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Wednesday, Nov. 5, 2025 at 9 a.m. ET CALL PARTICIPANTS Chief Executive Officer — Connor Teskey Chief Financial Officer — Patrick Taylor Co-President, General Counsel — Jen Mazin Need a quote from a Motley Fool analyst? Email [email protected] Funds From Operations (FFO) -- $302 million, or 46¢ per unit, a 10% increase year over year. FFO Growth Target -- Management maintained its guidance to deliver "10% plus FFO per unit growth target for 2025." New Commercial Contracts -- Signed agreements to deliver 4,000 gigawatt hours per year of renewable generation during the quarter. Commissioned Capacity -- 1,800 megawatts of new projects were brought online in the period. Major Nuclear Partnership -- In October, Brookfield Renewable (BEP 2.91%) announced a strategic partnership with the US government and Westinghouse (private) involving a minimum $80 billion investment to build new US nuclear reactors with government backing to arrange financing and order placement. Westinghouse Contribution -- Westinghouse currently services over 50% of the global nuclear fleet, with roughly 85% of its earnings from long-term operating plant services and nuclear fuel contracts. Hydroelectric Segment FFO -- Delivered $119 million, representing over 20% growth year over year, on strong performance in Canada and Colombia, higher US pricing, and commercial activities. Wind and Solar FFO -- Generated a combined $177 million, supported by acquisitions in Nayeon, Geronimo Power, and UK offshore wind. This was partially offset by wind asset sales in the US, Spain, and Portugal since the prior year. Storage and Sustainable Solutions FFO -- $127 million, reflecting growth from Nayawan and Westinghouse, above the prior year. Liquidity Position -- Maintained $4.7 billion in available liquidity and reaffirmed a BBB+ investment grade rating. Financings Executed -- Completed $7.7 billion in new financings in the quarter, totaling $38 billion over the past 12 months; $1.1 billion attributed to asset up financings in Q3 alone. Capital Recycling Activity -- Closed sales and agreements expected to generate $2.8 billion ($900 million net to Brookfield Renewable), including partial sale of North American distributed generation business and other asset disposals. Asset Recycling Program -- Sold $1.1 billion of assets acquired via Nayeon within a year, demonstrating rapid asset rotation following the acquisition. Sector Demand Trends -- Accelerated demand from hyperscalers and sovereign computing drove increased commercial contracting and asset utilization across hydro, wind, and solar portfolios. Battery Storage Developments -- Commissioned a 340 megawatt battery in Australia, now the country's largest operational battery solution, with storage costs down over 50% in the past year. Microsoft/Google Hydro Contracts -- Signed new 20-year contract with Microsoft (MSFT 1.39%) for hydro supply in PJM, and executed multiple hydro contracts under prior framework agreements with Google (GOOGL +2.44%). Valuation Arbitrage -- Management stated, "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." Target Long-Term Returns -- Management reiterated a 12% to 15% long-term total return objective for the business, with nuclear construction targeted "meaningfully above" according to Connor Teskey this range. Management introduced a transformative partnership in which the US government will back Westinghouse with at least $80 billion to build new nuclear reactors, providing direct support through financing and permitting. Brookfield advanced capital recycling efforts, locking in $2.8 billion in asset sales agreements to bolster liquidity and deploy capital for new growth. The company commissioned 1,800 megawatts of new renewable capacity and secured 4,000 gigawatt hours in long-term power contracts, deepening commercial ties with Microsoft and Google. CFO Patrick confirmed $7.7 billion of new financings and sustained a robust $4.7 billion liquidity position, while achieving a BBB+ rating from three agencies. CEO Teskey clarified that nuclear’s current FFO share is approximately 5% but may expand over time as new opportunities mature. Jen Mazin emphasized that under the US partnership, the government receives 20% of Westinghouse distributions only after shareholders receive $17.5 billion, creating additional value incentives. CEO Teskey stated, So Westinghouse way to think about it is the energy systems division of Westinghouse. Typically operates at at least a 20% margin. That may fluctuate year to year, but over the life of this facility, about In the energy systems division. We expect those margins to go up with economies of on the back of an order of this size, but his it's been about 20% margins, and we would expect that to almost be the floor going forward. Management noted that first revenues from the US nuclear buildout may commence within the next couple of quarters, with a material ramp-up occurring in three to four years as construction intensifies. Full safe harbor coverage has been secured for Brookfield’s entire US renewables pipeline through 2029, allowing certainty on federal tax credits for upcoming projects. Interest from global hyperscalers and sovereign computing organizations continues to broaden, diversifying the company's power offtake base worldwide. INDUSTRY GLOSSARY FFO (Funds From Operations): A cash flow metric widely used by infrastructure and real asset investors, representing net income plus depreciation and other non-cash expenses, and excluding changes in working capital. Up Financing: A form of refinancing that increases the amount of debt secured by an asset, typically to extract additional capital after improving cash flows or contractual arrangements. Safe Harbor: A provision allowing the company to pre-qualify assets or projects for federal tax credits or regulatory treatment under prescribed rules for a future period. PJM: The regional transmission organization coordinating electricity supply and demand across much of the eastern United States. AP1000: Westinghouse's flagship nuclear reactor design, often referenced in nuclear buildouts and new project agreements. Hyperscaler: Large technology companies deploying massive computing infrastructure (e.g., data centers) and requiring scale energy procurement. Full Conference Call Transcript 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 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 three key themes we have highlighted in recent quarters. Ongoing electrification, reindustrialization across our operating regions, and the extraordinary demand 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, off-takers 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 solutions, 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 US nuclear champion. In October, we announced a strategic partnership with the US government with the intention of achieving the objective of reinvigorating the nuclear power industrial base as set out in President Trump's executive order. Under the partnership, the US 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 kick start scale deployment of new Westinghouse reactors in The US, and around the world. Separate from our partnership with the US government, this past month, Brookfield signed a letter of intent to conduct six weeks of early stage diligence on the potential development of two BC summer nuclear reactors. The reactors are Westinghouse AP1000s that 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 off-takers. The development of these reactors represents 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 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 off-takers. And as the largest private owners and operators of hydro assets in The United States, with approximately five 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 two facilities. And then more recently, we also signed a new twenty 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 Hydro's which would fit well within our portfolio. In this quarter, we closed our previously announced incremental investment into Efahen. 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 higher peak loads, and greater renewables penetration. Is battery storage. Costs continue to come down decreasing more than 50% in the past twelve months, and we are seeing a notable increase in counterparties willing to 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 corporate to help deliver energy solutions utilizing battery storage. Now while we are deploying significant 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. Today, 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 US government. Jan Mazin: Thank you, Connor. And good morning, everyone. As Connor mentioned, in October, we announced a strategic partnership between the US government and Westinghouse. Where the US government will order new 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 US government with the owners of Westinghouse to dramatically enhance the value of the business. By providing for an opportunity for profit sharing in circumstances. Westinghouse, which we in Cameco acquired in 2023, is a leading provider of mission critical technology, services, and products to the nuclear power industry. Westinghouse is the US nuclear champion. Currently servicing over 50% of the global nuclear fleet. Over two thirds of operating nuclear reactors in the world are derived from Westinghouse technology. Westinghouse operates through three main business segments. Today, its operating plant services and nuclear fuel businesses together generate roughly 85% of the company's earnings. Driven by long term contracts with the 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 service and nuclear fuel will continue to grow alongside the bottom. Nuclear market. This leading position and the stable growing cash flows from these two businesses formed the foundation of our original investment thesis. Westinghouse also owns the intellectual property for the world's leading utility scale reactor. The 1,000. As well as the 300 It's 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. With without a assuming construction risk or operating liability. While we have always had strong conviction in the long term rule, new energy will play, and the potential of this energy system 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 bills announced, primarily in Europe, and also restarts in The United States. And now the recently announced partnership with the US government represents a significant catalyst for the trajectory of growth. At Westinghouse. Under the agreement, the US government plans to invest at least $80 billion into new build new facilities in The United States. That will use Westinghouse reactors. The US 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 facilities. Which is on average between sixty and eighty years each. The partnership creates significant value for Westinghouse and Brookfield Renewable in three 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 service over the course of the reactor's 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 cost going forward. As the supply chain scales. This should have the added benefit of helping Westinghouse further its technology both in The United States and globally. Far beyond this initial order of reactors. Interestingly, even since the announcement last than two 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 US government to create significant near term value at Westinghouse. While maintaining the current governance structure of the business. Under our agreement, provided that the US 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 be before January 2029? US government will receive 20% of distributions from Westinghouse. But only after the current shareholders have first re received $17.5 billion in distribution. In summary, the partnership and near term development of new reactors are expected to deliver significant value for West Westinghouse over the long term. Through reactor construction, development of the 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 strong start to what we believe will be a meaningful runway of For the growth. business. Positioning Westinghouse to far exceed our original underwriting expectations, and deliver significant value for our shareholders and over the long term. With that, I will pass it on to Patrick to discuss our operating results. And financial position. Patrick Taylor: Thanks, Jen. And good morning to everyone on the call. Our business performed well this quarter. Delivering funds from operations of $302 million. Or 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 and 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 US 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 Nayeon, Geronimo Power, and the portfolio of offshore wind assets in The UK 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 Nayawan 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 plus investment grade rating from three major rating agencies. We continue to differentiate our franchise with our 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, executed $7.7 billion in financing bringing our total financings over the last twelve 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 Google, that we signed earlier in the year. And we completed an innovative up financing at our Smoky Mountain Hydro asset. These financings, size to investment grade, attracted strong investor demand and we're over five times oversubscribed at the tightest spreads we have seen for these types of financings in the past five 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 twenty year contract with Microsoft at one of our hydro facilities in the PJM market in The US. 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 US 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 Neon earlier this year. Since our acquisition of Nayeon, we have implemented an asset recycling program and sold assets of worth $1.1 billion of enterprise value in less than one year of ownership. This is up effectively from a run rate of zero before we acquired the business. As we look ahead, we anticipate an acceleration of opportunities to deploy capital through M and A, and within our existing business 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: Thank you. And wait for your name to be announced. To withdraw your question, please press 11 again. One moment, please. And our first question comes from the line of Nelson Ng with RBC Capital Markets. Nelson Ng: Great. Thanks, and good morning, everyone. Quick question. So 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 this? 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 of the changes take place? Thanks. Connor Teskey: Good morning. Nelson, and thanks for the question. You're 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 of megawatts through into operations on an ongoing basis But the bottleneck to growth is not capital, is 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 this situation to accelerate permitting, to fast track approvals The intent is there. Progress to date limited, but we're we are confident it can only get better from here. Nelson Ng: Yeah. Great. Thanks, Connor. And then just on data centers, obviously, The US is a big focus. But I 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? Connor Teskey: We wouldn't wanna give you an oversimplified but I would say it is almost everywhere. But let's go a layer 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. It is a very con 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. Support this. Same way we support data center demand from corporates. Nelson Ng: Great. Thanks for the color. Connor. I'll I'll leave it there and get back in the queue. Connor Teskey: Thank you. Operator: Your next question comes from the line of Sean Steuart with TD Cowen. Sean Steuart: Thanks. Good morning. First question for Connor and Chen. Can you give us an expected time line The US build out the Westinghouse agreement Just trying to gauge the timeline of expected FFO contribution And I guess the question is in the context of US. Has some ambitious timelines for this build out. How would that compare with typical for AP 1,000 reactors in terms of the time frame? Connor Teskey: Sure. So for the question, Sean. May maybe just to take a step back What has the US 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 US government has done and our partnership is a big part of this effort, is to say, we will backstop all of that We wanna 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 two. Nobody has taken a breath. We worked from trying to close the agreement 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 it's soon as that development process starts, Westinghouse does begin to generate revenue. But now let's put some contacts 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 a essentially in the reactor life, there's three stages. For the first three to four 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 three. There is a period of heightened profitability for the energy division of Westinghouse. And that lasts anywhere from three to six 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 eighty 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 to or this partnership with the US government start as quickly as the next couple quarters. But it will really ramp up I would say, in the three to four year time frame. Sean Steuart: Thanks for that detail, Connor. Second question is with respect to the Santee. Cooper project and ask If Brookfield invests directly how do you hedge basis risk around cost overruns or delays in those risks? At the BEP level. Connor Teskey: Certainly. So maybe just for everyone benefit, the timing of the US Westinghouse partnership and the Santee Cooper announcement was entirely coincidental that they came a day or two apart. These are separate and 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. Sean Steuart: K. That's all I have to pronounce. Thanks very much. Thank you. Operator: And our next question comes from the line of Robert Hope with Scotiabank. Robert Hope: Good morning, everyone. 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 are framework or protections would you look to be a you know, potential buyer of we'll call it, backstop reactors by the US government. Connor Teskey: Hi, Rob. You for the question. Perhaps to break it into two parts, we feel that Brookfield Renewable is extremely well positioned to play a major and significant grow role in the growth of nuclear power both in The United States and around the world. And that comes from couple 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, 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 the space. When it comes to our partnership with the US government, as previously mentioned, the US 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 off takers. I e, they pay a 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 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 gonna 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. Robert Hope: Alright. 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 assets versus building new wind and solar And could we see some additional hydro deals with Microsoft So our Microsoft framework agreement from a couple years ago always considered the inclusion 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 being the recent contracting of a contract a hydro facility in PJM directly with So our framework agreement always included other technologies including hydro. And we could see more of it in the future, Absolutely. Thank you. Thank you. And our next question comes from the line of Mark Jarvi with CIBC. Mark Jarvi: Thanks. Good morning, everyone. I already mentioned having the US government backstop the new builds. So they did all the cost overruns. And I guess since that framework's been identified, have you engaged with other stakeholders like EPC firms, utilities, and off takers 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 US government partnership, Westinghouse is not a owner of those facilities. We are simply the provider of the engineering design and technology services the 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 US government. And that is the construct of the facility. Could that create opportunities in the future? Should the US government look to bring partners into specific projects perhaps, but that has not been discussed or agreed at this point. It's only in con context of something like Santee Cooper, which is a live opportunity outside the construct of our partnership with the US government where we're con 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. 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. I wasn't inferring that you would take the risk, but I and there's been hesitancy by other participants to maybe get involved because they don't wanna show the I'm just curious if the US government has alleviated all the concerns for other stakeholders, potentially. I wouldn't say it's our job to speak on behalf of the US government, but maybe to sit. Be a little bit more help 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 US 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 protection. And we obviously, nothing's 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 buying agreement, is that something that could be done by year end? Or is that sort of 2026? Connor Teskey: So perhaps just to be clear, are you speaking about the US government office of the US? Yeah. The government opportunity. Yep. Yeah. Sure. So we expect that to be done within ninety days of the signing, of the announcement. Two weeks ago. So I guess that positions us to right around year Mark Jarvi: Got it. Okay. Thanks. Operator: And our next question comes from the line of Mark Strauss with JP Morgan. Mark Strauss: Yes. Good morning. Thanks for taking our questions. Connor, I appreciate you don't want speak on behalf of the U. S. Government. But you know, to the extent that you're you're able to share this do you think the government is more committed to the $80 billion back up where they come more committed to the 10 reactors. Basically, I appreciate that you're not taking the risk of the overruns or call 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 could 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 hear again, it's not our position to speak on behalf of the US 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's 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 you know, is it 80 billion or 82 billion or 78 billion? What they want to see is The US be the leading provider of nuclear power generation in the world? And that we 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 US nuclear technology to other regions around the world. that we feel we cannot stress enough about our partnership with the US government is, yes, the 80 billion of reactor orders is very beneficial But what this really is kick start 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 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 US 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 three stages. Can you talk about how we should be thinking about the margin during each of those stages? Either on EBITDA or FFO? Thank you. Connor Teskey: Sure. So Westinghouse way to think about it is the energy systems division of Westinghouse. Typically operates at least a 20% margin. That may fluctuate year to year, but over the life of this facility, about In the energy systems division. We expect those margins to go up with economies of on the back of an order of this size, but his it's been about 20% margins, and we would expect that to almost be the floor going forward. Mark Strauss: Alright. Thank you. Operator: And our next question comes from the line of Valtese Sidhu with National Bank of Canada. Valtese Sidhu: Thank you, and good morning, everyone. Connor has have there been any changes in your perspective regarding the eligibility of products in your US development pipeline through 2029 for federal tax credits? Connor Teskey: 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 US development pipeline out to 2029, we feel very comfortable about our position there. The second consideration there is obviously in and around Fioch. And there really isn't much more clarity at this time around the specifics of the fiat definition. 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 US suppliers. So what we would say is on the safe harboring side, we feel in a great position. And on the FIAX side, we continue to wait and will react to accordingly. But similar to other regulatory changes, we expect it to be manageable within our portfolio. Valtese Sidhu: Great. And just on the asset rotation side of business, 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'd be great. Connor Teskey: 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 twelve 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 Nailwind. 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 two to three quarters. That's probably where the bulk of our monetization activity is currently planned. Valtese Sidhu: Very helpful. You for the color. I'll leave you there. Connor Teskey: Thank you. Operator: Your next question comes from the line of Benjamin Vaughn with BMO. Benjamin Pham: Had a couple of follow-up questions on the nuclear deployment strategy. Can you talk about potentially in the next five years context, what do you think nuke is gonna be as a percentage of your business? Is it potentially a new business line that you can break out? And then and maybe just related to that, it might be bit of an odd question. So just given what mentioned, is there any sort of like internal constraints or ESG constraints on how big that exposure could be for renewable. Connor Teskey: 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 over allocate 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 is certainly at its highest level. That we've ever seen. And 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 you know, overtakes something like our hydro FFO that is north of 40%. So could we see nuclear grow from its current position? Absolutely. But it's gonna grow in proportion to a business that's seeing growth across essentially every sector that we operate. Benjamin Pham: Okay. Got it. And then let's switch it to the Sante opportunity Can you talk about, I know you're looking to derisk construction as much as you can, But can you talk high level just the nuclear opportunity? Where if it's in the target return? Is it that 12 to 15%? Are you targeting above that? And related to that, how do you think about the synergies of Westinghouse potential on the services side? In a total return. Connor Teskey: So across Brookfield Renewable, we target 12 to 15% for 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 west inghouse and what it provides for us, Westinghouse is 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 plant 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. Benjamin Pham: Okay. Got it. That's what I was I was thinking. Just wanted to clarify. May one last thing then. I know it's I don't know if 5% today. It's it's got lot of ways to go. Do you do you but do you think though, like, dollar for dollar if you look at the new side of things? Like, isn't it in a sense of the best reward right now? Because it sounds like the returns are above your targets and then we're, you know, not a lot of comps out there, but we're seeing new exposure trades of, like, 20, 30 times EBITDA. Connor Teskey: Similar to how we approach every part of our business, we're gonna 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 base load 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 US 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. Benjamin Pham: Okay. Got it. Thanks. Thank you, Connor. Connor Teskey: Thank you. Operator: I'll now hand the call back over to CEO Connor Teskey. Any closing remarks. Connor Teskey: Thank you, everyone, for joining our 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. Operator: Ladies and gentlemen, thank you for participating. This does conclude today's program. And you may now disconnect.
