic U.S. suppliers.

So what we would say is on the safe harboring side. We feel in a great position. And on the FEOC side, we continue to wait, and we'll react accordingly. But similar to other regulatory changes, we expect it to be manageable within our portfolio.

And just on the asset rotation side of the business, just given the need for power and coupled with the current policy and macro backdrop, how are you seeing valuations trend in the private markets relative to the public? And if you can give any color on jurisdiction, no breakdown, whether it's Europe and rest of the world, that would be great.

Thank you for the question. In no uncertain terms, the demand and valuations for recently built contracted high-quality operating cash-generative renewables assets is significantly higher in the private markets than the public markets right now. And we would classify the demand for those assets as very robust. We feel perhaps that we've increased our capital recycling activities in that regard over the last 12 months.

I would say we're just getting started. We're in the early innings of accelerating our capital recycling opportunities and capital recycling activities to take advantage of that dynamic as one, we are bringing more new build projects through COD each year through our growing development capabilities; and two, a growing demand for acquisition of these assets at attractive prices in the broader market. Obviously, this quarter, we've done some recycling of assets, particularly in the United States. Through Neoen, we've been doing it on a global basis.

We would say with a strong degree of confidence given processes that are currently ongoing, we would expect to see significant asset recycling activities in North America, Western Europe, Australia and India, I would say, over the next 2 to 3 quarters. That's probably where the bulk of our monetization activity is currently planned.

Your next question comes from the line of Benjamin Pham with BMO.

I had a couple of follow-up questions on the nuclear deployment strategy. Can you talk about potentially in the next 5 years context, what do you think nuke is going to be as a percentage of your business? Is it potentially a new business line that you can break out? And maybe just related to that, it might be a bit of an odd question to just -- given what you mentioned. Is there any sort of like internal constraints or [ easy ] kind of strains on how big that exposure could be for renewable?

There's certainly no constraints. As we do across our broader business, we'll allocate capital to where we see the best risk-adjusted returns across our business. And if that happens to be in nuclear, we could see ourselves overallocate to that space. I would highlight, yes, there were a lot of headlines around nuclear in the quarter. I think that's probably an understatement. However, our core businesses of hydro are producing perhaps better than they ever have and the demand we're seeing for contracting there that certainly at its highest level that we've ever seen in our wind and solar business also continues to accelerate.

Today, when we look at the FFO of Brookfield, I think Westinghouse and nuclear represents about 5%. We would expect that to grow over time. It's got a long way to run before it overtake something like our hydro FFO that is north of 40%. So could we see nuclear grow from its current position? Absolutely. But it's going to grow in proportion to a business that's seeing growth across essentially every sector that we operate.

Okay. Got it. And then switching to the [ Santee ] opportunity. Can you talk about -- I know you're looking to derisk construction as much you can. But can you talk high level just for the nuclear opportunity, where if it's in the target return? Is it -- that's out of 15%? Are you targeting above that? And then related to that, how do you think about the synergies of Westinghouse potential on the services side in a total return?

So across Brookfield Renewable, we target 12% to 15% returns on a blended basis. Obviously, our long-term contracted operating assets are probably at the low end or potentially even below that. When we look to do construction and development, even if it's in solar, we target north of 15% return. So if we're looking at nuclear, we are certainly going to be well and meaningfully above our 12% to 15% return target for the business for that sector. So absolutely, higher returns relative to some of the other asset classes that we focus on.

In terms of Westinghouse and what it provides for us, Westinghouse as a stand-alone business is extremely well positioned to participate in the growth of nuclear in a number of ways. Even if a reactor is not a Westinghouse technology, Westinghouse is likely to benefit from its fuel fabrication business and its operating plan services business, even if it's not a Westinghouse technology. So any growth in the nuclear segment around the world, Westinghouse benefits from. Obviously, the new build of Westinghouse reactors is incredibly beneficial to Westinghouse, which is why we're so excited about some of the ongoing opportunities.

But then thirdly, there are very few people, if any, who have the knowledge and experience of Westinghouse when assessing new nuclear opportunities around the world. We think our ownership of Westinghouse provides an undeniable competitive advantage and expertise when we assess new opportunities in this space. However, when we do assess those opportunities, we would not blend Westinghouse's economics with the returns on capital that we would expect to generate as a owner and constructor of a new facility. Westinghouse would have to make an appropriate margin on its services, and we would have to make an appropriate return on capital. We would not socialize those two things in order to justify a transaction.

Okay. Got it. That's what I was thinking, I just wanted to clarify. Maybe one last thing then. I know it's new 5% today. It's got a lot of ways to go. Do you -- do you think, though, like dollar for dollar, if you look at the new side of things. Like, is it in a sense of the best reward right now? Because it sounds like the returns are above your targets. And then were not a lot of comps out there, but we're seeing nuke exposure trades like 20x, 30x EBITDA.

Similar to how we approach every part of our business, we're going to take a long-term view to value creation. And there is certainly a lot of excitement around nuclear around the world. We think a lot of it is warranted due to the growing demand for clean, dispatchable baseload power and nuclear as one of, if not the only incremental scale provider of that type of electricity. But we're only going to put money to work where we see attractive returns on capital.

We obviously will look to capitalize on opportunities in the market if we're seeing great prices for our assets or our businesses. But right now, we think we are in the early innings of a multi-decade build-out of nuclear power generation that fortunately, through our ownership of Westinghouse and now our partnership with the U.S. government, we think we are in the pole position on. And our focus here is capitalizing on that position and driving long-term earnings growth in our business for years and decades to come. And we think that's the best way to create huge amounts of value to BEP in the future.

Thank you. I'll now hand the call back over to CEO, Connor Teskey, for any closing remarks.

Thank you, everyone, for joining our Q3 earnings call and your continued support and interest in Brookfield Renewable. We look forward to speaking to you at the end of the next quarter for our year-end 2025 results. Thank you, and have a great day.

Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.