Great Lakes Hydro Income Fund Reports Fourth Quarter and Year-end Results - Strong hydrology drives increase in generation and revenues
| Letter to unitholders | Unaudited Consolidated Financial Statements | Supplemental Information |
GATINEAU, Québec, February 6, 2007 – Great Lakes Hydro Income Fund today reported its financial and operating results for the fourth quarter and year ended December 31, 2006.
In the fourth quarter of 2006, power generation totaled 968 gigawatthours (GWh)compared with 880 GWh a year earlier. Revenues increased to $42.0 million and income before non-cash and special items to $17.3 million. These results reflect the continued strength of the hydrological conditions in Québec and
New England.
Financial and operating results increased significantly for the full-year period. Power generation totaled 4,151 GWh compared with 3,503 GWh last year. Revenue increased by 15% to $177.1 million and income before non-cash and special items by 19% to $82.6 million. These results were driven by exceptionally strong water inflows in Québec throughout 2006 as well as improved hydrological conditions in our Ontario operations. They also include generation of 59 GWh from the Cedar Dam facility in Quebec that was commissioned in December 2005, and 34 GWh from the Carmichael Falls, Ontario facility that was acquired on July 1, 2006.
In 2006, the Fund’s cash distributions increased to $60.1 million from $58.7 million last year.
| 2006 FINANCIAL AND OPERATING HIGHLIGHTS | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Unaudited (CDN$ millions, except where noted) |
Three months ended | Year ended | |||||||
| December 31 | December 31 | ||||||||
| 2006 | 2005 | 2006 | 2005 | ||||||
| Revenues | $ | 42.0 | $ | 39.2 | $ | 177.1 | $ | 154.5 | |
| Income before non-cash and special items | 17.3 | 17.0 | 82.6 | 69.5 | |||||
| Distribution | 15.1 | 14.7 | 60.1 | 58.7 | |||||
| Per unit | |||||||||
| Income before non-cash and special items | 0.36 | 0.35 | 1.71 | 1.44 | |||||
| Distribution | 0.31 | 0.30 | 1.24 | 1.22 | |||||
| Power generated (GWh) | 968 | 880 | 4,151 | 3,503 | |||||
| Average price (¢/KWh) | 4.3 | 4.5 | 4.3 | 4.4 | |||||
In 2006, a total of $30.2 million was invested in sustaining capital expenditures and enhancement initiatives, and $6.0 million in major maintenance. Major capital projects, many of which extend over multi-year periods, are now underway at facilities in Québec, British Columbia, Ontario, Maine and New Hampshire. It is anticipated that organic growth will add 15 GWh to the Fund’s generation in 2007 and a further 48 GWh by the end of 2009.
At December 31, 2006, the Fund had a cash balance of $31.8 million, almost $25 million of availability on its credit facilities and almost $21 million available on its hydrology reserve facilities with Brookfield Power.
“2006 was an excellent year for the Fund. Looking forward to 2007, we expect to derive the benefit of a full-year’s contribution from our Carmichael Falls acquisition as well as additional efficiency and capacity gains from our capital improvement program,” said Richard Legault, President and Chief Executive Officer.
YEAR-END CONFERENCE CALL
A conference call for investors and media to review the fourth quarter and year results for 2006 will be held on Wednesday, February 7, 2007 at 10:00 a.m. (ET). To participate in the conference call, please dial 416-644-3423 or 1-800-732-9307 toll-free in North America, at 9:50 a.m. (ET). For those unable to participate in the conference call, a taped rebroadcast will also be available until midnight February 9, 2007. To access this rebroadcast, please call 1-877-289-8525 toll-free in North America, and enter the passcode 21215564#. 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, 2005 | January 31, 2006 | 10.125 cents |
| January 31, 2006 | February 28, 2006 | 10.33 cents |
| February 28, 2006 | March 31, 2006 | 10.33 cents |
| March 31, 2006 | April 28, 2006 | 10.33 cents |
| April 28, 2006 | May 31, 2006 | 10.33 cents |
| May 31, 2006 | June 30, 2006 | 10.33 cents |
| June 30, 2006 | July 31, 2006 | 10.33 cents |
| July 31, 2006 | August 31, 2006 | 10.33 cents |
| August 31, 2006 | September 29, 2006 | 10.417 cents |
| September 30, 2006 | October 31, 2006 | 10.417 cents |
| October 31, 2006 | November 30, 2006 | 10.417 cents |
| November 30, 2006 | December 29, 2006 | 10.417 cents |
TAX INFORMATION
Tax information will be forwarded to the Canadian Depository for Securities Limited and will be posted on the Fund’s web site by Friday, March 2, 2007. Brokerage firms receive the tax information from the Canadian Depository System, and have the responsibility for preparing the required tax slips (T5013) for mailing to unitholders by March 31, 2007.
FORWARD-LOOKING STATEMENTS
This news release may contain forward-looking statements concerning the Great Lakes Hydro Income Fund (“Fund”) business and operations. Forward looking statements can be identified by the use of words, such as “believe”, “well positioned”, “long-term”, “grow”, “expand”, “enhance” or variations of such words and phrases or state that certain actions, events or results “will” be taken, occur or be achieved. Forward looking statements involve assumptions, known and unknown risks, uncertainties and other factors which may cause the actual results or performance to be materially different from any future results or performance expressed or implied by the forward statements. More details relating to risk factors can be found in the Fund’s annual information form in the section entitled Risk Factors.
Examples of such statements include, but are not limited to factors relating to production and the business, financial position, operations and prospects for the Fund. They include (1) the Fund’s level of generation; (2) the Fund’s cost of production; (3) interest rates as they bear on the Fund’s indebtedness; (4) planned capital expenditures; (5) the impact of changes in the Canadian dollar – U.S. dollar on the Fund’s costs and results of operations; (6) the negotiation of collective agreements with its unionized employees; (7) business and economic conditions; (8) the legislation governing air emissions, discharges into water, waste, hazardous materials and workers’ health and safety as well as the impact of future legislation and regulations on expenses, capital expenditures and restrictions on operations; (9) regulatory investigations, claims, lawsuits and other proceedings; and (10) reliance on the guaranteed price for electricity by Brookfield Power Inc. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied in the forward-looking statements contained herein, and as a such, you are cautioned not to place undue reliance on these forward-looking statements.
These forward-looking statements represent our views as of the date of this news release. While the Fund anticipates that subsequent events and developments may cause the Fund’s views to change, the Fund disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Fund’s views as of any date subsequent to the date of this news release.
ABOUT GREAT LAKES HYDRO INCOME FUND
Great Lakes Hydro (www.greatlakeshydro.com) is a premier Canadian income fund. We are the largest power income fund in North America with 1,015 megawatts of power generating capacity and an average annual production of 3,874 gigawatt hours.
Great Lakes Hydro Income Fund produces electricity exclusively from environmentally friendly hydroelectric resources. The Fund owns, operates and manages 26 high quality hydroelectric generating stations located on eight river systems in four distinct geographic regions across North America: Quebec, Ontario, British Columbia and New England.
Brookfield Power, which comprises all the power operations of Brookfield Asset Management, owns 50.1% of the Fund’s outstanding units.
Great Lakes Hydro Income Fund units are listed for trading on the Toronto Stock Exchange under the symbol GLH.UN.
For further information:
Grace Pollock
Director, Corporate Communications and Investor Relations
819-561-8072, unitholderenquiries@greatlakeshydro.com