Canadian Utilities Reports 2010 Earnings

 

CALGARY, ALBERTA--(Marketwire - Feb. 23, 2011) - Canadian Utilities Limited (TSX:CU) (TSX:CU.X)

Canadian Utilities today reported earnings of $435.0 million ($3.46 per share) for 2010 compared to $466.6 million ($3.71 per share) in 2009. Adjusted Earnings (1) were $440.9 million ($3.50 per share) in 2010 compared to $427.6 million ($3.40 per share) in 2009, an increase of $13.3 million. Adjusted Earnings exclude one- time gains and items that are not in the normal course of business (see Financial Summary and Reconciliation of Adjusted Earnings).

In 2010, Adjusted Earnings increased in the Utilities Segment due to higher infrastructure investment in the regulated rate base and regulatory decisions received by ATCO Gas for the Carbon storage facility, partially offset by court and regulatory decisions received by ATCO Gas in regards to its deferred gas account. Adjusted Earnings were also reduced in the Energy Segment by lower prices for natural gas storage.

For the fourth quarter, 2010 earnings were $128.6 million ($1.02 per share) compared to $127.1 million ($1.01 per share) in 2009. Adjusted Earnings in the fourth quarter were $130.6 million ($1.02 per share) compared to $129.1 million ($1.02 per share) in 2009, an increase of $1.5 million.

In the fourth quarter, Adjusted Earnings increased in the Utilities Segment due to higher infrastructure investment in the regulated rate base, partially offset in the Energy Segment by lower prices for natural gas storage and lower power prices and spark spreads in the U.K. electricity market.

RECENT DEVELOPMENTS

--  ATCO, Canadian Utilities' parent company, announced the creation of a
    new company - ATCO Australia. Based in Perth, ATCO Australia will
    provide a full range of energy and infrastructure services and will be
    led by Managing Director & Chief Operating Officer, Steven J. Landry. 
--  Canadian Utilities Limited declared a first quarter dividend for 2011 of
    40.25 cents per Class A non-voting and Class B common share, a 6.6%
    increase over the 37.75 cents paid in each of the previous four
    quarters. Dividends have increased each year since 1972. 
--  On January 1, 2011, ATCO Ltd. and Canadian Utilities Limited completed
    the transfer of ATCO Ltd.'s wholly- owned subsidiary, ATCO Resources
    Ltd., from ATCO Ltd. to ATCO Power Ltd., a wholly-owned subsidiary of
    Canadian Utilities Limited for Class A non-voting and Class B common
    shares of Canadian Utilities Limited. 
--  CU Inc. issued $125 million of debentures in November 2010 and $75
    million of equity preferred shares in December 2010. 
--  Canadian Utilities Limited and CU Inc. filed an application with the
    Alberta Utilities Commission to approve the transfer of natural gas
    storage facility assets located at Carbon, Alberta from ATCO Gas to ATCO
    Midstream. 

FINANCIAL SUMMARY AND RECONCILIATION OF ADJUSTED EARNINGS

A financial summary and reconciliation of earnings to Adjusted Earnings is provided below:

                               For the Three Months   For the Twelve Months 
                                  Ended December 31       Ended December 31 
----------------------------------------------------------------------------
                                   2010        2009        2010        2009 
----------------------------------------------------------------------------
($ Millions except per share                                                
 data)                                            Unaudited                 
Earnings                          128.6       127.1       435.0       466.6 
ATCO Power Mark-to-Market                                                   
 Adjustment                         2.0         2.0         5.9         7.4 
ASL Transaction                       -           -           -       (29.6)
H.R. Milner Tax Reassessment          -           -           -       (16.8)
----------------------------------------------------------------------------
Adjusted Earnings (1)             130.6       129.1       440.9       427.6 
----------------------------------------------------------------------------
Earnings Per Share                 1.02        1.01        3.46        3.71 
----------------------------------------------------------------------------
Adjusted Earnings Per Share                                                 
 (1)                               1.02        1.02        3.50        3.40 
----------------------------------------------------------------------------
Revenues                          709.3       675.6     2,657.2     2,584.0 
----------------------------------------------------------------------------
Funds Generated By                                                          
 Operations (1) (2)               186.2       229.1       738.2       793.4 
----------------------------------------------------------------------------
1.  These measures are not defined by Generally Accepted Accounting
    Principles and may not be comparable to similar measures used by other
    companies. 
2.  This measure is cash flow from operations before changes in non-cash
    working capital. 

In 2009, the third quarter amalgamation of Canadian Utilities Limited subsidiary, ATCO Frontec, with ATCO Ltd. subsidiaries, ATCO Structures and ATCO Noise Management, to form ATCO Structures & Logistics (ASL Transaction) resulted in a one-time gain of $29.6 million. As a result, Canadian Utilities owns 24.5% of a more efficient and focused company created to better serve global customers.

Canadian Utilities also benefited from the court decision that overturned a Canada Revenue Agency reassessment dealing with the sale of the H.R. Milner generating plant (H.R. Milner Tax Reassessment). This decision resulted in one-time earnings of $16.8 million in the third quarter of 2009.

The increase in Revenues for the fourth quarter is primarily due to higher infrastructure investment in regulated rate base in the Utilities Segment.

The increase in Revenues for the twelve months ended December 31, 2010 is primarily due to the lease of ATCO Power's Karratha generating plant in Australia that commenced commercial operations in the first half of 2010. Revenues also increased in the Utilities Segment due to higher infrastructure investment in regulated rate base.

The decrease in Funds Generated by Operations for the fourth quarter is primarily due to regulatory deferral amounts which vary from quarter to quarter and are, therefore, not comparable or indicative of performance.

The decrease in Funds Generated by Operations for the twelve months ended December 31, 2010, is primarily due to higher availability penalties paid by ATCO Power due to a planned outage at the Battle River generating plant.

Canadian Utilities' consolidated financial statements and management's discussion and analysis of financial condition and results of operations for the three and twelve months ended December 31, 2010, will be available on Canadian Utilities' website (www.canadian-utilities.com) or via SEDAR (www.sedar.com) or can be requested from the Company.

Alberta-based Canadian Utilities Limited, an ATCO company, with more than 5,700 employees and assets of approximately $9 billion, delivers service excellence and innovative business solutions worldwide with leading companies engaged in Utilities (pipelines, natural gas and electricity transmission and distribution), Energy (power generation, natural gas gathering, processing, storage and liquids extraction) and Technologies (business systems solutions). More information can be found at www.canadian-utilities.com.

Forward-Looking Information:

Certain statements contained in this news release may 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", and similar expressions. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The Corporation believes that the expectations reflected in the forward- looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.

Any forward-looking information contained in this news release represents the Corporation's expectations as of the date hereof, and is subject to change after such date. The Corporation disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation.



B.R. (Brian) Bale
Canadian Utilities Limited
Senior Vice President & Chief Financial Officer
(403) 292-7502
www.canadian-utilities.com