Boralex: Significantly higher results for the second quarter

MONTREAL, Aug. 7, 2013 /PRNewswire/ - Delivering on its growth strategy, Boralex Inc.  ("Boralex" or the "Corporation")(TSX: BLX) reported improved financial results for the second quarter of 2013, with a 23% increase in earnings before income taxes, interest and amortization ("EBITDA").

FINANCIAL HIGHLIGHTS

The improvement in the Corporation's performance in the second quarter of 2013 resulted in large part from the contribution of the St-Patrick wind farm in France acquired in June 2012, as well as from better wind conditions in Canada and more favourable water flows in the U.S., which more than offset the impact of the shutdown of operations at the Kingsey Falls thermal power station. In the second quarter of 2013, these positive factors sparked improvements in the Corporation's production, revenues from energy sales, EBITDA and cash flows from operations⁽²⁾ of 9%, 3%, 23% and 73%, respectively, compared with the same period of 2012.

In the second quarter of 2013, Boralex closed US$90 million in long-term financing secured by two of its U.S. power stations which will allow the Corporation to repay a US$70.7 million existing loan facility and free up funds to support its development. This non-recourse financing will bear interest at an annual rate of 3.51% and will be amortized by semi-annual payments over a 12-year period.

A GROWING COMPANY: SEVERAL SITES UNDER CONSTRUCTION

The Corporation continues to develop several projects in Canada and France, which will significantly influence its asset profile in the next few years. "Construction of Phase I of the Seigneurie de Beaupré Wind Farms is still on schedule despite a one-week work shutdown caused by a general strike in Québec's construction industry last June," said Boralex President and CEO Patrick Lemaire. The first 272 MW will be commissioned in December 2013 followed by an additional 68 MW with the Phase II in December 2014. Elsewhere in Canada, construction is expected to begin on the Témiscouata I wind farm in the third quarter. Work is on schedule at the Jamie Creek hydroelectric site, which the Corporation expects to commission in early 2014.

In France, construction continues at the La Vallée and Vron wind farms, with commissioning still scheduled for late 2013. The Corporation is currently actively working at finalizing the financing for the Fortel-Bonnières and St-François projects.

As of June 30, 2013, Boralex can count on $128 million in available cash to fuel its growth.

About Boralex
Boralex is a power producer whose core business is dedicated to the development and the operation of renewable energy power stations. Currently, the Corporation operates an asset base with an installed capacity of almost 500 MW in Canada, the Northeastern United States and France. Boralex is also committed under power development projects, both independently and with Canadian and European partners, to add approximately 550 MW of power that will be put in service by the end of 2015. With more than 200 employees, Boralex is known for its diversified expertise and in-depth experience in four power generation types — wind, hydroelectric, thermal and solar. 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.

Certain statements contained in this press release, including those regarding future results and performance, are forward‑looking statements based on current expectations, within the meaning of securities legislation. Boralex would like to point out that, by their very nature, forward-looking statements involve risks and uncertainties such that its results or the measures it adopts could differ materially from those indicated by or underlying these statements, or could have an impact on the degree of realization of a particular projection. The main factors that could lead to a material difference between the Corporation's actual results and the projections or expectations set forth in the forward-looking statements include, but are not limited to, the general impact of economic conditions, raw material price increases and availability, currency fluctuations, volatility in the selling price of electricity, the Corporation's financing capacity, negative changes in general market conditions and regulations affecting the industry, as well as other factors discussed in the Corporation's filings with the various securities commissions.

There can be no assurance as to the materialization of the results, performance or achievements as expressed or implied by forward-looking statements. The reader is cautioned not to place undue reliance on such forward-looking statements. Unless required to do so under applicable securities legislation, Boralex management does not assume any obligation to update or revise forward-looking statements to reflect new information, future events or other changes.

The summarized financial statements included in this press release also contain certain non-IFRS financial measures. In order to assess the performance of its assets and reporting segments, Boralex uses EBITDA, cash flows from operations, the ratio of net debt, adjusted EBITDA and adjusted net earnings, as performance measures. Management believes that these measures are financial indicators widely accepted by investors to assess the operational performance of a company and its ability to generate cash through operations. These non-IFRS measures are drawn primarily from the unaudited interim condensed consolidated financial statements accompanying this press release, but do not have a standardized meaning under IFRS; accordingly, they may not be comparable to similarly named measures used by other companies.

Consolidated Financial Statements
Consolidated Statements of Financial Position

Consolidated Statements of Earnings (Loss)

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Changes in Equity

Consolidated Statements of Cash Flows

Segmented Information

The Corporation's power stations are grouped into four distinct operating segments - wind, hydroelectric, thermal and solar power. The Corporation operates under one reportable segment: 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 same accounting rules are used for segmented information as for the consolidated accounts.

The operating segments are presented according to the same criteria used to prepare the internal report submitted to the segment leader who allocates resources and assesses operating segment performance. The President and Chief Executive Officer is considered the segment leader, who assesses segment performance based on power production, revenues from energy sales, EBITDA and the cash flow from operations.

EBITDA does not have a standardized meaning under IFRS; accordingly, it 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, which are IFRS measures.

EBITDA
EBITDA is reconciled to the most comparable IFRS measure, namely, net earnings (loss) attributable to shareholders of Boralex, in the following table:

Cash flows from operations
Cash flows from operations are equal to net cash flows related to operating activities before change in non-cash items related to operating activities. Management uses this measure to assess cash flows generated by the Corporation's operations and its capacity to finance its expansion through those funds. In light of the seasonal nature of the Corporation's operations and development activities, changes in non-cash items can vary considerably. In addition, development activities result in significant changes in Trade and other payables during the construction period, as well as an initial injection of working capital at project start-up. Accordingly, the Corporation considers it more representative not to integrate changes in non-cash items in this performance measure.

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

Cash flows from operations are reconciled to the most comparable IFRS measure, namely, net cash flows related to operating activities, in the following table:

Adjusted EBITDA
The following two tables reconcile wind segment EBITDA and consolidated EBITDA as reported in the financial statements with adjusted EBITDA:

Adjusted net earnings (loss)
The following table reconciles net earnings (loss) attributable to shareholders of Boralex as reported in the financial statements with adjusted net earnings (loss):

Information by Operating Segment

Information by Geographic Segment

Subsequent Event

Seigneurie de Beaupré 4

On July 5, 2013, Boralex transferred assets amounting to $6,382,000 to Seigneurie de Beaupré 4 Wind Farm GP, located in Canada, as a capital contribution in exchange for partnership units.

In May 2013, in connection with the Seigneurie de Beaupré 4 wind farm project, Boralex entered into a partnership agreement with a subsidiary of Gaz Métro L.P. and created the partnership of which each party owns 50%. Under the agreement, all expenditures are made jointly and all earnings, costs, expenses, liabilities, obligations and risks resulting from the partnership are shared jointly but not severally. Boralex's interest in the partnership is accounted for using the equity method. The year-end date is December 31.

Vron

In August 2013, the Corporation closed long-term project financing for the Vron wind farm project in France. Disbursements will be made in August 2013. The loan, which is secured by the assets of this wind farm, comprises four tranches totalling €14,150,000 ($19 373 000). The loan will be amortized in quarterly payments over a 15-year period. The Corporation has used interest rate swaps to set a fixed rate of 4% for the total debt over the loan term, thereby reducing its exposure to rate fluctuations.

Jamie Creek

In August 2013, the Corporation closed long-term project financing for the Jamie Creek hydroelectric power station project in Canada. Disbursements will be made in August 2013. The loan, without recourse to the Corporation, is secured by the assets of this hydroelectric power station and totals $55,250,000. The loan will enjoy a nine-year grace period for repayment of principal and be amortized thereafter, in semi-annual payments, over a 31-year period. The interest rate on the financing is fixed at 5.42% over the loan term.

SOURCE BORALEX INC.