Intrinsic value of Brookfield Renewable Partners L.P. - BEP-UN

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$39.16

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$39.16

 
Intrinsic value

$1,101

 
Up/down potential

+999%

 
Rating

str. buy

 
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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of BEP-UN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 6.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  50.59
  45.50
  41.45
  37.81
  34.52
  31.57
  28.91
  26.52
  24.37
  22.43
  20.69
  19.12
  17.71
  16.44
  15.29
  14.27
  13.34
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.36
  7.12
  6.91
Revenue, $m
  3,313
  4,820
  6,818
  9,396
  12,640
  16,631
  21,440
  27,126
  33,737
  41,306
  49,852
  59,385
  69,901
  81,392
  93,841
  107,227
  121,530
  136,727
  152,798
  169,726
  187,498
  206,105
  225,544
  245,816
  266,931
  288,901
  311,746
  335,490
  360,166
  385,808
  412,458
Variable operating expenses, $m
 
  3,372
  4,720
  6,458
  8,646
  11,338
  14,581
  18,416
  22,875
  27,980
  33,744
  40,052
  47,145
  54,895
  63,291
  72,319
  81,965
  92,215
  103,054
  114,471
  126,458
  139,007
  152,117
  165,790
  180,031
  194,848
  210,256
  226,270
  242,913
  260,207
  278,181
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,506
  3,372
  4,720
  6,458
  8,646
  11,338
  14,581
  18,416
  22,875
  27,980
  33,744
  40,052
  47,145
  54,895
  63,291
  72,319
  81,965
  92,215
  103,054
  114,471
  126,458
  139,007
  152,117
  165,790
  180,031
  194,848
  210,256
  226,270
  242,913
  260,207
  278,181
Operating income, $m
  807
  1,448
  2,099
  2,938
  3,994
  5,293
  6,859
  8,710
  10,862
  13,326
  16,108
  19,333
  22,757
  26,497
  30,550
  34,908
  39,564
  44,512
  49,744
  55,255
  61,041
  67,098
  73,426
  80,026
  86,900
  94,052
  101,490
  109,220
  117,253
  125,601
  134,277
EBITDA, $m
  1,862
  1,569
  2,220
  3,059
  4,115
  5,414
  6,980
  8,831
  10,983
  13,447
  16,230
  19,333
  22,757
  26,497
  30,550
  34,908
  39,564
  44,512
  49,744
  55,255
  61,041
  67,098
  73,426
  80,026
  86,900
  94,052
  101,490
  109,220
  117,253
  125,601
  134,277
Interest expense (income), $m
  794
  902
  1,846
  3,094
  4,703
  6,729
  9,221
  12,223
  15,774
  19,902
  24,628
  29,964
  35,916
  42,483
  49,658
  57,431
  65,789
  74,720
  84,209
  94,244
  104,814
  115,911
  127,529
  139,667
  152,325
  165,509
  179,227
  193,491
  208,318
  223,725
  239,736
Earnings before tax, $m
  -18
  546
  253
  -156
  -709
  -1,436
  -2,362
  -3,513
  -4,912
  -6,576
  -8,519
  -10,631
  -13,160
  -15,985
  -19,108
  -22,523
  -26,225
  -30,208
  -34,465
  -38,989
  -43,773
  -48,813
  -54,103
  -59,640
  -65,425
  -71,456
  -77,737
  -84,272
  -91,065
  -98,124
  -105,459
Tax expense, $m
  -72
  147
  68
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  5
  399
  184
  -156
  -709
  -1,436
  -2,362
  -3,513
  -4,912
  -6,576
  -8,519
  -10,631
  -13,160
  -15,985
  -19,108
  -22,523
  -26,225
  -30,208
  -34,465
  -38,989
  -43,773
  -48,813
  -54,103
  -59,640
  -65,425
  -71,456
  -77,737
  -84,272
  -91,065
  -98,124
  -105,459

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  301
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  37,475
  54,162
  76,612
  105,575
  142,025
  186,865
  240,896
  304,790
  379,071
  464,111
  560,138
  667,245
  785,409
  914,518
  1,054,390
  1,204,799
  1,365,503
  1,536,255
  1,716,831
  1,907,035
  2,106,720
  2,315,788
  2,534,201
  2,761,983
  2,999,223
  3,246,075
  3,502,758
  3,769,554
  4,046,808
  4,334,922
  4,634,362
Adjusted assets (=assets-cash), $m
  37,174
  54,162
  76,612
  105,575
  142,025
  186,865
  240,896
  304,790
  379,071
  464,111
  560,138
  667,245
  785,409
  914,518
  1,054,390
  1,204,799
  1,365,503
  1,536,255
  1,716,831
  1,907,035
  2,106,720
  2,315,788
  2,534,201
  2,761,983
  2,999,223
  3,246,075
  3,502,758
  3,769,554
  4,046,808
  4,334,922
  4,634,362
Revenue / Adjusted assets
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
  0.089
Average production assets, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Working capital, $m
  -1,116
  280
  395
  545
  733
  965
  1,244
  1,573
  1,957
  2,396
  2,891
  3,444
  4,054
  4,721
  5,443
  6,219
  7,049
  7,930
  8,862
  9,844
  10,875
  11,954
  13,082
  14,257
  15,482
  16,756
  18,081
  19,458
  20,890
  22,377
  23,923
Total debt, $m
  13,967
  27,970
  46,873
  71,260
  101,951
  139,706
  185,201
  238,999
  301,544
  373,148
  454,002
  544,186
  643,681
  752,390
  870,162
  996,807
  1,132,119
  1,275,893
  1,427,937
  1,588,090
  1,756,224
  1,932,259
  2,116,163
  2,307,956
  2,507,712
  2,715,562
  2,931,689
  3,156,331
  3,389,778
  3,632,371
  3,884,498
Total liabilities, $m
  31,600
  45,604
  64,507
  88,894
  119,585
  157,340
  202,835
  256,633
  319,178
  390,782
  471,636
  561,820
  661,315
  770,024
  887,796
  1,014,441
  1,149,753
  1,293,527
  1,445,571
  1,605,724
  1,773,858
  1,949,893
  2,133,797
  2,325,590
  2,525,346
  2,733,196
  2,949,323
  3,173,965
  3,407,412
  3,650,005
  3,902,132
Total equity, $m
  5,874
  8,558
  12,105
  16,681
  22,440
  29,525
  38,062
  48,157
  59,893
  73,330
  88,502
  105,425
  124,095
  144,494
  166,594
  190,358
  215,749
  242,728
  271,259
  301,312
  332,862
  365,895
  400,404
  436,393
  473,877
  512,880
  553,436
  595,590
  639,396
  684,918
  732,229
Total liabilities and equity, $m
  37,474
  54,162
  76,612
  105,575
  142,025
  186,865
  240,897
  304,790
  379,071
  464,112
  560,138
  667,245
  785,410
  914,518
  1,054,390
  1,204,799
  1,365,502
  1,536,255
  1,716,830
  1,907,036
  2,106,720
  2,315,788
  2,534,201
  2,761,983
  2,999,223
  3,246,076
  3,502,759
  3,769,555
  4,046,808
  4,334,923
  4,634,361
Debt-to-equity ratio
  2.378
  3.270
  3.870
  4.270
  4.540
  4.730
  4.870
  4.960
  5.030
  5.090
  5.130
  5.160
  5.190
  5.210
  5.220
  5.240
  5.250
  5.260
  5.260
  5.270
  5.280
  5.280
  5.290
  5.290
  5.290
  5.290
  5.300
  5.300
  5.300
  5.300
  5.310
Adjusted equity ratio
  0.150
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  5
  399
  184
  -156
  -709
  -1,436
  -2,362
  -3,513
  -4,912
  -6,576
  -8,519
  -10,631
  -13,160
  -15,985
  -19,108
  -22,523
  -26,225
  -30,208
  -34,465
  -38,989
  -43,773
  -48,813
  -54,103
  -59,640
  -65,425
  -71,456
  -77,737
  -84,272
  -91,065
  -98,124
  -105,459
Depreciation, amort., depletion, $m
  1,055
  121
  121
  121
  121
  121
  121
  121
  121
  121
  121
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Funds from operations, $m
  692
  520
  306
  -35
  -588
  -1,314
  -2,241
  -3,392
  -4,791
  -6,455
  -8,398
  -10,631
  -13,160
  -15,985
  -19,108
  -22,523
  -26,225
  -30,208
  -34,465
  -38,989
  -43,773
  -48,813
  -54,103
  -59,640
  -65,425
  -71,456
  -77,737
  -84,272
  -91,065
  -98,124
  -105,459
Change in working capital, $m
  -162
  87
  116
  150
  188
  231
  279
  330
  383
  439
  496
  553
  610
  666
  722
  776
  830
  881
  932
  982
  1,031
  1,079
  1,127
  1,176
  1,225
  1,274
  1,325
  1,377
  1,431
  1,487
  1,546
Cash from operations, $m
  854
  432
  190
  -184
  -776
  -1,546
  -2,520
  -3,722
  -5,174
  -6,894
  -8,894
  -11,184
  -13,770
  -16,652
  -19,830
  -23,299
  -27,054
  -31,090
  -35,397
  -39,971
  -44,804
  -49,892
  -55,230
  -60,816
  -66,650
  -72,731
  -79,062
  -85,649
  -92,496
  -99,612
  -107,005
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
New CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from investing activities, $m
  -4,311
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Free cash flow, $m
  -3,457
  432
  190
  -184
  -776
  -1,546
  -2,520
  -3,722
  -5,174
  -6,894
  -8,894
  -11,184
  -13,770
  -16,652
  -19,830
  -23,299
  -27,054
  -31,090
  -35,397
  -39,971
  -44,804
  -49,892
  -55,230
  -60,816
  -66,650
  -72,731
  -79,062
  -85,649
  -92,496
  -99,612
  -107,005
Issuance/(repayment) of debt, $m
  2,029
  14,304
  18,903
  24,387
  30,690
  37,755
  45,495
  53,799
  62,544
  71,604
  80,855
  90,184
  99,495
  108,710
  117,772
  126,645
  135,312
  143,774
  152,044
  160,152
  168,135
  176,035
  183,904
  191,793
  199,756
  207,850
  216,127
  224,642
  233,447
  242,593
  252,128
Issuance/(repurchase) of shares, $m
  1,086
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  4,415
  14,304
  18,903
  24,387
  30,690
  37,755
  45,495
  53,799
  62,544
  71,604
  80,855
  90,184
  99,495
  108,710
  117,772
  126,645
  135,312
  143,774
  152,044
  160,152
  168,135
  176,035
  183,904
  191,793
  199,756
  207,850
  216,127
  224,642
  233,447
  242,593
  252,128
Total cash flow (excl. dividends), $m
  971
  14,737
  19,093
  24,203
  29,914
  36,209
  42,975
  50,077
  57,370
  64,710
  71,961
  79,000
  85,725
  92,058
  97,942
  103,346
  108,258
  112,684
  116,647
  120,182
  123,330
  126,143
  128,674
  130,976
  133,107
  135,119
  137,065
  138,993
  140,951
  142,981
  145,123
Retained Cash Flow (-), $m
  -1,057
  -2,684
  -3,547
  -4,576
  -5,759
  -7,085
  -8,537
  -10,095
  -11,736
  -13,436
  -15,172
  -16,923
  -18,670
  -20,399
  -22,100
  -23,765
  -25,391
  -26,979
  -28,531
  -30,052
  -31,550
  -33,033
  -34,509
  -35,990
  -37,484
  -39,003
  -40,556
  -42,154
  -43,806
  -45,522
  -47,311
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  12,053
  15,546
  19,627
  24,155
  29,125
  34,438
  39,981
  45,634
  51,274
  56,789
  62,077
  67,055
  71,658
  75,842
  79,581
  82,867
  85,705
  88,116
  90,129
  91,780
  93,111
  94,164
  94,987
  95,623
  96,116
  96,509
  96,840
  97,145
  97,459
  97,811
Discount rate, %
 
  11.00
  11.55
  12.13
  12.73
  13.37
  14.04
  14.74
  15.48
  16.25
  17.06
  17.92
  18.81
  19.75
  20.74
  21.78
  22.87
  24.01
  25.21
  26.47
  27.80
  29.19
  30.65
  32.18
  33.79
  35.48
  37.25
  39.11
  41.07
  43.12
  45.28
PV of cash for distribution, $m
 
  10,859
  12,493
  13,922
  14,955
  15,551
  15,657
  15,270
  14,431
  13,222
  11,749
  10,129
  8,473
  6,878
  5,419
  4,142
  3,071
  2,209
  1,540
  1,040
  680
  430
  263
  155
  88
  49
  26
  13
  6
  3
  1
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Brookfield Renewable Partners L.P. owns a portfolio of renewable power generating facilities. It owns and manages 207 hydroelectric generating stations, 37 wind facilities, 3 biomass facilities, and 2 natural gas-fired plants with 7,284 megawatts of generating capacity in the United States, Canada, Brazil, and Europe. The company sells its generation output primarily to public power authorities, load-serving utilities, and industrial users. Brookfield Renewable Partners Limited operates as the general partner of Brookfield Renewable Partners L.P. The company was formerly known as Brookfield Renewable Energy Partners L.P. and changed its name to Brookfield Renewable Partners L.P. in May 2016. Brookfield Renewable Partners L.P. was founded in 1999 and is based in Toronto, Canada.

FINANCIAL RATIOS  of  Brookfield Renewable Partners L.P. (BEP-UN)

Valuation Ratios
P/E Ratio 1306.7
Price to Sales 2
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 7.7
Price to Free Cash Flow 7.7
Growth Rates
Sales Growth Rate 50.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 210.4%
Total Debt to Equity 237.8%
Interest Coverage 1
Management Effectiveness
Return On Assets -7.4%
Ret/ On Assets - 3 Yr. Avg. 0.2%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0.4%
Return On Equity 0.1%
Return On Equity - 3 Yr. Avg. 1.2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 57.7%
Gross Margin - 3 Yr. Avg. 64.3%
EBITDA Margin 55.3%
EBITDA Margin - 3 Yr. Avg. 62.8%
Operating Margin 24.4%
Oper. Margin - 3 Yr. Avg. 29.4%
Pre-Tax Margin -0.5%
Pre-Tax Margin - 3 Yr. Avg. 4.4%
Net Profit Margin 0.2%
Net Profit Margin - 3 Yr. Avg. 2.6%
Effective Tax Rate 400%
Eff/ Tax Rate - 3 Yr. Avg. 84.9%
Payout Ratio 15100%

BEP-UN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BEP-UN stock intrinsic value calculation we used $3313 million for the last fiscal year's total revenue generated by Brookfield Renewable Partners L.P.. The default revenue input number comes from 2016 income statement of Brookfield Renewable Partners L.P.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BEP-UN stock valuation model: a) initial revenue growth rate of 45.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11%, whose default value for BEP-UN is calculated based on our internal credit rating of Brookfield Renewable Partners L.P., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Brookfield Renewable Partners L.P..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BEP-UN stock the variable cost ratio is equal to 71.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BEP-UN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.6% for Brookfield Renewable Partners L.P..

Corporate tax rate of 27% is the nominal tax rate for Brookfield Renewable Partners L.P.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BEP-UN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BEP-UN are equal to 0%.

Life of production assets of 0.6 years is the average useful life of capital assets used in Brookfield Renewable Partners L.P. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BEP-UN is equal to 5.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5874 million for Brookfield Renewable Partners L.P. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 165.943 million for Brookfield Renewable Partners L.P. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Brookfield Renewable Partners L.P. at the current share price and the inputted number of shares is $6.5 billion.


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