02/03/2025 - Brookfield Corporation: 2024 Financial Statements and MD&A (English)

Management's Discussion and Analysis

For the year ended December 31, 2024

This Management's Discussion and Analysis for the year ended December 31, 2024 is provided as of February 28, 2025. Unless the context indicates or requires otherwise, the terms, "we", "us", and "our company" mean (i) when such references refer to a point in time before December 24, 2024, Brookfield Renewable Holdings Corporation (formerly, Brookfield Renewable Corporation) "BRHC" and its direct subsidiaries, and indirect operating entities as a group; (ii) when such references refer to a point in time on or after December 24, 2024, Brookfield Renewable Corporation (formerly 1505127 B.C.Ltd.) ("BEPC"). BEPC is an indirect controlled subsidiary of Brookfield Renewable Partners L.P. ("BEP", or collectively with its subsidiaries, including BRHC and our company, "Brookfield Renewable") (NYSE: BEP; TSX:BEP.UN). Unless the context indicates or requires otherwise, the "partnership" means Brookfield Renewable and its controlled subsidiaries, excluding BRHC and our company. The ultimate parent of Brookfield Renewable and Brookfield Renewable Corporation is Brookfield Corporation ("Brookfield Corporation"). Brookfield Corporation and its subsidiaries, other than Brookfield Renewable and Brookfield Renewable Corporation, and unless the context otherwise requires, includes Brookfield Asset Management Ltd. ("Brookfield Asset Management"), are also individually and collectively referred to as "Brookfield" in this Management's Discussion and Analysis. The term "Brookfield Holders" means Brookfield, Brookfield Wealth Solutions and their related parties.

In addition to historical information, this MD&A contains forward-looking statements. Readers are cautioned that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. See "Cautionary Statements Regarding Forward-Looking Statements".

BEPC's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), which require estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and the amounts of revenue and expense during the reporting periods.

References to $, C$, €, R$, and COP are to United States ("U.S.") dollars, Canadian dollars, Euros, Brazilian reais and Colombian pesos, respectively. Unless otherwise indicated, all dollar amounts are expressed in U.S. dollars.

For a description on our operational and segmented information and for the non-IFRS financial measures we use to explain our financial results see "Part 9 - Presentation to Stakeholders and Performance Measurement". For a reconciliation of the non-IFRS financial measures to the most comparable IFRS financial measures, see "Part 4 - Financial Performance Review on Proportionate Information - Reconciliation of non-IFRS measures". This Management's Discussion and Analysis contains forward-looking information within the meaning of U.S. and Canadian securities laws. Refer to "Part 10 - Cautionary Statements" for cautionary statements regarding forward-looking statements and the use of non- IFRS measures. Our Annual Report and additional information filed with the Securities Exchange Commission ("SEC") and with securities regulators in Canada are available on our website (https://bep.brookfield.com), on the SEC's website (www.sec.gov), or on SEDAR+ (www.sedarplus.ca).

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PART 1 - OVERVIEW

BUSINESS OVERVIEW

BEPC is a Canadian corporation incorporated on October 3, 2024 under the laws of British Columbia. Our company was established by Brookfield Renewable to be an alternative investment vehicle for investors who prefer owning securities through a corporate structure. While our operations are primarily located in the United States, Brazil, Colombia, and Europe, shareholders will, on economic terms, have exposure to all regions BEP operates in as a result of the exchange feature attaching to the Class A exchangeable subordinate voting shares ("BEPC exchangeable shares"), whereby BEPC will have the option to meet an exchange request by delivering cash or non- voting limited partnership units of BEP ("LP units").

The BEPC exchangeable shares of our company are structured with the intention of being economically equivalent to the LP units. We believe economic equivalence is achieved through identical dividends and distributions on the BEPC exchangeable shares and the LP units and each BEPC exchangeable share being exchangeable at the option of the holder for one LP unit at any time. Given the economic equivalence, we expect that the market price of the BEPC exchangeable shares will be significantly impacted by the market price of the LP units and the combined business performance of our company and Brookfield Renewable as a whole. In addition to carefully considering the disclosure made in this document, shareholders are strongly encouraged to carefully review the partnership's periodic reporting. The partnership is required to file reports, including annual reports on Form 20- F, and other information with the United States Securities and Exchange Commission (the "SEC"). The partnership's SEC filings are available to the public from the SEC's website at https://www.sec.gov. Copies of documents that have been filed with the Canadian securities authorities can be obtained at https://www.sedarplus.ca. Information about the partnership, including its SEC filings, is also available on its website at https:// bep.brookfield.com. The information found on, or accessible through https://bep.brookfield.com is not incorporated into and does not form a part of this MD&A.

Our company, Brookfield Renewable Holdings Corporation ("BRHC"), our subsidiaries and Brookfield Renewable, (together our "Group"), target a total return of 12% to 15% per annum on the renewable assets that we own, measured over the long-term. Our group intends to generate this return from cash flows from our operations plus growth through investments in upgrades and expansions of our asset base, as well as acquisitions and capital recycling initiatives. Brookfield Renewable determines its distributions based primarily on an assessment of its operating performance. Our group uses Funds From Operations ("FFO") to assess operating performance which can be used on a per unit basis as a proxy for future distribution growth over the long-term. For further details, see the "Performance Disclosures" section of this MD&A.

The Arrangement

On December 24, 2024, the partnership, BRHC, and the company completed an arrangement (the "Arrangement"), pursuant to which 1505127 B.C. Ltd. (which was renamed Brookfield Renewable Corporation) became the "successor issuer" (as defined in NI 44-101) to the former BEPC, which was renamed Brookfield Renewable Holdings Corporation and BRHC's class A exchangeable subordinate voting shares were delisted. The purpose of the Arrangement was to allow BEPC to maintain the benefits of its business structure, while addressing proposed amendments to the Income Tax Act (Canada) that were expected to result in additional costs to the company if no action was taken. In connection with the Arrangement, among other things, (i) holders of class A exchangeable subordinate voting shares of BRHC, other than Brookfield, received BEPC exchangeable shares in exchange for their class A exchangeable subordinate voting shares of BRHC on a one-for-one basis; (ii) Brookfield transferred their class A exchangeable subordinate voting shares of BRHC to BEPC in exchange for class A.2 exchangeable shares on a one-for-one basis; (iii) the class A exchangeable subordinate voting shares of BRHC were delisted; (iv) the exchangeable shares of BEPC were listed on the NYSE and the TSX; (v) the partnership transferred 55 class B shares of BRHC to BEPC in exchange for 55 class B shares of BEPC; and (vi) 43,605 class B shares of BEPC were issued to the partnership in exchange for $1 million. The class A.2 exchangeable shares are exchangeable by Brookfield into BEPC exchangeable shares (subject to an ownership cap that limits the exchange by Brookfield of class A.2 exchangeable shares such that exchanges by Brookfield may not result in Brookfield

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owning 9.5% or more of the aggregate fair market value of all issued and outstanding shares of BEPC) or LP units on a one-for-one basis.

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PART 2 - FINANCIAL PERFORMANCE REVIEW ON CONSOLIDATED INFORMATION

The following table reflects key financial data for the year ended December 31:

(MILLIONS, EXCEPT AS NOTED)		2024			2023			2022
....................................................................................................................Revenues	$	4,142		$	3,967		$	3,778
Direct operating costs		(1,767)			(1,466)			(1,174)
Management service costs		(106)			(88)			(169)
Interest expense		(1,667)			(1,258)			(1,032)
Depreciation		(1,262)			(1,342)			(1,179)
Remeasurement of interests held in BRHC by the partnership		58			-			-
Remeasurement of BEPC exchangeable and BRHC class A.2 exchangeable shares		61			-			-
Remeasurement of exchangeable and class B shares of BRHC		574			(106)			1,800
Income tax expense		(167)			(73)			(118)
Net income		433			308			1,850
		Average FX rates to USD
..................................................................................................................................€		0.92			0.92			0.95
R$		5.39			4.99			5.16
COP		4,071			4,328			4,253

Current Year Variance Analysis (2024 vs 2023)

Revenues totaling $4,142 million represents an increase of $175 million compared to prior year due to the growth of our business, inflation escalation on contracted generation and high asset availability. Recently acquired and commissioned facilities contributed 4,107 GWh of generation and $156 million of revenues, which was partly offset by recently completed asset sales that reduced generation by 2,572 GWh and revenues by $167 million. On a same store, constant currency basis, revenues increased by $155 million as the benefits from inflation escalation on our contracted generation in Brazil and Colombia were offset by lower resources at our hydroelectric portfolios.

The strengthening of the Colombian peso relative to the U.S. dollar compared to the prior year was partially offset by the relative weakening of the Brazilian real, increasing revenues by $31 million, offset by a $36 million unfavorable foreign exchange impact on our operating and interest expenses.

Direct operating costs totaled $1,767 million, representing an increase of $301 million compared to prior year due to additional costs from our recently acquired and commissioned facilities, higher power purchases in Colombia, which are passed through to our customers and the above noted foreign exchange fluctuations partly offset by our recently completed asset sales.

Management service costs totaled $106 million representing an increase of $18 million compared to prior year.

Interest expense totaling $1,667 million represents an increase of $409 million compared to prior year due to recent acquisitions, financing initiatives to fund development activities, the re-classification of distributions on the BRHC Class C shares as interest expense due to their treatment as a liability as a result of the Arrangement, and the above noted foreign exchange fluctuations.

Remeasurement of shares classified as financial liabilities resulted in a $693 million gain compared to a $106 million loss in the prior year due to the movement in the LP unit and BEPC exchangeable share price during the periods.

Depreciation expense totaling $1,262 million represents a decrease of $80 million compared to prior year due to asset sales.

Net income totaling $433 million represents an increase of $125 million over the same period in the prior year due to the above noted items, offset by other income relating to non-recurring items that benefited the prior year.

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Prior Year Variance Analysis (2023 vs 2022)

Revenues totaling $3,967 million represents an increase of $189 million over the same period in the prior year due to the growth of our business and higher realized prices. Recently acquired and commissioned facilities contributed 2,833 GWh of generation and $163 million of revenues, which was partly offset by recently completed asset sales that reduced generation by 1,134 GWh and revenues by $89 million. On a same store, constant currency basis, revenues increased by $92 million as the benefits from higher realized prices across most markets on the back of inflation escalation and commercial initiatives were partially offset by lower hydrology at our Colombian hydroelectric assets and lower average revenue per MWh at our European wind and solar assets as a result of adjustments to the regulated price earned in Spain that decreased revenue in the short term but has no impact on the value of the asset given the regulatory construct.

The weakening of the U.S. dollar relative to the prior year across most currencies increased revenues by $23 million, offset by a $28 million unfavorable foreign exchange impact on our operating and interest expenses.

Direct operating costs totaling $1,466 million, represents an increase of $292 million compared to prior year due to additional costs from our recently acquired and commissioned facilities and higher power purchases in Colombia, which are passed through to our customers, partly offset by our recently completed asset sales and the above noted strengthening of the U.S. dollar.

Management service costs totaling $88 million represent a decrease of $81 million over the same period in the prior year.

Interest expense totaling $1,258 million represents an increase of $226 million over the same period in the prior year due to growth in our portfolio and upfinancings completed in the prior year at our North American and South American hydroelectric assets to fund the growth of our business.

Remeasurement of BEPC exchangeable shares resulted in a $106 million loss compared to a $1,800 gain in the prior year due to the movement in the LP unit price during the periods.

Depreciation expense totaling $1,342 million represents an increase of $163 million over the same period in the prior year due to the growth of our business.

Net income totaling $308 million represents a decrease of $1,542 million over the same period in the prior year due to the above noted items, other income relating to non-recurring income and a gain on sale of non-core wind assets.

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PART 3 - ADDITIONAL CONSOLIDATED FINANCIAL INFORMATION

SUMMARY CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

The following table provides a summary of the key line items on the audited annual consolidated statements of financial position as at December 31:

(MILLIONS)	December 31, 2024	December 31, 2023
Current assets	3,114	3,298
Equity-accountedinvestments	753	644
Property, plant and equipment, at fair value	38,696	44,038
Total assets	44,129	49,421
Non-recourseborrowings	13,775	16,072
Deferred income tax liabilities	6,493	5,819
Interests held in BRHC by Brookfield Renewable	4,432	-
BEPC exchangeable and class A.2 exchangeable shares	4,168	-
Exchangeable and class B shares of BRHC	-	4,721
Total equity in net assets	12,108	17,129
Total liabilities and equity	44,129	49,421
	FX rates to USD
€	0.97	0.91
R$	6.19	4.84
COP	4,409	3,822

Property, plant and equipment

Property, plant and equipment totaled $38.7 billion as at December 31, 2024 compared to $44.0 billion as at December 31, 2023, representing a decrease of $5.3 billion. Our continued investments in the development of power generation assets and our sustaining capital expenditure increased property, plant and equipment by $0.8 billion. Our annual revaluation which recognized the benefit of higher power prices across select markets and the expected growth in demand for renewable power increased property, plant and equipment by $3.1 billion. The increases were offset by dispositions and assets classified as held for sale that decreased property, plant and equipment by $1.2 billion, the strengthening of the U.S. dollar versus most currencies that decreased property plant and equipment by $2.5 billion and depreciation expense that reduced property, plant and equipment by $1.3 billion. During the year we also transferred our 100% interest in a portfolio of 5,900 MW operating and under construction assets, with a 6,100 MW development pipeline in the U.S. to a subsidiary of Brookfield Renewable, which reduced property, plant and equipment by $4.1 billion.

See Note 12 - Property, plant and equipment, at fair value in our audited annual consolidated financial statements for information on the revaluation assumptions used and sensitivity analysis.

Shares classified as financial liability

Prior to the Arrangement, class C shares were classified as financial liabilities due to their cash redemption feature, however they met certain qualifying criteria and were presented as equity instruments given the narrow scope presentations existing in IAS 32. Following the Arrangement and upon consolidation of BRHC into our company, the class C shares are now presented as financial liabilities as Interests held in BRHC at a value of $4,432 million.

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As a result of the Arrangement, holders of the BRHC exchangeable shares, other than Brookfield, received our company's exchangeable shares in exchange for their BRHC exchangeable shares on a one-for-one basis and Brookfield transferred their exchangeable shares of BRHC to our company in exchange for class A.2 shares on a one-for-one basis. The exchangeable shares and class A.2 exchangeable shares, upon consolidation into our company, are classified as liabilities at a value of $4,168 million.

RELATED PARTY TRANSACTIONS

Our company's related party transactions are in the normal course of business, are recorded at the exchange amount, and are primarily with the partnership and Brookfield.

Since inception, our parent company has had a Master Services Agreement with Brookfield. The Master Services Agreement was amended in connection with the completion of the Arrangement to include, among other things, BEPC as a service recipient.

Our company sells electricity to Brookfield through a single long-term PPA across our New York hydroelectric facilities.

In 2011, on formation of Brookfield Renewable, Brookfield transferred certain development projects to subsidiaries of our company for no upfront consideration but is entitled to receive variable consideration on commercial operation or sale of these projects. These projects have been transferred to our company as part of the special distribution.

Our company has entered into voting agreements with Brookfield and the partnership, whereby our company gained control of the entities that own certain renewable power generating facilities in the United States and Brazil, as well as TerraForm Power. Our company has also entered into a voting agreement with its consortium partners in respect of the Colombian business. The voting agreements provide our company the authority to direct the election of the Boards of Directors of the relevant entities, among other things, and therefore provide our company with control. Accordingly, our company consolidates the accounts of these entities.

Our company may participate with institutional partners in Brookfield Americas Infrastructure Fund, Brookfield Infrastructure Fund II, Brookfield Infrastructure Fund III, Brookfield Infrastructure Fund IV, Brookfield Infrastructure Fund V, Brookfield Infrastructure Income Fund, Brookfield Global Transition Fund I, Brookfield Global Transition Fund II, and Brookfield Infrastructure Debt Fund ("Private Funds"), each of which is a Brookfield sponsored fund, and in connection therewith, our company, together with our institutional partners, has access to financing using the Private Funds' credit facilities.

From time to time, in order to facilitate investment activities in a timely and efficient manner, our company will fund deposits or incur other costs and expenses (including by use of loan facilities to consummate, support, guarantee or issue letters of credit) in respect of an investment that ultimately will be shared with or made entirely by Brookfield sponsored vehicles, consortiums and/or partnerships (including private funds, joint ventures and similar arrangements), our company, or by co-investors.

Brookfield has provided a $400 million committed unsecured revolving credit facility maturing in December 2029 and the draws bear interest at the Secured Overnight Financing Rate ("SOFR") plus a margin. During the current period, there were no draws on the committed unsecured revolving credit facility provided by Brookfield. Brookfield may from time to time place funds on deposit with the company which are repayable on demand including any interest accrued. There were nil funds placed on deposit with the company as at December 31, 2024 (December 31, 2023: nil). The interest expense on the Brookfield revolving credit facility and deposit for the year ended December 31, 2024 totaled nil (2023: nil and 2022: nil).

On March 26, 2024, as part of normal course organizational structuring initiatives of our group, the company transferred 100% of its interest in a portfolio of 5,900 MW of operating and under construction assets, with a 6,100 MW development pipeline in the U.S. to a subsidiary of the partnership, for a nominal amount of consideration, to achieve the optimal holding structure for tax purposes. As a result of the disposition, the company derecognized $4.5 billion of total assets, $3.2 billion of total liabilities and $1.3 billion of non-controlling interest from the consolidated statements of financial position. This resulted in a loss on disposition of $63 million recognized within contributed surplus in the consolidated statements of changes in equity.

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On December 24, 2024, the partnership, BRHC, and the company completed an arrangement (the "Arrangement"), pursuant to which 1505127 B.C. Ltd. (which was renamed Brookfield Renewable Corporation) became the "successor issuer" (as defined in NI 44-101) to the former BEPC, which was renamed Brookfield Renewable Holdings Corporation and BRHC's class A exchangeable subordinate voting shares were delisted. The purpose of the Arrangement was to allow BEPC to maintain the benefits of its business structure, while addressing proposed amendments to the Income Tax Act (Canada) that were expected to result in additional costs to the company if no action was taken. In connection with the Arrangement, among other things, (i) holders of class A exchangeable subordinate voting shares of BRHC, other than Brookfield, received BEPC exchangeable shares in exchange for their class A exchangeable subordinate voting shares of BRHC on a one-for-one basis; (ii) Brookfield transferred their class A exchangeable subordinate voting shares of BRHC to BEPC in exchange for class A.2 exchangeable shares on a one-for-one basis; (iii) the class A exchangeable subordinate voting shares of BRHC were delisted; (iv) the exchangeable shares of BEPC were listed on the NYSE and the TSX; (v) the partnership transferred 55 class B shares of BRHC to BEPC in exchange for 55 class B shares of BEPC; and (vi) 43,605 class B shares of BEPC were issued to the partnership in exchange for $1 million. The class A.2 exchangeable shares are exchangeable by Brookfield into BEPC exchangeable shares (subject to an ownership cap that limits the exchange by Brookfield of class A.2 exchangeable shares such that exchanges by Brookfield may not result in Brookfield owning 9.5% or more of the aggregate fair market value of all issued and outstanding shares of BEPC) or LP units on a one-for-one basis.

In connection with the Arrangement, the company entered into two deposit agreements with one or more subsidiaries of the partnership, one as depositor or lender and one as depositee or borrower. Each deposit agreement contemplates potential deposit arrangements pursuant to which the parties thereunder would mutually agree to deposit funds thereunder from time to time on a demand basis at a specified rate of interest. Additionally, the company, as borrower, entered into a credit agreement with a subsidiary of the partnership, as lender, pursuant to which the subsidiary of the partnership established a revolving credit facility in the aggregate principal amount of $150 million in favour of the company.

The credit agreement has a ten-year term, subject to automatic one-year extensions occurring annually unless terminated by the lender.

From time to time Brookfield Wealth Solutions and its related entities may participate in capital raises undertaken by the company. Brookfield Wealth Solutions frequently participates alongside market participants at market rates and as at December 31, 2024, $13 million of non-recourse borrowings (2023: $14 million) were due to Brookfield Wealth Solutions. As at December 31, 2024, the company had $58 million (2023: $184 million) of borrowings from Brookfield Wealth Solutions classified as due to related party. Subsidiaries of Brookfield Wealth Solutions may from time to time decide to participate in the company's equity offerings.

In addition, our company has executed, amended, or terminated other agreements with the partnership and Brookfield that are described in Note 27 - Related party transactions in our audited consolidated financial statements. For a description of certain of our agreements with Brookfield and the partnership, please see Item 7.B "Related Party Transactions" in our Form 20-F for the annual period ended December 31, 2024.

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