ATCO Ltd.
TSX : ACO.X
TSX : ACO.Y

ATCO Ltd.

October 30, 2013 08:01 ET

ATCO Reports Higher Third Quarter 2013 Earnings

CALGARY, ALBERTA--(Marketwired - Oct. 30, 2013) - ATCO Ltd. (TSX:ACO.X)(TSX:ACO.Y) -

ATCO today reported higher earnings for the third quarter of 2013 led by continued investment in utility infrastructure to support Alberta growth.

Third quarter Adjusted Earnings were $84 million compared to $79 million for the same period in 2012. The company achieved increased earnings from the Utilities, along with solid performance from ATCO Structures & Logistics as a result of strong earnings in the modular structures business in North America and high demand for lodging and support services.

Also, in the third quarter of 2013, ATCO Structures & Logistics recognized a $56 million one-time gain on the sale of its interest in the Chilean joint venture, Tecno Fast ATCO S.A. The gain on this sale is included in earnings attributable to Class I and Class II Shares but is excluded from Adjusted Earnings.

Earnings attributable to Class I and Class II Shares were $132 million in the third quarter compared to $81 million in the same period in 2012 primarily due to the inclusion of the gain on sale of Tecno Fast ATCO S.A. Adjusted Earnings will differ from earnings attributable to Class I and Class II Shares because of the timing of recoveries from or refunds to customers of amounts that are deferred by the Utilities for regulatory purposes; however, over time there is no difference. In addition, one-time items are not included in Adjusted Earnings.

Adjusted Earnings were $293 million for the nine months ended September 30, 2013 compared to $268 million in 2012. Earnings attributable to Class I and Class II Shares were $347 million for the nine months ended September 30, 2013 compared to $272 million in 2012.

Investment in Alberta's utility infrastructure by ATCO Electric, ATCO Gas and ATCO Pipelines in the third quarter was $514 million, bringing the total for the first nine months of 2013 to $1,488 million, which is comparable to the same period of 2012.

RECENT DEVELOPMENTS

  • Construction commenced on the remaining 2,086 rooms of BHP Billiton's Jansen Potash Project in Saskatchewan during the third quarter and this workforce housing lodge is expected to be completed during the second quarter of 2015.
  • Construction of the Eastern Alberta Transmission Line continued in the third quarter with foundation installation and tower assembly underway.
  • ATCO declared a fourth quarter dividend for 2013 of 18.75 cents per Class I Non-Voting and Class II Voting Share. ATCO's annual dividend per share has increased for 20 consecutive years.
  • On September 9, 2013, ATCO's subsidiary, CU Inc., issued $600 million of 30-year 4.722% Debentures maturing September 9, 2043.
  • On September 18, 2013, CU Inc. issued $75 million of 50-year 4.855% Debentures maturing September 18, 2063.

FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED EARNINGS

A financial summary and reconciliation of Adjusted Earnings to earnings attributable to Class I and Class II Shares is provided below:

For the Three Months For the Nine Months
Ended September 30(4) Ended September 30(4)
($ Millions except share data) 2013 2012 2013 2012
Adjusted Earnings (1) 84 79 293 268
Gain on sale of Tecno Fast ATCO S.A. 56 - 56 -
Adjustments for Rate Regulated Activities (2) (8 ) 2 (2 ) 4
Earnings Attributable to Class I and Class II Shares 132 81 347 272
Revenues 1,015 981 3,195 2,932
Funds Generated By Operations (3) 450 403 1,382 1,173
Weighted Average Shares Outstanding (millions of shares) 114.8 114.8 114.8 115.1
(1) Adjusted Earnings are earnings attributable to Class I and Class II Shares after adjusting for the timing of revenues and expenses associated with rate regulated activities. Adjusted Earnings also exclude one-time gains and losses and items that are not in the normal course of business or day-to-day operations. Adjusted Earnings present earnings on the same basis as was used prior to adopting International Financial Reporting Standards (IFRS) - that basis being the U.S. accounting principles for rate regulated entities - and they are a key measure used to assess segment performance, to reflect the economics of rate regulation and to facilitate comparability of ATCO's earnings with other Canadian rate regulated companies.
(2) Refer to Note 5 to the consolidated financial statements for descriptions of the adjustments for rate regulated activities and the timing of their recovery from or refund to customers.
(3) This measure is cash flow from operations before changes in non-cash working capital. It does not have standardized meaning under IFRS and may not be comparable to similar measures used by other companies.
(4) 2012 financial information has been restated as a result of adopting new and amended IFRS accounting standards that became effective in 2013.

Revenues in the third quarter and the first nine months of 2013 increased primarily due to increased rate base in the Utilities and higher power pool prices in ATCO Power.

Funds Generated by Operations increased in the third quarter and the first nine months of 2013 primarily for the same reasons earnings increased.

ATCO's consolidated financial statements and management's discussion and analysis for the three and nine months ended September 30, 2013 will be available on the ATCO website (www.atco.com), via SEDAR (www.sedar.com) or can be requested from the Corporation.

ATCO Ltd., with more than 9,400 employees and assets of approximately $16 billion, delivers service excellence and innovative business solutions worldwide with leading companies engaged in structures & logistics (manufacturing, logistics and noise abatement), utilities (pipelines, natural gas and electricity transmission and distribution), energy (power generation, natural gas gathering, processing, storage and liquids extraction) and technologies (business systems solutions). More information can be found at www.atco.com.

Forward-Looking Information:

Certain statements contained in this news release may constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "estimate", "expect", "may", "will", "intend", "should", and similar expressions. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Corporation believes that the expectations reflected in the forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.

Any forward-looking information contained in this news release represents the Corporation's expectations as of the date hereof, and is subject to change after such date. The Corporation disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.

Contact Information

  • ATCO Ltd.
    B.R. (Brian) Bale
    Senior Vice President & Chief Financial Officer
    (403) 292-7502
    www.atco.com