ATCO Reports Second Quarter 2011 Earnings

CALGARY, ALBERTA--(Marketwire - July 29, 2011) - ATCO Ltd. (TSX:ACO.X)(TSX:ACO.Y)

ATCO Ltd. today reported earnings attributable to Class I and Class II shares of $61 million ($1.07 per share) and Adjusted Earnings of $62 million ($1.08 per share) for the quarter ended June 30, 2011. This compares to earnings of $59 million ($1.01 per share) and Adjusted Earnings of $59 million ($1.02 per share) for the same period in 2010, an increase of $3 million in Adjusted Earnings.

Adjusted Earnings in the second quarter of 2011 were consistent overall with the comparable period in 2010. Increases in Adjusted Earnings due to higher infrastructure investment in the regulated rate base in the Utilities Segment were offset in the Energy Segment by expiry of the Barking generating plant's revenue contract in the third quarter of 2010.

Earnings attributable to Class I and Class II shares were $171 million ($2.96 per share), and Adjusted Earnings were $170 million ($2.94 per share), for the six months ended June 30, 2011. This compares to earnings of $149 million ($2.55 per share) and Adjusted Earnings of $154 million ($2.65 per share) for the same period in 2010, an increase of $16 million in Adjusted Earnings.

Adjusted Earnings in the first half of 2011 increased due to higher power pool prices and related spark spreads for ATCO Power's Alberta generating plants in the Energy Segment, higher infrastructure investment in the regulated rate base in the Utilities Segment and lower dividends on preferred shares resulting from the redemption of ATCO's Series 3 Preferred shares in March 2010.

For ATCO Structures & Logistics, Adjusted Earnings in both the second quarter and first half of 2011 were consistent with the prior year as continued strength in manufacturing and rental fleet activity and camp support services offset the expiry of the Afghanistan infrastructure and support services contracts at the end of March 2011.

Adjusted Earnings is 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. The importance of Adjusted Earnings is further explained after the Financial Summary and Reconciliation of Adjusted Earnings section.

Earnings reflect ATCO's implementation of International Financial Reporting Standards (IFRS). Comparative figures for 2010 have been presented on the same basis.

RECENT DEVELOPMENTS

• ATCO's subsidiary, Canadian Utilities Limited, signed a conditional agreement to acquire 100 per cent ownership of Western Australia Gas Networks (WAGN), a natural gas distribution utility company that serves the City of Perth and surrounding areas. The aggregate purchase price is approximately AUD$1 billion. The purchase involves the assumption of approximately AUD$644 million of debt, with the balance funded from current cash reserves. All conditions have now been satisfied or waived and the acquisition closed today.

• ATCO Structures & Logistics was awarded a contract by Bechtel to construct a 1,700-person workforce housing facility for a liquefied natural gas processing plant on Curtis Island, Queensland, Australia.

• ATCO Ltd. declared a second quarter dividend for 2011 of 28.5 cents per Class I Non-Voting and Class II Voting share. Dividends per share in 2011 have increased for the eighteenth consecutive year.

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 Ended June 30			For the Six Months Ended June 30
($ Millions except per share data)	2011		2010	2011		2010
	(Unaudited)
Adjusted Earnings (1)	62		59	170		154
Adjustments for Rate Regulated Activities	1		-	3		(5	)
Adjustment for Acquisition Transaction Costs	(2	)	-	(2	)	-
Earnings attributable to Class I and Class II Shares	61		59	171		149
Adjusted Earnings Per Share (1)	1.08		1.02	2.94		2.65
Earnings Per Share	1.07		1.01	2.96		2.55
Revenues	879		851	1,900		1,759
Funds Generated By Operations (1) (2)	287		254	732		594

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.

The increase in Revenues in the second quarter of 2011 is primarily due to higher revenues in the Utilities Segment arising from increased infrastructure investment and colder weather and increased manufacturing and rental activity in ATCO Structures & Logistics. In addition, the second quarter of 2010 included one-time revenues of $65 million related to the lease of the second unit of the Karratha plant in Australia.

The increase in Revenues in the first half of 2011 is primarily due to increased manufacturing and rental activity in ATCO Structures & Logistics, higher revenues in the Utilities Segment arising from increased infrastructure investment and colder weather, increased flow through natural gas sales in ATCO Midstream and higher Alberta pool prices in ATCO Power, partially offset by expiry of the Barking generating plant's revenue contract in the third quarter of 2010. In addition, the first half of 2010 included one-time revenues of $130 million related to the lease of the first and second units of the Karratha plant in Australia.

The increase in Funds Generated by Operations in the second quarter and first half of 2011 is primarily due to higher cash earnings and increased availability incentive receipts in ATCO Power.

IMPORTANCE OF ADJUSTED EARNINGS

Adjusted Earnings are defined as 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 will present earnings on the same basis as was used prior to adopting IFRS – that basis being the U.S. accounting principles for rate regulated entities commonly used by regulated companies in Canada. 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 is a key measure for several reasons:

• It is used by ATCO in assessing segment performance and allocating resources.

• It is ATCO's view that this measure is a better reflection of the economics of rate regulation that are directly affected by orders and decisions of utility regulators.

• It will facilitate comparison with those Canadian regulated companies that choose to wait another year before adopting IFRS and with those companies that may choose to adopt U.S. accounting principles instead of IFRS.

For rate regulated activities, the differences between Adjusted Earnings and earnings as reported under IFRS are strictly timing in nature: Adjusted Earnings for the Utilities Segment are recognized on the basis of accounting principles that recognize the economics of rate regulation and take into account the orders and decisions of the regulator, whereas earnings under IFRS are recognized when billed to customers. Over time, there is no difference.

Refer to note 4 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.

ATCO Ltd.'s consolidated financial statements and management's discussion and analysis for the three and six months ended June 30, 2011, 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 8,000 employees and assets of approximately $11 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.