ATCO Reports 2014 Second Quarter Earnings
28 Luglio 2014 - 1:35PM
Marketwired Canada
ATCO Ltd. (TSX:ACO.X) (TSX:ACO.Y)
ATCO today reported second quarter adjusted earnings of $57 million in 2014
compared to $89 million in 2013. Adjusted earnings were $172 million for the six
months ended June 30, 2014 compared to $209 million for the same period of 2013.
Major drivers of this decrease were unfavourable market conditions in the
Company's power generation business, an Alberta Utilities Commission (AUC)
decision received by the Utilities in the second quarter and reduced earnings
from ATCO Structures & Logistics.
The decrease in earnings in ATCO Power was primarily due to a 66% decline in the
average Alberta Power Pool price in the second quarter of 2014 over the same
period in 2013 and higher natural gas input costs. Also contributing to the
decrease were higher business development costs to pursue power generation
opportunities and the launch of ATCO Power's recently announced commercial and
industrial sales program.
The decrease in earnings was also impacted by the AUC decision for information
technology (IT) in the second quarter of 2014. The decision covers an unusually
long period from the start of 2010 to the end of 2014. It reduced the Company's
adjusted earnings in the second quarter by $14 million, of which only $1 million
related to the second quarter of 2014, and $13 million related to prior periods.
The Utilities continued to invest in electricity and natural gas transmission
and distribution facilities to support growth in the province and replace aging
infrastructure. ATCO Electric, ATCO Gas and ATCO Pipelines collectively invested
$501 million in the second quarter, bringing the total for the first half of
2014 to $1 billion.
ATCO Structures & Logistics' second quarter earnings were lower than the same
period last year. The earnings for this company are significantly influenced by
the cyclical nature of large natural resource project activity. Reduced
manufacturing activity and profit margins, combined with lower utilization and
reduced rental rates and expiry of a logistics and facility services contract,
resulted in lower earnings.
Earnings attributable to Class I and Class II Shares were $66 million for the
quarter ended June 30, 2014 compared to $98 million in the same period of 2013.
Earnings attributable to Class I and Class II Shares were $193 million for the
six months ended June 30, 2014 compared to $215 million in the same period of
2013.
RECENT DEVELOPMENTS
-- ATCO declared a third quarter dividend for 2014 of 21.5 cents per Class
I Non-Voting and Class II Voting Share. ATCO's annual dividend per share
has increased for 21 consecutive years.
-- The Company announced it has competitively outsourced its information
technology (IT) services to Wipro Ltd. (Wipro), a global IT, consulting
and business process services company. Wipro will provide the Company
with a complete suite of IT services. Wipro will also acquire the shares
of ATCO I-Tek and the assets of ATCO I-Tek Australia. The sale is
expected to close in the third quarter of 2014 subject to customary
closing conditions.
FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED EARNINGS
A financial summary and reconciliation of adjusted earnings to earnings
attributable to Class I and Class II Shares is provided below:
For the Three Months For the Six Months
Ended June 30 Ended June 30
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($ Millions except share
data) 2014 2013 2014 2013
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Adjusted earnings (1) 57 89 172 209
Adjustments for rate-
regulated activities (2) 15 9 27 6
Impairment (3) (6) - (6) -
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Earnings attributable to
Class I and Class II Shares 66 98 193 215
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Revenues 1,114 1,081 2,340 2,180
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Funds generated by
operations (4) 395 474 951 932
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Weighted average shares
outstanding (millions of
shares) 114.8 114.8 114.8 114.8
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(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, significant impairments 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 3 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) Refer to Note 4 to the consolidated financial statements for an
explanation of ATCO Power Australia's Bulwer Island power station
impairment.
(4) 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.
The increase in revenues in the second quarter and the first six months of 2014
was due primarily to increased rate base in the Utilities segment, and higher
recoveries from customers related to colder weather and increased recoverable
costs.
The $79 million decrease in funds generated by operations for the second quarter
was due primarily to lower earnings and lower contributions from utility
customers, while year-to-date funds generated by operations increased overall
due to higher contributions received from customers in the first quarter for
utility capital expenditures.
ATCO's consolidated financial statements and management's discussion and
analysis for the three and six months ended June 30, 2014, will be available on
the ATCO website (www.atco.com), via SEDAR (www.sedar.com) or can be requested
from the Company.
ATCO Ltd., with more than 9,800 employees and assets of approximately $17
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 Company 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
Company's expectations as of the date hereof, and is subject to change after
such date. The Company 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
ATCO Ltd.
B.R. (Brian) Bale
Senior Vice President & Chief Financial Officer
(403) 292-7502
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