ATCO REPORTS 2024 EARNINGS

Canada NewsWire

CALGARY, AB, Feb. 27, 2025

CALGARY, AB, Feb. 27, 2025 /CNW/ - ATCO Ltd. (TSX: ACO.X) (TSX: ACO.Y)

ATCO Ltd. (ATCO or the Company) today announced adjusted earnings (1) in 2024 of $481 million ($4.29 per share), which were $49 million ($0.47 per share) higher compared to $432 million ($3.82 per share) in 2023. Fourth quarter adjusted earnings in 2024 of $146 million ($1.30 per share) were $19 million ($0.17 per share) higher compared to $127 million ($1.13 per share) in the fourth quarter of 2023.

2024 earnings attributable to Class I and Class II Shares reported in accordance with International Financial Reporting Standards (IFRS earnings) were $430 million ($3.83 per share) compared to $432 million ($3.82 per share) in 2023. Fourth quarter 2024 IFRS earnings were $138 million ($1.23 per share) compared to $95 million ($0.85 per share) in the fourth quarter of 2023.

 
(1) Adjusted earnings is a total of segments measure. 
 See Other Financial and Non-GAAP Measures Advisory 
 included in this News Release. 
 

RECENT DEVELOPMENTS

ATCO Structures

   -- Awarded multiple contracts totaling $29 million to supply and install an 
      accommodation camp, and to design and supply mine dry and administrative 
      facilities for a uranium mine in Western Canada. Delivery of units 
      commenced during the fourth quarter of 2024 with final site completion 
      expected in the second quarter of 2025. 
 
   -- Awarded a $12 million contract to decommission and relocate a rapid 
      deployment camp in the Pilbara region of Western Australia. The project 
      commenced during the fourth quarter of 2024 and is expected to be 
      completed during the second quarter of 2025. 
 
   -- Awarded a $4 million contract to supply and install auxiliary buildings 
      in support of an expansion project for a mine site located in 
      north-central Chile. The rental term of 19 months is expected to commence 
      in the first quarter of 2025. 

Ashcor

   -- Subsequent to year end, on January 6, 2025, Ashcor announced an agreement 
      with Consumers Energy to extract and repurpose impounded coal ash from 
      the soon to be retired J.H. Campbell Generating Complex, located near 
      Holland, Michigan. This project represents Ashcor's first RAM$(TM)$ 
      facility in the United States. Construction of the facility is expected 
      to begin in the second quarter of 2025 with operations anticipated to 
      begin early 2027. 

Canadian Utilities

   -- On November 8, 2024, ATCO Gas Australia received the final Access 
      Agreement (AA6) decision from the Economic Regulation Authority $(ERA.AU)$. 
      This final decision is a result of a constructive and collaborative 
      regulatory process. The decision from the ERA approves the prices for 
      ATCO Gas Australia's gas distribution network for the next five years. 
      The decision also determines the rate of return for the AA6 period, which 
      adopts a return on equity of 8.23 per cent, compared to 5.02 per cent in 
      the previous Access Arrangement. 
 
   -- In 2024, ATCO Energy Systems has advanced two large utility 
      infrastructure projects; Yellowhead Mainline Project (Yellowhead) in 
      Natural Gas Transmission and the Central East Transfer Out Project (CETO) 
      in Electricity Transmission. 
 
          -- Stakeholder engagement for Yellowhead has begun and is progressing 
             well. ATCO Pipelines has hosted 10 open houses in various 
             communities along the proposed project route. Yellowhead consists 
             of approximately 200-230 kilometres of high-pressure natural gas 
             pipeline and is on-track for construction to commence in 2026, 
             subject to regulatory and the Company's approvals. 
 
          -- Electricity Transmission began construction in the third quarter 
             of 2024 of the CETO project. The construction of the 135-km 240kV 
             transmission line will support renewable energy integration in 
             Alberta and transport electricity in the counties of Red Deer, 
             Lacombe and Stettler, supplying more than 1,500 megawatts of 
             electricity to Alberta's grid. Electricity Transmission is 
             building 85-km of the transmission line and AltaLink LP is 
             constructing the remaining 50-km. 
 
   -- Incurred $559 million and $1,611 million in capital expenditures in the 
      fourth quarter and full year of 2024, of which 89 per cent and 92 per 
      cent, respectively, were invested in our regulated utilities in ATCO 
      Energy Systems and ATCO Australia, with the remaining 11 per cent and 8 
      per cent largely invested in ATCO EnPower. 
 
   -- The Regulated Utilities' capital expenditure plan for 2025 - 2027 
      includes a minimum expected expenditure of $6.1 billion. 

Corporate

   -- On January 9, 2025, ATCO declared a first quarter dividend of 50.45 cents 
      per share or $2.02 per share Class I non-voting and Class II voting share 
      on an annualized basis. 

This news release should be read in concert with the full disclosure documents. ATCO's consolidated financial statements and management's discussion and analysis for the year ended December 31, 2024 will be available on the ATCO website (www.ATCO.com), via SEDAR+ (www.sedarplus.ca) or can be requested from the Company.

TELECONFERENCE AND WEBCAST

ATCO will hold a live teleconference and webcast with Adam Beattie, President, Structures and Katie Patrick, Executive Vice President, Chief Financial & Investment Officer at 11:00 am Mountain Time (1:00 pm Eastern Time) on Thursday, February 27, 2025 at 1-844-763-8274. No pass code is required.

Opening remarks will be followed by a question and answer period with investment analysts. Participants are asked to please dial-in 10 minutes prior to the start and request to join the ATCO teleconference.

Management invites interested parties to listen via live webcast at: https://www.atco.com/en-ca/about- us/investors/events-presentations.html.

A replay of the teleconference will be available approximately two hours after the conclusion of the call until March 27, 2025. Please call 1-855-669-9658 and enter pass code 8512290.

As a global enterprise, ATCO Ltd. and its subsidiary and affiliate companies have approximately 21,000 employees and assets of $27 billion. ATCO is committed to future prosperity by working to meet the world's essential energy, housing, security and transportation challenges. ATCO Structures designs, builds and delivers products to service the essential need for housing and shelter around the globe. ATCO Frontec provides operational support services to government, defence and commercial clients. ATCO Energy Systems delivers essential energy for an evolving world through its electricity and natural gas transmission and distribution, and international electricity operations. ATCO EnPower creates sustainable energy solutions in the areas of electricity generation, energy storage, industrial water and cleaner fuels. ATCO Australia develops, builds, owns and operates energy and infrastructure assets. ATCOenergy and Rümi provide retail electricity and natural gas services, home maintenance services and professional home advice that bring exceptional comfort, peace of mind and freedom to homeowners and customers. ATCO also has investments in ports and transportation logistics, the processing and marketing of ash, retail food services and commercial real estate. More information can be found at www.ATCO.com.

Investor & Analyst Inquiries:

Colin Jackson

Senior Vice President, Financial Operations

Colin.Jackson@atco.com

(403) 808 2636

Media Inquiries:

Kurt Kadatz

Director, Corporate Communications

Kurt.Kadatz@atco.com

(587) 228 4571

Subscription Inquiries:

To receive ATCO Ltd. news releases, please click here.

Other Financial and Non-GAAP Measures Advisory Adjusted Earnings

Consolidated adjusted earnings is a "total of segments measure", as defined in National Instrument 52-112 -- Non-GAAP and Other Financial Measures Disclosure ("NI 52-112"). The most directly comparable measure to adjusted earnings reported in accordance with IFRS is "earnings attributable to Class I and Class II shares". IFRS earnings include timing adjustments related to rate-regulated activities, unrealized gains or losses on mark-to-market forward and swap commodity contracts, one-time gains and losses, impairments, and items that are not in the normal course of business or a result of day-to-day operations. These items are not included in adjusted earnings. A reconciliation of adjusted earnings to earnings attributable to Class I non-voting shares and Class II voting shares is provided below.

 
                                          Three Months Ended    Year Ended 
                                           December 31           December 31 
($ millions except share data)            2024       2023       2024    2023 
Adjusted Earnings                               146        127     481     432 
Restructuring (1)                               (4)         --    (33)      -- 
ATCO Electric settlement decision (2)            --         --     (4)      -- 
Unrealized gains on mark-to-market 
forward and swap 
commodity contracts (3)                          24         24      30      97 
Rate-regulated activities (4)                  (24)       (19)    (39)    (43) 
IT Common Matters decision (5)                  (4)        (3)    (12)    (11) 
Impairments (6)                                  --       (19)      --    (23) 
Madeira additional income taxes (7)              --       (15)      --    (15) 
Transition of managed IT services (8)            --         --      --     (5) 
Other (9)                                        --         --       7      -- 
Earnings attributable to Class I 
 non-voting and Class 

 II voting shares                               138         95     430     432 
Weighted average shares outstanding 
 (millions of shares)                         112.2      113.4   112.2   113.2 
 
 
(1)In the fourth quarter and year ended December 31, 
 2024, the Company recorded restructuring costs of 
 $4 million (after-tax and non- controlling interests) 
 and $33 million (after-tax and non-controlling interests) 
 mainly related to staff reductions and associated 
 severance costs. 
(2)In the second quarter of 2024, the Company recognized 
 costs of $4 million (after-tax and non-controlling 
 interests) related to an Alberta Utilities Commission 
 $(AUC.AU)$ enforcement proceeding on the settlement agreement 
 of two matters the Electric Transmission business 
 had self- reported to AUC Enforcement staff. 
(3)The Company's electricity generation and retail 
 electricity and natural gas businesses in Alberta 
 enter into fixed-price swap commodity contracts to 
 manage exposure to electricity and natural gas prices 
 and volumes. These contracts are measured at fair 
 value. Unrealized gains and losses due to changes 
 in the fair value of the fixed-price swap commodity 
 contracts in the electricity generation and electricity 
 and natural gas retail businesses are recognized in 
 the earnings of the ATCO EnPower segment and Corporate 
 & Other, respectively. Realized gains or losses are 
 recognized in adjusted earnings when the commodity 
 contracts are settled. 
(4)The Company records significant timing adjustments 
 as a result of the differences between rate-regulated 
 accounting and IFRS with respect to additional revenues 
 billed in the current year, revenues to be billed 
 in future years, regulatory decisions received, and 
 settlement of regulatory decisions and other items. 
(5)Consistent with the treatment of the gain on sale 
 in 2014 from the IT services business by the Company, 
 financial impacts associated with the IT Common Matters 
 decision are excluded from adjusted earnings. 
(6)For the year ended December 31, 2023, impairments 
 of $23 million (after-tax and non-controlling interests) 
 were recognized, relating to assets that no longer 
 represent value to the Company. Of these impairments, 
 $17 million (after-tax and non-controlling interests) 
 related to impairments of certain computer software 
 assets which are no longer expected to be used in 
 the business and $4 million (after-tax and non- controlling 
 interests) related to certain electricity generation 
 assets in Electricity Transmission which had been 
 removed from service. 
(7)In the fourth quarter of 2023, ATCO Structures 
 and Logistics recognized income taxes and interest 
 of $15 million relating to the 2009-2016 reassessment 
 notices received from the Portuguese Tax Authority. 
(8)In the first quarter of 2023, the Company recognized 
 legal and other costs of $5 million (after-tax and 
 non-controlling interests) related to the Wipro Ltd. 
 master services agreements matter that was concluded 
 on February 26, 2023. 
(9)In the third quarter of 2024, Canadian Utilities 
 Limited transferred ownership of ATCO Energy Ltd. 
 to ATCO Ltd. Canadian Utilities Limited recorded a 
 loss of $14 million ($7 million after non-controlling 
 interests) which is eliminated on consolidation with 
 ATCO. 
 

Mid-Year Rate Base and Mid-Year Rate Base CAGR

Mid-year rate base is a "non-GAAP financial measure" and mid-year rate base CAGR is a "non-GAAP ratio" each as defined in NI 52-112. Growth in mid-year rate base is a leading indicator of a utility's earnings trend.

The Regulated Utilities finance infrastructure investments, referred to as rate base, through a combination of equity and debt. Regulatory proceedings establish the approved rate of return on equity $(ROE)$ and the equity ratio -- the proportion of utility investments financed with equity, with the remainder financed by debt.

Mid-year rate base for a given year is calculated as the average of the opening rate base and the closing rate base. The Company determines its customer rates by multiplying its rate base by the approved equity ratio and the approved rate of ROE, as well as recovering forecast costs and return of capital. As such, the Company s earnings will trend based on changes in the approved ROE, the approved equity ratio, and the mid-year rate base.

The most directly comparable measures to mid-year rate base reported in accordance with IFRS are "property, plant and equipment" and "intangible assets". The following tables reconcile rate base and mid-year rate base to property, plant and equipment and intangible assets for the year ended December 31, 2024.

ATCO Energy Systems

 
                                                         Year Ended 
                                                          December 31 
($ billions)                                             2024     2023 
Property, plant and equipment (1)Intangible assets (1)   19.81.1  19.01.0 
                                                            20.9     20.0 
Adjustments: 
Property, plant and equipment, and intangible assets 
 of non-regulated businesses                               (2.2)    (2.2) 
Customer contributions (2)                                 (2.0)    (2.0) 
Removal costs collected from customer rates                (1.6)    (1.5) 
Other                                                      (0.3)    (0.2) 
Rate Base (3)                                               14.8     14.1 
Mid-Year Rate Base (3)                                      14.5     14.0 
 
 
(1) Please refer to Note 3 - Geographic Information 
 section (Canada) of the Company's 2024 Consolidated 
 Financial Statements. 
(2) Please refer to Note 16 - Customer Contributions 
 section of the Company's 2024 Consolidated Financial 
 statements. 
(3) Non-GAAP financial measure. 
 

ATCO Gas Australia

 
                                                       Year Ended 
                                                        December 31 
($ billions)                                           2024    2023 
Property, plant and equipment, and intangible assets 
 (1)                                                      1.5     1.5 
                                                          1.5     1.5 
Adjustments: 
Property, plant and equipment, and intangible assets 
 of non-regulated businesses                            (0.2)   (0.2) 
Other                                                     0.1     0.1 
Rate Base (2)                                             1.4     1.4 
Mid-Year Rate Base (2)                                    1.4     1.4 
 
 
(1) Please refer to Note 3 - Geographic Information 
 section (Australia) of the Company's 2024 Consolidated 
 Financial Statements. 
(2) Non-GAAP financial measure. 
 

Forward-Looking Information Advisory

Certain statements contained in this news release constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "estimate", "expect", "may", "will", "intend", "should", "goals", "targets", "strategy", "future", and similar expressions. In particular, forward-looking information in this news release includes, but is not limited to, references to: the expected value, timing and term of contracts; the expected timing of commencement, completion or commercial operations of activities, contracts and projects, including ATCO Structures' various projects and Ashcor's first RAM(TM) facility in the United States; the state of stakeholder engagement on the Yellowhead project, the anticipated size and specifications of the project, and the anticipated timing for commencement of construction on the project;

the anticipated size, capacity and benefits of the CETO project and expectations regarding construction of the project; the Regulated Utilities' capital expenditure plan for 2025 to 2027 and expected rate base growth; and the payment of dividends.

Although the Company believes that the expectations reflected in the forward-looking information are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct. Forward- looking information should not be unduly relied upon. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors, which may cause actual results, levels of activity, and achievements to differ materially from those anticipated in such forward-looking information. The forward-looking information reflects the Company's beliefs and assumptions with respect to, among other things, the development and performance of technology and technological innovations; continuing collaboration with certain business partners, and regulatory and environmental groups; the performance of assets and equipment; the ability to meet current project schedules, and other assumptions inherent in management's expectations in respect of the forward-looking information identified herein.

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