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[GREAT LAKES POWER INC. LOGO] NEWS RELEASE
GREAT LAKES ANNOUNCES NET INCOME OF $116 MILLION
FOR TWELVE MONTHS ENDED DECEMBER 31, 2000
TORONTO, FEBRUARY 2, 2001 - Great Lakes Power Inc. today announced net income
for the year ended December 31, 2000 of $116 million or $0.92 per fully diluted
common share, compared to $113 million or $0.90 per share in 1999. Power
generation for 2000 increased to 4,581 gigawatt hours ("GWh"), up 27% from 3,604
GWh last year mainly as a result of the acquisition of the Maclaren Energy
hydroelectric system in western Quebec in late 1999.
Great Lakes' Chairman and Chief Executive Officer, Ed Kress, commented as
follows: "The additional contribution from our power operations in Ontario and
Quebec was substantially offset by the impact of abnormally dry conditions in
the US Midwest on our power operations in Louisiana. The company's recently
announced $500 million capital investment program is moving ahead well, with
construction on the High Falls power station in northern Ontario expected to
start in the first half of 2001."
RESULTS FOR 2000
The company's northern Ontario power generating, transmission and distribution
system sold 2,309 GWh of electricity during 2000, down from 2,341 GWh in 1999.
Internal power generation decreased to 1,369 GWh from 1,503 GWh in the preceding
year, with lower precipitation throughout 2000. The company's ongoing facilities
upgrading program continued with the returbining of three generating units at
the Andrews, MacKay and Hogg power stations, which added 7 megawatts ("MW") of
capacity.
The Maclaren Energy system, operated through 50%-owned Great Lakes Hydro Income
Fund, generated 1,554 GWh of power during the year, 10% higher than plan. The
strategic power interconnection at Masson, Quebec, which links the Quebec and
Ontario power grids, was recently upgraded and expanded by 240 MW to 400 MW.
The company's other operations in Canada and the United States generated 1,658
GWh of power during 2000, down from 1,909 GWh in 1999. Higher precipitation in
Quebec increased Pontiac Power's generation from 205 GWh to 217 GWh. The Lake
Superior Power cogeneration plant in Ontario also increased its production to
852 GWh from 843 GWh, including the energy equivalents of contracted natural gas
resold to take advantage of higher prices. Louisiana HydroElectric Power's
generation declined substantially from 810 GWh in 1999 to 538 GWh in 2000, as a
result of significantly lower water flows on the Mississippi River. The
financial impact of this lower generation was partly offset by drawing down
hydrological reserves previously set aside for this purpose.
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CAPITAL INVESTMENT PROGRAM
Work continues on Great Lakes' $500 million capital investment plan, which forms
an integral part of a strategic plan to double power operating earnings by the
year 2005.
High Falls, Construction is expected to begin in May on the 45 MW, $75 million
Ontario redevelopment of the High Falls hydroelectric generating station on the
Michipicoten River in northern Ontario, for expected completion in fourth
quarter of 2002.
Sault Ste. Marie, Planning continues for the construction of a $25 million high voltage 230
Ontario / Michigan kilovolt transmission interconnection to link the company's generating
stations in Ontario with the neighbouring power grid in Michigan. This
interconnection will have a capacity of 300 MW and will enhance Great
Lakes' ability to access other energy markets to maximize the value of its
power system.
Powell River, The Great Lakes Hydro Income Fund has acquired a 50% economic interest in
British Columbia two hydroelectric generating stations in the city of Powell River, B.C.
which have an aggregate capacity of 82 MW, at a cost of $113 million.
Pingston Creek, Site development has commenced for a 30 MW, $45 million hydroelectric
British Columbia generating station near Revelstoke, B.C. in partnership with Canadian Hydro
Developers Inc. Construction is expected to start during the first half of
2001 after negotiating power sales and transmission agreements, for
completion in mid 2002.
Passo do Meio, Pre-development work continues for five new hydroelectric generating
Rio Grande do Sul, stations in southern Brazil, which have a total capacity of 81 MW
Brazil representing an investment of approximately $80 million. Site development
work has started on the first of these projects, the 30 MW Passo do Meio
generating station in the State of Rio Grande do Sul.
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CORPORATE
As previously announced, a Special Meeting of Great Lakes' shareholders will be
held on Wednesday, February 28, 2001 to consider the proposal to amalgamate the
company with a wholly-owned subsidiary of Brascan Corporation, as part of a
going private transaction. The board of directors has recommended approval of
this proposal. If this amalgamation is approved, the affairs of the company will
be continued by the successor company, under the name Great Lakes Power Inc.
OUTLOOK
Although abnormally dry conditions continue to prevail in the US Midwest, the
financial impact of these conditions is expected to be partly offset by
increased contributions from other power operations and by the impact of the
company's ongoing facilities upgrading program. Through its capital investment
plan, the company is aggressively seeking to increase returns as new development
projects and acquisitions are brought on stream.
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Note: This news release contains forward-looking statements concerning the
company's business and operations. The company cautions that, by their nature,
forward-looking statements involve risk and uncertainty and the company's actual
results could differ materially from those expressed or implied in such
statements. Reference should be made to the company's most recent Annual
Information Form for a description of the major risk factors.
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Great Lakes Power Inc. generates, transmits and distributes electricity in
northern Ontario and western Quebec, and has ownership and operating interests
in other power generating facilities in Canada and the United States.
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For more information, please contact:
MEDIA: INVESTORS AND FINANCIAL ANALYSTS:
Edward C. Kress Richard Legault
Chairman and Vice-President and
Chief Executive Officer Chief Financial Officer
(416) 363-9491 (416) 956-5138
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[GREAT LAKES POWER INC. LOGO]
FINANCIAL HIGHLIGHTS
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THREE MONTHS ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31
millions, except per share amounts 2000 1999 2000 1999
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REVENUES $ 92 $ 66 $ 334 $ 286
NET INCOME $ 24 $ 21 $ 116 $ 113
PER FULLY DILUTED COMMON SHARE $0.19 $0.17 $0.92 $0.90
DIVIDENDS PER COMMON SHARE $0.16 $0.16 $0.64 $0.64
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OPERATING STATISTICS
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THREE MONTHS ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31
Gigawatt hours 2000 1999 2000 1999
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NORTHERN ONTARIO POWER
Electricity generation 306 294 1,369 1,503
Electricity sales 591 590 2,309 2,341
Internal generation (1) 48% 48% 57% 62%
MACLAREN ENERGY (2)
Electricity generation 325 191 1,554 192
Electricity sales 323 193 1,573 193
VALERIE FALLS POWER
Electricity generation and sales 12 15 51 51
PONTIAC POWER
Electricity generation 45 58 217 205
Electricity sales 45 56 214 202
LOUISIANA HYDROELECTRIC POWER
Electricity generation 72 69 538 810
Electricity sales 68 66 520 780
LAKE SUPERIOR POWER (3)
Electricity generation and sales 220 220 852 843
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TOTAL
ELECTRICITY GENERATION 980 847 4,581 3,604
ELECTRICITY SALES 1,259 1,140 5,519 4,410
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(1) Electricity generation as a percentage of electricity available for sale
before distribution and line loss.
(2) Acquired in November 1999 through the Great Lakes Hydro Income Fund.
(3) Including energy equivalents of contracted gas sales.
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[GREAT LAKES POWER INC. LOGO] CONSOLIDATED FINANCIAL STATEMENTS(1)
CONSOLIDATED STATEMENT OF INCOME
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THREE MONTHS ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31
millions, except per share amounts 2000 1999 2000 1999
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REVENUE
Power operations $ 63.0 $ 40.0 $ 226.8 $ 187.7
Long-term investments 11.5 13.1 48.0 47.4
Investment income 17.0 12.8 58.7 51.2
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91.5 65.9 333.5 286.3
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EXPENSE
Interest 20.8 16.9 79.2 64.4
Power and fuel purchases 26.5 17.7 69.8 54.1
Operating costs 7.6 6.1 26.8 19.2
Depreciation 5.3 4.2 20.7 16.7
Minority interests 1.5 0.9 4.6 3.7
Income and other taxes 5.9 (0.6) 16.9 15.1
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67.6 45.2 218.0 173.2
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NET INCOME $ 23.9 $ 20.7 $ 115.5 $ 113.1
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PER FULLY DILUTED
COMMON SHARE $ 0.19 $ 0.17 $ 0.92 $ 0.90
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CONSOLIDATED STATEMENT OF CASH FLOWS
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YEAR ENDED
DECEMBER 31
millions 2000 1999
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CASH PROVIDED FROM OPERATIONS $ 125.5 $ 131.5
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FINANCING AND SHAREHOLDER
DISTRIBUTIONS
Borrowings -- 290.0
Debt repayments (6.9) (187.5)
Convertible debenture interest (17.6) (15.9)
Common share dividends (64.9) (64.9)
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(89.4) 21.7
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INVESTING
Securities (8.7) (1.9)
Loans and other receivables 14.9 (37.1)
Property, plant and equipment (52.7) (139.0)
Other 10.9 17.1
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(35.6) (160.9)
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CASH AND CASH EQUIVALENTS
Increase (Decrease) 0.5 (7.7)
Balance, beginning of year 6.2 13.9
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BALANCE, END OF YEAR $ 6.7 $ 6.2
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CONSOLIDATED BALANCE SHEET
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DECEMBER 31 December 31
millions 2000 1999
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ASSETS
Securities $ 661.3 $ 646.1
Loans and other receivables 322.0 325.1
Long-term investments 536.2 534.9
Property, plant and equipment 956.8 899.1
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$ 2,476.3 $ 2,405.2
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LIABILITIES
Accounts payable and other $ 76.4 $ 99.4
Mortgage bonds 393.5 346.2
Term debentures 558.8 543.8
FUTURE INCOME TAX LIABILITY 104.4 106.7
MINORITY INTERESTS 94.2 93.1
SHAREHOLDERS' EQUITY (2) 1,249.0 1,216.0
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$ 2,476.3 $ 2,405.2
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NOTES:
(1) These financial statements should be read in conjunction with the Notes to
the company's audited Consolidated Financial Statements for the years ended
December 31, 2000 and 1999.
(2) SHAREHOLDERS' EQUITY
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DECEMBER 31 December 31
millions 2000 1999
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Common shares (101,393,934) $ 603.5 $ 603.5
Retained earnings 397.8 364.8
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1,001.3 968.3
Subordinated convertible debentures 247.7 247.7
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$1,249.0 $1,216.0
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The subordinated convertible debentures are convertible at $10.00 per common
share into 24.8 million common shares.