Q4 2019 Earnings Call

[music].

Yeah, ladies and gentlemen, thank you for standing by and welcome to the P.P. fourth quarter 2019 results conference call and web cast.

This time I'll participant lines aren't to listen only mode.

After the speakers presentation there'll be a question and answer session.

You ask the question during the session you will need depressed stars then one on your telephone keypad.

Please be advised said today's conference maybe recorded.

If you require any further assistance. Please press start then zero to reach an operator.

I know it down to conference over to your Speaker today, Mr. <unk> Chief Executive Officer. Please go ahead Sir.

Thank you operator, good morning, everyone in thank you for joining us for our fourth quarter in 2019 conference call.

Before we began I'd like to remind you that a copy of our news release investors supplement and letter to unitholders can be found on our website.

I also want to remind you that we may make forward looking statements on this call. These payments are subject to known and unknown risks.

Your results may differ materially.

For more information you're encouraged to review our regulatory filings available on C.D.R. add car and on our website.

2019 was another positive year for the business, we achieved strong performance throughout our operations increase margins with recently acquired businesses and deployed capital in line with our targets more importantly, our growth over the past 20 years has enabled us to establish ourselves as one of the largest renewable power investor.

Isn't operators globally.

This is backed by a multi decade track record of generating strong returns across hydro wind solar and storage assets. Accordingly, we are very well positioned to participate in the decarbonization of global electricity grid that will occur over the next 25 to 50 years.

Our capabilities provide communities governments and the private sector around the world the ability to accelerate the transition to a greener future today. Our capacity is approximately 19000 megawatts of electricity from renewable resources.

This production avoids approximately 27 million metric tons of carbon dioxide emissions annually with our development pipeline, we would create enough carbon free power to displace an additional 17 million metric tons of carbon dioxide per year.

To put this into perspective, just from our existing fleet today, we displays all of the carbon dioxide emissions generated by the city of London, England each year.

Alternatively, we couldn't displaced the amount of generated by many energy in technology firms, who are looking to to lowered their carbon footprint to neutral or negative by 2030 or so.

We are proud of the amount of carbon dioxide. We avoid is equivalent to removing approximately 6 million vehicles from the road or planting 450 million trees. We highlight this to you now given the focus many organizations are placing on reducing carbon dioxide emissions. We think it is useful for our unit holders to consider.

After the impact our business is already making on communities businesses employees and government when making their long term investment decisions.

We remain committed to earning a strong compound return for you over the long term on a per unit basis.

But also remain committed.

To being a leader in decarbonization.

This will enable you to earn a good return, but also contribute to a better world.

With that I wanted to give you some highlights from the business for the year.

First we increased episode per unit by 13 per se driven by a creative gross and strong operational performance. We continue our track record of strong F. of per unit gross added 10% annual growth rate since our strategic combination with brookfields renewable assets in 2011.

In addition, we advance key commercial priorities and delivered on cost saving initiatives totaling approximately $40 million globally, and analyze basis or $12 million next to that.

We invested $2 billion or $550 million and that's about of equity across nine transactions, including doubling the size of our Asian and distributed generation businesses.

Leading global solar developer and investing in a hydro portfolio in Canada.

We commissioned 50 megawatts of new capacity progression, approximately 2000 megawatts through construction and advanced stage permitting and increase the size of our development pipeline to approximately 13000 megawatts.

We maintained our robust investment right balance sheet ended the year with $2.7 billion available liquidity and raised approximately $1.4 billion incremental liquidity ration sales and strategic I'm financing.

We also announced the creation of a Canadian Corporation that see that will provide investors the optionality to invest in Bath.

Through either the current partnership or through a corporation, which is expected to support the expansion of our Investor base.

During the fourth quarter, we closed or acquisition of 50% interest in <unk>.

Leading global solar developer went this acquisition, we have significantly enhanced our solar don't development capabilities, adding 970 megawatts of operating assets and almost 6000 megawatts to our global construction and development pipeline.

Also in the fourth quarter, we signs to agreements to acquire 14 solar development projects in Brazil, with 428 megawatts of total capacity for total consideration of $120 million or $30 million next to that.

Both these transactions are expected to closing the first order of 2020 and represent attractive additions to our business in Brazil with approximately 2000 megawatts of capacity across multiple technologies being hydro wind and solar.

Furthermore, through our interest in Terraform power, we acquired 44 megawatts of P.V. solar assets in Spain.

And sign an agreement to acquire 100 megawatts of solar C.S.P. in Spain located.

Close to Terraform power C.S.P. plans for which $115 million expect for $115 million, which we expect to close in the first quarter of 2020.

Lastly in January we announced a nonbinding all share proposal to acquire the outstanding shares of Terraform power other than the 62% owned by S.N.R. institutional powers.

We believe this transaction will create significant value for investors in both companies by simplifying our corporate structure in immediately a creative transaction, which will further strengthen brookfield renewables position as one of the largest public pureplay renewable power companies in the world with that I'll now turned the call over to why it to discuss or operating results and financial position.

Thank you Sachin and good morning, everyone <unk>.

And 2019, we generated apropos of $761 million, 813% increase over the prior year at the business benefited from recent acquisition strong operational performance and the execution on our margin enhanced enhancement initiative.

During the year or hydro electric segment deliver it up at Boeing $720 million, representing 87% increase over the prior year.

Our stores segment, I'll also perform well generating $27 million.

The year as our portfolio continues to <unk> provide critical great stabilizing and celery services and backup <unk> capacity to increasingly intermediate grid.

During the year, our generation was roughly in line with the long term average as we continue to benefit from the diversity of our our fleet.

Our priority over the past decade has been to diversify the business, which opened a long term mitigates exposure to resorts volatility regional our market disruptions and potential credited event.

We also continued to execute on key contracting initiatives across all or businesses.

Our focus in Latin America continues to be an extended the average duration of our power purchase agreements as well as signing contracts with high quality credit worthy counterparties.

Globally, we continue to see increasing value ascribe to the unique scale renewables storage capabilities that hydro electric outfits provide to increasingly intermittent electricity degree right.

For example, in Colombia, we secured approximately 3 million I've I've been celery service revenue.

State we qualified to receive the highest your renewable energy to credit for a number of our hydro electric that fits in the northeast, which will contribute contribute approximately $3 million to F.L. annually and in the U.K.. Our first hydro portfolio, what's the critical linked to restarting the grid following a nationwide blackout in August.

Are wind and solar statements generated combine $274 million about that though represents an 18% increase over the prior year.

These portfolios benefited from contributions from recent growth initiatives, including the acquisition to win portfolios in Asia and through our interest in Terre foreign power a large distributed generation portfolio in in the United States and pull your contribution from Saudi you pay scale European wind and solar portfolio.

We also benefited from executing on opportunistic on EM outsourcing agreement aimed at the risking their portfolios and where appropriately where appropriate delivering cost savings.

We executed on three such agreements across Terraform power and Darwin portfolio in Brazil.

A common theme across all these opportunities was attractive availability guarantees any more comprehensive scope than what was currently in place.

At Terraform power.

Well delivered aggregate cost savings of approximately $30 million or $9 million net.

Finally, we continue to advance our global Greenfield development activities, including progressing number 700, Meg lots of instruction diversified across distributed and utility scale solar wind storage in hydro in seven different countries. We're also progressing almost 1400 Meg lots of advanced stage project through final permitted.

In any contracting and our total Greenfield development pipeline now totals approximately 13000 megawatt.

I have no during the year, we signed power purchase agreements for three when Repowering projects in New York in California, totaling 220 megawatt and these projects are expected to be commission and 2021.

We have been owners operators of long duration critical electricity assets for over a century, and therefore understand that embedded strong E.S.P. practices into our investing in opera in activities.

<unk> to preserve in capital mitigating risk and creating long term value.

Fundamentally strong.

Actresses drive further economic value to our business and inherently create higher barriers to entry.

As such we integrate relevant E.S.G. considerations into our investing in operating strategy.

Therefore proud to announce that we have published our inaugural E.S.G. report, which is now available on our website.

Report among other things illustrate the on the ground work, we do to maintain our social license to operate.

With one of the largest public pureplay renewable portfolio globally, we're helping to accelerate the decarbonisation global electricity grid.

Additionally, maintaining socially responsible practices from health and safety to community relations to biodiversity is a critical component of successful operations over the long term.

We operate with the highest ethical standards conduct in our business with integrity and above compliance with laws and regulations. We aim for best practice everywhere we operate.

U.S.G.N. sustainability investing continues to gain momentum globally with the S.G. button expected to rising to the trillions over the next decade.

We believe our portfolios inherent environmental attributes coupled with our longstanding practices around maintaining these social license to operate provide significant tail with two <unk> two demand growth for.

Are liquidated position remains robot with approximately $2.7 billion, a total available liquidity at your end.

In a year, we executed on key financing in capital raising initiative aimed at maintaining and robust access to capital a prudent data maturity ladder any low risk investment grade balance sheet.

During the year, we executed I'm more than $6 billion in finances across the business, which allowed us to raise $1 billion of incremental liquidity extend our average <unk> 10 years m. reduced annual interest costs by approximately $15 million or $9 million net dot.

No. We continue to advance our main financing strategy in order to capitalize are growing demand for carbon free debt products and Diversifier investor base.

Today, we have issued six scream bonds that both the corporate in project level, which together and total approximately $2.4 billion.

During the fourth quarter. We also closed our first incentive loan as part of our corporate credit facility.

That will allow us to reduce our cost of boring as we continue to accelerate the decarbonisation of global electricity grid.

As demand for sustainability focused investing continues to grow.

Back refinancing and sustainability loans.

Recently become a more prominent funding lever within our business.

We also continued to execute our capital recycling strategy of selling mature do your best score noncore asset lower cost a capital buyers and read applying the proceeds into higher yielding an opportunity.

During the year, we based on the six mil $600 million or $365 million and that to US three that's funny strategy, allowing us to crystallising approximately 18% return on her Portuguese in Northern Ireland went assets and to return more than two times or capital invested in South Africa.

In light of recent grow strong balance sheet and access to capital on January 13th we announced that our board of directors improved our 2020 quarterly distribution and raised by 5%.

In our total annual distribution per unit to $2 in 17 cents.

This increase continues art track record of growing our distribution since or I.P.O. in 1999 at an annual rate 6%.

Our long term goal remains there's always to deliver it 12% to 15% long term told overturned on a per unit basis through the prudent execution of our capital allocation strategy application of our operating expertise to both enhanced value in d. risk our business, while maintaining an investment grade balance sheet.

That concludes are far more remarks. Thank you for joining us. This morning, we'd be pleased to take your questions at this time operator.

As a reminder to ask a question you will need to press start then one on your telephone keypad.

To withdraw your question press the pound key.

Please stand by only compiled a q. and a roster.

Mhm.

Mm mm.

Our first question comes from line of Sean Stewart was T.D. Securities airline is now.

Thanks, Good morning, everyone.

Few questions first one to talk about the the funding platform at at the September Investor dating indication was that.

<unk> 4 billion equity investment plan over five years wouldn't involve any equity raises.

And I know that the term privatization offers separate from that investment plan, but it's supposed to the broader question is has you thinking around issuing equity changed in light of the the relative share price strength.

In recent months, how do you weigh your equity evaluation against potential asset recycling returns at this point any change in your thinking there.

Yeah Shaun. Thanks, a question you good morning, what I would say as we had always said our our goal is to deployed $4 billion up that equity.

Capitol in into grow and and that we had a funding strategy that wasn't relying on issue next week that we would use the additional that capacity we have at her asset to to create more proceeds from that I didn't invest great basis. We also want to corporate level, we regular issue preferred share.

Into the Canadian market and potentially into the U.S. market as well as we grow we will continue to create more debt capacity corporate again focused on and invest grade.

Basis, and then the final finding still for US was always around you know asset sales and and and really with the idea that from an a creative basis that the the the best way to grow our business because you don't when you're when you're being targeted and you're selling assets you can find those theorists assets mature better bet you a low cost the capitol.

And for US that's just that much lower costs. The capital then bend issue in one of our unit, which is one or most expensive costs capital and then secondly, it's just very on strategic because you're going to be selling some assets. There earlier in their development phase as opposed to you know focusing on those maturity run faster so that that has fundamental mentally.

Not changed really the their turf transaction should be.

Separate hi, and really was about.

Simplifying <unk> destruction between <unk>. It is really just trading deter public shares for about public shares and so really it should be thought of as the 4 billion continues to be our our goal in terms of dewpoint equity in to grow the funding planned remain the same and that that this strategy around that proposal Porter was really.

Your round simplifying that structure and just move in those terms shareholders up into the the <unk> structure.

Got it okay. Thanks Wyatt.

One housekeeping question, then I'll get back in the queue on slight 18 of the the <unk>. The the proportion of results for Q. for show Solar <unk> 39 million ahead of revenue 38 million can you can you reconcile that for us.

Yeah, Shaun <unk>, let me just I'll I'll I'll call you off line on that point, okay. Thanks, White I'll get back in the queue.

Our next question comes from Nelson in with RBC capital markets Caroline.

Oh, great. Thanks, I think this question is also for a white, but on the I'm just thinking the corporate segments. There was like 25 million of other income.

<unk> give some color as to what that relates to the quarter and whether that's a recurring item or not.

Yeah, So Nelson as as you likely no we maintain some some marketable securities. These are told positions that we have across our business. You know right now there's around 150 million or so of those types of investments in so you know, they're really tend to be more told strategic.

Investments that we are pursuing but you know sometimes we we will trade out of those and and what that represent is they again on the sales one of those positions.

Okay got it my next question relates to the 14 solar developments in Brazil that you guys agreed to acquire can you guys talk a bit about whether those projects have P.P.A.S and also what the timing of those projects are in terms of construction.

<unk>.

Ah Hey, it's action here yeah. So there it's a mix there's I'd say the majority of them have contracts, but one of the real advantage as we have in places like Brazil, and I would extend that.

<unk> Columbia particular is that we have a very strong marketing capability, where we have clients who are constantly buying power from us under medium to long term arrangements typically anywhere between five and 12 years.

And sometimes all we have to 20 years and so we've found that in these markets. We can differentiate ourselves by buying portfolios of development opportunities, whether they'd be when hydro or solar odd that last contracts that other developers where investors can sometimes be challenged.

Mcguire for value and and we can then feed them into our marketing organization provide those P.P.A.'s with our existing relationships I and then commercializing fairly quickly I in terms of timeline, we would expect those to be built out over the next 24 months.

And then be part of our operations.

Okay and then this one last question before I get back in the queue in terms, though wind repowering contracts in New York in California are the New York lens related to turn then the California ones related to that or how should we think about the okay. Yeah that you've got it right.

Okay. Thanks got back in the queue.

Hi next question comes from Mark Derby with C.A.B.C. World markets online.

Oh come on everyone with with the close you guys show in the in the supplemental how many projects you haven't construction, maybe just talk a little bit of though.

The pace of which you think you'll be adding projects in the construction 320 20.

Yeah. The thing with Celio is it's it's a step separate stand alone a management team and development shop. So we would expect.

<unk>.

18, 100 megawatts odd to be pushed through construction any two operations over the next year and a half call. It 18 to 24 months and then after that will start eating into the development pipeline as we advance that the development pipeline.

It's likely that we see a line of sight until about half of it at this stage in terms of the 6000 megawatts you could assume there's about half of it that we have a strong line of sight towards developing building out getting P.P.A.S development is a business, where you have to be patient and and I think beyond.

Thing that we feel good about half the other half is a bit of an option and we'll see how that evolved over the next few years. Okay. <unk> and then just on on the maybe this the storage segments, but it also probably U.S. hydro realize probably seen but with the capacity prices in new England continue to soften and maybe some uncertainty in P.J.M., how do you guys.

<unk> trying to find alternatives source of revenue for that business and making sure. You guys. Can you know you know have high realized prices what sort of the at look around for the wreck opportunities or or just for maximizing those assets.

Yeah, I mean, you, obviously saw where the capacity options cleared yesterday look I think one thing that we always take great comfort in his we have been good value oriented buyers of our hydro facilities.

Typically targeting and all in revenue number in that sort of $40 a mega what our range when we have choir, and and and that's made up of energy capacity.

Now get paid for class to racks, we get paid for cements Hillary Stabilisation products and we've been able to maintain our total revenue profile in around that range. So there's always gonna be pieces that move up and down and we have a very strong marketing capability based in New York and and we feel confident that we can still managed to sell the various.

Pieces of that portfolio and grabbed that total value and even over the last decade, where we've seen higher prices really come down we've always been able to at least get an average revenue profile in that range, which for US just gives this great comfort that even at the bottom we have the tools to be able to dispatch the power match.

Load and and optimize the S. and so you know our fundamental thesis was with Hydros was always that if you can acquire them at the bottom and generate a strong yield you have a tremendous optionality ahead of you.

Given the penetration of wind and solar over the last decade that optionality in our view just continues to increase.

The on that you know capacity markets will do what they do yeah, and they only thing I would add mark too that is just again, we've we've spoken a lot about the diversity of are fleeting. This this has been a focus of ours, creating diversity because as you mentioned and the new England capacity market what was weaker this year law that driven around.

The inclusion I'm mistaken and the perspective that that that overtime that were reverse and so by having a business did that isn't holy reliant on on one capacity market, there's gonna be impacted by those kind of one also events is is it really.

Manage risk of our business in protecting our revenue streams has been to focus of ours and so we think we're in a good position not perspective.

Okay, well if it affects.

Hi next question comes from Rupert married with National Bank financial timeline is helping.

Good morning, everyone.

Going back to eggs SILEO in the supplementary information it looks like you could see about 500 megawatts approach X. Commission. This year you remind us what are your your plans for asset recycling with this portfolio and and what sort of return should we be expecting.

<unk> on the the assets, whether they're recycled or or not recycled.

So you should expect that we're going to turn our capital in that business.

Quickly, meaning I develop.

Operate or get to see already and then look to sell down partial interests to you know largely financial investors, who are looking for that stable coupon or that stable yield and and we're going to use the proceeds to effectively start to build out the balance pipeline that was our strategy going in.

And and therefore, it's a business, where we don't expect put a lot of additional equity into it and we will but a little bit over time as a business grows but for what we acquired for our 50% of the portfolio for its existing development pipeline for the assets that were under construction, we don't have a meaning.

Follow one contribution of equity much of that will get funded through s. itself.

From a returns perspective.

Generally we're trying to develop in that sort of very low double digit range.

Grabbing value by being a scaled procurement organization, having having the ability to acquire materials and component parts on a global basis like being able to in house the operations of existing assets to drive margin expansion I and to use our global footprint to help.

Absorb some of the operating risk that <unk> on its own couldn't do if we can do that and we can get into that low double digit return. There is a single digit by our market out there that is is attractive to us and that is searching for yield oriented products with long term <unk> that we.

Then sell down to and that should get us into the Midteen type returned a and obviously if our assumptions improve around financing or cost we start to get into the hiking type returns.

And when you talk about selling a partial interests are you talking about 50% level here or or more what would you expect.

Yeah, <unk> generally a lot of the financial investors around the world are very happy to own 49%.

Of assets without having the obligation to operate them. We would continue to operate obviously if people want to buy 100% from us and as compelling value. We're we're fine with that you were pretty flexible in that regard.

And we recognize that stabilized assets that yield strong cash flow is a product today, that's in high demand across the world in public and private markets and so if we can create that with our development capabilities I and then sell it into that market the values that at a premium evaluation than than we should do.

That's a good use of our capital and it's a good fund raising strategy for us.

I agree thanks, and then secondly, Wyatt you talked a little about.

That refinancing is wholesome oh in M. cost savings last year, well what are the opportunities for for doing more of that.

In 2020, you touched on inability to do some more refinancing, but what's what's the sort of scale of of opportunity you can see for lowering your cost of dead and you're operating costs.

Yeah, that's actually a question rubber in terms of I'll start with the operating costs. You know I think what we would say on that first I'm not find is that we you know for for a number of years have identified operating cost savings across her business as an example in Columbia, where post privatization from.

From the government, we've been executed on a program to to reduce the cost in that business.

As an example, where where we are now operating with centralize operating system.

Out of Columbia wishes, driven sampling costs save means we've been reducing the number of contractors I et cetera. So cost savings continue to be an area, where we think we can drive incremental value. We did 12 million on an annualized <unk>. This year will probably be a bit short of that number on it and 2020, but but not materially.

And from the financing perspective, what I would say is you know really the opportunity on the financing perspective is is less about lowering our cost of borrowing just because we have fixed rate dad in place right. Now. So you know <unk> the cost of refinancing and pain, because you know would create a would offset the impact or.

Reduction in the rate, but fundamentally where from or refinance and perspective, where we really have an opportunity has to do with the find inclined we would have spoken about where.

Whether it's in Brazil, where we effect, we haven't I've heard business, given where did the lending markets in that country are we think we can generate a lot about finance is there on on a invest great basis or on a number of our hydro's as they come for refinancing right now the post P.P. a cash flows aren't finance so that creates.

<unk> for us to create incremental financing again at the end invest grade basis. So so really our focus there's you know for the next five years to generate around a billion dollars from those type of activities. We may generate some cost savings here and there but across the focus is more about extending maturity.

Raising that incremental capital to undergo the only thing I would add on cost savings. Just so that you you have a little bit of perspective on that is typically the way we've cut costs than the organization is through scaling up a region and when we scale up a region, we're not actually going in and cutting what we're doing is we're able to absorb.

Into our platform.

Addy operating costs, that's lower than if we were a small investor or or a single acid owner, where are you need some of the big infrastructure investments already made to run the business and so to why it's point you know if you look back over the last five years, we would've spent a lot of time in Canada as we had scaled up there to find ways to.

Increase margins, we found ways to do that in the U.S. before that we found ways to do that in Columbia more recently, if I look forward over the next five years the markets, where we're now all of a sudden seeing the opportunity to scale, where where we just have recently scaled up our Brazil in Europe I and then five to 10 years out Asia will be a great candidate, India and China and.

And so we we look at areas, where we're either seeing meaningful scale coming in or where we've recently scale and we look for opportunities to leverage that scale across a broader pool of assets such that we can be both competitive on the m. and a friend, but also drive and lower overall cost structure for that business. So it's.

Constant.

Area, we focused on and we have regional heads who are incentivize too I extend that program across their groups.

Gray thinks the color will get back in the <unk>.

Our next question comes from Andrew Gusky with Credit Suisse. Your mind is now open.

Thank you could morning, I think the first question is probably for Wyatt and it's just getting some perspective on.

Just a hypothetical if you actually generated a your L.T.A. what do you think your F.F., a would've been under and L.T.A. scenario versus what you generated and a quarter.

Yeah, I think you're you're you're speaking about the quarter. The for US you know like <unk>. We have said all along is that we expect.

We were below L.P.A. for the quarter, but if you look at where we are for the year. We generated at L.T.A.. So you know you're right there would've been a tail went to generate a at the L.T. for the quarter, but we expect those type of quarterly or or annual.

You know a bit of volatility around that perspective. It maybe I can just had one thing but this is a long duration business Andrew as as you know and as you've written about for many many years so.

Yeah, we have a quarter that's below but we had a few quarters above this year and I think the bigger focus should be just over the long term, we're pretty confident that the business is now both globally diverse enough and technologically diverse enough that these small abbott ebbs and flows don't have as meaningful an impact as they used to have five years ago 10 years.

Oh 20 years ago, where the business was much smaller much more concentrated geographically and technologically and I think you know we've been saying that for awhile now which is that's the key objective of ours and we've executed on that objective and therefore, what you see is even though you have a week's quarter you actually have a full year. That's in line with L.P.A. and that's just.

That's the benefit of diversification and we take that you know very seriously.

Yeah, that's a little bit of the underlying question is do you actually had a really resilient quarter, even with the L.T.A.B. <unk>.

You can blow the L.T.A., maybe just the the second question or or.

Are you about to undergo really an acceleration of development and solar.

From a capital deployment perspective, and this is really been <unk> process over the last 510 years, where you really weren't in that space.

Got a huge pipeline of opportunities at this point in time, so who's backing to take the bulk of your capital allocation from a development perspective.

Great question, we've been getting that we've been asked that recently. So generally are practice has been 70, 580% of our capital deployed a little going to eliminate 2020, 5% will be in development, but what we've always said is it's based on risk and reward development is inherently more risky therefore, you need to have.

Hi to a higher return.

And over the last five five or so years, we saw there being really no meaningful difference in returns for development.

W. returns for emanating and therefore, we focused largely on M. and a we did development in some regions. We continue to develop asses in Brazil, we did a little bit development in Europe in Ireland, where we had operations.

Wrong development capabilities bear, but he was on the margins.

And all of a sudden what's opened is this window for us to do development.

Again around solar because what we've seen is and and we've seen this on wind and solar so I shouldn't just say on solar we've seen the cost to build his largely flattened out and therefore, you need more experienced owner operator developer type.

Counterparty to take those projects to the finish line because you can't bank as a developer on decreasing car to drive your economic returns you need to actually driving through strong execution through procurement or operations. All the things that are bread and butter to us as opposed to I'm, making a bat that panel.

Costs or turbine costs would decline.

And that was not that we were rubber willing to make in a meaningful way over the last seven years. So now that we've seen that shift we're seeing more development opportunities come to us, we're being very select about which ones <unk> and I would say what you should see for US going forward is going back to that sort of 80, 20, where we're back to.

And they still being about 80% of our capital and development being 20, what we're not doing is flipping the organization and turning it into a developer, but given the scale of our business today.

Absolute number development just seems large because the business is very significant so when you have 50 billion of the U.M. and you've got you know on 15 billion dollar market cap, obviously, you know, 20% capital deployment targets the development looks large but on a relative basis, it's still we're still targeting 20% to 25% of our capital deployment in those types of activities.

I appreciate that and and those comments and enrolling in some of the earlier comments about how you build up a region, yeah, whether it be Columbia, Brazil by adding assets that does that really segue into what you can do from a distributor generation side and solar because now you really have a platform.

Yeah, you're you're hitting the now and the head. So you know D.G.. We think we have a great opportunity to be a market leader here, we need to obviously do it right. There's a lot of execution in front of I, we've scaled up that business. It's a small business I don't want anybody to think it's going to have this scale, you know, our hydro wind or solar businesses, but.

But it's one where there is a market segment here I have to do development Ah to acquire operating asset to consolidate customers and to provide a better service overall two behind the fence off takes so you know we can do that because we're experience around building operating scale and you need to have offerings.

Scale to run D.G. business properly, we're going to focus on C.N.I. customers as opposed to residential at this stage. It's a different business. Once you get into ready where you know just it's not as conducive to our strengths, we don't ever say never to anything, but but I'd say at this stage in the near term C. and I will be our focus.

That's great. Thank you.

<unk>.

Yeah.

I'm showing no further questions in Q. at this time I'd like to turn the call back to mystery shopper closing remarks.

Mhm.

Well. Thank you everyone for taking interest in the business. We appreciate all the support as always we look forward to giving them an update after the first quarter of Twentytwenty. Thanks again the line.

Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now just disconnect.

[music].

Yeah.

[music].

Hmm.

[music].