MONTREAL, May 11 /CNW Telbec/ - Boralex Inc. ("Boralex" or the "Corporation") capitalizes on its expansion strategy, reporting net earnings for the first quarter of fiscal 2011 of $7 million ($0.19 per share), up 250% from $2 million for the first quarter of fiscal 2010.

 <<
 (in millions of dollars, except per share amounts)
 -------------------------------------------------------------------------
 Quarters ended
 ------------------------
 March 31, March 31,
 2011 2010
 ------------------------
 Revenues from energy sales 82.0 51.0
 EBITDA 37.8 17.8
 Net earnings 7.0 2.0
 per share (basic) in dollars $0.19 $0.05
 Cash flows from operations 24.1 14.5
 -------------------------------------------------------------------------
 >>

Quarterly results

"Our first-quarter results clearly show the positive impact of Boralex's most recent expansion strategy," said President and CEO Patrick Lemaire. The 132% expansion in Boralex's installed wind power capacity and the acquisition of Boralex Power Income Fund (the "Fund") fuelled significant growth in financial results for the first quarter of fiscal 2011.

Revenues from energy sales for the three-month period ended March 31, 2011 totalled $82 million, up 61% from the same quarter of fiscal 2010. The inclusion of the Fund's ten power stations contributed an additional $30 million in revenues. More importantly, the Fund's contribution, coupled with the effect of the Corporation's new wind power stations, resulted in a 112% increase in EBITDA, to $37.8 million for the first quarter of fiscal 2011. The wind power segment remains Boralex's top EBITDA growth driver. Given wind power projects under development, the segment's leading contribution to Boralex's operating profitability is expected to grow over the next few years.

What's more, the acquisition of the Fund provides greater stability in profit margins and cash flows. As at March 31, 2011, the Corporation recorded a 66% increase in cash flows from operations, thereby generating flexibility and financial strength to drive Boralex's future growth.

2015 Vision

Subsequent to the recent growth in its wind power segment and the acquisition of the Fund, Boralex has expanded its footprint and positioning by balancing the contribution of each of its operating segments, with a combined total of 700 MW in energy producing assets in Canada, the U.S. and France, of which 73% have long-term power sales contracts. With more than 400 MW of projects currently under development with its various partners, all of which have long-term contracts, Boralex's strategic objective of reaching 1,000 MW in operating/contracted capacity has been met. "Boralex has set a new objective of attaining an operating/contracted capacity of 1,500 MW by 2015. This growth will occur primarily in France and Canada in the wind and solar power segments and, on a smaller scale, in the hydroelectric segment," added Mr. Lemaire.

Segment performance

In examining segment results, we note that the wind power segment has enjoyed a performance boost with the addition of 143 MW in new assets since January 2010, consisting of 90 MW in Canada and 53 MW in France. Quarterly revenues were up 61%, with revenues from energy sales and EBITDA of $18.3 million and $15.1 million, respectively. Note that in the first quarter, Boralex sold the Merlin-Buxton wind power project in Ontario, realizing a $1.8 million gain. This decision was prompted by the site's low development potential following structural changes out of Boralex control. In addition, a significant portion of the construction work at the first two Seigneurie de Beaupré wind farms, with an installed capacity of 272 MW, will be completed in 2011. The construction work on several foundations and most of the road work gets underway at the end of April.

Clearly, the performance boost in the hydroelectric power segment for the first quarter of fiscal 2011 compared with the same period of fiscal 2010 was a key benefit of acquiring the Fund. Adding the seven hydroelectric power stations increased segment revenues fourfold to $12.7 million, and EBITDA nearly fivefold, to $9.1 million. In February 2011, Boralex and Hydro-Québec renewed the power sales contract for 2 MW of installed capacity at the East Angus power station in Québec for an additional 20-year period. This was Boralex's first long-term contract to be successfully renegotiated and renewed with Hydro-Québec.

Our wood-residue thermal power segment reported revenues totalling $34.3 million, up 13.6% from $30.2 million for the same period in the previous year, while EBITDA rose 3% to $10.3 million year over year. Despite a higher average selling price, the Corporation's U.S. power stations continued to grapple with tough market conditions. In late February, Boralex entered into a two-year power sales contract for its Fort Fairfield power station in Maine. Moreover, the Ashland, Maine power station has been shut down indefinitely. This decision was prompted by the Corporation's operating strategy aimed at reducing operating costs through responsible management and minimizing the impact of a persistently fragile U.S. economy. Boralex expects performance at its Canadian power stations to hold steady or improve, particularly at the Senneterre power station, due in part to investments to secure its raw material supply. Furthermore, the Dolbeau power station was shut down as expected in April. Management continues to evaluate a number of scenarios for this facility.

Note that this quarter marked the Corporation's first financial statements prepared in accordance with International Financial Reporting Standards ("IFRS").

About Boralex

Boralex 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 not defined under IFRS. To assess the performance of its assets and reporting segments, the Corporation uses EBITDA and cash flows from operations as performance measures, as defined in the accompanying financial statements. These are measures not defined under IFRS and have no standard definition under IFRS. As a result, these measures may be different from similarly titled measures used by other companies.

 <<
 Consolidated Balance Sheets

 AS AT AS AT AS AT
 MARCH 31, DECEMBER JANUARY 1,
 (in thousands of dollars) (unaudited) 2011 31, 2010 2010
 -------------------------------------------------------------------------

 ASSETS
 CURRENT ASSETS
 Cash and cash equivalents 131,268 92,650 37,821
 Restricted cash 6,512 15,924 -
 Accounts receivable 51,053 60,420 39,632
 Available-for-sale financial asset 3,832 23,251 -
 Future income taxes - 512 422
 Inventories 7,980 9,179 8,726
 Prepaid expenses 4,475 2,516 2,537
 Fair value of derivative financial
 instruments - 769 -
 -------------------------------------------------------------------------
 205,120 205,221 89,138
 Investment - - 45,729
 Property, plant and equipment 735,106 738,884 412,707
 Energy sales contracts 104,066 103,994 49,023
 Water rights 112,274 113,015 4,146
 Other long-term assets 43,440 46,842 52,475
 Goodwill 38,063 38,063 -
 -------------------------------------------------------------------------
 1,238,069 1,246,019 653,218
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------

 LIABILITIES
 CURRENT LIABILITIES
 Bank loans and advances - 195 12,291
 Accounts payable and accrued
 liabilities 38,331 59,558 31,798
 Income taxes payable 3,934 3,209 283
 Fair value of derivative financial
 instruments 30 183 -
 Current portion of long-term debt 46,676 34,033 24,273
 -------------------------------------------------------------------------
 88,971 97,178 68,645
 Long-term debt 472,040 479,546 206,116
 Convertible debentures 221,429 220,824 -
 Long-term lease accruals 2,997 2,981 -
 Future income taxes 67,603 66,967 33,603
 Fair value of derivative financial
 instruments 9,448 10,834 7,645
 -------------------------------------------------------------------------
 862,488 878,330 316,009
 -------------------------------------------------------------------------

 EQUITY ATTRIBUTABLE TO SHAREHOLDERS
 Capital stock 222,870 222,853 222,694
 Equity component of convertible
 debentures 14,488 14,488 -
 Contributed surplus 5,189 5,028 4,290
 Retained earnings 149,311 142,300 105,538
 Accumulated other comprehensive loss (25,231) (25,874) (2,344)
 -------------------------------------------------------------------------
 366,627 358,795 330,178
 Non-controlling interests 8,954 8,894 7,031
 -------------------------------------------------------------------------
 Total equity 375,581 367,689 337,209
 -------------------------------------------------------------------------
 1,238,069 1,246,019 653,218
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Earnings
 FOR THE QUARTERS
 ENDED MARCH 31
 (in thousands of dollars, except per share -----------------------
 amounts and number of shares)(unaudited) 2011 2010
 -------------------------------------------------------------------------

 REVENUES
 Revenues from energy sales 82,028 51,004
 Management revenues from the Fund - 1,755
 Other income 152 300
 -------------------------------------------------------------------------
 82,180 53,059
 -------------------------------------------------------------------------

 COSTS AND OTHER EXPENSES
 Operating costs 39,215 27,019
 Administrative 4,293 3,706
 Development 884 1,613
 Management and operation of the Fund - 1,505
 Amortization 15,780 7,667
 Gain on sale of assets (2,377) (774)
 -------------------------------------------------------------------------
 57,795 40,736
 -------------------------------------------------------------------------

 OPERATING INCOME 24,385 12,323

 Financing costs 11,983 5,763
 Foreign exchange loss 1,519 454
 Net loss (gain) on financial instruments 316 (560)
 -------------------------------------------------------------------------

 EARNINGS BEFORE INCOME TAXES, SHARE IN EARNINGS
 OF THE FUND AND NON-CONTROLLING INTERESTS 10,567 6,666

 Income taxes 3,500 2,985
 -------------------------------------------------------------------------

 EARNINGS BEFORE SHARE IN EARNINGS OF THE FUND
 AND NON-CONTROLLING INTERESTS 7,067 3,681

 Share in earnings of the Fund - (1,425)
 Non-controlling interests (56) (280)
 -------------------------------------------------------------------------

 NET EARNINGS ATTRIBUTABLE TO SHAREHOLDERS 7,011 1,976
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------

 Net earnings per share (basic) $ 0.19 $ 0.05
 Net earnings per share (diluted) $ 0.18 $ 0.05
 Weighted average number of shares outstanding
 (basic) 37,766,491 37,740,921
 Weighted average number of shares outstanding
 (diluted) 57,487,945 37,910,184
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Comprehensive Income (Loss)

 FOR THE QUARTERS
 ENDED MARCH 31
 -----------------------
 (in thousands of dollars)(unaudited) 2011 2010
 -------------------------------------------------------------------------

 Net earnings for the period including
 non-controlling interests 7,067 2,256
 -------------------------------------------------------------------------

 Other comprehensive income (loss)
 TRANSLATION ADJUSTMENTS
 Unrealized foreign exchange gain (loss) on
 translation of financial statements of
 self-sustaining foreign operations 1,074 (9,303)
 Share of cumulative translation adjustments of
 the Fund - (478)
 Taxes - 6
 CASH FLOW HEDGES
 Change in fair value of financial instruments (776) (5,595)
 Hedging items realized and recognized in net
 earnings 629 (1,219)
 Hedging items realized and recognized in balance
 sheet 120 1,146
 Taxes (427) 777
 LOSS ON AVAILABLE-FOR-SALE FINANCIAL ASSET
 Unrealized loss on available-for-sale financial
 asset 27 -
 -------------------------------------------------------------------------
 647 (14,666)
 -------------------------------------------------------------------------
 Comprehensive income (loss) for the period
 including non-controlling interests 7,714 (12,410)
 -------------------------------------------------------------------------
 Less: Comprehensive loss for the period
 attributable to non-controlling interests (60) (268)
 -------------------------------------------------------------------------
 Comprehensive income (loss) for the quarter
 attributable to shareholders 7,654 (12,678)
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Changes in Equity

 Attributable to shareholders
 ----------------------------------------------
 Equity
 component of
 (in thousands of dollars) Capital convertible Contributed Retained
 (unaudited) stock debentures surplus earnings
 -------------------------------------------------------------------------
 Balance - beginning of
 period 222,853 14,488 5,028 142,300
 -------------------------------------------------------------------------

 COMPREHENSIVE INCOME:
 Net earnings for the
 period - - - 7,011
 Other comprehensive
 income - - - -

 Conversion of convertible
 debentures 17 - - -
 Expense related to stock
 options - - 161 -
 -------------------------------------------------------------------------
 Balance - end of period 222,870 14,488 5,189 149,311
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 FOR THE QUARTER ENDED
 MARCH 31, 2011
 -----------------------
 Attributable to
 shareholders
 ---------------------

 Compre-
 hensive Non-
 (in thousands of dollars) income controlling Total
 (unaudited) (loss) Total interests equity
 -------------------------------------------------------------------------
 Balance - beginning of
 period (25,874) 358,795 8,894 367,689
 -------------------------------------------------------------------------

 COMPREHENSIVE INCOME:
 Net earnings for the
 period - 7,011 56 7,067
 Other comprehensive
 income 643 643 4 647

 Conversion of convertible
 debentures - 17 - 17
 Expense related to stock
 options - 161 - 161
 -------------------------------------------------------------------------
 Balance - end of period (25,231) 366,627 8,954 375,581
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------



 Attributable to shareholders
 -----------------------------------

 (in thousands of dollars) Capital Contributed Retained
 (unaudited) stock surplus earnings
 -------------------------------------------------------------------------
 Balance - beginning of
 period 222,694 4,290 105,538
 -------------------------------------------------------------------------

 COMPREHENSIVE INCOME
 (LOSS):
 Net earnings for the
 period - - 1,976
 Other comprehensive loss - - -
 Expense related to stock
 options - 198 -
 -------------------------------------------------------------------------
 Balance - end of period 222,694 4,488 107,514
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 FOR THE QUARTER ENDED
 MARCH 31, 2010
 -----------------------

 Attributable to
 shareholders
 ---------------------
 Compre-
 hensive Non-
 (in thousands of dollars) income controlling Total
 (unaudited) (loss) Total interests equity
 -------------------------------------------------------------------------
 Balance - beginning of
 period (2,344) 330,178 7,031 337,209
 -------------------------------------------------------------------------

 COMPREHENSIVE INCOME
 (LOSS):
 Net earnings for the
 period - 1,976 280 2,256
 Other comprehensive loss (14,654) (14,654) (12) (14,666)
 Expense related to stock
 options - 198 - 198
 -------------------------------------------------------------------------
 Balance - end of period (16,998) 317,698 7,299 324,997
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Cash Flows
 FOR THE QUARTERS
 ENDED MARCH 31
 -----------------------
 (in thousands of dollars)(unaudited) 2011 2010
 -------------------------------------------------------------------------

 OPERATING ACTIVITIES
 Net earnings attributable to shareholders 7,011 1,976
 Distributions received from the Fund - 1,721
 Financing costs 11,983 5,763
 Interest paid (12,404) (6,139)
 Income taxes 3,500 2,985
 Income taxes paid (1,441) (181)
 Adjustments:
 Unrealized foreign exchange loss on inter
 company advance (1,090) -
 Net loss (gain) on financial instruments 316 (560)
 Share in earnings of the Fund - 1,425
 Amortization 15,780 7,667
 Gain on sale of assets (2,377) (774)
 Other 601 637
 -------------------------------------------------------------------------
 24,059 14,520
 Change in non-cash working capital items 16,199 8,198
 -------------------------------------------------------------------------
 40,258 22,718
 -------------------------------------------------------------------------
 INVESTING ACTIVITIES
 Additions to property, plant and equipment (10,638) (20,708)
 Change in restricted cash 9,412 (94,287)
 Proceeds from sale of a subsidiary - 878
 Change in reserve funds (4) 857
 Development projects (593) (45)
 Other 43 958
 -------------------------------------------------------------------------
 (1,780) (112,347)
 -------------------------------------------------------------------------
 FINANCING ACTIVITIES
 Decrease in bank loans and advances (201) (4,427)
 Net increase in long-term debt 11,737 188,549
 Payments on long-term debt (12,062) (59,417)
 -------------------------------------------------------------------------
 (526) 124,705
 -------------------------------------------------------------------------
 TRANSLATION ADJUSTMENT ON CASH AND CASH
 EQUIVALENTS 666 (6,509)
 -------------------------------------------------------------------------
 NET CHANGE IN CASH AND CASH EQUIVALENTS 38,618 28,567
 CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 92,650 37,821
 -------------------------------------------------------------------------
 CASH AND CASH EQUIVALENTS - END OF PERIOD 131,268 66,388
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 >>

SEGMENTED INFORMATION

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 main accounting policies that apply to the individual segments are as described in note 1.

In order to assess the performance of its assets and reporting segments, Boralex uses EBITDA and cash flows from operations as performance measures. Although they are non-IFRS performance measures, management believes that these measures are widely accepted financial indicators used by investors to assess the performance of a company and its ability to generate cash through operations. Nevertheless, since these measures are not defined under IFRS, they may not be comparable to similarly named measures used by other companies.

Investors should not view EBITDA as an alternative measure to, for example, net earnings, or as a measure of operating results or cash flows, or as a parameter for measuring liquidity.

The following table reconciles EBITDA with net earnings:

 <<
 FOR THE QUARTERS
 ENDED MARCH 31
 -----------------------
 2011 2010
 -------------------------------------------------------------------------
 Net earnings attributable to shareholders 7,011 1,976
 Non-controlling interests 56 280
 Income taxes 3,500 2,985
 Net loss (gain) on financial instruments 316 (560)
 Foreign exchange loss 1,519 454
 Financing costs 11,983 5,763
 Gain on sale of assets (2,377) (774)
 Amortization 15,780 7,667
 -------------------------------------------------------------------------
 EBITDA 37,788 17,791
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 >>

Investors should not consider cash flows from operations as an alternative measure to cash flows related to operating activities, which is an IFRS measure.

The following table reconciles cash flows from operations to cash flows related to operating activities:

 <<
 FOR THE QUARTERS ENDED
 MARCH 31
 ------------------------
 2011 2010
 -------------------------------------------------------------------------
 Cash flows related to operating activities 40,258 22,718
 Cash flows provided by change in non-cash
 working capital items (16,199) (8,198)
 -------------------------------------------------------------------------

 CASH FLOWS FROM OPERATIONS 24,059 14,520
 -------------------------------------------------------------------------
 >>

Revenues are allocated to different countries by the client's country of domicile. For the quarter ended March 31, 2011, three clients (two clients as at December, 2010) accounted for more than 10% of the Corporation's revenues.

The percentage of consolidated revenues for each of these clients and the segment(s) with which they do business with are presented in the following table:

 <<
 FOR THE QUARTER ENDED
 MARCH 31, 2011
 -------------------------------------------------------------------------
 % of sales attributable to one client Segment(s)
 -------------------------------------------------------------------------
 14 Wood residue
 15 Wind power and natural gas
 24 Hydroelectric and wood residue
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 INFORMATION BY OPERATING SEGMENT

 FOR THE QUARTERS FOR THE QUARTERS
 ENDED MARCH 31 ENDED MARCH 31
 2011 2010 2011 2010
 -------------------------------------------------------------------------
 Revenues
 Power production (MWh) from energy sales
 -------------------------------------------------------------------------
 Not Not
 reviewed reviewed
 ----------------------------------------------
 Wind power stations 152,570 90,291 18,273 11,413
 Hydroelectric power
 stations 145,004 40,309 12,732 3,054
 Wood-residue thermal
 power stations 372,419 320,107 34,309 30,216
 Natural gas thermal
 power stations 82,291 22,430 16,714 6,321
 -------------------------------------------------------------------------
 752,284 473,137 82,028 51,004
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 Additions to property,
 EBITDA plant and equipment
 ----------------------------------------------
 Wind power stations 15,066 9,419 8,119 19,342
 Hydroelectric power
 stations 9,076 1,873 174 215
 Wood-residue thermal
 power stations 10,283 10,028 1,295 984
 Natural gas thermal
 power stations 7,640 2,038 4 3
 Corporate and eliminations (4,277) (5,567) 1,046 164
 -------------------------------------------------------------------------
 37,788 17,791 10,638 20,708
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------

 AS AT AS AT AS AT AS AT
 MARCH 31, DECEMBER MARCH 31, DECEMBER
 2011 31, 2010 2011 31, 2010
 -------------------------------------------------------------------------
 Total assets Long-term assets
 ----------------------------------------------
 Wind power stations 526,834 536,135 474,869 469,707
 Hydroelectric power
 stations 359,910 364,548 342,936 350,773
 Wood-residue thermal
 power stations 147,843 162,070 132,968 137,376
 Natural gas thermal
 power stations 37,758 37,974 20,117 22,619
 Corporate 165,724 145,292 62,059 60,323
 -------------------------------------------------------------------------
 1,238,069 1,246,019 1,032,949 1,040,798
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 INFORMATION BY GEOGRAPHIC SEGMENT

 FOR THE QUARTERS FOR THE QUARTERS
 ENDED MARCH 31 ENDED MARCH 31
 2011 2010 2011 2010
 -------------------------------------------------------------------------
 Revenues
 Power production (MWh) from energy sales
 -------------------------------------------------------------------------
 Not Not
 reviewed reviewed
 ----------------------------------------------
 Canada 266,747 36,828 33,594 4,435
 United States 379,699 350,992 32,548 32,137
 Europe 105,838 85,317 15,886 14,432
 -------------------------------------------------------------------------
 752,284 473,137 82,028 51,004
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 Additions to property,
 EBITDA plant and equipment
 ----------------------------------------------
 Canada 17,324 (328) 6,962 3,985
 United States 12,024 11,051 310 1,171
 Europe 8,440 7,068 3,366 15,552
 -------------------------------------------------------------------------
 37,788 17,791 10,638 20,708
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------

 AS AT AS AT AS AT AS AT
 MARCH 31, DECEMBER MARCH 31, DECEMBER
 2011 31, 2010 2011 31, 2010
 -------------------------------------------------------------------------
 Total assets Long-term assets
 ----------------------------------------------
 Canada 640,772 634,043 527,665 529,787
 United States 293,591 301,921 267,917 263,094
 Europe 303,706 310,055 237,367 247,917
 -------------------------------------------------------------------------
 1,238,069 1,246,019 1,032,949 1,040,798
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 >>

ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

The Corporation's consolidated financial statements for the quarter ended March 31, 2011 are the first consolidated financial statements prepared in accordance with IFRS.

In preparing these consolidated financial statements in accordance with IFRS 1, the Corporation has applied the mandatory exceptions and some of the elective exemptions from full retrospective application of IFRS. The Corporation's transition date is January 1, 2010.

FIRST-TIME ADOPTION OF IFRS

The Corporation has applied the following elective exemptions and mandatory exceptions:

Elective exemptions:

Business combinations

IFRS 1 provides for the retrospective or prospective application of IFRS 3R, Business Combinations, as of the date of transition. Retrospective application requires the restatement of business combinations occurring prior to the date of transition. The Corporation has elected not to apply IFRS 3R retrospectively to business combinations occurring prior to the date of transition. Accordingly, these business combinations have not been restated. Under this exemption, no adjustments have been made to the carrying amount of net assets acquired as part of business combinations prior to the date of transition and determined according to Canadian GAAP.

Cumulative translation differences included under Accumulated other comprehensive loss

Retrospective application of IFRS in this respect would require us to determine the amount of cumulative translation differences in accordance with IAS 21, The Effects of Changes in Foreign Exchange Rates, from the date at which a foreign subsidiary or an associate was formed or acquired. IFRS 1 allows cumulative translation differences to be reset at zero at the date of transition. Boralex has elected to apply this elective exemption.

Fair value as deemed cost

IFRS 1 allows an entity to measure each of its property, plant and equipment items using the fair value method ("fair value model") and designate fair value as deemed cost as at the date of transition. An entity may also elect to recalculate the original cost ("cost model") and accumulated amortization retrospectively in accordance with IAS 16, Property, Plant and Equipment. Boralex has elected to apply this cost model for property, plant and equipment.

Asset retirement obligations

Under IFRIC 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities, an entity is required to determine its liabilities to decommission, remove or restore items of property, plant and equipment in accordance with IFRS as of the acquisition date of such items. IFRS 1 allows an entity to prospectively apply the requirements set out in IFRIC 1. The Corporation has elected to measure the liability and impact of amortization prospectively as of the date of transition.

Borrowing costs

IFRS 1 provides for the retrospective or prospective application of IAS 23, Borrowing Costs, as of the date of transition. IAS 23 requires an entity to capitalize borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of the asset. A "qualifying asset" is an asset that takes a substantial period of time to prepare for its intended use or sale. The Corporation has elected not to apply IAS 23 retrospectively.

Employee benefits

IFRS 1 allows entities to retroactively apply the corridor method according to IAS 19, Employee Benefits, and not to recognize actuarial gains and losses of pension plans. IFRS 1 also allows the actuarial gains and losses to be recognized in Retained earnings as at the date of transition. Boralex has elected to recognize all actuarial gains and losses accumulated at the date of transition in Retained earnings.

Mandatory exceptions:

Hedge accounting

Hedge accounting may be applied prospectively as of the date of transition only to transactions that meet the hedge accounting criteria set out in IAS 39, Financial Instruments: Recognition and Measurement. Hedging relationships may not be designated retrospectively and the supporting documentation may not be created retrospectively. As a result, only hedging relationships that meet the hedge accounting criteria as at the transition date are recorded as hedges in the Corporation's Accumulated other comprehensive loss under IFRS. All derivatives, whether they meet IAS 39 criteria for hedge accounting or not, were fair valued and recorded in the statement of financial position.

Estimates

Hindsight is not used to create or revise estimates. Therefore, the estimates previously made by the Corporation under Canadian GAAP were not revised for the application of IFRS.

IMPACT OF TRANSITION TO IFRS

The differences between Canadian GAAP ("previous GAAP") and IFRS identified as having a significant effect on the Corporation's previously reported consolidated financial performance and financial position are summarized in the following pages.

ACQUISITION OF THE FUND

The reconciliation tables shown below present the impact of the finalization of the PPA relating to the Fund (note 4). The impact of these adjustments is shown under the PPA columns in the reconciliation of the consolidated balance sheet as at December 31, 2010 and in the reconciliations of the consolidated statement of earnings and the consolidated statement of comprehensive income for the year ended December 31, 2010.

GENERAL PRESENTATION OF THE CONSOLIDATED STATEMENT OF INCOME

As part of its IFRS conversion process, the Corporation has carried out a comprehensive review of the overall presentation of items in its consolidated statement of earnings. However, to facilitate understanding of other reconciliation items specific to IFRS conversion, the reconciliations of the consolidated statements of earnings for the periods ended March 31, 2010 and December 31, 2010 provided below have been prepared according to the old presentation.

STATEMENT OF CASH FLOWS

Under Canadian GAAP, interest paid and income taxes paid included in the determination of net earnings were disclosed separately as supplementary cash flow information. Under IFRS, interest paid and income taxes paid are included in the body of the statement of cash flows as separate line items.

 <<
 Consolidated Balance Sheets - Reconciliation
 AS AT
 JANUARY 1,
 2010
 -----------
 IFRS
 (in thousands of dollars) Canadian adjust-
 (unaudited) Note GAAP ments IFRS
 -------------------------------------------------------------------------
 ASSETS
 CURRENT ASSETS
 Cash and cash equivalents 37,821 - 37,821
 Accounts receivable 39,632 - 39,632
 Future income taxes 422 - 422
 Inventories 8,726 - 8,726
 Prepaid expenses 2,537 - 2,537
 -------------------------------------------------------------------------
 89,138 - 89,138
 Investment (e) 55,446 (9,717) 45,729
 Property, plant and equipment (d) 413,539 (832) 412,707
 Energy sales contracts 49,023 - 49,023
 Water rights 4,146 - 4,146
 Other long-term assets 52,475 - 52,475
 -------------------------------------------------------------------------
 663,767 (10,549) 653,218
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 LIABILITIES
 CURRENT LIABILITIES
 Bank loans and advances 12,291 - 12,291
 Accounts payable and
 accrued liabilities (a),(b) 28,913 2,885 31,798
 Income taxes payable 283 - 283
 Current portion of
 long-term debt 24,273 - 24,273
 -------------------------------------------------------------------------
 65,760 2,885 68,645
 Long-term debt 206,116 - 206,116
 Future income taxes (a),(b),(d),
 (e),(f) 37,185 (3,582) 33,603
 Fair value of
 derivative financial
 instruments 7,645 - 7,645
 -------------------------------------------------------------------------
 316,706 (697) 316,009
 -------------------------------------------------------------------------

 EQUITY ATTRIBUTABLE
 TO SHAREHOLDERS
 Capital stock 222,694 - 222,694
 Contributed surplus (f) 4,295 (5) 4,290
 Retained earnings (a),(b),(c),
 (d),(e),(f) 159,900 (54,362) 105,538
 Accumulated other
 comprehensive income
 (loss) (c) (46,859) 44,515 (2,344)
 -------------------------------------------------------------------------
 340,030 (9,852) 330,178
 Non-controlling interests 7,031 - 7,031
 -------------------------------------------------------------------------
 Total equity 347,061 (9,852) 337,209
 -------------------------------------------------------------------------
 663,767 (10,549) 653,218
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Balance Sheets - Reconciliation
 AS AT
 DECEMBER
 31, 2010
 -----------
 Adjustments
 (in thousands of Canadian -----------------------
 dollars)(unaudited) Note GAAP PPA IFRS IFRS
 -------------------------------------------------------------------------
 ASSETS

 CURRENT ASSETS
 Cash and cash
 equivalents 92,650 - - 92,650
 Restricted cash 15,924 - - 15,924
 Accounts receivable 60,420 - - 60,420
 Available-for-sale
 financial asset 21,508 1,743 - 23,251
 Future income taxes 512 - - 512
 Inventories 9,179 - - 9,179
 Prepaid expenses 2,516 - - 2,516
 Fair value of
 derivative
 financial
 instruments 769 - - 769
 -------------------------------------------------------------------------
 203,478 1,743 - 205,221
 Property, plant
 and equipment (d) 810,700 (71,275) (541) 738,884
 Energy sales
 contracts (a),(d) 100,673 5,436 (2,115) 103,994
 Water rights 2,925 110,090 - 113,015
 Other long-term
 assets 44,774 2,068 - 46,842
 Goodwill (i) 70,721 (9,500) (23,158) 38,063
 -------------------------------------------------------------------------
 1,233,271 38,562 (25,814) 1,246,019
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 LIABILITIES

 CURRENT LIABILITIES
 Bank loans and advances 195 - - 195
 Accounts payable
 and accrued
 liabilities (a),(b) 58,815 - 743 59,558
 Income taxes
 payable 3,209 - - 3,209
 Fair value of
 derivative
 financial
 instruments 183 - - 183
 Current portion
 of long-term
 debt 34,033 - - 34,033
 -------------------------------------------------------------------------
 96,435 - 743 97,178
 Long-term debt 479,546 - - 479,546
 Convertible
 debentures 220,824 - - 220,824
 Future income
 taxes (a),(b),
 (d),(e),
 (f),(h),
 (i) 47,949 38,174 (19,156) 66,967
 Fair value of
 derivative
 financial
 instruments 10,834 - - 10,834
 Long-term lease
 accruals 2,981 - - 2,981
 -------------------------------------------------------------------------
 858,569 38,174 (18,413) 878,330
 -------------------------------------------------------------------------

 EQUITY ATTRIBUTABLE
 TO SHAREHOLDERS
 Capital stock 222,853 - - 222,853
 Equity component
 of convertible
 debentures (h) 19,537 - (5,049) 14,488
 Contributed
 surplus (f) 5,527 - (499) 5,028
 Retained earnings (a),(b),
 (c),(d),
 (e),(f),
 (g),(i) 184,690 388 (42,778) 142,300
 Accumulated
 other comprehensive
 income (loss) (c),(g) (66,799) - 40,925 (25,874)
 -------------------------------------------------------------------------
 365,808 388 (7,401) 358,795
 Non-controlling
 interests 8,894 - - 8,894
 -------------------------------------------------------------------------
 Total equity 374,702 388 (7,401) 367,689
 -------------------------------------------------------------------------
 1,233,271 38,562 (25,814) 1,246,019
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Earnings - Reconciliation

 FOR THE
 QUARTER
 ENDED
 MARCH 31,
 2010
 -----------
 (in thousands of dollars,
 except per share amounts IFRS
 and number of shares) Canadian adjust-
 (unaudited) Note GAAP ments IFRS
 -------------------------------------------------------------------------
 Revenues from energy sales 51,004 - 51,004
 Operating costs 27,019 - 27,019
 -------------------------------------------------------------------------
 23,985 - 23,985

 Share in earnings of the
 Fund (e) (1,461) 36 (1,425)
 Management revenues from
 the Fund 1,755 - 1,755
 Other income 300 - 300
 -------------------------------------------------------------------------
 24,579 36 24,615
 -------------------------------------------------------------------------
 OTHER EXPENSES
 Management and operation
 of the Fund 1,505 - 1,505
 Development 1,613 - 1,613
 Administrative (f) 3,829 (123) 3,706
 -------------------------------------------------------------------------
 6,947 (123) 6,824
 -------------------------------------------------------------------------
 OPERATING INCOME 17,632 159 17,791

 Amortization (d) 7,698 (31) 7,667
 Foreign exchange loss (g) 876 (422) 454
 Net gain on financial
 instruments (560) - (560)
 Financing costs 5,763 - 5,763
 Gain on sale of subsidiary (774) - (774)
 -------------------------------------------------------------------------
 13,003 (453) 12,550
 -------------------------------------------------------------------------
 EARNINGS BEFORE INCOME
 TAXES AND NON-CONTROLLING
 INTERESTS 4,629 612 5,241
 Income taxes (d)(e)(f) 3,001 (16) 2,985
 -------------------------------------------------------------------------
 Net earnings including
 non-controlling interests 1,628 628 2,256
 Non-controlling interests (280) - (280)
 -------------------------------------------------------------------------

 NET EARNINGS ATTRIBUTABLE
 TO SHAREHOLDERS 1,348 628 1,976
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------

 Net earnings per Class A
 share (basic and diluted) $ 0.04 $ 0.05
 Weighted average number of
 Class A shares outstanding
 (basic) 37,740,921 37,740,921
 Weighted average number of
 Class A shares outstanding
 (diluted) 37,910,184 37,910,184
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Earnings - Reconciliation
 FOR THE
 YEAR ENDED
 DECEMBER
 31, 2010
 ------------

 (in thousands of
 dollars, except per Adjustments
 share amounts and ------------------------
 number of shares) Canadian
 (unaudited) Note GAAP PPA IFRS IFRS
 -------------------------------------------------------------------------
 Revenues from
 energy sales 202,864 - - 202,864
 Operating costs 115,568 - - 115,568
 -------------------------------------------------------------------------
 87,296 - - 87,296
 Share in earnings
 of the Fund (e) (3,251) - 103 (3,148)
 Management revenues
 from the Fund 4,437 - - 4,437
 Other income 718 - - 718
 -------------------------------------------------------------------------
 89,200 - 103 89,303
 -------------------------------------------------------------------------
 OTHER EXPENSES
 Management and
 operation of the
 Fund 3,995 - - 3,995
 Development 4,214 - - 4,214
 Administrative (f) 17,025 - (494) 16,531
 -------------------------------------------------------------------------
 25,234 - (494) 24,740
 -------------------------------------------------------------------------
 OPERATING INCOME 63,966 - 597 64,563

 Amortization (d) 40,658 (571) (272) 39,815
 Foreign exchange loss (g) 4,298 - (3,604) 694
 Net loss on financial
 instruments 247 - - 247
 Financing costs 24,104 - - 24,104
 Impairment of goodwill (i) - - 23,158 23,158
 Net gain on deemed
 disposal of
 investment
 in the Fund (i) (15,130) - (9,614) (24,744)
 Gain on sale of
 subsidiary (774) - - (774)
 -------------------------------------------------------------------------
 53,403 (571) 9,668 62,500
 -------------------------------------------------------------------------

 EARNINGS BEFORE
 INCOME TAXES AND
 NON-CONTROLLING
 INTERESTS 10,563 571 (9,071) 2,063
 Recovery of income
 taxes (d),(e),
 (f),(i) (12,738) 183 (20,655) (33,210)
 -------------------------------------------------------------------------
 Net earnings
 including
 non-controlling
 interests 23,301 388 11,584 35,273
 Non-controlling
 interests (201) - - (201)
 -------------------------------------------------------------------------

 NET EARNINGS
 ATTRIBUTABLE TO
 SHAREHOLDERS 23,100 388 11,584 35,072
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------

 Net earnings per
 Class A share
 (basic and diluted) $ 0.61 $ 0.93
 Weighted average
 number of Class A
 shares outstanding
 (basic) 37,741,916 37,741,916
 Weighted average
 number of Class A
 shares outstanding
 (diluted) 37,860,092 37,860,092
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Comprehensive Loss - Reconciliation

 FOR THE
 QUARTER
 ENDED
 MARCH
 31, 2010
 ------------
 (in thousands of IFRS
 dollars) Canadian adjust-
 (unaudited) Note GAAP ments IFRS
 -------------------------------------------------------------------------
 Net earnings for the period
 including non-controlling
 interests 1,628 628 2,256
 -------------------------------------------------------------------------
 Other comprehensive loss
 TRANSLATION ADJUSTMENTS
 Unrealized foreign
 exchange loss on
 translation of
 financial statements
 of self-sustaining
 foreign operations (9,300) 9 (9,291)
 Reclassification to net
 earnings of a realized
 foreign exchange loss
 related to the
 reduction of net
 investment in
 self-sustaining foreign
 operations (g) 422 (422) -
 Share of cumulative
 translation adjustments
 of the Fund (478) - (478)
 Taxes 6 - 6
 CASH FLOW HEDGES
 Change in fair value of
 financial instruments (5,595) - (5,595)
 Hedging items realized
 and recognized in net
 earnings (1,219) - (1,219)
 Hedging items realized
 and recognized in
 balance sheet 1,146 - 1,146
 Taxes 777 - 777
 -------------------------------------------------------------------------
 (14,241) (413) (14,654)
 -------------------------------------------------------------------------
 Comprehensive loss for the
 period including
 non-controlling interests (12,613) 215 (12,398)
 -------------------------------------------------------------------------
 Less: Loss for the period
 attributable to
 non-controlling interests (280) - (280)
 -------------------------------------------------------------------------
 Comprehensive loss for the
 period attributable to
 shareholders (12,893) 215 (12,678)
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Comprehensive Income - Reconciliation

 FOR THE YEAR
 ENDED
 DECEMBER 31,
 2010
 ------------

 Adjustments
 (in thousands of ------------------------
 dollars) Canadian
 (unaudited) Note GAAP PPA IFRS IFRS
 -------------------------------------------------------------------------
 Net earnings for
 the year including
 non-controlling
 interests 23,301 388 11,584 35,273
 -------------------------------------------------------------------------

 Other comprehensive
 income (loss)
 TRANSLATION
 ADJUSTMENTS
 Unrealized
 foreign exchange
 loss on
 translation of
 financial
 statements of
 self-sustaining
 foreign
 operations (15,537) - 14 (15,523)
 Reclassification
 to net earnings
 of a realized
 foreign exchange
 loss related to
 the reduction of
 net investment in
 self-sustaining
 foreign operations (g) 3,604 - (3,604) -
 Taxes (179) - - (179)
 CASH FLOW HEDGES
 Change in fair
 value of financial
 instruments (11,028) - - (11,028)
 Hedging items
 realized and
 recognized in net
 earnings (5,554) - - (5,554)
 Hedging items
 realized and
 recognized in
 balance sheet 5,652 - - 5,652
 Taxes 3,829 - - 3,829
 LOSS ON AVAILABLE-
 FOR-SALE FINANCIAL
 ASSET
 Unrealized loss on
 available-for-sale
 financial asset (727) - - (727)
 -------------------------------------------------------------------------
 (19,940) - (3,590) (23,530)
 -------------------------------------------------------------------------
 Comprehensive income
 for the year including
 non-controlling
 interests 3,361 388 7,994 11,743
 -------------------------------------------------------------------------
 Less: Loss for the year
 attributable to
 non-controlling
 interests (201) - - (201)
 -------------------------------------------------------------------------
 Comprehensive income for
 the year attributable
 to shareholders 3,160 388 7,994 11,542
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Equity - Reconciliation

 Adjustments
 ------------------------------------
 (in thousands of dollars) Contributed Retained
 (unaudited) Note surplus earnings Results
 -------------------------------------------------------------------------
 Total equity according
 to Canadian GAAP
 -------------------------------------------------------------------------
 IFRS ADJUSTMENTS:
 Stock-based compensation
 over the vesting period (f) (5) 7 -
 Amortization of property,
 plant and equipment and
 intangible assets (d) - (579) -
 Investment in the Fund (e) - (7,151) -
 Foreign exchange impact: -
 Reversal of cumulative
 translation differences
 for all foreign
 operations as at the
 date of transition (c) - (44,515) -
 Business combinations
 - additional consideration (a) - (2,092) -
 Employee benefits -
 actuarial loss (b) - (32) -
 -------------------------------------------------------------------------
 (5) (54,362) -
 -------------------------------------------------------------------------
 Total equity according to IFRS
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 AS AT
 JANUARY
 1, 2010
 ------------
 Adjustments
 ------------
 Comprehen-
 (in thousands of dollars) sive Total
 (unaudited) Note income equity
 -------------------------------------------------------------------------
 Total equity according
 to Canadian GAAP 347,061
 -------------------------------------------------------------------------
 IFRS ADJUSTMENTS:
 Stock-based compensation
 over the vesting period (f) - 2
 Amortization of property,
 plant and equipment and
 intangible assets (d) - (579)
 Investment in the Fund (e) - (7,151)
 Foreign exchange impact: - -
 Reversal of cumulative
 translation differences
 for all foreign
 operations as at the
 date of transition (c) 44,515 -
 Business combinations
 - additional consideration (a) - (2,092)
 Employee benefits -
 actuarial loss (b) - (32)
 -------------------------------------------------------------------------
 44,515 (9,852)
 -------------------------------------------------------------------------
 Total equity according to IFRS 337,209
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Equity - Reconciliation

 Adjustments
 ------------------------------------
 (in thousands of dollars) Contributed Retained
 (unaudited) Note surplus earnings Results
 -------------------------------------------------------------------------
 Total equity according to
 Canadian GAAP
 -------------------------------------------------------------------------
 IFRS ADJUSTMENTS:
 Stock-based
 compensation over the vesting
 period (f) (128) 7 156
 Amortization of property,
 plant and equipment and
 intangible assets (d) - (579) 24
 Investment in the Fund (e) - (7,151) 26
 Foreign exchange impact: -
 Reversal of cumulative
 translation differences
 for all foreign operations
 as at the date of transition (c) - (44,515) -
 Reversal of reclassifications
 of translation adjustments to
 net earnings (g) - - 422
 Business combinations -
 additional consideration (a) - (2,092) -
 Employee benefits - actuarial
 loss (b) - (32) -
 Other (1) - -
 -------------------------------------------------------------------------
 (129) (54,362) 628
 -------------------------------------------------------------------------
 Total equity according to IFRS
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 AS AT
 MARCH
 31, 2010
 ------------
 Adjustments
 ------------
 Comprehen-
 sive
 (in thousands of dollars) income Total
 (unaudited) (loss) equity
 -------------------------------------------------------------------------
 Total equity according to Canadian GAAP 334,758
 -------------------------------------------------------------------------
 IFRS ADJUSTMENTS:
 Stock-based
 compensation over the vesting
 period (f) - 35
 Amortization of property,
 plant and equipment and
 intangible assets (d) - (555)
 Investment in the Fund (e) - (7,125)
 Foreign exchange impact: -
 Reversal of cumulative
 translation differences
 for all foreign operations
 as at the date of transition (c) 44,515 -
 Reversal of reclassifications
 of translation adjustments to
 net earnings (g) (422) -
 Business combinations -
 additional consideration (a) - (2,092)
 Employee benefits - actuarial
 loss (b) - (32)
 Other 9 8
 -------------------------------------------------------------------------
 44,102 (9,761)
 -------------------------------------------------------------------------
 Total equity according to IFRS 324,997
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 Consolidated Statements of Equity - Reconciliation

 Adjustments
 -----------------------------------
 Equity
 component
 of
 (in thousands of dollars) convertible Contributed Retained
 (unaudited) Note debentures surplus earnings
 -------------------------------------------------------------------------
 Total equity according to
 Canadian GAAP
 PPA adjustments
 -------------------------------------------------------------------------

 IFRS ADJUSTMENTS:
 Stock-based compensation over
 the vesting period (f) - (499) 7
 Amortization of property, plant
 and equipment and intangible
 assets (d) - - (579)
 Investment in the Fund (e) - - (7,151)
 Foreign exchange impact:
 Reversal of cumulative
 translation differences for
 all foreign operations as
 at the date of transition (c) - - (44,515)
 Reversal of reclassifications
 of translation adjustments
 to net earnings (g) - - -
 Business combinations -
 additional consideration (a) - - (2,092)
 Employee benefits - actuarial
 loss (b) - - (32)
 Future income taxes on the
 liability component of
 convertible debentures (h) (5,049) - -
 Other - - -
 -------------------------------------------------------------------------
 (5,049) (499) (54,362)
 -------------------------------------------------------------------------
 Total equity according to IFRS
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------


 AS AT
 DECEMBER
 31, 2010
 ------------
 Adjustments
 -----------------------
 Comprehen
 -sive
 (in thousands of dollars) income Total
 (unaudited) Note Results (loss) equity
 -------------------------------------------------------------------------
 Total equity according to
 Canadian GAAP 374,702
 PPA adjustments 388
 -------------------------------------------------------------------------
 375,090
 IFRS ADJUSTMENTS:
 Stock-based compensation over
 the vesting period (f) 624 - 132
 Amortization of property, plant
 and equipment and intangible
 assets (d) 233 - (346)
 Investment in the Fund (e) 7,151 - -
 Foreign exchange impact:
 Reversal of cumulative
 translation differences for
 all foreign operations as
 at the date of transition (c) - 44,515 -
 Reversal of reclassifications
 of translation adjustments
 to net earnings (g) 3,604 (3,604) -
 Business combinations -
 additional consideration (a) - - (2,092)
 Employee benefits - actuarial
 loss (b) - - (32)
 Future income taxes on the
 liability component of
 convertible debentures (h) - - (5,049)
 Other (28) 14 (14)
 -------------------------------------------------------------------------
 11,584 40,925 (7,401)
 -------------------------------------------------------------------------
 Total equity according to IFRS 367,689
 -------------------------------------------------------------------------
 -------------------------------------------------------------------------
 >>

NOTES TO THE RECONCILIATIONS

(a) Business Combinations

Under Canadian GAAP, additional consideration related to business combinations is recognized as an adjustment to the acquisition entry when such consideration is paid. Under IFRS, additional consideration is recognized at fair value at the time of the acquisition. Subsequent changes are recognized through income for the period.

On January 1, 2010, the Corporation recognized an additional consideration payable in the amount of $2,842,000, including related taxes of $750,000, in connection with the acquisition of the Thames River wind power sites in Ontario. An offsetting amount of $2,092,000 was charged to Retained earnings.

In the third quarter of 2010, the Corporation paid a portion of this additional consideration. As a result, a reversal of $2,142,000 was recorded in power sales contracts regarding the additional payable. A balance amount of $700,000 is payable.

(b) Employee Benefits

In accordance with the elective exemption provided for in IFRS 1, the Corporation has elected to recognize all actuarial gains and losses not recognized in its defined benefit pension plans. On January 1, 2010, the Corporation recognized actuarial losses in the amount of $43,000, including related taxes of $11,000. An offsetting amount of $32,000 was charged to Retained earnings.

(c) Cumulative Translation Adjustments Included Under Accumulated Other Comprehensive Income

In accordance with the elective exemption provided for in IFRS 1, the Corporation elected to reset at zero all cumulative translation gains and losses related to its foreign operations. As a result, an amount of $44,515,000 was transferred to Retained earnings as at the date of transition.

(d) Property, Plant and Equipment and Intangible Assets

Impairment Test

Under Canadian GAAP, an impairment loss is recognized only when the net carrying amount of an asset exceeds total undiscounted future cash flows. Under IFRS, an impairment loss is recognized only when the net carrying amount of an asset exceeds total discounted future cash flows. On January 1, 2010, Boralex tested its property, plant and equipment and energy sales contracts for impairment but no impairment charge was recognized.

Amortization Method

The Québec power stations with long-term sales contracts are amortized by component using the straight-line method according to IFRS. Under GAAP, they were amortized using the compound interest method at a rate of 3%. In addition, new components were identified according to IFRS and amortized separately.

These adjustments have the following impacts:

 <<
 As at January 1, 2010:
 Property, plant and equipment ($832,000)
 Future income tax liabilities ($253,000)
 Retained earnings ($579,000)

 Quarter ended March 31, 2010:
 Property, plant and equipment $31,000
 Future income tax liabilities $7,000
 Retained earnings $24,000

 Amortization expense ($31,000)
 Income tax expense $7,000

 Year ended December 31, 2010:
 Property, plant and equipment $245,000
 Energy sales contracts $27,000
 Future income tax liabilities $39,000
 Retained earnings $233,000

 Amortization expense ($272,000)
 Income tax expense $39,000
 >>

(e) Investment

Impairment Test

Under Canadian GAAP, an impairment loss is recognized only when the net carrying amount of an asset exceeds total undiscounted future cash flows. Under IFRS, an impairment loss is recognized only when the net carrying amount of an asset exceeds total discounted future cash flows. On January 1, 2010, the Fund tested its property, plant and equipment and intangible assets for impairment, based on these CGU. Subsequently, the Fund recognized an impairment loss of $55,072,000 for the property, plant and equipment at the Senneterre power station. As the Corporation's share in the Fund was 23.3%, the share of the impairment loss is equivalent to a $12,832,000 decrease in the investment, including related taxes amounting to $3,388,000.

This impairment charge was made as discounted future cash flows of this power station over the long term did not match the current value of the property plant and equipment. To perform the impairment test, the recoverable amount of the Senneterre power station was determined using the calculated value in use. The value in use was calculated using cash flow projections based on financial forecasts up to the expiry date of the power sales contract, which is 2026. Pre-tax cash flows were discounted using a real pre-tax discount rate of 12.14%.

Amortization Method

The Fund changed its accounting treatment for property, plant and equipment and intangible assets. The Québec power stations with long-term sales contracts are amortized by component using the straight-line method according to IFRS while, under Canadian GAAP, they were amortized using the compound interest method at a rate of 3%. In addition, new components were identified according to IFRS and amortized separately. The impact of these changes, net of the deferred gain, was a $3,115,000 increase in the investment in the Fund, based on the Corporation's 23.3% share in the Fund. The related taxes amounted to $822,000.

These adjustments following the impairment test and the change in the amortization method have the following impacts:

 <<
 As at January 1, 2010:

 Investment ($9,717,000)
 Future income tax liabilities ($2,566,000)
 Retained earnings ($7,151,000)

 Quarter ended March 31, 2010:
 Investment $36,000
 Future income tax liabilities $10,000
 Retained earnings $26,000

 Share in earnings of the Fund ($36,000)
 Income tax expense $10,000

 Year ended December 31, 2010:
 Investment $103,000
 Future income tax liabilities $17,000
 Retained earnings $86,000

 Share in earnings of the Fund ($103,000)
 Income tax expense $17,000
 >>

(f) Stock-Based Compensation

Under GAAP, the Corporation recognized its stock-based compensation expense on a straight-line basis while IFRS requires the expense to be recognized over the vesting period of each tranche.

These adjustments have the following impacts:

 <<
 As at January 1, 2010:
 Future income tax liabilities ($2,000)
 Contributed surplus ($5,000)
 Retained earnings $7,000

 Quarter ended March 31, 2010:
 Future income tax liabilities ($33,000)
 Contributed surplus ($123,000)
 Retained earnings $156,000

 Compensation expense ($123,000)
 Income tax expense ($33,000)

 Year ended December 31, 2010:
 Future income tax liabilities ($130,000)
 Contributed surplus ($494,000)
 Retained earnings $624,000

 Compensation expense ($494,000)
 Income tax expense ($130,000)

 (g) Foreign Exchange Impact
 >>

Under Canadian GAAP, when an entity makes a partial repayment of long-term intercompany advances considered as part of its net investment in a foreign subsidiary, a proportional amount of cumulative translation adjustments is recognized through earnings for the period. Under IFRS, an entity recognizes cumulative translation adjustments through earnings for the period only if there is a disposal of substantially all of its net investment in the foreign subsidiary.

These adjustments have the following impacts:

 <<
 Quarter ended March 31, 2010:
 Retained earnings $422,000
 Accumulated other comprehensive income ($422,000)

 Foreign exchange gain ($422,000)

 Year ended December 31, 2010:
 Retained earnings $3,604,000
 Accumulated other comprehensive income ($3,604,000)

 Foreign exchange gain ($3,604,000)
 >>

(h) Tax on on Convertible Debentures and imputed interest

Under Canadian GAAP, temporary differences between the liability component of convertible debentures and the underlying tax basis are not recognized as future income taxes. Under IFRS, future income taxes are recognized for such temporary differences. Accordingly, future income taxes were recognized in respect of the equity component of convertible debentures.

These adjustments have the following impacts:

 <<
 Year ended December 31, 2010:
 Future income tax liabilities $5,049,000
 Equity component of convertible debentures ($5,049,000)
 >>

(i) Investment in the Fund

The Fund's earnings have been consolidated as of September 15, 2010 with a share of non-controlling interests up to October 30, 2010. The acquisition of the Fund was carried out in two steps: (1) deemed disposal of the Corporation's interest in the Fund and calculation of the gain on the disposal, and (2) acquisition of all the units of the Fund at fair value and finalizing the allocation of the purchase price. The transactions under step 1 were recalculated under IFRS. The results of step 2 only impacted the PPA. To calculate the income taxes relating to the PPA, the Corporation used a tax rate specific to the tax structure of the Fund at the time of the acquisition without considering the future distributions anticipated by management, in accordance with IFRS. On November 2, 2010, the Corporation carried out a reorganization of the tax structure of the Fund, including its initial operations, and remeasured its future income tax balances using the new income tax rate. Due to this reorganization, the Corporation performed an impairment test on the goodwill and subsequently recognized an impairment loss of $23,158,000 in relation to goodwill. These adjustments have the following impacts:

 <<
 Year ended December 31, 2010:
 Deemed disposal of Boralex's investment in the Fund and calculation of
 ----------------------------------------------------------------------
 the gain on disposal:
 ---------------------
 Investment (reversal of IFRS adjustments) ($9,614,000)
 Future income tax liabilities $2,577,000
 Retained earnings $7,037,000

 Net gain on deemed disposal of investment in the Fund ($9,614,000)
 Income tax expense $2,577,000

 Impairment of goodwill and recovery of taxes:
 ---------------------------------------------
 Goodwill ($23,158,000)
 Future income tax liabilities ($23,158,000)

 Income tax expense ($23,158,000)
 Impairment of goodwill $23,158,000
 >>

For further information: Ms. Patricia Lemaire, Director, Publics Affairs and Communications, Boralex Inc., 514-985-1353, patricia.lemaire@boralex.com