ATCO Reports Second Quarter 2011 Earnings
29 Luglio 2011 - 3:06PM
Marketwired Canada
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$644 million of debt, with the balance funded from
current cash reserves. All conditions have now been satisfied or waived
and the acquisition closed today.
-- ATCO Structures & Logistics was awarded a contract by Bechtel to
construct a 1,700-person workforce housing facility for a liquefied
natural gas processing plant on Curtis Island, Queensland, Australia.
-- ATCO Ltd. declared a second quarter dividend for 2011 of 28.5 cents per
Class I Non-Voting and Class II Voting share. Dividends per share in
2011 have increased for the eighteenth consecutive year.
FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED EARNINGS
A financial summary and reconciliation of Adjusted Earnings to earnings
attributable to Class I and Class II shares is provided below:
For the Three Months For the Six Months
Ended June 30 Ended June 30
----------------------------------------------------------------------------
($ 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.
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