Thank you, for standing by. This is the Chorus Call conference operator. Welcome to the Brookfield Renewable Energy Partners 2014 Third 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.

Thank you, operator. Good morning, everyone, and thank you for joining us this morning for our third quarter conference call. With me on the call are Sachin Shah, our Chief Financial Officer; and Nick Goodman, our Senior Vice President of Finance. 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 our regulatory filings available on SEDAR, EDGAR and on our website. As we approach the end of another year, it is worth noting that this month marks the completion of our 15th year, as a leading owner, operator and developer of renewable energy assets. Over that time, we've built a world-class portfolio underpinned by more than 200 hydroelectric facilities, while expanding into new markets and technologies. Since our IPO in November, 1999, we have delivered a compounded annualized total return of 16%, and are well-positioned to add to this proven track record of value creation. Renewable energy remains a compelling growth industry and our unique operating, investing, and development platform will form the basis for continued growth in this asset class. At our recent Investor Day, we outlined Brookfield Renewable's growth strategy for the next several years centered on a number of organic initiatives with the potential to add $200 million to $300 million in incremental annual cash flows over the next 5 years before factoring in growth from mergers and acquisitions. In light of this embedded cash flow growth, we recently raised our annual distribution growth target reflecting our confidence in the long-term fundamentals for the business. We believe these organic levers represents approximately $7 to $10 of incremental value on a per share basis that is not reflected in our stock price today. Looking out to 2015 and beyond, conditions remain highly conducive to continue to accretive growth. In North America, an improving economy combined with coal plant retirements, among other factors, are expected to result in supply constraints, risk -- rising power prices and meaningful long term upside from our -- for our existing portfolio. In Brazil, we continue to leverage our marketing capabilities to sell uncontracted generation at attractive prices, and to enter long-term contracts at compelling values. In Europe, we completed the first full quarter of operation of our Irish wind portfolio, and we remain very impressed with the quality of the assets, the pipeline of projects and the team. The European continent represents a large and an attractive market and we're making great strides in developing a platform that will allow us to take advantage of these opportunities. And now, I'll hand the call over to Sachin.

Thanks, Richard. We continue to focus on positioning the business for long-term cash flow growth and value appreciation from organic and internally driven sources, most notably, rising power prices and the development of our proprietary pipeline of renewable power projects. In that regard, our existing assets in North America are very well-positioned to take advantage of rising prices over the long term. And we continue to add assets with this backdrop in mind. During the quarter, we completed the purchase of the 417-megawatt Safe Harbor facility in PJM. This transaction is consistent with our approach of acquiring very high-quality assets with strong cash flow generation and built-in upside tied to rising electricity prices. So far this year, we have acquired more than 800 megawatts of high-quality hydro and wind assets with similar potential. In Brazil, demand continues to outpace supply. And this imbalance has been further exacerbated by drought-like conditions, which have kept prices very high. This bodes well for our existing assets and potential new investments, both in hydro and more broadly in the renewable sector in Brazil. On the development front, we continue to advance our pipeline with the goal of bringing 500 to 750 megawatts of projects into operation over the next 5 years. This pipeline includes projects across fresh geographic footprints. Our most mature projects are situated in Brazil, where new supply is needed. And in Ireland, where energy policies and contractual frameworks continue to support the development of renewables. We have significant in-house development expertise with local teams in each of the operating platforms, who have successfully developed projects in their respective markets. Accordingly, we can take hydro and wind projects from concept to commissioning, while prudently managing risks and achieving premium returns on shareholder capital. Coming into the fourth quarter of this year, we will have approximately $500 million of projects under construction at very compelling returns. In Ireland, 3 wind projects totaling 137 megawatts or approximately $350 million, are presently under construction and all are proceeding on scope, schedule and budget. The largest of these is the 88-megawatt Knockacummer wind farm, which is nearing completion and now has all 35 turbines in operation, and generating revenue. The 37-megawatts Killhills project is expected to be completed by year end, and construction of a 12-megawatt Glentane 2 project is just underway with completion targeted for mid-2015. We are also progressing additional projects within our 200-megawatt Irish development pipeline, nearly 60 megawatts of which has received planning consent and continue towards the construction stage. In Brazil, we just started construction on the BRL 200 million, 25-megawatts Serra dos Cavalinhos I hydro project, which is expected to enter commercial operation by the end of 2016. I'll now hand the call over to Nick for a brief financial review.

Thank you, Sachin, and good morning. Our year-to-date results continue to track annual plans and are supported by a strong first half in which results exceeded expectations. Third quarter results trailed expectations as the contributions from growth in the portfolio was offset by lower generation from existing facilities. Our hydroelectric portfolio generated 3,800 gigawatt hours, which was 480 gigawatt hours and 740 gigawatt hours lower than LTA and the prior year, respectively. Recently acquired and commissioned facilities contributed 126 gigawatt hours. The year-over-year variance from existing facilities reflects a return to more normal generation levels in the U.S., following very strong hydrology in the prior year as well as generation levels that were below LTA in Canada in the current quarter. In Brazil, year-to-date generation is largely consistent with assured levels. But the lower Q3 production reflects our strategy of shifting generation into the first quarter of 2014 from the third quarter to take advantage of stronger pricing. Wind generation of 566 gigawatt hours was a 125 gigawatt hours higher compared to the prior year. Our recent acquisition of the wind portfolio in Ireland contributed a 174 gigawatt hours, partly offsetting the lower than average wind conditions in North America. Year-to-date adjusted EBITDA and FFO of $943 million and $444 million, respectively, are tracking on plan. Third quarter adjusted EBITDA was $223 million as compared to $260 million in Q3 2013. FFO was $61 million as compared to the $108 million in the prior year, a year which benefited from above LTA generation. Average realized prices of 78 megawatts -- $78 per megawatt hour was slightly higher than the $76 per megawatt hour in Q3 of last year and consistent with the largely contracted nature of our portfolio. We continue to fund the business on a long-term conservative basis and recently completed a number of important financing initiatives, including the extension of our $1.3 billion revolving credit facility to June 2019. The $480 million refinancing of our 417-megawatt Safe Harbor hydro acquisition and EUR 160 million term financing of a portion of the Irish wind portfolio. Our liquidity position remains strong at approximately $1.1 billion. Finally, as Richard mentioned, we increased our guidance on distribution growth from 3% to 5% to 5% to 9% annually, a level that reflects the stability of our predominantly hydro asset base together with the cash flow upside embedded in the business. That concludes our formal remarks. Thank you for joining us this morning. We'd be pleased to take your questions at this time. Operator?

[Operator Instructions] Our first question today comes from Nelson Ng of RBC Capital Markets.

Quick question on Brazil. So you mentioned that some of the generation was shifted from Q3 to Q1. I was just looking at the year-to-date hydrology and it was about 5% below the long-term average. Are you shifting any a generation to Q4 or do you think there's a chance that you'll end up with a little bit -- shorter -- or are you going to be short on generation for the year?

Nelson, it's Sachin. So there's a few concepts in there. So first of all, on shifting generation, we absolutely did shift generation from the third quarter to the first quarter. As you know, prices have remained elevated in Brazil, very high in light of just a weak supply position and the drought-like conditions that we referenced in our formal remarks. We're not shifting any more power. That being said, to your position about being short, although our total generation will be about 5% below assured, we don't contract out all of our power in Brazil. We keep about 10% uncontracted, and accordingly, although we might be, for the year, about 5% short, we actually will end up about 5% uncontracted and being able to sell that merchant power into a very high-priced market.

Okay. And Sachin, you mentioned, that there's about 200 megawatts of wind pipeline in Ireland. What's your expectation in terms of the development profile? Will the projects be completed in the, I guess, like 2016 to 2018 timeframe? Or like -- what's your kind of rough estimate on when they'll be completed?

Currently, out of that 200, we've got 140 that's actually in construction and about 90 of that is almost complete. It's earning revenue today. It's technically earning revenues under its tariff contract. So you covered a 140 of the 200. The other 60, I say, is moving along fairly advance stages and we would expect over the course of 2015 to 2017, '18 that we would be able to balance out.

Okay. And then just one last question. In terms of the Lake Superior gas facility, I think on the last call you mentioned that you're decommissioning that facility. I was just wondering whether you're decommissioning or just mothballing it in terms of -- I'm just wondering whether there's any opportunity to use the facility in the future, if demand for power in Ontario picks up?

Nelson, it's Richard. Right now you're absolutely right. We are, call it, mothballing, decommissioning, we're shutting it down. And until we actually can make a case for an economic contract that will sustain this particular plan for a long time. I think it will remain on an indefinite basis shutdown. However, I would like to say that at some point, we're certainly, I think, positive on the fact that Ontario will require capacity at some point. We do believe that this plant will find its place in the market over the next 3 to 5 years. But for now, like we are shutting it down indefinitely.

The next question comes from Frederic Bastien of Raymond James.

Your letter to shareholders does a good job of laying out your organic growth opportunities and the potential there, but there is a bit of information missing actually on the acquisition and the prospects. What are you seeing out there right now in terms of opportunities and also, if you could comment on the prices you're seeing out there?

Sure. Frederic, its Sachin. I'll cover it by market. So I'll start with North America. I think in North America, we've been really successful buying assets that leverage our operating platform. In particular, Merchant Hydro and candidly, that's our sweet spot. If we can buy assets that generate strong positive free cash flow in a very low price environment and give us optionality and give our shareholders optionality tied to a rising price environment, we'll continue to do that every day. And saying North America, those assets we tend to be much more competitive. But very contracted cash flow yielding assets that the financial investors can move into, that's more challenging for us to compete, because it becomes a cost of capital game. If I move to Brazil. Brazil, we've mentioned for, this I, think for the last 5 years that every year, you've got 4 to 5,000 new megawatts of installed capacity needed in that marketplace just to keep up with demand. So it's a market that continues to gravitate the cost of [indiscernible] and then often exceeds that with the drought-like conditions that we're seeing today. So we are very bullish in Brazil. We think it's a great market to invest. And in fact, some of the recent foreign exchange volatility and obviously, the elections have just created, I think, a more competitive -- or a less competitive environment for us. So I think that will be a market that we'll continue to focus on indefinitely. Lastly, in Europe, this is a long game in Europe. We started with Ireland, we're building a platform there. We want Europe to very much look like what we have in North America and Brazil 10 years from now. We moved some of our most senior people into Europe and all of that is around dedicating time and attention to building the platform slowly and on an integrated basis with a broader business in the U.S., Canada and Brazil.

Okay. In terms of -- just to follow up on that. In the U.S., are you seeing -- are there then more acquisitions of the size that you did completed in the past 18 months that are potentially available to you?

Yes. Look, I'd say, on the hydro side, there's a lot of hydro today held in the hands of private funds, utilities, ITPs, and I think we certainly don't have the view that the pace or the potential to acquire high-quality hydro has somehow diminished. We get this question all the time, Frederic, and I think as you've seen in the last 3 or 4 years, we continue to find those unique proprietary opportunities to source hydro transactions. And we still see a very strong market to buy hydro. And I'd say on the wind side, that's where we find the competition is just much more fierce, in particular for contracted wind.

The next question comes Sean Steuart of TD Securities.

A couple of questions. I appreciate that drought conditions in Brazil are supporting strong pricing right now, but can you comment on how you expect that, that might affect the overall balancing pool, I guess, looking out over the next year or so?

So it's Richard, Sean. I think if you look at drought-like conditions, I just want to make sure that it's well understood that it is certainly, one of the contributing factors to higher prices in Brazil. But I would also stress that there's been a lack of new construction and new plants being built and that has just not kept pace with demand. And right now I really do think that it's a combination of those 2 factors that are contributing to high prices. When we look at sort of where reservoirs are at this stage in Brazil, in addition to what the actual inflows are in various components of the marketplace, our expectation is that low production out of the hydro portfolio will continue to push more production from the actual thermal plant, which really produced power at a much higher marginal cost than is really what is pushing prices to higher levels. So again, we expect in the coming year particularly in 2015, our expectation is prices will continue to be at the current levels that we've seen over the last 18 to 24 months.

Okay. And wondering if you can give a bit more context on the Brazilian pipeline. You mentioned the 25-megawatt project that you're starting construction on now. And I think there was a mention of a couple of smaller projects behind that. I guess over the next few years, can you give us an idea of how you expect that development pipeline to roll out in Brazil.

Sure. We've got, I think, 2 of our hydro facilities that are in very advanced stage, still need a little bit of permitting. They would represent about 40 megawatts in our pipeline, that if we're successful on, I could see us starting construction in 2015. But they are contingent on certain permits. We have 150-megawatt wind project in Bahia, which is a very high wind region -- a very high value wind region in Brazil. Again, needs permitting, is moving along the development stage and is fairly advanced. But those are the nearest term. And then we probably have another 100 megawatts that's following in behind that into 2016 or '17.

The next question comes from and Andrew Kuske of Crédit Suisse.

I guess 2 unrelated question and the first part of it is if you could just update on your FX exposures. And then the second portion of the question relates to FX within the context of capital allocation. So with just some of the recent moves, are you more inclined now to look at allocating capital into Europe, but then also into Brazil?

Andrew, it's Sachin. Great question. So I'd say, first, let's start with FX exposures, just on unhedged basis, as you guys would all know. We've got about 30% of business in Canada, about 15% in Brazil and about 5% in Europe. That's commensurate with our FFO. Today, we've hedged all of our FFO about 18 to 24 months forward in Canada and -- sorry, in Europe. We remain unhedged on our Brazilian exposure, we just view the cost of hedging is too expensive. And so we have very minimal volatility. And I'd say in Brazil, the contracts we have are IGPM [ph]-based, which, if you recall, is really a basket of largely U.S. denominated goods, which means although we'll have near-term reported FFO variation from an FX perspective, that in actuality, a lot of our cash flows or our revenues in Brazil come back and are tied to the U.S. dollar on a lagging basis. So the businesses itself is largely protected from a currency perspective. And where it's not in Canada and Europe, we actually actively hedge and the costs warrant that. When it comes to capital allocation, you're absolutely right. We're seeing an environment in Brazil where the currency gets weaker. We're seeing the euro obviously under tremendous pressure with the deflationary environment and low interest rates relative to the U.S. and a strong U.S. economy. I don't think currencies drives our capital allocation. It's something we factor in, but in the end, we look at supply-demand imbalances and power market fundamentals from a long-term perspective. And then obviously an environment in particular like Brazil and Europe you see today. Some of these acquisitions that we're going to make or that we have made recently, could turn out to be spectacular long-term value placed for us as you take the combination of supply-demand issues in each of those markets and you take buying in at a very low currency. So all of that factors into our thinking, but currency is not the driver of our capital allocation strategy.

Okay. That's really helpful color. And then I guess just one follow up to that. Are you at the point where you've got enough really within your existing regions of influence at this point in time or are you looking at anything outside the existing areas?

Yes, I think -- it's Sachin again. I think we always look. There's -- we have a pretty big playground right now. We've got almost a billion people that we cover through Europe, Brazil, U.S. and Canada. And there's a lot of capacity needed in those markets and there's a lot for us to do. And we're very committed to building strong platforms in each of those markets. That being said, around the edges, we continue to look in Latin America. There's markets like Colombia and Peru, that are attractive in particular, Colombia. In North America, there's Mexico which is continuing to go through deregulation and policy initiatives, which incent renewable development. So it's prudent for us to pay attention, to be aware of what's going on, to look for opportunity. But there's enough in our existing markets, but we're not pushing a new geographic landscape beyond those 3 continents today, in any meaningful way.

[Operator Instructions] Our next question comes from James Ward of Macquarie.

What are you seeing in terms of any project price inflation given increase competition for assets like from YieldCo down in the U.S. and obviously, international like Evan Co. [ph] and so forth. And -- well, that's obviously impactful for wind. Have you seen a similar effect on hydro assets? Interested in your thoughts.

And just so I'm clear, it's Sachin here, are you talking about construction cost or on the M&A side on completed transactions or completed assets?

Mostly on the M&A side. But anything you can [indiscernible] into construction cost as well would be of interest.

Okay. So on the M&A side, I think, you're hitting the nail on the head. In North America, with a lot of the financial investors, YieldCo, you referenced them, we're seeing assets trade at mid-teens type multiples or high single-digit type yields, which makes it tough. We referenced -- Richard referenced our long-term track record of 16% total return. We're pretty clear that we need 12% to 15% return to our shareholders on new investment. And so I think it comes back to how we're structured at our growth engine and really our M&A capabilities. Where we've always excelled is our ability to source transactions ourselves to look for those situations that either need to leverage our operating platform, i.e., selling merchant power into wholesale markets, building projects through development. If you look at the 2 primary levers of our organic growth strategy, it's really centered around those theme. And that's a hard thing for a financial investor to replicate. They often don't have the internal expertise to sell power into wholesale markets, to optimize their asset base, to manage the regulatory side of hydros, which obviously, you need a real platform to do so. And then to develop projects and oversee construction activity. and if you look at in all of our markets, it's something that we've held near and dear to our heart and we've created a bit of competitive advantage by doing so. When it comes to construction costs, I think, it varies by market. So there was a time in Brazil that we saw construction costs outpace inflation. I think that would be -- there would be an element of that today. That being said, the need for supply is so dire in Brazil right now with demand growing really for the last 30 years. That -- the build versus buy arbitrage really doesn't exist or flipping it around, you can build projects at very accretive returns rather than just having to buy them at the low replacement cost.

The next question comes from Ben Pham of BMO Capital Markets.

I just wanted to go back on our question about outside markets, and you guys did mentioned South America in that bucket. You didn't mentioned Chile though. What are your thoughts about Chile? Is that attractive to you or is it not?

So -- it's Richard. Absolutely, it's attractive. I think that Chile is a great market. It's certainly a smaller, more -- certainly, I would say smaller scale market in terms of its needs. But has significant growth. So it's been a market that's been on our radar screen for a long time. However, there are related companies to Brookfield Renewable that ultimately are invested in what is referred to as trunk transmission in Chile, which then precludes any associated company from the group to invest in generation. So until such time that investment is within the group, we are not allowed to invest in generation. So that's been mainly that the reason why you haven't seen us invest in renewables in that country.

Okay. And on your commentary about the power prices rising overtime and driving your free cash flow higher, when do you expect that to really move the numbers? I mean we're starting to see it already. But is that more a back-ended path there on the power price upside?

Well, again, it's trying to ask us to predict how prices will behave in the future is a bit of a tricky thing to answer. I would just tell you that right now the big drivers in particularly in North America is the fact that you are certainly seeing a recovery of the economy in North America. You're also seeing the reality that today, I think the numbers is around 35,000 megawatts of coal, are actually targeted to shutdown in the near term. So that will clearly have an impact on the supply-demand balance. We see anywhere between short-term volatility increasing, which is what you've seen in last winter when it was really cold, to long-term sustained higher prices, which are probably again, maybe a few years away. But certainly, we're encouraged by the market dynamics right now. And feel that we have been saying this for the last couple of years and we're now starting to see a little bit of traction on that front.

Okay. And just one more, if I may, on the operational side, in your wind business. The production is relative to long-term opportunity. I'm just wondering, was there -- was anything more unusual going on in the quarter? Just some of the wind numbers have seen -- have been below long-term averages, but your numbers seem more dramatic relative to averages. So was anything else going on there?

It's Sachin here. No, I wish I had a better story for you than that. It's really winds speeds. Our availability was very high. Technically, the assets are performing extremely well, we don't have any issues from a reliability perspective. Unfortunately, it was one of those quarters where just across-the-board, we had low wind speeds and obviously, low generation.

The next question comes from Matthew Akman of Scotiabank.

A couple of questions on development prospects and then on hedging strategy. First, on development. I'm just wondering if site C in British Columbia ends up getting hung up on permitting, are you guys positioned to take advantage of sort of later decade or into next decade opportunities?

It's Richard. I can tell you that site C has been on the books for a very long time. So I won't be the one trying to predict whether it gets done or not. At the same time, in British Columbia, particularly that market, we have been much more focused on smaller scale projects that make sense. Kokish is a perfect example. It is a 45-megawatt project that was actually, certainly, I think challenging to permit and get done because it took a long time, but it's actually a pretty valuable projects for BC hydro in the province, and consumers for that matter. So we also have wind projects in various jurisdictions. So if it actually gets done, I still think that there's room to develop those projects. If it doesn't get permitted, then I think it speaks loudly for the outlook for the projects that I've just mentioned to you. So we're bullish on sort of the BC, sort of landscape in the next few years, depending on what happens with this project, like I say, that's been on the books for a very long time, I think, it will be more bullish or less bullish.

Okay. And in Southern California, has there been any progress on repowering any of the wind that was acquired through the Western Wind acquisition?

So it's Richard, I'll just jump in on that. When I think -- we continue to look at every project and some of the projects, as you mentioned, MESA [ph] would be one of them. It's 30 megawatts. These were very sort of antiquated probably 20-year technology in terms of wind turbines. So there is obviously, an opportunity here to redeveloped and certainly, redevelop those sites, and we are certainly, looking at this and it is part of our pipeline of projects that we refer to. So again, the question is we have been pretty disciplined in building only when we actually had long-term contracts to support the new build. And that is really the, call it, the catalyst that's going to get us under construction on a lot of these projects.

Okay. And finally, I'm just wondering on your hedging strategies, whether you've been giving any thought on capacity payments, which are, as they rise specially in place like PJM, and increasing a portion of your cash flows, are you guys happy to sort of float with annual auctions or is there a hedging strategy on capacity?

Well, I think -- thank you for actually -- that's an excellent question. But I think capacity markets have been improving across the Northeast and in the South. PJM in particular, I would say, also New England obviously, as a result of some fairly significant constraints. So we are looking to trying to secure long-term contracts. Keeping in mind, that the auctions are typically fairly short term and not necessarily something that we can lock in for more than maybe a year or 2 in advance from where we actually deliver such capacity. So we are looking to buyers of power that would want to secure the capacity and the combination of the capacity, the flexibility of the assets, the green attributes, and roll that into a price, that ultimately is very advantageous to consumers, because we actually have a fixed price for a long period of time to offer consumers from our facility. So in order to hedge our capacity to that particular product, we look to long-term PPAs to do that.

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

Well, again, thank you very much. As we say, it's now 15 years since we actually started this. We're extremely pleased with the progress we've made. And hopefully, by the end of this year, we continue to make progress for shareholders. So thank you for joining us this morning and look forward to our fourth quarter conference call. Thank you.

This concludes today's conference call. You may now disconnect your lines. Thank you for participating.