Hydro-Quebec. 83HB Half Yearly Report

  Hydro-Quebec. (83HB) - Half Yearly Report

RNS Number : 1498S
Hydro-Quebec
27 November 2012




Regulatory Announcement

Hydro-Québec

27 November 2012

HYDRO-QUÉBEC - HALF-YEARLY FINANCIAL REPORT FOR 2012

A copy of the  Quarterly Report of Hydro-Québec  for the Second Quarter  ended 
June 30, 2012 has been submitted to the National Storage Mechanism and will be
available for viewing shortlyat:

http://www.morningstar.co.uk/uk/NSM

To view this document in PDF format, please paste the following URLs into the
address bar of your browser.

http://www.rns-pdf.londonstockexchange.com/rns/1498S_-2012-11-27.pdf

This document is also available as follows:

- for viewing on Hydro-Québec's website, www.hydroquebec.com; and/or

- by  writing  to the  Director  - International  Financing,  Cash  and 
Financial Services; Hydro‑Québec, 75René‑Levesque Boulevard West, 6^th Floor,
Montréal, Québec, Canada H2Z 1A4.

Disclosure and Transparency Rule ("DTR") 4.2

The condensed set of consolidated financial statements of Hydro-Québec and its
subsidiaries as at the end of the Second Quarter ended June30, 2012 which are
included in the Quarterly Report -  Second Quarter 2012, the Message from  the 
Chairman of the Board  and the President and  Chief Executive Officer in  such 
Report, AppendixA below and the Responsibility Statement in Appendix B  below 
together constitute the Half-Yearly Financial Report of Hydro-Québec for  2012 
pursuant to DTR4.2 and is Regulated Information.

APPENDIX A - PRINCIPAL RISKS AND UNCERTAINTIES

The  principal  risks  and  uncertainties  which  could  affect  our  business 
activities in the remaining  six months of Fiscal2012  are the same as  those 
disclosed in our 2011Annual Report. They  are described in pages64 to 67  of 
such report.

These risks are not set out in any  order of priority and do not comprise  all 
the risks and uncertainties that Hydro‑Québec may face.

APPENDIX B - RESPONSIBILITY STATEMENT

The following Responsibility Statement is  made in accordance with  DTR4.2.10 
with respect to Hydro-Québec's Half-Yearly Financial Report.

We confirm that:

§ the  Half-Yearly Financial  Report has  not been  audited or  reviewed  by 
Auditors.

§ to the best of our knowledge, the condensed set of consolidated  financial 
statements of Hydro‑Québec and  its subsidiaries as at  the end of the  Second 
Quarter ended June30, 2012 was prepared in accordance with the applicable set
of accounting  standards  and  gives a  true  and  fair view  of  the  assets, 
liabilities,  financial   position  and   profit  of   Hydro-Québec  and   its 
subsidiaries taken as a whole; and

§ to the best of our knowledge,  the Message from the Chairman of the  Board 
and the  President and  Chief  Executive Officer  contained in  the  Quarterly 
Report - Second Quarter 2012, includes  a fair review of the important  events 
that have occurred in  the first six  months of the  financial year and  their 
impact on the condensed set of consolidated financial statements and, together
with AppendixA above, constitutes a  fair review of the information  required 
by DTR4.2.7.





Jean-Hugues Lafleur

Vice-President, Financing, Treasury and Pension Fund

27 November 2012

Hydro-Québec

                                                              Quarterly Report

                                                           Second Quarter 2012

Message from the Chairman of the Board
and the President and Chief Executive Officer

Summary of operations for the first six months

For  the  six  months  ended  June  30,  2012,  the  net  result  amounted  to 
$1,722million, compared to $1,854million for the same period last year.  The 
difference is partly owing to a decrease in revenue from electricity sales  in 
Québec due to  lower demand,  mainly in the  industrial sector,  which had  an 
impact of $98million. It  also stems from a  $17-million decrease in  revenue 
from net electricity exports by  Hydro‑Québec Production and from  electricity 
purchases of $74million from Rio Tinto Alcan. These factors were mitigated by
a $47-million reduction in financial expenses.

Second quarter

For the second quarter of 2012,  the net result was $386million, compared  to 
$452million in 2011. This  decline is attributable to  a decrease in  revenue 
from electricity sales in Québec due in part to lower demand in the industrial
sector, which  had an  impact of  $31million,  as well  as to  a  $39-million 
reduction in  the  net  result  from  special  contracts  with  certain  large 
industrial customers in  Québec and  to electricity  purchases of  $41million 
from Rio  Tinto Alcan.  These  factors were  partly  offset by  a  $13-million 
increase in revenue  from net electricity  exports by Hydro-Québec  Production 
and by a $26-million reduction in financial expenses.

Consolidated
operations for the first six months

Revenue totaled $6,476million, compared to $6,627million in 2011.



In Québec,  revenue  from electricity  sales  amounted to  $5,523million,  or 
$267million less than  in 2011, mainly  because of the  mild temperatures  in 
2012 and lower demand, especially in the industrial sector.



On markets outside Québec, revenue from electricity sales was $659million,  a 
$78-million decrease essentially due to market conditions.



Other revenue totaled  $294million, a  $194-million increase  over 2011  that 
stems mainly from the amounts that  Hydro-Québec will be able to recover  from 
customers, primarily for revenue variances related to climate conditions given
the mild temperatures in 2012.



Total expenditure amounted to $3,564million, or $28million more than in 2011
on account of the $74million in  electricity purchases from Rio Tinto  Alcan, 
among other things. Other electricity  purchases decreased by $53million.  It 
should also  be mentioned  that in  the first  quarter of  2012,  Hydro-Québec 
Production made a $10‑million contribution to the Northern Plan Fund under the
Act to establish the Northern Plan Fund.

Segmented
operations for the first six months

Generation

Hydro-Québec Production  posted  a net  result  of $905million,  compared  to 
$1,144million in 2011. This  $239-million decrease is  due to a  $108-million 
reduction in revenue  from electricity sales  to Hydro-Québec Distribution  on 
account of  the mild  temperatures in  2012  and of  lower demand  in  Québec. 
Revenue from  net electricity  exports decreased  by $17million,  essentially 
because of  market  conditions.  In  addition, the  net  result  from  special 
contracts with  certain  large  industrial customers  in  Québec,  assumed  by 
Hydro-Québec Production, was $38million lower than in 2011, and the  division 
made electricity purchases of $74million from Rio Tinto Alcan. It should also
be mentioned that in the first quarter of 2012, Hydro-Québec Production made a
$10-million contribution to the Northern Plan Fund under the Act to  establish 
the Northern Plan Fund.

Transmission

Hydro-Québec  TransÉnergie's  net  result  was  $317million,  a   $50-million 
increase over 2011  that is due  to a  positive change of  $21million in  the 
amounts that Hydro‑Québec is entitled to recover from customers for  variances 
in revenue from point-to-point transmission  services, among other things.  In 
addition, financial expenses decreased by $35million.

Distribution

Hydro-Québec Distribution posted a net result of $471million, an increase  of 
$40million over  last  year.  Revenue from  electricity  sales  decreased  by 
$231million, mainly on  account of the  mild temperatures in  2012 and  lower 
demand, mostly  in  the industrial  sector.  This  decrease was  offset  by  a 
positive change of $130million in the amounts that Hydro-Québec will be  able 
to recover from customers, primarily for revenue variances related to  climate 
conditions, as well  as by  a $117-million decrease  in electricity  purchases 
from  Hydro-Québec  Production  and  a  $36-million  reduction  in   financial 
expenses.

Construction

The Construction segment includes activities  related to the projects  carried 
out by Hydro-Québec Équipement et  services partagés and by Société  d'énergie 
de la Baie James (SEBJ).



Work  handled  by  Hydro-Québec   Équipement  et  services  partagés   totaled 
$834million, compared to $772million in  2011. Among other projects  carried 
out for Hydro-Québec  Production, the division  continued construction of  the 
Romaine complex. Work done  for Hydro-Québec TransÉnergie included  connecting 
Romaine‑2 generating station, integrating  output from wind  farms as well  as 
various projects  stemming from  continued  investment in  asset  sustainment, 
among other things.



As for  SEBJ, its  volume of  activity amounted  to $82million,  compared  to 
$174million last  year.  In January  2012,  the  Eastmain-1-A/Sarcelle/Rupert 
project reached  an important  milestone with  the commissioning  of the  last 
generating unit at Eastmain-1-A powerhouse.

Investment

In the first half of  2012, Hydro-Québec invested $1,614million in  property, 
plant and equipment  and intangible  assets, including  the Energy  Efficiency 
Plan, compared to $1,692million in 2011. As expected, a large portion of this
amount  was  devoted  to  the  major  hydroelectric  development  projects  of 
Hydro-Québec  Production,  especially  Eastmain-1-A/Sarcelle/Rupert  and   the 
Romaine complex.



Hydro-Québec TransÉnergie continued investing in its transmission system. Work
progressed on the 735-kV line  that will connect Romaine-2 generating  station 
with Arnaud substation. The division also  carried on with its investments  in 
maintenance  and  improvement   to  ensure  the   reliability  and   long-term 
operability of its transmission assets and enhance service quality.



Hydro-Québec Distribution  kept up  investments to  handle the  growth of  its 
Québec customer base as  well as to  maintain and improve  the quality of  its 
facilities, especially  those related  to distribution  system automation.  It 
also continued implementation of the Energy Efficiency Plan.

Financing

During the  second  quarter  of  2012,  Hydro-Québec  issued  US$1billion  of 
debentures on the  global market, bearing  interest at 1.38%  and maturing  in 
June 2017. The funds will  be used to support  part of the investment  program 
and to refinance maturing debt.

/s/ Michael L. Turcotte /s/ Thierry Vandal
Michael L. Turcotte     Thierry Vandal
Chairman of the Board   President and Chief Executive Officer



September 7, 2012





CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)





CONSOLIDATED STATEMENTS OF OPERATIONS

In millions of Canadian dollars       Three months ended Six months ended
(unaudited)                                      June 30          June 30
                                Notes     2012     2011    2012    2011
Revenue                           3      2,688     2,809   6,476    6,627
Expenditure
Operations                                 641       618   1,281    1,217
Electricity and fuel purchases             292       297     646      636
Depreciation and amortization     4        573       623   1,173    1,228
Taxes                                      205       202     464      455
                                         1,711     1,740   3,564    3,536
Operating result                           977     1,069   2,912    3,091
Financial expenses                5        591       617   1,190    1,237
Net result                                 386       452   1,722    1,854





CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

In millions of Canadian dollars  Three months ended Six months ended
(unaudited)                                 June 30          June 30
                                      2012     2011     2012    2011
Balance, beginning of period        15,954   15,367   14,618  13,965
Net result                             386      452    1,722   1,854
Balance, end of period              16,340   15,819   16,340  15,819











The accompanying notes are an integral part of the consolidated financial
statements.



















CONSOLIDATED BALANCE SHEETS

In millions of Canadian dollars         Note As at June 30, As at December31,
(unaudited)                                            2012               2011
ASSETS
Current assets
Cash and cash equivalents                             2,145              1,377
Short-term investments                                1,024              1,102
Accounts receivable and other
receivables                                           1,806              1,744
Derivative instruments                                1,070              1,322
Regulatory assets                                        21                 18
Materials, fuel and supplies                            237                236
                                                      6,303              5,799
Property, plant and equipment                        57,429             56,901
Intangible assets                                     2,147              2,187
Investments                                             137                124
Derivative instruments                                1,171              1,313
Regulatory assets                                        10                 21
Other assets                                          3,495              3,292
                                                     70,692             69,637
LIABILITIES
Current liabilities
Borrowings                                              865                 52
Accounts payable and accrued
liabilities                                           1,797              2,099
Dividend payable                                          -              1,958
Accrued interest                                        812                862
Derivative instruments                                  630                261
Current portion of long-term debt                     1,344              1,025
                                                      5,448              6,257
Long-term debt                                       41,112             40,744
Asset retirement obligations                            555                540
Derivative instruments                                1,747              2,098
Other long-term liabilities                             910                883
Perpetual debt                                          281                281
                                                     50,053             50,803
EQUITY
Share capital                                         4,374              4,374
Retained earnings                                    16,340             14,618
Accumulated other comprehensive income                 (75)              (158)
                                                     16,265             14,460
                                                     20,639             18,834
                                                     70,692             69,637
Contingency                              8
The accompanying notes are an integral
part of the consolidated financial
statements.



On behalf of the Board of Directors,
/s/ Jacques Leblanc                  /s/Michael L. Turcotte
Jacques Leblanc                         Michael L. Turcotte

Chair of the Audit Committee          Chairman of the Board

CONSOLIDATED STATEMENTS OF CASH FLOWS

In millions of Canadian dollars            Three months ended Six months ended
(unaudited)                                           June 30          June 30
                                     Notes      2012     2011     2012    2011
Operating activities
Net result                                       386      452    1,722   1,854
Adjustments to determine net cash
flows
from operating activities
Depreciation and amortization          4         573      623    1,173   1,228
Amortization of premiums, discounts
and issue expenses related to debt
securities                             5          66       25      156      51
Other                                             24      249     (21)     233
Change in non-cash working capital
items                                  6         716      642    (428)   (703)
Net change in accrued benefit assets
and liabilities                                 (94)    (117)    (196)   (239)
                                               1,671    1,874    2,406   2,424
Investing activities
Additions to property, plant and
equipment                                      (838)    (877)  (1,528) (1,564)
Additions to intangible assets                  (38)     (66)     (86)   (128)
Cash receipts from the government
reimbursement
for the 1998 ice storm                             1        1        3       3
Acquisition of investments                         -      (1)       -       -
Net (acquisition) disposal of
short-term investments                         (364)     (79)       83     938
Other                                             84        6       88       8
                                             (1,155)  (1,016)  (1,440)   (743)
Financing activities
Issuance of long-term debt                     1,014    1,537    1,014   3,497
Repayment of long-term debt                    (135)  (1,244)    (622) (2,016)
Cash receipts arising from credit
risk management                                1,660    1,156    2,772   1,794
Cash payments arising from credit
risk management                              (1,196)    (859)  (2,176) (1,951)
Net change in borrowings                       (360)    (757)      772      73
Dividend paid                                      -        -  (1,958) (1,886)
Other                                              -        -      (1)       -
                                                 983    (167)    (199)   (489)
Foreign currency effect on cash and
cash equivalents                                   3        -        1     (2)
Net change in cash and cash
equivalents                                    1,502      691      768   1,190





Cash and cash equivalents, beginning
of period                                        643      579    1,377      80
Cash and cash equivalents, end of
period                                         2,145    1,270    2,145   1,270
Supplementary cash flow information    6

The accompanying notes are an integral part of the consolidated financial
statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

In millions of Canadian dollars            Three months ended Six months ended
(unaudited)                                           June 30          June 30
                                               2012      2011     2012    2011
Net result                                      386       452    1,722   1,854
Other comprehensive income
Change in deferred (losses) gains on
items
designated as cash flow hedges                  (2)     (160)      225       -
Reclassification to operations of
deferred gains on items designated as
cash flow hedges                               (63)      (88)    (142)   (127)
                                               (65)     (248)       83   (127)
Comprehensive income                            321       204    1,805   1,727

The accompanying notes are an integral part of the consolidated financial
statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

For the three- and six-month periods ended June 30, 2012 and 2011

Amounts shown in tables are in millions of Canadian dollars.

Note 1 Basis of Presentation

In September 2010, the Canadian  Accounting Standards Board (AcSB)  authorized 
rate-regulated entities  to  defer  the adoption  of  International  Financial 
Reporting Standards  (IFRS) until  January1, 2012,  or the  beginning of  the 
first fiscal year  starting after  that date. In  May 2012,  the AcSB  granted 
these entities an optional one-year extension to make the changeover to  IFRS. 
Since Hydro-Québec was entitled to exercise these deferral rights, it opted to
present its 2011  and 2012  financial statements in  accordance with  Canadian 
generally accepted  accounting  principles  as  set forth  in  PartV  of  the 
Canadian  Institute   of  Chartered   Accountants  Handbook,   "Pre-Changeover 
Accounting Standards."

Hydro-Québec's consolidated financial statements also reflect the decisions of
the Régie de l'énergie (the "Régie"). These decisions may affect the timing of
the recognition  of  certain  transactions  in  the  consolidated  operations, 
resulting in  the  recognition of  regulatory  assets and  liabilities,  which 
Hydro-Québec considers it is likely to recover or settle subsequently  through 
the rate-setting process.

The quarterly consolidated financial statements, including the present  notes, 
do not  contain all  the required  information regarding  annual  consolidated 
financial statements  and should  therefore be  read in  conjunction with  the 
consolidated financial  statements and  accompanying notes  in  Hydro-Québec's 
Annual Report2011.

The accounting policies used to  prepare the quarterly consolidated  financial 
statements are  consistent  with  those  presented  in  Hydro-Québec's  Annual 
Report2011.

Hydro-Québec's quarterly results are not necessarily indicative of results for
the year on account  of seasonal temperature  fluctuations. Because of  higher 
electricity demand during  winter months,  revenue from  electricity sales  in 
Québec is higher during the first and fourth quarters.

Note 2 Effects of Rate Regulation on the Consolidated Financial
Statements

Adoption of IFRS-compliant accounting policies

In decision  D-2012-021 of  March2,  2012, the  Régie authorized  changes  to 
certain accounting  policies  applied by  the  Transmission Provider  and  the 
Distributor for  rate-setting purposes,  in order  to ensure  compliance  with 
IFRS.

These  changes  concern  the  recognition  of  costs  related  to  the  Energy 
Efficiency Plan according  to IAS38,  Intangible Assets,  the recognition  of 
asset retirement  obligations  according  to  IAS37,  Provisions,  Contingent 
Liabilities  and  Contingent   Assets,  and  IFRIC1,   Changes  in   Existing 
Decommissioning, Restoration and Similar  Liabilities, and the recognition  of 
employee benefits according to IAS19, Employee Benefits. In addition, the net
amount of accrued benefit assets and liabilities is no longer included in  the 
rate base. These  changes have  been taken into  account in  setting the  2012 
rates of the Transmission Provider and the Distributor.

Transmission

In decision D-2012-066  of June6,  2012, the Régie  set Hydro-Québec's  power 
transmission rates for 2012. The authorized return on the rate base was set at
6.84%, assuming a capitalization with 30% equity.

Distribution

In  decision  D-2012-035   of  March28,   2012,  the   Régie  authorized   an 
across-the-board reduction  of  0.45%  in  Hydro-Québec's  electricity  rates, 
effective April1, 2012.  The authorized return  on the rate  base was set  at 
6.80%, assuming a capitalization with 35% equity.

In decision D-2012-024 of March8, 2012, the Régie allowed the Distributor  to 
create deferred-expense accounts  bearing interest at  the authorized rate  on 
the rate base,  in order to  recognize expenses relating  to projects of  more 
than $10 million that  were integrated into a  rate application, but that  are 
pending approval at the  time the decision on  the rate application is  handed 
down. As at June30, 2012,  an amount of $7million  had been recognized as  a 
regulatory asset in this regard.

Note 3 Revenue

                    Three months ended Six months ended
                               June30          June30
                         2012     2011     2012    2011
Electricity sales^a     2,571    2,755    6,182   6,527
Other                     117       54      294     100
                        2,688    2,809    6,476   6,627

a) Including unbilled electricity deliveries, which totaled $638million as
at June30, 2012 ($654million as at June30, 2011).

Note 4 Depreciation and Amortization

                                Three months ended Six months ended
                                           June30          June30
                                     2012     2011     2012    2011
Property, plant and equipment^a       497      544    1,030   1,085
Intangible assets                      60       52      120     105
Regulatory assets                       7        -       11       8
Disposals of capital assets             9       27       12      30
                                      573      623    1,173   1,228

a) The revision of the useful life of property, plant and equipment in  2012 
resulted in a $54-million decrease in  the depreciation expense for the  three 
months ended June30, 2012, and to  a $75-million decrease for the six  months 
then ended.  For  2012,  it should  result  in  a decrease  on  the  order  of 
$183million. As part of  this revision, the  maximum depreciation period  for 
some hydroelectric generation  assets increased from  100 to 120years,  while 
the maximum  period  for  certain  transmission  line  and  substation  assets 
increased from 50 to 70 years and for certain distribution line and substation
assets, from 40 to  60years. The 2011 revision  had no significant impact  on 
the depreciation expense for the  three- and six-month periods ended  June30, 
2011.

Note 5 Financial Expenses

                                           Three months ended Six months ended
                                                      June30          June30
                                                2012     2011     2012    2011
Interest
Interest on debt securities                      561      624    1,096   1,243
Amortization of premiums, discounts and
issue expenses
related to debt securities                        66       25      156      51
                                                 627      649    1,252   1,294
Net exchange (gain) loss                         (3)        1        -       9
Guarantee fees related to debt securities         49       47       98      94
                                                  46       48       98     103
Less
Capitalized financial expenses                    76       78      147     154
Net investment income                              6        2       13       6
                                                  82       80      160     160
                                                 591      617    1,190   1,237

Note 6 Supplementary Cash Flow Information

                                           Three months ended Six months ended
                                                      June 30          June 30
                                                2012     2011     2012    2011
Change in non-cash working capital items
Accounts receivable and other receivables        581      450     (59)   (314)
Materials, fuel and supplies                     (3)        6      (1)      29
Accounts payable and accrued liabilities       (226)    (177)    (301)   (366)
Accrued interest                                 364      363     (67)    (52)
                                                 716      642    (428)   (703)
Investing activities not affecting cash
Increase in property, plant and equipment
and intangible assets                             10       12       48      25
Interest paid                                    139      175    1,019   1,119

Note 7 Employee Future Benefits

                                  Three months ended
                                             June30
                     Pension Plan        Other plans
                       2012  2011      2012     2011
Accrued benefit cost     51    30        28       31



                                  Six months ended
                                           June30
                     Pension Plan      Other plans
                       2012  2011     2012    2011
Accrued benefit cost    102    60       56      62

Note 8 Contingency

The Québec  government  must  decide  on  the  future  of  Gentilly-2  nuclear 
generating station. Should it decide to close down the station, abandoning the
current refurbishment  project would  have  a major  financial impact  on  the 
capitalized costs associated with this  asset, which amounted to $1.3  billion 
as at June 30, 2012, and would  require a review of the assumptions  regarding 
the work needed to dismantle the station.

Note 9 Subsequent Event

In September 2012, the decision was  made to abandon the project to  refurbish 
Gentilly‑2 nuclear generating station.



Note 10 Segmented Information

The following tables contain information  related to operations and assets  by 
segment:



                                                                           Three months ended
                                                                                June30, 2012
                                                                          Intersegment
                                                                Corporate eliminations
                                                                and Other          and
             Generation Transmission Distribution Construction Activities  adjustments  Total
Revenue
External
customers           327           28        2,324            -          9            -  2,688
Intersegment
customers         1,043          741           17          531        365      (2,697)      -
Net result          292          163         (78)            -          9            -    386
Total assets
as at
June30,
2012             32,074       18,735       12,975          427      6,707        (226) 70,692



                                                                           Three months ended
                                                                                June30, 2011
                                                                          Intersegment
                                                                Corporate eliminations
                                                                and Other          and
             Generation Transmission Distribution Construction Activities  adjustments  Total
Revenue
External
customers           367           27        2,407            -          8            -  2,809
Intersegment
customers         1,122          746           19          537        365      (2,789)      -
Net result          362          132         (46)            -          4            -    452
Total assets
as at
June30,
2011             31,134       18,230       12,949          451      4,743        (315) 67,192



                                                                             Six months ended
                                                                                June30, 2012
                                                                          Intersegment
                                                                Corporate eliminations
                                                                and Other          and
             Generation Transmission Distribution Construction Activities  adjustments  Total
Revenue
External
customers           728           59        5,664            -         25            -  6,476
Intersegment
customers         2,499        1,494           37          916        709      (5,655)      -
Net result          905          317          471            -         29            -  1,722
Total assets
as at
June30,
2012             32,074       18,735       12,975          427      6,707        (226) 70,692



                                                                             Six months ended
                                                                                June30, 2011
                                                                          Intersegment
                                                                Corporate eliminations
                                                                and Other          and
             Generation Transmission Distribution Construction Activities  adjustments  Total
Revenue
External
customers           821           53        5,739            -         14            -  6,627
Intersegment
customers         2,645        1,492           38          946        697      (5,818)      -
Net result        1,144          267          431            -          9            3  1,854
Total assets
as at
June30,
2011             31,134       18,230       12,949          451      4,743        (315) 67,192

Note 11 Comparative Information

Some corresponding period data of the previous year have been reclassified  to 
conform to the presentation  adopted in the current  periods or in  accordance 
with  the  changes  to  accounting   policies  described  in  Note2  to   the 
consolidated financial statements  published in  Hydro-Québec's Annual  Report 
2011.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(unaudited)

Amounts shown in tables are in millions of Canadian dollars.



                          Three months ended       Six months ended
                                     June30                June30
Summary of Operations  2012  2011 Change (%)  2012  2011 Change (%)
Revenue               2,688 2,809    4.3  Ü  6,476 6,627    2.3  Ü
Expenditure           1,711 1,740    1.7  Ü  3,564 3,536    0.8  Û
Financial expenses      591   617    4.2  Ü  1,190 1,237    3.8  Ü
Net result              386   452   14.6  Ü  1,722 1,854    7.1  Ü







                                                           2012
Consolidated Financial Information by Quarter    Q1    Q2 Q3 Q4
Net Result                                    1,336   386
Revenue                                       3,788 2,688
Revenue from Electricity Sales in Québec      3,242 2,281
Revenue from Electricity Sales Outside Québec   369   290







                                                                 2011
Consolidated Financial Information by Quarter    Q1    Q2    Q3    Q4
Net Result                                    1,402   452   383   374
Revenue                                       3,818 2,809 2,645 3,120
Revenue from Electricity Sales in Québec      3,358 2,432 2,200 2,730
Revenue from Electricity Sales Outside Québec   414   323   364   298





Quarter Highlights

Generation

Inauguration of Eastmain-1-A powerhouse

In June, Hydro-Québec inaugurated Eastmain-1-A  powerhouse, which will play  a 
key role in the company's sustainable development strategy. With an  installed 
capacity of 768MW, this hydroelectric facility will generate up to 2.3TWh  a 
year, enough to supply 135,000homes. It is part of a larger project that also
includes the  partial diversion  of the  Rivière Rupert  as well  as a  second 
generating station, Sarcelle powerhouse, which is still under construction.

Transmission

Régie de l'énergie decision

In May, the Régie de l'énergie authorized Hydro-Québec's project to  reinforce 
the 315-kV transmission system in Abitibi. This $118.8-million project  should 
be completed by December 2014.

Distribution

Forest biomass power

In May, the Québec government raised  the goal for the power purchase  program 
for electricity produced by forest biomass cogeneration from 150MW to 300MW.
Hydro-Québec Distribution is responsible for implementing this program,  which 
was launched in December 2011.

Two prizes in energy efficiency

In June,  the  Government  of  Canada awarded  two  ENERGY  STAR  2012  Market 
Transformation Awards to  Hydro-Québec: Utility of  the Year- Provincial  and 
Promotional Campaign  of  the  Year.  These  awards  recognize  leadership  in 
promoting energy efficiency in Canada.

Technological innovation

Exemplary partnerships

At the third annual  Célébrons le partenariat gala,  held in May to  celebrate 
excellence in  partnerships,  the  Association pour  le  développement  de  la 
recherche et de l'innovation du Québec [Québec association for the development
of  research  and  innovation]   payed  tribute  to  Hydro-Québec's   research 
institute, IREQ, for its  exemplary partnering approach  in two projects.  The 
first project, carried out in conjunction with ndb Technologies, involved  the 
design of a  portable system  to detect partial  discharges and  hot spots  in 
power transformers. The second initiative, conducted with Concordia University
and Natural Resources Canada, led to  the development of a solar simulator  to 
help design smart buildings with zero net energy consumption.

Signing of a licensing agreement for battery materials

Also in May, IREQ signed a licensing agreement enabling Focus Metals to set up
a graphite purification centre  and a graphite  anode production facility  for 
lithium-ion batteries.  Under  the  agreement,  Focus  Metals  will  transform 
first-production graphite  sourced  from  its Lac  Knife  (Québec)  high-grade 
deposit to  battery-grade material.  IREQ will  provide technical  support  to 
Focus Metals, including help in improving its materials and processes.



Transportation electrification

Charging stations at five shopping centres

In  May,  the  founding  partners  of  The  Electric  Circuit-Les  Rôtisseries 
St-Hubert,  RONA,   METRO,  the   Agence  métropolitaine   de  transport   and 
Hydro-Québec-announced a  partnering agreement  with First  Capital Realty,  a 
leading owner, developer and operator of shopping centres, for the  deployment 
of 20public charging stations for electric  vehicles by the end of 2012.  The 
first stations  will  be  installed at  Carrefour  Charlemagne  (Charlemagne), 
Carrefour Saint-Hubert (Saint-Hubert), Carrefour St-David Ouest and  Carrefour 
St-David Est (Beauport) and Carrefour du Versant Ouest (Outaouais). This  last 
location represents The Electric Circuit's first foray into the region.



























Hydro-Québec, 75, boul. René-Lévesque Ouest, Montréal (Québec) H2Z 1A4

Ce document est également publié en français.
www.hydroquebec.com
ISSN 0848-5836





                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR UBABRUOAAUAA -0- Nov/27/2012 17:52 GMT
 
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