Marie-Josée Privyk - Director, Investor Relations Michel Letellier - President and CEO Jean Trudel - Senior Vice President, Communications and CIO Jean Perron - Senior Vice President and CFO

Rupert Merer - National Bank Financial Sean Steuart - TD Securities Kelsey Roste - RBC Capital Markets

Thank you. [Foreign Language] Good morning, ladies and gentlemen.

I'm here today with Michel Letellier, President and CEO of Innergex; and Mr. Jean Trudel, Chief Investment Officer and Senior Vice President, Communications.

Also joining us is Mr. Jean Perron, Chief Financial Officer and Senior Vice President.

Please note that the presentations will be in English. However, you are welcome to address your questions either in French or English.

[Foreign Language] I would also like to point out that journalists are invited to call us afterwards if they wish to address any questions. In a minute, Mr.

Letellier will provide an update on our operating activities and Mr. Trudel will provide some details on our financial results for September 30, 2014.

We will then open the Q&A session with all three senior executives. The financial statements and the MD&A have been filed on SEDAR and are readily accessible via the internet.

You may also access the press release, financial statements and the MD&A on the Innergex website in the Investor section. During this conference call, we will refer to financial measures such as adjusted EBITDA, free cash flow and payout ratio that are not recognized measures according International Financial Reporting Standards, as they do not have a standardized meaning.

Also please be advised that this conference call will contain forward-looking information that reflects the corporation's expectations with respect to future results or developments. For explanations concerning a principal assumption used by the corporation to derive this forward-looking information and the principle risks and uncertainties that could cause actual results to differ materially from those anticipated, I invite you to consult the first pages of the corporation MD&A as well as our annual information form.

I now turn the conference to Michel Letellier

Thank you, Marie-Josée. Good morning, everybody.

So happy with the result beside little bit of low hydrology still in this quarter. But October and November seems to be picking up a lot, Jean Trudel will give you little bit more flavor on those.

Happy also to see that our operation and machine and the availability was great, so that's always important for us making sure that we are doing the right thing in order to have those machine available and our operation teams are doing great job on that aspect. I am very happy to report on that too.

This quarter has been very busy in terms of construction activities. If we go a little bit toward the project that we have which we remember we have four hydroelectric projects in BC being under construction.

And we have one wind project in Quebec being in a very late stage of development. We are going to start construction in a few weeks by clearing trees, so I'll get to each of the project very quickly.

Upper Lillooet River and Boulder is a cluster representing little more than 150 megawatt project in BC. These two projects are advancing very well.

If you remember we had a little bit of challenge establishing all the infrastructure for the temporary camp for the crew, just there is small remember we will have -- and we have about 350 crew members onsite so it's a little village that we had to build in the middle of the wood with all that constraint that one can imagine. But everything has been finalized and people moved into the camp in mid July.

That was a great I guess milestone because obviously traveling and communication had a little bit of challenge before the camp being occupied. So from mid July everything went on the fifth gear and works have advanced very well during the last period.

Very good progress on both projects, divergent of the water in Upper Lillooet is now being done, so that's a big milestone as well. And commission line is advancing.

The powerhouse is up from the ground as well. All the portal and terminal works have been initiated.

And we have gone through the -- I guess the most difficult part is starting the tunnel. So things are looking fairly well on Upper Lillooet River and Boulder as well.

Before moving to Tretheway is a little bit -- little smaller project, but nonetheless always interesting to see we have -- if you remember, selected local contractor for--that was the first time we were working with this contractor is called Zindane. He has proved to be a very efficient and very easy to work with, very collaborative in terms of finding solution, so very happy on the mood on that site.

Things are to some degree maybe a little bit in advance in terms of schedule, in our budget so very happy on Tretheway. We still are focusing on putting that project in commercial over next year.

Seems everything in line to do so. Big Silver, as you remember, we had started little bit later the construction.

But so far the contractor was the same as Upper Lillooet River and Boulder and CRT is part of that joint venture between two Quebec based contractors CRT and BC. CRT had done for us Northwest Stave and Kwoiek, and they have put the same management team on their side and we have put the same management team on our side at Kwoiek.

So communication has been great on the job too. And they have catch up with the delay given that -- given the fact that they had started little bit late.

They are catching up very fast and everything is being well done on site and very happy on the advance schedule. We are going to start the tunneling with the crew that are stopping in Upper Lillooet for winter time.

That crew is moving to Big Silver and we are going to start the tunneling at the end of this month. So far Big Silver doing, looking very well as well.

But also very happy to report on Mesgi'g Ugju's'n project called MU, MU a little bit easier to remember. And that's 150 megawatt wind farm in Quebec.

If you remember we are partner with Mi'kmaq first nation on that project. I think that we had been little bit conservative in establishing our budget with MU, given the fact that there was a lot competition for wind turbine and I would describe that as a buyer market for us.

And we have taken advantage of those situations in the market place. And we have been able to select the Senvion 3.2 megawatt machine with 140 meter of diameter, that machine is very well suited for the site.

We had initially thought to use the 2.2 megawatt machine with 92 meter of diameter and Senvion made it available the 3.2 which to some degree has a better ratio of production per dollar. So all the metrics, financial metrics of MU project seems to be improved quite a bit.

We are also very happy to report that we had to degrade governmental decree that conclude all the environment public process. So now we can access all the (inaudible) permit and start construction as soon as later this month on that project.

We are going also to issue call of tender for the balance of plan. We think that it's also a buying opportunity for us.

There is a lot of competition and not that much work for the big construction crew that are specialized win in Quebec. So again we anticipate to have pleasant or good surprise in terms of pricing regarding the balance of plan.

So far the MU project seems to be improving on all financial metrics and schedule is not an issue at all. So very happy to report on that as well.

We also been busy in applying for and preparing submission for the Quebec RFP 450 megawatt, recall just a very quick reminder, that's 450 megawatt split directly with 300 megawatt being allotted to, exclusively to Baie-des-Sables in the Gaspe Peninsula area. And 150 megawatt anywhere in Quebec.

So we have been focusing our self on Baie-des-Sables and Gaspe. We have four site but we have made five proposals with different variables.

That represents a little bit more than 100 megawatt worth of submission. Obviously, you will -- as you probably had seen there is a lot of players, very competitive RP, what we can say is that we have been true to ourselves, we have been very diligent in preparing all the costing and long-term forecast.

We are happy with the prices that we have submitted. I think they are competitive.

But we have use our view of how much it cost and how much it should be getting any returns. So we are positive and we are happy again with the submission we've done.

But very competitive process, so we are going to be anxious to know the result. We expect the result from Hydro-Quebec to be somewhere in the beginning of 2015.

Initially it was supposed to be before Christmas. But the submission date was delayed by two months.

So we had the same delay to the conclusion of Hydro-Quebec that would put us somewhere in February. So on that note I would obviously I will be available for answering questions later on.

So I'm going to switch to Jean Trudel.

Thank you, Mr. Michel.

And good morning everyone. During the third quarter which in terms of production normally accounts for 28% of the year.

The corporation facilities produced 827 gigawatt hour of electricity. So it is a 70% increase compared to the same quarter of 2013.

The increase in production is mainly attributable to the addition of Magpie Hydro facility acquired in July, 2013. The addition of Kwoiek creek in Northwest Stave hydro facility commissioned at the end of 2013.

And the addition of SM-1 Hydro acquired in June, 2014. So for the three months period production was at 97% of long term average, basically stronger than expected with wind regimes and Quebec, coupled with the positive contribution from hydro facilities and the solar facility all located in Ontario where does not sufficient of said the below average water source at our hydroelectric facilities located in BC and Quebec.

But nonetheless it is a fairly close to LTA quarter. So for a quarter revenue increased by 14% to $66.4 million and adjusted EBITDA increased 11% to $51.7 million compared to the same period last year.

In view of the current request for proposals in Quebec, the 2015 request for proposal in Ontario for which actually worked out to announce that we've been qualified on November 4. And also other development initiatives such as the partnership agreement to develop six hydro projects in BC with the [insert] nation.

Our prospective project expenses increased to $1.6 million this quarter compared to $0.7 million in 2013. Also as it could be expected the decline in benchmark rates during the quarter negatively impacted the mark-to-market value of our hedging instrument by $6.9 million, which is a non-cash expense.

And also concurrently with the closing of the long-term financing for Tretheway creek, the corporation realized the loss on derivative of $8.4 million in favor the lower than expected fixed rate on this $93 million financing for the construction period just 40 years. So if we include these losses on derivatives, the corporation reported a net loss of $4.5 million for the quarter but excluding the derivative losses and the related income taxes, net earnings for the three months period would have been $7.1 million compared to net earnings of $9.7 million in 2013.

That leads to a payout ratio for the last 12 months period at 113% compared to 89% in 2013. This variation can be mainly explained by the production that was lower than long-term average, which of course affected revenues and cash flows.

If the facilities have performed as long-term average the payout ratio would have been closer to 93%. The outlook for October is very good; actually even the beginning of November is good.

If we look at October, even if it is only a month, so we have to be cautious but it is quite positive with very strong hydrology in BC, in Ontario and also above average in Quebec. And with the wind segment performing very close to the long-term average.

So overall production for the month of October is standing at 133% of long-term average. In terms of financing.

During the quarter we close the non-recourse project financing for the Tretheway creek project. And the terms and conditions were more favorable than expected which allowed the corporation to fix a lower than expected interest rate and to borrow substantially more at the project level, even when we account for the payment of the realized loss on derivatives.

And also on November 6, we amended our revolving term credit facility to extend its maturity by one year to 2019. And to temporary increase its size to $475 million for an eight months period.

So basically we've done this amendment to provide us with additional flexibility to negotiate the best terms and conditions for the very important financing of Upper Lillooet hydro power and Big Silver. In case of the Upper Lillooet financing, we have received several interesting offers from different group of lenders at this point.

And we are presently analyzing these offers, and we expect to close the financing in Q1, 2015 along with Big Silver. So I am turning back the line to Michel, he will conclude with some additional remarks.

Yes. Just want to make sure we are coming back to our bases and the fundamental of Innergex.

As you all know we have focused on long term, we have 100% of our contract under EPA, and we have more than 20 years average remaining on our young portfolio of assets that are a majority of hydro. We are fully hedged on our project finance, fully amortized over the period of the initial first term of the EPA.

We have built in growth in our portfolio that will basically increase by 30% our installed capacity; all these five projects are now under construction. And they will enable us to bring our EBITDA from $150 million of EBITDA to about $300 million by 2017.

And all that without any equity. Just also I think that we are in a great industry.

We are fully 100% renewable energy that has a great potential of being part of the solution of global warming, very proud to be in that business. Thank you.

This completes the presentation part of the conference call. We now invite you to ask your questions.

Good morning, everyone. Michel, can you talk a little about the construction pipeline and particular the hydro portfolio?

Can you talk about your confidence in the construction costs? Where there maybe remaining risks on those costs and how are you managing the costs?

Well, obviously in construction mainly hydro tunnel is always the -- I guess one of the risky part. I think that we have been clearly conservative in establishing the last budget.

Although there is always possibility but we remained with some contingency. As a portfolio and I am not saying that none of those will have a little hiccup here and there, but as a portfolio I think that we are well into what we perceive to be good and conservative budget.

I am not expecting as a portfolio to see any material increase for the end of this project. And as I was mentioning I think that you guys could read between the lines that the MU project seems to be heading towards something being probably materially lower than what we anticipated as well.

All right, great. When you talk about contingency on those constructions cost if you -- is there any potential you could come under budget then?

On a total portfolio including MU, I am confident that we are very conservative in our total construction for the total portfolio of what we have now in the five projects that we have, very, very confident.

Great and then just quick follow up. You had a slight change in the Tretheway capacity and production estimate in this quarter; can you talk about the optimization process on the project and the others and how much flexibility there is in the project specification at this point?

This one is a little bit specific because beside we are always trying as you probably asking they are trying to minimize any capacity increase on EPA. We think that and we have the intention to fully exercise of our right.

We think that in the case of Tretheway, we have the ability to increase by 10% installed capacity. And we will have the machine, will have the capacity to do 10% more than the public or I mean -- the disclosed figure, thank you.

But we have to go through some proceeding with BC Hydro. I think the BP is very, very clear and we have the full intention to go and exercise our right on that aspect.

So that's why you have seen maybe this rule, this discrepancy in the installed capacity of Tretheway

Okay. So there could be some further changes that but possible to the upside in the future.

Yes.

Thanks, good morning, everyone. Couple of questions.

Michel, can you address I guess the strategy in your bidding for Quebec RFP; you noted several submissions that you have. Just trying to get context on-- and I appreciate you probably can't get into details but any context you can provide on price variance across the bids and bit more context on the strategy of the multiple bid you submitted?

Yes, well if we could here for a long time, as you can imagine that it is a little bit complicated. But what we tried is making sure that we have selected a turbine supplier that we were confident and with that have the bench potential to have the biggest local content, because this is quite important for us, we believe Innergex that the long term ability of the industry in Quebec is to making sure that these call are effective in creating local jobs.

So we were focusing on making sure that the turbine supplier would realize to the maximum possible the existing facilities that are already in production in the Gaspe Peninsula and Baie-des-Sables. So that was one part making sure that we wanted to have the full economic benefit for the local area.

Second is making sure that we would have good side with win obviously, but also making sure that we would have also the ability to interconnect at competitive rate. We have one project here [Marswie] that doesn't seem to have a lot of competition, that are I would say acceptable to the rules of Hydro-Quebec.

So this one could be interconnect for sure by 2017. The other Baie-des-Sables project RFP and [Lebak] so far Hydro-Quebec has not been able to, I would say guarantee interconnection by 2017.

So our strategy was to make [Marswie] competitive, attractive and even this incident we have provided three variable in terms of capacity. One has to understand that Hydro-Quebec will try to have the best portfolio in terms of price, interconnection and local jobs into the 450 megawatt.

So that doesn't mean that they will select all the best projects. They will try to have the best, cost effective portfolio for 450 megawatt.

So we were trying to make some variable in terms of installed capacity to provide flexibility to Hydro-Quebec in order to make up for the best portfolio. We also have provided an alternative to our expansion of MU.

Mind you that we had to compensate for first our first nation partner because if we were to build the extension in the MU project, we would have had some effect on the production. So that was taken into consideration when bidding into making sure that the first phase of MU would have been may called in any loss to future revenue because of the expansion.

So all in all I think that what we have tried to do is making sure that our project were submitted were very well supported by also local stakeholder, we had an extensive discussion with the local group, we were the first to sign what we call the alliance. The alliance is the all the MRC from the Baie-des-Sables and the Gaspe peninsula came together as a one group and being the partner of choice or the only partner available for Baie-des-Sables Gaspe peninsula, just a reminder that we have to have 50% partner in this RP, so we made a lot of effort making sure that we were meeting all the criteria with our local partner and we did the -- I guess the public consultation on all of our site, we were all positive and well received.

So we are proud of what we have done. And we be sure of being winner?

No, but I can assure you that we have put forward a great proposal, a very cost effective proposal. I think that the government and Hydro-Quebec will be very surprised, positively surprised to see the prices from the industry.

And it is only good to see that price of electricity produced by wind is coming down, and I don't think it is a great secret but price will be below the $0.09 by far, and I think that this is a good testimony wind can be competitive in the future.

Thank you and good morning everyone. Might just have a couple questions.

I want to follow up with the -- that was great color on the Quebec wind RP, and Michel, you had alluded to some potential delays from interconnect -- from Hydro-Quebec not being able to provide interconnection. I was wondering in general, do you believe that for the majority of the project you submitted -- is the schedule very tight to meet the 2017 and 2016 timeframe.

2016 is tight. There are some places where as an example MU project wouldn't have any problem because it is just an extension of the existing work that Hydro-Quebec is doing.

I cannot comment on Hydro-Quebec ability but it is always a little bit of the-- I would say the grey area in these calls we -- and it's not only Hydro-Quebec. We trying it was little bit the same.

They are just providing guideline when we bid, things can change depending on their schedule and the focus they want to put into their crew. But it is something that we don't control.

(Inaudible) [Lebak] which are the biggest public site in the Baie-des-Sables, clearly Hydro-Quebec would have some limitation to be able to provide interconnection by 2017. That can be I guess change throughout the process and I am sure that tough management of Hydro-Quebec might challenge some of the other division in the initial scheduling.

But that something that we cannot control.

Thank you. I guess also just not the Hydro-Quebec; do you foresee any potential delays with obtaining environmental permits that may delay the process?

Not in ours. I cannot comment on obviously the other project.

But what we have done through our experience of developing winning Quebec as you know we have been able to permit more than seven projects in Quebec lately. We have done a very detailed micro siting of when we have look into all the fatal flaw concerning birds or other mammal in the area.

As an example last week we had to relocate initially some of the turbine because of the (inaudible) extended drainage could have been close to some of our turbine. So we had made sure that in advance we would have moved this wind turbine location to a safer location for that mammal.

We have done very detailed work in our analysis so that I am very, very confident that therefore selected by Hydro-Quebec. We can deliver and obtain all the permitting in due time to deliver the projects.

Okay, thank you. So last quarter you guys mentioned that you had informed Hydro-Quebec that you would like to renew the 7 megawatt hydro PPA that expires December 1st.

I was wondering if you could just provide any comment on if Hydro-Quebec has got back to you with respect to the economics.

Yes. That's not only us as you might know.

There was a wave of contract signed in Hydro-Quebec. We called the (inaudible) the RFP of 1991 that was the genesis of the IPP in Quebec.

So there were about close to 300 megawatt of small hydro that had been signed throughout that period of five to six, seven years that program lasted. There are some that have been due to renew and there were some ongoing discussion with other member of our industry and under the association called (inaudible) here in Quebec.

We have made some discussion and initial negotiation with Hydro-Quebec. It seems to be evident given the fact that those are public contract.

And given the fact that in Quebec, there is I guess challenges in terms of budget and making sure that the liberal governments are focused on providing good fiscal management. That it would hard for Hydro-Quebec to provide very generous rate.

So negotiations are difficult, but there is process of arbitration that is built into our EPA. And right now I think that's going to be the way to solve this problem.

There are a few projects that are in front of us in terms of arbitration scheduling. And we are following those and we are exchanging in terms of member of the industry.

But I think that the decision will be governed by arbitration decision to solve these wind renewal prices.

That's great, thank you. Do you have any thoughts on the potential timing for this?

Yes. The first arbitration process will start somewhere in December.

And they may or they may take few months to get through the full process. I would imagine that some activities or decision will be done somewhere March or April.

In the meantime we are going to get ready to have our own arbitration. That should start somewhere I guess June or April next year if not later.

In the meantime, Hydro-Quebec has taken the approach of keeping the rates as just continuity of the EPA. They have done that for almost two years for the first project that has been come to I guess renewal date.

We expect that Hydro-Quebec will do the same with our Senvion project.

Thank you. And thank you everyone.

We appreciate this opportunity to provide enough data on our company. And please do not hesitate to contact us if you have any other questions.

[Foreign Language]

Thank you very much, everybody.