Brookfield Renewable Partners L.P. Limited Partnership Units

Good day, ladies and gentlemen, and welcome to the BEP First Quarter 2019 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touchdown telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Sachin Chah, Chief Executive Officer. Sir, you may begin.

Thank you, Operator. Good morning, everyone, and thank you for joining us for our first quarter 2019 conference call. Before I begin, I'd like to remind you that a copy of our news release, investor supplement, and letter to unit holders can be found on our website. I also want to remind you that we may make forward-looking statements on this call. These statements are subject to known and unknown risks, and our future results may differ materially. For more information, you're encouraged to review our regulatory filings available on CDAR Edgar and on our website we continue to advance our key priorities for the business our long-term objective remains focused on generating 12 to 15 percent total returns on a per unit basis our approach over the last 20 years has consistently been to acquire high-quality assets and businesses surface value over time through operational improvements while maintaining a low risk profile underpinned by an investment grade balance sheet and strong access to capital more recently we've reached a scale in the business where we can add asset sales as an alternative source of low-cost funding, which can be redeployed accretively into our acquisition and development program. The first quarter of 2019 was strong, as we generated FFO per unit of 73 cents, representing an 18% increase over the prior year. We agreed to invest approximately $630 million of capital, or $160 million net to BEPS, across two transactions, one in Canada and one in India, all at returns commensurate with our long-term targets. We also commissioned a 19-megawatt hydro facility in Brazil and advanced an additional 134 megawatts of hydro, wind, storage, and rooftop solar construction projects globally. We raised over $400 million of proceeds through asset sales and the issuance of preferred share units, and ended the quarter with $2.3 billion of available liquidity. Finally, we continue to reduce our FFO payout ratio, which is now trending below 90% on an annualized basis. As most of you know, in March 2019, we agreed to invest $750 million into TransAlta Corporation, the largest power producer in Alberta, Canada. The investment will occur in two tranches. $350 million was funded yesterday, and $400 million will be funded in October 2020. The investment provides us with the option to convert into an interest in TransAlta's 800-megawatt portfolio of high-quality hydroelectric assets in Alberta between the years 2025 and 2028 based on a multiple of 13 times the average annual EBITDA over the prior three years before conversion. As part of the transaction, we also agreed to increase our ownership in TransAlta's common shares from approximately 5% today to over 9%. The TransAlta investment was the culmination of a multi-year relationship and establishes a strong partnership with the company to help advance its growth strategy as it transitions to a low-carbon energy future. In India, we've been discussing opportunities over the last number of years and generally have remained patient as valuations remain high. Today, we announced a relatively small transaction where we agreed to invest in two wind farms totaling 210 megawatts in India for $70 million or $18 million net to BEP, bringing our total portfolio in that country to just over 500 megawatts. These assets were recently constructed with a track record of strong operating performance and are fully contracted under a long-term 25-year power purchase agreement with a creditworthy utility. Looking ahead, we believe the business is well positioned to deliver strong results during all points of the economic cycle. Should the current protracted bull market continue into the foreseeable future, we will continue to execute on the same strategy that we've pursued over the last number of years, looking for pockets of capital scarcity and unique multifaceted transactions in order to partner with other counterparties. In addition, we'll continue to finance the business on an investment-grade basis and leverage our operating expertise to enhance value through operational organic growth levers. Should the markets weaken, we believe our strong balance sheet, our liquidity, our robust asset sales program and access to capital will reduce the need to issue equity to fund growth. Accordingly, we believe we are one of the few companies in this sector with a strategy and the financial flexibility to benefit during periods of both market strength and weakness. With that, I'll now turn the call over to Wyatt to discuss our operating results and our financial position.

Thank you, Sachin, and good morning, everyone. During the first quarter, we generated FFO of $227 million, up from $193 million in the prior year. Our business continues to benefit from growing resource diversity, limited off-taker concentration risk, and the build-out of our development pipeline. During the quarter, overall generation exceeded the long-term average by 7%. As we have stated for many years, We do not manage the business based on under or over performance of generation relative to the long-term average and do not factor this into our long-term planning. Instead, our focus remains on diversifying the business which, over the long term, mitigates exposure to resource volatility, regional or market disruptions, and potential credit events. For example, given the breadth of our business, the recent events with PG&E will have no impact on our business as we have almost no exposure. Furthermore, our single largest non-government third-party customer represents only 3% of Generation, providing strong downside protection and safeguarding our cash flows. During the first quarter, our hydroelectric segment contributed $218 million to FFO. In North America, Generation was above the long-term average, and we ended the quarter with above-average reservoir levels in Canada and PGM, where we have significant seasonal storage flexibility. Additionally, we saw strong results in South America, supported by high prices for our energy and ancillary products. We continue to make progress on our contracting initiatives for our hydroelectric portfolio, signing 15 contracts in the quarter for a total of approximately 2,300 gigawatt hours per year. Our focus in Colombia and Brazil has been to lengthen the term of our power purchase contracts as power price volatility in these markets provides an opportunity to stabilize future revenues while locking in upside as our contracts are generally at or below market. Our wind and solar businesses contributed $67 million to FFO during the quarter, a 43% increase relative to the prior year as we've benefited from acquisitions and contributions from recently commissioned projects. We continue to generate stable revenues from these assets, as we benefit from the diversification of our fleet and highly contracted cash flows with long duration power purchase agreements. Our storage facilities and other operations, which are not reliant on power prices but rather sell services to the grid, contributed $7 million to FFO during the quarter. We commissioned a 19 megawatt hydroelectric facility in Brazil from our development pipeline during the quarter. In addition, we continue to build out 134 megawatts of hydroelectric, wind, solar, and storage products that are currently under construction that are expected to contribute $13 million to FFO once commissioned. We're also advancing our global hydro, wind, solar, and distributed generation development pipeline, including 636 megawatts of construction-ready and advanced-stage projects through final permitting and securing a route to market. We're also assessing 220 megawatts of repowering projects in New York, California, and Hawaii, all markets where renewables play a critical role in providing low-cost, clean energy. Our balance sheet remains strong with $2.3 billion of available liquidity at quarter end. We have no material debt maturities over the next four years, and our overall debt duration is 10 years. We remain well protected from foreign exchange volatility due to our hedging program, Accordingly, an overall 10% move in the currencies and markets we operate would have an overall 4% impact to our FFO. During the quarter, we raised $400 million through asset sales and the issuance of preferred units. We completed the sale of an additional 25% interest in a portfolio of Canadian hydroelectric assets. We also advanced the sales of our non-core portfolios in South Africa, Thailand, and Malaysia that once closed will generate an additional $90 million of total liquidity to Beth. As always, we remain focused on delivering to our unit holders long-term total returns of 12% to 15% on a per-unit basis. We thank you for your continued support, and we look forward to updating you on our progress in that regard. That concludes our formal remarks. Thank you for joining us this morning. We'd be pleased to take your questions at this time. Operator?