Brookfield Renewable Partners L.P. Limited Partnership Units

Good day, ladies and gentlemen, and welcome to the Brookfield Renewable Partners second 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 touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Sachin Chau, Chief Executive Officer of Brookfield Renewable Partners. Sir, you may begin.

Thank you, Operator. Good morning, everyone, and thank you for joining us for our second quarter of 2019. Before we 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. Our business performed well in the second quarter of 2019, supported by strong performance at our operating businesses and contributions from recent acquisitions. We advanced our strategic priorities during the quarter, deploying capital in a number of transactions while maintaining a robust balance sheet and access to capital. Of note, we generated FFO per unit of 74 cents a share, 35% increase over the prior year. We announced our investment in a joint venture with a global solar developer with over 6,500 megawatts utility-scale PV solar for approximately $500 million, or $125 million net to PEP, which we expect to close in the fourth quarter. We closed the acquisition of 210 megawatts of operating wind in India in and the first $350 million Canadian dollar tranche of our $750 million investment into an Alberta renewables portfolio. We announced the acquisition of a 322 megawatt distributed generation portfolio in the U.S. through TerraPower, nearly doubling our DG footprint and providing significant opportunities to drive incremental cash flow growth through operational and commercial synergies. And we ended the quarter with over $2.5 billion of available liquidity, raised approximately $275 million in incremental liquidity, the closing of the sale of certain of our South African facilities, as well as strategic up-financing and other liquidity initiatives. Finally, we reduced our FFO payout ratio on an annualized basis to approximately 85%. Our 50-50 joint venture with AKR to own one of the largest solar developers globally with an experienced management team, best-in-class contracting capabilities, and a proven track record of developing assets at premium returns. The portfolio comprises approximately 275 megawatts of operating solar, 1,400 megawatts of solar under construction, and a broader 4,800 megawatt development pipeline, which should provide significant growth optionality over the long term. Over the next five years, plan for the business is to develop 500 to 800 megawatts of new solar capacity annually in the existing pipeline and to look for additional development opportunities in the global solar market. This growth will complement our existing pipeline of development projects that today include over 600 megawatts of advanced stage wind, hydro, and solar, and approximately 130 megawatts of assets and construction. We expect to close the investment in the fourth quarter of 2019. Additionally, subsequent to quarter end, we announced through Terraform Power that we entered into an agreement to acquire for approximately $720 million a scale distributed generation business in the U.S. totaling 320 megawatts of recently constructed, fully contracted capacity underpinned by 17-year average remaining CPA term with credit for the offtake. This investment will nearly double our DG footprint making us one of the largest such portfolios in the U.S. and providing significant opportunities to drive incremental cash flow growth through operational and commercial synergy. The investment is immediately accretive and requires no incremental capital as we expect to fund the transaction in Terraform through project-level financings and asset sales. This transaction extends Terraform's contract profile, reduces its portfolio resource variability, and improves its organic cash flow growth. We expect the transaction to close in the third quarter of 2019. Finally, we continue to execute on our capital recycling program during the quarter, completing the sale of four of the six projects in our South African portfolio, proceeds of $108 million, or $33 million net to BEP. We also advance the sales of the final two projects in our South African portfolio, and other non-core portfolios in Thailand and Malaysia. We expect these asset sales to close in 2019 for total proceeds of approximately $180 million or $55 million net GDP. I'll now turn over the call to Wyatt to discuss our operating and financial position.

Thank you, Sachin, and good morning, everyone. During the second quarter, we generated FFO of $230 million dollars up from $172 million in the prior year as the business benefited from contributions from recent acquisitions and operational improvements driving cash flow growth. We also continue to benefit from the diversity of our portfolio, a strong generation from our North American hydroelectricity, more than offset a period of relative weak in reason. In the second quarter, our hydroelectric segment generated FFO of $226 million. Our portfolio saw strong generation in North America at 15% above the long-term average and strong pricing income. We continue to advance our contracting initiatives across our business to focus on commercial and industrial products. In South America, we remain focused on extending our contract terms signing 14 CPAs in Colombia and Brazil for a total of over 1,200 gigawatt hours per year. As a result of these initiatives, in Colombia, approximately 30% of our contracts now have terms greater than five years versus none in 2016 when we acquired this. In North America, we continue to benefit from a 17-year average contract term and no material maturities until 2020. Our wind and solar segments generated a combined $66 million of FFO, up 32% relative to the same period in 2018, as we benefited from acquisitions and contributions to the recently commissioned project, as well as our cost-saving initiative. We also added 25 megawatts to our global rooftop solar portfolio, including commissioning 10 megawatts for our joint venture with GLP in China. and closing the first phase of a 15-megawatt acquisition in the U.S. Northeast. Our storage and other operations segments performed well, generating $7 million of FFOs during the second quarter as the growing intermittency of global electricity grids continues to increase the scarcity value of utility-scale global storage. We ended the quarter with over $2.5 billion of available liquidity In addition, we continue to prioritize investment-grade balance sheets that are rated triple B positive by S&P, which we believe gives us significant financial flexibility and provides investors with a lower overall risk profile. Lastly, we remain focused on terming out our debt at low rates and hedging our cash flows from currency fluctuation and the cost of economic prudence. During the quarter, we extended the term of debt in our Colombian subsidiary for approximately 10 years by issuing 1.1 trillion pesos of bonds in the local market. This was one of the largest financings ever completed in Colombia, and given the high-quality nature of our portfolio, was significantly oversubscribed. At Terraform Power, we progressed up financings of select assets in the portfolio and used the proceeds to repay creditors. Looking ahead, we continue to focus on executing on our key priorities, including maintaining a robust balance sheet, access to diverse sources of capital, enhancing cash flows from our existing business, and assessing acquisition options. 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.