Raised 2021 Financial
Guidance
Reflecting strong YTD performance and confidence
in executing
differentiated business model in H2 2021
Revenue Growth of 8.3% in Q2
Funds from Operations Growth of 20.0% in Q2
Adjusted
EBITDA Growth of 14.1% in Q2
18 vessels and 184,000 TEU
newbuild fleet growth
Secured forward fixtures for 45
operating vessels(1)
$16.2 Billion(2)(3) Total Gross
Contracted Cash Flow
Atlas Corp. Second Quarter 2021 Financial
Performance Compared to Second Quarter 2020
- Revenue growth of 8.3% to $393.9
million for the quarter ended June
30, 2021
- Funds From Operations ("FFO")(4) growth of 20.0% to
$193.5 million and FFO Per
Share(4) growth of 14.1% to $0.73 for the quarter ended June 30, 2021
- Adjusted EBITDA(4) growth of 14.1% to $272.5 million for the quarter ended June 30, 2021
- Earnings per diluted share of $0.18 for the quarter ended June 30, 2021, includes a $56.1 million non-cash charge, or $0.21 per diluted share, related to loss on debt
extinguishment
- Adjusted diluted EPS(4) of $0.39 for the quarter ended June 30, 2021, excluding this non-cash charge,
representing growth of 50%
LONDON, Aug. 9, 2021 /CNW/ - Atlas Corp. ("Atlas" or
the "Company") (NYSE: ATCO) announced today its results for the
quarter ended June 30, 2021.
(1)
|
Includes forward
fixtures entered into during the quarter ended June 30, 2021 and
forward fixtures for ten 10,000 TEU vessels announced on August 5,
2021.
|
(2)
|
These gross
contracted cash flows include purchase obligations and exclude
purchase options, extensions, higher charter rate options and
profit-sharing components.
|
(3)
|
Gross contracted cash
flow as of June 30, 2021, pro forma for (i) gross lease payments to
be received from vessel acquisitions announced since period end,
including undelivered vessels and (ii) forward fixtures for ten
10,000 TEU vessels announced on August 5, 2021.
|
(4)
|
This is a non-GAAP
financial measure. Refer to "Definitions of Non-GAAP Financial
Measures" and the "Non-GAAP Reconciliations" for a definition of
this term and a reconciliation of this non-GAAP financial measure,
as used in this release, to their most directly comparable GAAP
financial measure.
|
Comments from Management:
Bing Chen, President and CEO of Atlas, commented, "Our strong
second quarter performance was at the high end of our expected
range, enabling us to raise financial guidance for 2021. Increasing
our financial guidance reflects both our strong first half
performance and the confidence we have in delivering continued
high-performance over the long-term. With Seaspan's industry record
of newbuilds and significant forward fixing of our operating fleet,
we're pleased to provide one-time long-term financial guidance to
assist investors understanding of how our business model benefits
from the current market and the cumulative impact on our financial
performance. This disclosure also demonstrates our confidence to
execute consistently and achieve quality growth through all market
cycles."
"Our liner customers continued to value Seaspan's long-term
partnership through both forward-fixing of operating fleet charters
and executing on strategic orders for newbuild vessels. APR
reported solid Q2 performance and is focused on expanding upon the
opportunities beyond the two current successful deployments in
Mexicali and California."
"Seaspan has significantly transformed its operational and
financial profile over the past four years. Today, we have a highly
differentiated model in the market with unmatched business scale,
operational excellence, customer flexibility, fleet versatility,
financial strength, and creative solutions. Our resilient and
differentiated business model has generated $16.2 billion of high-quality long-term gross
contracted cash flows. We have secured 100% of our gross contracted
cash flows for 2021. This is a testament to our consistent
long-term approach and the ability to drive quality growth by
providing value-added creative solutions to our customers through
all business and market cycles."
Graham Talbot, CFO of Atlas,
commented, "Our finance teams have executed with equally high
performance throughout 2021, which culminated in the achievement of
several financial milestones over the past several months. In
relatively short time, we have simplified our capital structure,
created greater financial flexibility, secured a lower cost of
capital, funded the majority of our newbuild program, and improved
liquidity."
"With the support of our strategic investor Fairfax, we have restructured their holdings
and anticipate further developments to unlock value and broaden our
growing base of global investors. We are now rated by three top
credit agencies and expect further traction on our path to an
investment grade company credit rating. To build upon our investor
engagement, Atlas provided this quarter detailed disclosure of
fleet, operational and growth information along with long-term
financial goals. Our enhanced reporting is aligned with our
commitment to transparency and highlights our differentiated and
resilient business model."
Atlas Corp. Q2 2021 and Recent Achievements:
- Gross contracted cash flows of $16.2
billion(1)(2) as of the day of this announcement,
including $8.3
billion(1)(3) related to vessel fleet growth
since December 31, 2020.
- Earnings per diluted share of $0.18 for the quarter ended June 30, 2021, including a $56.1 million non-cash charge, or $0.21 per diluted share, related to loss on debt
extinguishment, compared to earnings per diluted share of
$0.26 for the same period in
2020.
- Adjusted diluted EPS was $0.39
for the quarter ended June 30, 2021,
excluding this non-cash charge(3).
- Exchanged and amended $600.0
million Fairfax Senior Notes.
-
- Atlas exchanged $300.0 million
Fairfax Senior Notes for 12.0 million Series J 7.0% Cumulative
Redeemable Perpetual Preferred Shares with a liquidation value of
$25.00 per share and 1.0 million
five-year warrants to purchase an equal number of Atlas common
shares at $13.71 per share.
- Seaspan amended $300.0 million of
the Fairfax Senior Notes, removing security and guarantees such
that the notes are pari passu with Seaspan's existing senior
unsecured indebtedness.
- Redeemed Series E and G preferred shares for $334.9 million.
- Completed exchange offer and Nasdaq Global Market listing for
7.125% senior unsecured notes due in 2027.
- In July, Atlas announced the appointment of Ms. Katie Ward as a new non-executive board member,
effective September 1, 2021.
Seaspan Q2 2021 and Recent Achievements:
- Seaspan entered into agreements to acquire eight conventional
fuel vessels during the quarter ended June
30, 2021, and 10 dual-fuel LNG vessels in July 2021. The table below summarizes our 55
newbuild vessels:
|
Month
acquired
|
Newbuilds
|
Total
TEU
|
12200 TEU
|
November-2020
|
5
|
|
61,000
|
12000 TEU
|
February-2021
|
4
|
|
48,000
|
15000 TEU
|
February and
March-2021
|
10
|
|
150,000
|
15000 TEU
LNG
|
February-2021
|
10
|
|
150,000
|
15500 TEU
|
March-2021
|
6
|
|
93,000
|
24000 TEU
|
February-2021
|
2
|
|
48,000
|
12000 TEU
|
June-2021
|
2
|
|
24,000
|
15000 TEU
|
June-2021
|
6
|
|
90,000
|
7000 TEU
LNG
|
July-2021
|
10
|
|
70,000
|
Total
|
|
55
|
|
734,000
|
- Seaspan entered into forward fixtures for 45 operating vessels
during the second quarter and in August
2021. Details on forward fixtures are now included in our
fleet table included as part of the Q2 2021 supplemental financial
workbook which can be found on our Events and Presentation page of
our website.
(1)
|
These gross
contracted cash flows include purchase obligations and exclude
purchase options, extensions, higher charter rate options and
profit-sharing components.
|
(2)
|
Gross contracted cash
flow as of June 30, 2021, pro forma for gross lease payments to be
received from vessel acquisitions announced since period end,
including undelivered vessels.
|
(3)
|
This is a non-GAAP
financial measure. Refer to "Definitions of Non-GAAP Financial
Measures" and the "Non-GAAP Reconciliations" for a definition of
this term and a reconciliation of this non-GAAP financial measure,
as used in this release, to their most directly comparable GAAP
financial measure.
|
Seaspan Q2 2021 and Recent Achievements (continued):
- Seaspan took delivery of the following vessels:
-
- Two 8,500 TEU scrubber-fitted containerships in April 2021 and May
2021.
- One 15,000 TEU scrubber-fitted containership in May 2021 and the second of the pair subsequent to
quarter end in early-July 2021.
- Seaspan continued industry leading newbuild fleet growth and
innovation with flexibility to adopt future fuel alternatives:
-
- 20 dual-fuel LNG vessels on order, adding two key vessel size
categories to our fleet and furthering the sustainability
development of some of global trade's fast-growing shipping
lanes.
-
- In July 2021, Seaspan further
aligned with its commitment to ESG principles by ordering the
installation of fuel tanks capable of conversion to ammonia-based
next generation fuel in five LNG newbuild vessels
- 35 conventional vessels on order to position fleet for emerging
trend of larger capacity vessels servicing the same routes.
- Seaspan completed significant steps to increase its proportion
of unsecured debt and simplify its capital structure:
-
- Expanded unsecured debt by $1.05
billion during the second quarter and through to
July 2021, setting precedents for
container shipping financing.
-
- Seaspan issued $300.0 million of
6.5% sustainability-linked senior unsecured notes due in 2026 in
the Nordic bond market.
- Subsequent to quarter end, Seaspan issued $750.0 million of 5.50% senior unsecured notes
due in 2029.
- Amended and upsized its vessel portfolio financing program to,
among other things, lower interest costs and improve credit terms,
creating greater financial flexibility.
-
- Increased size of revolving credit facility from $300.0 million to $400.0
million.
- Added $180.0 million of capacity
under the bank loan facilities.
- Completed largest reported sustainability-linked US private
placement of $500.0 million of notes,
secured by the same portfolio of vessels, with a weighted average
maturity of approximately 12 years, and weighted average initial
interest rate of approximately 4.1%.
- Kroll Bond Rating Agency placed Seaspan's BB corporate rating
and BBB- senior secured rating(1) on watch upgrade.
- S&P Global Ratings assigned an issuer credit rating of
'BB-' to Seaspan and a 'BB-' rating to Seaspan's senior unsecured
notes.
- Fitch ratings assigned a first-time Issuer Default Rating (IDR)
of 'BB' to Seaspan and a 'BB' rating to Seaspan's senior unsecured
notes.
APR Q2 2021 and Recent Achievements:
- APR successfully deployed two peaking power grid stability
projects.
-
- APR secured contracts to provide 330MW utilizing ten gas
turbines to provide peaking power in Mexico.
- APR secured US market contract to provide three mobile turbines
to California's Imperial
Irrigation District.
(1)
|
Kroll Bond Rating
Agency rated Seaspan's Portfolio Financing Program BBB- and
provided a Corporate Rating of BB.
|
Consolidated Results:
The following table summarizes Atlas' consolidated results for
the three months ended June 30, 2021,
March 31, 2021 and June 30, 2020.
|
Three Months
Ended
|
|
(in millions of US
dollars, except per share
amounts, percentages and ratios, unaudited)
|
June 30,
2021
|
|
|
March 31,
2021
|
|
|
June 30,
2020
|
|
GAAP
Financial
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
393.9
|
|
|
$
|
372.6
|
|
|
$
|
363.8
|
|
Net
earnings
|
|
66.0
|
|
|
|
97.6
|
|
|
|
82.7
|
|
Earnings per share,
diluted
|
|
0.18
|
|
|
|
0.31
|
|
|
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
272.5
|
|
|
|
237.9
|
|
|
|
238.9
|
|
FFO(1)
|
|
193.5
|
|
|
|
159.2
|
|
|
|
161.3
|
|
FFO per
Share(1)
|
|
0.73
|
|
|
|
0.60
|
|
|
|
0.64
|
|
Adjusted
EPS(1)
|
|
0.39
|
|
|
|
0.31
|
|
|
|
0.26
|
|
Net Debt to Adjusted
EBITDA(1)
|
|
4.6
|
x
|
|
|
4.5
|
x
|
|
|
5.2
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Position
|
|
|
|
|
|
|
|
|
|
|
|
Ending
Liquidity(2)
|
|
1,270.5
|
|
|
|
837.5
|
|
|
|
382.9
|
|
Gross Contracted Cash
Flow(3)
|
|
13,735.8
|
|
|
|
12,086.5
|
|
|
|
4,947.1
|
|
Total
Borrowings(4)
|
|
5,123.2
|
|
|
|
4,604.4
|
|
|
|
4,268.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operational
|
|
|
|
|
|
|
|
|
|
|
|
Vessel
Utilization
|
|
98.5
|
%
|
|
|
99.2
|
%
|
|
|
97.4
|
%
|
Power Fleet
Utilization
|
|
78.2
|
%
|
|
|
63.7
|
%
|
|
|
68.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This is a non-GAAP
financial measure. Refer to "Definitions of Non-GAAP Financial
Measures" and the "Non-GAAP Reconciliations" for a definition of
this term and a reconciliation of this non-GAAP financial measure,
as used in this release, to their most directly comparable GAAP
financial measure. Adjusted EPS for the quarter ended June 30, 2020
is the same as diluted earnings per share for the
period.
|
(2)
|
This is the total
cash and cash equivalents balance plus the total available undrawn
committed credit facilities at period end.
|
(3)
|
Gross contracted cash
flow as at June 30, 2021 includes $5.4 billion of lease payments
receivable from operating leases, $0.9 billion of gross lease
receivable from finance leases and $7.4 billion of gross lease
payments for acquired vessels with signed charter agreements that
are undelivered as at June 30, 2021. Gross contracted cash flow as
at March 31, 2021 includes $4.2 billion of lease payments
receivable from operating leases, $0.9 billion of gross lease
receivable from finance leases and $7.0 billion of gross lease
payments for acquired vessels with signed charter agreements that
are undelivered as at March 31, 2021. Gross contracted cash flow as
at June 30, 2020 includes $4.1 billion of lease payments receivable
from operating leases and $0.8 billion of gross lease receivable
from financing leases. Gross contracted cash flow includes purchase
obligations and excludes purchase options, extension options,
higher charter rate options and profit-sharing
components.
|
(4)
|
Total borrowings do
not include debt to be incurred in connection with certain
undelivered vessels.
|
Financial Results Summary:
Revenue growth of 8.3% to $393.9
million for the quarter ended June
30, 2021, compared to the same quarter in 2020. The growth
was primarily driven by the contribution of seven vessels delivered
to Seaspan after June 2020.
Adjusted EBITDA growth of 14.1% to $272.5 million for the quarter ended
June 30, 2021, compared to the same
quarter in 2020. The growth was primarily driven by the
contribution of seven vessels delivered to Seaspan after June
2020.
FFO Per Share growth of 14.1% to $0.73 for the quarter ended June 30, 2021, compared to the same quarter in
2020. The growth was primarily driven by the contribution of seven
vessels delivered to Seaspan after June
2020.
Earnings Per Diluted Share was $0.18 for the quarter ended June 30, 2021, including a $56.1 million non-cash charge, or $0.21 per diluted share, related to loss on debt
extinguishment, compared to earnings per diluted share of
$0.26 for the same period in
2020.
Adjusted Earnings Per Diluted Share growth of 50% to
$0.39 for the quarter ended
June 30, 2021, excluding the non-cash
charge, compared to $0.26 for the
same period in 2020.
Liquidity
As of June 30,
2021, Atlas had total liquidity of $1.27 billion, consisting of $591.0 million of cash and cash equivalents and
$679.5 million of availability under
undrawn committed credit facilities. As of June 30, 2021, Atlas had an unencumbered asset
base including 33 vessels with a book value of $1.2 billion.
Guidance:
The following table* is based on Atlas' current expectations for
the years ending December 31, 2021,
2022, 2023 and 2024.
|
|
|
|
Revised
|
|
|
|
|
|
|
|
|
|
Guidance
Metrics
(in millions of US
dollars)
|
2020
Actual
|
|
|
2021
Guidance(1)(2)
|
|
2022
Guidance(2)
|
|
2023
Guidance(2)
|
|
2024
Guidance(2)
|
Revenue(3)
|
$
|
1,421.0
|
|
|
$
|
1,585.0
|
|
$
|
1,745.0
|
|
$
|
1,920.0
|
|
$
|
2,215.0
|
Operating
expense
|
|
275.0
|
|
|
|
339.0
|
|
|
380.0
|
|
|
430.0
|
|
|
510.0
|
G&A
expense
|
|
65.0
|
|
|
|
97.0
|
|
|
99.0
|
|
|
102.0
|
|
|
106.0
|
Operating lease
expense(4)
|
|
151.0
|
|
|
|
156.0
|
|
|
155.0
|
|
|
125.0
|
|
|
115.0
|
Adjusted
EBITDA(5)
|
|
924.0
|
|
|
|
993.0
|
|
|
1,111.0
|
|
|
1,263.0
|
|
|
1,484.0
|
Adjusted Net
Earnings(6)
|
|
311.0
|
|
|
|
440.0
|
|
|
535.0
|
|
|
605.0
|
|
|
695.0
|
Interest
expense(4)
|
|
192.0
|
|
|
|
205.0
|
|
|
210.0
|
|
|
250.0
|
|
|
350.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents Seaspan
and APR guidance for 2021.
|
(2)
|
For the long-term
guidance provided above, APR's Adjusted EBITDA and Adjusted Net
Earnings contributions to Atlas are forecasted to be ~$103mn and
~$24mn, respectively (consistent with 2021 revised
guidance).
|
(3)
|
The classification of
a lease will be determined at the commencement date of the lease.
Sales type lease was assumed for the bareboat charters arranged for
the newbuilds. Currently 17 vessels of the newbuild program are
expected to deliver during 2024; 2024 guidance reflects
partial-year contribution of delivered vessels.
|
(4)
|
Average LIBOR assumed
for 2021, 2022, 2023, and 2024 is 0.17%, 0.48%, 0.96%, and 1.30%
respectively.
|
(5)
|
This is a non-GAAP
financial measure. Refer to "Definitions of Non-GAAP Financial
Measures" and "Non-GAAP Reconciliations" for a definition of
this term and a reconciliation of this non-GAAP financial measure,
as used in this release, to their most directly comparable GAAP
financial measure.
|
(6)
|
Interest Expense is
included in Adjusted Net Earnings; impact from the change in fair
value of financial instruments is excluded from the guidance.
Adjusted Net Earnings excludes preferred dividends and excludes
impact from the change in fair value of financial
instruments.
|
|
* The forward-looking
statements contained in this press release are based on certain
assumptions made by the Company based on currently available
information, management's experience and other factors believed to
be appropriate. The guidance is based on the 55 newbuild vessels
that we have contracted to acquire with no further vessel
acquisitions assumed. The Company believes these assumptions to be
reasonable at this time, but the forward-looking statements are
subject to risk and uncertainties, many of which are beyond the
Company's control, which may cause actual results to differ
materially from those implied or expressed by the forward-looking
statements. The risk that the assumptions on which the 2022, 2023,
and 2024 outlook and guidance are based prove incorrect may
increase the later the period to which the outlook relates, and the
extended period of this outlook may increase the chance actual
results vary materially from such expectations. Please read
"Cautionary Statement Regarding Forward-Looking
Statements".
|
Segmental Financial Results:
The following table
summarizes segmental financial results for the three months ended
June 30, 2021.
|
Three Months Ended
June 30, 2021
|
(in millions of US
dollars, unaudited)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and
Other(2)
|
|
Total
|
Revenue
|
$
|
348.1
|
|
$
|
45.8
|
|
$
|
-
|
|
$
|
393.9
|
Operating
expense
|
|
74.4
|
|
|
8.5
|
|
|
-
|
|
|
82.9
|
G&A
expense
|
|
11.0
|
|
|
4.9
|
|
|
0.1
|
|
|
16.0
|
Operating lease
expense
|
|
36.0
|
|
|
0.8
|
|
|
-
|
|
|
36.8
|
Adjusted
EBITDA(1)
|
|
226.7
|
|
|
45.3
|
|
|
0.5
|
|
|
272.5
|
FFO(1)
|
|
168.7
|
|
|
41.9
|
|
|
(17.1)
|
|
|
193.5
|
Net earnings
(loss)
|
|
41.6
|
|
|
24.2
|
|
|
0.2
|
|
|
66.0
|
Gross Contracted Cash
Flow(3)
|
|
13,478.2
|
|
|
257.6
|
|
|
-
|
|
|
13,735.8
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This is a non-GAAP
financial measure. Refer to "Definitions of Non-GAAP Financial
Measures" and "Non-GAAP Reconciliations" for a definition of this
term and a reconciliation of this non-GAAP financial measure, as
used in this release, to their most directly comparable GAAP
financial measure.
|
(2)
|
Elimination and Other
includes amounts relating to preferred shares, change in contingent
consideration asset, elimination of intercompany transactions and
unallocated amounts.
|
(3)
|
Gross contracted cash
flow as at June 30, 2021 includes $5.4 billion of lease payments
receivable from operating leases, $0.9 billion of gross lease
receivable from finance leases and $7.4 billion of gross lease
payments for acquired vessels with signed charter agreements that
are undelivered as at June 30, 2021. Gross contracted cash
flow includes purchase obligations and excludes purchase options,
extension options, higher charter rate options and profit-sharing
components.
|
Distribution:
On July 7,
2021, the Board of Directors of Atlas declared a quarterly
distribution in the amount of $0.125 per common share,
unchanged from the prior quarter. Regular quarterly dividends on
the Series D, Series H, Series I and Series J preferred shares were
also declared. All dividends were paid on July 30, 2021.
Conference Call and Webcast:
Atlas will host a
conference call and webcast presentation for investors, analysts
and interested parties to discuss its second quarter
results on August 10, 2021 at
8:30 a.m. ET. Participants should
call, 1-877-246-9875, International Dial-In, 1-707-287-9353, Listen
Only Toll-Free Dial-In Number, 1-888-556-5741, and Listen Only
International Dial-In Number, 1-857-270-6226 and request the Atlas
call (conference ID: 2941786). The live webcast and slide
presentation are available under "Events & Presentations"
at www.atlascorporation.com. A webcast replay will be
available until August 12, 2022.
The replay telephone numbers are: US/Canada 1-855-859-2056 and International
1-404-537-3406, and the replay passcode is: 2941786. The phone
replay will be available until August 25,
2021.
About Atlas
Atlas is a leading global asset management
company, differentiated by its position as a best-in class owner
and operator with a focus on disciplined capital deployment to
create sustainable shareholder value. We target long-term, risk
adjusted returns across high quality infrastructure assets in the
maritime sector, energy sector and other infrastructure verticals.
For more information visit atlascorporation.com.
About Seaspan
Seaspan is a leading independent
owner and operator of containerships. We charter our vessels
primarily pursuant to long-term, fixed-rate charters to the world's
largest container shipping liners. Seaspan's fully-delivered fleet
consists of 186 containerships, representing total capacity of
approximately 1,854,200 TEU. Seaspan's fully delivered fleet of
vessels has an average age of approximately four years and an
average remaining lease period of approximately seven years,
on a TEU-weighted basis. For more information, visit
seaspancorp.com.
About APR
APR provides rapidly deployable, large-scale
power and fast-track mobile power to underserved markets and
industries. APR's mobile, turnkey power plants help run industries,
cities and countries globally in both developed and developing
markets. For more information, visit aprenergy.com.
ATLAS CORP.
UNAUDITED CONSOLIDATED
BALANCE SHEETS
(IN MILLIONS OF US DOLLARS)
|
|
June 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
591.0
|
|
$
|
304.3
|
Accounts
receivable
|
|
|
77.5
|
|
|
75.9
|
Inventories
|
|
|
57.0
|
|
|
60.2
|
Prepaid expenses and
other
|
|
|
39.3
|
|
|
33.9
|
Net investment in
lease
|
|
|
12.7
|
|
|
10.7
|
Acquisition related
assets
|
|
|
101.2
|
|
|
99.3
|
|
|
|
878.7
|
|
|
584.3
|
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
7,006.6
|
|
|
6,974.7
|
Right-of-use
assets
|
|
|
782.2
|
|
|
841.2
|
Net investment in
lease
|
|
|
498.4
|
|
|
418.6
|
Goodwill
|
|
|
75.3
|
|
|
75.3
|
Deferred tax
assets
|
|
|
24.4
|
|
|
19.3
|
Derivative
instruments
|
|
|
1.8
|
|
|
-
|
Other
assets
|
|
|
966.6
|
|
|
375.7
|
|
|
$
|
10,234.0
|
|
$
|
9,289.1
|
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
144.7
|
|
$
|
134.1
|
Deferred
revenue
|
|
|
21.3
|
|
|
28.2
|
Income tax
payable
|
|
|
116.1
|
|
|
110.4
|
Long-term debt -
current
|
|
|
325.1
|
|
|
332.1
|
Operating lease
liabilities - current
|
|
|
157.2
|
|
|
160.9
|
Other financing
arrangements - current
|
|
|
86.9
|
|
|
64.1
|
Other liabilities -
current
|
|
|
68.0
|
|
|
24.8
|
|
|
|
919.3
|
|
|
854.6
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
3,581.6
|
|
|
3,234.0
|
Operating lease
liabilities
|
|
|
614.9
|
|
|
669.3
|
Other financing
arrangements
|
|
|
1,054.6
|
|
|
801.7
|
Derivative
instruments
|
|
|
44.4
|
|
|
63.0
|
Other
liabilities
|
|
|
21.0
|
|
|
40.9
|
|
|
|
6,235.8
|
|
|
5,663.5
|
|
|
|
|
|
|
|
Cumulative redeemable
preferred shares
|
|
|
296.9
|
|
|
-
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Share
capital
|
|
|
2.4
|
|
|
2.4
|
Additional paid in
capital
|
|
|
3,851.7
|
|
|
3,842.7
|
Deficit
|
|
|
(133.1)
|
|
|
(199.2)
|
Accumulated other
comprehensive loss
|
|
|
(19.7)
|
|
|
(20.3)
|
|
|
|
3,701.3
|
|
|
3,625.6
|
|
|
$
|
10,234.0
|
|
$
|
9,289.1
|
ATLAS CORP.
UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN MILLIONS OF US DOLLARS,
EXCEPT SHARES IN THOUSANDS AND PER SHARE AMOUNTS)
|
|
Three Months Ended
June
30,
|
|
Six Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
393.9
|
|
$
|
363.8
|
|
$
|
766.5
|
|
$
|
672.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
82.9
|
|
|
67.0
|
|
|
159.1
|
|
|
126.8
|
Depreciation and
amortization
|
|
|
90.8
|
|
|
88.5
|
|
|
178.1
|
|
|
160.7
|
General and
administrative
|
|
|
16.0
|
|
|
19.8
|
|
|
39.0
|
|
|
30.2
|
Indemnity claim under
acquisition agreement
|
|
|
(15.5)
|
|
|
—
|
|
|
(15.5)
|
|
|
—
|
Operating
leases
|
|
|
36.8
|
|
|
38.2
|
|
|
72.9
|
|
|
76.7
|
|
|
|
211.0
|
|
|
213.5
|
|
|
433.6
|
|
|
394.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
|
182.9
|
|
|
150.3
|
|
|
332.9
|
|
|
277.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
(income):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
54.6
|
|
|
50.8
|
|
|
101.4
|
|
|
100.4
|
Interest
income
|
|
|
(1.7)
|
|
|
(1.1)
|
|
|
(2.2)
|
|
|
(2.5)
|
Loss (gain) on
derivative instruments
|
|
|
1.7
|
|
|
7.0
|
|
|
(7.0)
|
|
|
31.8
|
Loss on debt
extinguishment
|
|
|
56.1
|
|
|
—
|
|
|
56.1
|
|
|
—
|
Other
expenses
|
|
|
4.6
|
|
|
4.8
|
|
|
12.7
|
|
|
5.5
|
|
|
|
115.3
|
|
|
61.5
|
|
|
161.0
|
|
|
135.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
1.6
|
|
|
6.1
|
|
|
8.3
|
|
|
8.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
66.0
|
|
$
|
82.7
|
|
$
|
163.6
|
|
$
|
134.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends - preferred
shares
|
|
|
(17.9)
|
|
|
(16.7)
|
|
|
(34.7)
|
|
|
(33.5)
|
Net earnings
attributable to common shares
|
|
$
|
48.1
|
|
$
|
66.0
|
|
$
|
128.9
|
|
$
|
101.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares, basic
|
|
|
246,303
|
|
|
247,210
|
|
|
246,169
|
|
|
237,187
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
|
2,351
|
|
|
68
|
|
|
2,192
|
|
|
146
|
Fairfax
warrants
|
|
|
10,697
|
|
|
—
|
|
|
9,990
|
|
|
2,975
|
Holdback
shares
|
|
|
6,242
|
|
|
6,087
|
|
|
6,282
|
|
|
4,114
|
Exchangeable
note
|
|
|
972
|
|
|
—
|
|
|
486
|
|
|
—
|
Weighted average
number of shares, diluted(1)
|
|
|
266,565
|
|
|
253,365
|
|
|
265,119
|
|
|
244,422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share,
basic
|
|
$
|
0.19
|
|
$
|
0.27
|
|
$
|
0.52
|
|
$
|
0.43
|
Earnings per share,
diluted
|
|
$
|
0.18
|
|
$
|
0.26
|
|
$
|
0.49
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Fairfax
warrants are excluded in the computation of diluted EPS for the
three-months ended June 30, 2020 as their effects are
anti-dilutive.
|
ATLAS CORP.
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(IN MILLIONS OF US
DOLLARS)
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash from (used
in):
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
66.0
|
|
$
|
82.7
|
|
$
|
163.6
|
|
$
|
134.6
|
Items not involving
cash:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
90.8
|
|
|
88.5
|
|
|
178.1
|
|
|
160.7
|
Change in right-of-use
asset
|
|
31.6
|
|
|
29.6
|
|
|
62.4
|
|
|
58.8
|
Non-cash interest
expense and accretion
|
|
11.6
|
|
|
10.0
|
|
|
23.5
|
|
|
18.9
|
Unrealized change in
derivative instruments
|
|
(5.0)
|
|
|
2.1
|
|
|
(20.5)
|
|
|
22.9
|
Amortization of
acquired revenue contracts
|
|
3.9
|
|
|
4.2
|
|
|
8.1
|
|
|
8.1
|
Loss on debt
extinguishment
|
|
56.1
|
|
|
-
|
|
|
56.1
|
|
|
-
|
Other
|
|
(4.7)
|
|
|
2.2
|
|
|
2.0
|
|
|
2.0
|
Change in other
operating assets and liabilities
|
|
(34.9)
|
|
|
(60.6)
|
|
|
(77.3)
|
|
|
(116.6)
|
Cash from operating
activities
|
|
215.4)
|
|
|
158.7
|
|
|
396.0
|
|
|
289.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for
property, plant and equipment
|
|
(249.9)
|
|
|
(203.9)
|
|
|
(257.3)
|
|
|
(453.1)
|
Prepayment on vessel
purchase
|
|
(272.6)
|
|
|
-
|
|
|
(464.7)
|
|
|
(35.8)
|
Payment on settlement
of interest swap agreements
|
|
(8.1)
|
|
|
(5.3)
|
|
|
(13.4)
|
|
|
(8.1)
|
Cash and restricted
cash acquired from APR Energy acquisition
|
|
-
|
|
|
-
|
|
|
-
|
|
|
50.6
|
Loss on foreign
currency repatriation
|
|
(3.2)
|
|
|
(4.6)
|
|
|
(9.2)
|
|
|
(4.6)
|
Receipt from
contingent consideration asset
|
|
6.4
|
|
|
-
|
|
|
13.3
|
|
|
-
|
Other assets and
liabilities
|
|
(122.5)
|
|
|
(7.8)
|
|
|
(119.9)
|
|
|
(9.6)
|
Cash used in
investing activities
|
|
(649.9)
|
|
|
(221.6)
|
|
|
(851.2)
|
|
|
(460.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of
long-term debt and other financing arrangements
|
|
(542.6)
|
|
|
(132.7)
|
|
|
(972.8)
|
|
|
(791.3)
|
Issuance of long-term
debt and other financing arrangements
|
|
1,304.5
|
|
|
238.2
|
|
|
1,839.0
|
|
|
1,036.9
|
Fairfax notes
issued
|
|
-
|
|
|
-
|
|
|
-
|
|
|
100.0
|
Financing
fees
|
|
(25.8)
|
|
|
(6.1)
|
|
|
(28.3)
|
|
|
(19.0)
|
Share issuance
cost
|
|
(0.1)
|
|
|
-
|
|
|
(0.1)
|
|
|
-
|
Dividends on common
shares
|
|
(31.2)
|
|
|
(30.8)
|
|
|
(62.3)
|
|
|
(57.7)
|
Dividends on preferred
shares
|
|
(16.8)
|
|
|
(16.7)
|
|
|
(33.6)
|
|
|
(33.5)
|
Cash from financing
activities
|
|
688.0
|
|
|
51.9
|
|
|
741.9
|
|
|
235.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase / (decrease)
in cash, cash equivalents and restricted cash
|
|
253.5
|
|
|
(11.0)
|
|
|
286.7
|
|
|
64.2
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
375.7
|
|
|
272.5
|
|
|
342.5
|
|
|
197.3
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
629.2
|
|
$
|
261.5
|
|
$
|
629.2
|
|
$
|
261.5
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
provides a reconciliation of cash, cash equivalents and restricted
cash reported within the consolidated balance sheets that sum to
the amounts shown in the consolidated statements of cash
flows:
|
|
June
30,
|
|
|
June
30,
|
|
2021
|
|
|
2020
|
Cash and cash
equivalents
|
$
|
591.0
|
|
|
$
|
221.8
|
Restricted
cash
|
|
38.2
|
|
|
|
39.7
|
Total cash, cash
equivalents and restricted cash shown in the consolidated
statements of cash flows
|
$
|
629.2
|
|
|
$
|
261.5
|
ATLAS CORP.
NON-GAAP
RECONCILIATIONS
FUNDS FROM OPERATIONS
|
Three Months
Ended
|
(in millions of
U.S. dollars, except shares in thousands and per share amounts,
unaudited)
|
June 30,
2021
|
March 31,
2021
|
June 30,
2020
|
|
|
|
|
|
|
|
GAAP Net
earnings
|
$
|
66.0
|
$
|
97.6
|
$
|
82.7
|
|
|
|
|
|
|
|
Preferred share
dividends
|
|
(17.9)
|
|
(16.8)
|
|
(16.7)
|
Gain on
sale
|
|
(0.4)
|
|
(0.5)
|
|
(0.6)
|
Loss on debt
extinguishment
|
|
56.1
|
|
–
|
|
–
|
Unrealized change in
fair value of derivative instruments
|
|
(4.9)
|
|
(15.5)
|
|
2.1
|
Change in contingent
consideration asset(1)
|
|
0.6
|
|
1.1
|
|
0.7
|
Loss on foreign
currency repatriation(2)
|
|
3.2
|
|
6.0
|
|
4.6
|
Depreciation and
amortization
|
|
90.8
|
|
87.3
|
|
88.5
|
FFO
|
$
|
193.5
|
$
|
159.2
|
$
|
161.3
|
Weighted average
number of shares, basic
|
|
246,303
|
|
246,033
|
|
247,210
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
Share-based
compensation
|
|
2,351
|
|
2,030
|
|
68
|
Fairfax
warrants
|
|
10,697
|
|
9,284
|
|
–
|
Holdback
shares
|
|
6,242
|
|
6,322
|
|
6,087
|
Exchangeable
note
|
|
972
|
|
–
|
|
–
|
Weighted average
shares outstanding, diluted
|
|
266,565
|
|
263,669
|
|
253,365
|
FFO per share,
diluted
|
$
|
0.73
|
$
|
0.60
|
$
|
0.64
|
|
|
Three Months Ended
June 30, 2021
|
(in millions of
U.S. dollars, unaudited)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and Other(3)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
earnings
|
$
|
41.6
|
|
$
|
24.2
|
|
$
|
0.2
|
|
$
|
66.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred share
dividends
|
|
-
|
|
|
-
|
|
|
(17.9)
|
|
|
(17.9)
|
Gain on
sale
|
|
-
|
|
|
(0.4)
|
|
|
-
|
|
|
(0.4)
|
Loss on debt
extinguishment
|
|
56.1
|
|
|
-
|
|
|
-
|
|
|
56.1
|
Unrealized change in
fair value of derivative instruments
|
|
(4.9)
|
|
|
-
|
|
|
-
|
|
|
(4.9)
|
Change in contingent
consideration asset(1)
|
|
-
|
|
|
-
|
|
|
0.6
|
|
|
0.6
|
Loss on foreign
currency repatriation(2)
|
|
-
|
|
|
3.2
|
|
|
-
|
|
|
3.2
|
Depreciation and
amortization
|
|
75.9
|
|
|
14.9
|
|
|
-
|
|
|
90.8
|
FFO
|
$
|
168.7
|
|
$
|
41.9
|
|
$
|
(17.1)
|
|
$
|
193.5
|
|
(1)
|
The change in
contingent consideration asset relates to the mark to market impact
of contingent consideration related to the acquisition of APR.
Pursuant to the acquisition agreement, the sellers of APR agreed to
compensate the Company for losses on cash repatriation from a
foreign jurisdiction related to cash generated from specified
contracts less relevant costs (the "Peso Contingent Asset
Arrangement"). The seller's indemnification obligations will end on
April 30, 2022, or earlier if certain conditions are met. In
February 2021, the sellers of APR further agreed to compensate the
Company, subject to definitive documentation, for losses on sale or
disposal of certain fixed asset and inventory items. The definitive
documentation was executed on April 30, 2021. The value of
compensation receivable from the sellers is accounted for as a
contingent consideration asset.
|
(2)
|
Loss on foreign
currency repatriation relates to losses recognized on cash
repatriation from a foreign jurisdiction, where compensation is
receivable through the Peso Contingent Asset Arrangement.
Compensation is made by the sellers in cash or return of previously
issued equity, which is offset against the contingent consideration
asset when received and therefore, is not reflected in the income
statement.
|
(3)
|
Elimination and Other
includes amounts relating to preferred shares, change in contingent
consideration asset, elimination of intercompany transactions and
unallocated amounts.
|
ATLAS CORP.
NON-GAAP
RECONCILIATIONS
ADJUSTED EPS
|
Three months
ended
June 30,
|
|
Six months
ended
June 30,
|
(in millions of
U.S. dollars, except shares in thousands and per share amounts,
unaudited)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
earnings
|
$
|
66.0
|
$
|
82.7
|
|
$
|
163.6
|
$
|
134.6
|
Preferred share
dividends
|
|
(17.9)
|
|
(16.7)
|
|
|
(34.7)
|
|
(33.5)
|
Loss on debt
extinguishment
|
|
56.1
|
|
–
|
|
|
56.1
|
|
–
|
Adjusted
Earnings
|
$
|
104.2
|
$
|
66.0
|
|
$
|
185.0
|
$
|
101.1
|
Weighted average
number of shares, basic
|
|
246,303
|
|
247,210
|
|
|
246,169
|
|
237,187
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
2,351
|
|
68
|
|
|
2,192
|
|
146
|
Fairfax
warrants
|
|
10,697
|
|
–
|
|
|
9,990
|
|
2,975
|
Holdback
shares
|
|
6,242
|
|
6,087
|
|
|
6,282
|
|
4,114
|
Exchangeable
note
|
|
972
|
|
–
|
|
|
486
|
|
–
|
Weighted average
shares outstanding, diluted(1)
|
|
266,565
|
|
253,365
|
|
|
265,119
|
|
244,422
|
Adjusted EPS,
diluted
|
$
|
0.39
|
$
|
0.26
|
|
$
|
0.70
|
$
|
0.41
|
|
(1)
|
Fairfax warrants are
excluded in the computation of diluted EPS for the three-months
ended June 30, 2020 as their effects are anti-dilutive.
|
|
|
Three Months Ended
June 30, 2021
|
(in millions of
U.S. dollars, unaudited)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and Other(1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
earnings
|
$
|
41.6
|
|
$
|
24.2
|
|
$
|
0.2
|
|
$
|
66.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred share
dividends
|
|
-
|
|
|
-
|
|
|
(17.9)
|
|
|
(17.9)
|
Loss on debt
extinguishment
|
|
56.1
|
|
|
-
|
|
|
-
|
|
|
56.1
|
Adjusted Earnings
(loss)
|
$
|
97.7
|
|
$
|
24.2
|
|
$
|
(17.7)
|
|
$
|
104.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2021
|
(in millions of
U.S. dollars, unaudited)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and Other(1)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
earnings
|
$
|
148.2
|
|
$
|
15.3
|
|
$
|
0.1
|
|
$
|
163.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred share
dividends
|
|
-
|
|
|
-
|
|
|
(34.7)
|
|
|
(34.7)
|
Loss on debt
extinguishment
|
|
56.1
|
|
|
-
|
|
|
-
|
|
|
56.1
|
Adjusted Earnings
(loss)
|
$
|
204.3
|
|
$
|
15.3
|
|
$
|
(34.6)
|
|
$
|
185.0
|
|
|
(1)
|
Elimination and Other
includes amounts relating to preferred shares, elimination of
intercompany transactions and unallocated amounts.
|
ATLAS CORP.
NON-GAAP
RECONCILIATIONS
ADJUSTED EBITDA
|
Three Months
Ended
|
(in millions of
U.S. dollars, unaudited)
|
June 30,
2021
|
March 31,
2021
|
June 30,
2020
|
|
|
|
|
|
|
|
GAAP Net
earnings
|
$
|
66.0
|
$
|
97.6
|
$
|
82.7
|
|
|
|
|
|
|
|
Interest
expense
|
|
54.6
|
|
46.8
|
|
50.8
|
Interest
income
|
|
(1.7)
|
|
(0.5)
|
|
(1.1)
|
Income tax
expense
|
|
1.6
|
|
6.7
|
|
6.1
|
Depreciation and
amortization
|
|
90.8
|
|
87.3
|
|
88.5
|
Loss on debt
extinguishment
|
|
56.1
|
|
–
|
|
–
|
Gain on
sale
|
|
(0.4)
|
|
(0.5)
|
|
(0.6)
|
Loss (gain) on
derivative instruments
|
|
1.7
|
|
(8.7)
|
|
7.0
|
Change in contingent
consideration asset(1)
|
|
0.6
|
|
1.1
|
|
0.7
|
Loss on foreign
currency repatriation(2)
|
|
3.2
|
|
6.0
|
|
4.6
|
Other
expenses
|
|
–
|
|
2.1
|
|
0.2
|
Adjusted
EBITDA
|
$
|
272.5
|
$
|
237.9
|
$
|
238.9
|
|
|
Three Ended June
30, 2021
|
(in millions of
U.S. dollars, unaudited)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and Other (3)
|
|
Total
|
GAAP Net
earnings
|
$
|
41.6
|
|
$
|
24.2
|
|
$
|
0.2
|
|
$
|
66.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
50.3
|
|
|
5.0
|
|
|
(0.7)
|
|
|
54.6
|
Interest
income
|
|
(0.1)
|
|
|
(1.6)
|
|
|
-
|
|
|
(1.7)
|
Income tax
expense
|
|
0.3
|
|
|
1.3
|
|
|
-
|
|
|
1.6
|
Depreciation and
amortization
|
|
75.9
|
|
|
14.9
|
|
|
-
|
|
|
90.8
|
Loss on debt
extinguishment
|
|
56.1
|
|
|
-
|
|
|
-
|
|
|
56.1
|
Gain on
sale
|
|
-
|
|
|
(0.4)
|
|
|
-
|
|
|
(0.4)
|
Loss on derivative
instruments
|
|
1.7
|
|
|
-
|
|
|
-
|
|
|
1.7
|
Change in contingent
consideration asset(1)
|
|
-
|
|
|
-
|
|
|
0.6
|
|
|
0.6
|
Loss on foreign
currency repatriation(2)
|
|
-
|
|
|
3.2
|
|
|
-
|
|
|
3.2
|
Other
expenses
|
|
0.9
|
|
|
(1.3)
|
|
|
0.4
|
|
-
|
Adjusted
EBITDA
|
$
|
226.7
|
|
$
|
45.3
|
|
$
|
0.5
|
|
$
|
272.5
|
|
|
(1)
|
The change in
contingent consideration asset relates to the mark to market impact
of contingent consideration related to the acquisition of APR.
Pursuant to the acquisition agreement, the sellers of APR agreed to
compensate the Company for losses on cash repatriation from a
foreign jurisdiction related to cash generated from specified
contracts less relevant costs (the "Peso Contingent Asset
Arrangement"). The seller's indemnification obligations will end on
April 30, 2022, or earlier if certain conditions are met. In
February 2021, the sellers of APR further agreed to compensate the
Company, subject to definitive documentation, for losses on sale or
disposal of certain fixed asset and inventory items. The definitive
documentation was executed on April 30, 2021. The value of
compensation receivable from the sellers is accounted for as a
contingent consideration asset.
|
(2)
|
Loss on foreign
currency repatriation relates to losses recognized on cash
repatriation from a foreign jurisdiction, where compensation is
receivable through the Peso Contingent Asset Arrangement.
Compensation is made by the sellers in cash or return of previously
issued equity, which is offset against the contingent consideration
asset when received and therefore, is not reflected in the income
statement.
|
(3)
|
Elimination and Other
includes amounts relating to preferred shares, change in contingent
consideration asset, elimination of intercompany transactions and
unallocated amounts.
|
ATLAS CORP.
NON-GAAP
RECONCILIATIONS
NET DEBT TO ADJUSTED EBITDA
(in millions of
U.S. dollars, unaudited)
|
June 30,
2021
|
March 31,
2021
|
June 30,
2020
|
Long-term debt
(1)
|
$
|
3,906.7
|
$
|
3,680.3
|
$
|
3,546.5
|
Other financing
arrangements (1)
|
|
1,141.5
|
|
865.5
|
|
671.2
|
Deferred financing
fee
|
|
75.0
|
|
58.6
|
|
50.8
|
Total
Borrowings
|
|
5,123.2
|
|
4,604.4
|
|
4,268.5
|
Debt discount and
fair value adjustment
|
|
75.1
|
|
131.4
|
|
141.1
|
Cash and cash
equivalents
|
|
(591.0)
|
|
(337.5)
|
|
(221.8)
|
Restricted
cash
|
|
(38.2)
|
|
(38.2)
|
|
(39.7)
|
Net
Debt
|
$
|
4,569.1
|
$
|
4,360.1
|
$
|
4,148.1
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
(in millions of
U.S. dollars, unaudited)
|
June 30,
2021
|
March 31,
2021
|
June 30,
2020
|
Net
Earnings
|
$
|
221.6
|
$
|
238.4
|
$
|
248.4
|
Interest
expense
|
|
192.6
|
|
188.8
|
|
201.2
|
Interest
income
|
|
(4.7)
|
|
(4.1)
|
|
(5.5)
|
Income tax
expense
|
|
16.9
|
|
21.4
|
|
8.6
|
Depreciation and
amortization
|
|
371.3
|
|
369.0
|
|
289.0
|
Loss on debt
extinguishment
|
|
56.1
|
|
-
|
|
-
|
Gain on
sale
|
|
(0.1)
|
|
(0.3)
|
|
(0.6)
|
Loss on derivative
instruments
|
|
(3.2)
|
|
2.0
|
|
51.4
|
Change in contingent
consideration asset(2)
|
|
(2.5)
|
|
(2.4)
|
|
(2.6)
|
Loss on foreign
currency repatriation(3)
|
|
23.4
|
|
24.7
|
|
4.6
|
Goodwill
impairment
|
|
117.9
|
|
117.9
|
|
-
|
Other
expenses
|
|
9.7
|
|
9.9
|
|
1.8
|
Adjusted
EBITDA
|
$
|
999.0
|
$
|
965.3
|
$
|
796.3
|
|
|
|
|
|
|
|
Net Debt to
Adjusted EBITDA
|
|
4.6x
|
|
4.5x
|
|
5.2x
|
|
(1)
|
Debt and other
financing arrangements include both current and long-term
portions.
|
(2)
|
The change in
contingent consideration asset relates to the mark to market impact
of contingent consideration related to the acquisition of APR.
Pursuant to the acquisition agreement, the sellers of APR agreed to
compensate the Company for losses on cash repatriation from a
foreign jurisdiction related to cash generated from specified
contracts less relevant costs (the "Peso Contingent Asset
Arrangement"). The seller's indemnification obligations will end on
April 30, 2022, or earlier if certain conditions are met. In
February 2021, the sellers of APR further agreed to compensate the
Company, subject to definitive documentation, for losses on sale or
disposal of certain fixed asset and inventory items. The definitive
documentation was executed on April 30, 2021. The value of
compensation receivable from the sellers is accounted for as a
contingent consideration asset.
|
(3)
|
Loss on foreign
currency repatriation relates to losses recognized on cash
repatriation from a foreign jurisdiction, where compensation is
receivable through the Peso Contingent Asset Arrangement.
Compensation is made by the sellers in cash or return of previously
issued equity, which is offset against the contingent consideration
asset when received and therefore, is not reflected in the income
statement.
|
ATLAS CORP.
NON-GAAP
RECONCILIATIONS
OPERATING NET DEBT TO ADJUSTED
EBITDA
|
As at June 30,
2021
|
(in millions of
U.S. dollars, unaudited)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and Other(4)
|
|
Total
|
Long-term
debt(1)
|
$
|
3,695.8
|
|
$
|
261.7
|
|
$
|
(50.8)
|
|
$
|
3,906.7
|
Other financing
arrangements(1)
|
|
1,141.5
|
|
|
-
|
|
|
-
|
|
|
1,141.5
|
Deferred financing
fee
|
|
67.5
|
|
|
7.5
|
|
|
-
|
|
|
75.0
|
Total
Borrowings
|
|
4,904.8
|
|
|
269.2
|
|
|
(50.8)
|
|
|
5,123.2
|
Debt discount and
fair value adjustment
|
|
75.1
|
|
|
-
|
|
|
-
|
|
|
75.1
|
Cash and cash
equivalents
|
|
(521.6)
|
|
|
(69.4)
|
|
|
-
|
|
|
(591.0)
|
Restricted
cash
|
|
-
|
|
|
(38.2)
|
|
|
-
|
|
|
(38.2)
|
Net
Debt
|
$
|
4,458.3
|
|
$
|
161.6
|
|
$
|
(50.8)
|
|
$
|
4,569.1
|
Vessels under
construction
|
|
(510.8)
|
|
|
-
|
|
|
-
|
|
|
(510.8)
|
Operating Net
Debt
|
$
|
3,947.5
|
|
$
|
161.6
|
|
$
|
(50.8)
|
|
$
|
4,058.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended June 30, 2021
|
(in millions of
U.S. dollars, unaudited)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and Other(4)
|
|
Total
|
Net Earnings
(Loss)
|
$
|
316.4
|
|
$
|
(104.9)
|
|
$
|
10.1
|
|
$
|
221.6
|
Interest
expense
|
|
175.2
|
|
|
21.1
|
|
|
(3.7)
|
|
|
192.6
|
Interest
income
|
|
(0.5)
|
|
|
(4.2)
|
|
|
-
|
|
|
(4.7)
|
Income tax
expense
|
|
0.8
|
|
|
16.1
|
|
|
-
|
|
|
16.9
|
Depreciation and
amortization
|
|
299.9
|
|
|
71.4
|
|
|
-
|
|
|
371.3
|
Loss on debt
extinguishment
|
|
56.1
|
|
|
-
|
|
|
-
|
|
|
56.1
|
Gain on
sale
|
|
-
|
|
|
(0.1)
|
|
|
-
|
|
|
(0.1)
|
Loss on derivative
instruments
|
|
(3.2)
|
|
|
-
|
|
|
-
|
|
|
(3.2)
|
Change in contingent
consideration asset(2)
|
|
-
|
|
|
-
|
|
|
(2.5)
|
|
|
(2.5)
|
Loss on foreign
currency repatriation(3)
|
|
-
|
|
|
23.4
|
|
|
-
|
|
|
23.4
|
Goodwill
impairment
|
|
-
|
|
|
117.9
|
|
|
-
|
|
|
117.9
|
Other
expenses
|
|
1.4
|
|
|
6.4
|
|
|
1.9
|
|
|
9.7
|
Adjusted
EBITDA
|
$
|
846.1
|
|
$
|
147.1
|
|
$
|
5.8
|
|
$
|
999.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Net Debt
to Adjusted EBITDA
|
|
4.7x
|
|
|
1.1x
|
|
|
|
|
|
4.1x
|
|
|
(1)
|
Debt and other
financing arrangements include both current and long-term
portions.
|
(2)
|
The change in
contingent consideration asset relates to the mark to market impact
of contingent consideration related to the acquisition of APR.
Pursuant to the acquisition agreement, the sellers of APR agreed to
compensate the Company for losses on cash repatriation from a
foreign jurisdiction related to cash generated from specified
contracts less relevant costs (the "Peso Contingent Asset
Arrangement"). The seller's indemnification obligations will end on
April 30, 2022, or earlier if certain conditions are met. In
February 2021, the sellers of APR further agreed to compensate the
Company, subject to definitive documentation, for losses on sale or
disposal of certain fixed asset and inventory items. The definitive
documentation was executed on April 30, 2021. The value of
compensation receivable from the sellers is accounted for as a
contingent consideration asset.
|
(3)
|
Loss on foreign
currency repatriation relates to losses recognized on cash
repatriation from a foreign jurisdiction, where compensation is
receivable through the Peso Contingent Asset Arrangement.
Compensation is made by the sellers in cash or return of previously
issued equity, which is offset against the contingent consideration
asset when received and therefore, is not reflected in the income
statement.
|
(4)
|
Elimination and Other
includes amounts relating to preferred shares, change in contingent
consideration asset, elimination of intercompany transactions and
unallocated amounts.
|
ATLAS CORP.
NON-GAAP
RECONCILIATIONS
TOTAL BORROWINGS
|
As at June
30,
|
|
2021
|
|
2020
|
(in millions of
U.S. dollars, unaudited)
|
Total
Outstanding
|
|
Interest
Rate (2)
|
|
Years to
Maturity
|
|
Total
Outstanding
|
Credit
facilities(1)(8)
|
$
|
2,506.2
|
|
1.9%
|
|
3.01
|
|
$
|
3,047.9
|
Senior unsecured
notes(3)(8)
|
|
80.0
|
|
7.1%
|
|
6.33
|
|
|
80.0
|
Fairfax
notes(4)(8)
|
|
300.0
|
|
5.5%
|
|
3.78
|
|
|
600.0
|
Exchangeable notes
(5)(8)
|
|
201.3
|
|
3.8%
|
|
4.46
|
|
|
-
|
NOK
Bond(6)(8)
|
|
500.0
|
|
6.5%
|
|
3.80
|
|
|
-
|
Sustainability-linked
Senior Secured Notes(7)
|
|
450.0
|
|
4.1%
|
|
12.13
|
|
|
-
|
Debt discount and fair
value adjustment
|
|
(75.1)
|
|
-
|
|
-
|
|
|
(141.1)
|
Other financing
arrangements(8)
|
|
1,160.8
|
|
3.0%
|
|
10.12
|
|
|
681.7
|
Total
borrowings
|
|
5,123.2
|
|
|
|
|
|
|
4,268.5
|
Vessels under
construction
|
|
(510.8)
|
|
-
|
|
-
|
|
|
-
|
Operating
borrowings
|
$
|
4,612.4
|
|
|
|
|
|
$
|
4,268.5
|
|
|
(1)
|
As at June 30, 2021,
$2,131.5 million was secured by vessels.
|
(2)
|
As at June 30, 2021,
the three month and six month average LIBOR on the Company's
revolving credit facilities were 0.1% and 0.2%, respectively.
The three month and six month average LIBOR on the Company's term
loan credit facilities were 0.1% and 0.2%, respectively.
|
(3)
|
Correspond to the
7.125% senior unsecured notes due in 2027. $27.7m was held by
Seaspan that was subsequently redeemed in July 2021, and $52.3
million is held by Atlas.
|
(4)
|
Correspond to the
5.50% senior notes due in 2025 and 2026.
|
(5)
|
Correspond to the
3.75% senior unsecured notes where the holder has the option to
exchange into Atlas common shares, cash or combination of Atlas
common shares or cash, at Seaspan's discretion, on or after
September 2025 or earlier upon the occurrence of certain
conditions. The notes are due in December 2025.
|
(6)
|
Correspond to the
6.5% senior unsecured sustainability-linked bonds issued in the
Nordic bond market, due in 2024 and due in 2026.
|
(7)
|
Corresponds to
Sustainability-Linked Senior Secured Notes with interest ranging
from 3.91% to 4.26% and matures between 2031 and 2036.
|
(8)
|
These exclude
deferred financing fees and include both current and long-term
portions.
|
ATLAS CORP.
Definitions of Non-GAAP Financial Measures
This release includes various financial measures that are
non-GAAP financial measures as defined under the rules of the
United States Securities and Exchange Commission ("SEC"). These
non-GAAP financial measures, which include FFO, FFO Per Share,
Diluted ("FFO Per Share"), Adjusted Earnings, Adjusted Earnings Per
Share, Diluted ("Adjusted EPS"), Adjusted EBITDA, Net Debt and
Total Borrowings, are intended to provide additional information
and are not prepared in accordance with, and should not be
considered substitutes for financial measures prepared in
accordance with U.S. generally accepted accounting principles
("GAAP"). Investors are cautioned that there are material
limitations associated with the use of the non-GAAP financial
measures as an analytical tool.
For a reconciliation of each non-GAAP measure to its most
comparable GAAP measure, please see the "Non-GAAP Reconciliations"
tables in this press release. A reconciliation of projected
Adjusted EBITDA and Adjusted Net Income as shown under "Guidance"
is not provided herein because the projected comparable GAAP
measure for the years ended December 31,
2021, 2022, 2023 and 2024 cannot be prepared without
unreasonable burden and with sufficient certainty. The components
of the projected GAAP measure that cannot be so prepared include,
but are not limited to, income tax expense, gains/losses on sale,
loss on derivative instruments, impairment, change in contingent
consideration asset and loss on foreign currency repatriation.
FFO and FFO Per Share represent net
earnings adjusted for depreciation and amortization, gains/losses
on sale, unrealized change in fair value of derivative instruments,
loss on foreign currency repatriation, change in contingent
consideration asset, preferred share dividends accumulated,
impairment, loss on debt extinguishment and certain other items
that management believes are not representative of its operating
performance. FFO and FFO Per Share are useful performance measures
because they exclude those items that management believes are not
representative of its performance.
FFO and FFO Per Share are not defined by GAAP and should
not be considered as an alternative to net earnings, earnings per
share or any other indicator of the Company's performance required
to be reported by GAAP. In addition, this measure may not be
comparable to similar measures presented by other companies.
Adjusted Earnings and Adjusted EPS represents
net earnings adjusted for preferred share dividends accumulated,
impairment, loss on debt extinguishment and other items that
management believes are not representative of its ongoing
performance.
Adjusted Earnings and Adjusted EPS are not defined by GAAP
and should not be considered as an alternative to net earnings, net
earnings per share or any other indicator of the Company's
performance required to be reported by GAAP. In addition, this
measure may not be comparable to similar measures presented by
other companies and the closest measure is net earnings. Management
believes that these metrics are helpful in providing investors with
information to assess the on-going operations of the business.
Adjusted EBITDA represents net earnings before
interest expense and income, tax expense, depreciation and
amortization, impairments, write-down and gains/losses on sale,
gains/losses on derivative instruments, loss on foreign currency
repatriation, change in contingent consideration asset, loss on
debt extinguishment, other expenses and certain other items that
management believes are not representative of its operating
performance.
Adjusted EBITDA provides useful information to investors in
assessing the Company's results from operations. Management
believes that this measure is useful in assessing performance and
highlighting trends on an overall basis. Management also believes
that this performance measure can be useful in comparing its
results with those of other companies, even though other companies
may not calculate this measure in the same way. The GAAP measure
most directly comparable to Adjusted EBITDA is net earnings.
Adjusted EBITDA is not defined by GAAP and should not be considered
as an alternative to net earnings or any other indicator of the
Company's performance required to be reported by GAAP.
The Company is unable to provide reconciliations of
forward-looking Adjusted EBITDA and its components to their most
directly comparable GAAP financial measures on a forward-looking
basis because the necessary components that impact those GAAP
financial measures cannot be reliably predicted. These components
include, but are not limited to, income tax expense, gains/losses
on sale, loss on derivative instruments, impairment, change in
contingent consideration asset and loss on foreign currency
repatriation. Such components may have a significant, and
potentially unpredictable, impact on our future financial
results.
Net Debt represents total borrowings before debt discount
and fair value adjustments, net of cash and cash equivalents and
restricted cash. Total
Borrowings represents long-term
debt and other financing arrangements, excluding deferred
financing fees.
Operating Net Debt represents total borrowings
before debt discount and fair value adjustments, net of cash and
cash equivalents, restricted cash and vessels under
construction.
Net Debt and Total Borrowings provide useful
information to investors in assessing the Company's leverage.
Management believes this measure is useful in assessing the
Company's ability to settle contracted debt payments. Management
also believes that this leverage measurement can be useful in
comparing its position with those of other companies, even though
other companies may not calculate this measure in the same way. The
GAAP measure most directly comparable to Net Debt and Total
Borrowings is the total of long-term debt and other financing
arrangements. Net Debt and Total Borrowings are not defined by GAAP
and should not be considered as an alternative to long-term debt
and other financing arrangements or any other indicator of the
Company's financial position required to be reported by GAAP.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This release contains forward-looking statements (as such term
is defined in Section 21E of the Securities Exchange Act of 1934,
as amended, or the Exchange Act) concerning Atlas' operations, cash
flows, and financial position, including, without limitation,
Atlas' financial guidance, including 2022 to 2024 outlook, and its
ability to continue to grow its business and create increased
shareholder value. Statements that are predictive in nature, that
depend upon or refer to future events or conditions, or that
include words such as "continue," "expects," "anticipates,"
"intends," "plans," "believes," "estimates," "projects,"
"forecasts," "will," "may," "potential," "should" and similar
expressions are forward–looking statements. These forward-looking
statements represent Atlas' estimates and assumptions only as of
the date of this release and are not intended to give any assurance
as to future results. As a result, you are cautioned not to rely on
any forward-looking statements. Forward-looking statements appear
in a number of places in this release. Although these statements
are based upon assumptions Atlas believes to be reasonable based
upon available information, they are subject to risks and
uncertainties. These risks and uncertainties include, but are not
limited to:
- Atlas' future operating and financial results;
- Atlas' future growth prospects;
- Atlas' business strategy and capital allocation plans, and
other plans and objectives for future operations;
- Atlas' primary sources of funds for short, medium and long-term
liquidity needs;
- potential acquisitions, financing arrangements and other
investments, and the expected benefits from such transactions;
- Atlas' financial condition and liquidity, including its ability
to realize the benefits of recent financing activities, borrow and
repay funds under its credit facilities, its ability to obtain
waivers or secure acceptable replacement charters under the credit
facilities, its ability to refinance existing facilities and notes,
and to obtain additional financing in the future to fund capital
expenditures, acquisitions and other general corporate
activities;
- conditions in the public equity market and the price of Atlas'
shares;
- changes in governmental rules and regulations or actions taken
by regulatory authorities, and the effect of governmental
regulations on Atlas' business;
- the financial condition of Seaspan's and APR's customers,
lenders and other counterparties and their ability to perform their
obligations under their agreements with Seaspan and APR,
respectively;
- the continued ability to meet specified restrictive covenants
in Atlas' and its subsidiaries' financing and lease arrangements,
notes and preferred shares;
- any economic downturn in the global financial markets and
potential negative effects of any recurrence of such disruptions on
the demand for the services of Seaspan's containerships or APR's
mobile power solutions or on our customers' ability to charter our
vessels, lease our power generation assets and pay for our
services;
- the length and severity of the novel coronavirus (COVID-19)
pandemic, including as a result of new variants of the virus, and
its impact on Atlas' business;
- a major customer experiencing financial distress, due to the
COVID-19 pandemic, bankruptcy or otherwise;
- global economic and market conditions and shipping industry
trends, including charter rates and other factors affecting supply
and demand for our containerships and power generation
solutions;
- disruptions in global credit and financial markets as the
result of the COVID-19 pandemic or otherwise;
- Atlas' expectations as to impairments of its vessels and power
generation assets, including the timing and amount of potential
impairments;
- the future valuation of Atlas' vessels, power generation assets
and goodwill;
- future time charters and vessel deliveries, including future
long-term charters for certain existing vessels;
- estimated future capital expenditures needed to preserve the
operating capacity of Seaspan's containership fleet and comply with
regulatory standards, as well as Atlas' expectations regarding
future dry-docking and operating expenses, including ship operating
expense and expenses related to performance under our contracts for
the supply of power generation capacity, and general and
administrative expenses;
- availability of crew, number of off-hire days and dry-docking
requirements;
- Seaspan's continued ability to maintain, enter into or renew
primarily long-term, fixed-rate time charters for its vessels and
leases of our power generation assets;
- the potential for early termination of long-term time charters
and Seaspan's potential inability to enter into, renew or replace
long-term time charters;
- Seaspan's ability to leverage to its advantage its
relationships and reputation in the containership industry;
- changes in technology, prices, industry standards,
environmental regulation and other factors which could affect
Atlas' competitive position, revenues and asset values;
- disruptions and security threats to our technology
systems;
- taxation of Atlas and of distributions to its
shareholders;
- Atlas' exemption from tax on U.S. source international
transportation income;
- the continued availability of services, equipment and software
from subcontractors or third-party suppliers required to provide
APR's power generation solutions;
- APR's ability to protect its intellectual property and defend
against possible third-party infringement claims relating to its
power generation solutions;
- Atlas' ability to achieve or realize expected benefits from ESG
initiatives;
- potential liability from future litigation;
- other factors detailed from time to time in Atlas' periodic
reports; and
- other risks that are not currently material or known to
us.
Forward-looking statements in this release are estimates and
assumptions reflecting the judgment of senior management and
involve known and unknown risks and uncertainties. These
forward-looking statements are based upon a number of assumptions
and estimates that are inherently subject to significant
uncertainties and contingencies, many of which are beyond Atlas'
control. Actual results may differ materially from those expressed
or implied by such forward-looking statements. The risk that the
assumptions on which the 2022 to 2024 outlook and guidance are
based prove incorrect may increase the later the period to which
the outlook relates, and the extended period of this outlook may
increase the chance actual results vary materially from such
expectations. Accordingly, all forward-looking statements should be
considered in light of various important factors listed above and
including, but not limited to, those set forth in "Item 3. Key
Information—D. Risk Factors" in Atlas' Annual Report for the year
ended December 31, 2020 on Form 20-F
filed with the SEC on March 19,
2021.
Atlas does not intend to revise any forward-looking statements
in order to reflect any change in its expectations or events or
circumstances that may subsequently arise. Atlas expressly
disclaims any obligation to update or revise any of these
forward-looking statements, whether because of future events, new
information, a change in Atlas' views or expectations, or
otherwise. You should carefully review and consider the various
disclosures included in Atlas' Annual Report and in Atlas' other
filings made with the SEC that attempt to advise interested parties
of the risks and factors that may affect Atlas' businesses,
prospects and results of operations.
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SOURCE Atlas Corp.