Brookfield Renewable Energy Partners L.P.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED MARCH 31, 2015 AND 2014

HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2015

Operating Results

The entire portfolio continued to maintain high availability and reliability with no material unplanned outages. Total generation was 5,823 GWh, compared to the long-term average of 6,516 GWh and to 5,711 GWh from the prior year. Revenues were $441 million, compared to $480 million in the prior year. Net income was $51 million, compared to $125 million in the prior year.

Adjusted EBITDA was $338 million, compared to $360 million in the prior year. Funds From Operations was $153 million, compared to $185 million in the prior year.

North America

·The hydroelectric portfolio generated 3,763 GWh, below the long-term average of 3,995 GWh and a decrease from the prior year of 139 GWh. Lower generation levels in the United States were partly offset by the above long-term average inflows in our Canadian portfolio

·The incremental generation and revenues from a full period’s contribution from the hydroelectric facilities acquired last year in Pennsylvania and Maine was 224 GWh and $20 million, respectively

·The hydroelectric facility in British Columbia commissioned last year contributed 50 GWh and $7 million of revenues

·The wind portfolio experienced lower wind conditions resulting in generation levels of 484 GWh, below the long-term average of 635 GWh and a decrease from prior year generation of 610 GWh

Latin America

·The hydroelectric portfolio generated 739 GWh, below assured levels of 947 GWh and a decrease of 360 GWh from the prior year as a result of the continuing drought conditions in Brazil. The impact of the adverse conditions on our financial results was partly reduced by our participation in the balancing pool administered by the Brazilian government, and by maintaining a lower level of contracted generation 

Europe

·The wind portfolio experienced higher wind conditions resulting in generation levels of 451 GWh, above the long-term average of 440 GWh.  The Irish wind facilities acquired last year contributed 360 GWh and $31 million of revenues, while the wind facilities acquired in Portugal in February 2015 contributed 91 GWh and $9 million of revenues

Growth and Development

Along with our institutional partners, we completed acquisitions of 436 MW in operating renewable power generation facilities and 102 MW of advanced renewable development projects:

·313 MW operating renewable power generation portfolio in Brazil which comprises of 43 MW of hydroelectric, 150 MW of wind, and 120 MW of biomass generating capacity. The portfolio is expected to generate 1,264 GWh annually. We also acquired a 55 MW biomass development project expected to generate 186 GWh annually that will be fully commissioned in 2016. The acquisition of a 120 MW hydroelectric facility in Brazil, expected to generate 527 GWh annually, is expected to close in the second quarter of 2015

·123 MW wind portfolio in Portugal expected to generate 260 GWh annually

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·Two hydroelectric development projects in Brazil totalling 47 MW expected to generate 280 GWh annually and be fully commissioned in 2017.  These projects will begin development in 2015

We achieved full commissioning on 125 MW of wind facilities and continued construction on scope, schedule and budget on 37 MW of development projects:

·Two Irish wind facilities totaling 125 MW, expected to generate 349 GWh annually, were fully commissioned

·12 MW Irish wind development project, expected to generate 33 GWh annually, is on schedule to be fully commissioned in mid-2015

·25 MW hydroelectric development project in Brazil, expected to generate 119 GWh annually, is on schedule to be fully commissioned in 2017

Brookfield Renewable retains an approximate 40% controlling interest in the above-noted acquisitions, recently commissioned facilities and development projects.

Liquidity and Capital Resources

Our available liquidity at quarter-end included approximately $1.3 billion of cash and cash equivalents and the available portions of credit facilities. Our debt to total capitalization is 42% and approximately 77% of our borrowings are non-recourse to Brookfield Renewable.

During the quarter, we completed the following financing initiatives:

·Issued C$400 million ($317 million) of medium-term corporate notes, maturing in June 2025 at a fixed rate of 3.75%

·Secured an 18-month extension on $75 million of debt associated with a portfolio of hydroelectric and wind facilities in the United States held through the Brookfield Americas Infrastructure Fund. The debt bears interest at LIBOR plus 2.75%, and matures in August 2016

·Refinanced indebtedness associated with a 45 MW hydroelectric portfolio in British Columbia by issuing C$90 million ($76 million) of bonds with an interest rate of 2.95%, maturing in May 2023.

Corporate borrowings and subsidiary borrowings have weighted-average terms of approximately seven and ten years, respectively.

We increased LP Unitholder distributions to $1.66 per LP Unit on an annualized basis, an increase of 11 cents per LP Unit, which took effect with the distribution payable on March 31, 2015.

Brookfield Renewable Energy Partners L.P.Management’s Discussion and AnalysisMarch 31, 2015

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HISTORICAL OPERATIONAL AND FINANCIAL INFORMATION

THREE MONTHS ENDED MARCH 31	2015		2014
(MILLIONS, EXCEPT AS NOTED)
Operational information:(1)
Capacity (MW)		7,265		6,057
Long-term average generation (GWh)(2)		6,516		5,770
Actual generation (GWh)(2)		5,823		5,711
Average revenue ($ per MWh)		76		84
Selected financial information:
Revenues	$	441	$	480
Adjusted EBITDA(3)		338		360
Funds From Operations(3)		153		185
Adjusted Funds From Operations(3)		138		171
Net income		51		125
Funds From Operations per LP Unit(3)(4)		0.56		0.70
Distributions per LP Unit(5)(6)		1.59		1.48

		Mar 31		Dec 31
(MILLIONS, EXCEPT AS NOTED)			2015		2014
Balance sheet data:
Property, plant and equipment, at fair value		$	18,361	$	18,566
Equity-accounted investments			256		273
Total assets			19,685		19,849
Long-term debt and credit facilities			7,834		7,678
Deferred income tax liabilities			2,547		2,637
Total liabilities			11,130		10,968
Preferred equity			667		728
Participating non-controlling interests -
	in operating subsidiaries		2,323		2,062
General partnership interest in a holding
	subsidiary held by Brookfield		54		59
Participating non-controlling interests -  in a
	holding  subsidiary - Redeemable
	/Exchangeable units held by Brookfield		2,617		2,865
Limited partners' equity			2,894		3,167
Total equity			8,555		8,881
Debt to total capitalization(7)			42%		40%

⁽¹⁾Includes 100% of capacity and generation from equity-accounted investments.

⁽²⁾For assets acquired or reaching commercial operation during the year, this figure is calculated from the acquisition or commercial operation date.

⁽³⁾Non-IFRS measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures”, “Financial Review by Segments for the Three Months Ended March 31, 2015”.

⁽⁴⁾For the three months ended March 31, 2015, weighted average LP units, Redeemable/Exchangeable units and General Partnership units totaled 275.7 million (2014: 265.3 million).

⁽⁵⁾Figure is based on last twelve months of operations.

⁽⁶⁾Represents distributions per unit to holders of Redeemable/Exchangeable partnership units, LP Units and GP interest.

⁽⁷⁾Total capitalization is calculated as total debt plus deferred income tax liabilities, net of deferred income tax assets, and equity.

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This Management’s Discussion and Analysis for the three months ended March 31, 2015 is provided as of May 6, 2015. Unless the context indicates or requires otherwise, the terms “Brookfield Renewable”, “we”, “us”, and “our” mean Brookfield Renewable Energy Partners L.P. and its controlled entities.

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

Certain comparative figures have been reclassified to conform to the current year’s presentation.

Unless otherwise indicated, all dollar amounts are expressed in United States (“U.S.”) dollars.

The ultimate partner of Brookfield Renewable is Brookfield Asset Management Inc. (“Brookfield Asset Management”). Brookfield Asset Management and its subsidiaries, other than Brookfield Renewable, are also individually and collectively referred to as Brookfield in this Management’s Discussion and Analysis.

PRESENTATION TO PUBLIC STAKEHOLDERS

Brookfield Renewable’s consolidated equity interests include the non-voting limited partnership units ("LP Units") held by public unitholders, Redeemable/Exchangeable partnership units in Brookfield Renewable Energy L.P. (“BRELP”), a holding subsidiary of Brookfield Renewable, held by Brookfield (“Redeemable/Exchangeable partnership units”), and a general partnership interest in BRELP held by Brookfield (“GP interest”). The LP Units and the Redeemable/Exchangeable partnership units have the same economic attributes in all respects, except that the Redeemable/Exchangeable partnership units provide Brookfield the right to request that their units be redeemed for cash consideration. In the event that Brookfield exercises this right, Brookfield Renewable has the right, at its sole discretion, to satisfy the redemption request with LP Units, rather than cash, on a one-for-one basis. Brookfield, as holder of Redeemable/Exchangeable partnership units, participates in earnings and distributions on a per unit basis equivalent to the per unit participation of the LP Units. As Brookfield Renewable, at its sole discretion, has the right to settle the obligation with LP Units, the Redeemable/Exchangeable partnership units are classified under equity, and not as a liability. 

Given the exchange feature referenced above, we are presenting LP Units, Redeemable/Exchangeable partnership units, and the GP interest as separate components of consolidated equity. This presentation does not impact the total income, per unit or share information, or total consolidated equity.

As at the date of this report, Brookfield owns an approximate 62% LP Unit interest, on a fully-exchanged basis, and all general partnership interests in Brookfield Renewable, representing a 0.01% interest, while the remaining  approximately 38% is held by the public.

Performance Measurement

We present our key financial metrics based on total results prior to distributions made to LP Unitholders, the Redeemable/Exchangeable Unitholders and holders of the GP interest. In addition, our operations are segmented by the type of power generation (Hydroelectric, Wind, and Other, which includes Co-gen and Biomass) with Hydroelectric and Wind further segmented by geography (North American, which is comprised of the United States and Canada segments; Latin America, which includes the former Brazil segment; and Europe), as that is how Brookfield Renewable’s Chief Executive Officer, President and Chief Operating Officer, and Chief Financial Officer (collectively, the chief operating decision maker, or “CODM”) review our results, manage operations and allocate resources. Accordingly, we report our

Brookfield Renewable Energy Partners L.P.Management’s Discussion and AnalysisMarch 31, 2015

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results in accordance with these segments. Refer to Note 14 – Segmented information in our interim consolidated financial statements for further details.

One of our primary business objectives is to generate reliable and growing cash flows while minimizing risk for the benefit of all stakeholders. We monitor our performance in this regard through four key metrics — i) Net Income (loss), ii) Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), iii) Funds From Operations,  and iv) Adjusted Funds From Operations.

It is important to highlight that Adjusted EBITDA, Funds From Operations, and Adjusted Funds From Operations do not have any standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other companies. We provide additional information on how we determine Adjusted EBITDA, Funds From Operations, and Adjusted Funds From Operations, and we provide reconciliations to net income and cash flows from operating activities. See “Financial Review by Segments for the Three Months Ended March 31, 2015”.

Net Income (Loss)

Net income (loss) is calculated in accordance with IFRS.

Adjusted EBITDA

Adjusted EBITDA means revenues less direct costs (including energy marketing costs), plus our share of cash earnings from equity-accounted investments and other income, before interest, income taxes, depreciation, management service costs and the cash portion of non-controlling interests.

Funds From Operations

Funds From Operations is defined as Adjusted EBITDA less interest, current income taxes and management service costs, which is then adjusted for the cash portion of non-controlling interests.

Our payout ratio is defined as distributions to Redeemable/Exchangeable partnership units, LP Units and the GP interest, including general partnership incentive distributions, divided by Funds From Operations.

Adjusted Funds From Operations

Adjusted Funds From Operations is defined as Funds From Operations less Brookfield Renewable’s share of adjusted sustaining capital expenditures (based on long-term sustaining capital expenditure plans).

Statement Regarding Forward-Looking Statements and Use of Non-IFRS Measures

This Management's Discussion and Analysis containsforward-looking information within the meaning of U.S. and Canadian securities laws. We may make such statements in this Management's Discussion and Analysis, in other filings with the U.S. Securities and Exchange Commission (“SEC”) or in other communications with Canadian regulators - see “Cautionary Statement Regarding Forward-Looking Statements”. We make use of non-IFRS measures in this Management's Discussion and Analysis- see “Cautionary Statement Regarding Use Of Non-IFRS Measures”. This Management's Discussion and Analysis, our Form 20-Fand additional information filed with the SEC and with securities regulators in Canada are available on our website at www.brookfieldrenewable.com, on the SEC’s website at www.sec.gov or on SEDAR’s website at www.sedar.com.

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GENERATION AND FINANCIAL REVIEW FOR THE THREE MONTHS ENDED MARCH 31, 2015

The following table reflects the actual and long-term average generation for the three months ended March 31:

							Variance of Results
									Actual vs.
			Actual Generation(1)		LTA Generation(1)		Actual vs. LTA		Prior Year
GENERATION (GWh)			2015	2014	2015	2014	2015	2014
Hydroelectric
	North America
		United States	2,535	2,591	3,213	2,794	(678)	(203)	(56)
		Canada	1,502	1,311	1,229	1,193	273	118	191
			4,037	3,902	4,442	3,987	(405)	(85)	135
	Latin America		739	1,099	947	929	(208)	170	(360)
			4,776	5,001	5,389	4,916	(613)	85	(225)
Wind
	North America
		United States	203	273	311	311	(108)	(38)	(70)
		Canada	281	337	324	324	(43)	13	(56)
			484	610	635	635	(151)	(25)	(126)
	Europe		451	-	440	-	11	-	451
			935	610	1,075	635	(140)	(25)	325
Other			112	100	52	219	60	(119)	12
Total(2)			5,823	5,711	6,516	5,770	(693)	(59)	112

⁽¹⁾For assets acquired or reaching commercial operation during the year, this figure is calculated from the acquisition or commercial operation date.

⁽²⁾Includes 100% of generation from equity-accounted investments.

We compare actual generation levels against the long-term average to highlight the impact of one of the important factors that affect the variability of our business results. In the short-term, we recognize that hydrology and wind conditions will vary from one period to the next; over time however, we expect our facilities will continue to produce in line with their long-term averages, which have proven to be reliable indicators of performance.

Our risk of a generation shortfall in Latin America continues to be minimized by participation in a hydrological balancing pool administered by the government of Brazil. This program mitigates hydrology risk by assuring that all participants receive, at any particular point in time, a balanced amount of electricity, irrespective of the actual volume of energy generated. The program reallocates energy, transferring surplus energy from those who generated an excess to those who generate less than their assured energy, up to the total generation within the pool. Periodically, low precipitation across the entire country’s system could result in a temporary reduction of generation available for sale which has been the case for the last twelve months. During these periods, we expect that a higher proportion of thermal generation would be needed to balance supply and demand in the country potentially leading to higher overall spot market prices. In anticipation of adverse hydrological conditions, we continue to maintain a lower level of contracted generation, thereby preserving optionality and flexibility in the portfolio and allowing us to capture increased revenues in times of strong power prices.

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The entire portfolio continued to maintain high availability and reliability with no material unplanned outages. Generation for the three months ended March 31, 2015 totaled 5,823 GWh, below the long-term average of 6,516 GWh, and an increase of 112 GWh as compared to the prior year. The generation from existing facilities on a consolidated basis decreased 613 GWh. This was partly mitigated by the non-controlling interests in certain facilities, reducing the impact on Brookfield Renewable to 490 GWh.

The hydroelectric portfolio generated 4,776 GWh, below the long-term average of 5,389 GWh and a decrease of 225 GWh compared to the prior year. 

·Existing hydroelectric facilities generated 4,502 GWh, below the long-term average of 4,942 GWh and a decrease of 499 GWh as compared to the prior year. Higher inflows at our Canadian facilities were offset by the decrease in generation from our United States and Latin American facilities

·The contribution from recently acquired or commissioned facilities resulted in incremental generation of 274 GWh

The wind portfolio generated 935 GWh, below the long-term average of 1,075 GWh and an increase of 325 GWh compared to the prior year.

·Existing wind facilities generated 484 GWh, below the long-term average of 635 GWh, and a decrease of 126 GWh as compared to the prior year. The variance was caused by lower wind conditions across the North American portfolio

·The contribution from recently acquired or commissioned facilities resulted in incremental generation of 451 GWh

Our 105 MW natural gas-fired facility in New York generated 112 GWh as we took advantage of prevailing power prices which were in excess of gas market prices.

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The following table reflects Adjusted EBITDA, Funds From Operations, Adjusted Funds From Operations, and provides a reconciliation to net income for the three months ended March 31:

(MILLIONS, EXCEPT AS NOTED)			2015		2014
Revenues		$	441	$	480
Other income			27		3
Share of cash earnings from equity-accounted investments			4		7
Direct operating costs			(134)		(130)
Adjusted EBITDA(1)			338		360
Interest expense – borrowings			(105)		(101)
Management service costs			(14)		(11)
Current income taxes			(5)		(8)
Less: cash portion of non-controlling interests
	Preferred equity		(8)		(9)
	Participating non-controlling interests - in operating subsidiaries		(53)		(46)
Funds From Operations(1)			153		185
Less: adjusted sustaining capital expenditures(2)			(15)		(14)
Adjusted Funds From Operations(1)			138		171
Add: cash portion of non-controlling interests			61		55
Add: adjusted sustaining capital expenditures			15		14
Other items:
	Depreciation		(158)		(126)
	Unrealized financial instruments loss		(8)		-
	Share of non-cash loss from equity-accounted investments		(1)		(6)
Deferred income tax recovery (expense)			6		(2)
Other			(2)		19
Net income		$	51	$	125
Basic and diluted earnings per LP Unit(3)		$	0.10	$	0.29

⁽¹⁾Non-IFRS measures.  See “Cautionary Statement Regarding Use of Non-IFRS Measures” and “Financial Review by Segments for the Three Months Ended March 31, 2015”.

⁽²⁾Based on long-term sustaining capital expenditure plans.

⁽³⁾Average LP Units outstanding during the period totaled 143.4 million (2014: 133.0 million).

Net income is one important measure of profitability, in particular because it has a standardized meaning under IFRS. The presentation of net income on an IFRS basis for our business will often lead to the recognition of a loss or a year-over-year decrease in income even though the underlying cash flows generated by the assets are supported by strong margins and stable, long-term power purchase agreements. The primary reason for this is that we recognize a significantly higher level of depreciation for our assets than we are required to reinvest in the business as sustaining capital expenditures.

As a result, we also measure our financial results based on Adjusted EBITDA, Funds From Operations, and Adjusted Funds From Operations to provide readers with an assessment of the cash flow generated by our assets and the residual cash flow retained to fund distributions and growth initiatives.

Revenues totaled $441 million which represented a year-over-year decrease of $39 million. The year-over-year decrease in generation from our existing facilities in the United States, combined with a relatively lower pricing environment, resulted in a $35 million decrease in revenues. Higher generation in Canada and annual escalations in our power purchase agreements contributed $8 million.

In Latin America, revenues declined $29 million year-over-year due to the impact of the continued drought conditions.

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Annual escalations in our power purchase agreements partly offset the lower than average wind conditions across our existing wind portfolio, resulting in a year-over-year decrease in revenues of $13 million.

The growth in our hydroelectric and wind portfolios over the last 12 months resulted in incremental revenues of $27 million and $40 million, respectively.

Revenues from our co-generation facilities decreased $10 million, reflecting the temporary suspension of our facility in Ontario partly offset by the increased generation at our 105 MW facility in New York.

With 50% of our portfolio located in the United States, our foreign exchange exposure is limited. Canadian dollar and Euro exposure, representing 35% of the portfolio, is proactively managed through foreign currency contracts. The remaining 15% is exposed to the Brazilian Real, which is not hedged through foreign currency contracts due to high associated costs. However, the exposure is mitigated by the annual inflation-linked escalations in our power purchase agreements.

The average total revenue per MWh of $76 decreased $8 per MWh from the prior year, reflecting the impact of the relatively lower pricing environment and to a lesser extent the impact of the appreciation of the U.S. dollar.

Direct operating costs totaling $134 million represent a year-over-year increase of $4 million, reflecting the cost reduction effort at our North American and Latin American operations and the reduction in power purchased in the open market for our co-generation facilities. The growth in our portfolio resulted in incremental costs of $17 million.

Interest expense totaling $105 million represents a year-over-year increase of $4 million. The savings attributable to repayments in the normal course on existing subsidiary borrowings were partially offset by the issuance of C$400 million of medium-term corporate notes in the current quarter. Incremental borrowing costs of $14 million were attributable to the growth in our portfolio.

Management service costs totaling $14 million represent a year-over-year increase of $3 million, primarily attributable to the increase in the market value of our LP Units and the issuance of 10.25 million LP Units in 2014.

The cash portion of non-controlling interests totaling $61 million represents a year-over-year increase of $6 million. The increase of $20 million related to the growth in our portfolio was partly offset by the decrease in performance from certain existing assets in our portfolio.

Funds From Operations totaling $153 million (2014: $185 million) reflects the variances noted above, and incorporates growth of $7 million from the hydroelectric portfolio and $9 million from the wind portfolio.

Net income was $51 million for the three months ended March 31, 2015 (2014: $125 million).

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SEGMENTED DISCLOSURES

Segmented information is prepared on the same basis that Brookfield Renewable’s CODM manages the business, evaluates financial results, and makes key operating decisions.  See Note 14 - Segmented information in our interim consolidated financial statements.

HYDROELECTRIC

The following table reflects the results of our operations for the three months ended March 31:

(MILLIONS, EXCEPT AS NOTED)	2015
	North America						Latin
	United States		Canada		Total		America		Total
Generation (GWh) – LTA(1)(2)		3,213		1,229		4,442		947		5,389
Generation (GWh) – actual(1)(2)		2,535		1,502		4,037		739		4,776
Revenues	$	191	$	106	$	297	$	45	$	342
Adjusted EBITDA(3)		127		104		231		31		262
Funds From Operations(3)	$	54	$	86	$	140	$	21	$	161

(MILLIONS, EXCEPT AS NOTED)	2014
	North America						Latin
	United States		Canada		Total		America		Total
Generation (GWh) – LTA(1)(2)		2,794		1,193		3,987		929		4,916
Generation (GWh) – actual(1)(2)		2,591		1,311		3,902		1,099		5,001
Revenues	$	206	$	98	$	304	$	89	$	393
Adjusted EBITDA(3)		151		79		230		73		303
Funds From Operations(3)	$	75	$	63	$	138	$	58	$	196

⁽¹⁾Includes 100% of generation from equity-accounted investments.

⁽²⁾For assets acquired or reaching commercial operation during the year, this figure is calculated from the acquisition or commercial operation date.

⁽³⁾Non-IFRS measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures”, and “Financial Review by Segments for the Three Months Ended March 31, 2015”.

North America

Generation from the portfolio was 4,037 GWh, below the long-term average of 4,442 GWh and an increase from prior year generation of 3,902 GWh.

Revenues totaling $297 million represent a year-over-year decrease of $7 million. Funds From Operations totaling $140 millionrepresent a year-over-year increase of $2 million.

United States

Generation from the portfolio was 2,535 GWh, below the long-term average of 3,213 GWh and prior year generation of 2,591 GWh. Generation from existing facilities decreased 280 GWh as compared to the prior year due to lower inflows in New York, Louisiana, Tennessee and North Carolina. The non-controlling interests in our facilities in Tennessee and North Carolina, Louisiana and Maine reduced the impact on our financial results. A full period’s contribution from facilities acquired in 2014 resulted in incremental generation of 224 GWh. 

Revenues totaling $191 million represent a year-over-year decrease of $15 million. The lower generation impacted revenues by $19 million. While wholesale prices for both energy and capacity continue to trend

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higher relative to the cyclical lows experienced during the last few years, pricing did not reach the peaks of 2014. The impact was a $16 million reduction in revenues.

A full period’s contribution from facilities acquired in 2014 resulted in incremental revenues of $20 million.

Funds From Operations totaling $54 millionrepresent a year-over-year decrease of $21 million, primarily attributable to the decrease in revenues from existing facilities. The facilities acquired in 2014 contributed an incremental $4 million.

Canada

Generation from the portfolio of 1,502 GWh was above both the long-term average of 1,229 GWh and prior year generation of 1,311 GWh. Hydrological conditions were strong at our facilities in Ontario and British Columbia. The facility in British Columbia commissioned in 2014 provided incremental generation of 50 GWh.

Revenues totaling $106 million represent a year-over-year increase of $8 million. The primary contributor to the increase was the above long-term average generation, supplemented by annual escalators in our power purchase agreements. The recently commissioned facility contributed $7 million.

Funds From Operations totaling $86 million represent a year-over-year increase of $23 million. The increase reflects the higher revenues. The appreciation of the U.S. dollar impacted revenues by $7 million but also affected costs and other expenses. The effect was fully offset by the ongoing foreign currency hedging program.

Latin America

Generation from the portfolio was 739 GWh, below the long-term average of 947 GWh and a decrease from prior year of 1,099 GWh. Conditions in Brazil continue to be challenging with generation being affected by the drought conditions. The impact was reduced by our participation in the Brazilian balancing pool and by maintaining a lower level of contracted generation in order to preserve optionality and flexibility in the portfolio.

Revenues totaling $45 million represent a year-over-year decrease of $44 million, primarily attributable to decrease in generation. Funds From Operations totaling $21 million represent a year-over-year decrease of $37 million. The appreciation of the U.S. dollar impacted revenues by $15 million, but also affected costs and other expenses resulting in a net decrease in Funds From Operations of $10 million. 

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WIND

The following table reflects the results of our operations for the three months ended March 31:

(MILLIONS, EXCEPT AS NOTED)	2015
	North America
	United States		Canada		Total		Europe		Total
Generation (GWh) – LTA(1)(2)		311		324		635		440		1,075
Generation (GWh) – actual(1)(2)		203		281		484		451		935
Revenues	$	20	$	31	$	51	$	41	$	92
Adjusted EBITDA(3)		10		26		36		39		75
Funds From Operations(3)	$	(2)	$	18	$	16	$	17	$	33

(MILLIONS, EXCEPT AS NOTED)	2014
	North America
	United States		Canada		Total		Europe		Total
Generation (GWh) – LTA(1)(2)		311		324		635		N/A		635
Generation (GWh) – actual(1)(2)		273		337		610		N/A		610
Revenues	$	29	$	39	$	68	$	N/A	$	68
Adjusted EBITDA(3)		16		35		51		N/A		51
Funds From Operations(3)	$	(1)	$	25	$	24	$	N/A	$	24

⁽¹⁾Includes 100% of generation from equity-accounted investments.

⁽²⁾For assets acquired or reaching commercial operation during the year, this figure is calculated from the acquisition or commercial operation date.

⁽³⁾Non-IFRS measures. See “Cautionary Statement Regarding Use of Non-IFRS Measures”, and “Financial Review by Segments for the Three Months Ended March 31, 2015”.

North America

Generation from the portfolio of 484 GWh was below the long-term average of 635 GWh and prior year generation of 610 GWh.

Revenues totaling $51 million represent a year-over-year decrease of $17 million. Funds From Operations totaling $16 million represent a year-over-year decrease of $8 million.

United States

Generation from the portfolio of 203 GWh was below the long-term average of 311 GWh and lower than prior year generation of 273 GWh, primarily attributable to lower wind conditions across the portfolio. The impact on our financial results was reduced by the non-controlling interests in certain of our facilities in California and New England.

Revenues totaling $20 million represent a year-over-year decrease of $9 million attributable to the decrease in generation. Funds From Operations totaling negative $2 million represent a year-over-year decrease of $1 million. The decrease in revenues was partly offset by decreases in costs and the cash portion of non-controlling interests.

Canada

Generation from the portfolio was 281 GWh, below the long-term average of 324 GWh and lower than the prior year generation of 337 GWh, primarily attributable to lower wind conditions.

Revenues totaling $31 million represent a year-over-year decrease of $8 million attributable to the decrease in generation and the appreciation of the U.S. dollar. Funds From Operations totaling $18

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million represent a year-over-year decrease of $7 million primarily attributable to the decrease in revenues.

Europe

Generation from our wind portfolio in Europe of 451GWh was consistent with the long-term average of 440GWh. Our portfolio in Ireland generated 360GWh, while our portfolio in Portugal contributed 91GWh.

Revenues totaled $41million for the quarter, and Funds From Operations totaled $17 million. The impact of the appreciation of the U.S. dollar was fully offset by the ongoing foreign currency hedging program.

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Analysis Of Consolidated Financial Statements and Other Information

Property, Plant and Equipment

In accordance with IFRS, Brookfield Renewable has elected to revalue its property, plant and equipment at a minimum on an annual basis, as at December 31^st of each year. Substantially all of Brookfield Renewable’s property, plant and equipment, are carried at fair value as opposed to historical cost, using a 20-year discounted cash flow model. This model incorporates future cash flows from long-term power purchase agreements that are in place where it is determined that the power purchase agreements are linked specifically to the related power generating assets. The model also includes estimates of future electricity prices, anticipated long-term average generation, estimated operating and capital expenditures, and assumptions about future inflation rates and discount rates by geographical location. For power generating assets acquired through business combinations during the year, Brookfield Renewable initially measures the assets at fair value consistent with the policy described in Note 2(l) – Business combinations in our December 31, 2014 audited consolidated financial statements. Accordingly, in the year of acquisition, power generating assets are not revalued at year-end unless there is an indication that assets are impaired.

Property, plant and equipment, at fair value totaled $18.4 billion as at March 31, 2015 as compared to $18.6 billion as at December 31, 2014. During the three months ended March 31, 2015, the acquisition of 43 MW of hydroelectric facilities, 273 MW of wind facilities and 120 MW of biomass facilities totaled $917 million. The development and construction of power generating assets totaled $36 million. Property, plant and equipment were impacted by foreign currency changes related to the appreciation of the U.S. dollar in the amount of $1.0 billion. We also recognized depreciation expense of $158 million which is significantly higher than what we are required to reinvest in the business as sustaining capital expenditures. 

Fair value of property, plant and equipment can vary with discount and terminal capitalization rates. Excluding power generating assets acquired during the year ended December 31, 2014, the following table summarizes the impact of a change in discount rates and terminal capitalization rates on the fair value of property, plant and equipment as at December 31:

(BILLIONS)		2014		2013
50 bps increase in discount rates	$	(1.3)	$	(1.1)
50 bps decrease in discount rates		1.5		1.3
50 bps increase in terminal capitalization rate(1)		(0.3)		(0.3)
50 bps decrease in terminal capitalization rate(1)		0.4		0.3

⁽¹⁾The terminal capitalization rate applies only to hydroelectric assets in North America.

Terminal values are included in the valuation of hydroelectric assets in North America. For the hydroelectric assets in Brazil, cash flows have been included based on the duration of the authorization or useful life of a concession asset without consideration of potential renewal value. The weighted-average remaining duration at December 31, 2014, was 15 years (2013: 16 years). Consequently, there is no terminal value attributed to the hydroelectric assets in Brazil. If an additional 20 years of cash flows were included, the fair value of property, plant and equipment would increase by approximately $1 billion. See Note 11 - Property, plant and equipment, at fair value in our December 31, 2014 audited consolidated financial statements.

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liquidity and capital Resources

A key element of our financing strategy is to raise the majority of our debt in the form of asset-specific, non-recourse borrowings at our subsidiaries on an investment grade basis. As at March 31, 2015, long-term indebtedness increased from December 31, 2014 as a result of the portfolio growth. The debt to capitalization ratio increased from December 31, 2014 due primarily to the issuance of C$400 million ($317 million) of medium-term corporate notes and the appreciation of U.S. dollar, and was 42% as at March 31, 2015.

Capitalization

The following table summarizes the capitalization using book values:

	Mar 31		Dec 31
(MILLIONS, EXCEPT AS NOTED)		2015		2014
Credit facilities(1)	$	319	$	401
Corporate borrowings(2)		1,492		1,286
Subsidiary borrowings(3)		6,023		5,991
Long-term indebtedness		7,834		7,678
Deferred income tax liabilities, net of deferred income tax assets		2,400		2,495
Equity		8,555		8,881
Total capitalization	$	18,789	$	19,054
Debt to total capitalization		42%		40%

⁽¹⁾Credit facilities are comprised of $113 million drawn by a subsidiary of Brookfield Renewable and guaranteed by Brookfield Renewable, and $206 million borrowed under a subscription credit facility made available by a private fund sponsored by Brookfield Asset Management. This subscription credit facility is only available to us on a limited basis, and is secured by capital contributed to the private fund.

⁽²⁾Issued by a subsidiary of Brookfield Renewable and guaranteed by Brookfield Renewable. The amounts are unsecured.

⁽³⁾Issued by subsidiaries of Brookfield Renewable and secured against their respective assets. The amounts are not guaranteed.

During the three months ended March 31, 2015 we completed the following financings:

In March 2015, we issued C$400 million ($317 million) of medium-term corporate notes, maturing in June 2025 at a fixed rate of 3.75%. Proceeds of the offering were used to repay existing indebtedness and for general corporate purposes.

In February 2015, we secured an 18-month extension on $75 million of debt associated with a portfolio of hydroelectric and wind facilities in the United States held through the Brookfield Americas Infrastructure Fund. The debt bears interest at LIBOR plus 2.75%, and matures in August 2016.

In February 2015, we refinanced indebtedness associated with a 45 MW hydroelectric facility in British Columbia by issuing C$90 million ($76 million) of bonds with an interest rate of 2.95%, maturing in May 2023. We own a 50%, equity-accounted interest in this facility.

In February 2015, as part of the acquisition of a 123 MW wind portfolio in Portugal, Brookfield Renewable assumed loans with principal balances totaling €99 million ($109 million). The loans bear interest at an initial weighted-average fixed rate of 6.28%, including the related interest rate swaps, and have a weighted-average remaining term of 9.5 years.

In March 2015, as part of the acquisition of a 313 MW operating renewable power generation portfolio in Brazil comprising of 43 MW of hydroelectric, 150 MW of wind, and 120 MW of biomass generating capacity and a 55 MW biomass development project, Brookfield Renewable assumed R$631 million ($197 million) of debt with a combination of variable and fixed interest rates, and a weighted-average remaining term of 12.7 years.

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Available liquidity

We operate with sufficient liquidity to enable us to fund growth initiatives, capital expenditures, distributions, withstand sudden adverse changes in economic circumstances or short-term fluctuations in generation, and to finance the business on an investment grade basis. Principal sources of liquidity are cash flows from operations and access to public and private capital markets.

The following table summarizes the available liquidity:

		Mar 31		Dec 31
(MILLIONS)		2015		2014
Cash and cash equivalents		$	196	$	150
Credit facilities
	Authorized credit facilities		1,480		1,480
	Draws on credit facilities(1)		(113)		(401)
	Issued letters of credit		(217)		(227)
Available portion of credit facilities			1,150		852
Available liquidity		$	1,346	$	1,002

⁽¹⁾Amounts are unsecured and revolving. Interest rate is at the LIBOR plus 1.20% (December 31, 2014: 1.20%).

Long-term debt and credit facilities

The following table summarizes our principal repayment obligations and maturities as at March 31, 2015:

(MILLIONS)				Balance of 2015		2016		2017		2018		2019		Thereafter		Total
Principal repayments
	Subsidiary borrowings(1)
		North America
			United States	$	67	$	422	$	784	$	777	$	67	$	1,346	$	3,463
			Canada		40		128		47		50		49		1,328		1,642
					107		550		831		827		116		2,674		5,105
		Latin America			39		31		32		31		29		188		350
		Europe			30		43		46		49		52		404		624
					176		624		909		907		197		3,266		6,079
	Corporate borrowings and
			credit facilities(1)		206		237		-		158		113		1,103		1,817
	Equity-accounted investments				-		-		125		-		-		35		160
					382		861		1,034		1,065		310		4,404		8,056

⁽¹⁾Subsidiary borrowings and corporate borrowings and credit facilities include $7 million and $69 million of unamortized premiums and deferred financing fees, respectively.

The remaining subsidiary borrowings due in 2015 are normal course principal repayments. Repayments on subsidiary borrowings in 2016 include maturities of $250 million on our portfolio of hydroelectric facilities in the Southeastern United States and $75 million of debt associated with a portfolio of hydroelectric and wind facilities in the United States held through the Brookfield Americas Infrastructure Fund. Both of these borrowings are expected to be refinanced in the normal course.

We remain focused on refinancing near term facilities on acceptable terms and maintaining a manageable maturity ladder. We do not anticipate material issues in addressing our borrowings through

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2019 on acceptable terms and will do so opportunistically based on the prevailing interest rate environment.

The overall maturity profile and average interest rates associated with our borrowings and credit facilities are as follows:

	Average term (years)		Average interest rate (%)
	Mar 31	Dec 31		Mar 31	Dec 31
	2015	2014		2015	2014
Corporate borrowings	7.3	6.7	5.0		5.3
Subsidiary borrowings	10.2	10.4	5.4		5.3
Credit facilities	4.3	4.5	1.4		1.4

During the three months ended March 31, 2015, we issued C$400 million ($317 million) of medium-term corporate notes maturing in June 2025, reducing our overall costs on corporate borrowings from 5.3% to 5.0% and increasing the average term to 7.3 years.

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CONTRACT PROFILE

We have a largely predictable profile driven by both long-term power purchase agreements with a weighted-average remaining duration of 17 years combined with a well-diversified portfolio that reduces variability in our generation volumes. We operate the business on a largely contracted basis to ensure a high degree of predictability in Funds From Operations. We do however maintain a long-term view that electricity prices and the demand for electricity from renewable sources will rise due to a growing level of acceptance around climate change and the legislated requirements in some areas to diversify away from fossil fuel based generation.

The following table sets out contracts over the next five years for generation output assuming long-term average:

FOR THE YEAR ENDED DECEMBER 31				Balance of 2015			2016		2017		2018		2019
Generation (GWh)
Contracted(1)
	Hydroelectric
		North America
			United States(2)		6,669		9,126		7,002		7,002		7,002
			Canada		3,945		4,681		4,634		4,634		4,624
					10,614		13,807		11,636		11,636		11,626
		Latin America			2,405		3,000		2,662		2,352		2,364
					13,019		16,807		14,298		13,988		13,990
	Wind
		North America
			United States		1,007		1,292		1,292		1,292		1,292
			Canada		873		1,197		1,197		1,197		1,197
		Latin America			470		561		560		560		560
		Europe			982		1,400		1,400		1,400		1,400
					3,332		4,450		4,449		4,449		4,449
Other					372		475		484		533		533
					16,723		21,732		19,231		18,970		18,972
Uncontracted					2,327		3,897		6,383		6,644		6,642
Total long-term average					19,050		25,629		25,614		25,614		25,614
Long-term average on a proportionate basis(3)					14,388		19,295		19,285		19,285		19,285
Contracted generation - as at March 31, 2015
% of total generation					88	%	85	%	75	%	74	%	74	%
% of total generation on a proportionate basis(3)					92	%	89	%	83	%	81	%	81	%
Price per MWh - total generation				$	72	$	75	$	78	$	79	$	80
Price per MWh - total generation on a
	proportionate basis				69		72		73		74		75

⁽¹⁾Assets under construction are included when long-term average and pricing details are available and the commercial operation date is established in a definitive construction contract.

⁽²⁾Includes generation of 1,515 GWh for 2015 and 2,124 GWh for 2016 secured under financial contracts.

⁽³⁾Long-term average on a proportionate basis includes wholly-owned assets, and our share of partially-owned assets and equity-accounted investments.

The majority of the long-term power purchase agreements are with investment-grade rated or creditworthy counterparties. The composition of our contracted generation under power purchase agreements for 2015 is comprised of: Brookfield (42%), public power authorities (23%), industrial users (29%) and distribution companies (6%).

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SUMMARY CONSOLIDATED BALANCE SHEETS

The following table provides a summary of the key line items on the interim consolidated balance sheets:

			Mar 31		Dec 31
(MILLIONS)		2015		2014
Property, plant and equipment, at fair value		$	18,361	$	18,566
Equity-accounted investments			256		273
Total assets			19,685		19,849
Long-term debt and credit facilities			7,834		7,678
Deferred income tax liabilities			2,547		2,637
Total liabilities			11,130		10,968
Preferred equity			667		728
Participating non-controlling interests - in operating subsidiaries			2,323		2,062
General partnership interest in a holding subsidiary held by Brookfield			54		59
Participating non-controlling interests - in a holding subsidiary -
	Redeemable/Exchangeable units held by Brookfield		2,617		2,865
Limited partners' equity			2,894		3,167
Total liabilities and equity			19,685		19,849

Contractual obligations

Development and construction

The remaining development project costs on three hydroelectric projects in Brazil totaling 72 MW and a 12 MW wind facility in Ireland are expected to be $264 million. The wind facility in Ireland is expected to be fully operational in 2015, and the hydroelectric projects in Brazil in 2017.  

Commitments and contingencies

In November 2014, we entered into an agreement to acquire a 488 MW portfolio in Brazil comprising hydroelectric, wind, and biomass generating capacity. The transaction represents a total enterprise value of $R2.4 billion ($935 million). During the three months ended March 31, 2015 we completed the acquisition of 368 MW in renewable power generation facilities. The acquisition of a 120 MW hydroelectric facility, expected to generate 527 GWh annually, is expected to close in the second quarter of 2015, subject to regulatory approvals and closing conditions. The acquisition is being pursued with our institutional partners, and Brookfield Renewable will retain an approximate 40% controlling interest.

Brookfield Renewable, on behalf of its subsidiaries, and subsidiaries themselves have provided letters of credit, which include, but are not limited to, guarantees for debt service reserves, capital reserves, construction completion and performance. See “Liquidity and Capital Resources” for further details. 

Brookfield Renewable, along with institutional investors, has provided letters of credit, which include, but are not limited to, guarantees for debt service reserves, capital reserves, construction completion and performance as it relates to interests in the Brookfield Americas Infrastructure Fund and the Brookfield Infrastructure Fund II. As at March 31, 2015, the letters of credit issued were $115 million (2014: $125 million).

Guarantees

In the normal course of operations, we execute agreements that provide for indemnification and guarantees to third parties in transactions such as acquisitions, construction projects, capital projects, and

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purchases of assets. We have also agreed to indemnify our directors and certain of our officers and employees. The nature of the indemnities prevent us from making a reasonable estimate of the maximum potential amount that could be required to pay third parties, as many of the agreements do not specify a maximum amount and the amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. Historically, we have made no significant payments under indemnification agreements.

Off-Balance Sheet Arrangements

Brookfield Renewable has no off-balance sheet financing arrangements.

Related Party Transactions

Brookfield Renewable’s related party transactions are in the normal course of business, and are recorded at the exchange amount. Brookfield Renewable’s related party transactions are primarily with Brookfield.

Brookfield Renewable sells electricity to Brookfield through long-term power purchase agreements to provide contracted cash flow and reduce Brookfield Renewable’s exposure to electricity prices in deregulated power markets. Brookfield Renewable also benefits from a wind levelization agreement with Brookfield which reduces the exposure to the fluctuation of wind generation at certain facilities and thus improves the stability of its cash flow.

In addition to these agreements, Brookfield Renewable and Brookfield have executed other agreements that are described in Note 9 - Related Party Transactions in our December 31, 2014 audited consolidated financial statements.

Brookfield Renewable has also entered into a number of voting agreements with Brookfield whereby Brookfield, as managing member of entities related to Brookfield Americas Infrastructure Fund and Brookfield Infrastructure Fund II, in which Brookfield Renewable holds investments in power generating operations with institutional partners, agreed to provide to Brookfield Renewable the authority to direct the election of the Boards of Directors of such entities.

The following table reflects the related party agreements and transactions on the interim consolidated statements of income for the three months ended March 31:

(MILLIONS)			2015		2014
Revenues
	Power purchase and revenue agreements	$	109	$	35
	Wind levelization agreement		2		1
		$	111	$	36
Direct operating costs
	Energy purchases	$	(2)	$	(6)
	Energy marketing fee		(5)		(5)
	Insurance services		(7)		(7)
		$	(14)	$	(18)
Management service costs		$	(14)	$	(11)

Revenues from power purchase and revenue agreements for the three months ended March 31, 2015 were higher as compared to the prior year. The increase is primarily due to an increased level of price support, reflecting the relatively lower pricing environment in the current quarter, and the impact of power purchase agreements for certain recently acquired facilities.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

The following table summarizes the key items on the interim consolidated statements of cash flows for the three months ended March 31:

(MILLIONS)	2015		2014
Cash flow provided by (used in):
Operating activities	$	232	$	272
Financing activities		375		340
Investing activities		(552)		(588)
Foreign exchange loss on cash		(9)		-
Increase in cash and cash equivalents	$	46	$	24

Cash and cash equivalents as at March 31, 2015 totaled $196 million, representing an increase of $46 million since December 31, 2014.

Operating Activities

Cash flows provided by operating activities totaling $232 million for the first quarter of 2015 represent a year-over-year decrease of $40 million primarily attributable to the decrease in Funds From Operations.

Financing Activities

Cash flows provided by financing activities totaled $375 million for the first quarter of 2015. Long-term debt – borrowings were $521 million, and related to growth and the issuance of medium-term corporate notes during the quarter. Long-term debt – repayments related to subsidiary borrowings and credit facilities were $317 million. The capital provided by participating non-controlling interests – in operating subsidiaries relates to the growth in our portfolio, and amounted to $330 million.

For the first quarter of 2015, distributions paid to LP Unitholders were $115 million (2014: $164 million). We increased our distributions to $1.66 per LP Unit, an increase of 11 cents per LP Unit which took effect in the current quarter. The amounts paid in the first quarter of 2014 included distributions declared in both that quarter, and in the fourth quarter of 2013. The distributions paid to preferred shareholders and participating non-controlling interests - in operating subsidiaries were $44 million (2014: $26 million). See “Dividends and Distributions” for further details.

Investing Activities

Cash flows used in investing activities for the three months ended March 31, 2015 totaled $552 million. Our investments were with respect to the acquisition of a 123 MW wind portfolio in Portugal and a 368 MW renewable power portfolio in Brazil. When combined, these investments totaled $528 million. In addition, our continued investment in the development and construction of power generating assets was $21 million and sustainable capital expenditures totaled $15 million.

NON-CONTROLLING INTERESTS

Preferred equity

As at March 31, 2015, no preference shares have been redeemed. On April 1, 2015, the fixed dividend rate on the Series 1 Preference Shares for the five years commencing May 1, 2015 and ending April 30, 2020 was reset and, if declared, will be paid at an annual rate of 3.355% ($0.2096875 per share per quarter).

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General partnership interest in a holding subsidiary held by Brookfield

Brookfield, as the owner of the 1% GP interest in BRELP, is entitled to regular distributions plus an incentive distribution based on the amount by which quarterly LP Unit distributions exceed specified target levels. To the extent that LP Unit distributions exceed $0.375 per LP Unit per quarter, the incentive is 15% of distributions above this threshold. To the extent that quarterly distributions exceed $0.4225 per LP Unit, the incentive distribution is equal to 25% of distributions above this threshold. Accordingly, incentive distributions of $2 million were made during the three months ended March 31, 2015.

Participating non-controlling interests - in a holding subsidiary - Redeemable/Exchangeable units held by Brookfield

BRELP has issued Redeemable/Exchangeable partnership units to Brookfield, which may at the request of the holder, require BRELP to redeem these units for cash consideration. The right is subject to Brookfield Renewable’s right of first refusal which entitles it, at its sole discretion, to elect to acquire all of the units presented to BRELP that are tendered for redemption in exchange for LP Units. If Brookfield Renewable elects not to exchange the Redeemable/Exchangeable partnership units for LP Units, the Redeemable/Exchangeable partnership units are required to be redeemed for cash. As Brookfield Renewable, at its sole discretion, has the right to settle the obligation with LP Units, the Redeemable/Exchangeable partnership units are classified as equity, and not as a liability.

LIMITED PARTNERS’ EQUITY

Brookfield Asset Management owns, directly and indirectly, 169,685,609 LP Units and Redeemable/Exchangeable partnership units, representing approximately 62% of Brookfield Renewable on a fully-exchanged basis.

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SHARES AND UNITS OUTSTANDING

The shares and units outstanding are presented in the following table:

		Mar 31, 2015	Dec 31, 2014
Class A Preference Shares
	Series 1	10,000,000	10,000,000
	Series 3	10,000,000	10,000,000
	Series 5	7,000,000	7,000,000
	Series 6	7,000,000	7,000,000
		34,000,000	34,000,000
GP interest		2,651,506	2,651,506
Redeemable/Exchangeable partnership units		129,658,623	129,658,623
LP Units
	Balance, beginning of year	143,356,854	132,984,913
	Issuance of LP Units	-	10,250,000
	Distribution reinvestment plan	43,749	121,941
Balance, end of period/year		143,400,603	143,356,854
Total LP Units on a fully-exchanged basis(1)		273,059,226	273,015,477
LP Units held by
Brookfield		40,026,986	40,026,986
External LP Unitholders		103,373,617	103,329,868
		143,400,603	143,356,854

⁽¹⁾The fully-exchanged amounts assume the exchange of Redeemable/ Exchangeable partnership units for LP Units at the beginning of the year.

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DIVIDENDS AND DISTRIBUTIONS

The composition of the dividends and distributions for the three months ended March 31 are presented in the following table:

THREE MONTHS ENDED MARCH 31		Declared				Paid
(MILLIONS, EXCEPT AS NOTED)			2015		2014		2015		2014
Class A Preference Shares
	Series 1	$	2	$	3	$	3	$	3
	Series 3		2		2		2		2
	Series 5		2		2		2		2
	Series 6		2		2		2		2
		$	8	$	9	$	9	$	9
Participating non-controlling interests - in  operating
	subsidiaries	$	35	$	17	$	35	$	17
General partnership interest in a holding subsidiary
	held by Brookfield	$	1	$	1	$	1	$	1
	Incentive distribution		2		1		2		1
		$	3	$	2	$	3	$	2
Participating non-controlling interests - in  a holding subsidiary
	- Redeemable/Exchangeable units held by Brookfield	$	55	$	50	$	54	$	80
Limited partners' equity
	Brookfield		17		15		17		24
	External LP Unitholders		44		36		41		58
		$	61	$	51	$	58	$	82

In February 2015, LP Unitholder distributions were increased to $1.66 per unit on an annualized basis, an increase of eleven cents per LP Unit, which took effect with the distribution payable in March 2015.

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Critical ESTIMATES AND CRITICAL JUDGMENTS in applying accounting policies

The interim consolidated financial statements are prepared in accordance with IFRS, which require the use of estimates and judgments in reporting assets, liabilities, revenues, expenses and contingencies. In the judgment of management, none of the estimates outlined in Note 2 –Significant accounting policies in our December 31, 2014 audited consolidated financial statements are considered critical accounting estimates as defined in NI 51-102 with the exception of the estimates related to the valuation of property, plant and equipment and the related deferred income tax liabilities. These assumptions include estimates of future electricity prices, discount rates, expected long-term average generation, inflation rates, terminal year and operating and capital costs, the amount, the timing and the income tax rates of future income tax provisions. Estimates also include determination of accruals, purchase price allocations, useful lives, asset valuations, asset impairment testing, deferred tax liabilities, decommissioning retirement obligations and those relevant to the defined benefit pension and non-pension benefit plans. Estimates are based on historical experience, current trends and various other assumptions that are believed to be reasonable under the circumstances.

In making estimates, management relies on external information and observable conditions where possible, supplemented by internal analysis, as required. These estimates have been applied in a manner consistent with that in the prior year and there are no known trends, commitments, events or uncertainties that we believe will materially affect the methodology or assumptions utilized in this report. These estimates are impacted by, among other things, future power prices, movements in interest rates, foreign exchange and other factors, some of which are highly uncertain, as described in the “Risk Factors” section of our 2014 Annual Report. The interrelated nature of these factors prevents us from quantifying the overall impact of these movements on Brookfield Renewable’s financial statements in a meaningful way. These sources of estimation uncertainty relate in varying degrees to substantially all asset and liability account balances. Actual results could differ from those estimates.

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Future changes in accounting policies

(i)      Financial Instruments

In July 2014, the IASB issued the final version of IFRS 9, Financial Instruments (“IFRS 9”) which reflects all phases of the financial instruments project and replaces IAS 39, Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. The standard introduces new requirements for classification and measurement, impairment, and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective application is required, but comparative information is not compulsory. Early application of previous versions of IFRS 9 (2009, 2010 and 2013) is permitted if the date of initial application is before 1 February 2015. Management is currently evaluating the impact of IFRS 9 on the consolidated financial statements.

(ii)      Amendments to IFRS 10 and IAS 28

The amendments to IFRS 10, Consolidated Financial Statements (“IFRS 10”) and IAS 28, Investments in Associates and Joint Ventures (2011) (“IAS 28”) address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if the assets are housed in a subsidiary. The amendments are effective for transactions occurring in annual periods beginning on or after 1 January 2016 with earlier application permitted. Management is currently evaluating the impact of the amendments to IFRS 10 and IAS 28 on the consolidated financial statements.

(iii)     Revenue recognition

IFRS 15, Revenue from Contracts with Customers (“IFRS 15”) was issued by IASB on May 28, 2014.  IFRS 15 outlines a single comprehensive model to account for revenue arising from contracts with customers and will replace the majority of existing IFRS requirements on revenue recognition including IAS 18, Revenue,  IAS 11, Construction Contracts and related interpretations. The core principle of the standard is to recognize revenue to depict the transfer of goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard has prescribed a five-step model to apply the principles. The standard also specifies how to account for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. IFRS 15 is effective for annual periods beginning on or after January 1, 2017. Management is currently evaluating the impact of IFRS 15 on the consolidated financial statements.

Internal Control over Financial Reporting

No changes were made in our internal control over financial reporting during the quarter ended March 31, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Brookfield Renewable Energy Partners L.P.Management’s Discussion and AnalysisMarch 31, 2015

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SUMMARY OF HISTORICAL QUARTERLY RESULTS ON A CONSOLIDATED BASIS

The following is a summary of unaudited quarterly financial information for the last eight consecutive quarters:

				2015		2014								2013
(MILLIONS, EXCEPT AS NOTED)					Q1		Q4		Q3		Q2		Q1		Q4		Q3		Q2
Generation (GWh) - LTA(1)(2)				6,516		5,770		5,065		6,691		5,770		5,380		4,960		6,171
Generation (GWh) - actual(1)(2)				5,823		5,839		4,383		6,615		5,711		5,268		5,154		6,265
Revenues				$	441	$	408	$	342	$	474	$	480	$	393	$	392	$	484
Adjusted EBITDA(3)					338		273		223		360		360		272		260		357
Funds From Operations(3)					153		116		61		198		185		137		108		187
Net income (loss)
	Non-controlling interests
		Preferred equity			8		9		10		10		9		10		10		10
		Participating non-controlling
			interests - in operating subsidiaries		14		(8)		(2)		21		40		(7)		8		24
		General partnership interest in a
			holding subsidiary held by Brookfield		-		-		-		-		1		-		-		-
		Participating non-controlling
			interests - in a holding subsidiary
			- Redeemable/Exchangeable units
			held by Brookfield		14		14		(16)		20		37		10		5		22
	Limited partners' equity				15		16		(17)		21		38		11		5		22
					51		31		(25)		72		125		24		28		78
Basic and diluted earnings (loss)
	per LP Unit				0.10		0.11		(0.13)		0.15		0.29		0.08		0.04		0.17
Average LP Units outstanding (millions)					143.4		143.3		143.3		135.3		133.0		132.9		132.9		132.9
Distributions:
	Preferred equity				8		9		10		10		9		10		10		10
	General partnership interest in a
		holding subsidiary held by Brookfield			3		1		2		1		2		1		1		1
	Participating non-controlling
		interests - in a holding subsidiary
		- Redeemable/Exchangeable units
		held by Brookfield			55		50		50		51		50		47		47		47
	Limited partners' equity				61		56		56		53		51		48		49		48

⁽¹⁾Includes 100% of generation from equity-accounted investments.

⁽²⁾For assets acquired or reaching commercial operation during the year, this figure is calculated from the acquisition or commercial operation date.

⁽³⁾Non-IFRS measures. See "Cautionary Statement Regarding Use of Non-IFRS Measures" and “Financial Review by Segments for the Three  Months Ended March 31, 2015”.

Brookfield Renewable Energy Partners L.P.Management’s Discussion and AnalysisMarch 31, 2015

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ADDITIONAL INFORMATION

Additional information, including our Form 20-F filed with the SEC and securities regulators in Canada, are available on our website at www.brookfieldrenewable.com, on SEC’s website at www.sec.gov and on SEDAR’s website at www.sedar.com. 

Subsequent eventS

In April 2015, the fixed dividend rate on the Series 1 Preference Shares for the five years commencing May 1, 2015 and ending April 30, 2020 was reset and, if declared, will be paid at an annual rate of 3.355% (C$0.2096875 per share per quarter). The holders of 4,518,289 Series 1 Preference Shares exercised their right to convert their shares into Class A, Series 2 Preference Shares on a one-for-one basis. The holders of the Series 2 Preference Shares will be entitled to receive floating rate cumulative preferential cash dividends, equal to the T-Bill Rate plus 2.62%. The quarterly dividend in respect of the May 1, 2015 to July 31, 2015 dividend period will be paid at an annual rate of 3.148% (C$0.198367 per share), payable on July 31, 2015).

On May 5, 2015, an affiliate of Brookfield, on behalf of a consortium of investors that would, if successful, include Brookfield Renewable, pre-qualified for the Colombian government’s sale process relating to its controlling stake in Isagen, Colombia’s second largest energy generator.

Brookfield Renewable Energy Partners L.P.Management’s Discussion and AnalysisMarch 31, 2015

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FINANCIAL REVIEW BY SEGMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2015

The following table reflects Adjusted EBITDA, Funds From Operations, Adjusted Funds From Operations, and provides a reconciliation to net income and cash flows from operating activities for the three months ended March 31:

							Corporate
(MILLIONS)			Hydroelectric		Wind		and Other		2015		2014
Revenues			$	342	$	92	$	7	$	441	$	480
Other income				17		8		2		27		3
Share of cash earnings from equity-accounted
	investments			4		-		-		4		7
Direct operating costs				(101)		(25)		(8)		(134)		(130)
Adjusted EBITDA(1)				262		75		1		338		360
Interest expense - borrowings				(61)		(24)		(20)		(105)		(101)
Management service costs				-		-		(14)		(14)		(11)
Current income taxes				(4)		(1)		-		(5)		(8)
Less: cash portion of non-controlling interests
	Preferred equity			-		-		(8)		(8)		(9)
	Participating non-controlling interests - in
		operating subsidiaries		(36)		(17)		-		(53)		(46)
Funds From Operations(1)			$	161	$	33	$	(41)	$	153	$	185
Less: adjusted sustaining capital expenditures(2)										(15)		(14)
Adjusted Funds From Operations(1)										138		171
Add: adjusted sustaining capital expenditures										15		14
Add: cash portion of non-controlling interests										61		55
Other items:
	Depreciation and amortization									(158)		(126)
	Unrealized financial instruments loss									(8)		-
	Share of non-cash loss from equity-
		accounted investments								(1)		(6)
Deferred income tax recovery (expense)										6		(2)
Other										(2)		19
Net income									$	51	$	125
Adjustments for non-cash items										166		119
Dividends received from equity accounted
	investments									8		6
Changes in due to or from related parties										14		40
Net change in working capital balances										(7)		(18)
Cash flows from operating activities									$	232	$	272

⁽¹⁾Non-IFRS measures.  See “Cautionary Statement Regarding Use of Non-IFRS Measures”.

⁽²⁾Based on long-term sustaining capital expenditure plans.

Brookfield Renewable Energy Partners L.P.Management’s Discussion and AnalysisMarch 31, 2015

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cautionary statement regarding forward-looking statements

This Management's Discussion and Analysis contains forward-looking statements and information, within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, “safe harbor” of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations, concerning the business and operations of Brookfield Renewable. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Forward-looking statements in this Management's Discussion and Analysis include statements regarding the quality of Brookfield Renewable’s assets and the resiliency of the cash flow they will generate, Brookfield Renewable’s anticipated financial performance, future commissioning of assets, contracted portfolio, technology diversification, acquisition opportunities, expected completion of acquisitions, future energy prices and demand for electricity, economic recovery, achievement of long-term average generation, project development and capital expenditure costs, diversification of shareholder base,  energy policies, economic growth, growth potential of the renewable asset class, the future growth prospects and distribution profile of Brookfield Renewable and Brookfield Renewable’s access to capital. Forward-looking statements can be identified by the use of words such as “plans”, “expects”, “scheduled”, “estimates”, “intends”, “anticipates”, “believes”, “potentially”, “tends”, “continue”, “attempts”, “likely”, “primarily”, “approximately”, “endeavours”, “pursues”, “strives”, “seeks”, or variations of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Although we believe that our anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information in this Management's Discussion and Analysis are based upon reasonable assumptions and expectations, we cannot assure you that such expectations will prove to have been correct. You should not place undue reliance on forward-looking statements and information as such statements and information involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.

Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: our limited operating history; the fact that we are not subject to the same disclosure requirements as a U.S. domestic issuer; risks commonly associated with a separation of economic interest from control or the incurrence of debt at multiple levels within our organizational structure; the risk that we may be deemed an “investment company” under the Investment Company Act; the risk that the effectiveness of our internal controls over financial reporting could have a material effect on our business; changes to hydrology at our hydroelectric stations, to wind conditions at our wind facilities or to weather generally at any biomass cogeneration facilities; the risk that counterparties to our contracts do not fulfill their obligations, and as our contracts expire, we may not be able to replace them with agreements on similar terms; increases in water rental costs (or similar fees) or changes to the regulation of water supply; volatility in supply and demand in the energy market; risks relating to the increasing amount of uncontracted generation in our portfolio; exposure to additional costs as a result of our operations being highly regulated and exposed to increased regulation; the risk that our concessions and licenses will not be renewed; increases in the cost of operating our plants; our failure to comply with conditions in, or our inability to maintain, governmental permits; equipment failure; dam failures and the costs of repairing such failures; exposure to force majeure events; exposure to uninsurable losses; adverse changes in currency exchange rates; availability and access to interconnection facilities and transmission systems; health, safety, security and environmental risks; disputes, governmental and regulatory investigations and litigation; local communities affecting our operations; losses resulting from fraud, bribery, corruption, other illegal acts, inadequate or failed internal processes or systems, or from external events; risks relating to our reliance on computerized business systems; general industry risks relating to operating in the North American, Latin American and European power market sectors; advances in technology that impair or eliminate the competitive advantage of our projects; newly developed technologies in which we invest not performing as anticipated; labour disruptions and economically unfavourable collective bargaining agreements; our inability to finance our operations due to the status of the capital markets; the operating and financial restrictions imposed on us

Brookfield Renewable Energy Partners L.P.Management’s Discussion and AnalysisMarch 31, 2015

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by our loan, debt and security agreements; changes in our credit ratings; changes to government regulations that provide incentives for renewable energy; our inability to identify sufficient investment opportunities and complete transactions; risks related to the growth of our portfolio and our inability to realize the expected benefits of our transactions, including transactions that have been announced by not yet closed; our inability to develop existing sites or find new sites suitable for the development of greenfield projects; risks associated with the development of our generating facilities and the various types of arrangements we enter into with communities and joint venture partners; Brookfield Asset Management’s election not to source acquisition opportunities for us and our lack of access to all renewable power acquisitions that Brookfield Asset Management identifies; our lack of control over our operations conducted through joint ventures, partnerships and consortium arrangements; our ability to issue equity or debt for future acquisitions and developments will be dependent on capital markets; foreign laws or regulation to which we become subject as a result of future acquisitions in new markets; and the departure of some or all of Brookfield’s key professionals.

We caution that the foregoing list of important factors that may affect future results is not exhaustive. The forward-looking statements represent our views as of the date of this Management's Discussion and Analysis and should not be relied upon as representing our views as of any date subsequent to May 6, 2015, the date of this Management's Discussion and Analysis. While we anticipate that subsequent events and developments may cause our views to change, we disclaim any obligation to update the forward-looking statements, other than as required by applicable law. For further information on these known and unknown risks, please see “Risk Factors” included in our Form 20-F.

cautionary statement regarding use of non-ifrs measures

This Management's Discussion and Analysis contains references to Adjusted EBITDA, Funds From Operations and Adjusted Funds From Operations which are not generally accepted accounting measures under IFRS and therefore may differ from definitions of Adjusted EBITDA, Funds From Operations and Adjusted Funds From Operations used by other entities. We believe that Adjusted EBITDA, Funds From Operations and Adjusted Funds From Operations are useful supplemental measures that may assist investors in assessing the financial performance and the cash anticipated to be generated by our operating portfolio. Neither Adjusted EBITDA, Funds From Operations nor Adjusted Funds From Operations should be considered as the sole measure of our performance and should not be considered in isolation from, or as a substitute for, analysis of our financial statements prepared in accordance with IFRS.

A reconciliation of Adjusted EBITDA, Funds From Operations and Adjusted Funds From Operations to net income and cash flows from operating activities is presented in our Management’s Discussion and Analysis. We have also provided a reconciliation of Adjusted EBITDA and Funds From Operations to net income in Note 14 - Segmented information in our interim consolidated financial statements.    

Brookfield Renewable Energy Partners L.P.Management’s Discussion and AnalysisMarch 31, 2015

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GENERALINFORMATION

Corporate Office 73 Front Street Fifth Floor Hamilton, HM12 Bermuda Tel:  (441) 294-3304 Fax: (441) 516-1988 www.brookfieldrenewable.com Officers of Brookfield Renewable Energy Partners L.P.’s Service Provider, BRP Energy Group L.P. Harry Goldgut Group Chairman Richard Legault Chief Executive Officer Sachin Shah President and Chief Operating Officer Nicholas Goodman Chief Financial Officer Transfer Agent & Registrar Computershare Trust Company of Canada 100 University Avenue 9th floor Toronto, Ontario, M5J 2Y1 Tel  Toll Free: (800) 564-6253 Fax Toll Free: (888) 453-0330 www.computershare.com

Directors of the General Partner of Brookfield Renewable Energy Partners L.P. Jeffrey Blidner Eleazar de Carvalho Filho John Van Egmond David Mann Lou Maroun Patricia Zuccotti Lars Josefsson Exchange Listing NYSE: BEP (LP Units) TSX:    BEP.UN (LP Units) TSX:    BRF.PR.A (Preferred shares – Series 1) TSX:    BRF.PR.B (Preferred shares – Series 2) TSX:    BRF.PR.C (Preferred shares – Series 3) TSX:    BRF.PR.E (Preferred shares – Series 5) TSX:    BRF.PR.F (Preferred shares – Series 6) Investor Information Visit Brookfield Renewable online at www.brookfieldrenewable.com  for more information. The 2014 Annual Report and Form 20-F is also available online. For detailed and up-to-date news and information, please visit the News Release section. Additional financial information is filed electronically with various securities regulators in United States and Canada through EDGAR at www.sec.gov and through SEDAR at www.sedar.com.  Shareholder enquiries should be directed to the Investor Relations Department at (416) 359-1955 or unitholderenquiries@brookfieldrenewable.com

NYSE:

BEP

TSX:

BEP.UN

www.brookfieldrenewable.com