Continuing to optimize business by increasing contract duration, delivering on newbuild program and maintaining robust liquidity
- Third quarter 2022 financial performance compared to third quarter 2021:
- Revenue decrease of 2.7% to
$439.6 million - Net earnings of
$185.7 million and Diluted EPS of$0.59 - Adjusted EBITDA(1) decrease of 9.7% to
$291.1 million - Robust balance sheet with liquidity of
$1,294.3 million , total borrowings(1) to total assets of 52.5% - Approximately 70% of Seaspan's total borrowings and preferred shares is fixed rate, protecting against the prevailing interest rate environment
(1) Non-GAAP financial measure. A reconciliation of each non-GAAP financial measure to the most closely comparable GAAP measure is included in this release beginning on page 14 |
"Seaspan bolstered its customer partnership with leading global liners by forward fixing 14 operating vessels in the quarter. We continued diligently executing our newbuild program with four deliveries since the beginning of the third quarter, all ahead of schedule, with each successfully commencing their long-term charters. Despite the unprecedented challenges, our dedicated and experienced teams have proven again their reliable execution. We have now successfully delivered 121 newbuilds since our IPO in 2005."
"APR Energy continued its pivot to quality and predictable cash flow opportunities. Our team successfully completed its 4-month power generation contract with
"With our focus on creative customer solutions, a dedicated team and relentless pursuit of operational excellence, we remain well positioned to offer predictable financial returns through all market cycles."
"Seaspan revenue was maintained due to early delivery of newbuild vessels and higher market rates, offset by planned vessel sales. APR revenue declined due to relatively high utilization in the third quarter of 2021."
"We have continued to grow our backlog by proactively extending charters with customers, adding over
On the back of these enhancements, Atlas received its first credit rating during the quarter, achieving a BB+ corporate rating from
"With a gross contracted cash flow balance of
The table below summarizes our
Actual | Expected | |||
Q3 2022 | Remainder of | 2023 | 2024 | |
Beginning of period balance | 127 | 129 | 132 | 154 |
Delivered/Acquired | 2 | — | — | — |
Future scheduled deliveries | — | 3 | 22 | 36 |
Sold | — | — | — | — |
End of period balance | 129 | 132 | 154 | 190 |
End of period balance (managed)(1) | 8 | 8 | 8 | 8 |
(1) Represents vessels that are operated on behalf of other owners. |
Containership Leasing Developments
Seaspan entered into proactive lease extensions for 14 operating vessels in the third quarter of 2022, adding approximately
In August and September of 2022, Seaspan accepted delivery of its third and fourth 11,800 TEU vessels, each of which commenced a 5-year charter upon delivery, respectively. In
In
Mobile Power Generation Developments
In
In September and
Financing Developments
In
In
Credit Rating Developments
In the third quarter of 2022, Seaspan's credit ratings from Fitch, S&P, and Kroll were reaffirmed at BB, BB-, and BB+, respectively. Key drivers of reaffirming the ratings included Seaspan's growing levels of unsecured debt and unencumbered assets.
In
Poseidon Acquisition of Atlas
On
In a separate press release issued on
Distribution
On
On
Common Shares Outstanding
As of
The following table summarizes Atlas' consolidated results for the three months ended
Three Months Ended | |||||
(in millions of | September 30, 2022 | June 30, 2022 | September 30, 2021 | ||
Key Metrics | |||||
Revenue | $ 439.6 | $ 413.3 | $ 451.9 | ||
Net earnings | 185.7 | 140.0 | 94.6 | ||
Adjusted EBITDA(1) | 291.1 | 279.5 | 322.2 | ||
FFO(1) | 205.4 | 201.7 | 248.0 | ||
FFO per Share, diluted(1) | 0.71 | 0.70 | 0.93 | ||
Adjusted EPS, diluted(1) | 0.39 | 0.35 | 0.54 | ||
Diluted EPS | 0.59 | 0.43 | 0.30 | ||
Financial Position | |||||
Operating Net Debt to Adjusted EBITDA(1) | 3.6x | 3.4x | 4.0x | ||
Ending Liquidity(2) | 1,294.3 | 1,100.7 | 957.1 | ||
Gross Contracted Cash Flow(3) | 18,603.2 | 17,754.0 | 17,850.6 | ||
Total Borrowings(1)(4) | 5,982.2 | 5,538.6 | 5,605.8 | ||
Total Borrowings to Assets (%) | 52.5 % | 51.2 % | 53.9 % | ||
Operational | |||||
Containership Leasing Utilization | 98.6 % | 98.3 % | 98.6 % | ||
Mobile Power Generation Utilization | 80.0 % | 68.8 % | 91.9 % |
(1) | Non-GAAP financial measure. A reconciliation of each non-GAAP financial measure to the most closely comparable GAAP measure is included in this release beginning on page 14. |
(2) | This is the total cash and cash equivalents balance plus the total available undrawn committed credit facilities at period end, excluding committed and undrawn newbuild financings. |
(3) | Gross contracted cash flow as at |
(4) | Total borrowings do not include debt to be incurred in connection with certain undelivered vessels. |
Revenue decrease of 2.7% to
Adjusted EBITDA decrease of 9.7% to
FFO Per Share decrease of 23.7% to
Diluted EPS was
Adjusted Diluted EPS decrease of 27.8% to
Liquidity
As of
The following table summarizes selected segmented financial results for the three months ended
Three Months Ended | |||||||
(in millions of | Containership |
| Elimination | Total | |||
Revenue | $ 384.9 | $ 54.7 | $ — | $ 439.6 | |||
Operating expense | 77.6 | 6.7 | — | 84.3 | |||
G&A expense | 23.0 | 9.2 | (1.0) | 31.2 | |||
Operating lease expense | 29.1 | 0.8 | — | 29.9 | |||
Adjusted EBITDA(1) | 255.2 | 38.0 | (2.1) | 291.1 | |||
FFO(1) | 193.4 | 29.2 | (17.2) | 205.4 | |||
Gross Contracted Cash Flow(2) | 18,329.6 | 273.6 | — | 18,603.2 |
(1) | Non-GAAP financial measure. A reconciliation of each non-GAAP financial measure to the most closely comparable GAAP measure is included in this release beginning on page 14. |
(2) | Gross contracted cash flow as at |
(3) | Elimination and Other includes amounts relating to preferred shares, change in contingent consideration asset, elimination of intercompany transactions and unallocated amounts. |
Atlas plans to host a conference call for all shareholders and interested parties at
To attend the conference call or webcast, participants should register online at ir.atlascorporation.com/events-and-presentations, and you will be provided with details to access the event. To avoid delays, participants are encouraged to register a day in advance or at a minimum 15 minutes before the start of the call. A replay of the call will also be available approximately two hours following the conclusion of the call and accessible until
Date of Conference Call: | |
Scheduled Time: | |
Direct Link to Dial-In Registration Webpage: | Click Here |
Direct Link to Webcast Registration Webpage: | Click Here |
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.
Seaspan is the largest global containership lessor, primarily focused on long-term, fixed-rate leases with the world's largest container shipping liners. As at
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.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS OF
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 594.3 | $ 288.6 | ||
Accounts receivable | 87.2 | 56.2 | ||
Inventories | 52.0 | 46.4 | ||
Prepaid expenses and other | 32.1 | 35.7 | ||
Net investment in lease | 20.7 | 16.8 | ||
Acquisition related assets | 108.8 | 104.0 | ||
895.1 | 547.7 | |||
Property, plant and equipment | 6,889.8 | 6,952.2 | ||
Vessels under construction | 1,337.6 | 1,095.6 | ||
Right-of-use assets | 770.0 | 724.9 | ||
Net investment in lease | 893.4 | 741.5 | ||
75.3 | 75.3 | |||
Deferred tax assets | 0.6 | 1.9 | ||
Derivative instruments | 119.5 | 6.1 | ||
Other assets | 402.9 | 424.4 | ||
$ 11,384.2 | $ 10,569.6 | |||
Liabilities and shareholders' equity | ||||
Current liabilities: | ||||
Accounts payable and accrued liabilities | $ 180.4 | $ 183.4 | ||
Deferred revenue | 46.7 | 46.6 | ||
Income tax payable | 92.1 | 96.9 | ||
Long-term debt - current | 531.4 | 551.0 | ||
Operating lease liabilities - current | 114.6 | 155.1 | ||
Finance lease liabilities - current | 229.1 | — | ||
Other financing arrangements - current | 123.1 | 100.5 | ||
Other liabilities - current | 40.0 | 42.0 | ||
1,357.4 | 1,175.5 | |||
Long-term debt | 3,623.6 | 3,731.8 | ||
Operating lease liabilities | 412.0 | 562.3 | ||
Other financing arrangements | 1,630.7 | 1,239.3 | ||
Derivative instruments | 3.6 | 28.5 | ||
Other liabilities | 14.4 | 17.7 | ||
Total liabilities | 7,041.7 | 6,755.1 | ||
Cumulative redeemable preferred shares | 296.9 | 296.9 | ||
Shareholders' equity: | ||||
Share capital | 2.8 | 2.4 | ||
Additional paid in capital | 3,717.7 | 3,526.8 | ||
Retained earnings | 343.5 | 7.5 | ||
Accumulated other comprehensive loss | (18.4) | (19.1) | ||
4,045.6 | 3,517.6 | |||
$ 11,384.2 | $ 10,569.6 |
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS OF
Three Months Ended | Nine Months Ended | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Revenue | $ 439.6 | $ 451.9 | $ 1,261.0 | $ 1,218.4 | ||||
Operating expenses: | ||||||||
Operating expenses | 84.3 | 86.9 | 257.3 | 253.2 | ||||
Depreciation and amortization | 93.0 | 106.6 | 282.9 | 284.7 | ||||
General and administrative | 31.2 | 15.9 | 83.7 | 48.6 | ||||
Indemnity claim under acquisition agreement | — | (13.6) | (21.3) | (29.1) | ||||
Operating leases | 29.9 | 36.5 | 93.1 | 109.4 | ||||
(Gain) Loss on sale | (0.6) | (0.1) | 3.7 | (1.0) | ||||
237.8 | 232.2 | 699.4 | 665.8 | |||||
Operating earnings | 201.8 | 219.7 | 561.6 | 552.6 | ||||
Other expenses (income): | ||||||||
Interest expense | 61.5 | 50.0 | 158.9 | 151.4 | ||||
Interest income | (2.3) | (0.6) | (2.9) | (2.8) | ||||
Loss on equity investment | 2.3 | — | 2.3 | — | ||||
(Gain) Loss on derivative instruments | (58.1) | 0.2 | (126.6) | (6.8) | ||||
Loss on debt extinguishment | 2.2 | 70.9 | 9.4 | 127.0 | ||||
Other expenses | 1.9 | 4.5 | 15.3 | 17.2 | ||||
7.5 | 125.0 | 56.4 | 286.0 | |||||
Income tax expense | 8.6 | 0.1 | 10.1 | 8.4 | ||||
Net earnings | $ 185.7 | $ 94.6 | $ 495.1 | $ 258.2 | ||||
Dividends - preferred shares | (15.2) | (15.2) | (45.6) | (49.9) | ||||
Net earnings attributable to common shares | $ 170.5 | $ 79.4 | $ 449.5 | $ 208.3 | ||||
Interest on senior unsecured exchangeable notes(1) | 1.9 | — | 5.7 | — | ||||
Net earnings attributable to diluted shares | $ 172.4 | $ 79.4 | $ 455.2 | $ 208.3 | ||||
Weighted average number of shares, basic | 275,189 | 246,411 | 264,463 | 246,251 | ||||
Effect of dilutive securities: | ||||||||
Share-based compensation | 2,446 | 2,590 | 2,340 | 2,041 | ||||
Fairfax warrants | 9 | 11,419 | 4,266 | 10,466 | ||||
Holdback shares | 727 | 6,153 | 2,436 | 6,239 | ||||
Senior unsecured exchangeable notes(1) | 15,475 | 1,399 | 15,475 | 790 | ||||
Weighted average number of shares, diluted | 293,846 | 267,972 | 288,980 | 265,787 | ||||
Earnings per share, basic | $ 0.62 | $ 0.32 | $ 1.70 | $ 0.85 | ||||
Earnings per share, diluted(1) | $ 0.59 | $ 0.30 | $ 1.58 | $ 0.78 |
(1) | Effective |
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS OF
Three Months Ended | Nine Months Ended | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Cash from (used in): | |||||||
Operating activities: | |||||||
Net earnings | $ 185.7 | $ 94.6 | $ 495.1 | $ 258.2 | |||
Items not involving cash: | |||||||
Depreciation and amortization | 91.7 | 106.6 | 282.9 | 284.7 | |||
Change in right-of-use asset | 26.4 | 31.9 | 82.5 | 94.3 | |||
Non-cash interest expense and accretion | 5.2 | 8.0 | 16.2 | 31.5 | |||
Unrealized change in derivative instruments | (58.9) | (6.3) | (138.4) | (26.8) | |||
Amortization of acquired revenue contracts | 3.2 | 3.7 | 9.6 | 11.8 | |||
Loss on debt extinguishment | 2.2 | 70.9 | 9.4 | 127.0 | |||
Loss on equity investment | 2.3 | — | 2.3 | — | |||
(Gain) Loss on sale | (0.6) | (0.1) | 3.7 | (1.0) | |||
Other | 2.4 | 9.4 | 12.4 | 12.3 | |||
Change in other operating assets and liabilities | (33.8) | (64.6) | (146.4) | (138.4) | |||
Cash from operating activities | 225.8 | 254.1 | 629.3 | 653.6 | |||
Investing activities: | |||||||
Expenditures for property, plant and equipment and vessels under construction | (333.4) | (622.6) | (805.8) | (1,331.9) | |||
Prepayment on vessel purchase | — | — | — | (132.3) | |||
Payment on settlement of interest swap agreements | (2.9) | (5.6) | (14.2) | (19.0) | |||
Gain (Loss) on foreign currency repatriation | 3.1 | (1.4) | 2.7 | (10.6) | |||
Receipt from contingent consideration asset | — | 11.9 | 12.5 | 25.2 | |||
Other assets and liabilities | 72.9 | 11.4 | 179.5 | 11.1 | |||
Capitalized interest relating to newbuilds | (12.2) | (4.5) | (32.3) | (8.0) | |||
Cash used in investing activities | (418.3) | (610.8) | (657.6) | (1,465.5) | |||
Financing activities: | |||||||
Repayments of long-term debt and other financing arrangements | (314.5) | (244.2) | (805.2) | (1,217.0) | |||
Issuance of long-term debt and other financing arrangements | 757.6 | 958.7 | 1,077.6 | 2,797.7 | |||
Redemption of Fairfax Notes | — | (300.0) | — | (300.0) | |||
Redemption of preferred shares | — | (330.4) | — | (330.4) | |||
Financing fees | (5.3) | (12.3) | (16.6) | (40.6) | |||
Share issuance cost | — | — | — | (0.1) | |||
Dividends on common shares | (35.1) | (31.1) | (101.5) | (93.4) | |||
Dividends on preferred shares | (15.2) | (17.4) | (45.6) | (51.0) | |||
Proceeds from exercise of warrants | — | — | 201.3 | — | |||
Cash from financing activities | 387.5 | 23.3 | 310.0 | 765.2 | |||
Increase (decrease) in cash and cash equivalents | 195.0 | (333.4) | 281.7 | (46.7) | |||
Cash and cash equivalents and restricted cash, beginning of period | 413.5 | 629.2 | 326.8 | 342.5 | |||
Cash and cash equivalents and restricted cash, end of period | $ 608.5 | $ 295.8 | $ 608.5 | $ 295.8 |
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS OF
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:
Cash and cash equivalents | $ 594.3 | $ 257.6 | |
Restricted cash | 14.2 | 38.2 | |
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows | $ 608.5 | $ 295.8 |
NON-GAAP RECONCILIATIONS
NET EARNINGS TO FUNDS FROM OPERATIONS
Three Months Ended | |||||
(in millions of |
|
|
| ||
GAAP Net earnings | $ 185.7 | $ 140.0 | $ 94.6 | ||
Preferred share dividends | (15.2) | (15.2) | (15.2) | ||
(Gain) Loss on sale | (0.6) | 1.9 | (0.1) | ||
Loss on debt extinguishment | 2.2 | 7.2 | 70.9 | ||
Unrealized change in fair value on derivative instruments | (58.9) | (32.7) | (6.3) | ||
Change in contingent consideration asset (1) | (0.8) | (2.1) | (3.9) | ||
Loss on foreign currency repatriation (2) | — | 0.8 | 1.4 | ||
Depreciation and amortization | 93.0 | 101.8 | 106.6 | ||
FFO | 205.4 | 201.7 | 248.0 | ||
Interest on senior unsecured exchangeable notes(3) | 1.9 | 1.9 | — | ||
FFO attributable to diluted shares | $ 207.3 | $ 203.6 | $ 248.0 | ||
Weighted average number of shares, basic | 275,189 | 270,871 | 246,411 | ||
Effect of dilutive securities: | |||||
Share-based compensation | 2,446 | 2,182 | 2,590 | ||
Fairfax warrants | 9 | 691 | 11,419 | ||
Holdback shares | 727 | 3,060 | 6,153 | ||
Senior unsecured exchangeable notes(3) | 15,475 | 15,475 | 1,399 | ||
Weighted average shares outstanding, diluted | 293,846 | 292,279 | 267,972 | ||
FFO per share, diluted(3) | $ 0.71 | $ 0.70 | $ 0.93 |
(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 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 sellers' indemnification obligations ended on |
(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) | Effective |
NON-GAAP RECONCILIATIONS
NET EARNINGS TO FUNDS FROM OPERATIONS
Three Months Ended | |||||||
(in millions of | Containership |
| Elimination | Total | |||
GAAP Net earnings | $ 167.1 | $ 19.8 | $ (1.2) | $ 185.7 | |||
Preferred share dividends | — | — | (15.2) | (15.2) | |||
Gain on sale | — | (0.6) | — | (0.6) | |||
Loss on debt extinguishment | 2.2 | — | — | 2.2 | |||
Unrealized change in fair value on derivative instruments | (58.9) | — | — | (58.9) | |||
Change in contingent consideration asset (1) | — | — | (0.8) | (0.8) | |||
Depreciation and amortization | 83.0 | 10.0 | — | 93.0 | |||
FFO | $ 193.4 | $ 29.2 | $ (17.2) | $ 205.4 |
Nine Months Ended | |||||||
(in millions of | Containership |
| Elimination | Total | |||
GAAP Net earnings | $ 484.2 | $ 12.6 | $ (1.7) | $ 495.1 | |||
Preferred share dividends | — | — | (45.6) | (45.6) | |||
Loss (Gain) on sale | 4.0 | (0.3) | — | 3.7 | |||
Loss on debt extinguishment | 4.6 | 4.8 | — | 9.4 | |||
Unrealized change in fair value on derivative instruments | (138.4) | — | — | (138.4) | |||
Loss on foreign currency repatriation (2) | — | 4.0 | — | 4.0 | |||
Depreciation and amortization | 242.9 | 40.0 | — | 282.9 | |||
FFO | $ 597.3 | $ 61.1 | $ (47.3) | $ 611.1 |
(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 sellers' indemnification obligations expired on |
(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. |
NON-GAAP RECONCILIATIONS
NET EARNINGS TO ADJUSTED EPS
Three Months Ended | Nine Months Ended | ||||||
(in millions of |
|
|
|
| |||
GAAP Net earnings | $ 185.7 | $ 94.6 | $ 495.1 | $ 258.2 | |||
Preferred share dividends | (15.2) | (15.2) | (45.6) | (49.9) | |||
Loss on debt extinguishment | 2.2 | 70.9 | 9.4 | 127.0 | |||
Unrealized change in fair value on derivative instruments | (58.9) | (6.3) | (138.4) | (26.8) | |||
Adjusted Earnings | 113.8 | 144.0 | 320.5 | 308.5 | |||
Interest on senior unsecured exchangeable notes(1) | 1.9 | — | 5.7 | — | |||
Adjusted Earnings attributable to diluted shares | $ 115.7 | $ 144.0 | $ 326.2 | $ 308.5 | |||
Weighted average number of shares, basic | 275,189 | 246,411 | 264,463 | 246,251 | |||
Effect of dilutive securities: | |||||||
Share-based compensation | 2,446 | 2,590 | 2,340 | 2,041 | |||
Fairfax warrants | 9 | 11,419 | 4,266 | 10,466 | |||
Holdback shares | 727 | 6,153 | 2,436 | 6,239 | |||
Senior unsecured exchangeable notes(1) | 15,475 | 1,399 | 15,475 | 790 | |||
Weighted average shares outstanding, diluted | 293,846 | 267,972 | 288,980 | 265,787 | |||
Adjusted EPS, diluted(1) | $ 0.39 | $ 0.54 | $ 1.13 | $ 1.16 |
(1) | Effective |
NON-GAAP RECONCILIATIONS
NET EARNINGS TO ADJUSTED EPS
Three Months Ended | |||||||
(in millions of | Containership |
| Elimination | Total | |||
GAAP Net earnings | $ 167.1 | $ 19.8 | $ (1.2) | $ 185.7 | |||
Preferred share dividends | — | — | (15.2) | (15.2) | |||
Loss on debt extinguishment | 2.2 | — | — | 2.2 | |||
Unrealized change in fair value on derivative instruments | (58.9) | — | — | (58.9) | |||
Adjusted Earnings | $ 110.4 | $ 19.8 | $ (16.4) | $ 113.8 |
Nine Months Ended | |||||||
(in millions of | Containership |
| Elimination | Total | |||
GAAP Net earnings | $ 484.2 | $ 12.6 | $ (1.7) | $ 495.1 | |||
Preferred share dividends | — | — | (45.6) | (45.6) | |||
Loss on debt extinguishment | 4.6 | 4.8 | — | 9.4 | |||
Unrealized change in fair value on derivative instruments | (138.4) | — | — | (138.4) | |||
Adjusted Earnings | $ 350.4 | $ 17.4 | $ (47.3) | $ 320.5 |
(1) Elimination and Other includes amounts relating to preferred shares, elimination of intercompany transactions and unallocated amounts. |
NON-GAAP RECONCILIATIONS
NET EARNINGS TO ADJUSTED EBITDA
Three Months Ended | |||||
(in millions of | |||||
GAAP Net earnings | $ 185.7 | $ 140.0 | $ 94.6 | ||
Interest expense | 61.5 | 51.6 | 50.0 | ||
Interest income | (2.3) | (0.4) | (0.6) | ||
Income tax expense | 8.6 | 1.2 | 0.1 | ||
Depreciation and amortization | 93.0 | 101.8 | 106.6 | ||
Loss on debt extinguishment | 2.2 | 7.2 | 70.9 | ||
(Gain) Loss on sale | (0.6) | 1.9 | (0.1) | ||
(Gain) Loss on derivative instruments | (58.1) | (27.8) | 0.2 | ||
Change in contingent consideration asset (1) | (0.8) | (2.1) | (3.9) | ||
Loss on foreign currency repatriation (2) | — | 0.8 | 1.4 | ||
Other expenses | 1.9 | 5.3 | 3.0 | ||
Adjusted EBITDA | $ 291.1 | $ 279.5 | $ 322.2 |
(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 sellers' indemnification obligations expired |
(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. |
NON-GAAP RECONCILIATIONS
NET EARNINGS TO ADJUSTED EBITDA
Three Months Ended | |||||||
(in millions of | Containership |
| Elimination | Total | |||
GAAP Net earnings | $ 167.1 | $ 19.8 | $ (1.2) | $ 185.7 | |||
Interest expense | 58.7 | 3.1 | (0.3) | 61.5 | |||
Interest income | (2.2) | (0.1) | — | (2.3) | |||
Income tax expense | 0.4 | 8.2 | — | 8.6 | |||
Depreciation and amortization | 83.0 | 10.0 | — | 93.0 | |||
Loss on debt extinguishment | 2.2 | — | — | 2.2 | |||
Gain on sale | — | (0.6) | — | (0.6) | |||
Gain on derivative instruments | (58.1) | — | — | (58.1) | |||
Change in contingent consideration asset (1) | — | — | (0.8) | (0.8) | |||
Other expenses (income) | 4.1 | (2.4) | 0.2 | 1.9 | |||
Adjusted EBITDA | $ 255.2 | $ 38.0 | $ (2.1) | $ 291.1 |
| |||||||
(in millions of | Containership |
| Elimination | Total | |||
GAAP Net earnings | $ 484.2 | $ 12.6 | $ (1.7) | $ 495.1 | |||
Interest expense | 146.1 | 13.4 | (0.6) | 158.9 | |||
Interest income | (2.4) | (0.5) | — | (2.9) | |||
Income tax expense | 0.9 | 9.2 | — | 10.1 | |||
Depreciation and amortization | 242.9 | 40.0 | — | 282.9 | |||
Loss on debt extinguishment | 4.6 | 4.8 | — | 9.4 | |||
Loss (Gain) on sale | 4.0 | (0.3) | — | 3.7 | |||
Gain on derivative instruments | (126.6) | — | — | (126.6) | |||
Loss on foreign currency repatriation(2) | — | 4.0 | — | 4.0 | |||
Other expenses (income) | 16.7 | (4.4) | 0.8 | 13.1 | |||
Adjusted EBITDA | $ 770.4 | $ 78.8 | $ (1.5) | $ 847.7 |
(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 sellers' indemnification obligations expired on |
(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. |
NON-GAAP RECONCILIATIONS
OPERATING NET DEBT TO ADJUSTED EBITDA
As at | |||||||
(in millions of | Containership |
| Elimination | Total | |||
Long-term debt(1) | $ 4,053.0 | $ 158.1 | $ (56.1) | $ 4,155.0 | |||
Other financing arrangements(1) | 1,753.8 | — | — | 1,753.8 | |||
Deferred financing fees | 71.1 | 2.3 | — | 73.4 | |||
Total Borrowings | 5,877.9 | 160.4 | (56.1) | 5,982.2 | |||
Cash and cash equivalents | (477.2) | (117.1) | — | (594.3) | |||
Restricted cash | — | (14.2) | — | (14.2) | |||
Net Debt | 5,400.7 | 29.1 | (56.1) | 5,373.7 | |||
Vessels under construction | (1,337.6) | — | — | (1,337.6) | |||
Operating Net Debt | $ 4,063.1 | $ 29.1 | $ (56.1) | $ 4,036.1 | |||
Twelve Months Ended | |||||||
(in millions of | Containership |
| Elimination | Total | |||
GAAP Net earnings (loss) | $ 662.9 | $ (16.5) | $ (9.0) | $ 637.4 | |||
Interest expense | 186.9 | 18.4 | (0.7) | 204.6 | |||
Interest income | (2.4) | (0.8) | — | (3.2) | |||
Income tax expense | 1.0 | 33.7 | — | 34.7 | |||
Depreciation and amortization | 322.2 | 42.7 | — | 364.9 | |||
Loss on debt extinguishment | 4.6 | 4.8 | — | 9.4 | |||
(Gain) Loss on sale | (11.9) | 0.2 | — | (11.7) | |||
Gain on derivative instruments | (133.9) | — | — | (133.9) | |||
Change in contingent consideration asset (2) | — | — | 7.3 | 7.3 | |||
Loss on foreign currency repatriation (3) | — | 7.3 | — | 7.3 | |||
Other expenses (income) | 20.5 | (7.3) | 1.2 | 14.4 | |||
Adjusted EBITDA | $ 1,049.9 | $ 82.5 | $ (1.2) | $ 1,131.2 | |||
Net Debt to Adjusted EBITDA | 5.1x | 0.4x | 4.8x | ||||
Operating Net Debt to Adjusted EBITDA | 3.9x | 0.4x | 3.6x |
(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 sellers' indemnification obligations expired on |
(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. |
NON-GAAP RECONCILIATIONS
OPERATING NET DEBT TO ADJUSTED EBITDA
As at | |||||||
(in millions of | Containership |
| Elimination | Total | |||
Long-term debt(1) | $ 4,126.7 | $ 258.5 | $ (51.9) | $ 4,333.3 | |||
Other financing arrangements(1) | 1,189.6 | — | — | 1,189.6 | |||
Deferred financing fees | 76.4 | 6.5 | — | 82.9 | |||
Total Borrowings | 5,392.7 | 265.0 | (51.9) | 5,605.8 | |||
Debt discount and fair value adjustment | 5.4 | — | — | 5.4 | |||
Cash and cash equivalents | (160.4) | (97.2) | — | (257.6) | |||
Restricted cash | — | (38.2) | — | (38.2) | |||
Net Debt | 5,237.7 | 129.6 | (51.9) | 5,315.4 | |||
Vessels under construction | (1,019.9) | — | — | (1,019.9) | |||
Operating Net Debt | $ 4,217.8 | $ 129.6 | $ (51.9) | $ 4,295.5 | |||
Twelve Months Ended | |||||||
(in millions of | Containership |
| Elimination | Total | |||
GAAP Net earnings (losses) | $ 297.5 | $ (79.9) | $ 14.5 | $ 232.1 | |||
Interest expense | 179.5 | 20.6 | (2.8) | 197.3 | |||
Interest income | (0.5) | (3.9) | — | (4.4) | |||
Income tax expense | 0.7 | 11.8 | — | 12.5 | |||
Depreciation and amortization | 303.8 | 70.2 | — | 374.0 | |||
Loss on debt extinguishment | 127.0 | — | — | 127.0 | |||
Gain on sale | — | (0.3) | — | (0.3) | |||
Gain on derivative instruments | (5.2) | — | — | (5.2) | |||
Change in contingent consideration asset (2) | — | — | (6.2) | (6.2) | |||
Loss on foreign currency repatriation (3) | — | 17.8 | — | 17.8 | |||
— | 117.9 | — | 117.9 | ||||
Other expenses | 2.8 | 3.8 | 2.2 | 8.8 | |||
Adjusted EBITDA | $ 905.6 | $ 158.0 | $ 7.7 | $ 1,071.3 | |||
Net Debt to Adjusted EBITDA | 5.8x | 0.8x | 5.0x | ||||
Operating Net Debt to Adjusted EBITDA | 4.7x | 0.8x | 4.0x |
(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 sellers' indemnification obligations ended on |
(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. |
NON-GAAP RECONCILIATIONS
OPERATING BORROWINGS
As at | |||||||
2022 | 2021 | ||||||
(in millions of | Total | Interest | Years to | Total | |||
Revolving credit facilities(2) | $ — | — | — | $ 80.0 | |||
Term loan credit facilities(1)(2) | 1,698.7 | 4.6 % | 3.34 | 2,316.5 | |||
Senior unsecured notes(2)(3) | 1,302.4 | 5.9 % | 5.17 | 1,302.2 | |||
Senior unsecured exchangeable notes (2)(4) | 201.3 | 3.8 % | 3.21 | 201.3 | |||
Senior secured notes(1)(2)(5) | 1,000.0 | 4.7 % | 11.12 | 500.0 | |||
Debt discount and fair value adjustment | — | — | — | (5.4) | |||
Deferred financing fees on long term debt | (47.4) | — | — | (61.3) | |||
Long term debt | 4,155.0 | 4,333.3 | |||||
Other financing arrangements(2) | 1,779.8 | 5.3 % | 9.65 | 1,211.2 | |||
Deferred financing fees on other financing arrangements | (26.0) | — | — | (21.6) | |||
Other financing arrangement | 1,753.8 | 1,189.6 | |||||
Total deferred financing fees | 73.4 | — | — | 82.9 | |||
Total borrowings | 5,982.2 | 5,605.8 | |||||
Vessels under construction(6) | (1,337.6) | — | — | (1,019.9) | |||
Operating borrowings | $ 4,644.6 | $ 4,585.9 |
(1) | As at |
(2) | These exclude deferred financing fees and include both current and long-term portions. |
(3) | Corresponds to the following: (i) 7.125% senior unsecured notes due in 2027, (ii) 6.5% senior unsecured sustainability-linked bonds issued in the Nordic bond market, due in 2024 and 2026, and (iii) 5.5% senior unsecured notes due 2029. |
(4) | Corresponds 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 |
(5) | Corresponds to Sustainability-Linked Senior Secured Notes with fixed interest rates ranging from 3.91% to 5.49% and maturities between 2031 and 2037. |
(6) | As at |
This release includes various financial measures that are non-GAAP financial measures as defined under the rules of the
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, these measures may not be comparable to similar measures presented by other companies.
Adjusted Earnings and Adjusted EPS represent net earnings adjusted for preferred share dividends accumulated, impairment, loss on debt extinguishment, unrealized change in fair value on derivative instruments and certain 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, these measures 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 ongoing operations of the business.
Adjusted EBITDA represents net earnings before interest expense and income, tax expense, depreciation and amortization, impairment, 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.
Total Borrowings represents long-term debt and other financing arrangements, excluding deferred financing fees. Operating borrowings represents Total Borrowings less amounts related to vessels under construction.
Net Debt represents Total Borrowings before debt discount and fair value adjustments, net of cash and cash equivalents and restricted cash. Operating Net Debt represents Net Debt less amounts related to vessels under construction.
Net Debt and Total Borrowings provide useful information to investors in assessing the Company's leverage. Management believes these measures are useful in assessing the Company's ability to settle contracted debt payments. Management also believes that these leverage measurements can be useful in comparing the Company's position with those of other companies, even though other companies may not calculate these measures 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). 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:
- the impact and timing of the pending transaction between Atlas and Poseidon;
- 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 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 or bankruptcy due to the COVID-19 pandemic, the
Ukraine -Russia conflict 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, the
Ukraine -Russian conflict or otherwise; - the impact of inflation, recession or other actual or anticipated economic pressures;
- 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.
Certain participants in the pending transaction described herein will prepare and file with the
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, 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
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
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