Atlas Reports First Quarter 2021 Results

Company generates record 27.3%⁽¹⁾ fleet growth

Revenue Growth of 20.8% in Q1
Funds from Operations Growth of 27.6% in Q1
Adjusted EBITDA Growth of 21.1% in Q1
$12.1 Billion⁽²⁾⁽³⁾ Total Gross Contracted Cash Flow

Atlas Corp. First Quarter 2021 Financial Performance Compared to First Quarter 2020

• Revenue growth of 20.8% to $372.6 million for the quarter ended March 31, 2021
• Funds From Operations ("FFO")⁽⁴⁾ growth of 27.6% to $159.2 million and FFO Per Share⁽⁴⁾ growth of 13.2% to $0.60 for the quarter ended March 31, 2021
• Adjusted EBITDA⁽⁴⁾ growth of 21.1% to $237.9 million for the quarter ended March 31, 2021

LONDON, May 3, 2021 /CNW/ - Atlas Corp. ("Atlas" or the "Company") ATCO announced today its results for the quarter ended March 31, 2021.

Comments from Management:

Bing Chen, President and CEO of Atlas, commented, "Following a strong performance in 2020, Atlas has delivered another record growth in this quarter while significantly expanding upon the breadth and scope of our franchise. Regardless of the different market cycles, Seaspan teams have consistently delivered operational excellence and creative solutions to facilitate our customers' requirements in environmental initiatives, technology application, and logistics optimization. We are leveraging our five key competencies to pivot APR's business and its strategies to broader opportunities and applications within the energy space while developing a stronger foundation to support the global development towards cleaner power sources. With our customers' trusted partnership, our dedicated team and integrated platform, we are positioned well to drive future quality growth, operational excellence and the delivery of strong financial performance for our shareholders."

Graham Talbot, CFO of Atlas, commented, "During the first quarter of 2021, the Company has continued to enhance its funding portfolio and further optimize its capital structure. While these elements are always in focus, we are confident that our liquidity and financial strength will continue to improve over 2021 as we execute on financial opportunities to fund continued quality growth, strengthen our balance sheet and further develop our multi-platform business."

Atlas Corp. Q1 2021 and Recent Achievements:

• Gross contracted cash flows of $12.1 billion⁽¹⁾⁽²⁾, as of the day of this announcement, including $6.0 billion⁽¹⁾⁽³⁾ related to vessel fleet growth since December 31, 2020.
• Earnings per diluted share of $0.31 for the quarter ended March 31, 2021, an increase of 106.7% compared to the same period in 2020.

Seaspan:

• Seaspan achieved record growth of 36 total vessels since December 31, 2020, backed by long term charters with an average term of approximately 11 years⁽⁴⁾.

• Seaspan placed on Upgrade Watch by Kroll Bond Ratings for its investment grade BBB- Senior Secured and BB corporate ratings⁽⁵⁾.
• Seaspan issued $200.0 million unsecured 6.5% sustainability-linked senior notes, due in 2024, in the Nordic bond market.
• Subsequent to quarter end:
• Seaspan closed $300.0 million unsecured 6.5% sustainability-linked senior notes, due in 2026, in the Nordic bond market.

APR:

• Subsequent to quarter end, APR secured contracts to provide 330MW utilizing 10 gas turbines to provide peaking power in Mexico.

Consolidated Results:

The following tables summarize Atlas' consolidated results for the quarters ended March 31, 2021 and March 31, 2020⁽⁴⁾.

Financial Results Summary:

Revenue growth of 20.8% to $372.6 million for the quarter ended March 31, 2021, compared to the same quarter in 2020. In the first quarter of 2021, Seaspan represented 89.0% and APR represented 11.0% of total revenue, while Seaspan accounted for $39.1 million or 60.9% and APR accounted for $25.1 million or 39.1% of the total revenue increase compared to the first quarter of 2020. The growth was primarily driven by the contribution of nine vessels delivered to Seaspan after March 2020 and a full quarter contribution from APR in 2021 compared to a partial quarter in 2020. 

Adjusted EBITDA growth of 21.1% to $237.9 million for the quarter ended March 31, 2021, compared to the same quarter in 2020. The growth was primarily driven by the contribution of nine vessels delivered to Seaspan after March 2020 and a full quarter contribution from APR in 2021 compared to a partial quarter in 2020. 

FFO Per Share growth of 13.2% to $0.60 for the quarter ended March 31, 2021, compared to the same quarter in 2020. The growth was primarily driven by the contribution of nine vessels delivered to Seaspan after March 2020.

Liquidity

As of March 31, 2021, Atlas had total liquidity of $837.5 million, consisting of $337.5 million of cash and cash equivalents and $500.0 million of availability under undrawn committed credit facilities. As of March 31, 2021, Atlas had an unencumbered asset base including 31 vessels with a book value of $1.1 billion⁽¹⁾.

Guidance 2021:

The following table is based on Atlas' current expectations for Seaspan and APR for the year ending December 31, 2021, and reiterates initial guidance provided on March 8, 2021.

Atlas Corporate Developments:

• Year-to-date 2021, the Company has added $6.0 billion⁽¹⁾⁽²⁾ of gross contracted cash flows related to vessel fleet growth.
• Long-term gross contracted cash flows increase the visibility, dependability and strength of the Company's financial and operating model, and growth profile. Atlas' creative customer partnerships are the primary driver of quality growth through long-term charters with our major liner customers. These new win-win solutions result in greater customer diversification, and further reduce the Company's exposure to market risks. At the same time, the Company has leveraged its fully integrated platform to deliver unique solutions in the marketplace, which combine to extend Atlas' competitive advantages and increase the strength of its resilient and differentiated business model.

Seaspan Q1 and Recent Corporate Developments:

• Seaspan's fully-delivered fleet gross contracted cash flows were $11.8 billion⁽¹⁾⁽³⁾ as at May 3, 2021, reflecting record fleet growth in 2021, including addition of 32 newbuild and four secondary market vessels. These transactions significantly increased the Seaspan fleet size by 536,000 TEU to a total of 1,670,200 TEU with 64.0% growth⁽⁴⁾ in the strategically important 10,000 TEU – 15,000 TEU category.

• In February 2021, Seaspan issued $200.0 million in senior unsecured sustainability-linked bonds in the Nordic bond market. The bonds mature in February 2024 and bear interest at 6.5% per annum.
• In April 2021, Seaspan issued $300.0 million in senior unsecured sustainability-linked bonds in the Nordic bond market. The bonds mature in April 2026 and bear interest at 6.5% per annum.

APR Q1 and Recent Corporate Developments:

• APR's gross contracted cash flows were $264.5 million⁽¹⁾, at March 31, 2021.
• APR appointed Phillip Lord as Chief Financial Officer.
• Subsequent to quarter end, APR secured contracts to provide 330MW utilizing 10 gas turbines to provide peaking power in Mexico.

Segmental Financial Results:

The following table summarizes segmental financial results for the quarter ended March 31, 2021.

Distribution:
On April 5, 2021, the Board of Directors of Atlas declared a quarterly distribution in the amount of $0.125 per common share, unchanged from the prior quarter. Regular quarterly dividends on the Series D, Series E, Series G, Series H and Series I preferred shares were also declared. All dividends were paid on April 30, 2021.

Conference Call and Webcast:
Atlas will host a conference call and webcast presentation for investors, analysts and interested parties to discuss its first quarter results on May 4, 2021 at 8:30 a.m. ET. Participants should call, 1 (877) 246 9875, International Dial-In, 1 (707) 287 9353, Listen Only Toll-Free Dial-In Number, 1 (888) 556 5741, and Listen Only International Dial-In Number, 1-(857) 270 6226 and request the Atlas call (conference ID: 1985562). The live webcast and slide presentation are available under "Events & Presentations" at www.atlascorporation.com. A webcast replay will be available until May 2, 2022.

The replay telephone numbers are: US/Canada 1-(855) 859 2056 and International 1 404 537 3406, and the replay passcode is: 1985562. The phone replay will be available until May 19, 2021.       

About Atlas
Atlas is a leading global asset management company, differentiated by its position as a best-in class owner and operator with a focus on disciplined capital deployment to create sustainable shareholder value. We target long-term, risk adjusted returns across high quality infrastructure assets in the maritime sector, energy sector and other infrastructure verticals. For more information visit atlascorporation.com

About Seaspan
Seaspan is a leading independent owner and operator of containerships. We charter our vessels primarily pursuant to long-term, fixed-rate time charters to the world's largest container shipping liners. Seaspan's fully-delivered fleet consists of 168 containerships, representing total capacity of approximately 1,670,200 TEU. Seaspan's fully delivered fleet of vessels has an average age of approximately 5 years and an average remaining lease period of approximately 7 years, on a TEU-weighted basis. For more information, visit seaspancorp.com

About APR
APR provides rapidly deployable, large-scale power and fast-track mobile power to underserved markets and industries. APR's mobile, turnkey power plants help run industries, cities and countries globally in both developed and developing markets. For more information, visit aprenergy.com.

ATLAS CORP.
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS OF US DOLLARS)

ATLAS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS OF US DOLLARS, EXCEPT SHARES IN THOUSANDS AND PER SHARE AMOUNTS)

ATLAS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS OF US DOLLARS)

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:

ATLAS CORP.
NON-GAAP RECONCILIATIONS
FUNDS FROM OPERATIONS

Atlas Corp.
NON-GAAP RECONCILIATIONS
Adjusted EBITDA

ATLAS CORP.
NON-GAAP RECONCILIATIONS
NET DEBT TO ADJUSTED EBITDA

ATLAS CORP.
NON-GAAP RECONCILIATIONS
TOTAL BORROWINGS

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 Earnings, Adjusted Earnings Per Share, Diluted ("Adjusted EPS"), 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, impairment 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.

FFO and FFO Per Share are not defined by GAAP and should not be considered as an alternative to net earnings, earnings per share or any other indicator of the Company's performance required to be reported by GAAP. In addition, this measure may not be comparable to similar measures presented by other companies.

Adjusted Earnings and Adjusted EPS represents net earnings adjusted for preferred share dividends accumulated, impairment and other items that the Company believes are not representative of its ongoing performance.

Adjusted Earnings and Adjusted EPS are not defined by GAAP and should not be considered as an alternative to net earnings, net earnings per share or any other indicator of the Company's performance required to be reported by GAAP. In addition, this measure may not be comparable to similar measures presented by other companies and the closest measure is net earnings. These metrics are helpful in providing investors with information to assess the on-going operations of the business.                                                                                                     

Adjusted EBITDA represents net earnings before interest expense and income, tax expense, depreciation and amortization, impairments, write-down and gains/losses on sale, gains/losses on derivative instruments, loss on foreign currency repatriation, change in contingent consideration asset, other expenses and certain other items that the Company believes are not representative of its operating performance.

Adjusted EBITDA provides useful information to investors in assessing the Company's results from 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 and its components 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, impairment, 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 continue to grow its business and create increased shareholder value. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "will," "may," "potential," "should" and similar expressions are forward–looking statements. These forward-looking statements represent Atlas' estimates and assumptions only as of the date of this release and are not intended to give any assurance as to future results. As a result, you are cautioned not to rely on any forward-looking statements. Forward-looking statements appear in a number of places in this release. Although these statements are based upon assumptions Atlas believes to be reasonable based upon available information, they are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to:

• Atlas' future operating and financial results;
• Atlas' future growth prospects;
• Atlas' business strategy and capital allocation plans, and other plans and objectives for future operations;
• Atlas' primary sources of funds for short, medium and long-term liquidity needs;
• potential acquisitions, financing arrangements and other investments, and the expected benefits from such transactions;
• Atlas' financial condition and liquidity, including its ability to borrow and repay funds under its credit facilities, its ability to obtain waivers or secure acceptable replacement charters under the credit facilities, its ability to refinance existing facilities and notes, and to obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
• conditions in the public equity market and the price of Atlas' shares;
• changes in governmental rules and regulations or actions taken by regulatory authorities, and the effect of governmental regulations on Atlas' business;
• the financial condition of Seaspan's and APR's customers, lenders and other counterparties and their ability to perform their obligations under their agreements with Seaspan and APR, respectively;
• the continued ability to meet specified restrictive covenants in Atlas' and its subsidiaries' financing and lease arrangements, notes and preferred shares;
• any economic downturn in the global financial markets and potential negative effects of any recurrence of such disruptions on the demand for the services of Seaspan's containerships or APR's mobile power solutions or on our customers' ability to charter our vessels, lease our power generation assets and pay for our services;
• the length and severity of the novel coronavirus (COVID-19) pandemic, including as a result of new variants of the virus, and its impact on Atlas' business;
• a major customer experiencing financial distress, due to the COVID-19 pandemic, bankruptcy or otherwise;
• global economic and market conditions and shipping industry trends, including charter rates and other factors affecting supply and demand for our containerships and power generation solutions;
• disruptions in global credit and financial markets as the result of the COVID-19 pandemic or otherwise;
• Atlas' expectations as to impairments of its vessels and power generation assets, including the timing and amount of potential impairments;
• the future valuation of Atlas' vessels, power generation assets and goodwill;
• future time charters and vessel deliveries, including future long-term charters for certain existing vessels;
• estimated future capital expenditures needed to preserve the operating capacity of Seaspan's containership fleet and comply with regulatory standards, as well as Atlas' expectations regarding future dry-docking and operating expenses, including ship operating expense and expenses related to performance under our contracts for the supply of power generation capacity, and general and administrative expenses;
• availability of crew, number of off-hire days and dry-docking requirements;
• Seaspan's continued ability to maintain, enter into or renew primarily long-term, fixed-rate time charters for its vessels and leases of our power generation assets;
• the potential for early termination of long-term time charters and Seaspan's potential inability to enter into, renew or replace long-term time charters;
• Seaspan's ability to leverage to its advantage its relationships and reputation in the containership industry;
• changes in technology, prices, industry standards, environmental regulation and other factors which could affect Atlas' competitive position, revenues and asset values;
• disruptions and security threats to our technology systems;
• taxation of Atlas and of distributions to its shareholders;
• Atlas' exemption from tax on U.S. source international transportation income;
• the continued availability of services, equipment and software from subcontractors or third-party suppliers required to provide APR's power generation solutions;
• APR's ability to protect its intellectual property and defend against possible third-party infringement claims relating to its power generation solutions;
• 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, 2020 on Form 20-F filed with the United States Securities and Exchange Commission ("SEC") on March 19, 2021.

Atlas does not intend to revise any forward-looking statements in order to reflect any change in its expectations or events or circumstances that may subsequently arise. Atlas expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in Atlas' views or expectations, or otherwise. You should carefully review and consider the various disclosures included in Atlas' Annual Report and in Atlas' other filings made with the SEC that attempt to advise interested parties of the risks and factors that may affect Atlas' businesses, prospects and results of operations.

SOURCE Atlas Corp.