STOCK SYMBOL: GLH.UN/TSX
GATINEAU, QC, July 31 /CNW Telbec/ - Great Lakes Hydro Income Fund today reported its financial and operating results for the second quarter ended June 30, 2007. The Fund provides additional information on its results and strategy in its Letter to Unitholders and Supplemental Information available at www.greatlakeshydro.com under Investor Relations/Financial Highlights.
Power generation in the second quarter of 2007 totaled 932 gigawatthours (GWh), reflecting slightly better than long-term average (LTA) in both British Columbia and New England where inflows continued to be strong. However, generation levels in Quebec and Ontario were below average for the period.
- Second-quarter revenues of $41.4 million and income before non-cash items of $18.0 million were lower than $48.7 million and $25.7 million, respectively, in 2006 when water inflows were exceptionally strong. The 2007 operating results are attributable to the lower generation levels. - Distributions to unitholders increased year over year to $15.1 million or 10.417 cents per unit as a result of the added contribution from the Carmichael facility acquired in July 2006. Financial and Operating Highlights ------------------------------------------------------------------------- Unaudited Three months Six months CDN $ millions, ended June 30 ended June 30 except otherwise noted 2007 2006 2007 2006 ------------------------------------------------------------------------- Revenues $ 41.4 $ 48.7 $ 89.6 $ 97.5 Income before non-cash items 18.0 25.7 42.8 51.2 Distribution 15.1 14.9 30.2 29.9 Per unit Income before non-cash items 0.37 0.53 0.89 1.06 Distribution 0.31 0.31 0.63 0.62 Power generated (GWh) 932 1,120 1,996 2,260 Average price (cents/KWh) 4.4 4.3 4.5 4.3 ------------------------------------------------------------------------- ------------------------------------------------------------------------- "As we continue to monitor hydrology conditions across our watersheds, our focus remains on managing our generating portfolio for long-term growth and value creation through capital improvements and increased operating efficiencies," said Richard Legault, President and Chief Executive Officer. The future tax expense in the second quarter includes a one-time charge of $29.5 million in relation to Bill C-52 that was passed into law on June 22, 2007 making specific investment flow-through entities, such as the Fund, taxable in 2011. This non-cash charge represents the tax effect of the difference in the tax and accounting values of the Fund's assets and, as such, does not affect income before non-cash items. Since the Fund was not taxable in prior years, this non-cash charge was not previously recorded. The Fund is committed to executing a multi-year capital program in all its operations to maintain the quality and reliability of its systems, as well as to increase generating capacity and cash flows. This program to upgrade the Fund's civil works, mechanical equipment and electrical systems represents an investment in the next 20-40 years and will add a complete cycle to the life of our assets. Although the Fund expects to invest an average of $18.7 million annually over the next 20 years, several larger capital items are required in 2007 that will total approximately $41.1 million, of which $13.7 million has been spent in the year to date. CONFERENCE CALL A conference call for investors and media to review the second quarter results for 2007 will be held on Wednesday, August 1st, 2007 at 10:00 a.m. (EDT). To participate in the conference call, please dial 416-644-3420 or 1-800-732-6179 toll-free in North America, at 9:50 a.m. (EDT). For those unable to participate in the conference call, a taped rebroadcast will also be available until midnight August 3rd, 2007. To access this rebroadcast, please call 1-877-289-8525 toll-free in North America, and enter the passcode 21238792(number sign). 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 ------------------------------------------------------------------------- May 31, 2007 June 29, 2007 10.417 cents April 30, 2007 May 31, 2007 10.417 cents March 31, 2007 April 30, 2007 10.417 cents February 28, 2007 March 30, 2007 10.417 cents January 31, 2007 February 28, 2007 10.417 cents December 29, 2006 January 31, 2007 10.417 cents November 30, 2006 December 29, 2006 10.417 cents October 31, 2006 November 30, 2006 10.417 cents September 30, 2006 October 31, 2006 10.417 cents August 31, 2006 September 29, 2006 10.417 cents July 31, 2006 August 31, 2006 10.33 cents June 30, 2006 July 31, 2006 10.33 cents
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 3,875 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.
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