Brookfield Renewable Partners LP (BEP) 2014 Q1 法說會逐字稿

Thank you for standing by. This is the Chorus Call conference operator. Welcome to the Brookfield Renewable Energy Partners 2014 first quarter conference call and webcast. The conference is being recorded.

(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, Mr Legault.

Thank you, operator. Good morning, everyone, and thank you for joining us this morning for our first-quarter conference call. With me on the call is Sachin Shah, our Chief Financial Officer, and Nick Goodman, our SVP, 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 www.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 are encouraged to review our regulatory filings available on SEDAR, EDGAR, and on our website. Clearly, we are very pleased with our financial results which were amongst the strongest in our history and provide a validation of our growth and investment strategy that we've pursued over the last 24 months.

Adjusted EBITDA of $360 million and funds from operations of $185 million were amongst the highest of any quarter in our history. Both hydroelectric and wind generation were largely in line with long-term averages, but the story this quarter was one of pricing.

We saw high prices across our markets, and we were able to capitalize on these trends. In the northeastern US, gas constraints and plant retirements -- compounded by a very cold winter -- led to prices that were considerably higher than in recent memory, while in Brazil, similar under-investment in supply -- compounded by a hot and dry summer -- has led to prices routinely reaching the daily price maximum in excess of BRL800 per megawatt hour.

These price trends significantly contributed to our quarter -- our first-quarter results. As we've outlined over the last few quarters, our strategy is built on three key themes: first, growing in our core markets and diversifying into new markets; second, commercializing our development pipeline at premium returns; and, third, positioning the portfolio for improving market conditions.

All of these themes are aligned to help us meet or exceed our distribution growth targets. We've made great strides in each of these areas in the first quarter, and I will now pass it on to Sachin to provide you an update on our progress against the strategy.

Thanks, Richard. Since launching BREP we have acquired more than 200 million megawatt hours of generation at historically low prices in anticipation of a significant need for new investment and rising prices. The first quarter of this year has shown early signs of this thesis playing out in both North America and Brazil, as Richard described earlier. During the quarter, we closed on the acquisition of a 33% interest in the 417-megawatt Safe Harbor hydroelectric facility in PJM and the 70-megawatt Black Bear hydroelectric portfolio in New England.

Both of these transactions are consistent with our strategy of buying high-quality hydro with upside in attractive markets. In addition, we are progressing on closing our first acquisition in Europe as we move forward on establishing an operating platform and growth engine in a new market. The Bord Gais acquisition in Ireland includes 320 megawatts of operating wind capacity and represents approximately 15% of Ireland's installed wind capacity.

The output is contracted on a long-term basis, featuring fixed-minimum prices indexed to inflation and the ability to benefit from rising market prices over time. Ireland is primarily a gas-fired market. And its strong wind resources allows wind power to be an attractive and cost-effective source of long-term electricity supply, which positions the portfolio for future growth, given its more than 400 megawatts of pipeline in construction and under development projects.

In addition, we have been advancing both our existing development pipeline and looking to acquire new projects in an environment we believe undervalues their potential. A great example of this is our 45-megawatt Kokish River hydroelectric facility in British Columbia. We are extremely pleased to announce that, together with our partners, the Namgis First Nations, we have achieved commercial operations of this facility which benefits from a 40-year PPA with BC Hydro, and we've delivered on scope, schedule, and budget with returns that will be in line with our expected target of 17% to 20%.

Our development efforts are now focused on developing several hydro projects in Brazil, as well as the significant Bord Gais wind portfolio, which will bring our renewable development pipeline to more than 2,000 megawatts. To put the cash-flow growth potential of the business into perspective, we underwrote much of our merchant position in North America at $40 to $50 a megawatt hour. And, on the assumption power prices in North America increase to $70 to $80 a megawatt hour on a sustained basis, it would add approximately $60 million to our annual FFO.

In addition, we believe our development pipeline provides us the opportunity to invest approximately $500 million of BREP equity over the next five years, which could add another $80 million to $100 million of FFO annually to the business over that time. This embedded optionality can provide meaningful cash flow of upside to our investors and gives us confidence that we can grow our distributions at the high end of our stated 3% to 5% range, annually, without factoring in future M&A growth.

I'll now hand the call over to Nick to discuss our financial and operating results.

Thank you, Sachin, and good morning. Generation for the quarter was in line with long-term average. Strong financial performance was driven by high prices across our markets. Revenues were $480 million, compared to $437 million for the same period last year, reflecting higher prices and growth in our portfolio.

Operating costs were in line with plan and reflect the cost-saving initiatives implemented last year as part of our North American reorganization. As a result, adjusted EBITDA for the period was $360 million, representing a year-over-year increase of $41 million. After factoring out partners' share of EBITDA and interest costs, funds from operations totaled $185 million, an increase of $23 million year over year.

Our financial position continues to be very strong, with $1.2 billion of liquidity at year end. As we continue to grow the asset base, we remain focused on lowering our cost of capital. In the quarter, interest costs remained consistent year over year, reflecting our efforts to extend maturities and lock in low rates in this environment.

As you know, much of our portfolio benefits from long-term contracts. This allows us to both refinance maturing debt and pull additional capital out of our asset base. This optionality has proven to be an important source of potential capital which can be redeployed into accretive opportunities. An example of this is the recent refinancing of our hydroelectric portfolio in Northern Ontario, completed in the first quarter, which generated incremental proceeds of $150 million.

Finally, during the quarter, Brookfield Renewable was added to the S&P/TSX Composite Index. Membership in the index should provide greater global visibility and liquidity, which should be beneficial in our efforts to grow and diversify our shareholder base and enhance our access to capital over time.

That concludes our formal remarks. Thank you for joining us this morning, and we would be pleased to take your questions at this time.

Thank you.

(Operator Instructions)

The first question is from Nelson Ng of RBC Capital Markets. Please go ahead.

Thanks and congratulations on a good quarter. First question is in terms of the, I guess, high power prices due to the polar vortex, are you able to quantify the benefit that you experienced in the US?

Sure. Hey, Nelson. It's Sachin here. If you look at our EBITDA being about $40 million ahead of last year, just over $40 million ahead of last year, I would say about 70% of that came from price increases, 70% to 75% came from pricing, and about 25% to 30% came from growth in the portfolio.

Okay. That's great. And then just moving on to the Irish wind acquisition, do you have an expected time for that transaction to close? How are you looking at Q2, Q3?

We expect it would be by the end of Q2.

Okay. Got it. And then just finally in terms of the Lake Superior gas facility in Ontario, do you guys have an update in terms of negotiations with the Ontario government, and can you just remind us when that facility's PPA expires?

Sure. It's Sachin again. The PPA hasn't expired. In terms of our negotiations I'd say they're ongoing, but we are not hopeful that they will resolve themselves in a way that we would find satisfactory. So I'd say our expectation at this point, Nelson, is we have one other gas facility in the portfolio that we run from time to time when [sparks] rising gas prices provide profit opportunity, and we'd likely put LSP into that category as well if we are not able to resolve the contract negotiations satisfactorily with the LPA.

Okay. Then just one more slightly off topic question probably for Richard. With the recently announced sale of [Alltel, Inc] yesterday, obviously they own transmission assets, I was just wondering whether electricity transmission assets in general, whether it's in North America or Brazil, would be an asset class that's suitable for BREP, or is that an asset type that�s reserved for other Brookfield entities like BIP?

Nelson, I can be very clear on that topic I think. Transmission infrastructure is an -- or transmission assets are an infrastructure asset, and they are part of BIP today and will be so in the future.

Okay. Thanks for that.

The next question is from Juan Plessis of Canaccord Genuity. Please go ahead.

Thanks very much. Richard, you have spoken about locking in long term contracts at some of your recently purchased merchant facilities at some time in the future. What's your view on the timing for power prices to improve to a level where you are comfortable locking in contracts?

Well, I think that you know again we have in North America in particular, we have two significant positions. One is in New England as part of the White Pines acquisition. The other is for the contract that is coming to its end with TVA in Tennessee. I think those two positions today, if you look at where markets are, conditions are improving. And, in our minds, we continue to think that we either keep all options open but we have been having a lot of discussions with various parties in that area.

I would say that again long term those prices haven't reached what we believe to be something that's appealing to lock in for a long period of time. We think the option value of keeping it on sort of the shorter end of that spectrum is probably more valuable to shareholders today. But I think within the next couple years, I think I do see things improving.

I believe that what we saw in the first quarter clearly is a trend not just a blip, and we'll see how that translates into long term contracts. But to answer your question directly, I think not -- probably a couple years still to go before we lock in long term deals.

Okay. Great. Thanks for that. Moving on to Brazil, you locked in some generation for future quarters at favorable prices. Can you give us a sense as to the magnitude of what that might mean I guess in terms of incremental revenue over the rest of the year? Also did you sell forward at favorable prices last year?

Hey, Juan. It's Sachin. Sure. I'd say this dovetails nicely with your first question around the right time to lock in. I'd say in Brazil we are now entering 24 months into a high price environment, and buyers of power are starting to realize that there is significant stress on the system, and they need -- and new investment is needed. This wasn't just a blip. And so what's happening is we are starting to see term come to the market, contracts for three to five years to eight years are starting to be signed.

And we have been largely patient over the last 12 months. I'd say we are now starting to look to sign longer term contracts, five year type contracts if we can find them. In terms of pricing, you will remember that our largest position there was about a terawatt hour of power at [Atakira] one of our facilities which had a contract that was coming due at around BRL150 to BRL160 a megawatt hour, and we would expect that we could start to sign contracts in around the BRL200 to BRL220 range for that piece of power that we have on contract.

And that would be the biggest position in Brazil. Everything else would be fairly small.

That's great. Thanks very much.

The next question comes from Andrew Kuske of Credit Suisse. Please go ahead.

Thank you. Good morning. Just continue with the contracting theme and looking at North America. When I look at essentially the realized revenue per megawatt hour at the US portfolio it looks to be roughly about $80 for the quarter versus say $72 and change a year ago. What kind of conversations are you having with people and for what kind of volume and price if you can get into that kind of granularity at this stage.

Again, it's Richard, Andrew. I would certainly prefer not to get into that granularity simply because I think there are a number of discussions, a number of pricing points. Term is important, so this is very specific to every discussion. All I'm saying is at this time we see that there is real retirement of capacity in both PJM and New England markets.

We see that ultimately a lot of the distribution utilities, the larger consumers are starting to get concerned because obviously when prices were $40 to $45 everyone was fairly relaxed about signing long term deals. But as you see a lot more pressure on the actual grid and system, I think that clearly that interest has now sort of reemerged. I wouldn't say it is a -- I don't think there is any imminent contracts to tell you about, and I would rather just not get into a lot of details with some of them being somewhat confidential with those customers.

That�s understood. I guess maybe more broadly and away from the price specifics, but are you seeing still a healthy appetite for and price delta to the positive side for renewable portfolio power versus what would come from fossil?

Absolutely. I would say that that -- there is appetite, Andrew, just to be specific. There is appetite. There is also appetite for term. The issue is price. So it's now just a matter of time, in my mind, before people start to want to actually lock in a fixed price for a long period of time.

People feel that this was more I think somebody referred to it as the polar vortex which actually somebody has coined that phrase, but I really think that at some point it was a lot more than just cold. The system, you know -- starting to appear in the system a lot of cracks that pushed prices on a sustained basis for the whole quarter in ranges that people didn't expect. So I think that�s errors -- certainly that seems very positive in my mind for the portfolio and we are extremely well positioned in both PJM and New England with the positions that we have.

And I would sort of reiterate that in Brazil that's even more so. There is a significant need for power infrastructure in Brazil right now, and ultimately dry conditions have just compounded that, but at the end there has been an under investment in Brazil. We essentially identified that a couple years ago. We find that today we are extremely well positioned there as well.

Then, if I may, just one final follow up on that price spread on renewable versus fossil. I guess what we have seen historically has generally been something like in the northeast market of the US, a $20 to $40 premium for renewable power over market price. It varies obviously, but we've tended to see that kind of premium. With the surge in market prices now, which are largely driven by the rise in fossil fuels and some tightness in the market, do you think that spread really remains the same, or does it start to widen out even a little bit more?

Listen, I will -- in my mind as the actual value of power increases, there probably is something where that spread will certainly I think narrow simply because, as you get closer to sort of bulk power, and ultimately there is a lesser need if you want renewables to actually be part of your portfolio, the premium needs to be probably less so.

Andrew, it's Sachin, just to add to that. If you think about -- we've had conversations in the past where if you look at long term what's going to provide bulk power and diversity to the system in North America, it's gas, because it's plentiful. And that's clearly going to provide bulk power. And then diversity will come from renewables which also have added benefit of reduction in carbon.

To make a long term guess on where gas settles, which, to your point provides that spread to renewables, I think people are getting more and more comfortable that gas prices are going up which means power prices on a bulk basis are going to go up. And renewables have always been at a premium to that given their carbon -- their less carbon intensive nature. I think our view would be both -- two things, power prices are going up, and the spread is narrowing.

That's very helpful. Thank you very much.

Next question is from Sean Steuart of TD Securities. Please go ahead.

Thanks. A couple questions. With respect to the development pipeline, wondering if you can give some guidance. I guess is, let's start with Ireland, the Bord Gais assets. How much do you anticipate spending on CapEx to build out that development pipeline over the next couple of years once you close that deal? And then follow-on, in Brazil I guess you have noted the 125 megawatt project. How much CapEx can we anticipate there?

Sure. You have heard us say we think there's about $500 million of equity to spend over the next five years. I would say starting with Europe on the Bord Gais acquisition, I would expect based on what we have seen, we haven't closed on the transaction, but we have underwritten all the assets. And I would say our expectation would be somewhere in the EUR75 million to EUR100 million range to build out a portion of that development pipeline over the next three to four years.

Then when I get to Brazil I would say we've got -- clearly there's that 25 megawatt project which we're advancing. There is another probably 150 megawatts which could follow on after that if we get the right pricing environment, the right economics in those projects. That would likely be another $250 million to $300 million of development spend. So there is a healthy level of development spend between those two markets.

I'd say it is less so today in North America, but as prices rise and if they start to rise on a sustained basis some of our projects in North America start to look more meaningful as well.

Thanks, Sachin. Just one other question for you. You noted the success you've had in, I guess, refinancing activity, extending maturities, lowering borrowing cost. Any guidance you can give, I guess, on further room to optimize that part of your capital structure?

That's a good question. I think we have been doing that as much as we can obviously the last few years. I think the real amazing option we have in the business right now will come from a lot of these assets that we've bought on a merchant basis.

If you think about us underwriting these at $40 to $50 a megawatt hour, even if prices go to $65 or $70 and are lower than what we think the baseline should be, there is significant amount of capital you could pull out over the next five years as we refinance all these assets and pull a large portion of our equity -- initial equity capital invested out of the asset base.

And the benefit of that is, one, it allows you to continue with an investment grade capital structure as long as you've locked in those revenues, but, two is, it minimizes dilution of the stock which the end game for us is growing our cash flow on a per share basis. So, we've had a track record of doing this for the last 15 years, and I think that's a huge part of the optionality of the business in the next five years that we don't spend a lot of time talking about, but you kind of see show up every year through $100 million to $200 million of up financing.

That's good context. Thanks, Sachin.

Next question comes from Steven Paget of FirstEnergy Capital. Please go ahead.

Good morning. It's Steven. Could you please give more detail on the northern Ontario refinancing, the term and interest level and the contracts backing those assets?

Sure. Hi, Steven. It's Sachin. So those would be termed to 2023, so I believe nine years. And they were two tranches of debt that we issued for a total of $150 million. The first tranche was around 3.8%. The second tranche was just under 5% for that period. And they're backed by the contracts we have in place currently on all of our Ontario assets.

Thank you, Sachin. And when you discuss the $500 million in potential equity investment, how much of that could reach a final investment decision by the end of 2015?

I'd say it's not -- it's fairly lumpy, and by the end of 2015, we haven't really given guidance as to the profile, but I'd say $100 million by the end of -- $100 million to $150 million by the end of 2015 isn't unrealistic.

Thank you. And how much of this potential investment would be in Brazil?

A lot of our pipeline right now, as you heard from the previous question, a lot of our pipeline today is in Brazil. It's a market that, one, we control a pretty good position in the hydro electric development pipeline, and I'd say out of the $500 million, I'd say 80% or so is Brazil and 20% is Europe.

Excellent. Thank you. Would -- have you ever looked at the possibility of selling power options maybe modeled on a Black Shoals basis a way for someone concerned about power prices to buy a power option that gives them some hedging?

Well, it's Richard. I can tell you that there is a market that actually trades options for power. So ultimately, although the liquidity past some period of call it 30, 36 months would become somewhat thin but we have not really sort of explored that type of instrument in order to surface value for shareholders.

I wouldn't expect that we would. We've always considered that we do better at optimizing the physical electron values than to actually going into financial markets. There are obviously sort of risks that that entails it was never really part of our business model.

And finally my last question, if I might, how much of your power sales in the US in the first quarter were -- would you classify as peaking and how much would be base load?

Hey, Steven. I'd say if you look at our -- in North America much of our position in Canada is reservoir based. I'd say a lot of that provides peak power. In the US, the generation I'd say is pretty balanced between run river base load and peaking with reservoirs. If I had to put a percentage on it, though, I'd say we probably have about 30% that provides peaking capability, and the balance is more base load.

Just to add to that I think our Canadian and US portfolio have a very different profile, so most of our Canadian assets would have reservoirs and therefore have peaking capabilities. In the US I would say it's about 30% on average of the portfolio.

Thank you both. Those are my questions.

Excellent. Thank you.

(Operator Instructions)

Your next question comes from Frederic Bastien of Raymond James. Please go ahead.

Good morning, guys. I am sorry I came in late, but I am sure you have brought up -- you have touched on that subject, but you did mention that the pricing strength was encouraging in the quarter and perhaps not only due to the cold weather. Have you seen this trend carry into the second quarter?

It's Richard. Yes, I think we have seen obviously not as strong, but the encouraging thing I find is that the actual forward curves have moved up, so that's not just the quarter. That's actually moving up the whole curve over time.

So whether or not today you are in a period where the actual freshette particularly in the Northeast where the actual snow melt on the ground across our watersheds are coming in a little late, so the volumes clearly are going to be a little late in the quarter. But prices obviously are reflecting that there is more power today than there was in the first quarter in the market place.

Like I say, Frederic, the one key thing that is encouraging for us is across the spectrum of various markets the actual price curves longer term are going up.

Good to hear. Also just curious about the opportunities that you are currently looking in other parts of � well, I guess in Europe more specifically. Are these heavily weighted towards hydro as per your current portfolio, or are you looking at a basket of opportunities that's more evenly weighted between perhaps hydro and wind power?

It's Sachin over here. I'd say fairly evenly weighted. Obviously we love hydro and we recognize the value it brings to a system and to shareholders. The reality is hydro is just more difficult to acquire in Europe. It doesn't transact often, and it's often held in a very fragmented way. We actually have looked at some hydro transactions in Europe. We have been participating in processes around hydro, but we have also seen a number of wind and solar opportunities there. And I think all three technologies we would pursue in Europe. Obviously it's all dependent on return and risk for us and what we think we can grow the operating business on.

Okay. If you looked at the opportunities that you are seeing for the entire portfolio, are you still seeing a lot of activity in the US and Brazil?

Absolutely. I think the US in particular is tremendously strong right now in terms of transaction activity, capital that's coming into the market. A lot of the capital that was previously spread out throughout the world is now back in the US, and you are seeing that through the capital markets. You are seeing that through the health of the balance sheet of a lot of US corporates. And we're -- I think we're very excited about the next five years of growth in the US for this business.

It's been good to us in the last few years. But the opportunities look very deep. Brazil I'd say we like it. A lot of capital has actually fled Brazil, and the currency has declined in value. But we have a strong operating presence there. We're the largest owner of small hydros in the country. For us it's a perfect time to continue to try to find opportunities there.

We wish we had more that we had found over the last 12 months, but we're very happy about the market, and the fundamentals on the power side look extremely strong as we've highlighted on this call.

Great. Thanks for the color.

Next question comes from [Tutptu Tumke] of Scotiabank. Please go ahead.

Hey, thanks. It's Matthew Akman actually. A couple quick questions on the quarter. I wasn't totally clear in Brazil whether in the first quarter those pricing upsides you got were from spot sales or from short term hedges you had put on last year.

Hey, Matt. It's actually from two things. One is we did sell a little bit of our power into the current spot market or at the PLD price. We also shaped some of our power. What we mean by that is we have the flexibility in our contracts to move power between quarters. And just with prices being so high, we took power from future quarters and effectively sold it in the first quarter. We just think it was a unique period in Brazil where prices were capping out every day, and we wanted to maximize the revenue profile of the business and sold as much as we could in that environment.

Okay. Thanks. Do you guys see any potential negative impacts of drought? There's upside in pricing, but if things get too dry, obviously, the entire pool gets low. What's your outlook there?

It's Richard. All I would say is that obviously it's a very exceptional year. I think that one of the lowest on record in terms of condition -- hydrological conditions in Brazil. And that is combined with certainly a growing load base, and when we look at sort of how they're dealing with that, they're using thermal facilities to actually compensate for that. That is what is driving prices to the levels that you see today.

We would see -- ultimately today everyone is watching very closely, because I think, when you reach the limits of the thermal capacity, then ultimately there is just not enough power to serve the market. So that actually will send signals to the market in terms of either pricing to try and curtail people from consuming as much, but we are watching very closely what the government will do at this stage. People have actually -- are not calling for rationing or measures that I have just described. But you know ultimately the system is really at a critical point.

Okay. Finally, in the US, I mean, prices were obviously very unusually high, and theoretically your results could have been even stronger there if you captured all of that at all times. I'm just wondering what were any of the mitigating factors there that results were strong but that held results back from being even stronger. I know generation was lower than long term average, but were there also constraints on production on some of those really peaky peaks that we saw in the Northeast?

Hey, Matt. No, you know, we -- it wasn't the reliability or constraint issue. We had actually excellent reliability. We were able to generate through the winter and into the spring. We actually drew our reservoirs down into a station of freshette on a normal course basis. I would say that obviously we are selling physical power, and so timing the market will depend a little bit upon the shape of our generation.

But we wouldn't view it necessarily that way. I think we were able to capture much of the upside. We obviously had some hedges on from the prior year that affected this current period that would have been at prices better than what we underwrote but lower than where the market cleared this year. Maybe that's getting to your point of just a little bit lower than had we just sold it all at spot.

Okay. Great. Thanks guys. Those are my questions.

Thank you.

The next question comes from Bert Powell of BMO Capital Markets.

Thanks. Richard and Sachin, in your letter you talk about the objective of building a leading renewable platform in Europe and if I think about it, the platform that you've built here and the trading operation in Gatineau and kind of the advantage that gives you having that platform's ability to be smart buyers of merchant power. I am wondering how you are thinking about a European platform. Is that something that you are looking to replicate? Is that something you can build? Or is that something that you think you have to buy?

Well, Bert, let me start. It's Richard. So first, when you look at the platform that we have in our business model is quite sort of similar went from one market to another. The marketing side is very unique and specific to each market. So if, for example, in Brazil we have a team of people that actually sign long term contracts, but we really don't have the same trading capabilities or delivering power in real time, because there is no such market in Brazil.

Right.

In North America we have adjusted to ensure that every asset has to be bid into every pool that it resides in. So therefore we have a very significant presence on the marketing side. In Europe I would say it is a very different place to do business. Clearly each market is very unique, and we are reflecting on what -- how do we actually enter that market, and what's the appropriate marketing strategy?

But I believe it's going to be a little bit of a hybrid between what you see in Brazil and what you see in North America. The one key advantage though that I would tell you that is I would say more critical is how we actually leverage platforms from a cost perspective. Automation, system controls, and ability to actually make sure that as we add assets to a portfolio we can do it efficiently and very effectively and more effectively than our competition. I truly believe that that has been one of the key elements that sets us apart from competition. We're long term investors in each market.

We set up our business so that actually we can deal with growth in an effective fashion, and ultimately we build knowledge and competency in each one of these markets. So I would say what we're trying do in Europe is very much aligned from a cost and operational side to what we have done in other jurisdictions. And on the revenue side it will be specific to European markets and I believe somewhere in between Brazil and North America.

Thank you for that. Then just on acquisitions, are you -- I know Brookfield brings a lot to the table, and I think that has enabled you to generally have more proprietary type transactions. Has anything changed on that front? Are you still seeing that to be the case, and the opportunities where the attributes that you bring to the table as an organization are still being well received by prospective vendors in this market?

Bert, it's Richard. For the last -- since we created the income fund in 1999 and now the successor to that income fund today, BREP, I really believe that we have benefited from the relationship with Brookfield Asset Management. Obviously they have a very global platform, lots of investment professionals across the world, and ultimately deal flow is very much sort of tied not specifically every deal, but certainly I think our deal flow is more complete with that relationship than without.

Okay. Thank you.

This concludes the time allocated for questions on today's call. I will now hand the call back over to Mr. Legault for closing comments.

Well, thank you again for joining us in this first quarter conference call; very appreciative of your questions and comments and certainly look forward to our second quarter call. Thank you very much.

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