Brookfield Renewable Partners L.P. Limited Partnership Units

Ladies and gentlemen, thank you for standing by, and welcome to the BEP fourth quarter 2019 results conference call and webcast. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, then 1 on your telephone keypad. Please be advised that today's conference may be recorded. If you require any further assistance, please press star, then 0 to reach an operator. I'd now like to hand the conference over to your speaker today, Mr. Sachin Shah, Chief Executive Officer. Please go ahead, sir.

Thank you, Operator. Good morning, everyone, and thank you for joining us for our fourth quarter 2019 conference call. 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 risk 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. 2019 was another positive year for the business. We achieved strong performance throughout our operations, increased margins with recently acquired businesses, and deployed capital in line with our targets. More importantly, our growth over the past 20 years has enabled us to establish ourselves as one of the largest renewable power investors and operators globally. This is backed by a multi-decade track record of generating strong returns across hydro, wind, solar, and storage assets. Accordingly, we are very well positioned to participate in the decarbonization of global electricity grids that will occur over the next 25 to 50 years. Our capabilities provide communities, governments, and the private sector around the world the ability to accelerate the transition to a greener future. Today our capacity is approximately 19,000 megawatts of electricity from renewable resources. This production avoids approximately 27 million metric tons of carbon dioxide emissions annually. With our development pipeline, we would create enough carbon-free power to displace an additional 17 million metric tons of carbon dioxide per year. To put this into perspective, Just from our existing fleet today, we displace all of the carbon dioxide emissions generated by the City of London in England each year. Alternatively, we could displace the amount generated by many energy and technology firms who are looking to lower their carbon footprint to neutral or negative by 2030 or so. We are proud of the amount of carbon dioxide we avoid, is equivalent to removing approximately 6 million vehicles from the road or planting 450 million trees. We highlight this to you now, given the focus many organizations are placing on reducing carbon dioxide emissions. We think it is useful for our unit holders to consider the impact our business is already making on communities, businesses, employees, and governments when making their long-term investment decisions. We remain committed to earning a strong compound return for you over the long term on a per unit basis, but also remain committed to being a leader in decarbonization. This will enable you to earn a good return, but also contribute to a better world. With that, I wanted to give you some highlights from the business for the year. First, we increased FFO per unit by 13%, driven by a creative growth and strong operational performance We continue our track record of strong FFO per unit growth at a 10% annual growth rate since our strategic combination with Brookfield's renewable assets in 2011. In addition, we advanced key commercial priorities and delivered on cost-saving initiatives, totaling approximately $40 million globally on an annualized basis, or $12 million net to BEF. We invested $2 billion, or $550 million net to BEF, of equity across nine transactions, including doubling the size of our Asian and distributed generation businesses, adding a leading global solar developer, and investing in a hydro portfolio in Canada. We commissioned 50 megawatts of new capacity, progressed approximately 2,000 megawatts through construction and advanced stage permitting, and increased the size of our development pipeline to approximately 13,000 megawatts. We maintained our robust investment-grade balance sheet, ended the year with $2.7 billion of available liquidity, and raised approximately $1.4 billion in incremental liquidity through asset sales and strategic up-financings. We also announced the creation of a Canadian corporation, BEPC, that will provide investors the optionality to invest in BEP through either the current partnership or through a corporation, which is expected to support the expansion of our investor base. During the fourth quarter, we closed our acquisition of 50% interest in Exelio, a leading global solar developer. With this acquisition, we have significantly enhanced our solar development capabilities, adding 970 megawatts of operating assets and almost 6,000 megawatts to our global construction and development pipeline. Also in the fourth quarter, we signed two agreements to acquire 14 solar development projects in Brazil with 428 megawatts of total capacity for total consideration of $120 million, or $30 million net to bet. Both these transactions are expected to close in the first quarter of 2020 and represent attractive additions to our business in Brazil with approximately 2,000 megawatts of capacity across multiple technologies, being hydro, wind, and solar. Furthermore, through our interest in Terraform Power, We acquired 44 megawatts of PV solar assets in Spain and signed an agreement to acquire 100 megawatts of solar CSP in Spain located close to Terraform Power's CSP plant, for $115 million, which we expect to close in the first quarter of 2020. Lastly, in January, we announced a non-binding all-share proposal to acquire the outstanding shares of Terraform Power. other than the 62% owned by us and our institutional powers. We believe this transaction will create significant value for investors in both companies by simplifying our corporate structure in an immediately accretive transaction, which will further strengthen Brookfield Renewables' position as one of the largest public pure-play renewable power companies in the world. With that, I'll now turn the call over to Wyatt to discuss our operating results and financial position.

Thank you, Sachin, and good morning, everyone. In 2019, we generated FFO of $761 million, a 13% increase over the prior year, as the business benefited from recent acquisitions, strong operational performance, and the execution on our margin enhancement initiatives. During the year, our hydroelectric segment delivered FFO of $720 million, representing a 7% increase over the prior year. Our storage segment also performed well, generating $27 million of FFO in the year as our portfolio continues to provide critical grid stabilizing ancillary services and backup capacity to increasingly intermittent grids. During the year, our generation was roughly in line with the long-term average as we continue to benefit from the diversity of our fleet. Our priority over the past decade has been to diversify the business which, over the long term mitigates exposure to resource volatility, regional or market disruptions, and potential credit events. We also continue to execute on key contracting initiatives across all our businesses. Our focus in Latin America continues to be on extending the average duration of our power purchase agreements, as well as signing contracts with high-quality, credit-worthy counterparties. Globally, we continue to see increasing value ascribed to the unique scale renewable storage capabilities that hydroelectric assets provide to increasingly intermittent electricity rates. For example, in Colombia, we secured approximately $3 million of ancillary service revenues. In the United States, we qualified to receive the highest tier renewable energy credits for a number of our hydroelectric assets in the Northeast, which will contribute approximately $3 million to FFO annually, and in the UK, our first hydro portfolio was the critical link to restarting the grid following a nationwide blackout in August. Our wind and solar segments generated a combined $274 million of FFO, representing an 18% increase over the prior year. These portfolios benefited from contributions from recent growth initiatives, including the acquisition of two wind portfolios in Asia, and through our interest in Terraform Power, a large distributed generation portfolio in the United States and full-year contribution from Saudi Yield, a scale European wind and solar portfolio. We also benefited from executing on opportunistic O&M outsourcing agreements aimed at de-risking the portfolios and where appropriate, delivering cost savings. We executed on three such agreements across Terraform Power and our wind portfolio in Brazil. A common theme across all these opportunities was attractive availability guarantees and a more comprehensive scope than what was currently in place. At Terraform Power, these initiatives will deliver aggregate cost savings of approximately $30 million or $9 million net to us. Finally, we continue to advance our global greenfield development activities, including progressing over 700 megawatts of construction diversified across distributed and utility-scale solar, wind, storage, and hydro in seven different countries. We're also progressing almost 1,400 megawatts of advanced stage projects through final permitting and contracting, and our total greenfield development pipeline now totals approximately 13,000 megawatts. Of note, during the year, we signed power purchase agreements for three wind repowering projects in New York and California, totaling 220 megawatts, and these projects are expected to be commissioned in 2021. We have been owners, operators of long-duration critical electricity assets for over a century, and therefore understand that embedding strong ESG practices into our investing and operating activities is essential to preserving capital, mitigating risk, and creating long-term value. Fundamentally, strong ESG practices drive further economic value to our business and inherently create higher barriers to entry. As such, we integrate relevant ESG considerations into our investing and operating strategies. We are therefore proud to announce that we have published our inaugural ESG report, which is now available on our website. The report, among other things, illustrates the on-the-ground work we do to maintain our social license to operate. With one of the largest public pure-play renewable portfolios globally, we are helping to accelerate the decarbonization of global electricity grids. Additionally, maintaining socially responsible practices from health and safety to community relations to biodiversity is a critical component of successful operations over the long term. We operate with the highest ethical standards, conducting our business with integrity, and above compliance with laws and regulations, we aim for best practice everywhere we operate. ESG and sustainability investing continues to gain momentum globally, with ESG funds expected to rise into the trillions over the next decade. We believe our portfolio's inherent environmental attributes, coupled with our longstanding practices around maintaining a social license to operate, provides significant tailwinds to demand growth for us. Our liquidity position remains robust with approximately $2.7 billion of total available liquidity at year-end. During the year, we executed on key financing and capital raising initiatives aimed at maintaining robust access to capital, a prudent debt maturity ladder, and a low-risk investment-grade balance sheet. During the year, we executed on more than $6 billion of financings across the business, which allowed us to raise $1 billion of incremental liquidity, extend our average debt duration to 10 years, and reduce annual interest costs by approximately $15 million or $9 million net to us. Of note, we continue to advance our green financing strategy in order to capitalize on growing demand for carbon-free debt products and diversify our investor base. Today, we have issued six green bonds at both the corporate and project level, which together total approximately $2.4 billion. During the fourth quarter, we also closed our first incentive-linked loan as part of our corporate credit facility that will allow us to reduce our cost of borrowing as we continue to accelerate the decarbonization of global electricity grids. As demand for sustainability-focused investing continues to grow, we expect green financing and sustainability-linked loans will increasingly become a more prominent funding lever within our business. We also continue to execute our capital recycling strategy of selling mature de-risk or non-core assets to lower-cost-to-capital buyers and redeploying the proceeds into higher-yielding opportunities. During the year, we raised almost $600 million, or $365 million net to us, through this funding strategy. allowing us to crystallize an approximate 18% return on our Portuguese and Northern Ireland wind assets and to return more than two times our capital invested in South Africa. In light of recent growth, strong balance sheet, and access to capital, on January 13th, we announced that our Board of Directors approved our 2020 quarterly distribution and raised it by 5%, bringing our total annual distribution per unit to $2.17, This increase continues our track record of growing our distribution since our IPO in 1999 at an annual rate of 6%. Our long-term goal remains, as always, to deliver 12% to 15% long-term total returns on a per-unit basis through the prudent execution of our capital allocation strategy, application of our operating expertise to both enhance value and de-risk our business while maintaining an investment-grade balance sheet. That concludes our formal remarks. Thank you for joining us this morning. We'd be pleased to take your questions at this time. Operator?