Financial Highlights

Net income totaled $3,141 million, an increase of $234 million compared to 2007. The increase is due to growth of $380 million in net electricity exports by Hydro-Québec Production, which correspond to electricity sales outside Québec less short-term electricity purchases for exports, and a $126-million non-recurring gain related to the price adjustments provided for in the contract of sale for the interest in HQI Transelec Chile S.A. (“Transelec”), in Chile.
Revenue rose by $387 million to $12.7 billion due to electricity sale increases of $77 million in Québec and $302 million outside Québec.

Consolidated Financial Data¹

In millions of Canadian dollars	2008 Twelve months ended December 31	2007 Twelve months ended December 31	2006 Twelve months ended December 31

Revenue	12,717	12,330	11,161
Expenditure
Operations	2,497	2,541	2,389
Electricity and fuel purchases	1,406	1,555	1,315
Depreciation and amortization	2,336	1,991	2,007
Taxes	541	553	534
Water-power royalties²	552	267	-
Regulatory deferrals	(72)	29	(93)
Total expenditures	7,260	6,936	6,152
Operating income	5,457	5,394	5,009
Financial expenses	2,445	2,512	2,212
Income from continuing operations	3,012	2,882	2,797
Income (loss) from discontinued operations	129	25	944
Net income	3,141	2,907	3,741
Dividends declared	2,252	2,095	2,342
Balance sheet summary
Total assets	66,774	64,866	63,254
Long-term debt, including current portion and perpetual debt	36,415	34,534	34,427
Equity	22,062	20,892	18,840
Investments for continuing operations affecting cash
Property, plant and equipment and intangible assets	3,756	3,464	3,348
Costs related to Energy Efficiency Plan	236	172	149
Total investments	3,992	3,636	3,497

Certain comparative figures have been reclassified to reflect the presentation adopted in the current year.
The payment of water-power royalties results from the fact that Hydro-Québec is subject to the Watercourses Act. For this transition year, the half-rate rule applied.

Source: Hydro-Québec.