Brookfield Renewable Partners L.P. Limited Partnership Units

Ladies and gentlemen, thank you for standing by, and welcome to the BEP Second Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. It is now my pleasure to introduce CEO Sachin Shah.

Thank you, Operator. Good morning, everyone, and thank you for joining us for our second quarter 2020 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 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. This morning, I will provide an outlook on the business and an update on our recent growth initiatives. After my remarks, Wyatt will provide an overview of our operating results as well as an update on our balance sheet and funding plan. Following our remarks, we look forward to taking your questions and comments. Over the past 20 years, we have built a scale global renewable power business with over 50 billion of operating assets and an 18,000 megawatt development pipeline, and deep expertise across all major renewable technologies. The world continues to be in the early stages of a global transition to the decarbonization of electricity grids. This shift, which is fueled by a push to reduce carbon dioxide emissions to meet increasingly stringent carbon reduction targets, and solar and wind power becoming the lowest cost easiest-to-build providers of bulk power will require significant investment over the coming decades. Accordingly, there is considerable room for our business to grow for many years ahead, and as subsidies decline or fall away, the opportunity will increasingly favor investors like ourselves who can drive value and enhance cash flows from our global scale and depth of operating expertise. We believe that we have established ourselves as one of the few entities of scale with the track record and global capabilities to partner with governments and businesses to help them achieve their goal of greening the global electricity grids, while earning a strong return for our investors. Our solar business has grown substantially over the last five years. Today, we have over 3,000 megawatts of solar in operations, and an additional nearly 10,000 megawatts of solar under development. As a result of technology advances and reductions in construction costs, solar can stand on its own without subsidies and, more importantly, is now amongst the lowest cost sources of conventional power globally. To put this in perspective, solar costs over the last five years, the period in which we have built our business, have gone from over $4 per watt to install to less than a dollar per watt in almost all jurisdictions around the world. As a result of these favorable economics, as well as the renewable nature and perpetual source of free energy, we believe it is possible that in 10 years from now, the majority of the production capacity of Brookfield Renewable will be solar capacity. It is not that we do not believe in wind or hydro, but the growth in solar and the ability for us to develop and earn strong risk-adjusted returns should enable us to grow our solar operations at a far greater pace. Recently, we executed two transactions that highlight the strength and scale of our solar capabilities and demonstrate the various ways we approach creating value for our shareholders. First, we completed the merger of Terraform Power into Brookfield Renewable on an all-stock basis. Terraform Power was one of the largest owners of solar globally prior to the bankruptcy of of its sponsor in 2016. Given our scale, we were one of the few organizations that could acquire it through the restructuring and immediately stabilize the business by implementing an operating plan and resuming growth. As a result, we have driven significant value in the business, delivering Terraform Power shareholders, including Beth, a 35% annualized total return and over two times their money since our involvement. The merger is accretive to Brookfield Renewable, strengthens our business in North America and Europe, and further enhances our position as one of the largest publicly traded pure play renewable power businesses with an equity market capitalization of approximately $20 billion. The second transaction we executed was to acquire a 1,200 megawatt solar development project in Brazil. This is one of the largest solar development projects in the world. and requires both development and energy marketing capabilities to bring the project to completion. The project is 75% contracted, and we intend to leverage our deep energy marketing capabilities to contract the remaining power. In addition, given our global scale, we expect to drive down equipment procurement, installation, and operating costs to deliver additional value over time. Accordingly, we expect to achieve Approximately 20% returns on this investment. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2020. In total this quarter, we have agreed on transactions to invest approximately $600 million or $130 million net of equity. Also of note, last week, we completed the special distribution of BEPC shares, providing investors with greater flexibility in how they invest in our business. BEPC is listed on the same exchanges as BEP, offering investors the optionality to invest in Brookfield Renewable through either a partnership or corporation, which we believe should lead to increased demand and enhanced liquidity for our securities. We completed the special distribution on July 30th, by providing unit holders with one share of BEPC for every four units of BEP. We have subsequently seen strong support for BEPC shares in the market with strong trading volumes over the first few weeks of trading and the share price trading slightly above the BEP unit price. We are very pleased with the launch and positive market reception thus far. I'll now turn the call over to Wyatt to discuss our operating results and financial position.

Thank you, Sachin, and good morning, everyone. During the second quarter, we generated FFO of $232 million, or 75 cents per unit, which is up slightly from the prior year as the business benefited from recent acquisitions, strong operational performance, and execution on margin enhancement initiatives. On a normalized basis, our results are up 19% over the last year. With an increasingly diversified portfolio of operating assets, limited off-taker concentration risk, and a strong contract profile, our cash flows are highly resilient. While generation for the quarter was below the long-term average, driven largely by drier conditions in New York and Columbia, generation so far this year has been roughly in line with long-term average. As we have reiterated, we expect this type of resource cyclicality and therefore do not manage the business based on under or over performance of generation relative to the long-term average in any given period. Our focus continues to be on diversifying the business, which mitigates exposure to any single resource, market, or counterparty. We continue to be focused on maintaining a highly diversified investment-grade customer base with over 600 customers around the world, under long-term power purchase agreements. For example, our commercial and industrial counterparties, which comprise less than 20% of our generation, are well diversified across regions and sectors, with our largest C&I customer representing only 2% of our total contracted generation. Our contract profile remains strong, with 95% of total generation contracted in 2020 and a weighted average remaining contract length of 15 years. Therefore, our cash flows are well protected from exposure to short-term price volatility and are expected to remain stable over the long term. Turning to our segment results, during the quarter, our hydroelectric segment delivered FFO of $193 million. In North America, we remain focused on securing short-term contracts in this low power price environment to retain upside optionality for when prices improve. In our Brazilian and Colombian portfolios, we continue to focus on extending the duration of our contract profile while maintaining a certain portion of uncontracted generation to mitigate hydrology risk. This quarter, we secured 17 new contracts in Latin America for a total of over 430 gigawatt hours per year, including one contract in Colombia with a seven-year term. Our weighted average remaining contract duration is now nine years in Brazil and three years in Colombia. Next, our wind and solar segments generated a combined $85 million of FFO, representing a 29% increase over the prior year, as we continue to generate stable revenues from these assets and benefit from the diversification of our fleet and highly contracted cash flows with long-duration power purchase agreements. This quarter, we commissioned almost 100 megawatts of solar projects and secured five long-term PPAs with investment-grade counterparties to support our 1,500-megawatt wind development pipeline in the U.S. and Europe. Our liquidity position remains strong with close to $3.4 billion of total available liquidity, which allows us to support our current operations as well as to opportunistically pursue new investments. Our investment-grade balance sheet has no material maturities over the next five years, an average overall debt duration of 10 years, and approximately 80% of our financings are non-recourse to BEPS. During the quarter, we executed over $1.1 billion of financings across the business. We also continued to execute on our capital recycling strategy of selling mature, de-risk, or non-core assets to lower-cost capital buyers, and redeploying the proceeds into higher yielding opportunities. So far this year, we generated close to $500 million of proceeds or $80 million net to BAP from these activities. In summary, our business remains resilient as we continue to actively look for opportunities to grow our portfolio on a value basis. As such, we remain firm in our belief that Brookfield Renewable is one of the strongest best-positioned platforms that contribute to the decarbonization of the globe through investment in multiple renewable technologies. In short, we believe the prospects for growth of our business are better than they ever have been, and looking forward, we remain well-positioned to achieve our objective of delivering total returns on a per-unit basis of 12% to 15% over the long term. That concludes our formal remarks for today's call. Thank you for joining us this morning. With that, I'll pass it back to our operator for questions.