Atlas Corp.
- Revenue growth of 36.6% to $386.2
million compared to the same period in 2019.
- Funds From Operations (FFO)(1) growth of 96.0% to
$173.5 million compared to the same
period in 2019.
- FFO, per diluted share growth of 70.0% to $0.68 compared to the same period in 2019.
- Adjusted EBITDA(1) growth of 38.8% to $249.8 million compared to the same period in
2019.
Seaspan Corporation
- Seaspan continues to execute quality growth during adversity,
securing long-term contracted revenue
-
- Received delivery of four high-quality vessels, (2-12,000 TEU
and 2-13,000 TEU)
- Seaspan closed $200 million
sustainability-linked loan, expanding the company's innovative
portfolio financing program to $1.8
billion
LONDON, Nov. 9, 2020 /CNW/ - Atlas Corp. ("Atlas or the
"Company") (NYSE: ATCO) announced today its results for the three
and nine months ended September 30,
2020.
Comments from Management
Bing Chen, President and CEO of Atlas, commented, "Our third
quarter performance highlights the resiliency of Atlas' scalable
platform and our focus on operational excellence, driving FFO per
diluted share of $0.68. Through our
creative customer partnerships and delivery of fully integrated
solutions to generate quality growth, we have added four large
vessels under long-term charters bringing our total fleet to 127
vessels with contracted revenue of $4.4
billion. Achieving year-over-year growth of 96.0% and 38.8%
of FFO and Adjusted EBITDA, respectively, we are delivering
consistent value creation for our stakeholders. With $427.6 million of liquidity, a strong balance
sheet, and trusted customer partnership, Atlas is well positioned
to drive continued enterprise growth through fluctuating economic
and industry cycles. I am proud of how our team's consistent focus
on operational excellence has resulted in solid performance and the
delivery of best-in-class customer services."
(1)
|
This is a non-GAAP
financial measure. Refer to "Definitions and Non-GAAP Financial
Measures" and the Appendices for a definition of this term and a
reconciliation of this non-GAAP financial measure, as used in this
release, to the financial measures under GAAP.
|
Consolidated Results
The following tables summarize Atlas' consolidated results for
the three months ended September 30,
2020, June 30, 2020, and
September 30, 2019.
|
Three Months
Ended
|
(in millions of US
dollars, except per share
amounts, percentages and ratios, unaudited)
|
September
30, 2020
|
|
June 30,
2020
|
|
September
30, 2019(5)
|
GAAP
Financial
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
386.2
|
|
$
|
363.8
|
|
$
|
282.7
|
Net
earnings
|
|
84.1
|
|
|
82.7
|
|
|
43.0
|
Earnings per share,
diluted
|
|
0.27
|
|
|
0.26
|
|
|
0.11
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
|
249.8
|
|
|
238.9
|
|
|
180.0
|
FFO(1)
|
|
173.5
|
|
|
161.3
|
|
|
88.5
|
FFO per Share,
Diluted(1)
|
|
0.68
|
|
|
0.64
|
|
|
0.40
|
Net Debt to Adjusted
EBITDA(1)
|
|
4.8x
|
|
|
5.2x
|
|
|
3.5x
|
|
|
|
|
|
|
|
|
|
Financial
Position
|
|
|
|
|
|
|
|
|
Ending
Liquidity(2)
|
|
427.6
|
|
|
382.9
|
|
|
912.9
|
Ending Contracted
Revenue(3)
|
|
4,442.4
|
|
|
4,625.0
|
|
|
4,080.9
|
Total
Borrowings(1)
|
|
4,302.7
|
|
|
4,268.5
|
|
|
3,438.7
|
|
|
|
|
|
|
|
|
|
Operational
|
|
|
|
|
|
|
|
|
Vessel
Utilization
|
98.6%
|
|
97.4%
|
|
99.6%
|
Power Fleet
Utilization(4)
|
80.0%
|
|
68.4%
|
|
81.0%
|
|
|
(1)
|
This is a non-GAAP
financial measure. Refer to "Definitions and Non-GAAP Financial
Measures" and the Appendices for a definition of this term and a
reconciliation of this non-GAAP financial measure, as used in this
release, to the financial measures under GAAP.
|
(2)
|
This is the total
cash and cash equivalents balance plus the total available undrawn
committed credit facilities at period end.
|
(3)
|
Ending contracted
revenue is on a pro-forma basis including operating and sales-type
leases on vessels delivered in October and November
2020.
|
(4)
|
Power fleet
utilization in comparative periods has been adjusted to reflect
average utilization during the quarter.
|
(5)
|
The financial
information for September 30, 2019 does not include APR Energy
performance.
|
Guidance 2020
The following table is based on Atlas' current expectations for
Seaspan and APR.
Operating
Metrics
(in millions of US
dollars)
|
Previous
Guidance
|
|
Updated
Guidance
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Seaspan
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
1,190.0
|
|
$
|
1,220.0
|
|
$
|
1,210.0
|
|
$
|
1,220.0
|
Operating
expense
|
|
245.0
|
|
|
250.0
|
|
|
245.0
|
|
|
250.0
|
G&A
expense
|
|
35.0
|
|
|
40.0
|
|
|
35.0
|
|
|
40.0
|
Operating lease
expense
|
|
145.0
|
|
|
150.0
|
|
|
145.0
|
|
|
150.0
|
Adjusted
EBITDA(1)
|
|
750.0
|
|
|
795.0
|
|
|
770.0
|
|
|
795.0
|
|
|
|
|
|
|
|
|
|
|
|
|
APR (for period
from February 29,
2020 to December 31, 2020)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
190.0
|
|
$
|
220.0
|
|
$
|
195.0
|
|
$
|
215.0
|
Operating
expense
|
|
40.0
|
|
|
54.0
|
|
|
40.0
|
|
|
41.0
|
G&A
expense
|
|
38.0
|
|
|
40.0
|
|
|
37.0
|
|
|
38.0
|
Operating lease
expense
|
|
3.0
|
|
|
4.0
|
|
|
3.0
|
|
|
4.0
|
Adjusted
EBITDA(1)
|
|
110.0
|
|
|
130.0
|
|
|
115.0
|
|
|
132.0
|
Segmental Financial Results
The following table summarizes segmental financial results for
the three months ended September 30,
2020.
|
Three Months Ended
September 30, 2020
(unaudited)
|
(in millions of US
dollars,
unaudited)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and
Other(3)
|
|
Total
|
Revenue
|
$
|
305.9
|
|
$
|
80.3
|
|
$
|
-
|
|
$
|
386.2
|
Operating
expense
|
|
67.3
|
|
|
10.9
|
|
|
-
|
|
|
78.2
|
G&A
expense
|
|
6.4
|
|
|
13.5
|
|
|
1.2
|
|
|
21.1
|
Operating lease
expense
|
|
36.0
|
|
|
1.0
|
|
|
-
|
|
|
37.0
|
Adjusted
EBITDA(1)
|
|
196.3
|
|
|
55.0
|
|
|
(1.5)
|
|
|
249.8
|
FFO(1)
|
|
148.0
|
|
|
42.8
|
|
|
(17.3)
|
|
|
173.5
|
Net
earnings
|
|
79.0
|
|
|
5.4
|
|
|
(0.3)
|
|
|
84.1
|
Ending Contracted
Revenue(2)
|
|
4,118.0
|
|
|
324.4
|
|
|
-
|
|
|
4,442.4
|
|
|
(1)
|
This is a non-GAAP
financial measure. Refer to "Definitions and Non-GAAP Financial
Measures" and the Appendices for a definition of this term and a
reconciliation of this non-GAAP financial measure, as used in this
release, to the financial measures under GAAP.
|
(2)
|
Ending contracted
revenue is on a pro-forma basis including operating and sales-types
leases on vessels delivered in October and November
2020.
|
(3)
|
Elimination and other
include amounts relating to preferred shares, corporate
headquarters and elimination of intercompany
transactions.
|
Financial Results Summary
Revenue increased by 36.6% to $386.2 million for the three months ended
September 30, 2020, compared with the
same period in 2019. APR represented 77.6% and Seaspan represented
22.4% of the total increase compared to the third quarter of 2019.
Revenue increase was driven primarily from thirteen vessels
delivered between December 2019 and
September 2020, and the contribution
from APR.
Adjusted EBITDA was $249.8
million for the three months ended September 30, 2020, an increase of 38.8% compared
to the same period in 2019. This was driven by the contribution of
APR and increased Seaspan contribution from the delivery of
thirteen vessels, in addition to lower operating lease expense due
to lower LIBOR.
FFO increased by 96.0% to $173.5 million for the three months ended
September 30, 2020, compared with the
same period in 2019. This reflects revenue contributions from APR
and new vessels, and lower interest expense.
Liquidity
As of September 30,
2020, Atlas had total liquidity of $427.6 million, consisting of $220.6 million of cash and cash equivalents and
$207.0 million of availability under
undrawn committed revolving credit facilities. As of September 30, 2020, Atlas had an unencumbered
asset base including 30 vessels with a book value of $1.03 billion(1).
Seaspan Corporate Developments
In August and
September 2020, Seaspan received
delivery of two 13,000 TEU containerships that are on long-term
charters with leading global liners.
In October and November 2020,
Seaspan received delivery of two high-quality 12,000 TEU
containerships, built in 2018, both with committed long-term
charters with leading global liners.
In October 2020, Seaspan closed a
$200.0 million sustainability-linked
loan, increasing the capacity of the company's innovative portfolio
financing program to $1.8
billion.
APR Corporate Developments
APR commenced an
operational realignment program to enhance its fast power
solutions and focus on developing and building longer-term power
projects.
On September 30, 2020 APR
concluded the term of its contract for three peaking power
gas-fired plants in Mexicali, Baja
California, Mexico.
Distribution
The Board of Directors of Atlas has
declared a quarterly distribution in the amount
of $0.125 per common share, payable on October 30, 2020, unchanged from the prior
quarter. Regular quarterly dividends on the Preferred Shares Series
D, Series E, Series G, Series H and Series I were also
declared.
(1)
|
Balance Sheet value
as at September 30, 2020.
|
Common Shares Outstanding
As of November 9, 2020, there were 246.0 million
common shares outstanding, excluding 6.7 million shares reserved
for future issuance to the sellers of APR in accordance with the
terms and conditions of the APR acquisition agreement.
Conference Call and Webcast
Atlas will host a
conference call and webcast presentation for investors, analysts,
and interested parties to discuss its third quarter
results on November 10, 2020 at
8:30 a.m. ET. Participants should
call 1-877-246-9875 (US/Canada) or 1-707-287-9353 (International)
and request the Atlas call (conference ID: 1678510). The live
webcast and slide presentation are available under "Events &
Presentations" at www.atlascorporation.com.
A replay will be available until November
25, 2020. The replay telephone numbers are: US/Canada 1-855-859-2056 and International
1-404-537-3406 and the replay passcode is: 1678510.
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 deploying capital 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 time charters to the
world's largest container shipping liners. Seaspan's fleet consists
of 127 containerships, representing total capacity of approximately
1,073,000 TEU. Seaspan's operating fleet of vessels has an average
age of approximately 7 years and an average remaining lease period
of approximately 4 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, please visit aprenergy.com.
ATLAS
CORP.
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
(IN MILLIONS OF US
DOLLARS)
|
|
|
|
|
|
September 30,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
220.6
|
|
$
|
195.0
|
Accounts
receivable
|
|
86.2
|
|
|
18.7
|
Inventories
|
|
72.0
|
|
|
14.2
|
Prepaid expenses and
other
|
|
29.9
|
|
|
17.6
|
Net investment in
lease
|
|
10.5
|
|
|
35.2
|
Acquisition related
assets
|
|
65.0
|
|
|
-
|
|
|
484.2
|
|
|
280.7
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
7,029.8
|
|
|
5,707.7
|
Right-of-use
assets
|
|
872.0
|
|
|
957.2
|
Net investment in
lease
|
|
421.6
|
|
|
723.6
|
Goodwill
|
|
84.1
|
|
|
75.3
|
Deferred tax
assets
|
|
13.0
|
|
|
-
|
Other
assets
|
|
305.4
|
|
|
172.5
|
|
$
|
9,210.1
|
|
$
|
7,917.0
|
Liabilities and
shareholders' equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
151.5
|
|
$
|
83.4
|
Deferred
revenue
|
|
20.7
|
|
|
20.3
|
Income tax
payable
|
|
84.8
|
|
|
-
|
Long-term debt -
current
|
|
246.7
|
|
|
363.7
|
Operating lease
liabilities - current
|
|
160.3
|
|
|
159.7
|
Other financing
arrangements - current
|
|
57.7
|
|
|
134.6
|
Other liabilities -
current
|
|
32.1
|
|
|
7.8
|
|
|
753.8
|
|
|
769.5
|
|
|
|
|
|
|
Long-term
debt
|
|
3,207.7
|
|
|
2,696.9
|
Operating lease
liabilities
|
|
699.4
|
|
|
782.6
|
Other financing
arrangements
|
|
738.9
|
|
|
373.9
|
Deferred tax
liabilities
|
|
7.5
|
|
|
-
|
Derivative
instruments
|
|
68.3
|
|
|
50.2
|
Other
liabilities
|
|
42.3
|
|
|
11.2
|
|
|
5,517.9
|
|
|
4,684.3
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Share
capital
|
|
2.4
|
|
|
2.1
|
Additional paid in
capital
|
|
3,834.9
|
|
|
3,452.9
|
Deficit
|
|
(124.5)
|
|
|
(200.7)
|
Accumulated other
comprehensive loss
|
|
(20.6)
|
|
|
(21.6)
|
|
|
3,692.2
|
|
|
3,232.7
|
|
$
|
9,210.1
|
|
$
|
7,917.0
|
ATLAS
CORP.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(IN MILLIONS OF US
DOLLARS, EXCEPT SHARES IN THOUSANDS AND PER SHARE
AMOUNTS)
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
|
Nine Months
Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
386.2
|
|
$
|
282.7
|
|
$
|
1,058.4
|
|
$
|
843.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
(income):
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
78.2
|
|
|
56.8
|
|
|
205.0
|
|
|
170.4
|
Depreciation and
amortization
|
|
103.9
|
|
|
63.9
|
|
|
264.6
|
|
|
189.9
|
General and
administrative
|
|
21.1
|
|
|
7.7
|
|
|
51.3
|
|
|
23.3
|
Operating
leases
|
|
37.0
|
|
|
38.2
|
|
|
113.7
|
|
|
116.3
|
Income related to
modification of time charters
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(227.0)
|
|
|
240.2
|
|
|
166.6
|
|
|
634.6
|
|
|
272.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
146.0
|
|
|
116.1
|
|
|
423.8
|
|
|
570.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
(income):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
45.3
|
|
|
52.4
|
|
|
145.7
|
|
|
170.5
|
Interest
income
|
|
(0.9)
|
|
|
(2.0)
|
|
|
(3.4)
|
|
|
(8.2)
|
Loss on derivative
instruments
|
|
2.2
|
|
|
22.1
|
|
|
34.0
|
|
|
37.7
|
Other
expenses
|
|
10.8
|
|
|
0.5
|
|
|
16.3
|
|
|
1.7
|
|
|
57.4
|
|
|
73.0
|
|
|
192.6
|
|
|
201.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
4.5
|
|
|
0.1
|
|
|
12.5
|
|
|
0.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
84.1
|
|
$
|
43.0
|
|
$
|
218.7
|
|
$
|
368.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends - preferred
shares
|
|
(16.8)
|
|
|
(18.0)
|
|
|
(50.3)
|
|
|
(54.2)
|
Net earnings
attributable to common shares
|
$
|
67.3
|
|
$
|
25.0
|
|
$
|
168.4
|
|
$
|
314.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares, basic
|
|
245,924
|
|
|
216,142
|
|
|
240,120
|
|
|
213,938
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
474
|
|
|
697
|
|
|
290
|
|
|
460
|
Fairfax
warrants
|
|
210
|
|
|
5,696
|
|
|
2,322
|
|
|
3,841
|
Holdback
shares
|
|
6,734
|
|
|
-
|
|
|
5,002
|
|
|
-
|
Weighted average
number of shares, diluted
|
|
253,342
|
|
|
222,535
|
|
|
247,734
|
|
|
218,239
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share,
basic
|
$
|
0.27
|
|
$
|
0.12
|
|
$
|
0.70
|
|
$
|
1.47
|
Earnings per share,
diluted
|
$
|
0.27
|
|
$
|
0.11
|
|
$
|
0.68
|
|
$
|
1.44
|
ATLAS
CORP.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(IN MILLIONS OF US
DOLLARS)
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash from (used
in):
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
84.1
|
|
$
|
43.0
|
|
$
|
218.7
|
|
$
|
368.2
|
Items not involving
cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
103.9
|
|
|
63.9
|
|
|
264.6
|
|
|
189.9
|
Change in right-of-use
asset
|
|
|
30.7
|
|
|
28.0
|
|
|
90.2
|
|
|
83.4
|
Non-cash interest
expense and accretion
|
|
|
10.6
|
|
|
7.7
|
|
|
29.5
|
|
|
22.6
|
Unrealized change in
derivative instruments
|
|
|
(4.6)
|
|
|
(0.4)
|
|
|
18.3
|
|
|
(13.7)
|
Amortization of
acquired revenue contracts
|
|
|
4.6
|
|
|
4.0
|
|
|
12.7
|
|
|
9.8
|
Other
|
|
|
3.4
|
|
|
3.1
|
|
|
5.4
|
|
|
7.8
|
Change in other
operating assets and liabilities
|
|
|
(39.6)
|
|
|
(3.4)
|
|
|
(156.8)
|
|
|
(22.8)
|
Cash from operating
activities(1)
|
|
|
193.1
|
|
|
145.9
|
|
|
482.6
|
|
|
645.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for
property, plant and equipment
|
|
|
(154.6)
|
|
|
(3.5)
|
|
|
(607.7)
|
|
|
(10.5)
|
Short-term
investments
|
|
|
-
|
|
|
0.1
|
|
|
-
|
|
|
2.5
|
Prepayment of vessel
purchase
|
|
|
(4.4)
|
|
|
(6.6)
|
|
|
(40.2)
|
|
|
(6.6)
|
Payment on settlement
of interest swap agreements
|
|
|
(5.4)
|
|
|
(104.8)
|
|
|
(13.5)
|
|
|
(122.1)
|
Cash and restricted
cash acquired from APR Energy
acquisition
|
|
|
-
|
|
|
-
|
|
|
50.6
|
|
|
-
|
Loss on cash
repatriation
|
|
|
(7.0)
|
|
|
-
|
|
|
(11.6)
|
|
|
-
|
Receipt from
contingent consideration asset
|
|
|
3.2
|
|
|
-
|
|
|
3.2
|
|
|
-
|
Other
assets
|
|
|
(2.0)
|
|
|
(1.2)
|
|
|
(11.7)
|
|
|
(6.1)
|
Cash used in
investing activities
|
|
|
(170.2)
|
|
|
(116.0)
|
|
|
(630.9)
|
|
|
(142.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of
long-term debt and other financing
arrangements
|
|
|
(159.8)
|
|
|
(379.8)
|
|
|
(951.1)
|
|
|
(1,635.2)
|
Issuance of long-term
debt and other financing arrangements
|
|
|
188.2
|
|
|
115.9
|
|
|
1,225.1
|
|
|
734.9
|
Notes and warrants
issued
|
|
|
-
|
|
|
-
|
|
|
100.0
|
|
|
250.0
|
Proceeds from exercise
of warrants
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
250.0
|
Redemption of
preferred shares
|
|
|
-
|
|
|
(47.8)
|
|
|
-
|
|
|
(47.8)
|
Financing
fees
|
|
|
(5.9)
|
|
|
(7.9)
|
|
|
(24.9)
|
|
|
(23.6)
|
Dividends on common
shares
|
|
|
(31.2)
|
|
|
(26.7)
|
|
|
(88.9)
|
|
|
(75.1)
|
Dividends on preferred
shares
|
|
|
(16.8)
|
|
|
(18.2)
|
|
|
(50.3)
|
|
|
(53.7)
|
Cash from (used in)
financing activities
|
|
|
(25.5)
|
|
|
(364.5)
|
|
|
209.9
|
|
|
(600.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase
in cash, cash equivalents and restricted cash
|
|
|
(2.6)
|
|
|
(334.6)
|
|
|
61.6
|
|
|
(98.1)
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
|
261.5
|
|
|
607.9
|
|
|
197.3
|
|
|
371.4
|
Cash, cash
equivalents and restricted cash, end of period
|
|
$
|
258.9
|
|
$
|
273.3
|
|
$
|
258.9
|
|
$
|
273.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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:
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
220.6
|
|
$
|
258.9
|
|
|
|
|
|
|
Restricted
cash
|
|
|
38.3
|
|
|
14.4
|
|
|
|
|
|
|
Total cash, cash
equivalents and restricted cash shown in the
|
|
|
|
|
|
|
|
|
|
|
|
|
consolidated
statements of cash flows
|
|
$
|
258.9
|
|
$
|
273.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cash from
operating activities for the nine months ended September 30, 2019
includes $227.0 million received in connection with modification of
time charters.
|
ATLAS
CORP.
|
FUNDS FROM
OPERATIONS
|
|
|
|
Three Months
Ended
|
(in millions of
U.S. dollars, except shares in
thousands and per share amounts,
unaudited)
|
September 30,
2020
|
|
June 30,
2020
|
|
September 30,
2019
|
GAAP Net
Earnings
|
$
|
84.1
|
|
$
|
82.7
|
|
$
|
43.0
|
|
|
|
|
|
|
|
|
|
Preferred share
dividends
|
|
(16.8)
|
|
|
(16.7)
|
|
|
(18.0)
|
Loss (gain) on
sale
|
|
0.1
|
|
|
(0.6)
|
|
|
-
|
Unrealized change in
fair value of derivative
instruments
|
|
(4.6)
|
|
|
2.1
|
|
|
(0.4)
|
Change in contingent
consideration asset(1)
|
|
(0.2)
|
|
|
0.7
|
|
|
-
|
Loss on foreign
currency repatriation(2)
|
|
7.0
|
|
|
4.6
|
|
|
-
|
Depreciation and
amortization
|
|
103.9
|
|
|
88.5
|
|
|
63.9
|
FFO
|
$
|
173.5
|
|
$
|
161.3
|
|
$
|
88.5
|
Weighted average
shares outstanding, diluted
|
|
253,342
|
|
|
253,365
|
|
|
222,535
|
FFO per Share,
Diluted
|
$
|
0.68
|
|
$
|
0.64
|
|
$
|
0.40
|
|
Three Months Ended
September 30, 2020
|
(in millions of
U.S. dollars)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and
Other(3)
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net
Earnings
|
$
|
79.0
|
|
$
|
5.4
|
|
$
|
(0.3)
|
|
$
|
84.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred share
dividends
|
|
-
|
|
|
-
|
|
|
(16.8)
|
|
|
(16.8)
|
Loss on
sale
|
|
-
|
|
|
0.1
|
|
|
-
|
|
|
0.1
|
Unrealized change in
fair value of
derivative instruments
|
|
(4.6)
|
|
|
-
|
|
|
-
|
|
|
(4.6)
|
Change in contingent
consideration
asset(1)
|
|
-
|
|
|
-
|
|
|
(0.2)
|
|
|
(0.2)
|
Loss on foreign
currency repatriation(2)
|
|
-
|
|
|
7.0
|
|
|
-
|
|
|
7.0
|
Depreciation and
amortization
|
|
73.6
|
|
|
30.3
|
|
|
-
|
|
|
103.9
|
FFO
|
$
|
148.0
|
|
$
|
42.8
|
|
$
|
(17.3)
|
|
$
|
173.5
|
|
|
(1)
|
The change in
contingent consideration asset relates to the mark to market impact
of contingent consideration related to the acquisition of APR
Energy. Pursuant to the acquisition agreement, the sellers of APR
Energy 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 "Contingent Asset
Arrangement"). The indemnification will end on April 30, 2022 or
earlier if certain other conditions in the agreement are met. 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 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
include amounts relating to preferred shares, corporate
headquarters and elimination of intercompany
transactions.
|
ATLAS
CORP.
|
ADJUSTED
EBITDA
|
|
|
|
Three Months
Ended
|
(in millions of
U.S. dollars, unaudited)
|
September 30,
2020
|
|
June 30,
2020
|
|
September 30,
2019
|
GAAP Net
Earnings
|
$
|
84.1
|
|
$
|
82.7
|
|
$
|
43.0
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
45.3
|
|
|
50.8
|
|
|
52.4
|
Interest
income
|
|
(0.9)
|
|
|
(1.1)
|
|
|
(2.0)
|
Income tax
expense
|
|
4.5
|
|
|
6.1
|
|
|
0.1
|
Depreciation and
amortization
|
|
103.9
|
|
|
88.5
|
|
|
63.9
|
Loss (gain) on
sale
|
|
0.1
|
|
|
(0.6)
|
|
|
-
|
Loss on derivative
instruments
|
|
2.2
|
|
|
7.0
|
|
|
22.1
|
Change in contingent
consideration
asset(1)
|
|
(0.2)
|
|
|
0.7
|
|
|
-
|
Loss on foreign
currency repatriation(2)
|
|
7.0
|
|
|
4.6
|
|
|
-
|
Other
expenses
|
|
3.8
|
|
|
0.2
|
|
|
0.5
|
Adjusted
EBITDA
|
$
|
249.8
|
|
$
|
238.9
|
|
$
|
180.0
|
|
Three Months Ended
September 30, 2020
|
(in millions of
U.S. dollars, unaudited)
|
Containership
Leasing
|
|
Mobile Power
Generation
|
|
Elimination
and
Other (3)
|
|
Total
|
GAAP Net
Earnings
|
$
|
79.0
|
|
$
|
5.4
|
|
$
|
(0.3)
|
|
$
|
84.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
40.7
|
|
|
5.6
|
|
|
(1.0)
|
|
|
45.3
|
Interest
income
|
|
(0.1)
|
|
|
(0.8)
|
|
|
-
|
|
|
(0.9)
|
Income tax
expense
|
|
0.4
|
|
|
4.1
|
|
|
-
|
|
|
4.5
|
Depreciation and
amortization
|
|
73.6
|
|
|
30.3
|
|
|
-
|
|
|
103.9
|
Loss on
sale
|
|
-
|
|
|
0.1
|
|
|
-
|
|
|
0.1
|
Loss on derivative
instruments
|
|
2.2
|
|
|
-
|
|
|
-
|
|
|
2.2
|
Change in contingent
consideration asset(1)
|
|
-
|
|
|
-
|
|
|
(0.2)
|
|
|
(0.2)
|
Loss on foreign
currency repatriation(2)
|
|
-
|
|
|
7.0
|
|
|
-
|
|
|
7.0
|
Other expenses
(income)
|
|
0.5
|
|
|
3.3
|
|
|
-
|
|
|
3.8
|
Adjusted
EBITDA
|
$
|
196.3
|
|
$
|
55.0
|
|
$
|
(1.5)
|
|
$
|
249.8
|
|
|
(1)
|
The change in
contingent consideration asset relates to the mark to market impact
of contingent consideration related to the acquisition of APR
Energy. Pursuant to the acquisition agreement, the sellers of APR
Energy 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 "Contingent Asset
Arrangement"). The indemnification will end on April 30, 2022 or
earlier if certain other conditions in the agreement are met. 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 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
include amounts relating to preferred shares, corporate
headquarters and elimination of intercompany
transactions.
|
ATLAS
CORP.
|
NET DEBT TO
ADJUSTED EBITDA
|
|
|
|
|
|
|
|
|
|
(in millions of
U.S. dollars, unaudited)
|
September 30,
2020
|
|
June 30,
2020
|
|
September 30,
2019
|
Long-term debt
(1)
|
$
|
3,454.4
|
|
$
|
3,546.5
|
|
$
|
2,799.3
|
Other financing
arrangements (1)
|
|
796.6
|
|
|
671.2
|
|
|
603.1
|
Deferred financing
fee
|
|
51.7
|
|
|
50.8
|
|
|
36.3
|
Total
Borrowings
|
|
4,302.7
|
|
|
4,268.5
|
|
|
3,438.7
|
Debt discount and
fair value adjustment
|
|
136.0
|
|
|
141.1
|
|
|
155.8
|
Cash and cash
equivalents
|
|
(220.6)
|
|
|
(221.8)
|
|
|
(258.9)
|
Restricted
cash
|
|
(38.3)
|
|
|
(39.7)
|
|
|
(14.4)
|
Net
Debt
|
$
|
4,179.8
|
|
$
|
4,148.1
|
|
$
|
3,321.2
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
(in millions of
U.S. dollars, unaudited)
|
September 30,
2020
|
|
June 30,
2020
|
|
September 30,
2019
|
Net
Earnings
|
$
|
289.5
|
|
$
|
248.4
|
|
$
|
431.4
|
Interest
expense
|
|
194.1
|
|
|
201.2
|
|
|
228.0
|
Interest
income
|
|
(4.5)
|
|
|
(5.5)
|
|
|
(9.5)
|
Income tax
expense
|
|
13.0
|
|
|
8.6
|
|
|
0.7
|
Depreciation and
amortization
|
|
329.1
|
|
|
289.0
|
|
|
254.5
|
Gain on
sale
|
|
(0.5)
|
|
|
(0.6)
|
|
|
-
|
Loss on derivative
instruments
|
|
31.6
|
|
|
51.4
|
|
|
51.9
|
Change in contingent
consideration asset(2)
|
|
(2.8)
|
|
|
(2.6)
|
|
|
-
|
Loss on foreign
currency repatriation(3)
|
|
11.6
|
|
|
4.6
|
|
|
-
|
Other
expenses
|
|
5.0
|
|
|
1.8
|
|
|
2.2
|
Adjusted
EBITDA
|
$
|
866.1
|
|
$
|
796.3
|
|
$
|
959.2
|
|
|
|
|
|
|
|
|
|
Net Debt to
Adjusted EBITDA
|
|
4.8x
|
|
|
5.2x
|
|
|
3.5x
|
|
|
(1)
|
Debt and other
financial 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
Energy. Pursuant to the acquisition agreement, the sellers of APR
Energy 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 "Contingent Asset
Arrangement"). The indemnification will end on April 30, 2022 or
earlier if certain other conditions in the agreement are met. 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 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.
|
BORROWINGS
|
|
|
(in millions of
U.S. dollars, unaudited)
|
As at September
30,
|
|
2019
|
|
2020
|
|
Total
Outstanding
|
|
Total Outstanding
|
|
Interest
Rate (2)
|
|
Years to
Maturity
|
Credit
facilities(1)(5)
|
$
|
2,404.8
|
|
$
|
2,950.4
|
|
2.5
|
%
|
3.71
|
Senior unsecured
notes(3)(5)
|
|
80.0
|
|
|
80.0
|
|
7.1
|
%
|
7.07
|
Fairfax
notes(4)(5)
|
|
500.0
|
|
|
600.0
|
|
5.5
|
%
|
5.09
|
Debt discount and fair
value adjustment
|
|
(155.8)
|
|
|
(136.0)
|
|
|
|
|
Other financing
arrangements(5)
|
|
609.7
|
|
|
808.3
|
|
3.2
|
%
|
11.53
|
Total
borrowings
|
$
|
3,438.7
|
|
$
|
4,302.7
|
|
|
|
|
|
|
(1)
|
As of September 30,
2020, $2,708.7 million was secured by vessels.
|
(2)
|
As at September 30,
2020, three month average LIBOR on the
revolving facilities and term loan credit facilities were
0.2% and 0.3% respectively.
|
(3)
|
These are the 7.125%
senior unsecured notes due 2027.
|
(4)
|
These are the 5.50%
senior notes due 2025, 2026 and 2027.
|
(5)
|
These exclude
deferred financing fees and include both current and long-term
portions.
|
ATLAS CORP.
Definitions and Non-GAAP Financial Measures
This release includes various financial measures that are
non-GAAP financial measures as defined under the rules of the SEC.
These non-GAAP financial measures, which include FFO, FFO Per
Share, Diluted (FFO Per Share), Adjusted EBITDA, Net Debt and Total
Borrowings, are intended to provide additional information and
should not be considered substitutes for measures of performance
prepared in accordance with GAAP.
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 and
certain other items that the Company believes are not
representative of its operating performance. FFO and FFO Per Share
are useful performance measures because they exclude those items
that the Company believes are not representative of its
performance. Please refer to the Funds From
Operation section of this release for a reconciliation of
these non-GAAP financial measures to net earnings.
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 EBITDA represents net income before
interest, taxes, 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 and other expenses.
Adjusted EBITDA provides useful information to investors in
assessing the Company's results of operations. The Company believes
that this measure is useful in assessing performance and
highlighting trends on an overall basis. The Company 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 to their most directly comparable
GAAP financial measures on a forward-looking basis without
unreasonable effort because items that impact those GAAP financial
measures are out of the Company's control and/or cannot be
reasonably predicted. These items include, but are not limited to,
income tax expense, gains/losses on sale, loss on derivative
instruments, change in contingent consideration asset and loss on
foreign currency repatriation. Such information 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.
Net Debt and Total Borrowings provide useful
information to investors in assessing the Company's leverage. The
Company believes this measure is useful in assessing the Company's
ability to settle contracted debt payments. The Company 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.
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 and its ability to grow its business over
the near and long-term. 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' 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 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 recent novel coronavirus
(COVID-19) outbreak and its impact on Atlas' business;
- a major customer experiencing financial distress, particularly
related to the COVID-19 pandemic;
- disruptions in global credit and financial markets as the
result of the COVID-19 pandemic;
- Atlas' expectations as to impairments of Seaspan's vessels and
power generation assets, including the timing and amount of
potential impairments;
- the future valuation of Seaspan's vessels, APR's 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;
- expectations about the availability of vessels to purchase and
the useful lives of Seaspan's vessels;
- availability of crew, number of off-hire days and dry-docking
requirements;
- general market conditions and shipping market trends, including
charter rates and other factors affecting supply and demand;
- 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;
- the values of Seaspan's vessels and other factors or events
that trigger impairment assessments or results;
- 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;
- potential liability from future litigation; and
- other factors detailed from time to time in Atlas' periodic
reports.
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. Accordingly, these
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, 2019 on Form 20-F filed on
April 13, 2020 and in the "Risk
Factors" in Reports on Form 6-K that are filed with the Securities
and Exchange Commission from time to time relating to its quarterly
financial results.
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 Securities and Exchange Commission 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.