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Press release from CNW Group

Strong Asset Growth in 2010

Wednesday, February 23, 2011

Strong Asset Growth in 201007:00 EST Wednesday, February 23, 2011MONTREAL, Feb. 23 /CNW Telbec/ - The 133% increase in the wind power asset portfolio and the acquisition of Boralex Power Income Fund (the "Fund") were the key developments in 2010 for Boralex Inc. ("Boralex" or the "Corporation"), pointing to a good performance in fiscal 2011. These items saw the Corporation record its all-time best fourth-quarter earnings before interest, taxes, depreciation and amortization ("EBITDA"). << (in millions of dollars, except per unit amounts) ------------------------------------------------------------------------- Three-month periods ended Twelve-month periods ended --------------------------------------------------------- December 31, December 31, December 31, December 31, 2010 2009 2010 2009 Revenues from energy sales 73.0 46.1 202.9 184.8 EBITDA 30.2 12.0 64.0 57.3 Net earnings 0.5 14.7 23.1 24.4 Per share (basic and diluted) $0.01 $0.39 $0.61 $0.65 Cash flows from operations 13.2 11.3 37.0 47.4 ------------------------------------------------------------------------- >>The integration of the Fund's power stations and the commissioning of over 140 MW of wind power during fiscal 2010 significantly increased the Corporation's annual power generation, totalling 2,044,784 MWh in 2010 compared with 1,574,874 MWh in 2009. This growth was also reflected in revenues from energy sales, which rose to $202.9 million in 2010 from $184.8 million in 2009.In the fourth quarter of 2010, Boralex finalized the full acquisition of the Fund by executing the business combination agreement for the two entities on November 1, 2010. The swift integration of these assets and their immediate contribution to Boralex's year-end results underscore the complementary nature of these newly combined asset portfolios. Boralex recognized $64.0 million in EBITDA for fiscal 2010-of which $30.2 million was recorded solely in the fourth quarter of 2010-compared with $57.3 million for fiscal 2009. The Fund's assets contributed $15.1 million to EBITDA in the fourth quarter of fiscal 2010. Year over year, EBITDA nearly tripled in the fourth quarter of 2010, lifting Boralex to its best-ever fourth-quarter operating results.The acquisition of the Fund entailed a host of benefits for Boralex, particularly an increase to 73% of installed capacity covered by long-term contracts from 63%, which will translate into greater stability in profit margins and cash flows. In addition, the acquisition of the Fund had a particularly strong impact on the hydroelectric power segment, whose contribution to Boralex's consolidated revenues rose to 12.9% in 2010 from 5.6% in 2009, while its share of consolidated EBITDA increased to 22.4% in 2010 from 7.4% in 2009-clear signs of the breadth and profitability of the hydroelectric assets acquired from the Fund. The contribution to the Corporation's operating results from this segment, which tripled in size with the acquisition, is expected to generate higher throughout in fiscal 2011.Fiscal 2010 also saw significant growth in the wind power segment. In 2010, 143.5 MW in new capacity was brought online, more than doubling the segment's installed capacity. The contribution of these new assets will be fully reflected in the Corporation's financial results in fiscal 2011. Another notable event in 2010 was the acquisition by Boralex and its partners of rights for 119 MW in new wind power projects slated for commissioning in 2014 and 2015. The Corporation's fourth-quarter results show how Boralex is reaping the benefits of its expansion strategy in the wind power segment, which notably accounted for the Corporation's largest share of EBITDA in fiscal 2010, totalling $36.3 million in 2010 compared with $26.8 million in 2009.The Corporation's wood-residue thermal power stations reported revenues from energy sales and EBITDA for fiscal 2010 of $105.4 million and $23.5 million, respectively, compared with $123.4 million and $40.0 million, respectively, for 2009. These declines resulted in part from the adverse impact of the termination of the U.S. tax credits program, lower market prices for electricity, foreign currency fluctuations and a drop in REC prices. The renewal of the power sales contract at the Fort Fairfield power station and the implementation of a new sorting system for old bark piles at the Senneterre power station are expected to have a positive impact in fiscal 2011. "Management remains cautious about the thermal power segment's outlook for 2011, but we're confident the segment has attractive potential over the longer term," stated President and CEO Patrick Lemaire.For the year ended December 31, 2010, Boralex reported net earnings totalling $23.1 million or $0.61 per share (basic and diluted) compared with $24.4 million or $0.65 per share (basic and diluted) for 2009."Boralex is poised to reap the benefits of its new assets in 2011, as operating results reflect the full contribution of the wind power stations commissioned in 2010 and the Fund's power stations. Fiscal 2011 will see the addition of a new operating segment for Boralex with the commissioning in May of its first solar power station, whose construction is proceeding on schedule," added Mr. Lemaire. As a result of the development and acquisition of new assets in 2010, Boralex doubled the installed capacity of its energy portfolio, now totalling 700 MW, in addition to a development project pipeline with partners, exceeding 400 MW. As a result, the strategic goal of 1,000 MW in operation and development has nearly been met.About BoralexBoralex is a power producer whose core business involves developing and operating renewable energy power stations with a total installed capacity of 700 MW in Canada, the Northeastern United States and France. Boralex is also committed under power development projects both independently and with European and Canadian partners to add approximately 400 MW of power. With nearly 350 employees, Boralex is known for its diversified expertise and in-depth experience in three power generation segments - wind, hydroelectric and thermal - and will add a fourth segment to its energy portfolio with the upcoming commissioning of its first solar power station. Boralex's shares and convertible debentures are listed on the Toronto Stock Exchange under the ticker symbols BLX and BLX.DB, respectively. More information is available at www.boralex.com or www.sedar.com.Some statements in this press release, including those regarding future results and performance, are forward-looking statements based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the general impact of economic conditions, raw material price increases and availability, currency fluctuations, fluctuations in electricity selling prices, the Corporation's financing capacity, and adverse changes in general market and industry conditions, as well as other factors listed in the Corporation's filings with various securities commissions.The summarized financial statements included in this press release also contain certain financial measures that are not in accordance with Canadian generally accepted accounting principles ("GAAP"). To assess the operating performance of its assets and reporting segments, the Corporation uses earnings before interest, taxes and amortization ("EBITDA") and cash flows from operations as performance measures. These are non-GAAP measures and have no standard definition under GAAP. These measures may be different from similarly-titled measures used by other companies. EBITDA corresponds to "Operating income" as reported in Boralex's consolidated statement of earnings. Cash flows from operations are equal to cash flows related to operating activities before change in working capital as reported in the consolidated statement of cash flows accompanying this press release. << Consolidated Balance Sheets As at As at December 31, December 31, (in thousands of dollars) (unaudited) 2010 2009 ------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents 92,650 37,821 Restricted cash 15,924 - Accounts receivable 60,420 39,632 Available-for-sale financial asset 21,508 - Future income taxes - 422 Inventories 9,179 8,726 Prepaid expenses 2,516 2,537 Fair value of derivative financial instruments 769 - ------------------------------------------------------------------------- 202,966 89,138 Investment - 55,446 Property, plant and equipment 810,700 413,539 Energy sales contracts 100,673 49,023 Goodwill 70,721 - Other long-term assets 47,699 56,621 ------------------------------------------------------------------------- 1,232,759 663,767 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities Current liabilities Bank loans and advances 195 12,291 Accounts payable and accrued liabilities 58,815 28,913 Income taxes payable 3,209 283 Fair value of derivative financial instruments 183 - Current portion of long-term debt 34,033 24,273 ------------------------------------------------------------------------- 96,435 65,760 Long-term debt 479,546 206,116 Convertible debentures 220,824 - Long-term lease accruals 2,981 - Future income taxes 47,437 37,185 Fair value of derivative financial instruments 10,834 7,645 ------------------------------------------------------------------------- 858,057 316,706 ------------------------------------------------------------------------- Equity attributable to shareholders Capital stock 222,853 222,694 Equity component of convertible debentures 19,537 - Contributed surplus 5,527 4,295 Retained earnings 184,690 159,900 Accumulated other comprehensive loss (66,799) (46,859) ------------------------------------------------------------------------- 365,808 340,030 Non-controlling interests 8,894 7,031 ------------------------------------------------------------------------- Total equity 374,702 347,061 ------------------------------------------------------------------------- 1,232,759 663,767 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Earnings (in thousands of dollars, except per share amounts For the For the and number of three-month periods twelve-month periods shares) ended December 31, ended December 31, (unaudited) 2010 2009 2010 2009 ------------------------------------------------------------------------- Revenues from energy sales 73,036 46,149 202,864 184,779 Renewable energy tax credits - 3,404 - 13,853 Operating costs 37,448 28,119 115,568 122,100 ------------------------------------------------------------------------- 35,588 21,434 87,296 76,532 Share in earnings of the Fund - (5,088) (3,251) (2,090) Management revenues from the Fund - 1,789 4,437 5,876 Other income 120 286 718 2,061 ------------------------------------------------------------------------- 35,708 18,421 89,200 82,379 ------------------------------------------------------------------------- Other expenses Management and operation of the Fund - 1,348 3,995 4,789 Development 1,583 1,517 4,214 4,729 Administrative 3,884 3,571 17,025 15,536 ------------------------------------------------------------------------- 5,467 6,436 25,234 25,054 ------------------------------------------------------------------------- Operating income 30,241 11,985 63,966 57,325 Amortization 16,146 6,675 40,658 26,056 Foreign exchange loss 2,736 1,271 4,298 1,473 Net loss on financial instruments 372 929 247 923 Financing costs 11,026 3,497 24,104 13,727 Net gain on deemed disposal of investment in the Fund 948 - (15,130) - Gain on sale of subsidiary - - (774) - Gain on dilution - (13,865) - (13,865) ------------------------------------------------------------------------- 31,228 (1,493) 53,403 28,314 ------------------------------------------------------------------------- Earnings (loss) before income taxes and non- controlling interests (987) 13,478 10,563 29,011 Income taxes (recovery) (1,923) (1,280) (12,738) 4,470 ------------------------------------------------------------------------- Net earnings including non- controlling interests 936 14,758 23,301 24,541 Non-controlling interests (478) (46) (201) (102) ------------------------------------------------------------------------- Net earnings attributable to shareholders 458 14,712 23,100 24,439 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net earnings per Class A share (basic and diluted) 0.01 0.39 0.61 0.65 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of Class A shares outstanding (basic) 37,744,869 37,740,921 37,741,916 37,740,921 Weighted average number of Class A shares outstanding (diluted) 37,843,347 37,865,365 37,860,092 37,836,411 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Retained Earnings For the twelve-month periods ended December 31, (in thousands of dollars) (unaudited) 2010 2009 ------------------------------------------------------------------------- Balance - beginning of year 159,900 135,461 Net earnings for the year 23,100 24,439 Excess of purchase price paid for acquisition of non-controlling interests (1,725) - Excess of proceeds from partial sale of a subsidiary 3,415 - ------------------------------------------------------------------------- Balance - end of year 184,690 159,900 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Comprehensive Income (Loss) For the For the three-month periods twelve-month periods (in thousands of ended December 31, ended December 31, dollars) (unaudited) 2010 2009 2010 2009 ------------------------------------------------------------------------- Net earnings for the year including non-controlling interests 936 14,758 23,301 24,541 ------------------------------------------------------------------------- Other comprehensive income (loss) Translation adjustments Unrealized foreign exchange loss on translation of financial statements of self-sustaining foreign operations (8,956) (6,056) (15,537) (32,389) Reclassification to net earnings of a realized foreign exchange loss related to the reduction of net investment in self-sustaining foreign operations 1,973 1,141 3,604 1,076 Share of cumulative translation adjustments of the Fund - (101) - (2,174) Taxes (216) 33 (179) 581 Cash flow hedges Change in fair value of financial instruments 2,821 39 (11,028) 7,140 Hedging items realized and recognized in net earnings (1,100) (3,991) (5,554) (22,608) Hedging items realized and recognized in balance sheet 804 (271) 5,652 (3,884) Taxes (629) 651 3,829 4,383 Loss on available-for-sale financial asset Unrealized loss on available-for-sale financial asset (727) - (727) - ------------------------------------------------------------------------- (6,030) (8,555) (19,940) (47,875) ------------------------------------------------------------------------- Comprehensive income (loss) for the year including non-controlling interests (5,094) 6,203 3,361 (23,334) ------------------------------------------------------------------------- Less: Earnings for the year attributable to non-controlling interest (478) (46) (201) (102) ------------------------------------------------------------------------- Comprehensive income (loss) for the year attributable to shareholders (5,572) 6,157 3,160 (23,436) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Cash Flows For the For the three-month periods twelve-month periods (in thousands of ended December 31, ended December 31, dollars) (unaudited) 2010 2009 2010 2009 ------------------------------------------------------------------------- Operating activities Net earnings 458 14,712 23,100 24,439 Distributions received from the Fund - 2,409 4,475 9,638 Adjustments for non-cash items Net loss on financial instruments 372 719 247 1,253 Share in earnings of the Fund - 5,088 3,251 2,090 Amortization 16,146 6,675 40,658 26,056 Amortization of financing costs (250) 719 3,035 2,893 Renewable energy tax credits 721 (3,165) 1,709 (7,113) Gain on sale of subsidiary - - (774) - Gain on deemed disposal of investment in the Fund - - (21,260) - Gain on dilution - (16,315) - (16,315) Imputed interest on convertible debentures 325 - 411 - Future income taxes (5,347) (51) (20,100) 3,002 Others 753 539 2,198 1,470 ------------------------------------------------------------------------- 13,178 11,330 36,950 47,413 Change in non-cash working capital items 5,998 13,259 5,417 13,373 ------------------------------------------------------------------------- 19,176 24,589 42,367 60,786 ------------------------------------------------------------------------- Investing activities Additions to property, plant and equipment (49,171) (24,399) (186,993) (84,532) Change in restricted cash 19,098 - (15,924) - Business acquisitions - The Fund (32,421) - (71,232) - - Others - (47,283) (2,142) (53,758) Proceeds from sale of a subsidiary - - 878 - Change in reserve funds - 150 883 (1,091) Development projects (1,316) (3,357) (2,046) (10,337) Purchase of non-controlling interest - - (1,751) (968) Others 530 671 2,736 (6,366) ------------------------------------------------------------------------- (63,280) (74,218) (275,591) (157,052) ------------------------------------------------------------------------- Financing activities Increase (decrease) in bank loans and advances 195 (925) (12,096) 12,291 Increase in long-term debt 3,780 35,158 267,051 68,714 Payments on long-term debt (6,650) (6,788) (74,407) (27,539) Net issuance of convertible debentures - - 103,945 - Net proceeds from share issuance 132 - 132 - Distributions paid to unitholders (1,565) - (1,565) - Increase in non-controlling interests - 23,181 5,662 23,181 ------------------------------------------------------------------------- (4,108) 50,626 288,722 76,647 ------------------------------------------------------------------------- Translation adjustment on cash and cash equivalents 130 (814) (669) (11,755) ------------------------------------------------------------------------- Net change in cash and cash equivalents (48,082) 183 54,829 (31,374) Cash and cash equivalents - beginning of year 140,732 37,638 37,821 69,195 ------------------------------------------------------------------------- Cash and cash equivalents - end of year 92,650 37,821 92,650 37,821 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- SUPPLEMENTAL INFORMATION Cash and cash equivalents paid for: Interest 10,325 2,526 24,022 9,130 Income taxes 205 - 3,571 1,736 ------------------------------------------------------------------------- Segmented Information (tabular amounts in thousands of dollars, unless otherwise specified) (unaudited) >>The Corporation's power stations are grouped into four distinct segments: wind power, hydroelectric power, wood-residue thermal power and natural gas thermal power, and are engaged mainly in power generation. The classification of these segments is based on the different cost structures relating to each of the four types of power stations.The Corporation analyzes the performance of its operating segments based on the earnings before interest, taxes, depreciation and amortization ("EBITDA"). EBITDA is not a measure of performance under Canadian generally accepted accounting principles; however, management uses this performance measure to assess the operating performance of its segments. Earnings for each segment are presented on the same basis as those of the Corporation. << The following table reconciles EBITDA with net earnings: For the For the three-month periods twelve-month periods ended December 31, ended December 31, 2010 2009 2010 2009 ------------------------------------------------------------------------- Net earnings attributable to shareholders 458 14,712 23,100 24,439 Non-controlling interests 478 46 201 102 Income taxes (recovery) (1,923) (1,280) (12,738) 4,470 Gain on dilution - (13,865) - (13,865) Gain on sale of subsidiary - - (774) - Net gain on deemed disposal of investment in the Fund 948 - (15,130) - Financing costs 11,026 3,497 24,104 13,727 Net loss on financial instruments 372 929 247 923 Foreign exchange loss 2,736 1,271 4,298 1,473 Amortization 16,146 6,675 40,658 26,056 ------------------------------------------------------------------------- EBITDA 30,241 11,985 63,966 57,325 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Information by operating segment For the For the three-month periods twelve-month periods ended December 31, ended December 31, 2010 2009 2010 2009 ------------------------------------------------------------------------- PRODUCTION (MWh) Wind power stations 143,379 79,741 377,392 235,418 Hydroelectric power stations 220,380 41,017 328,290 145,303 Wood-residue thermal power stations 310,790 304,399 1,236,930 1,156,652 Natural gas thermal power stations 71,712 14,859 102,172 37,501 ------------------------------------------------------------------------- 746,261 440,016 2,044,784 1,574,874 ------------------------------------------------------------------------- ------------------------------------------------------------------------- REVENUES FROM ENERGY SALES Wind power stations 17,479 10,974 45,924 33,872 Hydroelectric power stations 18,060 2,948 26,221 10,329 Wood-residue thermal power stations 24,173 27,031 105,357 123,391 Natural gas thermal power stations 13,324 5,196 25,362 17,187 ------------------------------------------------------------------------- 73,036 46,149 202,864 184,779 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA Wind power stations 14,103 9,085 36,263 26,789 Hydroelectric power stations 14,401 1,743 18,929 5,538 Wood-residue thermal power stations 1,904 9,359 23,491 39,995 Natural gas thermal power stations 4,105 915 6,291 2,155 Corporate and eliminations (4,272) (9,117) (21,008) (17,152) ------------------------------------------------------------------------- 30,241 11,985 63,966 57,325 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT Wind power stations 41,625 22,884 175,217 76,761 Hydroelectric power stations 104 153 2,354 1,184 Wood-residue thermal power stations 2,599 670 4,990 4,851 Natural gas thermal power stations (189) - (179) 28 Corporate 5,032 692 4,611 1,708 ------------------------------------------------------------------------- 49,171 24,399 186,993 84,532 ------------------------------------------------------------------------- ------------------------------------------------------------------------- As at As at December 31, December 31, 2010 2009 ------------------------------------------------------------------------- TOTAL ASSETS Wind power stations 538,604 363,644 Hydroelectric power stations 264,481 34,622 Wood-residue thermal power stations 213,842 138,014 Natural gas thermal power stations 40,561 13,600 Corporate 175,271 113,887 ------------------------------------------------------------------------- 1,232,759 663,767 ------------------------------------------------------------------------- ------------------------------------------------------------------------- PROPERTY, PLANT AND EQUIPMENT Wind power stations 420,675 288,225 Hydroelectric power stations 198,331 25,758 Wood-residue thermal power stations 159,629 84,660 Natural gas thermal power stations 20,834 7,150 Corporate 11,231 7,746 ------------------------------------------------------------------------- 810,700 413,539 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Information by geographic segment For the For the three-month periods twelve-month periods ended December 31, ended December 31, 2010 2009 2010 2009 ------------------------------------------------------------------------- PRODUCTION (MWh) United States 396,780 336,223 1,393,618 1,274,837 France 107,628 88,972 295,141 267,291 Canada 241,853 14,821 356,025 32,746 ------------------------------------------------------------------------- 746,261 440,016 2,044,784 1,574,874 ------------------------------------------------------------------------- ------------------------------------------------------------------------- REVENUES FROM ENERGY SALES United States 30,969 28,890 116,726 130,780 France 16,883 15,667 47,548 50,556 Canada 25,184 1,592 38,590 3,443 ------------------------------------------------------------------------- 73,036 46,149 202,864 184,779 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA United States 11,328 9,891 34,970 43,043 France 9,237 8,202 23,389 24,364 Canada 9,676 (6,108) 5,607 (10,082) ------------------------------------------------------------------------- 30,241 11,985 63,966 57,325 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT United States 656 664 3,775 4,735 France 13,684 7,564 76,141 10,710 Canada 34,831 16,171 107,077 69,087 ------------------------------------------------------------------------- 49,171 24,399 186,993 84,532 ------------------------------------------------------------------------- ------------------------------------------------------------------------- As at As at December 31, December 31, 2010 2009 ------------------------------------------------------------------------- TOTAL ASSETS United States 284,926 179,494 France 310,161 254,142 Canada 637,672 230,131 ------------------------------------------------------------------------- 1,232,759 663,767 ------------------------------------------------------------------------- ------------------------------------------------------------------------- PROPERTY, PLANT AND EQUIPMENT United States 174,054 89,889 France 224,647 190,797 Canada 411,999 132,853 ------------------------------------------------------------------------- 810,700 413,539 ------------------------------------------------------------------------- ------------------------------------------------------------------------- >>For further information: Patricia Lemaire, Director, Public Affairs and Communications, Boralex Inc., 514-985-1353, patricia.lemaire@boralex.com