China Hydroelectric Corporation Announces Results for the Fourth Quarter and Full Year 2013

 China Hydroelectric Corporation Announces Results for the Fourth Quarter and
                                Full Year 2013

PR Newswire

BEIJING, April 21, 2014

BEIJING, April 21, 2014 /PRNewswire/ -- China Hydroelectric Corporation (NYSE:
CHC, CHCWS) ("China Hydroelectric" or "the Company"), an owner, developer, and
operator of small hydroelectric power projects in the People's Republic of
China, today announced its unaudited financial results for the fourth quarter
and twelve months ended December 31, 2013.

For the fourth quarter of 2013, revenues from continuing operations (net of
value-added tax) declined by 18.5% year over year to $10.1 million, due to a
16.6% decline in electricity sold. We recorded a net loss attributable to
China Hydroelectric shareholders from continuing operations of $5.1 million
for the fourth quarter of 2013, compared to a $9.2 million loss for the same
period of 2012. This improvement is partially attributable to a $2.9 million
decrease in general and administrative expenses.

Revenues from continuing operations (net of value-added tax) for the full year
2013 declined by 12.8% year over year to $74.5 million, due to a 13.2% decline
in electricity sold. We recorded a net loss attributable to China
Hydroelectric shareholders from continuing operations of $2.2 million for the
full year 2013, compared to a $5.2 million loss for the full year 2012. This
improvement is partially attributable to a $7.0 million decrease in general
and administrative expenses over that period.

"The Company's management team has continued to mitigate the impact of lower
precipitation in 2013 with effective cost reductions, reduced third party
borrowings, and a drawdown of new long-term bank borrowings," stated Mr. Amit
Gupta, Chairman of China Hydroelectric.

"Weather conditions in Zhejiang and Fujian provinces, two of our three main
operating regions, experienced an improvement during the fourth quarter, but
recorded overall precipitation levels that were slightly below long-term
averages for the full year 2013. Precipitation in Yunnan province improved
slightly in Q4 2013 from the same period in 2012 but remained well below
long-term average," stated Dr. You-Su Lin, interim Chief Executive Officer of
China Hydroelectric. "As announced in the previous quarter, we have taken an
asset impairment loss as a result of the flood damaged Liyuan project in
Sichuan province. The management team has been actively working with the
insurance company for reimbursement of the damage, but assessment of the loss
is still currently on-going. Going forward, we are pleased to report we have
received a tariff increase in Yunnan for electricity sold to the provincial
grid companies," Dr. Lin added.

Operating Highlights

Precipitation in the fourth quarter of 2013 was approximately 36% above the
long-term average, due to favorable conditions in two of the three main
provinces in which the Company operates. Precipitation in the fourth quarter
of 2012 was 52% above the long-term average. Due to less precipitation,
electricity sold in the fourth quarter of 2013 declined approximately 16.6%
when compared to the fourth quarter of 2012. The reduced rainfall resulted in
a utilization rate of 21.1% in the fourth quarter of 2013, compared to 24.7%
in the fourth quarter of 2012.

Precipitation for the full year 2013 was approximately 8% below the long-term
average, due to lower precipitation levels in all three of the main provinces
in which the Company operates. Due to less precipitation, electricity sold for
the full year 2013 declined approximately 13.2% when compared to the full year
2012. The reduced rainfall resulted in a utilization rate of 34.0% for the
full year 2013, compared to 39.2% for the full year 2012.

The following table presents precipitation levels for the Company's three main
operating regions as a percentage of historical long term average for the
periods indicated.

Precipitation- Percentage of Long-Term Average *^+

Province               Q4 2013    Q4 2012        Fiscal    Fiscal    Fiscal
                                                 2013      2012      2011
Zhejiang               173%       168%           96%       134%      70%
Fujian                 170%       211%           93%       128%      62%
Yunnan                 68%        65%            86%       87%       86%
Total Company          136%       152%           92%       121%      84%
*Source: Data collected by the Company and by provincial and national
meteorological recording stations
^+The Company refined collection of precipitation data in 2013 and believes
refined collections are more representative of actual historical experience.

The following table presents some key comparative financial and other
information (in US$ millions, except for electricity sold, effective tariff,
average effective utilization rate, per ADS data and percentages):

                            Q4      Q4                YTD(4)   YTD(4)   %
Summary Data                2013    2012    % Change                    Change
                                                      2013     2012
Continuing Operations
Electricity sold            235.2   282.1   -17%      1,534.3  1,768.0  -13%
(millions kWh)
Effective tariff            0.28    0.29    -3%       0.33     0.33     0.0%
(RMB/kWh)
Average effective           21.1%   24.7%   -15%      34.0%    39.2%    -13%
utilization rate
Revenues                    10.1    12.4    -19%      74.5     85.4     -13%
Gross profit                0.3     2.7     -89%      39.2     49.6     -21%
Adjusted EBITDA (1)         3.0     3.5     -14%      49.9     53.8     -7%
GAAP net loss               (5.1)   (9.2)   -44%      (2.2)    (5.2)    -58%
GAAP net loss per ADS (3)   (0.09)  (0.17)  -47%      (0.03)   (0.09)   -66%
Non-GAAP net                (5.5)   (8.3)   -34%      0.7      (3.8)    -118%
(loss)/income (2)
Non-GAAP net
(loss)/income per ADS       (0.09)  (0.15)  -41%      0.00     (0.07)   -100%
(2,3)
Net income from             -       1.1     -100%     -        3.9      -100%
discontinued operations
               (1) See "Net (loss) /income to adjusted EBITDA reconciliation"
               below
               (2) See "GAAP net loss to non-GAAP net (loss)/income
               reconciliation" below
               (3) Per ADS data is representative of basic and diluted ADS
               (4) "YTD" refers to the twelve months ended December 31.

Precipitation levels are one of the principal factors affecting the Company's
revenues, profitability, and cash generated by operations. Other important
factors include, but are not limited to: consistency of precipitation;
upstream reservoir conditions; the cascading effects of multiple hydroelectric
power projects on a single waterway; and upstream precipitation levels in the
Company's river basins. The various provinces in which the Company operates
are subject to different weather patterns or systems and precipitation
fluctuates from region to region and quarter to quarter.

Fourth Quarter Ended December 31, 2013 Financial Highlights

Revenues

Revenues, net of value added taxes, from continuing operations for the fourth
quarter of 2013 were $10.1 million, a decrease of 18.5%, or $2.3 million, from
$12.4 million for the fourth quarter of 2012. As previously noted, the
decrease was principally due to reduced electricity sales. The lower
electricity sales primarily resulted from significantly lower precipitation
levels in Fujian province, as compared to the fourth quarter of 2012.

The Company sold 235.2 million kWh from continuing operations in the fourth
quarter of 2013, a decrease of 46.9 million kWh, or 16.6%, from the 282.1
million kWh sold in the fourth quarter of 2012. The effective tariff for the
fourth quarter of 2013 was RMB 0.28/kWh, a decrease of 3.4% from 0.29/kWh in
the fourth quarter of 2012.

Cost of Revenues

Cost of revenues from continuing operations for the fourth quarter of 2013 was
$9.7 million, an increase of $0.1 million or 1.0% from the fourth quarter of
2012, mainly due to an increase of labor costs of $0.2 million, offset by
lower variable costs as a result of less favorable rainfall, compared with the
same period of the prior year.

Gross Profit and Margin

Gross profit from continuing operations for the fourth quarter of 2013
decreased by 88.9% to $0.3 million, from $2.7 million in the prior-year
period. Gross margin for the fourth quarter of 2013 decreased to 3% compared
to 22% in the same period of 2012, primarily due to decreased revenues and the
fixed nature of certain expenditures included in cost of revenues.

Operating Expenses

General and administrative expenses ("G&A expenses") for the fourth quarter of
2013 decreased 45% to $3.5 million from $6.4 million for the fourth quarter of
2012. The decrease was primarily due to the closure of the U.S. office,
one-time expenses in the fourth quarter of 2012 related to the proxy contest
and reduction of professional service expenses, offset by professional service
expenses related to the preliminary non-binding offer from NewQuest to acquire
all of the Company's outstanding ordinary shares not owned by the buyer
consortium (the "Going Private Transaction") and subsequent definitive merger
agreement approved by the special committee in January 2014.

Adjusted EBITDA and EBITDA Margin

Adjusted EBITDA decreased by 37.5% to $3.0 million in the fourth quarter of
2013 compared to $4.8 million in the same period of 2012. Adjusted EBITDA
margin decreased to 29% for the fourth quarter of 2013 compared to 39% in the
same period of 2012.

On a continuing basis, Adjusted EBITDA decreased by 14.3%, or $0.5 million, to
$3.0 million in the fourth quarter of 2013 from $3.5 million in the same
period of 2012, and Adjusted EBITDA margin remained unchanged at 29%.

Interest Expenses, net

Net interest expenses were $4.5 million in the fourth quarter of 2013,
compared to $6.7 million in the prior year period. The decrease was primarily
due to a reduced balance on short term borrowings from third party
individuals.

GAAP and Non-GAAP Net Loss

Net loss attributable to China Hydroelectric shareholders from continuing
operations was $5.1 million in the fourth quarter of 2013, compared to $9.2
million in the same period of 2012 which excluded $1.1 million of net income
attributable to China Hydroelectric shareholders from discontinued operations.
The improvement is partially attributable to a decrease in the Company's G&A
expenses.

Non-GAAP net loss attributable to China Hydroelectric shareholders from
continuing operations was $5.5 million, or $0.09 per diluted ADS, for the
fourth quarter of 2013, compared to a net loss of $8.3 million, or $0.15 per
diluted ADS in the prior year period. For reconciliation between GAAP and
non-GAAP earnings, see the table below entitled "GAAP Net Loss to Non-GAAP Net
(Loss)/Income Reconciliation."

Weighted average American depository shares ("ADSs") used in the fourth
quarter of 2013 and 2012 per share calculations were 54.0 million and 54.0
million ADSs, representing 162.1 million and 162.0 million ordinary shares,
respectively.

Twelve Months Ended December 31, 2013 Financial Highlights

Revenues

Revenues, net of value added taxes, from continuing operations, for 2013 were
$74.5 million, a decrease of 12.8%, or $10.9 million, from $85.4 million for
2012. The decrease in revenue for 2013 was principally due to lower
precipitation levels in all of the Company's three main operating regions
compared to 2012. The Company sold 1,534.3 million kWh from continuing
operations for 2013, a decrease of 233.7 million kWh, or 13.2%, from 1,768.0
million kWh sold in 2012. The effective tariff was RMB 0.33/kWh for 2013,
unchanged from the same period of 2012.

Cost of Revenues

Cost of revenues from continuing operations for 2013 was $35.4 million, as
compared to $35.8 million for 2012. Cost of revenues in the twelve months
ended December 31, 2013 decreased due to lower variable costs as a result of
less favorable rainfall for 2012, offset by a $0.3 million increase in labor
cost.

Gross Profit and Margin

Gross profit from continuing operations for 2013 decreased by 21.2% to $39.2
million, from $49.6 million in 2012. Gross margin for 2013 decreased to 53%
compared to 58% in the same period of 2012, primarily due to decreased
revenues and the fixed nature of certain expenses included in cost of
revenues.

Operating Expenses

G&A expenses for 2013 decreased by 34.0% to $13.3 million, from $20.3 million
for 2012. The decrease was primarily due to the closure of the U.S. office,
one-time expenses in the fourth quarter of 2012 related to the proxy contest
and reduction of professional service expenses, offset by professional service
expenses related to the Going Private Transaction.

Assets impairment loss

We recorded an asset impairment loss of $3.5 million in the third quarter of
2013, primarily reflecting the estimated asset damages resulting from a severe
flood in Sichuan province in July 2013 which damaged the tailrace concrete
apron, spillway gates, power generation plant, auxiliary equipment, and the
35KV substation of our Liyuan hydroelectric power project. The net asset
impairment loss of $3.5 million also reflected the insurance recovery of $0.6
million we received in 2013. The company is still assessing the total asset
loss caused by such flood and working with the insurance company to determine
how much of the total loss can be recovered.

Adjusted EBITDA and EBITDA Margin

Adjusted EBITDA decreased by 17.5% to $49.9 million in 2013 compared to $60.5
million in 2012. Adjusted EBITDA margin was 67% for 2013, unchanged from 2012.
On a continuing basis, Adjusted EBITDA decreased by 7.2%, or $3.9 million, to
$49.9 million in 2013 from $53.8 million in 2012. On a continuing basis,
Adjusted EBITDA margin increased from 63% to 67% year over year.

Interest Expenses, net

Net interest expenses were $22.5 million in 2013, compared to $28.0 million in
2012. The decrease was primarily due to a decrease in the balance of third
party borrowings in 2013.

GAAP and Non-GAAP Net (Loss)/Income

Net loss attributable to China Hydroelectric shareholders from continuing
operations was $2.2 million in 2013 compared to $5.2 million in 2012, which
excluded $3.9 million net income attributable to China Hydroelectric
shareholders from discontinued operations.

Non-GAAP net income attributable to China Hydroelectric shareholders from
continuing operations  was $0.7 million, or $0.00 per diluted ADS, for 2013,
compared to Non-GAAP net loss of $3.8 million, or $0.07 per diluted ADS, for
2012. For reconciliation between GAAP and non-GAAP earnings, see the table
below entitled "GAAP Net Loss to Non-GAAP (Loss)/Income Reconciliation."

Weighted average ADS used in 2013 and 2012 per share calculations were 54.0
million and 54.0 million ADSs, representing 162.1 million and 162.0 million
ordinary shares, respectively.

Balance Sheet

The Company's cash and cash equivalents (excluding restricted cash) were $14.2
million as of December 31, 2013, compared to $17.6 million as of September 30,
2013. Long-term bank loans were $250.1 million (including the current portion
of long-term loans of $38.3 million) as of December 31, 2013, an increase from
$238.5 million (including current portion of long-term loans of $37.2 million)
as of September 30, 2013. Short-term loans as of December 31, 2013 were $12.0
million, a decrease of $2.4 million from $14.4 million as of September 30,
2013.

As of December 31, 2013, the Company's working capital deficiency was $66.5
million. Up to the date of this release, the Company raised $52.2 million
through borrowings from banks and other institutions. Investors should expect
the Company to have a working capital deficit in the foreseeable future, due
to the use of leverage to finance the construction and acquisition of
hydroelectric projects, as well as the nature of hydroelectric power projects
to utilize a low level of working capital assets. The Company regularly raises
funds through various means, such as new borrowings from banks and other
non-financial institutions. New borrowings are used for multiple purposes,
such as daily operating liquidity, to fund new projects, and to refinance
existing short-term loans into longer-term debt.

Legal Proceeding

In 2009, the Company entered into a capital injection agreement with Henan
Lantian Group ("Lantian") to acquire a certain equity interest in Henan Wuyue
Storage Power Generation Co., Ltd. ("Wuyue"). The Company completed the first
capital injection of RMB 32.5 million in 2010. Thereafter, the project has
been largely at a standstill and the investment in Wuyue was written off as of
December 31, 2011. In 2012, the Company initiated a negotiation with Lantian
to terminate the original agreement. In May 2013, Lantian filed an arbitration
claim against the Company at China International Economic and Trade
Arbitration Commission ("CIETAC") for the penalty of late capital injection in
Wuyue, in a total amount of RMB25.74 million. The Company filed a counterclaim
against Lantian at CIETAC for termination of the agreements between Lantian
and the Company, no penalty of late capital injection and return of the
Company's capital injected in Wuyue. In September 2013, Lantian increased the
penalty claim amount from RMB25.74 million to RMB38.2 million. The hearing was
held on November 8, 2013. As of the date of this earning release, no ruling or
award has been granted in respect of the claim. We expect CIETAC to deliver a
ruling in relation to this proceeding during the second quarter, which will be
final and binding to all parties. 

In October 2013, twenty-four employees of Wuyue filed an arbitration claim
against Wuyue. Lantian and the Company were named as joint respondents for
unpaid salary and social security payment of RMB6.6 million. The claim was
heard by the Henan Guangshan County Labour Arbitration Committee ("GCLAC") in
November 2013. On November 26, 2013, GCLAC delivered a ruling which (i)
awarded RMB3.5 million to Wuyue for unpaid employee salary and social security
up to November 30, 2013, and (ii) concluded that we shall not pay any salary
or social security for the employees of Wuyue since November 30, 2013. On Feb
17, 2014, we paid RMB3.5 million to Wuyue in accordance with the ruling, which
has been immediately allocated to the Wuyue employees.

Business Outlook

As of the date of this release, rainfall in the first quarter of 2014 has been
lower than that of the same period in 2013. Fujian and Zhejiang, which are
regions in which the Company receives higher tariffs, continue to experience
average to slightly below average levels of precipitation. Please note that
all precipitation updates are offered as of the date of this release, and may
be materially different when actual precipitation results are reported.

Several of the Company's projects located in Yunnan province have received
tariff increases. The increases apply to electricity provided to the
provincial grid companies and are effective January 1, 2014. The new tariff
per kilowatt hour sold to the provincial grid companies is RMB0.1927 from June
to October, RMB0.235 during May and November, and RMB0.282 from December to
April. As of the filing date, the Company has not received any notice
indicating a change to the tariffs received for electricity sold to
non-provincial grid companies.

Conference Call

China Hydroelectric will host a conference call at 6:00 am (Pacific Time) /
9:00 am (Eastern Time) / 9:00 pm (Beijing / Hong Kong Time) on Tuesday, April
22, 2014 to discuss its fourth quarter and full year 2013 financial results
and recent business activities. To access the live teleconference, please dial
(U.S.) +1-888-466-4462 or (International) +1-719-457-2661, and enter pass code
8613792. This call is being webcast by ViaVid Communications and can be
accessed by clicking on this link:
http://public.viavid.com/index.php?id=108477, or at ViaVid's website at
http://www.viavid.com.

A playback will be available through May 6, 2014, by dialing (U.S.)
+1-877-870-5176 or (International) 1-858-384-5517and entering the pass code
8613792.

About China Hydroelectric Corporation

China Hydroelectric Corporation (NYSE: CHC, CHCWS) ("China Hydroelectric" or
"the Company") is an owner, developer, and operator of small hydroelectric
power projects in the People's Republic of China. Through its geographically
diverse portfolio of operating assets, the Company generates and sells
electric power to local power grids. The Company's primary business is to
identify, evaluate, acquire, develop, construct, and finance hydroelectric
power projects. The Company currently owns 25 hydropower stations in China
with total installed capacity of 517.8 MW, of which it acquired 21 stations
and constructed four. These hydroelectric power projects are located in four
provinces: Zhejiang, Fujian, Yunnan, and Sichuan. Hydropower is an important
factor in meeting China's electric power needs, accounting for approximately
22% of total nation-wide capacity.

For further information about China Hydroelectric Corporation, please visit
the Company's website at: http://www.chinahydroelectric.com.

Cautionary Statements Regarding Liquidity

The management remains confident in the Company's ability to secure capital in
order to fund its liquidity needs, debt obligations and growth plans, but
obtaining financing cannot be guaranteed. In the event that the Company fails
to raise funds sufficient to meet its liquidity needs, the Company may be
forced to substantially curtail its operations or otherwise take measures that
would materially and adversely affect its current operations and business
prospects.

Cautionary Note Regarding Forward-looking Statements and Weather Data

Statements contained herein that address operating results, performance,
events or developments that we expect or anticipate will occur in the future
are forward-looking statements. The forward-looking statements include, among
other things, statements relating to the Company's business strategies and
plan of operations, the Company's capital expenditure and funding plans, the
Company's operations and business prospects, projects under development,
construction or planning, the Company's ability to meet its liquidity needs,
the availability of restructuring measure or of lending by financing sources,
including banks in China, the regulatory environment, the potential impact of
flood damages to Liyuan project, and the business outlook. The forward-looking
statements are based on the Company's current expectations and involve a
number of risks, uncertainties and contingencies, many of which are beyond the
Company's control, which may cause actual results, performance or achievements
to differ materially from those anticipated. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated,
estimated or projected. Among the factors that could cause actual results to
materially differ include: supply and demand changes in the electric markets,
changes in electricity tariffs, hydrological conditions, the Company's
relationship with and other conditions affecting the power grids we service,
the Company's production and transmission capabilities, availability of
sufficient and reliable transmission resources, our plans and objectives for
future operations and expansion or consolidation, interest rate and exchange
rate changes, the effectiveness of the Company's cost-control measures, the
Company's liquidity and financial condition, environmental laws and changes in
political, economic, legal and social conditions in China, the availability of
financing from lenders in China due to bank restrictions or otherwise, and
other factors affecting the Company's operations that are set forth in the
Company's Annual Report on Form 20-F for the year ended December 31, 2012
filed with the Securities and Exchange Commission (the "SEC") on April 18,
2013 and in the Company's future filings with the SEC. Unless required by law,
the Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

This release also contains statistical data and estimates that we obtained
from provincial and national meteorological recording stations. Although we
believe that this data is reliable and consistent with our experience, we have
not independently verified it.

About Non-GAAP Financial Measures

To supplement China Hydroelectric consolidated financial results presented in
accordance with GAAP, China Hydroelectric uses non-GAAP net income/ (loss)
attributable to China Hydroelectric shareholders and adjusted EBITDA, which
are non-GAAP financial measures. Non-GAAP net income/ (loss) attributable to
China Hydroelectric shareholders for the fourth quarter and the twelve months
ended December 31, 2013 and 2012 excludes the following non-cash charges:
stock-based compensation expenses, exchange gains or losses and the change in
fair value of warrant liabilities. A reconciliation of GAAP and non-GAAP items
is provided in the table entitled "GAAP Net Loss to Non-GAAP Net (Loss)/Income
Reconciliation." Adjusted EBITDA is defined by the Company as earnings before
interest, taxes, depreciation and amortization and excluding certain non-cash
charges, including: stock-based compensation expenses, exchange losses, and
change in fair value of warrant liabilities. For further details, see the
table entitled "Net Loss to adjusted EBITDA reconciliation." The presentation
of these non-GAAP financial measures is not intended to be considered in
isolation or as a substitute for the financial information prepared and
presented in accordance with GAAP. For more information on these non-GAAP
financial measures, please see the tables captioned "Net Loss to Adjusted
EBITDA Reconciliation" and "GAAP Net Loss to Non-GAAP Net (Loss)/Income
Reconciliation" below.

China Hydroelectric believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance and liquidity by
excluding certain expenses that may not be indicative of its operating
performance and financial condition from a cash perspective. We believe that
both management and investors benefit from referring to these non-GAAP
financial measures in assessing the Company's performance and when planning
and forecasting future periods. These non-GAAP financial measures also
facilitate management's internal comparisons to China Hydroelectric historical
performance and liquidity. China Hydroelectric has computed its non-GAAP
financial measures using methods consistent with the Company's annual report
on Form 20-F. We believe these non-GAAP financial measures are useful for
investors because they permit greater transparency with respect to
supplemental information used by management in its financial and operational
decision making. A limitation of using these non-GAAP financial measures is
that they exclude certain charges that have been and may continue for the
foreseeable future to be significant expenses in the Company's results of
operations.

Statement Regarding Unaudited Financial Information

The financial information set forth in this press release is unaudited and
subject to adjustments. Adjustments to the financial statements may be
identified when our annual financial statements are prepared and audit work is
performed for the year end audit, which could result in significant
differences from this unaudited financial information.

For further information, please contact:

China Hydroelectric Corporation
Scott Powell                                 James Hull

Investor Relations and Corporate             Finance Manager
Communications
                                             Phone (China): +86-10-5963-6881
Phone (U.S.): +1 (646) 650-1351
                                             Email: james.hull@china-hydro.com
Email: ir@china-hydro.com



CHINA HYDROELECTRIC CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In US$ 000's, except for share and per share data)
                        Three Months Ended          Twelve Months Ended
                        December 31,  December 31,  December 31,  December 31,
                        2013          2012          2013          2012
Continuing Operations:
Revenues                10,052        12,375        74,517        85,388
Cost of revenues        (9,711)       (9,664)       (35,357)      (35,795)
Gross profit            341           2,711         39,160        49,593
Operating expenses
General and
administrative
expenses (including
share-based
 compensation
expenses of $211 and
$166 for the twelve
months                  (3,474)       (6,391)       (13,258)      (20,348)
 ended December
31, 2013 and 2012,
expenses of $33 and
$59 for
 three months
ended December 31,
2013 and 2012,
respectively)
Assets impairment loss  (14)          -             (3,549)       -
Total operating         (3,488)       (6,391)       (16,807)      (20,348)
expenses
Operating               (3,147)       (3,680)       22,353        29,245
income/(loss)
Interest income         17            64            98            84
Interest expense        (4,550)       (6,733)       (22,568)      (28,070)
Changes in fair value   553           (43)          839           (399)
of warrant liabilities
Exchange gain/(loss)    (128)         (40)          (41)          28
Other income, net       109           475           275           507
Income before income    (7,146)       (9,957)       956           1,395
tax expenses
Income tax              1,741         708           (3,474)       (6,451)
expense/(income)
Net loss from           (5,405)       (9,249)       (2,518)       (5,056)
continuing operations
Net income from
discontinued            -             1,137         -             3,907
operations
Net loss                (5,405)       (8,112)       (2,518)       (1,149)
Less:
Net loss/(income)
attributable to         305           48            297           (94)
non-controlling
interests
Net loss attributable
to China Hydroelectric  (5,100)       (8,064)       (2,221)       (1,243)
Corporation
shareholders
- Continuing            (5,100)       (9,201)       (2,221)       (5,150)
operations
- Discontinued          -             1,137         -             3,907
operations
Other Comprehensive
income/(loss), net of
taxes
 Foreign currency
translation             3,388         2,004         12,395        (1,413)
adjustments
Comprehensive           (2,017)       (6,075)       9,877         (2,529)
income/(loss)
 Less: comprehensive
loss/(income)
attributable to         327           65            364           (85)
non-controlling
interest
Comprehensive
(loss)/income           (1,690)       (6,010)       10,241        (2,614)
attributable to CHC
shareholders
GAAP net loss per
ADS- basic and         (0.09)        (0.15)        (0.03)        (0.02)
diluted
From continuing         (0.09)        (0.17)        (0.03)        (0.09)
operation
From discontinued       -             0.02          -             0.07
operation
GAAP net loss per
share – basic and       (0.03)        (0.05)        (0.01)        (0.01)
diluted
From continuing         (0.03)        (0.06)        (0.01)        (0.03)
operation
From discontinued       -             0.01          -             0.02
operation
Weighted average
American Depository     54,033,222    53,996,366    54,023,875    53,996,366
Shares – basic
Weighted average
ordinary shares-       162,099,665   161,989,097   162,071,626   161,989,097
basic
Weighted average
American Depository     54,033,222    53,996,366    54,023,875    53,996,366
Shares- diluted
Weighted average
ordinary shares-       162,099,665   161,989,097   162,071,626   161,989,097
diluted



CHINA HYDROELECTRIC CORPORATION
GAAP NET LOSS TO NON-GAAP NET (LOSS) /INCOME RECONCILIATION
(In US$ 000's)
                         Three Months Ended           Twelve Months Ended
                         December 31,  December 31,   December     December
                         2013          2012           31, 2013     31, 2012
Net loss attributable    (5,100)       (8,064)        (2,221)      (1,243)
to CHC shareholders
Non-GAAP adjustments:
Exchange gain/(loss)     128           40             41           (28)
Stock based
compensation             33            59             211          166
expense(1)
Change in fair value
of warrant               (553)         43             (839)        399
liabilities(2)
Bad debt                 -             792            -            792
Assets impairment loss   14            -              3,549        -
Non-GAAP net
(loss)/income            (5,478)       (7,130)        741          86
attributable to CHC
shareholders
Less:
Net income
attributable to CHC
shareholders from        -             (1,137)        -            (3,907)
discontinued
operations
Non-GAAP net
(loss)/income
attributable to CHC      (5,478)       (8,267)        741          (3,821)
shareholders from
continuing operations
Non-GAAP net
(loss)/income
attributable to CHC      (0.09)        (0.13)         0.00         0.00
shareholders per
ADS- basic and
diluted (3)
From continuing          (0.09         (0.15)         0.00         (0.07)
operation
From discontinued        -             0.02           -            0.07
operation
Non-GAAP net
(loss)/income
attributable to CHC     (0.03)        (0.04)         0.00         0.00
shareholders per
ordinary share- basic
and diluted
From continuing          (0.03)        (0.05)         0.00         (0.02)
operation
From discontinued        -             0.01           -            0.02
operation
Weighted average
American depository      54,033,222    53,996,366     54,023,875   53,996,366
shares - basic
Weighted average
ordinary shares-        162,099,665   161,989,097    162,071,626  161,989,097
basic
Weighted average
American Depository      54,033,222    53,996,366     54,023,875   53,996,366
Shares- diluted
Weighted average
ordinary shares-        162,099,665   161,989,097    162,071,626  161,989,097
diluted
       (1)Stock-Based Compensation Related Items: We provide non-GAAP
       information relative to our expense for stock-based compensation. We
       include stock-based compensation expense in our GAAP financial measures
       in accordance with Financial Accounting Standards Board ("FASB")
       Accounting Standards Codification ("ASC") Topic 718, Compensation-
       Stock Compensation ("FASB ASC Topic 718"). Because of varying available
       valuation methodologies, subjective assumptions and the variety of
       award types, which affect the calculations of stock-based compensation,
       we believe that the exclusion of stock-based compensation allows for
       more accurate comparisons of our operating results to our peer
       companies. Stock-based compensation is very different from other forms
       of compensation. The expense associated with granting an employee a
       stock option is spread over multiple years unlike other compensation
       expenses which are more proximate to the time of award or payment. For
       example, we may recognize expense on a stock option in a year in which
       the stock option is significantly underwater and typically would not be
       exercised or would not generate any compensation for the employee. The
       expense associated with an award of a stock option for 1,000 shares of
       stock by us in one quarter, for example may have a very different
       expense than an award of an identical number of shares in a different
       quarter. Further, the expense recognized by us for such an option may
       be very different than the expense recognized by other companies for
       the award of a comparable option. This makes it difficult to assess our
       operating performance relative to our competitors. Because of these
       unique characteristics of stock-based compensation, management excludes
       these expenses when analyzing the organization's business performance.
       We also believe that presentation of such non-GAAP information is
       important to enable readers of our financial statements to compare
       current period results with future periods.
       (2)Warrant liabilities Related Items: We provide non-GAAP information
       relative to the change in fair value of warrant liabilities. We include
       the change in fair value of warrant liabilities in our GAAP financial
       measures in accordance with Financial Accounting Standards Board
       ("FASB") Accounting Standards Codification ("ASC") Topic 815,
       Derivatives and Hedging ("FASB ASC Topic 815"). Because of varying
       available valuation methodologies, and subjective assumptions, which
       affect the calculations of the change in fair value of warrant
       liabilities, we believe that the exclusion of the change in fair value
       of warrant liabilities allows for more accurate comparisons of our
       operating results to our peer companies. Because of the characteristics
       of warrant liabilities, management excludes the change in fair value
       when analyzing the organization's business performance. We also believe
       that presentation of such non-GAAP information is important to enable
       readers of our financial statements to compare current period results
       with future periods.
       (3)The Company's American depository shares ("ADS") convert to
       ordinary shares at a rate of one ADS to three ordinary shares.
       (4)All the reconciliation items are attributed to China
       Hydroelectric Corporation Shareholders.



CHINA HYDROELECTRIC CORPORATION
AUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In US$ 000's)
                                              As of December  As of December
                                              31,              31,
                                              2013             2012
ASSETS
Current assets:
Cash and cash equivalents                     14,165           7,967
Restricted cash                               -                5,171
Accounts receivable (net of allowance for
doubtful accounts of nil as of December 31,   3,741            5,772
2013 and 2012)
Notes receivable                              492              1,877
Deferred tax assets                           1,994            1,659
Amounts due from related parties (net of
allowance for doubtful accounts of US$1,379   -                86
and US$1,338 as of December 31, 2013 and
2012)
Prepayments and other current assets (net of
provision for impairment allowance of         3,226            14,150
US$1,608 and US$1,560 as of December 31,
2013 and 2012)
Total current assets                          23,618           36,682
Non-current assets:
Property, plant and equipment, net            540,242          548,511
Land use right, net                           48,962           48,640
Intangible assets, net                        4,714            4,660
Goodwill                                      115,960          112,481
Deferred tax assets                           1,526            1,329
Other non-current assets                      2,220            2,013
Total non-current assets                      713,624          717,634
TOTAL ASSETS                                  737,242          754,316
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable                              1,992            3,124
Short-term loans                              11,973           21,676
Current portion of long-term loans            38,337           35,537
Amounts due to related parties                9,491            12,705
Accrued expenses and other current            28,072           43,825
liabilities
Warrant liabilities                           -                839
Deferred tax liabilities (current)            300              -
Total current liabilities                     90,165           117,706
Non-current liabilities:
Long term loans                               211,723          212,970
Deferred tax liabilities                      24,720           24,345
Other non-current liabilities                 8,005            6,780
Total non-current liabilities                 244,448          244,095
TOTAL LIABILITIES                             334,613          361,801
Shareholders' equity
Ordinary shares (par value US$0.001 per
share, 400,000,000 shares authorized as of
December 31, 2013 and 2012; 162,099,665 and   162              162
161,989,097 shares issued and outstanding as
of December 31, 2013 and 2012)
Additional paid in capital                    509,902          509,665
Accumulated other comprehensive income        54,059           41,597
Accumulated deficit                           (161,693)        (159,472)
Total China Hydroelectric Corporation         402,430          391,952
shareholders' equity
Non-controlling interests                     199              563
TOTAL SHAREHOLDER'S EQUITY                    402,629          392,515
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY    737,242          754,316



CHINA HYDROELECTRIC CORPORATION
NET LOSS TO ADJUSTED EBITDA RECONCILIATION
                                                                              Three Months Ended  Twelve Months
                                                                                                  Ended
                                                                              December  December  December  December
                                                                              31, 2013  31, 2012  31, 2013  31, 2012
Net loss                                                                      (5,405)   (8,112)   (2,518)   (1,149)
Interest expenses, net                                                        4,533     6,669     22,470    27,986
Other non-cash charges, including exchange gain,
change in fair value of warrant liabilities, and                          (392)     142       (587)     537
stock-based compensation expense
Income tax expenses/(income)                                                  (1,741)   (708)     3,474     6,451
Provision for impairment allowance for doubtful
accounts on amount due from related party and                             -         843       -         843
prepayments and other current assets
Interest expenses, income tax expenses, depreciation                          -         138       -         2,743
and amortization related to discontinued operations
Depreciation of property, plant and equipment and                         5,941     5,842     23,516    23,068
amortization of land use rights and intangibleassets
Assets impairment loss                                                        14        -         3,549     -
EBITDA, as adjusted                                                           2,950     4,814     49,904    60,479
                                                                              29%       39%       67%       67%
Less:
Income from discontinued operations                                           -         (1,137)   -         (3,907)
Interest expenses, income tax expense, depreciation and                       -         (138)     -         (2,743)
amortization related to discontinued operations
EBITDA, on a continuing basis, as adjusted                                    2,950     3,539     49,904    53,829
                                                                              29%       29%       67%       63%
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization and certain non-cash
charges including exchange loss, change in fair value of warrant liability, stock-based compensation. We believe
that EBITDA is widely used by other companies in the power industry and may be useful to investors as a measure of
the Company's financial performance. Given the significant investments that we have made in net property, plant and
equipment, depreciation and amortization expense comprises a meaningful portion of the Company's cost structure. We
believe that EBITDA will provide a useful tool for comparability between periods because it eliminates depreciation
and amortization expenses attributable to capital expenditures and business acquisitions. The presentation of EBITDA
should not be construed as an indication that the Company's future results will be unaffected by other charges and
gains we consider to be outside the ordinary course of our business.
EBITDA margin, as adjusted, is calculated by dividing the period's EBITDA by net revenue including discontinued
operations.



CHINA HYDROELECTRIC CORPORATION
AUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In US$ 000's)
                                                  Twelve Months Ended
                                                  December 31,  December31,
                                                  2013
                                                                 2012
Cash flows from operating activities:
Net loss                                          (2,518)       (1,149)
Adjustments to reconcile net income to net
cash generated from operating activities:
Depreciation of property, plant and equipment
andamortization of                               23,524        23,780
land use rights and intangible assets
Deferred income taxes                             (482)         (163)
Changes in fair value of warrant liabilities      (839)         399
Amortization of debt issuance costs               175           191
Authorization of government grant                 (3)           (3)
Stock-based compensation expense                  211           166
Loss from disposal of property, plant and         45            508
equipment
Exchange gain/ (loss)                             41            (28)
Asset impairment loss                             3,549         -
Gain from disposal of discontinued operation      -             (2,767)
Gain from extinguishment of amounts due to
originalshareholders of                          -             (462)
acquired subsidiaries
Provision for impairment allowance on
prepayment and othercurrent                      -             843
 assets
Net pension cost recognized                       -             33
Changes in operating assets and liabilities
Accounts receivable                               2,175         (1,797)
Notes receivable                                  789           (1,874)
Prepayments and other current assets              (426)         (463)
Other non-current assets                          (538)         779
Accounts payable                                  (1,084)       (345)
Amounts due to related parties                    (1)           (2)
Other non-current liabilities                     1,229         6,578
Accrued expenses and other current liabilities    (6,437)       (1,524)
Net cash provided by operating activities         19,410        22,700
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash          -             (8,923)
acquired
Proceeds from the disposal of subsidiaries,       10,957        20,212
net of tax
Acquisition of an intangible assets               (90)          -
Acquisition of property, plant and equipment      (1,087)       (7,091)
Proceeds from disposal of property, plant and     26            35
equipment
Payment to contractors for construction           (450)         (6,931)
projects
Proceeds from insurance claim                     549           -
Loans to a related party                          -             (86)
Net cash provided by/ (used in) investing         9,905         (2,784)
activities
Cash flows from financing activities:
Exercised options                                 26            -
Proceeds from short-term loans                    14,364        28,070
Proceeds from long-term loans                     32,335        72,947
Proceeds from loans from related parties          2,034         572
Proceeds from loans from third parties            3,425         20,161
Payment of debt issuance cost                     (194)         (704)
Repayment of loans from related parties           (5,585)       (69)
Repayment of loans from third parties             (13,313)      (38,136)
Repayment of short-term loans                     (26,225)      (28,051)
Repayment of long-term loans                      (36,544)      (69,986)
Restricted cash                                   5,249         (5,166)
Net cash used in financing activities             (24,428)      (20,362)
Net increase in cash and cash equivalents         4,887         (446)
Effect of changes in exchange rate on cash and    1,311         11
cash equivalents
Cash and cash equivalents at the beginning of     7,967         8,402
the period
Cash and cash equivalents at the end of the       14,165        7,967
period

SOURCE China Hydroelectric Corporation

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Website: http://chinahydroelectric.com
 
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