Atlas Corp. Common Shares

Welcome to the Atlas Corp Second Quarter 2022 Earnings Conference Call. I would like to remind everyone that this conference call is being recorded today, August 10, 2022. I'd now like to turn the call over to Ashton King, Manager of Investor Relations.

Good morning, everyone, and thank you for joining us today to discuss Atlas Corp's Second Quarter 2022 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 would like to remind you today that our discussion contains full booking statements, and I draw your attention to this disclaimer on slide two in the accompanying earnings presentation. Please note that we report non-GAAP measures which we believe provide investors a clear understanding of the performance of our business. 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 US 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 and can be found on our website. Please turn to slide three. On the call with me are Bing Chen, President and CEO of Atlas Corp, and Graham Talbott, 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 Operating Officer, Torsten Pedersen. Following our prepared remarks, we will open up the forum to a question and answer session. With that, I am pleased to now turn the call over to Atlas Corp's CEO, Ving Chen.

Thank you, Ashton, and good morning, everyone. Thank you for joining our call. To begin, I would like to quickly cover the TAPE private proposal that was received by our board of directors on August the 4th, 2022. We cannot comment on the proposal. For more information concerning the proposal, please refer to our public filings. As stated in our filings, the company does not intend to provide updates on the proposed transaction until appropriate or required. In the meantime, management is absolutely focused on business as usual and continuing to successfully execute on our strategy. Today my comments will focus on key developments at C-SPAN and APR during the second quarter. Then I will hand it over to Graham Talbot to present our Q2 2022 results and provide a financial update. Please turn to slide four. I would like to start by reviewing the major developments at C-SPAN. We continued delivering strong quarterly results driven by healthy industry fundamentals and further developments of our long-term strategic partnerships. We continued taking advantage of current market conditions by recycling capital through strategic vessel divestments. In the second quarter, we sold nine Panamax vessels that were no longer aligned with our long-term fleet strategy and continue seeking opportunities to optimize our fleet portfolio to meet the needs of our customers. In response to our customers' demand, we leveraged our fully integrated platform to continue driving quality growth, executing agreements to build four 7,700 TU dual-fuel LNG new builds, but are subject to closing conditions. If completed, these vessels will commence 18-year charter with a leading global liner contributing nearly $1 billion of future gross contracted cash flows. Including these four vessels, C-SPAN now has 29 dual-fuel LNG new builds in its portfolio. Leveraging our creative customer solutions, we forward fixed three vessels in the second quarter In the third quarter, we forward fixed another 14 vessels with leading global liners. These forward fixtures contributed over $1.3 billion to our total current growth contract cash flow balance of $18.9 billion, not including the four new builds I previously mentioned. This leads to our fleet being 100% contracted to the remainder of 2022, 99.6% for 2023, and 96.9% for 2024 on a TU basis. We also continued diligent execution of our new builds. In the second quarter, we delivered four fourth and fifth 12 200 tu new build vessels which commenced 18-year charter with another leading global liner upon delivery these deliveries mark c-span completing the full new build order of five twelve thousand two hundred tu vessels which received from a customer in late 2020. In June, we also delivered our first and second 11,800 TEU vessels, which commenced the five-year charter with another leading global liners upon delivery. With a running total of 117 new builds since our IPO in 2005, materially de-risking execution, we are working diligently to deliver our new build program on time and on budget, despite the challenges presented by the pandemic. During the second quarter, we maintained a strong vessel utilization rate of 98.3%. We also achieved a historically low lost time injury frequency of 0.26 as we continue to focus on the safety of our people. Together with our highly differentiated business model and consistent commitment to operational excellence, These successes drove our continued strong quarterly performance. Please turn to slide five. Now let's review some key developments at APR. In the second quarter, APR entered into a contract with a Mexico-based counterparty, providing the dry lease of four turbines with a capacity of 120 megawatts. In May, APR's new 44-month Brazil contract commenced, followed by the IID contract in June. The extension of APR's Brazil contract from a 12-month to 44-month is evidence of our strategy to migrate the business to long-term contract cash flow. As mentioned last quarter, APR completed its five-year contract in Argentina earlier this year, As of today, demobilization of the turbine is substantially complete. The turbines previously at our Zaparato plant were redeployed in APR's new dry lease contract, and we are working diligently to redeploy the remaining Maceo turbines. Upon successful full-size demobilization of the Maceo plant,