London, UK, November 3, 2020 – Seaspan Corporation (“Seaspan”), a wholly owned subsidiary of Atlas Corp. (“Atlas”) (NYSE:ATCO), today announced that it has taken delivery of two high-quality 12,000 TEU containerships (“the Vessels”) built in 2018. Both vessels have commenced long-term time charters with leading global liners. The acquisitions were previously announced in September 2020.
The Vessels were financed from additional borrowings as well as cash on hand. The transaction is expected to be immediately accretive to Atlas’ funds from operations per diluted share1, increase long-term contracted revenue by over $165 million, and contribute approximately $20 million of annualized Adjusted EBITDA2 for the year 2020. Seaspan’s global fleet consists of 127 vessels and approximately 1,073,000 TEU, with total contracted revenue of approximately $4.4 billion, and a weighted average remaining lease period of approximately 4 years.
Bing Chen, Chairman, President and Chief Executive Officer of Seaspan, commented, “We are pleased to continue the execution of our quality growth strategies, including consistent expansion of our fleet with 15 high-quality vessels added since December of 2019, which are all backed by long-term charters. Our relentless focus on disciplined capital allocation combined with consistent operational excellence has resulted in sustainable growth and scale, further enhancing our ability to deliver best-in-class fully integrated services. Our strong and creative customer partnerships continue to provide unique solutions within the containership trade and distinguish our value-added approach to driving mutually beneficial outcomes for all stakeholders.”
Atlas is a leading global asset management company, differentiated by its position as a best-in-class owner and operator with a focus on deploying capital to create sustainable shareholder value. Atlas brings together an experienced asset management team with deep operational and capital allocation experience. We target long-term, risk adjusted returns across high-quality infrastructure assets in the maritime sector, energy sector and other infrastructure verticals. Our two portfolio companies, Seaspan Corporation and APR Energy are unique, industry-leading operating platforms in the global maritime and energy spaces, respectively.
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Seaspan is a leading independent owner and operator of containerships with industry leading ship management services. We charter our vessels primarily pursuant to long-term, fixed-rate, time charters to the world’s largest container shipping liners. Seaspan’s fleet consists of 127 containerships, representing total capacity of approximately 1,073,000 TEU. Seaspan’s operating fleet of vessels has an average age of approximately 7 years and an average remaining lease period of approximately 4 years, on a TEU-weighted basis.
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1 Funds from operations (“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 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.
2 Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization, impairments, write-downs and gains/losses on sale, unrealized change in fair value of derivative instruments, loss on foreign currency repatriation, realized gains/losses on interest rate swaps, realized losses on interest rate swap amendments and terminations, and change in contingent consideration asset. The Company believes that this measure is useful in assessing performance and highlighting trends on an overall basis.
3 As of June 30, 2020, adjusted for vessels added to the fleet after that date.
Cautionary Note Regarding Forward-Looking Statements
This release contains certain forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events, including forward-looking statements regarding the expected benefits of the transaction to Atlas’s financial condition and results from operations. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “projects”, “forecasts”, “will”, “may”, “potential”, “should”, and similar expressions are forward-looking statements. These forward-looking statements reflect management’s current expectations only as of the date of this release. As a result, you are cautioned not to rely on any forward-looking statements. Although these statements are based upon assumptions we believe 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 potential for early termination of the charters and Seaspan’s inability to replace them; the possibility that we will not be able to continue to execute on our growth strategy; and other factors detailed from time to time in our periodic reports and filings with the Securities and Exchange Commission, including Atlas’s Annual Report on Form 20-F for the year ended December 31, 2019. We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of any of our securities.
This release includes non-GAAP financial measures. These non-GAAP financial measures, which include FFO per share and Adjusted EBITDA, should not be considered substitutes for measures of performance prepared in accordance with GAAP and readers are urged to review the Company’s audited financial statements. Atlas does not provide quantitative reconciliation of forward-looking FFO per share or Adjusted EBITDA to its most directly comparable GAAP financial measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, income tax expense, gains/losses on sale, unrealized and realized change in derivative instruments, change in contingent consideration asset and loss on foreign currency repatriation. These items are uncertain, depend on various factors, and could have a material impact on GAAP-reported results for the future period.
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