Brookfield Renewable Energy Partners L.P. (TSX:BEP.UN)(NYSE:BEP)
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Investors, analysts and other interested parties can access
Brookfield Renewable's 2013 second 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 second quarter results conference call can be accessed
via webcast on August 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 September 8, 2013.
All amounts in U.S. dollars unless stated otherwise.
Brookfield Renewable Energy Partners L.P. (TSX:BEP.UN)(NYSE:BEP)
("Brookfield Renewable") today announced significantly improved
results for the three and six months ended June 30, 2013.
"We are very pleased with our results for the second quarter and
first half of the year," said Richard Legault, President and CEO of
Brookfield Renewable. "Recent acquisitions have met or exceeded
expectations and contributed meaningfully to improved generation
and cash flows. Moreover, we continue to be very well positioned
for growth, with significant upside tied to a strengthening U.S.
economy and ultimately, rising energy prices. The current
investment environment complements our unique strengths as a
renewable energy company and is expected to further support
attractive total returns to shareholders over time."
Financial Results
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Unaudited Three months ended Six months ended
US$ millions June 30 June 30
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(except per unit amounts)
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2013 2012 2013 2012
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Generation (GWh)
- Total 6,265 4,101 11,800 8,918
- Brookfield Renewable's share 5,403 3,638 10,037 8,091
Revenues $ 484 $ 337 $ 921 $ 763
Adjusted EBITDA(1) $ 357 $ 221 $ 676 $ 539
Funds from operations (FFO)(1) $ 187 $ 87 $ 349 $ 262
FFO per unit(1)(2) $ 0.71 $ 0.33 $ 1.32 $ 0.99
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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.
Review of Operations
Total generation was 6,265 GWh for the three months ended June
30, 2013 compared to the long-term average of 6,171 GWh and to
4,101 GWh for the same period in the prior year. Hydroelectric
generation was 1,948 GWh higher than the prior year reflecting new
assets which performed strongly and contributed 994 GWh to
generation, and a return to long-term average generation in the
current quarter relative to the very dry conditions in the same
period last year. Reservoir levels on a portfolio basis are in line
with long-term average conditions for this time of year.
Generation from wind totaled 737 GWh and was essentially in line
with the long-term average. Wind generation increased by 270 GWh
year-over-year, reflecting improved wind conditions as well as the
acquisition of wind facilities in California.
For the second quarter, Adjusted EBITDA was $357 million as
compared to $221 million in Q2 2012, and assets acquired in the
last year contributed $45 million. Funds from operations of $187
million or $0.71 per unit was in line with plan as compared with
$87 million or $0.33 per unit in the prior year.
For the first half of 2013, funds from operations of $349
million or $1.32 per unit was in line with plan as compared with
$262 million or $0.99 per unit in the first six months of 2012.
The tables below summarize generation by segment and region:
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Generation (GWh) Variance of Results
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Actual Actual LTA Actual vs. Actual vs.
For the three months ended June 30 2013 2012 2013 LTA Prior Year
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Hydroelectric generation
United States 2,942 1,619 2,829 113 1,323
Canada 1,519 986 1,461 58 533
Brazil (1) 903 811 903 - 92
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5,364 3,416 5,193 171 1,948
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Wind Energy
United States 459 221 468 (9) 238
Canada 278 246 292 (14) 32
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737 467 760 (23) 270
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Other 164 218 218 (54) (54)
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Total generation (2) 6,265 4,101 6,171 94 2,164
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1. In Brazil, assured generation levels are used as a proxy for long-term
average.
2. Includes 100% of generation from equity-accounted investments.
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Generation (GWh) Variance of Results
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Actual Actual LTA Actual vs. Actual vs.
For the six months ended June 30 2013 2012 2013 LTA Prior Year
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Hydroelectric generation
United States 5,503 3,577 5,218 285 1,926
Canada 2,801 2,294 2,657 144 507
Brazil (1) 1,839 1,678 1,839 - 161
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10,143 7,549 9,714 429 2,594
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Wind Energy
United States 675 311 726 (51) 364
Canada 601 614 616 (15) (13)
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1,276 925 1,342 (66) 351
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Other 381 444 440 (59) (63)
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Total generation (2) 11,800 8,918 11,496 304 2,882
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1. In Brazil, assured generation levels are used as a proxy for long-term
average.
2. Includes 100% of generation from equity-accounted investments.
Quarterly Highlights
Achievements in the second quarter include:
-- Completed the acquisition and integration of Western Wind Energy Corp.,
expanding Brookfield Renewable's operating wind portfolio in the
attractive California market to 430 MW.
-- Successfully integrated the 360 MW White Pine hydroelectric portfolio in
Maine, providing meaningful upside potential from rising energy prices.
-- Enhanced liquidity by $300 million to approximately $1 billion as at the
date of this release, reflecting an increase to the corporate credit
facility to approximately $1.3 billion, strong operating cash flows and
the proceeds of the preferred share issuance in May 2013.
-- Advanced construction of the 45 MW Kokish River hydro project in western
Canada which is progressing as planned and is on track for completion in
mid-2014.
-- Achieved a listing of shares on the New York Stock Exchange on June 11,
2013, under the symbol BEP, which is expected to enhance Brookfield
Renewable's long-term access to capital globally.
Distribution Declaration
The Board of Directors has declared a quarterly distribution in
the amount of US$0.3625 per unit, payable on October 31, 2013 to
unitholders of record as at the close of business on September 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 June 30, 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)(NYSE:BEP)
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 12 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, future energy prices and
demand for electricity, economic recovery, the future growth
prospects, achieving long term average generation, project
development and capital expenditure costs, diversification of
shareholder base, energy policies, economic growth, growth
potential of renewable asset class 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, security 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 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 August 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 Form 20-F.
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 second
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.
ADJUSTED EBITDA AND FUNDS FROM OPERATIONS
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Three months ended Six months ended
June 30 June 30
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(MILLIONS, EXCEPT AS NOTED) 2013 2012 2013 2012
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Generation (GWh) 6,265 4,101 11,800 8,918
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Revenues $ 484 $ 337 $ 921 $ 763
Other income 2 5 4 10
Share of cash earnings from equity-
accounted investments 6 4 12 8
Direct operating costs (135) (125) (261) (242)
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Adjusted EBITDA (1) 357 221 676 539
Interest expense - borrowings (106) (104) (208) (214)
Management service costs (11) (8) (23) (15)
Current income taxes (8) (7) (11) (13)
Cash portion of non-controlling
interests
Preferred equity (10) (4) (17) (7)
Participating non-controlling
interests - in operating subsidiaries (35) (11) (68) (28)
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Funds from operations (1) $ 187 $ 87 $ 349 $ 262
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1. Non-IFRS measures. See "Cautionary Statement Regarding Use of Non-IFRS
Measures".
NET ASSET VALUE
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Total Per Share
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Jun 30 Dec 31 Jun 30 Dec 31
(MILLIONS, EXCEPT AS NOTED) 2013 2012 2013 2012
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Property, plant and equipment, at fair
value
Hydroelectric(1) $13,532 $13,005 $ 51.02 $ 49.04
Wind energy 2,588 2,244 9.76 8.46
Other 67 71 0.25 0.27
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16,187 15,320 61.03 57.77
Development assets 398 382 1.50 1.44
Equity-accounted investments 318 344 1.20 1.30
Working capital and other, net 322 149 1.21 0.56
Long-term debt and credit facilities (6,923) (6,119) (26.10) (23.07)
Participating non-controlling interests
- in operating subsidiaries (1,019) (1,028) (3.84) (3.88)
Preferred equity (804) (500) (3.03) (1.89)
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Net asset value(2) $ 8,479 $ 8,548 $ 31.97 $ 32.23
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1. Includes $37 million of intangible assets (2012: $44 million).
2. Non-IFRS measure. See "Cautionary Statement Regarding Use of Non-IFRS
Measures".
FINANCIAL RESULTS ON A CONSOLIDATED AND PROPORTIONATE BASIS
The following table reflects generation for the three months
ended June 30, 2013 on a proportionate and consolidated basis.
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Third
party
Proportionate interests Consolidated
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Wholly- Partially- Equity-
owned owned accounted
Generation (GWh) assets assets investments Total
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Hydroelectric
generation
United States 1,997 383 50 2,430 512 2,942
Canada 1,443 - 38 1,481 38 1,519
Brazil(1) 788 17 23 828 75 903
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4,228 400 111 4,739 625 5,364
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Wind energy
United States 156 66 - 222 237 459
Canada 278 - - 278 - 278
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434 66 - 500 237 737
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Other 164 - - 164 - 164
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Total generation
- 2013 4,826 466 111 5,403 862 6,265
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Total generation
- 2012 3,252 233 153 3,638 463 4,101
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1. In Brazil, assured energy generation levels are used as a proxy for
long-term average.
The following table illustrates our financial results for the
three months ended June 30, 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%:
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Third
party
Proportionate interests Consolidated
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(MILLIONS, Wholly- Partially- Equity-
EXCEPT AS owned owned accounted
NOTED) assets assets investments Total
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Revenues $ 359 $ 64 $ - $ 423 $ 61 $ 484
Other income 2 - - 2 - 2
Share of cash
earnings from
equity-
accounted
investments - - 6 6 - 6
Direct
operating
costs (112) (9) - (121) (14) (135)
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Adjusted
EBITDA(1) 249 55 6 310 47 357
Interest
expense -
borrowings (80) (14) - (94) (12) (106)
Management
service costs (11) - - (11) - (11)
Current income
taxes (8) - - (8) - (8)
Participating
non-
controlling
interests - in
operating
subsidiaries - - - - (35)(2) (35)
Preferred
equity (10) - - (10) - (10)
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Funds from
operations -
2013(1) $ 140 $ 41 $ 6 $ 187 $ - $ 187
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Funds from
operations -
2012(1) $ 70 $ 13 $ 4 $ 87 $ - $ 87
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1. Non-IFRS measures. Refer to "Cautionary Statement Regarding Use of Non-
IFRS Measures".
2. Represents third party interests' funds from operations.
The following table reflects generation for the six months ended
June 30, 2013 on a proportionate and consolidated basis.
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Third
party
Proportionate interests Consolidated
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Wholly- Partially- Equity-
owned owned accounted
Generation (GWh) assets assets investments Total
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Hydroelectric
generation
United States 3,536 746 98 4,380 1,123 5,503
Canada 2,579 - 111 2,690 111 2,801
Brazil(1) 1,612 35 43 1,690 149 1,839
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7,727 781 252 8,760 1,383 10,143
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Wind energy
United States 191 104 - 295 380 675
Canada 601 - - 601 - 601
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792 104 - 896 380 1,276
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Other 381 - - 381 - 381
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Total generation
- 2013 8,900 885 252 10,037 1,763 11,800
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Total generation
- 2012 7,280 536 275 8,091 827 8,918
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1. In Brazil, assured energy generation levels are used as a proxy for
long-term average.
The following table illustrates our financial results for the
six months ended June 30, 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%:
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Third
party
Proportionate interests Consolidated
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(MILLIONS, Wholly- Partially- Equity-
EXCEPT AS owned owned accounted
NOTED) assets assets investments Total
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Revenues $ 685 $ 119 $ - $ 804 $ 117 $ 921
Other income 4 - - 4 - 4
Share of cash
earnings from
equity-
accounted
investments - - 12 12 - 12
Direct
operating
costs (217) (18) - (235) (26) (261)
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Adjusted
EBITDA(1) 472 101 12 585 91 676
Interest
expense -
borrowings (157) (28) - (185) (23) (208)
Management
service costs (23) - - (23) - (23)
Current income
taxes (11) - - (11) - (11)
Participating
non-
controlling
interests - in
operating
subsidiaries - - - - (68)(2) (68)
Preferred
equity (17) - - (17) - (17)
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Funds from
operations -
2013(1) $ 264 $ 73 $ 12 $ 349 $ - $ 349
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Funds from
operations -
2012(1) $ 207 $ 45 $ 10 $ 262 $ - $ 262
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1. Non-IFRS measures. Refer to "Cautionary Statement Regarding Use of Non-
IFRS Measures".
2. Represents third party interests' funds from operations.
Contacts: Brookfield Renewable Energy Partners L.P. Zev Korman
Vice President, Investor and Media Relations
416-359-1955zev.korman@brookfield.com
www.brookfieldrenewable.com
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