Boralex Power Income Fund: Operating Results Up in 2008

MONTREAL, Feb. 20 /PRNewswire-FirstCall/ – Boralex Power Income Fund (the “Fund”) reports better operating results in 2008 than in 2007.

For the fiscal year ended December 31, 2008, revenue from the sale of energy rose to $109.3 million and earnings before interest, taxes, depreciation and amortization (EBITDA) to $57.7 million, for an increase of $7.1 million and $2.5 million respectively compared to fiscal 2007. Growth stems mainly from higher electricity and steam selling prices and increased power generation by the hydroelectric segment.

As at December 31, 2008, revenue from the hydroelectric segment amounted to $47.2 million, up a substantial 16.5% compared to the same period a year earlier. Favourable hydrology, particularly in the first quarter and second semester of 2008, had a positive impact on power generation at the Fund’s U.S. and Canadian facilities, which exceeded their historical averages.

In the wood residue segment, fiscal 2008 closed with revenues of $31.8 million, down 10.9% from 2007. The wood-residue thermal power stations generated EBITDA of $9.3 million as at December 31, 2008, compared to $16.5 million at the same date a year earlier. The lower figures are primarily due to the higher raw material costs and temporary downtime at the Dolbeau and Senneterre plants. These two plants have, however, been back in operation since mid-November, in time to benefit from capacity premiums.

The natural gas cogeneration plant earned revenue of $30.3 million in 2008, up 17.0% year over year, due primarily to increased power generation and index-linked electricity and steam selling prices. EBITDA rose to $14.8 million, up 18.4% from last year due to higher selling prices and capacity premiums.

Despite the world economic crisis, the nature of the Fund’s fixed-price contracts and the quality of its assets allow for a positive outlook for 2009. The wood-residue supply situation is an ongoing concern and the Fund will continue to regularly assess the situation to ensure it finds the best operational strategy for its facilities.

Note that in the fourth quarter 2008, the Fund recorded a non-cash $33.9 million impairment of goodwill and intangible assets of the Dolbeau facility. As a result, the Fund recorded a net loss of $5.8 million ($0.10 per trust unit) for fiscal 2008, compared to a net loss of $35.7 million ($0.60 per trust unit) for fiscal 2007. Excluding these items and an amount of $7.6 million of future income tax related to Canadian public trusts, the Fund would have generated net earnings of $20.5 million ($0.35 per unit).

About Boralex Power Income Fund

Boralex Power Income Fund is an unincorporated open-ended trust that indirectly owns ten power generating stations located in the province of Quebec and the United States producing energy from different sources including wood-residue or natural gas-fired thermal and cogenerating facilities as well as hydroelectric power stations. In total, these power stations have an installed capacity of 190 MW. The Fund’s units are listed for trading on The Toronto Stock Exchange under the symbol BPT.UN.

Certain statements in this release, including statements 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 effect of general economic conditions, decreased demand for the Fund’s products, availability of raw materials and increases in their cost, hydrology, fluctuations in currency exchange rates, fluctuations in sales prices and adverse changes in general market and industry conditions. The financial statements included in this press release also contain certain financial measurements that are not recognized as generally accepted accounting principles (GAAP).

The Fund uses EBITDA, among other measures, as a performance measure with respect to its operations. This term is not a defined financial measure according to Canadian generally accepted accounting principles (GAAP) and it does not have a standardized meaning prescribed by GAAP. Therefore, this measure may not be comparable to similar measures presented by other enterprises. EBITDA is defined in the excerpts from the financial statements appended to this press release.

    Notice to unitholders

    These quarterly financial statements for the periods ended December 31,
2008 and 2007 were not reviewed by our auditors Ernst & Young LLP. The
financial statements are the responsibility of the Manager of Boralex Power
Income Fund, and were reviewed and approved by Boralex Power Trust's trustees
and the members of their audit committee.

    Boralex Power Income Fund
    Consolidated Balance Sheets
    (in thousands of dollars)
    (unaudited)
                                                         As at         As at
                                                   December 31,  December 31,
                                                          2008          2007
    -------------------------------------------------------------------------

    Assets

    Current assets
    Cash and cash equivalents                           18,846        10,740
    Accounts receivable                                 17,610        13,333
    Income taxes receivable                                  -         1,949
    Inventories                                          2,953         2,405
    Prepaid expenses                                       945         1,248
    -------------------------------------------------------------------------
                                                        40,354        29,675

    Property, plant and equipment                      376,316       367,474
    Intangible assets                                   66,990        83,690
    Goodwill                                                 -        16,243
    Other long-term assets                               5,552         8,594
    -------------------------------------------------------------------------
                                                       489,212       505,676
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and unitholders' equity

    Current liabilities
    Short-term revolving credit facility                     -         2,300
    Accounts payable and accrued liabilities            13,985         8,909
    Income taxes payable                                   400             -
    Distributions payable to unitholders                 3,446         4,430
    Current portion of obligation under capital
     lease                                                  20           233
    -------------------------------------------------------------------------
                                                        17,851        15,872

    Future income tax liabilities                       43,280        48,817
    Fair value of derivative financial instruments         233             5
    Long-term debt                                     119,191       102,529
    Long-term lease accruals                             2,773         1,858
    -------------------------------------------------------------------------
                                                       183,328       169,081
    -------------------------------------------------------------------------

    Unitholders' equity
    Capital contribution                               422,174       422,174
    Capital contribution - exchangeable Class B
     units                                             112,867       112,867
    Deficit                                           (220,137)     (170,982)
    Accumulated other comprehensive loss                (9,020)      (27,464)
    -------------------------------------------------------------------------
                                                       305,884       336,595
    -------------------------------------------------------------------------
                                                       489,212       505,676
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Boralex Power Income Fund
    Consolidated Statements of Earnings
    (in thousands of dollars, except amounts per unit)
    (unaudited)
                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31,      ended December 31,
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------

    Revenues                      25,975      24,544     109,343     102,168
    -------------------------------------------------------------------------

    Expenses
    Operating                     12,234      11,642      47,452      43,580
    Administrative                 1,274         510       4,167       3,347
    -------------------------------------------------------------------------
                                  13,508      12,152      51,619      46,927
    -------------------------------------------------------------------------
    Operating income before
     amortization                 12,467      12,392      57,724      55,241
    Amortization of property,
     plant and equipment           4,934       3,548      18,895      14,998
    Amortization of intangible
     assets                        1,993       1,592       7,543       7,068
    -------------------------------------------------------------------------
    Operating income               5,540       7,252      31,286      33,175
    Financial expenses, net        2,324       1,720       7,740       6,778
    Foreign exchange loss
     (gain)                          587       1,217      (1,540)      4,072
    Change in fair value of
     derivative financial
     instruments                      (5)         (2)         (5)        (33)
    Impairment of goodwill        16,243      13,997      16,243      13,997
    Impairment of intangible
     assets                       17,724           -      17,724           -
    -------------------------------------------------------------------------
    Earnings (loss) before
     income taxes                (31,333)     (9,680)     (8,876)      8,361
    Income taxes (recovery)       (2,199)     (4,138)     (3,037)     44,054
    -------------------------------------------------------------------------
    Net loss for the period      (29,134)     (5,542)     (5,839)    (35,693)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted net
     loss per trust unit (in
     dollars)                      (0.49)      (0.09)      (0.10)      (0.60)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number
     of trust units
     outstanding              59,067,992  59,067,992  59,067,992  59,067,992
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Consolidated Statements of Deficit
    (in thousands of dollars)
    (unaudited)
                                                For the twelve-month periods
                                                           ended December 31,
                                                          2008          2007
    -------------------------------------------------------------------------

    Deficit - beginning of period                     (170,982)      (82,128)
    Net loss for the period                             (5,839)      (35,693)
    Distributions to unitholders                       (43,316)      (53,161)
    -------------------------------------------------------------------------

    Deficit - end of period                           (220,137)     (170,982)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Consolidated Statements of Comprehensive Income
    (in thousands of dollars)
    (unaudited)
                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31,      ended December 31,
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------

    Net loss for the period      (29,134)     (5,542)     (5,839)    (35,693)

    Other comprehensive income
     (loss) :

    Translation adjustments
    Unrealized foreign exchange
     gains (losses) on
     translation of the
     financial statements of
     self-sustaining foreign
     operations                   13,714        (575)     19,658     (17,445)

    Reclassification of
     accumulated foreign
     exchange losses on
     translation of financial
     statements of
     self-sustaining foreign
     operations following a
     reduction in net
     investment                      994       1,938       1,075       6,858

    Future income taxes              947         (49)      1,356      (1,019)

    Hedging of net investment
     in self-sustaining foreign
     operations
    Change in fair value of
     derivative instruments
     designated as hedges of
     net investment in
     self-sustaining foreign
     operations                     (628)        (42)       (904)      2,165

    Hedging items realized and
     recognized in net earnings     (309)       (585)     (2,741)     (2,141)
    -------------------------------------------------------------------------
                                  14,718         687      18,444     (11,582)
    -------------------------------------------------------------------------
    Comprehensive income (loss)
     for the period              (14,416)     (4,855)     12,605     (47,275)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Boralex Power Income Fund
    Consolidated Statements of Cash Flows
    (in thousands of dollars)
    (unaudited)
                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31,      ended December 31,
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------

    Operating activities
    Net loss for the period      (29,134)     (5,542)     (5,839)    (35,693)
    Items not affecting cash:
      Amortization of property,
       plant and equipment         4,934       3,548      18,895      14,998
      Amortization of
       intangible assets           1,993       1,592       7,543       7,068
      Amortization of deferred
       financing costs                93           3         341         320
      Long-term lease accruals       115          94         411         425
      Future income taxes         (2,864)     (5,010)     (5,373)     42,127
      Realized currency
       translation adjustments     1,002       1,938       1,083       6,858
      Impairment of goodwill      16,243      13,997      16,243      13,997
      Impairment of intangible
       assets                     17,724           -      17,724           -
      Other                           55          (2)        169         184
    -------------------------------------------------------------------------
                                  10,161      10,618      51,197      50,284
    Net change in non-cash
     working capital balances       (233)     (1,197)      2,703      (4,018)
    -------------------------------------------------------------------------
    Cash flows related to
     operating activities          9,928       9,421      53,900      46,266
    -------------------------------------------------------------------------

    Investing activities
    Additions to property,
     plant and equipment          (1,510)     (1,246)     (3,715)     (3,710)
    Acquisition of other assets       (4)         (6)        (90)       (205)
    Other                             (4)        (14)         (6)        (86)
    -------------------------------------------------------------------------
    Cash flows related to
     investing activities         (1,518)     (1,266)     (3,811)     (4,001)
    -------------------------------------------------------------------------

    Financing activities
    Distributions paid to
     unitholders                 (10,337)    (13,290)    (44,301)    (53,161)
    Net change in short-term
     revolving credit facility    (2,800)      1,000      (2,300)       (800)
    Repayment of capital lease
     obligation                      (59)        (57)       (233)       (235)
    Proceeds from sale of
     options on foreign
     exchange forward contracts       59         101         508         555
    -------------------------------------------------------------------------
    Cash flows related to
     financing activities        (13,137)    (12,246)    (46,326)    (53,641)
    -------------------------------------------------------------------------

    Translation adjustments on
     cash and cash equivalents     3,235          50       4,343      (3,761)
    -------------------------------------------------------------------------
    Net change in cash and
     cash equivalents during
     the period                   (1,492)     (4,041)      8,106     (15,137)
    Cash and cash equivalents -
     beginning of period          20,338      14,781      10,740      25,877
    -------------------------------------------------------------------------

    Cash and cash equivalents -
     end of the period            18,846      10,740      18,846      10,740
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental information

      Interest paid                1,348       1,149       7,211       7,508
      Income taxes paid              216         125       1,432       4,518
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Boralex Power Income Fund
    Segmented Information
    (tabular amounts are in thousands of dollars, unless otherwise specified)
    (unaudited)

    Segmented information

    The Fund's power stations are grouped into three distinct segments:
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 type of
power station. The Fund allocates its revenues by geographical region based on
the point of delivery of the power.
    The Fund analyzes the performance of its operating segments based on their
EBITDA, which is defined as earnings before interest, taxes, depreciation and
amortization. EBITDA is not a measure of performance defined under Canadian
generally accepted accounting principles; however, management uses this
performance measure to assess the operating performance of its reportable
segments. Results for each segment are presented on the same basis as those of
the Fund. In the consolidated statement of earnings, EBITDA is represented by
Operating income before amortization.
    The following table reconciles EBITDA with net loss:

                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31,      ended December 31,
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------

    Net loss for the period      (29,134)     (5,542)     (5,839)    (35,693)
    Income taxes (recovery)       (2,199)     (4,138)     (3,037)     44,054
    Impairment of intangible
     assets                       17,724           -      17,724           -
    Impairment of goodwill        16,243      13,997      16,243      13,997
    Change in fair value of
     derivative financial
     instruments                      (5)         (2)         (5)        (33)
    Foreign exchange loss (gain)     587       1,217      (1,540)      4,072
    Financial expenses, net        2,324       1,720       7,740       6,778
    Amortization of intangible
     assets                        1,993       1,592       7,543       7,068
    Amortization of property,
     plant and equipment           4,934       3,548      18,895      14,998
    -------------------------------------------------------------------------
    EBITDA                        12,467      12,392      57,724      55,241
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Information by operating segment
                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31,      ended December 31,
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------

    PRODUCTION (in MWh)
    Hydroelectric power
     stations                    134,753     107,801     536,407     457,939
    Wood-residue thermal power
     stations                     47,145      82,444     256,979     366,072
    Natural gas power station     54,819      53,092     206,152     200,015
    -------------------------------------------------------------------------
                                 236,717     243,337     999,538   1,024,026
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    REVENUES
    Hydroelectric power
     stations                     12,929       8,984      47,243      40,521
    Wood-residue thermal power
     stations                      6,325       8,459      31,779      35,747
    Natural gas power station      6,721       7,101      30,321      25,900
    -------------------------------------------------------------------------
                                  25,975      24,544     109,343     102,168
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EBITDA
    Hydroelectric power
     stations                     10,890       7,580      40,060      33,925
    Wood-residue thermal power
     stations                        871       2,865       9,296      16,512
    Natural gas power station      2,268       3,459      14,800      12,524
    Corporate and eliminations    (1,562)     (1,512)     (6,432)     (7,720)
    -------------------------------------------------------------------------
                                  12,467      12,392      57,724      55,241
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                                     For the
                                    For the quarters    twelve-month periods
                                   ended December 31,      ended December 31,
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------

    ADDITIONS TO PROPERTY,
     PLANT AND EQUIPMENT
    Hydroelectric power
     stations                       371          268         692         621
    Wood-residue thermal power
     stations                       443          840       1,287       1,169
    Natural gas power station       696          138       1,736       1,920
    -------------------------------------------------------------------------
                                  1,510        1,246       3,715       3,710
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                         As at         As at
                                                   December 31,  December 31,
                                                          2008          2007
    -------------------------------------------------------------------------

    ASSETS
    Hydroelectric power stations                       295,182       262,881
    Wood-residue thermal power stations                149,868       190,541
    Natural gas power station                           42,043        47,003
    Corporate and eliminations                           2,119         5,251
    -------------------------------------------------------------------------
                                                       489,212       505,676
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

SOURCE BORALEX POWER INCOME FUND