Canadian Utilities Limited
TSX : CU.X
TSX : CU.PB
TSX : CU.PA
TSX : CU

Canadian Utilities Limited

February 20, 2008 09:00 ET

Canadian Utilities Reports Record 2007 Earnings of $386.7 Million

CALGARY, ALBERTA--(Marketwire - Feb. 20, 2008) - Record earnings of $386.7 million ($3.08 per share) for the year ended December 31, 2007, compared to earnings of $323.9 million ($2.57 per share) for the year ended December 31, 2006 were reported today by Canadian Utilities.

"Canadian Utilities' 2007 record earnings were generated by all three of our diverse business divisions; Power Generation, Utilities and Global Enterprises," said Nancy Southern, President and Chief Executive Officer, Canadian Utilities. "The earnings reflect continued growth in our utility customer base, good performance from our power generation plants and the impact of various income tax adjustments."

Canadian Utilities also reported an increase in "adjusted earnings" in 2007, which excludes certain items not in the normal course of business or a result of day-to-day operations. Adjusted earnings for the year ended December 31, 2007 were $343.8 million ($2.74 per share) compared to $320.8 million ($2.54 per share) for the year ended December 31, 2006. Details are provided in the table below.

Earnings for the three months ended December 31, 2007, were $98.7 million ($0.78 per share), compared to earnings of $100.0 million ($0.80 per share) for the same three months of 2006. Adjusted earnings for the three months ended December 31, 2007 were $75.5 million ($0.60 per share), compared to adjusted earnings of $100.0 million ($0.80 per share) for the same three months of 2006.

RECENT DEVELOPMENTS

- ATCO Gas began servicing its one millionth customer in Alberta as the utility managed robust growth in the province.

- ATCO Power reported on November 5, 2007 that the 1,000 megawatt Barking Power Plant in East London, England, of which ATCO Power owns 25.5%, experienced an unplanned outage on 60% of the plant capacity. This outage reduced Canadian Utilities' 2007 earnings by $8.6 million ("Barking Outage"). The plant is expected to resume operations in March 2008. Business interruption and property insurance is expected to cover the majority of the outage losses after December 9, 2007.

- ATCO I-Tek, for the second consecutive year, received the "Top Customer Satisfaction Award in North American Energy Industry" for its operation of the ATCO Gas and ATCO Electric Call Centre.

- ATCO Electric received all regulatory approvals to proceed with construction of a new 226 kilometre transmission line required to support increasing power needs in fast-growing northwest Alberta. The 240-kilovolt line, which will extend from the Wabasca area to the Peace River region, is expected to be completed by March 31, 2010 at an estimated project cost of $210 million.



For the Three For the Twelve
Financial Summary and Reconciliation of Months Ended Months Ended
Adjusted Earnings December 31 December 31
-----------------------------------------------------------------------
2007 2006 2007 2006
-----------------------------------------------------------------------
($ Millions except per share data) (unaudited)

Reported Earnings 98.7 100.0 386.7 323.9
H.R. Milner Income Tax Reassessment - - - 12.4
2006 Changes in Income Taxes and Rates - - - (11.8)
Calgary Stores Block Gain - - - (3.7)
2007 Changes in Income Taxes and Rates (10.9) - (14.9) -
2007 Changes in Preferred Share Taxes - - (15.6) -
ATCO Power Mark-to Market Adjustment (2.8) - (2.9) -
ATCO Gas Tax Reassessments (9.5) - (9.5) -
-----------------------------------------------------------------------
Adjusted Earnings (1) 75.5 100.0 343.8 320.8
-----------------------------------------------------------------------
Earnings per share 0.78 0.80 3.08 2.57
-----------------------------------------------------------------------
Adjusted Earnings per share (1) 0.60 0.80 2.74 2.54
-----------------------------------------------------------------------
Revenues 657.1 671.1 2,404.9 2,430.4
-----------------------------------------------------------------------
Funds generated by operations (2) 180.0 168.4 725.9 657.5
-----------------------------------------------------------------------
(1) This measure is not defined by Generally Accepted Accounting
Principles and may not be comparable to similar measures used
by other companies.

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


Adjusted earnings for the twelve months ended December 31, 2007, increased primarily due to colder temperatures, higher sales per customer and customer growth in ATCO Gas, and the timing and demand of natural gas storage capacity sold, higher storage fees and higher margins for natural gas liquids (NGL) extraction in ATCO Midstream. This increase was partially offset by increased operation and maintenance and depreciation expenses in ATCO Gas due to customer growth and increased capital expenditures, and lower earnings in ATCO Power's Alberta generating plants due to lower spark spreads realized on sales of electricity and the impact of the Barking Outage.

Adjusted earnings for the three months ended December 31, 2007, decreased primarily due to lower earnings in ATCO Power's Alberta generating plants due to lower spark spreads realized on sales of electricity and the impact of the Barking Outage, increased operation and maintenance and depreciation expenses in ATCO Gas due to customer growth and increased capital expenditures and warmer temperatures in ATCO Gas. This decrease was partially offset by higher prices and volumes of natural gas processed for NGL extraction operations in ATCO Midstream, and decreased share appreciation rights expense due to changes in Canadian Utilities Limited Class A share and ATCO Ltd. Class I share prices since September 30, 2007.

Revenues for the twelve months ended December 31, 2007, decreased primarily due to the refund of future income tax balances, which also reduced income tax expense, resulting from the ATCO Electric 2007-2008 General Tariff Application Decision received in the third quarter of 2007, lower natural gas fuel purchases recovered on a "no-margin" basis and the impact of the Barking Outage in ATCO Power, and lower prices and volumes of natural gas processed for NGL extraction in ATCO Midstream. This decrease was partially offset by colder temperatures, higher sales per customer and customer growth in ATCO Gas, and the timing and demand of natural gas storage capacity sold and higher storage fees in ATCO Midstream.

Revenues for the three months ended December 31, 2007, decreased primarily due to lower sales in ATCO Power's Alberta generating plants due to lower Alberta Power Pool prices and the impact of the Barking Outage. This decrease was partially offset by higher prices and volumes of natural gas processed for NGL extraction operations in ATCO Midstream, and the recording of green house gas emission fees recovered by Alberta Power (2000) from its customers. It is anticipated that the Power Purchase Arrangements will allow Alberta Power (2000) to recover most of the costs associated with complying with these recent changes in environmental laws.

Funds generated by operations for the twelve months ended December 31, 2007, increased primarily due to higher earnings and increased deferred availability incentives in Alberta Power (2000). Funds generated by operations for the three months ended December 31, 2007, increased primarily due to increased deferred availability incentives in Alberta Power (2000).

Canadian Utilities Limited'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, 2007, will be available on Canadian Utilities' website (www.canadian-utilities.com) or via SEDAR (www.sedar.com) or can be requested from the Corporation.

Canadian Utilities Limited is part of the ATCO Group of Companies (www.atco.com). Canadian Utilities Limited is a Canadian based worldwide organization of companies with assets of approximately $7.3 billion and more than 6,500 employees, actively engaged in three main business divisions: Power Generation, Utilities (natural gas and electricity transmission and distribution) and Global Enterprises (technology, logistics and energy services).

Forward-Looking Information:

Certain statements contained in this news release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve 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 statements. The Corporation believes that the expectations reflected in the forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

The Corporation's actual results could differ materially from those anticipated in these forward-looking statements as a result of regulatory decisions, competitive factors in the industries in which the Corporation operates, prevailing economic conditions, and other factors, many of which are beyond the control of the Corporation.

The forward-looking statements contained in this news release represent the Corporations' expectations as of the date hereof, and are subject to change after such date. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.

Contact Information

  • Canadian Utilities Limited
    K.M. (Karen) Watson
    Senior Vice President & Chief Financial Officer
    (403) 292-7502