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Press release from Marketwire

ATCO Reports Higher Second Quarter Earnings

Friday, July 27, 2012

ATCO Reports Higher Second Quarter Earnings08:17 EDT Friday, July 27, 2012CALGARY, ALBERTA--(Marketwire - July 27, 2012) -ATCO Ltd. (TSX: ACO.X, ACO.Y)ATCO Ltd. today reported higher earnings for the second quarter led by worldwide increased activity for ATCO Structures & Logistics, additional infrastructure investment in the utilities to support Alberta growth and increased earnings from ATCO Australia, offset by the impact of major planned maintenance outages at two of ATCO Power's generating plants.Earnings attributable to Class I and Class II Shares were $73 million ($1.28 per share) and Adjusted Earnings were $74 million for the second quarter of 2012 compared to $61 million ($1.07 per share) and $61 million, respectively, in the same period of 2011.Earnings attributable to Class I and Class II Shares were $194 million ($3.37 per share) and Adjusted Earnings were $190 million for the six months ended June 30, 2012, compared to $171 million ($2.96 per share) and $169 million, respectively, in the first half of 2011.ATCO Structures & Logistics continued its strong performance this quarter as rental activity increased and manufacturing expanded to meet the growing demand for modular structures and services, especially new workforce housing in the resource-rich regions of Australia, Canada, and South America. In particular, building and installation are progressing as planned for major workforce housing complexes to accommodate more than 5,600 persons constructing three liquefied natural gas projects on Curtis Island, Queensland, Australia.ATCO Electric, ATCO Gas and ATCO Pipelines invested an additional $438 million in the second quarter in infrastructure to support Alberta's continuing growth, bringing the total for the first half of 2012 to $937 million, which was more than double the $458 million invested in the first half of 2011. These expenditures add to the rate base upon which the companies earn a return. A significant amount of this investment was required to connect major industrial customers in northeast Alberta to the province's transmission grid and to reinforce the electricity system serving that growing region of the province.Earnings from ATCO Australia include those from ATCO Gas Australia, which was acquired at the end of July 2011. This quarter, ATCO Gas Australia received a favorable decision on its appeal of an earlier decision covering the current access arrangement period 2010 to 2014, which resulted in increased Adjusted Earnings of $5 million.ATCO's increased earnings for the second quarter and first half of 2012 were reduced by major planned maintenance outages at the largest of ATCO Power's three Battle River units and one of its two Sheerness units. Scheduled maintenance is undertaken to ensure continued safe, reliable and efficient plant operations.RECENT DEVELOPMENTSATCO declared a third quarter dividend for 2012 of 32.75 cents per Class I Non-Voting and Class II Voting Share. ATCO's dividend per share has increased for 19 consecutive years. ATCO Structures & Logistics opened a 200,000 sq. ft. manufacturing plant in Pocatello, Idaho - its third in the U.S. - to help meet growing demand for its products and services throughout North America. ATCO's subsidiary, Canadian Utilities Limited, issued $150 million of 4.90% Cumulative Redeemable Second Preferred Shares Series AA on June 18 in order to redeem $150 million of 6.00% Cumulative Redeemable Second Preferred Shares Series X on June 30. Canadian Utilities issued $150 million of 4.90% Cumulative Redeemable Second Preferred Shares Series BB on July 5 in order to redeem $150 million of 5.80% Cumulative Redeemable Second Preferred Shares Series W on July 19. ATCO launched ATCO Sustainable Communities Inc., a new company that provides a full range of pre-fabricated building solutions for Indigenous and other remote communities. The new company will bring a focus to building partnerships that will develop sustainable Indigenous communities throughout Canada.FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED EARNINGSA financial summary and reconciliation of Adjusted Earnings to earnings attributable to Class I and Class II Shares is provided below:For the Three MonthsFor the Six MonthsEnded June 30Ended June 30($ Millions except per share data)2012201120122011Adjusted Earnings (1)7461190169Adjustments for Rate Regulated Activities (2)(1)244Acquisition Transaction Costs-(2)-(2)Earnings Attributable to Class I and Class II Shares7361194171Earnings Per Share1.281.073.372.96Revenues9878822,1011,903Funds Generated By Operations (3)332297788722(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 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 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) This measure is cash flow from operations before changes in non-cash working capital. It does not have standardized meaning under International Financial Reporting Standards (IFRS) and may not be comparable to similar measures used by other companies.The increase in revenues in the second quarter and first half of 2012 was due primarily to higher business activity in ATCO Structures & Logistics and increased rate base in the utilities, as well as the addition of ATCO Gas Australia in late July 2011. These increases were partially offset by lower flow through natural gas sales in ATCO Midstream and lower Alberta Power Pool prices.Funds Generated by Operations increased in the second quarter and first half of 2012 primarily for the same reasons earnings increased, as well as higher contributions by utility customers required to connect customers to utility infrastructure.ATCO's consolidated financial statements and management's discussion and analysis for the three and six months ended June 30, 2012, will be available on the ATCO website (www.atco.com), via SEDAR (www.sedar.com) or can be requested from the Corporation.Alberta-based ATCO Ltd., with more than 8,800 employees and assets of approximately $13 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.comForward-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.FOR FURTHER INFORMATION PLEASE CONTACT: B.R. (Brian) BaleATCO Ltd.Senior Vice President & Chief Financial Officer(403) 292-7502www.atco.com