Atlas Corp. Common Shares

Welcome to the Atlas Corp fourth quarter 2021 earnings conference call. I would like to remind everyone that this conference call is recorded today, February 17th, 2022. I would now like to turn the call over to Robert Weiner, head of investor relations at Atlas Corp.

Thank you, Chris. Good morning, everyone, and thank you for joining us today to discuss Atlas Corp's fourth quarter 2021 earnings report. We issued our earnings release yesterday evening after market closed. We will refer to our quarterly earnings release, accompanying earnings presentation, and earnings supplemental workbook today in this conference, which all can be found on the Investors tab on our website, atlascorporation.com. I'd like to remind you that our discussion today contains forward-looking statements, and I draw your attention to the disclaimer on slide number two in the accompanying earnings presentation. Please note that we report non-GAAP financial measures, which we believe provide investors a clear understanding of the performance of our businesses. The earnings release contains supplemental financial tables and information pertaining to our quarterly earnings report and includes definitions of non-GAAP financial measures and reconciliations of such non-GAAP measures to the most closely comparable U.S. GAAP measures. These definitions may also be found in the appendices at the back of the earnings presentation. which we may refer to in our call discussion. It can be found on our website. Please turn to slide number three. Now let me turn to a personal update. This will be my last conference call as I will be leaving Atlas at the end of the month. I want to thank the Atlas team and Atlas' investors and analysts, all of whom it has been my pleasure to work with and get to know. I believe Atlas is very well positioned to continue its growth and creation of value for shareholders. Taking over as the lead of investor relations is Wilcox Levy, who will be based in Vancouver, Canada. On the call with me are Ben Chen, President and Chief Executive Officer of Atlas Corp., and Graham Talbot, Chief Financial Officer of Atlas Corp. Joining us on the call during the Q&A session is C-SPAN's Chief Commercial Officer, Peter Curtis, and C-SPAN's Chief Operational Officer, Torsten Petersen. Following our prepared remarks, we will open up the forum to a question and answer session. With that, I am pleased to turn the call over to Atlas Corp CEO, Mr. Bing Chen.

Thank you, Rob, and good morning, everyone. Thank you for joining our call. I would like to begin by thanking Rob for his contribution to Atlas' success, and we wish him the best in his future endeavors. Today, my comments will focus on Q4 and 2021 highlights, key developments at C-SPAN and APR, and our through-cycle performance since 2018. Then I will hand over to Graham Talbot to present our Q4 2021 results and financial update. Please turn to slide four. I'm pleased to report that we beat our upgraded 2021 guidance delivering record financial performance despite the global supply chain disruptions and the pandemic. We continue to benefit from a robust container shipping market and a long-term strategic partnership with our liner customers, along with the deployment of APR's assets in new contracts and regions, resulting in a year-over-year adjusted EBITDA growth of 20.8%. We have locked in significant and high-quality growth through our $7.6 billion investment in 70 new-built vessels. They are all backed by long-term quality charters in addition to $6.9 billion of committed financings. This has resulted in a total gross contracted cash flow balance of $18 billion as of year-end. In 2021, we strengthened our balance sheet, improved our financing flexibility, and continued optimizing our cost of capital as we progressed towards an investment-grade credit rating. I'm also very pleased to report a solid first quarter performance that capped a record year. Atlas delivered robust double-digit growth across revenue adjusted EBITDA, and adjusted earnings per share compared to the same quarter last year. We are very pleased with this performance, and we are well positioned to continue delivering material value to our shareholders in 2022. Please turn to slide five. Let's review selected key developments at C-SPAN. The new-build vessel program is a testament of C-SPAN's integrated platform, which we have consistently invested in over the past 20 years. In response to the customer demand, we have leveraged our integrated platform through our people, process, and systems to execute on our 70-vessel new-build program, which is unprecedented in the industry. This new bill program further differentiates C-SPAN's competitive dominance, delivering $11.4 billion of gross contracted cash flows over an 11.5 years average charter duration. Three vessels on 18-year charters have been delivered ahead of the schedule so far, with 67 vessels to be delivered over the next three years. reinforcing our successful track record of building over 110 vessels since C-SPAN's inception, which does not include our 70 vessels new build program. During the fourth quarter, our vessel utilization rate was 98.5%, which is consistent with our vessel utilization since IPO. This performance was underpinned by successfully executing over 8,200 crew changes despite the operational challenges presented by pandemic. We continue to benefit from the strong market, as up to 15% of our fleet is exposed to floating index rates, and we forward-fixed 10 vessels during the Q4 and 68 vessels total in 2021, leading to only five charter roll-offs in 2022, 13 in 2023, and 27 in in 2024 as of 2021 year end. In addition, we achieved historical record low lost time injury frequency of 0.4 as we continue to focus on safety of our people. These successes together with our disciplined cost control drove our strong Q4 and 2021 performances and demonstrates our consistent operational excellence. Please turn to slide six. Now let's review selected key developments at APR. After two years of the global pandemic, mobile power market demand is beginning to improve globally, with projects resuming after postponements and disruptions. Two of APR's contracts totaling 400 megawatts rolled off in the fourth quarter, The first right at the start of the quarter, and the second is 15 days into the quarter. This reduced our quarterly utilization rate to the low 60% range, and this is consistent with last year's and reflects the seasonality of power demand and subsequent demobilization period of these projects. We have recently entered into three new deployments, which includes a renewal of APR's IID contract in California for 90 megawatts, a new market contract in Brazil for 228 megawatts, and the dry leasing of five turbines to a Texas-based counterparty for 120 megawatts. Similar to C-SPAN, APR achieved a strong LTIF rate of 0.23. APR is strengthening its platform by focusing on increasing the utilization of the turbines while developing long-term power projects in a disciplined manner, which in turn, generating predictable long-term contracted cash flow. Please turn to slide seven. I would like to wrap up my comments by reflecting on our past successes. and what is in store as we're building on our continued momentum. 2017 was a turning point in our company's history. Following David Sokol's appointment as the chairman of the board, we began the transformation of our governance and business model. I then joined in 2018 and began strengthening our management team and building and embedding our five core competencies. which is consistent operational excellence, creative customer partnerships, solid financial strength, quality growth, and disciplined capital allocation. Since that time, we have built a consistent track record of strong performance through a diverse set of market conditions, which is further evidence of our resilient business model that delivers value through cycles. We have enhanced the business model and management team, focused on delivering creative customer solutions by leveraging our fully integrated platform, actively managed our balance sheet to improve our financial strength, and have significantly grown our franchise with $18 billion of quality long-term contract cash flow, which provides predictable financial performance and significant value for our shareholders. These themes, coupled with our consistently strong performance, drive our upgraded 2022 guidance, which Graham will share later in the call. Thank you for your time today. I look forward to seeing you all at our investor day and discussing the future of Atlas in more detail. So I will now turn the call over to our CFO, Graham, please.