HAMILTON, BERMUDA--(Marketwired - May 8, 2013) - Brookfield Renewable Energy Partners L.P. (TSX:BEP.UN) -
All amounts in U.S. dollars unless stated otherwise
Investors, analysts and other interested parties can access Brookfield Renewable's 2013 first quarter results as well as the Letter to Shareholders and Supplemental Results on the web site under the Investor Relations section at www.brookfieldrenewable.com.
The 2013 first quarter results conference call can be accessed via webcast on May 8, 2013 at 9:00 a.m. ET at www.brookfieldrenewable.com or via teleconference at 1-800-319-4610 toll free in North America. For overseas calls please dial 1-604-638-5340, at approximately 8:50 a.m. ET. The teleconference taped rebroadcast can be accessed at 1-800-319-6413 (password: 1557#) until June 7, 2013.
Brookfield Renewable Energy Partners L.P. ("Brookfield Renewable") today announced its results for the three months ended March 31, 2013.
"Our first quarter results reflect strong operating performance and continued progress in meeting our long-term growth objectives," said Richard Legault, President and CEO of Brookfield Renewable. "Favourable hydrological conditions resulted in generation at long-term average levels, while the acquisition of more than 560 MW of hydroelectric and wind assets has expanded our portfolio in attractive markets. We continue to benefit from a high-quality portfolio, whose output is sold predominantly under long-term power sales agreements and is also well positioned to benefit from rising energy prices over time."
Financial Results
| Unaudited, US$ millions (except per unit amounts) |
Three Months Ended March 31 | ||||
| 2013 | 2012 | ||||
| Generation (GWh) | |||||
| - Total | 5,535 | 4,817 | |||
| - Brookfield Renewable's share | 4,634 | 4,453 | |||
| Revenues | $ | 437 | $ | 426 | |
| Adjusted EBITDA(1) | $ | 319 | $ | 318 | |
| Funds from operations (FFO)(1) | $ | 162 | $ | 175 | |
| FFO per unit(2) | $ | 0.61 | $ | 0.66 | |
| (1) | Non-IFRS measure. Refer to "Cautionary Statement Regarding Use of Non-IFRS Measures". |
| (2) | Weighted average LP units, redeemable/exchangeable partnership units held by Brookfield Asset Management and general partnership units totaled 265.2 million (2012: 265.1 million). |
Review of Operations
Total generation was 5,535 GWh for three months ended March 31, 2013 compared to the long-term average of 5,325 GWh and to 4,817 GWh for the same period in the prior year. The hydroelectric portfolio benefited from favourable inflows resulting in long-term average generation in most regions. Hydroelectric generation was 646 GWh higher than the prior year primarily due to the contribution of acquired or commissioned facilities in the last 12 months. Generation from existing hydroelectric facilities in Canada and parts of the United States was slightly lower than the prior year, when precipitation and generation levels were well above the average. Reservoir levels on a portfolio basis are in line with long-term average conditions for this time of year.
Generation from wind totaled 539 GWh, an increase of 81 GWh as compared to the same period of the prior year. Additional contributions from facilities acquired or commissioned in California and New England during the last 12 months, were partly offset by wind conditions in Canada which were equal to the long term average but lower than the strong results in the prior year.
For the first quarter of 2013, funds from operations was in line with plan at $162 million ($0.61 per unit) as compared with $175 million ($0.66 per unit) in the first quarter of 2012. Results in 2012 reflect above average hydrology and strong generation notably in markets where power purchase agreement prices are higher than our average price.
The tables below summarize generation by segment and region:
| Generation (GWh) | Variance of Results | |||||||
For the three months ended March 31 |
Actual 2013 |
Actual 2012 |
LTA 2013 |
Actual vs. LTA |
Actual vs. Prior Year |
|||
| Hydroelectric generation | ||||||||
| United States | 2,561 | 1,958 | 2,389 | 172 | 603 | |||
| Canada | 1,282 | 1,308 | 1,196 | 86 | (26 | ) | ||
| Brazil(1) | 936 | 867 | 936 | - | 69 | |||
| 4,779 | 4,133 | 4,521 | 258 | 646 | ||||
| Wind Energy | ||||||||
| United States | 216 | 90 | 258 | (42 | ) | 126 | ||
| Canada | 323 | 368 | 324 | (1 | ) | (45 | ) | |
| 539 | 458 | 582 | (43 | ) | 81 | |||
| Other | 217 | 226 | 222 | (5 | ) | (9 | ) | |
| Total generation(2) | 5,535 | 4,817 | 5,325 | 210 | 718 | |||
| (1) | In Brazil, assured generation levels are used as a proxy for long-term average. |
| (2) | Includes 100% of generation from equity-accounted investments. |
Growth Initiatives
In the first quarter, Brookfield Renewable deployed $600 million of equity to acquire over 560 MW of hydroelectric and wind facilities in our core markets:
- We completed the acquisition and refinancing of a 360 MW hydroelectric portfolio in Maine. Following this transaction Brookfield Renewable owns and operates nearly 1,300 MW of capacity in New England, making it one of the region's largest independent power producers.
- We acquired our partner's 50% stake in the 83 MW Powell River Energy portfolio in British Columbia. Brookfield Renewable has managed and operated the facility since 2001.
- We expanded our operating wind portfolio in the attractive California market to 430 MW with the acquisition of 93% of the outstanding shares of Western Wind Energy Corp. We expect to acquire the remaining shares in the second quarter.
During the quarter, we achieved commercial operations for a 29 MW hydroelectric project in Brazil, which brings the total to 14 stations and 314 MW that have been constructed in Brazil since 2003.
The 45 MW Kokish River hydro project in western Canada is progressing as planned and is on track for completion in mid-2014.
Financial Position and Liquidity
During the quarter, Brookfield Renewable completed C$580 million in project financings related to our Ontario wind portfolio. Available liquidity as at the date of this release is approximately $680 million.
Distribution Declaration
The Board of Directors has declared a quarterly distribution in the amount of US$0.3625 per unit, payable on July 31, 2013 to unitholders of record as at the close of business on June 30, 2013. The recent increase in the quarterly distribution to $1.45 per unit on an annualized basis took effect with the first quarter distribution paid on April 30, 2013. This distribution is consistent with Brookfield Renewable's policy of targeting a long-term, sustainable distribution in the range of 60-70% of FFO and which increases on average by 3% to 5% annually.
The regular quarterly dividends on the Brookfield Renewable Power Preferred Equity Inc. preferred shares have also been declared.
Information on Brookfield Renewable's distributions and preferred share dividends can be found on its website at www.brookfieldrenewable.com under Investor Relations.
Distribution Reinvestment Plan
Brookfield Renewable maintains a Distribution Reinvestment Plan ("DRIP") which allows holders of its limited partnership units who are resident in Canada to acquire additional units by reinvesting all or a portion of their cash distributions without paying commissions. Information on the DRIP, including details on how to enroll, is available on Brookfield Renewable's website at www.brookfieldrenewable.com/DRIP.
Additional Information
The Letter to Shareholders and the Supplemental Results for the period ended March 31, 2013 contain further information on Brookfield Renewable's strategy, operations and financial results. Shareholders are encouraged to read these documents, which are available at www.brookfieldrenewable.com.
Brookfield Renewable Energy Partners (TSX:BEP.UN) operates one of the largest publicly-traded, pure-play renewable power platforms globally. Its portfolio is primarily hydroelectric and totals approximately 5,900 megawatts of installed capacity. Diversified across 70 river systems and 11 power markets in the United States, Canada and Brazil, the portfolio's output is sold predominantly under long-term contracts and generates enough electricity from renewable resources to power more than three million homes on average each year. With a portfolio of high-quality assets and strong growth prospects, the business is positioned to generate stable, long-term cash flows supporting regular and growing cash distributions to shareholders. For more information, please visit www.brookfieldrenewable.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This news release 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 news release 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, listing on the NYSE, future energy prices and demand for electricity, 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 news release 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 risk that we may be deemed an "investment company" under the Investment Company Act; the fact that we are not subject to the same disclosure requirements as a U.S. domestic issuer; 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 or in wind conditions at our wind energy 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; our operations are highly regulated and exposed to increased regulation which could result in additional costs; 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 and environmental risks; disputes and litigation; our operations could be affected by local communities; losses resulting from fraud, bribery, corruption, other illegal acts, inadequate or failed internal processes or systems, or from external events; general industry risks relating to the North American and Brazilian 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 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 and complete sufficient investment opportunities; the growth of our portfolio; 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 all 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; 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 news release and should not be relied upon as representing our views as of any date subsequent to May 8, 2013, the date of this news release. 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 Annual Information Form and 20-F registration statement.
CAUTIONARY STATEMENT REGARDING USE OF NON-IFRS MEASURES
This news release contains references to Adjusted EBITDA, funds from operations and net asset value which are not generally accepted accounting measures under IFRS and therefore may differ from definitions of Adjusted EBITDA, funds from operations and net asset value used by other entities. We believe that Adjusted EBITDA, funds from operations and net asset value 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 net asset value 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 and funds from operations to net income is presented in our Management's Discussion and Analysis and in our interim consolidated financial statements for the first quarter of 2013 at www.brookfieldrenewable.com.
References to Brookfield Renewable are to Brookfield Renewable Energy Partners L.P. together with its subsidiary and operating entities unless the context reflects otherwise.
| 1 | 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, amortization, management service costs and the cash portion of non-controlling interests. 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. |
| NET ASSET VALUE | ||||||||||||
| Total | Per Share | |||||||||||
| Mar 31 | Dec 31 | Mar 31 | Dec 31 | |||||||||
| (MILLIONS, EXCEPT AS NOTED) | 2013 | 2012 | 2013 | 2012 | ||||||||
| Property, plant and equipment, at fair value | ||||||||||||
| Hydroelectric(1) | $ | 13,946 | $ | 13,005 | $ | 52.58 | $ | 49.04 | ||||
| Wind energy | 2,607 | 2,244 | 9.83 | 8.46 | ||||||||
| Other | 69 | 71 | 0.26 | 0.27 | ||||||||
| 16,622 | 15,320 | 62.67 | 57.77 | |||||||||
| Development assets | 338 | 382 | 1.27 | 1.44 | ||||||||
| Equity-accounted investments | 326 | 344 | 1.23 | 1.30 | ||||||||
| Working capital and other, net | 277 | 149 | 1.04 | 0.56 | ||||||||
| Long-term debt and credit facilities | (7,230 | ) | (6,119 | ) | (27.26 | ) | (23.07 | ) | ||||
| Participating non-controlling interests - in operating subsidiaries | (1,027 | ) | (1,028 | ) | (3.87 | ) | (3.88 | ) | ||||
| Preferred equity | (659 | ) | (500 | ) | (2.48 | ) | (1.89 | ) | ||||
| Net asset value(2) | $ | 8,647 | $ | 8,548 | $ | 32.60 | $ | 32.23 | ||||
| (1) | Includes $43 million of intangible assets (2012: $44 million). |
| (2) | Non-IFRS measure. Refer to "Cautionary Statement Regarding Use of Non-IFRS Measures". |
NET INCOME (LOSS), ADJUSTED EBITDA AND FUNDS FROM OPERATIONS ON A CONSOLIDATED BASIS
| Three months ended March 31 | ||||||||
| (MILLIONS, EXCEPT AS NOTED) | 2013 | 2012 | ||||||
| Generation (GWh) | 5,535 | 4,817 | ||||||
| Revenues | $ | 437 | $ | 426 | ||||
| Other income | 2 | 5 | ||||||
| Share of cash earnings from equity-accounted investments | 6 | 4 | ||||||
| Direct operating costs | (126 | ) | (117 | ) | ||||
| Adjusted EBITDA(1) | 319 | 318 | ||||||
| Interest expense - borrowings | (102 | ) | (110 | ) | ||||
| Management service costs | (12 | ) | (7 | ) | ||||
| Current income taxes | (3 | ) | (6 | ) | ||||
| Less: cash portion of non-controlling interests | (40 | ) | (20 | ) | ||||
| Funds from operations(1) | 162 | 175 | ||||||
| Add: cash portion of non-controlling interests | 40 | 20 | ||||||
| Other items: | ||||||||
| Depreciation and amortization | (128 | ) | (126 | ) | ||||
| Unrealized financial instrument gain (loss) | 16 | (9 | ) | |||||
| Share of non-cash loss from equity-accounted investments | (2 | ) | (3 | ) | ||||
| Deferred income tax recovery | (1 | ) | (13 | ) | ||||
| Other | (2 | ) | (13 | ) | ||||
| Net income | $ | 85 | $ | 31 | ||||
| Net income (loss) attributable to: | ||||||||
| Non-controlling interests | ||||||||
| Preferred equity | $ | 7 | $ | 3 | ||||
| Participating non-controlling interests - in operating subsidiaries | 16 | (1 | ) | |||||
| 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 | 30 | 14 | ||||||
| Limited partners' equity | 31 | 15 | ||||||
| Basic and diluted earnings per LP Unit (2) | $ | 0.23 | $ | 0.11 | ||||
| (1) | Non-IFRS measures. See "Cautionary Statement Regarding Use of Non-IFRS Measures". |
| (2) | Average LP Units outstanding during the period totaled 132.9 million. |
FINANCIAL RESULTS ON A PROPORTIONATE AND CONSOLIDATED BASIS
The following table reflects generation for the three months ended March 31, on a proportionate and consolidated basis.
| Proportionate | Third party interests |
Consolidated | |||||
| Generation (GWh) | Wholly- owned assets |
Partially- owned assets |
Equity- accounted investments |
Total | |||
| Hydroelectric generation | |||||||
| United States | 1,539 | 363 | 48 | 1,950 | 611 | 2,561 | |
| Canada | 1,136 | - | 73 | 1,209 | 73 | 1,282 | |
| Brazil(1) | 824 | 18 | 20 | 862 | 74 | 936 | |
| 3,499 | 381 | 141 | 4,021 | 758 | 4,779 | ||
| Wind energy | |||||||
| United States | 35 | 38 | - | 73 | 143 | 216 | |
| Canada | 323 | - | - | 323 | - | 323 | |
| 358 | 38 | - | 396 | 143 | 539 | ||
| Other | 217 | - | - | 217 | - | 217 | |
| Total generation(2) - 2013 | 4,074 | 419 | 141 | 4,634 | 901 | 5,535 | |
| Total generation(2) - 2012 | 4,028 | 303 | 122 | 4,453 | 364 | 4,817 | |
| (1) | In Brazil, assured energy generation levels are used as a proxy for long-term average. |
| (2) | Includes 100% of generation from equity-accounted investments. |
The following table illustrates our financial results for the three months ended March 31, 2013, including revenues, adjusted EBITDA, and funds from operations, on a proportionate basis, while adjusting for our share from facilities in which we own less than 100%:
| Proportionate | Third party interests |
Consolidated | |||||||||||||||
| (MILLIONS, EXCEPT AS NOTED) | Wholly- owned assets |
Partially- owned assets |
Equity- accounted investments |
Total | |||||||||||||
| Revenues | $ | 326 | $ | 55 | $ | - | $ | 381 | $ | 56 | $ | 437 | |||||
| Other income | 2 | - | - | 2 | - | 2 | |||||||||||
| Share of cash earnings from equity-accounted investments | - | - | 6 | 6 | - | 6 | |||||||||||
| Direct operating costs | (105 | ) | (9 | ) | - | (114 | ) | (12 | ) | (126 | ) | ||||||
| Adjusted EBITDA(1) | 223 | 46 | 6 | 275 | 44 | 319 | |||||||||||
| Interest expense - borrowings | (77 | ) | (14 | ) | - | (91 | ) | (11 | ) | (102 | ) | ||||||
| Management service costs | (12 | ) | - | - | (12 | ) | - | (12 | ) | ||||||||
| Current income taxes | (3 | ) | - | - | (3 | ) | - | (3 | ) | ||||||||
| Cash portion of non-controlling interests | (7)(2) | - | - | (7 | ) | (33)(3) | (40 | ) | |||||||||
| Funds from operations(1) | $ | 124 | $ | 32 | $ | 6 | $ | 162 | $ | - | $ | 162 | |||||
| (1) | Non-IFRS measures. Refer to "Cautionary Statement Regarding Use of Non-IFRS Measures". |
| (2) | Represents the distributions to preferred shareholders. |
| (3) | Represents third party interests' funds from operations. |
Contact Information:
Zev Korman
Director, Investor Relations
416-359-1955
zev.korman@brookfield.com
www.brookfieldrenewable.com