Brookfield Renewable Partners L.P. (BEP) Q4 2011 Earnings Report, Transcript and Summary

This is the Chorus Call Conference operator. Welcome to the Brookfield Renewable Energy Partners' Q4 and Year End Conference Call and Webcast. [Operator Instructions] At this time, I would like to turn the conference over to Richard Legault, Chief Executive Officer of Brookfield Renewable Power Fund. Please go ahead, Mr. Legault.

Thank you, operator. Good morning, everyone, and thank you for joining us this morning for our fourth quarter's conference call. With me on the call is Sachin Shah, our Chief Financial Officer. Before we begin, I would like to remind you that a copy of our news release, supplemental information and letter to unitholders can be found on our website at www.brookfieldrenewable.com. With all of the recent activity across the business, it's hard to believe that it has been less than 3 months since we completed the strategic combination and launched Brookfield Renewable Energy Partners. In the short amount of time since completing the transaction, we have commissioned several new projects, acquired new assets, raised the quarterly distribution and continued to enhance our financial and capital markets positioning. I'll speak about our progress in each of these areas this morning, but first, I wanted to thank all our investors for the strong support they have shown both during the combination and through our 2 recent offerings. I also wanted to recognize the tremendous work of our employees across the organization whose efforts make possible our leadership position amongst pure-play renewable power businesses globally. As you know, one of our key objectives in 2012 and beyond is the accretive growth of our Renewable Power portfolio and we have continued to deliver on that objective, having recently added 500 megawatts of capacity to our operating platform through the completion of existing development projects, as well as the acquisition of new facilities. Among these additions, we commissioned 4 new construction projects totaling nearly $1 billion worth of value. The projects include the Comber Wind farm in Canada, the Granite Reliable Wind farm in the U.S. and the Glen Ferris and Lower St. Anthony Falls Hydro facility also in the United States. On a combined basis, these projects will add 280 megawatts of capacity to our portfolio. These assets are notable not just for the significant cash flows they bring, but for how they reflect our growth strategy, the unique nature of our platform and our strong commitment to create value for shareholders. For example, the 99-megawatt Granite Reliable Wind farm was a preconstruction project when we acquired a majority stake in the fourth quarter of 2010. Our U.S. operating platform completed the remaining development activity, secured regulatory approvals and project financing and led the project through its construction phase. The project has since been completed and integrated into our U.S. fleet, all of this in the span of a little more than a year. Our Coram facility was in an even earlier stage of development at the time we got involved, lacking even a power purchase agreement and interconnection agreement. In the span of about a year, we were able to procure a long-term PPA, interconnection agreement, project financing and complete all other required engineering and commercial agreements. That project will also enter operations this quarter. These are just 2 examples, which demonstrate our ability to bring our capital and expertise to bear in rapid fashion and to work with our partners and other stakeholders in ways that build significant value. Notwithstanding our inclination to move quickly on opportunities, we also have the ability and financial resources to be very patient with our capital as is the case of a project such as Comber in which we invested 8 years bringing it from its earliest concept to its recent COD in the fourth quarter. Our patience has been well rewarded with an attractive long-term PPA and outstanding support from the local community and the construction of the project was completed on scope, schedule and budget, but most importantly safely. Our Kokish River Hydro project is yet another example of a longer-term initiative that stands to add significant value to the platform. Our investment in Kokish dates back more than 10 years, and in the fourth quarter, we received the environmental approvals that will allow us to begin construction, which we'll look to do in the coming months, once the remaining commercial agreements are in place. We also recently acquired new wind generation assets in California, including a 150-megawatt wind farm adjacent to our Coram wind project in the Tehachapi region. This new facility entered commercial operations in the first quarter and benefits from a 24-year power purchase agreement with Southern California Edison. We also acquired the remaining 50% stake previously held by our partners in Coram, along with a further 22 megawatts of additional operating wind generation. This brings our total capacity in this attractive California market to nearly 300 megawatts. On the heels of this progress in our growth plans, we announced an increase in our quarterly distribution of $0.03 per unit on an annualized basis. This marks the second time in the last 2 quarters we have increased the distribution, the first being upon completion of the combination. As a result, our current distribution rate is approximately 6% higher than the Fund's distributions prior to the launch of Brookfield Renewable Energy Partners. Looking ahead to 2012, we continue to see opportunities to grow the business. With respect to current initiatives, I mentioned the Kokish Hydro project, which should begin construction in the first half of this year. In addition, our 2 projects in Brazil totaling 48 megawatts continue to progress on schedule and are expected to enter commercial operation in early 2013. With a solid financial position, unique operating platform and strong relationship with Brookfield Asset Management, we are well-positioned to grow our business on a value basis. Finally, we remain focused on solidifying our position in the capital market as the leading publicly-traded renewable pure play. The successful secondary and notes offering that were just completed were both oversubscribed and confirm our ability to access capital markets and our commitment to diversify our shareholder base over time. Two additional initiatives in the coming months will further help to achieve our capital markets goals. These include a listing of our units on the New York Stock Exchange, as well as the introduction of a distribution reinvestment plan. These initiatives will make it easier for investors to participate in our growth over time and should enhance our access to capital even further by making our units more widely and more readily accessible. I will now ask Sachin to present the financial and operating results for the quarter.

Thank you, Richard, and good morning. Before I begin I wanted to point out that the results that I'll be discussing, such as those for revenue, EBITDA and FFO, are in a pro forma basis, which assumes that the combination had taken effect on January 1, 2010. Given the material impact of the combination agreements and contract amendment, we believe this approach will better assist investors in assessing our results, both relative to the prior year and to the long-term average. Generation levels improved in 2011 from the prior year due largely to heavy summer rainfall in the northeastern United States. As a result, total generation across the portfolio was 10% higher than in 2010 and slightly below long-term average. Hydrology conditions in Eastern Canada were lower than expectations. However, we did experience an improvement over the record dry conditions of 2010. Energy sales from our Hydro portfolio in Brazil were in line with plan and consistent with the levelization framework that exists in that market. Wind production was below long-term average during the year but ahead of the prior year as we had the full year benefit of wind facilities commissioned in late 2010. For the fourth quarter of 2011, our total generation was 6% lower than long-term average, reflecting below average inflows in Eastern Canada. Wind production increased 33% year-over-year, reflecting the commissioning of a new 166-megawatt wind farm in Ontario in November. Entering the first quarter of 2012, our reservoir levels are 7% above long-term average. And with our fully contracted portfolio, we are well positioned to deliver results in line with plans for the balance of the year. Revenues for the year were $1.3 billion, up $145 million or 12% from 2010. Approximately $21 million of the increase is attributable to the acquisition of a 30-megawatt Hydro facility in Brazil in June of 2011 and the completion of the Comber Wind facility in Eastern Canada in November. The balance is due to inflation-based escalation included in our PPAs and an increase in overall generation levels from the prior year. EBITDA increased year-over-year by $73 million or 9% to $926 million in 2011. Our margins were consistent with a 75% level that we typically experienced in the business. Interest costs reflect the costs related to approximately $1.1 billion of corporate debt and $4.2 billion of nonrecourse asset specific debt. Our financings are predominantly fixed rate and issuing local currencies providing protection to our equity capital against changes in foreign exchange and interest rate movements. In February of this year, we issued $400 million of corporate debt with a 10-year term at 4.79%. Proceeds from the issuance were used to repay higher yielding, shorter duration debt, further reducing our cost of capital in the business and improving our overall debt maturity profile. Our pro forma results also reflect the management service fees that we will incur on an annual basis, with a base management fee of $20 million annually plus 1.25% on growth in our total capitalizations. As a result of the factors previously discussed, funds from operations, or FFO, increased by $69 million or 20% to $419 million from $350 million in 2010. Factoring in the addition of Comber, a full year contribution from acquired or recently completed projects, as well as return to long-term average generation, we are on track to produce approximately $1.1 billion of EBITDA and $550 million of FFO in 2012. As you know, we maintain a comprehensive capital maintenance program aimed at maintaining the efficiency and reliability of our power-generating assets. Our sustaining CapEx in 2011 was in line with our annual expectations of approximately $50 million to $60 million annually. Looking at our balance sheet, our financial position remains strong. At the year end, we had over $450 million of available liquidity consisting of cash and the unutilized portion of committed bank lines. This provides us with significant cushion to fund ongoing growth and capital requirements and to protect against short-term fluctuations and generation. We have no corporate borrowings maturing over the next 3 years. Subsidiary borrowings maturing in 2012 include $260 million of debt on our Eastern Canadian wind assets, $120 million associated with our pump storage facility in New England, which we own 50% with a partner and $200 million attributed to our Hydro facilities in New York. We expect to be able to refinance all of our upcoming maturities in the normal course. The net asset value of the partnership increased 14% in 2011 to $8.4 billion or $32 a share compared to $7.4 billion in the prior year. Increases over 2010 reflect lower discount rates, the completion of plants under construction and the acquisition of Hydro facilities in Brazil, partially offset by lower foreign exchange rates in both Canada and Brazil. As Richard indicated, we are well-positioned to achieve our operating and financial objectives and we look forward to reporting on our progress next quarter. That concludes the financial and operating discussion. Thank you for joining us this morning, and we'd be pleased to take your questions at this time.

[Operator Instructions] The first question today comes from Juan Plessis of Canaccord Genuity.

In the third quarter call you suggested that there might be around $8 million of transaction-related expenses. Did that occur? Did you incur $8 million?

We did, Juan. We did incur that and we actually had $8 million of cost in the third quarter and we had a couple more in the fourth quarter, and they would be reflected not in our FFO though, they're part of our ongoing operations.

Okay. So those have been removed from your number of FFO.

Yes.

And with respect to the wind acquisitions you announced last month, can you tell us what the net megawatts of capacity was to breadth and perhaps the cost of the acquisition?

Well, I think -- it's Richard, Juan. Basically, I think the total capacity is 150 megawatts. I believe that the number for the actual capacity factor of those plants would be about 35%, but we can confirm that for you. And we've acquired this with institutional partners. So our interest is approximately 25%. So doing the math through that, I think the net megawatt to us are about 37.5. And then basically if you look at the capacity factor applying that to the 37.5, you should be able to recalculate our share of net megawatts, if I understood your question correctly.

Yes. That's very good. And what about the capital cost to purchase? The acquisition cost?

So we would have spent on 150 megawatts that Richard was referencing, our total acquisition cost would approximate $140 million, of which as we mentioned, our share would've been approximately 25%.

And just a clarification. There's a segment in the results titled Other. Does this relate to the gas-fired capacity?

Yes. So as you see -- are you talking about we have Hydro, Wind and an Other?

Yes.

Yes. Those are the 2 gas plants. That's correct.

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

Just in terms of the growth in the uncontracted generation over the next 5 years, is the generation -- does it mostly relate to Brazil?

It does, Nelson.

And could you say anything about, I guess, how you intend to kind of re-contract Brazil going forward? Do you expect that it will just continue to kind of roll forward?

Yes. And I can certainly speak to that, Nelson. I guess in Brazil today, I would say that new capacities required at the rate of about 5,000 to 6,000 megawatts per year as I pointed out in the past. The bilateral contract market is very healthy and tends to gravitate to, I would say, new entrant pricing. Our capacity coming to the end of their contracts is about 1 terawatt hours, so 1 million megawatt hours of our capacity in Brazil, and that is over mostly I would say 2013, 2014. And then so what we've been doing is watching prices very closely. It's a little bit like a Hydro plant in North America. We don't have any dispatch risk, so that power will be required by somebody in the marketplace in Brazil. And we have a great deal of confidence and conviction that there won't be any dispatch risk to that power. It's mostly about pricing and trying to make sure that we time it properly to maximize prices for our shareholders. We believe that by waiting a little bit, we could contract today, but we feel the prices will improve over the next, call it, 12 to 18 months. And we're going to be watching it very closely. But again, our view is that there is very little dispatch risk of that power, meaning that someone will need it and someone will buy it. It's mostly a price risk that we're trying to ensure that we maximize price in a, call it, very tight market where supply clearly is having difficulty matching up with demand.

I see. Okay. And then just kind of switching subjects. I know it's a small contributor to your portfolio, but what's the status in terms of re-contracting the Lake Superior gas fire facility in Ontario?

Well, we continue to work with other owners of gas facilities on renewing non-contracts as you know. We are making progress. As you've seen there is a somewhat of a surplus in Ontario. So we're still sort of adamant that particularly, I think, a facility like LSP has its place in the marketplace particularly in Northern Ontario. So we continue to work through all of the details, we're trying to renegotiate those contracts. And that's probably as much as I can tell you at this stage. The contract runs out in 2014. So I would expect that by the end of this year or early 2013, that we'll probably get more attention around this particularly from government and the OPA.

Okay. And then just one last question. In terms of the NYSE listing do you have an expected timetable for that in terms of which quarter you expect that will be listed?

We will file before the end of the first quarter.

The next question comes from Andrew Kuske of Crédit Suisse.

Richard, if you could just give us a little bit of color and commentary on your thoughts for renewable power exposure outside of the Americas because all of your assets right now are within the Americas region, and I'm sure you've looked elsewhere in the world. But if you just give us a bit of an overview as the markets you like, I assume the characteristics are that you're looking for be identical to what you've already got on the Americas, but if you just give us a bit of color on other markets that look attractive to you.

Andrew, I can certainly do that. I think that as we pointed out to everyone, I believe that the next 5 years, the lion's share of our capital is going to go into the core markets we're already in which is Canada, U.S. and Brazil. However, in looking at our strategy, we've also focused our efforts on trying to identify the best, call it, next core market for us. When we look at sort of the presence of Brookfield in Australasia, particularly in Australia and New Zealand, and the market dynamics in those particular markets, we think it makes a lot of sense that we focus some time and effort in getting to know that market a lot more. And I would say out of all of the markets, this would be one of our preferred areas to invest. I would say the other areas of -- and if you say outside the Americas, I would say that's number one. Number two would be I would say Europe on a very opportunistic basis. However, as we all understand, Europe is very challenging at the present time. But for years, I've been looking at Europe and finding that a very robust and low cost of capital utility market was out there, so it was very difficult to buy anything for value. That is changing. So is it immediate? No. Is it something that we are watching very closely to see if there are any opportunities? Not necessarily in some of the countries that are having more difficulties like Greece or others, but in countries that are probably more stable and have just a great deal to offer from a Hydro or renewable standpoint. So that would be number 2. And then we look for opportunities across the world. But I would say again, those are very broad markets that we think that will either one of those 2 opportunities will yield a, call it, fourth market for us to focus our efforts. I should also mention, Andrew, that when I look at Latin America, particularly when we say the Americas, there are other markets that again investment-grade countries, highly stable in terms of their fiscal policies and certainly regulatory policies around power, so some of those countries, like I would say Colombia, Peru and Chile, remain sort of areas that we continue to focus on.

That's very helpful. And just a further and related question is potentially a play on Europe really being in an indirect plan, North America or more direct plan North America with some of the European companies needing to delever and seeking to sell effectively non-core assets that are based in the Americas, do you see that as being a good opportunity?

Well, absolutely we do. I think again if you look at some of the opportunities to actually originate transactions are very much European companies that need liquidity, that own portfolios of assets across the world in different jurisdictions that I've mentioned already. So clearly, that would be an area that we could originate transactions from and that we have a very proactive outreach program to meet with these people to see if we can be of assistance or help them with liquidity either on a joint venture basis or to outright purchase some of these portfolios.

And then one final question if I may, and it's just more specifically on the California market. When we look at the build program that's in place there over the next few years, do you believe that renewable power generation is basically built out in its entirety within the state of California?

Well, the one thing that we have believed from the start was the scarcity value of wind is more site-specific. Wind throughout the U.S. particularly is not scarce. There's lots of areas where wind continues to actually be potentially one of the generation choices that a lot of regulators are going to make. But in a -- in California, the difference is the demand for the product is that much greater. The scarcity of the site is clearly much higher. And when we look at sort of the pricing and the ability to source contracts, both -- every megawatt and now we almost have 300 megawatts, have greater than 20-year contracts with very sort of strong credits in utilities in California. So again, our conviction remains the same. It is better to own wind in areas where it's difficult to permit, scarce resource, and that ultimately over the longer term, they will hold and improve value over that time. So said differently is our conviction remains the same and unshaken.

The next question comes from Matthew Akman of Bank of Nova Scotia.

The 48 megawatts of Hydro under construction in Brazil, is it contracted yet?

It is. I think at the present time, that 48 megawatts is not contracted at the present time. I think that we did enter into, I would say, 3 to 5 year contracts depending on the off-taker. So I would consider that as a shorter-term contract, but this is exactly to the point we continue to believe that pricing will become -- will improve over time in Brazil and we're trying to sort of stay in that horizon at 3 to 5 years.

Based on the short-term contract prices, are you going to hit your hurdle returns on those?

We are. I think we're trying to, again, improve the returns.

Okay. Separately, what is the projected in-service date for Kokish River?

I believe that if we start construction by the second quarter of this year, it's about a 24 to 30-month sort of construction period. So I would say best scenario would be early 2015 in-service.

Okay. You guys remarked that reservoir levels are 7% above long-term average. Can you break that down, not in numerical terms but just directionally?

Well, one thing certain is that you should consider that when we say 7% at the end of the year, it is for that time of year. Like there is a rule curve that we follow both from our licenses to operate reservoirs requires us to follow. And that means that vis-a-vis any other time at December 31, we are 7% where we would normally be for that time of year, which positions us really well for the first quarter. However, at the end of March, March 31 or early April, depending on sort of the amount of snow in the ground and how quickly spring comes, we need to empty our reservoirs to their lowest level possible based on that same rule curve, which means that flood control becomes the priority, not production of power. So that again, it means what it means for December 31, we're well positioned for Q1. We've got lots of water but by March 31, we need to actually empty our reservoirs in order to make the room necessary to prevent flooding downstream in a lot of these river systems that we have in North America. Brazil is different, but North America works pretty well the same way across the board.

But you're saying North America as the first quarter is above long-term average, not just...

Yes. The water we have stored is above long-term average.

Okay. My final question, maybe this is for Sachin. I'm looking at the DRIP as a priority, announced priority and yet you guys acknowledge you've got the $100 million anyways of free cash for organic investment, which seems to match nicely with your organic growth program. I mean is the DRIP a foregone conclusion that you'll turn it on? Or you're just more wait and see what evolves on acquisitions and so forth?

Yes. So the DRIP will be at that election of the shareholder. It's not something that we would mandatorily impose on anyone. So we don't need it in the business. It's just a nice feature to have if you're a shareholder, in case you want to participate in growth on that basis. But certainly it doesn't impact $100 million of extra cash we have a year, annually, nor is it something we can actually impose on anyone.

No, no. But I'm just wondering whether you implemented it at all. I mean, how do you think about that, I guess? Do you need the extra capital?

It's Richard. No, actually, we don't need the extra capital. But having to turn around [ph] to a lot of our investors in the past this is something that's been requested by investors and to be honest, I don't see a problem in actually putting the money to work at reasonable levels. I think the question is this is more responding to investor request that we felt, for us, it's an investor decision as Sachin points out. So they can elect or not elect to get their dividends reinvested into shares. And we feel that at the end of the day, if that's something that is important to investors, we wanted to be responsive.

So you just feel you have enough growth in the pipeline that you'll be able to put it to work?

I have no doubt.

The next question comes from Steven Paget of FirstEnergy.

A quick question on Pehonan in Saskatchewan. I'm wondering if you could update us on the progress of that Hydro asset?

Well, we continue to actually work through a lot of these sort of important decisions that need to be made around a contract. I think that the terms of that contract today, just maybe giving you some background in Pehonan, we have a development agreement where we're doing all of this work under the umbrella that if the government of Saskatchewan decides not to pursue this, that essentially our development dollars are refunded to us. At the same time, so that we have now completed a lot of the work that was envisioned in that development agreement, we are at a point where we need to actually get comfort that we will get a contract from the government of Saskatchewan. And we're in those discussions today. I think that early part of this year, we should know with greater certainty whether we're going to get one or not. We continue to believe that this project will be part of the landscape in Saskatchewan at some point in the future. And ultimately, we're looking forward to making sure that either today or in the future, we will secure a contract to build this project. But that's about as much as I can tell you today.

Okay. You mentioned possibly looking at New Zealand. Well, there's a lot of volcanoes in New Zealand, so I'm wondering if you're having any interest in geothermal?

I've mentioned in the past, geothermal is clearly a great interest to us. I would say simply because it is just such a great complement to the Hydro portfolio we have today. The scarcity of the resource, the scarcity of the actual expertise and skill sets, for us that kind of is a really good asset to do. But we've also said to everyone, we would not go into that business without some very strong partner, with a very strong track record. And clearly, that would be within the realm of the technology diversification strategy that we would have in the future. But as I've mentioned, only with a very strong partner.

The next question comes from Ian Tharp of CIBC World Markets.

So Richard, I think it was you or Sachin that mentioned the capital cost for the 150 megawatts in California of $140 million. That's the total capital cost for the 150?

No, that's the equity, Ian, that we've actually invested in. The construction, just to be clear, the Alta 8 project essentially we're acquiring once it's completely COD-ed. And therefore we acquired the equity interest that Terra-Gen owned, and they were committing to -- they were committed to deliver an operational project to us and fully operational. So when we quote the $140 million, that would be equity amount that we actually acquired it for.

And what's [indiscernible] what are they using?

I believe it's in the 60%, 65%.

We can get back to you on that.

It wouldn't be very different, Ian, than what we've done throughout our own portfolio. I would say about 65% somewhere in that range. It's still the same coverage ratio that we've seen and used. So I would expect it to be that. But we can certainly provide you clarity on that point.

Okay, great. And can you remind me of the timing for COD for that project?

It's actually, I think it's COD-ed now.

It is. Okay.

Yes. We've closed and ultimately that was COD-ed before we took ownership of it.

Right. Okay. And Richard, I think you talked about in the past some of the other activity in Brazil in terms of RFPs I know you've got the bilateral processes going on. But is there any news on that front? And also I know you focused on Hydro and Brazil, but are there opportunities also both on the wind side or perhaps biomass?

Yes. On your first part of your question on RFPs and auctions, again, those auctions typically if you look at sort of regulated or distribution companies, they go to market typically during the summer. So that will come for 2012, it will probably be June or July. So I would expect that. But the free market is basically any time. We've looked and secured contracts Pezzi and Cavalinhos was something that we wanted to do just simply because we were in construction. We wanted to secure a revenue stream at least for the period, the short period it became COD-ed. But ultimately the rest of our portfolio we continue to look at sort of what is being built today in Brazil. A lot of it is late, meaning some of the wind aren't getting -- some of the wind contracts that were allowed are not getting built as quickly as everyone expected. Secondly, the larger Hydro projects we expect to be late. So again, that's why we feel that going out too early and too quick on trying to secure contracts for what contracts we have in terms of rollovers, may not be the best strategy. But again the market is very robust. And ultimately I'm pretty sure, like I said earlier on, there's very little dispatch risk in our portfolio in Brazil. On the second part of your question, we continue to look at wind and just mostly from a curiosity standpoint, we believe that people are very aggressive on capacity factors that essentially are being promoted in Brazil. So we're not really looking at anything anywhere seriously in Brazil on the wind front. And we'll certainly look to probably in the future, either acquire operating ones, once we know exactly what the capacity factors may be or to actually build them once several have been built and we have a better picture of what the resource does yield. So that's our strategy on wind. On biomass, I would say, it is clearly a very good market. The government of Brazil is trying to diversify its portfolio. It's highly concentrated in hydroelectric facilities. And they've chosen biomass as the means of diversifying that particular portfolio. So we think that's a good area for us to look at and potentially invest in. Biomass, particularly in Brazil, is more based on the sugar industry and ethanol industry. So very strong and robust. They're probably one of the largest sugar producers in the world. So we feel that, that's a very strong underlying industry to build a biomass facility in Brazil. And we have, again, relationships are very strong with that industry through our agricultural lands that we have in Brazil. So we're very well-positioned. They offer long-term contracts, long-term financing at very attractive rates, and we think that this would be a good value-add area for BREP going forward. Hopefully that's helpful in answering your question.

Absolutely. And then one quick question on Kokish. You received your EA from last year, any other regulatory hurdles before you can reach your notice to proceed on the project?

Non-material. I think they're all pretty well normal course type things that we need to do. And again, we clearly continue to be very pleased with the process, but also mindful that we should be -- we want to do it at a pace where we get very strong commitment from the community, first nations and building these things are important to make sure that we have everyone on board. Obviously, that's not always possible. But I would say that we want the strongest position possible. So again, no material permit to be obtained at this time. So we're pretty comfortable we can start construction in the second -- before the end of the second quarter this year. And we'll continue to build support for the project within the region.

[Operator Instructions] The next question comes from Sean Steuart of TD Securities.

Just a couple of questions. Richard, I guess as we think about opportunistic acquisitions outside the 2,000-megawatt development pipeline, you touched on the economics of the California wind deals. Should we be thinking about 25% equity interest for BREP as a norm going forward, you've been transparent about involving other institutional partners, I guess, including Brookfield Funds but should we expect to see a lot of variance around that sort of equity interest for outside acquisitions?

I would say none at the present time. I think that clearly is something that were based on the funds that are currently in place, and it provides us a lot of confidence that small or large transactions can be completed on a just-in-time basis for better value, meaning that we don't need to worry about capital as much as a lot of our competitors. At the same time, our goal is to actually sort of try and increase that percentage over time. Clearly, I think as we grow, we will probably need to deploy capital at a rate where that percentage will probably increase in terms of our participation and contribution to these projects or to acquisitions in general.

Okay, understood. And then second question with respect to the gas-fired capacity you have, you touched on the re-contracting in Ontario. How should we think about the 2 assets? And I appreciate it's a small piece of the overall pie, but should we think of these as non-core assets you'd look to divest over time? How should we think about those assets?

That is exactly how you should look at them. Again we will not grow our gas-fired facilities in BREP. I think that again from an overall standpoint, we are a pure-play renewable business. We want to stay that way. These are 2 legacies that we've had in the portfolio. I do believe, and have strong conviction however, that they cost us no money and that the value in the future will be greater. I think that particularly as someone just mentioned this morning, if we can renew or renegotiate our non-contract that comes to an end in 2014 on LSP, clearly this will be a plant that has greater value. If you look at sort of the car street facility in New York, the shale gas element of the market in the U.S. has changed lots of things. But it makes, I believe, car street more attractive in the future. So we believe that we'll have better value in the future. But they are non-core assets.

There or no more questions at this time. I will now turn the call back over to Mr. Legault for concluding comments.

Well, thank you again for joining us this morning and it's been a pleasure to actually relate to you our fourth quarter financial results and also the initiatives that are now ongoing in Brookfield Renewable Energy Partners. And clearly, we look forward to speaking to you again in the first quarter, after the first quarter results are out. Thank you for joining us this morning. Operator, we will now disconnect.

Ladies and gentlemen, this concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.