This is the Chorus Call conference operator. Welcome to the Brookfield Renewable Energy Partners 2013 Fourth Quarter Conference Call and Webcast. [Operator Instructions] At this time, I'd like to turn the conference over to Richard Legault, President and Chief Executive Officer of Brookfield Renewable Energy Partners. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and thank you for joining us this morning for our fourth quarter conference call. With me on the call is Sachin Shah, our Chief Financial Officer. But before we begin, I would like to remind you that a copy of our news release, investor supplement and letter to shareholders can be found on our website at brookfieldrenewable.com. I would also like 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 other regulatory filings available on SEDAR, EDGAR and on our website. Our strong results in 2013, reflects the unique ability to add value to our portfolio through operating platforms, and the successful execution of our growth initiatives, all of which we believe will continue to drive value in 2014. In addition, with the announcement of the acquisition of additional hydro capacity in Northeastern United States, we continue our track record of acquiring renewable power assets on a value basis. Accordingly, we are pleased to begin the new year with a distribution increase that exceeds our target, and reflects the strength of the business and its prospects. Our growth strategy is simple. We invest in and operate high-quality renewable power assets, and accretively grow cash flows on a per share basis. To do this, we focus on organic growth initiatives, that we believe will support the higher end of our long-term distribution growth target of 3% to 5% per year. Our organic growth strategy is built upon 3 core themes. First, in the current power price environment, we believe, it's prudent to position the portfolio for improving market conditions. In the past 24 months, we have acquired 2 million-megawatt…

Thank you, Richard, and good morning. The business continued to perform well in the fourth quarter. Total generation was nearly 5,300 gigawatt hours, consistent with long-term average and substantially ahead of the same period last year due to the contributions of new assets and a return to normal inflows. Hydroelectric generation was more than 1,200 gigawatt hours higher than the prior year with new assets performing above expectations, and contributing more than half of the difference. Generation from our wind assets was below long-term average and modestly higher than the prior year. For the fourth quarter, adjusted EBITDA was $272 million, and FFO was $134 million, both in line with our plans and substantially above the prior year's results. As Richard indicated, the business possesses a number of organic drivers that we expect will enable us to continue to grow distributions at the high end of our stated range of 3% to 5% annually. The stability and growth of our dividends has been one of our hallmarks over the 15-year history of this business, and with today's results, we have announced an increase in our annualized distribution to $1.55 per unit. This represents a 7% increase from 2013, and nearly 20% increase since the combination -- since the combination at the end of 2011. This exceeds the high end of our target range, and reflects the strength of our underlying growth pipeline and improving market conditions. We are confident in the ability of the business to continue growing per share cash flows and distributions to shareholders over the long run. With $1.2 billion of liquidity, we are in a strong financial position to carry out our objectives. In 2013, we completed approximately $3 billion of refinancing activity, which has lowered our overall borrowing costs by 30 basis points on a portfolio basis, while maintaining our average debt duration at nearly 11 years. An additional $2 billion of new institutional capital from institutional partners earmarked for renewable power investments gives us tremendous financial flexibility to pursue transactions globally. That concludes our formal remarks. Thank you for joining us this morning. Rich and I will be pleased to take your questions at this time. Operator?

[Operator Instructions] The first question is from Bert Powell of BMO Capital Markets.

Just a clarification on Safe Harbor, the 33%, is that yours or is that yours that you'll share with Brookfield funds?

It's Sachin here. That's ours that we'll share with the Brookfield funds. Our share of that would be 40%.

The 40% of 33%.

Correct.

And then -- so -- and then, again, same with -- for Sachin, that the $289 million, again is the same percentage?

Sorry, the $289 million. Purchase price. Absolutely that -- it's commensurate with our interest in the funds.

Okay. And is this merchant power or contracted power?

It's substantially all merchant.

It's all merchant, okay. And then, just, Richard, just back to your comments about the efficiencies and the fact that you're able to basically take $12 million out annually. So kind of 2 questions; one, the pro forma results that you presented in the letter. Does that already contemplate that savings or would that be in addition to what you got in the pro forma?

Well, Bert. First of all, let me just say that over time, our growth has been substantial, and therefore, as you know, we've grown by acquiring assets more so than acquiring corporate structures. So, over time, obviously, we need to take a step back and start to look at whether or not synergies are possible across the different platforms. And we do that on a regular basis. So, to make sure that our employees are -- are certainly very important to us, and they do a great job. And I think, this is not a reflection of them but more a reflection of our growth profile over the years. Having said that, I think, when we look at when these savings are coming through, most of the savings again, we started this reorganization or combination during the summer of 2013. Some of that came through in 2013, but I would say, the lion's share of it is going to come through in 2014, as we complete a lot of the initiatives and staff reductions during the first quarter of 2014.

And, any severance or costs or charges associated with that, will you -- those -- will you highlight those separately?

Hi Bert, it's Sachin. Yes. So any of those costs that we've incurred -- obviously, we would incur those as this happened in the summer as Richard alluded to. They would already be accrued in our results. To your question on the pro forma, which we provide as supplemental disclosure. The only pro forma adjustment we make is really around volumes, hydrology and wind sweeps to get back to LTA. What we don't do is reflect the change in our cost structure. So, I would say we achieved partial savings this year. But the annualized savings should come through fully in 2014, and they're not embedded to our pro forma.

Okay. And last question, Sachin. Can you just talk a little bit to us about FX, and the impact on your business and how you're thinking about that? And, maybe just give us some metrics to think about that?

Sure. Let's start with Brazil. I think that's the most obvious place to start. And just to put it in perspective, that's 15% of our business today. So it's not a huge piece of the cash flows or the underlying results. But it's an important piece. And, I'd say, I would remind everyone on the call that substantially all of our portfolio there is contracted, and contracts in Brazil, on power assets are indexed to IGPM, which is not traditional CPI, but it's a basket of goods that is comprised of about half of the normal CPI basket, and half U.S. denominated goods. And so, what happens in that regard is that as you have your annual escalation, you get realized through the PPA. You're actually getting your revenue somewhat indexed to the U.S. dollar, or at least about 50% of your revenues being indexed to the U.S. dollar. So, and that is obviously on a lagging basis, but gives us tremendous protection against swings in the reais like we've seen over the last 24 months. I'd say, layered on top of that, it continues to just be an extremely expensive currency to hedge, the carrying costs on a reais to hedge it would be about 10% annually. And for us, that's just too large of a premium in light of the contract structure we have and the protections embedded in PPAs to pay to support the business. Moving to the Canadian dollar, we haven't historically hedged our Canadian dollar, and I'd say, the largest reason for that is much of our capital stack, is really Canadian denominated. All of our corporate debt, $1.5 billion is Canadian. These are bonds issued into Canada. Our preferred shares about $800 million. That's all issued into Canada. So when you take our cash flows in Canada, which were about 30% of the business, and you layer on, our capitalization, we have a very good natural hedge. And that's all in addition to nonrecourse debt in Canada in the same currency. Lastly, as we look to Europe, Richard announced us being named as preferred bidder. There we would absolutely consider hedging our FFO -- over a sort of 18 to 24 months depending on liquidity of the forward markets. The euro is a relatively inexpensive currency to hedge, given where interest rates are on that continent relative to the U.S. dollar. So we would enter into a hedging program to cover our FFO there.

Next question is from Juan Plessis of Canaccord Genuity.

With respect to Ireland, can you talk a little bit about the portfolio, when that's up for sale? The number of wind farms, if they have any PPAs associated with them? And, of course, the possible split between BREP and the institutional partners?

Sure. Hi Juan, it's Sachin. So, I can talk on a limited basis, because we are limited to what the government has disclosed. And what I can tell you is it's some -- by the end of 2015, it would be 500 megawatts of operating wind farms, fully contracted through the government feed-in tariff program. We like that tariff program. It's got contracts that are not, I'd say -- call aggressively high prices. And so we feel that we've got great protection on cash flows, and it's a regulatory regime that we are quite comfortable with. And an economy that's been improving steadily for the last 2 to 3 years. And repaying it's debt from an EU and IMF perspective. So, it's stable wind assets, stable contracted cash flows, and a country that we're quite comfortable with, that has good power market fundamentals and access to the interconnected market of the U.K.

Okay. Great. And, maybe just moving on to Brazil, can you provide us with any update on the recontracting efforts for some of the contracts that are expiring in Brazil this year?

Sure. Sachin again. So, it's been an extremely, extremely robust power price environment in Brazil. I think, you've probably heard us saying for 3 years now that demand growth continues to outpace new supply, and there's a tremendous need for new capacity in Brazil. And what's happened is, obviously, that new capacity coming from higher-priced resources, thermal facilities, wind farms, rather than their traditional base of hydro. So, as a result, power prices today are at historically high levels. We've obviously been, keeping an open position there, making sure that we were well-positioned in the portfolio to capture those higher prices. I'd say, we've been successful at capturing higher prices for all of 2014, and part of 2015. We're now looking for term. And so, if you look at our contract maturity portfolio, you will see that we continue to push out our open position into sort of part way through 2015. And we're looking for longer term now that we've seen a sustained level of higher prices.

The next question is from Nelson Ng of RBC Capital Markets.

Just a quick follow-up on the wind portfolio, Bord Gáis. How much wind is actually operating as of today out of the 500 megawatts?

Just over 300 megawatts is operating today.

Okay. And then, in terms of the subsidy or the feed-in tariff. Is it structured as a -- is it merchant plus a fixed subsidy? Or is it just -- or is it more similar to Ontario, where you just get a fixed price based on generation?

So, it's common in Europe. The U.K. has that, where you get merchants plus a fix, it's not like that in Ireland. Ireland has just a fixed payment. Now what you do get is you get the benefit if the merchant market goes above that fixed amount. You get to keep the difference. But you're protected with the floor price -- at a value and this is all public. You can look at the refit program in Ireland. It's about EUR 70 a megawatt hour plus some uplift payments that they pay. So you get that EUR 70 a megawatt hour, and you get, if prices in this spot market or wholesale market exceed that, you actually get that benefit, but your floor is protected.

Okay. And then just one clarification on the Safe Harbor Hydro acquisition. So the $289 million acquisition, is there any debt in the facility?

Down at the facility, there is a negligible amount of debt. And so, we would anticipate financing our purchase price with an investment grade level of debt. But that's something that's currently underway.

And then just kind of 1 last question. In terms of, I guess, this is probably for Richard. In terms of the expectation of investing $500 million of equity over the next 5 years, can you comment on the allocation between Brazil, Europe versus North America?

Sure. I think, number one, is I think the -- I'll start with Europe. Because that's probably the more current. There is obviously -- if there is 300 megawatts operating today, and by 2015, we expect 500 megawatts. There is a couple of 100 megawatts of wind that actually is going -- is coming with this acquisition, that's actually being added to our development pipeline. I think, when we look at the North American market, we continue to believe that again, reserve margins are shrinking in my opinion, faster than what a lot of the projections are showing. So there is -- will be a need. We still have a very robust development pipeline in North America, particularly, I think, I would say in the provinces of Ontario, British Columbia, and California, and in the Northeast. I would say those would be in my mind, probably, again continue to be maybe 25%, 30% of our growth. And then, you have Brazil. Brazil, it continues like -- Sachin was mentioning, there has been we -- and again, not trying to brag, but we've been calling 2014, '15 a little bit of the perfect storm, of under construction or underdevelopment of the supply chain, and a growing demand that's just ultimately now driving prices up to levels that clearly are short-term markets has been above BRL 300 per megawatt hour. So, we feel that, that's probably going to start getting a lot of traction with the development pipeline that we have. And I would expect that the next 5 years, it's probably going to be, call it 50% of our growth will be probably those projects in Brazil. Again -- I wouldn't say, quote me on this, but it's probably 50% Brazil, 25% or so Europe, and 25% North America would be my best guess.

The next question is from Matthew Akman of Scotiabank.

Can you guys just please give an update and overview on how White Pine is doing, in terms of both operations and then potential contracting?

It's Richard. I can start, Sachin can add anything I miss. If you've seen, the Northeast markets, and I would say, North New England in particular, they've been very, very strong. When you look at prices in the first, call it 4 weeks of the year, clearly, I think it's been very strong. Our ability to secure prices in the first quarter has been significant and particularly, I think -- significantly higher than our underwriting model when we bought it. So, the overall perspective I would give you is that, we are doing extremely well against the underwriting that we did, when we actually acquired this last year. Very pleased with the assets, great operating team, I think when you start looking at our prospects for that business, they're extremely positive in a great market, and operated by a great team.

The only thing I would just add is that, White Pine is exactly that type of asset that demonstrates the real return nature of our portfolio. We continue to stress that. In this price environment, North America if you can buy at the bottom and be patient. Our end game is to get contracts long term. But as prices go up, our cash flows are positively predisposed to a recovery, both economic and from a power markets perspective. And so, we do have conviction that these are real return type long-term assets, that just give you all of that leverage to the upside even if rates rise over the long term.

I'm just wondering, if in this kind of extreme weather environment, you can get the capacity out of it that you'd normally expect?

I'm sorry, your question is, if extreme -- you mean cold?

Yes.

Well, the assets perform really well in cold weather and warm weather. It doesn't really matter in my mind, it's like the extremities of the weather affect pricing much more than it does our assets, which is good news for us. Like we still can respond extremely well to price signals in all of these markets. And you've seen that in PJM or New York, or New England, very cold weather, obviously has driven power prices significantly higher than everyone expected. But I bring it all back to the first comment I made, the reserve margins, when even if it is minus 30 or minus 25 in various jurisdictions, reserve margins can’t be robust till 2020 when prices in PJM on a given day goes to $1700.

Yes. The acquisition that you guys just announced -- the Safe Harbor. Sorry Sachin, I wasn't sure if the $289 million was BEP's share or the total picture, it sounds like it's the 33% of 40%. Is that right?

No. $289 million is our total purchase price for the 33% interest with and BEP will take 40% of that.

Is there any debt on that?

As I said, there is a very negligible amount of debt down at the asset level. And we would intend to finance our $289 million with an investment grade level of debt.

[Operator Instructions] Next question is from Andrew Kuske of Crédit Suisse.

I guess the first question just relates to pricing. And you clearly -- we've seen in the last few years, if not a longer period of time -- a bit of dichotomy, and pricing for renewables, in particular in the U.S., and then some of the spot pricing. And then clearly weather's boosted up spot pricing dramatically in a short period of time. Are you seeing a greater motivation for contractual term in the U.S. at this point in time?

We are getting more meetings. I would say, listen, I believe that will trigger obviously, at $3 gas prices, everybody feels that there is no end in sight to low prices. It obviously, isn't a great time to go out and try to sign long-term contracts. So, we feel that the last couple of years, have been that scenario, but the flip side of that coin is what Sachin pointed out, which is -- it's a great time to buy great assets, that if you have the capital, and you have the patience to actually wait for rising prices. We've seen and I wouldn't want to think that all of a sudden, we are out of the woods, but I would say, I'm greatly encouraged by what we saw in the -- call it -- December, January. February is shaping up to be exactly the same. And March is actually very strong. So those are all encouraging signs, and obviously people are now thinking about whether the 2-years hiatus in terms of low prices, they should start thinking about locking in, sort of contracts for the longer term. And therefore, there are clearly more discussions around that, and we're encouraged by that.

Just to follow-up on that. Do you anticipate your overall level of contractiveness increasing throughout the year? As the year wears on, you'll probably bed down more contracts. In particular on the merchant facilities, you bought in the last few years, at arguably good value?

Yes. And Andrew, I think, we showed that in our documents that, essentially, in 5 years, we expect to be about 80% uncontracted. We continue to believe that's our best estimate and our best guess. We don't see any change -- any material change in the short term on those numbers. Because number one is that our job is to wait for the right price signal to try and lock in prices, longer term. So, we'd like to turn around and do 15-, 20-year contracts, and those contracts, I think, we will probably have a little bit, probably not -- again best guess is we continue to have those discussions, but I would believe '15, '16, are probably the years where we're going to start seeing more movement on that.

And then if I can just touch upon Europe and just Ireland in the context of overall Europe. The Irish situation seems to be -- opportunistic is probably the wrong word, but it's a bit of an opportunity in a smaller market? It is quite a small power market in the grand scheme of things. So how do you look at Ireland in the context of the overall continental strategy in Europe?

Andrew, it' Sachin. I think, we recognize that in Europe, we bring certain -- we come with certain advantages. We obviously have tremendous access to capital. We've got deep operating expertise in the North American and Brazilian context. What we don't have there is a, an operating platform. And I think, as we entered the market, and we've been looking at it for the last 24 months in earnest, we had a few objectives. One is our entry point should be in a place where physically the situation is sound, and either strong or on a good path to recovery. And Ireland fit that bill for us. Second, we wanted to invest in a technology that we were quite comfortable with and had an expertise, and obviously, we have a 1000 megawatts of wind in our business today that we run ourselves. And felt that we could -- an entry point into wind made a lot of sense. Third, we wanted to enter a situation where we could buy for potentially good value and so we were looking at distressed opportunities again. Working with a government seller, who is trying to repay debt, fit that bill. And then, finally we didn't want to take price risk. We wanted to make sure that we had stable cash flows, because as we go in, we recognize we need to get very smart about this market but that takes time. So, we have a view, we have a thesis on each of the various power markets in the continent. But it takes time to establish the type of expertise we have in North America. So I think -- fortunately, we found all of those attributes on this acquisition, and it will give us a foothold to start to enter the market with a business that's generating cash flow, day 1. While we continue to look for new opportunities and then start to resource up with people.

So I guess a bit of the view -- it's really -- it's an insulated market that doesn’t have a lot of market pressures from others -- other factors going on or other countries around it for sort of obvious reasons. And you boxed in a lot of the risks associated with that.

Correct.

This is really the foothold for you to look at other things and redeploy cash. Okay.

The next question is from John Mould of TD Securities.

Just a quick housekeeping question on the quarter, U.S., hydrology was about 9% below long-term average levels. Was that concentrated into any specific region of your portfolio?

Sachin, over here. No, it was not. It was, I'd say fairly spread out across all of our U.S. hydro assets. It wasn't one area where we had unusually low volumes.

The next question is from Frederic Bastien of Raymond James.

In your prepared comments, you mentioned that you actually looked at about $20 billion worth of transaction. Is it fair to say that, the bulk of that value was in Europe? Or was it more spread out than that?

Frederic, it's Sachin. No, I'd say, definitely not. I'd say, North America and Brazil, probably were the lion's share of it. Europe was certainly large, but, we're seeing a lot of activity in our core markets in North America, in particularly the U.S. and obviously Brazil.

Great. I guess, U.S. is pretty much indicative of what you've been experiencing also in the last couple of years. How about Canada, is this active at all in terms of M&A?

No, Canada is slower. There is development opportunities in Canada, but I'd say, on the acquisition front, it would be definitely slower.

There are no more questions at this time. I'll now hand the call back over to Mr. Legault for closing comments.

Well, again, thank you, everyone for joining us this morning. We really appreciate it, and look forward to 2014. Thanks again.

This concludes today's conference call. You may now disconnect your lines. Thank you for participating and have a pleasant day.