Great Lakes Hydro Income Fund Reports Strongest Year in the Fund’s History
Announces closing of acquisition of Prince Wind and Pingston Hydro joint venture interest
| Letter to unitholders | Unaudited Consolidated Financial Statements | Supplemental Information |
GATINEAU, Québec, February 5, 2009 – Great Lakes Hydro Income Fund (the “Fund”) today reported its financial and operating results for the fourth quarter and year ended December 31, 2008. The Fund provides additional information on its strategy and results in its Letter to Unitholders and Supplemental Information available at www.greatlakeshydro.com under Investor Relations/Financial Highlights.
Closing of Strategic Acquisition
The Fund also reported today the closing of the previously announced acquisition of the Prince Wind farm and Pingston Hydro joint venture interest from Brookfield Renewable Power for cash consideration of $65 million and a fixed number of exchangeable shares of the corporation that owns the projects. On a fully-exchanged basis, Brookfield Renewable Power will maintain its 50.01% ownership interest in the Fund.
Fourth Quarter Results
Generation of 905 gigawatt hours (GWh) for the fourth quarter was 22% higher than the 742 GWh generated in the same period last year and slightly above long-term average of 902 GWh. All regions reported improved generation except for Ontario which was well below normal due to weaker hydrology conditions. Despite the weaker fourth quarter, the Ontario region enjoyed its strongest year ever in 2008 at 6% above long term average.
The Québec region’s generation of 397 GWh was higher than the prior year period and long-term average by 182 GWh and 43 GWh, respectively. This led to a 71% revenue increase over the fourth quarter of 2007 and contributed to the Québec region’s second best year in terms of generation since the Fund’s inception. The New England Region ended a record 2008 with a strong fourth quarter, with quarterly revenues also benefiting from the appreciation in the U.S. currency. In British Columbia, generation increased nearly 10% from the fourth quarter of 2007 and was 24% above long-term average for the fourth quarter.
Fourth quarter revenues of $39.9 million and income before non-cash items of $18.7 million increased by 20% and 65%, respectively, from the same period a year earlier. Fourth quarter distributions to unitholders totaled $15.0 million or 31 cents per unit.
| 2008 FINANCIAL AND OPERATING HIGHLIGHTS | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Unaudited CDN $ millions, except otherwise noted |
Three months ended | Twelve months ended | |||||||
| December 31 | December 31 | ||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||
| Revenues | $ | 39.9 | $ | 33.3 | $ | 195.7 | $ | 155.8 | |
| Income before non-cash items | 18.7 | 11.3 | 100.1 | 65.3 | |||||
| Distribution | 15.0 | 15.0 | 60.3 | 60.3 | |||||
| Per unit | |||||||||
| Income before non-cash items | 0.39 | 0.23 | 2.07 | 1.35 | |||||
| Distribution | 0.31 | 0.31 | 1.25 | 1.25 | |||||
| Power generated (GWh) | 905 | 742 | 4,436 | 3,487 | |||||
| Average price (¢/KWh) | 4.6 | 4.5 | 4.6 | 4.5 | |||||
The year 2008 was the strongest in the Fund’s history. Total generation of 4,436 GWh was 27% above the prior year and 13% above long-term average due to increased precipitation and water inflows in the Québec, Ontario and New England regions throughout the year. Revenues of $195.7 million and income before non-cash items of $100.1 million were both significantly above prior year amounts of $155.8 million and $65.3 million, respectively.
“It has been a truly milestone year,” said Richard Legault. “Despite a very challenging economic backdrop, we achieved our strongest annual performance since the Fund was created. While strong hydrology prevailed throughout much of the year, our results are also a reflection of the quality of our assets and management’s focus on securing long-term, stable cash flows.”
In 2008, the Fund returned to a more normalized level of capital spending across its operations, having invested $16.8 million in capital expenditures and $3.5 million in major maintenance. The Fund currently expects to invest $17.3 million in capital expenditures and $4.5 million in major maintenance during 2009.
At December 31, 2008, the Fund had a strong liquidity position with $46.1 million available though its existing credit and hydrology facilities, and a current cash balance of $9.0 million.
“We are delighted to report the closing of this strategic transaction, which will lead to greater resource and regional diversification, and is expected to contribute significantly to the Fund maintaining its current annual distribution of $1.25 per unit on an after-tax basis past 2011,” added Mr. Legault.
CONFERENCE CALL
A conference call for investors and media to review the fourth quarter and year end results for 2008 will be held on Friday, February 6, 2009 at 10:00 a.m. (EST). To participate in the conference call, please dial 416-644-3415 or 1-800-733-7560 toll-free in North America, at 9:50 a.m. (EST). For those unable to participate in the conference call, a taped rebroadcast will also be available until midnight on February 10, 2009. To access this rebroadcast, please call 1-877-289-8525 toll-free in North America, and enter the passcode 21294411#. The conference call will also be webcast live on the Fund’s website at www.greatlakeshydro.com, where it will be archived for three months.
DISTRIBUTIONS
The schedule below sets out the cash distribution history for the last twelve months:
| RECORD DATE | PAYMENT DATE | DISTRIBUTION PER UNIT |
|---|---|---|
| December 31, 2008 | January 30, 2009 | 10.417 cents |
| November 30, 2008 | December 31, 2008 | 10.417 cents |
| October 31, 2008 | November 28, 2008 | 10.417 cents |
| September 30, 2008 | October 31, 2008 | 10.417 cents |
| August 31, 2008 | September 30, 2008 | 10.417 cents |
| July 31, 2008 | August 29, 2008 | 10.417 cents |
| June 30, 2008 | July 31, 2008 | 10.417 cents |
| May 30, 2008 | June 30, 2008 | 10.417 cents |
| April 30, 2008 | May 30, 2008 | 10.417 cents |
| March 31, 2008 | April 30, 2008 | 10.417 cents |
| February 29, 2008 | March 31, 2008 | 10.417 cents |
| January 31, 2008 | February 29, 2008 | 10.417 cents |
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This news release contains forward-looking statements and information concerning the business, operations and financial condition of the Great Lakes Hydro Income Fund (“Fund”). Forward-looking statements can be identified by the use of words, such as “pending”, “expected”, “will”, “allow”, “sustain” or variations of such words and phrases or state that certain actions, events or results “will” be taken, occur or be achieved. Although the Fund believes that the Fund’s anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based on reasonable assumptions and expectations, it can give no assurance that such assumptions and expectations will prove to have been correct. Forward-looking statements and information involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund to be materially different from anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information.
Examples of such statements include, but are not limited to factors relating to production and the business, financial position, distribution policy, operations and prospects for the Fund. They include but are not limited to: changes in hydrology and wind conditions; equipment failure; failure by counterparties to fulfill contractual obligations and failure by the Fund to replace contracts; the Fund’s dependence on Brookfield Renewable Power Inc. and potential conflicts of interest between Brookfield Renewable Power Inc. and the Fund; energy rate fluctuations; failure by the Fund to discover liabilities associated with acquisitions; changes in the general economy; failure of transmission systems or adequate transmission capacity; water rights; changes in the Canadian/US dollar exchange rate; changes to regulations and increases in regulatory costs; failure by the Fund to renew, maintain or obtain necessary governmental permits; inability to generate or sell electricity; failure by the Fund to maintain dam safety; inadequate insurance; failure by the Fund to comply with health, safety and environmental regulations; threat of legal action and claims against the Fund; labour disruptions; inability of the Fund to successfully integrate acquisitions; changes in technology; inability of the Fund to access and refinance capital on desirable terms and changes in interest rates; inability of the Fund to withdraw cash from subsidiaries; risks related to the nature of the Trust Units, tax matters and investment eligibility, the market for Trust Units and Trust Unit prices, and unitholder liability.
These factors and other risk factors, as described under “Risk Factors” in the Fund’s Annual Information Form, represent risks that the Fund believes are material. Other factors not presently known to the Fund or that the Fund presently believes are not material, could also cause actual results to differ materially from those expressed in the forward-looking statements and information contained and incorporated by reference herein. Accordingly, undue reliance should not be placed on these forward-looking statements or information. The Fund disclaims any obligation to update publicly or to revise any of the forward-looking statements or information contained in this news release, whether as a result of new information, future events or otherwise, except as required by applicable law.
ABOUT GREAT LAKES HYDRO INCOME FUND
Great Lakes Hydro (www.greatlakeshydro.com) is a premier Canadian income fund and one of the largest power income funds in North America with 1,255 megawatts of power generating capacity and average annual production of 4,596 gigawatt hours.
Great Lakes Hydro Income Fund produces electricity exclusively from environmentally friendly and renewable resources. The Fund indirectly owns or holds interests in 27 high quality hydroelectric generating stations and one wind farm in four distinct geographic regions across North America: Quebec, Ontario, British Columbia and New England.
Brookfield Renewable Power, which comprises all the power operations of Brookfield Asset Management, owns 50.01% of the Fund’s outstanding units on a fully exchanged basis. Great Lakes Hydro Income Fund units are listed for trading on the Toronto Stock Exchange under the symbol GLH.UN.
CONTACT INFORMATION
Zev Korman
Director, Investor Relations and Communications
Tel: (416) 359-1955
unitholderenquiries@greatlakeshydro.com
