Boralex Power Income Fund: Financial Results for Third Quarter 2007



    MONTREAL, Nov. 2 /CNW Telbec/ - Boralex Power Income Fund (the "Fund")
recorded $19.8 million in revenue from energy sales in the third quarter of
2007, compared to $23.5 million in the third quarter of 2006.
    Earnings before interest, taxes, depreciation and amortization ("EBITDA")
amounted to $9.8 million in the third quarter, compared to $13.6 million for
the same period in 2006. The Fund generated net earnings of $1.5 million, or
$0.03 per trust unit, in the third quarter, versus net earnings of
$6.3 million for the same quarter a year earlier.
    The decreases of $3.7 million in revenue, $3.8 million in EBITDA and
$4.8 million in net earnings stem mainly from lower power generation in the
hydroelectric segment due to much less favourable hydrology in the
United States compared to the third quarter of 2006.
    The hydroelectric segment produced 33.8% less electricity than in the
third quarter of 2006 and 22.8% less than the segment's historical average. As
a result, revenue amounted to $6.0 million, down $4.4 million compared to the
corresponding period in 2006. EBITDA stood at $4.8 million in the third
quarter of 2007, compared to $8.9 million for the same period a year earlier.
Note, however, that hydrology was exceptional in the third quarter of 2006 and
that power generation in the first nine months of 2007 was only 6.3% below the
historical average.
    Revenue in the wood-residue segment rose to $8.1 million in the third
quarter of 2007, compared to $7.9 million for the same period in 2006. The
Fund generated EBITDA of $4.0 million in this segment, up $0.1 million year
over year. The two thermal power stations showed good operating stability and
put in a solid performance in terms of profitability. In the first nine months
of 2007, EBITDA for the wood-residue segment increased to $13.6 million, up
$0.8 million over the same period in 2006, due to lower maintenance and fuel
costs.
    The Fund's natural gas power station recorded revenue of $5.7 million and
EBITDA of $3.0 million, up 7.5% and 20.0% respectively compared to the third
quarter of 2006.
    The Fund also announced in the third quarter of 2007 that the Special
Committee of the Board of Trustees had terminated the sale process, because of
current conditions in the financial markets.
    In short, for the first nine months of 2007, the Fund's revenue amounted
to $77.6 million and EBITDA stood at $42.8 million, compared to $85.2 million
and $52.0 million respectively for the same period in 2006. The Fund recorded
a net loss of $30.2 million for the first three quarters of 2007, compared to
net earnings of $26.6 million for the corresponding period a year earlier. The
decrease is attributable to the lower power generation and the impact of the
change to the Canadian Income Tax Act with respect to the taxation of public
income trusts, in effect since June 22, 2007.

    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
Québec 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,
increases in raw material costs, 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.
    The Fund uses EBITDA as performance measure with respect to its
operations. This term is not defined financial measure according to Canadian
generally accepted accounting principles (GAAP) and does not have standardized
meaning prescribed by GAAP. Therefore, this measure may not be comparable to
similar measures presented by other enterprises. EBITDA is defined in note 8
of the financial statements accompanying this press release, and in the Fund's
latest annual report.

    Notice to unitholders

    These quarterly financial statements for the periods ended September 30,
2007 and 2006 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
                                                   September 30, December 31,
                                              Note         2007         2006
    -------------------------------------------------------------------------

    Assets

    Current assets
    Cash and cash equivalents                            14,781       25,877
    Income taxes                                          2,654            -
    Accounts receivable                                   9,445       16,025
    Prepaid and others                                    3,375        2,017
    -------------------------------------------------------------------------
                                                         30,255       43,919
    Property, plant and equipment                       370,651      399,273
    Intangible assets                                    85,620       97,907
    Goodwill                                             30,240       30,240
    Other long-term assets                    2 ,4        9,312       12,104
    -------------------------------------------------------------------------
                                                        526,078      583,443
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and unitholders' equity

    Current liabilities
    Short-term revolving credit                           1,300        3,100
    Accounts payable and accrued liabilities              6,612       12,873
    Income taxes                                              -          393
    Distributions payable to unitholders                  4,430        4,430
    Current portion of long-term debt            5          231            -
    -------------------------------------------------------------------------
                                                         12,573       20,796
    Future income tax liabilities                6       53,838        6,463
    Long-term debt                            2 ,5      103,145      117,387
    Other long-term liabilities                           1,782        1,766
    -------------------------------------------------------------------------
                                                        171,338      146,412
    -------------------------------------------------------------------------

    Unitholders' equity
    Capital contribution                                422,174      422,174
    Capital contribution - exchangeable
     Class B units                                      112,867      112,867
    Deficit                                            (152,150)     (82,128)
    Accumulated other comprehensive income    2 ,7      (28,151)     (15,882)
    -------------------------------------------------------------------------
                                                        354,740      437,031
    -------------------------------------------------------------------------
                                                        526,078      583,443
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes


    Boralex Power Income Fund
    Consolidated Statements of Earnings
    (in thousands of dollars, except amounts per unit)
    (unaudited)
                                                                For the
                                 For the quarters         nine-month periods
                                ended September 30,       ended September 30,
                    Note         2007         2006         2007         2006
    -------------------------------------------------------------------------

    Revenue                    19,806       23,518       77,624       85,218
    -------------------------------------------------------------------------

    Expenses
    Operating costs             8,968        9,448       31,721       31,899
    Administration              1,065          441        3,054        1,320
    -------------------------------------------------------------------------
                               10,033        9,889       34,775       33,219
    -------------------------------------------------------------------------
    Operating income
     before
     amortization               9,773       13,629       42,849       51,999
    Amortization of
     property, plant
     and equipment              3,637        3,766       11,450       11,296
    Amortization of
     intangible
     assets                     1,378        1,755        5,476        6,077
    -------------------------------------------------------------------------
    Operating income            4,758        8,108       25,923       34,626
    Financial
     expenses, net              1,620        1,516        5,058        5,109
    Loss (Gain) on
     foreign currency
     translation                2,448         (564)       2,855       (1,582)
    Change in fair
     value of
     derivative
     instruments                    -           (5)         (31)        (136)
    -------------------------------------------------------------------------
    Earnings before
     income taxes                 690        7,161       18,041       31,235
    Income taxes
     (Recovery)        6         (818)         862       48,192        4,639
    -------------------------------------------------------------------------
    Net earnings
     (Net loss)                 1,508        6,299      (30,151)      26,596
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     net earnings
     (net loss)
     per trust unit
     (in dollars)                0.03         0.11        (0.51)        0.45
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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
                                                          nine-month periods
                                                          ended September 30,
                                                           2007         2006
    -------------------------------------------------------------------------

    Deficit - beginning of period                       (82,128)     (62,933)
    (Net loss) Net earnings                             (30,151)      26,596
    Distributions to unitholders                        (39,871)     (39,871)
    -------------------------------------------------------------------------

    Deficit - end of period                            (152,150)     (76,208)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Comprehensive Income
    (in thousands of dollars)
    (unaudited)
                                                                For the
                                 For the quarters         nine-month periods
                                ended September 30,       ended September 30,
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------

    Net Earnings (Net loss)
     for the period             1,508        6,299      (30,151)      26,596

    Other components of
     comprehensive income :

    Translation adjustments
    Non-realized exchange
     losses on translation
     of the financial
     statements of
     self-sustaining
     foreign operations        (6,477)        (210)     (16,818)      (6,408)

    Reclassification of
     accumulated exchange
     loss upon translation
     of financial statement
     for self-sustaining
     foreign operations
     following a reduction
     in net investment          2,919            4        3,898          905

    Cash flow hedges
    Change in fair value of
     derivatives designated
     as hedges of the net
     investment in
     self-sustaining
     foreign operations           885           27        2,207        1,053

    Realized hedging items
     reclassified to net
     earnings                    (520)        (429)      (1,556)      (1,460)

    -------------------------------------------------------------------------

                               (3,193)        (608)     (12,269)      (5,910)
    -------------------------------------------------------------------------
    Comprehensive income
     for the period            (1,685)       5,691      (42,420)      20,686
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes


    Boralex Power Income Fund
    Consolidated Statements of Cash Flows
    (in thousands of dollars)
    (unaudited)
                                                                For the
                                 For the quarters         nine-month periods
                                ended September 30,       ended September 30,
                    Note         2007         2006         2007         2006
    -------------------------------------------------------------------------

    Operating
     activities
    Net earnings
     (Net loss)                 1,508        6,299      (30,151)      26,596
    Items not
     affecting
     cash:
      Amortization
       of property,
       plant and
       equipment                3,637        3,766       11,450       11,296
      Amortization
       of intangible
       assets                   1,378        1,755        5,476        6,077
      Amortization
       of deferred
       financing
       costs                      101          107          317          323
      Long-term
       lease
       accruals                   105          115          331          347
      Future income
       taxes             6        312         (300)      47,137          266
      Recognized
       translation
       adjustments              3,299            4        4,885          301
      Others                       12           (5)         186         (136)
    -------------------------------------------------------------------------
                               10,352       11,741       39,631       45,070
    Net change in
     non-cash
     working capital
     balances                  (2,625)        (568)      (2,821)         949
    -------------------------------------------------------------------------
    Cash flows
     related to
     operating
     activities                 7,727       11,173       36,810       46,019
    -------------------------------------------------------------------------

    Investing
     activities
    Acquisition of
     property, plant
     and equipment               (550)        (630)      (2,464)      (1,864)
    Acquisition of
     other assets                 (12)        (145)        (199)        (499)
    Others                        (61)          38          (72)          13
    -------------------------------------------------------------------------
    Cash flows
     related to
     investing
     activities                  (623)        (737)      (2,735)      (2,350)
    -------------------------------------------------------------------------

    Financing
     activities
    Distributions
     paid to
     unitholders              (13,290)     (13,290)     (39,871)     (39,871)
    Net change of
     the short-term
     revolving
     credit                    (2,200)           -       (1,800)      (3,500)
    Decrease in
     long-term debt               (57)           -         (178)           -
    Proceeds from
     sale of options
     on forward
     exchange rate
     contracts                    113          114          454          459
    -------------------------------------------------------------------------
    Cash flows
     related to
     financing
     activities               (15,434)     (13,176)     (41,395)     (42,912)
    -------------------------------------------------------------------------

    Translation
     adjustments on
     cash and cash
     equivalents               (1,239)         125       (3,776)      (1,155)
    -------------------------------------------------------------------------
    Net change in
     cash and cash
     equivalents
     during the
     period                    (9,569)      (2,615)     (11,096)        (398)
    Cash and cash
     equivalents -
     Beginning of
     period                    24,350       26,293       25,877       24,076
    -------------------------------------------------------------------------
    Cash and cash
     equivalents -
     end of the
     period                    14,781       23,678       14,781       23,678
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplementary
     information

      Interest paid             2,420        2,457        6,359        6,253
      Income taxes paid           544        2,540        4,393        6,729
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying notes


    Boralex Power Income Fund
    Notes to Interim Consolidated Financial Statements
    (tabular amounts are in thousands of dollars, unless otherwise specified)
    (unaudited, unless otherwise specified)

    Note 1 - Accounting policies

    These unaudited interim consolidated financial statements were prepared
    following the same accounting policies as the audited consolidated
    financial statements of Boralex Power Income Fund (the "Fund") for the
    period ended December 31, 2006, except for the new accounting policies
    described in Note 2. These unaudited interim consolidated financial
    statements and accompanying notes should be read in conjunction with the
    latest audited consolidated financial statements.

    Note 2 - New accounting policies

    On January 1, 2007, the Fund adopted the new recommendations of
    Section 1530 "Comprehensive Income", of Section 3251 "Equity", of
    Section 3855 "Financial Instruments - Recognition and Measurement" and of
    Section 3865 "Hedges" from the Handbook of the Canadian Institute of
    Chartered Accountants (CICA). The retroactive application of the new
    standards does not require restatement of prior periods.

    Section 1530 "Comprehensive Income" describes standards for disclosing
    and presenting comprehensive income and its components. Comprehensive
    income is the change in a company's net assets which results from
    transactions and events from sources not related to unitholders. These
    transactions and events include changes in the currency translation
    adjustment relating to self-sustaining foreign operations and unrealized
    gains and losses resulting from changes in fair value of certain
    financial instruments.

    Section 3251 "Equity" describes the standards for presenting equity and
    changes in equity. Due to the adoption of Section 3251 and Section 1530
    described above, the Fund's financial statements now include information
    on comprehensive income and its other components. On January 1, 2007, an
    amount of $15,882,000, previously recorded as Deferred translation
    adjustments, was reclassified in Accumulated other comprehensive income.

    Section 3855 "Financial Instruments - Recognition and Measurement"
    establishes standards for recognizing and measuring financial assets,
    financial liabilities and derivatives. These standards prescribe when to
    recognize a financial instrument in the balance sheet and at what amount
    as well as the presentation for gains and losses on financial instruments
    in the consolidated financial statements.

    The Fund has made the following classifications:


    - Cash and cash equivalents are classified as "Assets held for trading".
      They are measured at fair value and the gains or losses resulting from
      the remeasurement at the end of the period are recognized in net
      income.

    - Accounts receivable are classified as "Loans and receivables". They are
      recorded at cost, which upon their initial measurement is equal to
      their fair value. Subsequent measurements are recorded at amortized
      cost using the effective interest method.

    - Deposits in trust related to long-term debt are classified as "Assets
      available for sale" and are measured at fair value. Gains and losses
      resulting from periodic remeasurement are recognized in comprehensive
      income.

    - Short-term revolving credit, accounts payable and accrued liabilities,
      distributions payable to unitholders as well as long-term debt are
      classified as "Other financial liabilities". They are initially
      recorded at fair value. Subsequent measurements are recorded at
      amortized cost using the effective interest method.

    Section 3855 also provides guidelines for the recognition of fees and
    costs incurred on the issuance of debt instruments. Transaction costs are
    now deducted from financial liabilities and are amortized using the
    effective interest method over the expected life of the liability in
    question. Following the application of Section 3855, non-amortized
    financing expenses of $3,006,000 as at January 1, 2007, previously
    recognized under Other long-term assets, have been reclassified under
    Long-term debt.

    Section 3865 "Hedges," of optional application, specifies the manner in
    which hedge accounting is applied. The Fund decided, in accordance with
    its risk management strategy, to continue to apply hedge accounting for
    its forward exchange rate contracts that hedge its net investment in
    self-sustaining foreign operations. These derivatives are recognized at
    their fair value and the gains or losses resulting from their periodic
    remeasurement are recognized in comprehensive income, to the extent that
    the hedging is deemed effective.

    The Fund chose January 1, 2003 as the transition date for embedded
    derivatives. An embedded derivative is a component of a financial
    instrument or of another contract with features similar to a derivative.
    This had no impact on the consolidated financial statements.

    Note 3 - Seasonality

    Since all of the Fund's power stations have long-term sales contracts
    with fixed prices, their results are not affected by price fluctuations
    resulting from seasonal demand for electricity.

    However, from December to March, which is a period of peak demand in
    Québec, the wood-residue thermal power stations, the natural gas
    cogeneration power station and a hydroelectric plant receive significant
    capacity premiums when power generation is maintained at a level set in
    their power sales contracts. All of these stations except the
    hydroelectric facility control how much power they generate, and to the
    extent that they do not experience any major downtime, they usually
    operate at full capacity for that period. Regular maintenance is then
    done in the second or third quarters, which generally lowers the
    operating results for those periods. In all, these facilities account for
    more than 50% of the Fund's installed capacity.

    For the Fund's hydroelectric facilities in Québec and the northeastern
    United States, production volume is dependent on water flows, which tend
    to be at their maximum in the spring and are generally good in the fall -
    the second and fourth quarters of the Fund's financial year; they are
    lower in the winter and summer. Note that the Fund's hydroelectric power
    stations do not have reservoirs that would help regulate fluctuations in
    water flows.

    Also, steam revenues, which account for about 20% of the Fund's
    consolidated revenue, are fairly stable from quarter to quarter because
    steam is produced to meet client demand, which is more predictable and
    stable.

    As a result, the first quarter is generally the most profitable, followed
    by the fourth quarter. Next is the second quarter, when water flows are
    usually significant, so that power generation in the hydroelectric sector
    partially compensates for the scheduled downtime at the wood-residue and
    natural gas cogeneration facilities. The third quarter is normally the
    least profitable quarter of the year.

    Note 4 - Other long-term assets
                                                          As at        As at
                                                   September 30, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                                    (audited)

    Fair value of forward exchange rate
     contracts (note 2)                                   4,232        3,581
    Deferred financing costs, net of accumulated
     amortization (note 2)                                    -        3,006
    Deposits in trust related to long-term debt           1,548        1,735
    Proceeds from sale of options on forward
     exchange rate contracts receivable                     195          644
    Project development costs                             3,337        3,138
    -------------------------------------------------------------------------
                                                          9,312       12,104
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Note 5 - Long-term debt
                                                          As at        As at
                                                   September 30, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                                    (audited)

    Senior secured notes of an original amount
     of $ 35,000,000 bearing interest at a fixed
     rate of 6.6%, with no repayment until
     maturity on July 9, 2014                            35,000       35,000

    Senior secured notes of an original amount
     of US$70,000,000 bearing interest at a fixed
     rate of 6.2%, with no repayment until maturity
     on August 31, 2013                                  70,438       82,387

    Other                                                   310            -
    -------------------------------------------------------------------------
                                                        105,748      117,387
    Less:
      Current portion                                       231            -
      Deferred financing costs (note 2)                   2,372            -
    -------------------------------------------------------------------------
                                                        103,145      117,387
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    The $35,000,000 notes are guaranteed by all current Canadian assets and
    the US$70,700,000 notes are guaranteed by all current U.S. assets. Under
    these agreements, the Fund is subject to a number of restrictive clauses,
    including the maintenance of certain financial ratios.

    For the US$70,700,000 notes, the loan agreement requires the Fund to
    maintain two reserve accounts at all times. The first, containing a
    minimum of US$300,000 ($299,000), is to provide for capital expenditures.
    The second is a debt service reserve containing a minimum of 3 months of
    interest payments on this debt, which amounts to US$1,100,000
    ($1,095,000). If certain ratios fall below a set level, the Fund will be
    required to deposit an additional US$400,000 ($399,000) each month until
    this reserve contains a maximum of 12 months of interest payments. If the
    financial ratios subsequently rise above the set threshold for more than
    two consecutive quarters, the Fund will be able to recover the surplus
    deposits above the required minimum. Throughout fiscal 2006 and during
    the first nine months of 2007, the Fund met the requirements for all
    financial ratios.

    Note 6 - Income taxes

    The amendments to Canada's Income Tax Act (ITA) related to publicly
    traded income trusts took effect on June 22, 2007. The former rules
    allowed for the deduction of amounts distributed from the income trust's
    taxable income, which made it possible to transfer the tax burden to
    unitholders. The consequence of the ITA amendment is that public income
    trusts will no longer be able to claim this deduction, and starting in
    2011, they must pay income taxes at a rate of 31.5%. Distributions will
    be considered dividends, just as they are for other Canadian
    corporations. As a result, the Fund has recorded future income taxes of
    $47.1 million related to the legislative amendment that will take effect
    in 2011. Since this results from an amendment to the ITA, the adjustment
    amount has been recorded as an expense in the income statement of the
    second quarter of 2007.

    To calculate the adjustment required, the Fund forecasted the changes in
    its tax attributes between September 30, 2007 and December 31, 2010. This
    calculation also takes into account the temporary differences
    attributable to the holders of exchangeable class B units. These
    forecasts will be updated quarterly and any change will be recorded in
    net earnings.

    Note 7 - Accumulated other comprehensive income

                                                  For the Nine-month periods
                                                          ended September 30,
                                                                        2007
    -------------------------------------------------------------------------

    Deferred translation adjustment reclassified
     in accordance with the new accounting policies
     (note 2)                                                        (15,882)

    Other comprehensive income for the period                        (12,269)
    -------------------------------------------------------------------------
    Balance end of period                                            (28,151)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Note 8 - Segmented information

    The Fund's power stations are grouped under three distinct segments:
    hydroelectric power, wood-residue thermal power and natural gas power,
    and are engaged mainly in the production of energy in Canada and in the
    United States. The classification of these segments is based on the
    different cost structures relating to each type of power station.

    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
    under Canadian generally accepted accounting principles; however,
    management uses this performance measure to assess the operating
    performance of its reportable segments. Earnings for each segment are
    presented on the same accounting policies as those of the Fund. In the
    consolidated statement of earnings, EBITDA corresponds to Operating
    income before amortization.

    The following table reconciles EBITDA with net earnings or net loss:

                                                                For the
                                 For the quarters         nine-month periods
                                ended September 30,       ended September 30,
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------

    Net earnings (Net loss)     1,508        6,299      (30,151)      26,596
    Income taxes (Recovery)      (818)         862       48,192        4,639
    Change in fair value of
     derivative instruments         -           (5)         (31)        (136)
    Loss (Gain) on foreign
     currency translation       2,448         (564)       2,855       (1,582)
    Financial expenses, net     1,620        1,516        5,058        5,109
    Amortization of
     intangible assets          1,378        1,755        5,476        6,077
    Amortization of property,
     plant and equipment        3,637        3,766       11,450       11,296
    -------------------------------------------------------------------------
    EBITDA                      9,773       13,629       42,849       51,999
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Information by operating segment

    -------------------------------------------------------------------------
    PRODUCTION (in MWh)
    Hydroelectric power
     stations                  77,554      117,077      350,138      435,110
    Wood-residue thermal
     power stations            98,464      100,537      283,628      284,614
    Natural gas power
     station                   46,324       45,693      146,923      151,311
    -------------------------------------------------------------------------
                              222,342      263,307      780,689      871,035
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    REVENUE
    Hydroelectric power
     stations                   6,040       10,360       31,537       39,714
    Wood-residue thermal
     power stations             8,062        7,899       27,288       26,685
    Natural gas power
     station                    5,704        5,259       18,799       18,819
    -------------------------------------------------------------------------
                               19,806       23,518       77,624       85,218
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EBITDA
    Hydroelectric power
     stations                   4,826        8,865       26,345       34,950
    Wood-residue thermal
     power stations             3,999        3,855       13,647       12,799
    Natural gas power
     station                    3,039        2,527        9,065        9,139
    Corporate and
     eliminations              (2,091)      (1,618)      (6,208)      (4,889)
    -------------------------------------------------------------------------
                                9,773       13,629       42,849       51,999
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT
    Hydroelectric power
     stations                     230          253          353          388
    Wood-residue thermal
     power stations               260           12          329          601
    Natural gas power
     station                       60          365        1,782          875
    -------------------------------------------------------------------------
                                  550          630        2,464        1,864
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                          As at        As at
                                                   September 30, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------
                                                                    (audited)
    ASSETS
    Hydroelectric power stations                        268,146      315,631
    Wood-residue thermal power stations                 190,921      195,970
    Natural gas power station                            61,036       62,878
    Corporate and eliminations                            5,975        8,964
    -------------------------------------------------------------------------
                                                        526,078      583,443
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Note 9 - Subsequent Event

    Following receipt by the Fund of a Notice of Termination of the operation
    and maintenance service agreement for the Dolbeau plant (the "Notice") by
    Bowater Canadian Forest Products Inc. ("Bowater"), the Fund sent Bowater
    Notice to Arbitrate in order to submit the dispute between the two
    parties to arbitration. At the same time, in accordance with our Service
    Agreement, the Fund asked for an injunction from the Quebec Superior
    Court to suspend the effect of the Notice during the arbitration
    proceedings. The Superior Court will hear the application starting on
    November 5, 2007.

    Note 10 - Comparative figures

    Certain reclassifications have been made to the prior year's consolidated
    financial statements to conform to the current year's presentation.
    




For further information:

For further information: Ms. Patricia Lemaire, Director, Communications,
Boralex Power Inc., (514) 985-1353, patricia_lemaire@cascades.com

Organization Profile

BORALEX POWER INCOME FUND

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