ATCO Reports Record Earnings for 2010

CALGARY, ALBERTA--(Marketwire - Feb. 23, 2011) - ATCO Ltd. (TSX:ACO.X) (TSX:ACO.Y)

ATCO Ltd. today reported earnings of $292.9 million ($5.04 per share) for 2010 compared to $283.3 million ($4.89 per share) for the same period in 2009. Adjusted Earnings ⁽¹⁾ were $296.0 million ($5.09 per share) in 2010 compared to $278.4 million ($4.81 per share) in 2009, an increase of $17.6 million. Adjusted Earnings exclude one- time gains and items that are not in the normal course of business (see Financial Summary and Reconciliation of Adjusted Earnings).

In 2010, Adjusted Earnings increased due to higher manufacturing and rental fleet activity in ATCO Structures & Logistics. Adjusted Earnings also increased in the Utilities Segment due to higher infrastructure investment in the regulated rate base and regulatory decisions received by ATCO Gas for the Carbon storage facility, partially offset by court and regulatory decisions received by ATCO Gas in regards to its deferred gas account. These increases were partially offset in the Energy Segment by lower prices for natural gas storage.

Earnings and Adjusted Earnings for the year also benefited from the redemption in March 2010 of all of ATCO's $150 million of outstanding 5.75% Cumulative Redeemable Preferred Shares. This redemption resulted in preferred dividend savings of $6.6 million for the year, more than offsetting the $3.0 million redemption premium. The net benefit to ATCO's overall 2010 earnings was $3.9 million.

For the fourth quarter, 2010 earnings were $82.2 million ($1.42 per share) compared to $78.2 million ($1.35 per share) for 2009. Adjusted Earnings in the fourth quarter were $83.3 million ($1.43 per share) compared to $79.3 million ($1.37 per share) in 2009, an increase of $4.0 million.

In the fourth quarter, Adjusted Earnings increased in ATCO Structures & Logistics due to higher manufacturing and rental fleet activity, and in the Utilities Segment due to higher infrastructure investment in the regulated rate base. Earnings and Adjusted Earnings also increased as a result of the redemption of ATCO's preferred shares in March 2010. These increases were partially offset in the Energy Segment by lower prices for natural gas storage and lower power prices and spark spreads in the U.K. electricity market.

RECENT DEVELOPMENTS

• ATCO Group announced the creation of a new company – ATCO Australia. Based in Perth, ATCO Australia will provide a full range of energy and infrastructure services and will be led by Managing Director & Chief Operating Officer, Steven J. Landry.
• ATCO Ltd. declared a first quarter dividend for 2011 of 28.5 cents per Class I Non-Voting and Class II Voting share, a 7.5% increase over the 26.5 cents paid in each of the previous four quarters. Dividends have increased each year since 1993.
• On January 1, 2011, ATCO Ltd. and Canadian Utilities Limited completed the transfer of ATCO Ltd.'s wholly- owned subsidiary, ATCO Resources Ltd., from ATCO Ltd. to ATCO Power Ltd., a wholly-owned subsidiary of Canadian Utilities Limited for Class A non-voting and Class B common shares of Canadian Utilities Limited. This transfer increased ATCO Ltd.'s ownership of Canadian Utilities Limited from 52.2% to 52.8%.
• ATCO Structures & Logistics was awarded contracts to provide critical utilities services and first-responder (fire and crash rescue and emergency ambulance) services for NATO at Kandahar Airfield in Afghanistan, and to provide a 1,000-person mining camp facility for the Detour Lake gold property in northeastern Ontario.
• CU Inc. issued $125 million of debentures in November 2010 and $75 million of equity preferred shares in December 2010.
• Canadian Utilities Limited and CU Inc. filed an application with the Alberta Utilities Commission to approve the transfer of natural gas storage facility assets located at Carbon, Alberta from ATCO Gas to ATCO Midstream.

FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED EARNINGS

A financial summary and reconciliation of earnings to Adjusted Earnings is provided below:

		For the Three Months				For the Twelve Months
		Ended December 31				Ended December 31
		2010		2009		2010		2009
($ Millions except per share data)		Unaudited
Earnings		82.2		78.2		292.9		283.3
ATCO Power Mark-to-Market Adjustment		1.1		1.1		3.1		3.9
H.R. Milner Tax Reassessment		-		-		-		(8.8)
Adjusted Earnings (1)		83.3		79.3		296.0		278.4
Earnings Per Share		1.42		1.35		5.04		4.89
Adjusted Earnings Per Share (1)		1.43		1.37		5.09		4.81
Revenues		941.8		861.4		3,445.4		3,108.9
Funds Generated By Operations (1) (2)		236.0		272.0		929.9		935.1

1. These measures are not defined by Generally Accepted Accounting Principles and may not be comparable to similar measures used by other companies.
2. This measure is cash flow from operations before changes in non-cash working capital.

In the third quarter of 2009, ATCO benefited from the court decision that overturned a Canada Revenue Agency reassessment dealing with the sale of the H.R. Milner generating plant (H.R. Milner Tax Reassessment). This decision resulted in one-time earnings of $8.8 million.

The increase in Revenues for the fourth quarter is primarily due to increased manufacturing and rental activity in ATCO Structures & Logistics in Canada, Australia and South America and higher infrastructure investment in regulated rate base in the Utilities Segment.

The increase in Revenues for the twelve months ended December 31, 2010 is primarily due to the lease of ATCO Power's Karratha generating plant in Australia that commenced commercial operations in the first half of 2010. Revenues also increased in the Utilities Segment due to higher infrastructure investment in regulated rate base, as well as increased manufacturing and rental activity in ATCO Structures & Logistics.

The decrease in Funds Generated by Operations for the fourth quarter is primarily due to regulatory deferral amounts which vary from quarter to quarter and are, therefore, not comparable or indicative of performance.

Funds Generated by Operations for the twelve months ended December 31, 2010 are relatively unchanged.

ATCO Ltd.'s consolidated financial statements and management's discussion and analysis of financial condition and results of operations for the three and twelve months ended December 31, 2010, will be available on ATCO Ltd.'s website (www.atco.com) or via SEDAR (www.sedar.com) or can be requested from the Company.

Alberta-based ATCO Ltd., with more than 7,700 employees and assets of approximately $10 billion, delivers service excellence and innovative business solutions worldwide with leading companies engaged in Utilities (pipelines, natural gas and electricity transmission and distribution), Energy (power generation, natural gas gathering, processing, storage and liquids extraction), Structures & Logistics (manufacturing, logistics and noise abatement) 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.