STOCK SYMBOL: GLH.UN/TSX
GATINEAU, QC, Nov. 6 /CNW Telbec/ - Great Lakes Hydro Income Fund
(GLH.UN: TSX), one of the largest power income funds in North America, today
reported its financial and operating results for the third quarter and nine
months ended September 30, 2006.
Total power generation was significantly higher in both the third quarter
and the year to date compared with the same periods in 2005. In the quarter,
total power generation increased to 923 GWh from 712 GWh last year, due
primarily to heavy rainfalls in Quebec. Revenues increased to $37.7 million
and income before non-cash items was $14.1 million. These results include a
full quarter's contribution from the Carmichael Falls facility in Ontario that
was acquired by the Fund in July 2006.
For the comparable nine-month periods, total power generation increased
to 3,183 GWh, revenue to $135.1 million and income before non-cash items to
$65.3 million, reflecting higher hydrology in all regions. At quarter end,
overall reservoir levels were in line with the long-term average.
<<
Financial and Operating Highlights
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
Unaudited
CDN$ millions, except where noted 2006 2005 2006 2005
-------------------------------------------------------------------------
Revenues $ 37.7 $ 31.6 $ 135.1 $ 115.3
Income before non-cash
and special item 14.1 10.8 65.3 52.5
Distribution 15.0 14.7 45.0 44.0
Per unit
Income before non-cash
and special item 0.29 0.22 1.35 1.09
Distribution 0.31 0.30 0.93 0.91
Power generated (GWh) 923 712 3,183 2,623
Average price (cents/KWh) 4.1 4.4 4.2 4.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
"Our excellent results in the third quarter and the year to date clearly
reflect the soundness of our strategy to build long-term, sustainable revenues
and unitholder value," said Richard Legault, President and Chief Executive
Officer. "The geographic diversification of our watersheds, combined with our
disciplined approach to managing the Fund's business, has enabled us to
deliver a strong and stable return on investment to our unitholders."
During the third quarter, a total of $7.3 million was invested in
sustaining capital expenditures and $2.0 million in major maintenance to
extend the life of the Fund's power generating assets as well as to enhance
and optimize annual generation. Capital projects include the re-powering of
three generating units at the High Falls facility in Quebec; the overhaul of a
generating unit at the Lois facility in British Columbia; the overhaul of the
gatehouse and four generating units at the Millinocket facility in Maine; and
replacement of the penstock at the Riverside facility in New Hampshire. For
2006, sustaining capital expenditures are expected to total $31.8 million,
down $5.6 million from last quarter due to the timing of projects.
At September 30, 2006, the Fund had a strong balance sheet and healthy
financial ratios. The cash balance was $19.2 million, in addition to almost
$26 million of availability on its credit facilities and almost $21 million
available on its hydrology reserve facilities with Brookfield Power.
Subsequent to quarter end, on November 3, 2006, the Fund completed a
non-revolving term loan facility of $32.0 million with a leading Canadian
institution. The facility, which is due in November 2011 and bears interest at
4.78%, will be fully repaid with interest and principal payable quarterly
commencing in February 2007. The term loan is secured by the Carmichael Falls
assets acquired in July 2006. The proceeds of the financing will be used to
support the Fund's capital expenditure plan and potential acquisition
opportunities.
On October 31, 2006, Canada's Minister of Finance announced proposed
changes to the taxation of publicly-traded flow-through entities; such changes
are designed to level the playing field between trusts and corporations. Under
this proposal, a tax similar to that on corporations would be applied to
income trusts, and the taxable portion of distributions to unitholders would
be considered as dividends. The changes as proposed will not apply to Great
Lakes Hydro Income Fund in taxation years that end before 2011. Further
information on the impact of this proposed legislation can be found in our
Supplemental Information posted on our website.
The Fund recommends that investors consult with their financial advisors
on the tax implications of this proposed legislation with respect to their
investment in Great Lakes Hydro Income Fund.
A more complete discussion of our results of operations and our financial
situation for the third quarter and nine months ended September 30, 2006 is
provided in our quarterly report and related supplemental information
available on our website (www.greatlakeshydro.com).
DISTRIBUTIONS
The schedule below sets out cash distribution history for the last six
months:
RECORD DATE PAYMENT DATE DISTRIBUTION PER UNIT
-------------------------------------------------------------------------
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
May 31, 2006 June 30, 2006 10.33 cents
April 28, 2006 May 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.
Q3 CONFERENCE CALL
A conference call for investors and media to review the third quarter
results for 2006 will be held on Tuesday, November 7, 2006 at 10:00 a.m. (ET).
To participate in the conference call, please dial 416-644-3423 or
1-800-814-4890 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 November 9, 2006. To access this rebroadcast, please
call 1-877-289-8525 toll free in North America, and enter the passcode
21206156(pound sign).
ABOUT GREAT LAKES HYDRO INCOME FUND
Great Lakes Hydro Income Fund is one of the largest power income funds 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 the majority of the power operations of
Brookfield Asset Management, owns 50.1% of the Fund's outstanding units. Great
Lakes Hydro Income Fund units are traded on the Toronto Stock Exchange under
the symbol GLH.UN.
%SEDAR: 00013106EF
