Full Year 2023 ATCO Ltd Earnings Call

Operator: Thank you for standing by. This is the conference operator. Welcome to the ATCO Ltd fourth quarter 2023 results conference call and webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad.

Thank you for standing by this is the conference operator welcome to the <unk> Co Ltd fourth quarter 2023 results conference call and webcast. As a reminder, all participants are in listen only mode and the conference is being recorded after the presentation, there will be an opportunity to ask questions.

Joined the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing star Zero I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President Finance Treasury and sustainability.

Operator: Should you need assistance during the conference call, you may signal an operator by pressing stars and 0. I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Finance, Treasury, and Sustainability. Please go ahead. Thank you. Good morning, everyone. We're pleased you could join us for ATCO's fourth quarter 2023 conference call. With me today is Executive Vice President and Chief Financial and Investment Officer Katie Patrick and the president of ATCO Structures, Adam Beattie. Before we move into our formal agenda, I would like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located. Today, we're speaking to you from our ACO Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy, comprised of the, Jessica. Kainai and Pagani Nations, the Sissinew Nation, and the Stony Dakota Nations, which include the Techniki, Berespaw, and Good Stony First Nations.

Go ahead, Mr. Jackson.

Thank you.

Good morning, everyone.

Pleased you could join us for Arcos <unk> fourth quarter 2023 conference call.

With me today is executive Vice President.

And chief financial and investment Officer, Katie Patrick.

And the president of Atco structures, Adam Beatty.

Before we move into our formal agenda I would like to take a moment to acknowledge the numerous additional territories in homeland in which our global facilities are located today.

Today, we're speaking to you from our Alco Park head office in Calgary, which is located in the Treaty seven region.

This is the ancestral territory that the Blackfoot Confederacy comprised of the six Zika.

Finite Bugatti nations to see new nation, and that's starting to coda nations that include that sticky bearish Pas and good Stony first nations.

Colin R. Jackson: The City of Calgary is also home to the Métis Nation of Alberta, Region 3. We honor and respect the diverse history, languages, ceremonies, and culture of the indigenous peoples who call these areas home. The call today will begin with some opening comments from Katie on recent company developments and financial results, followed by an update from Adam on our global structures business. After these prepared remarks, we will take questions from the investment community. Please note that a replay of the conference call, a short supplemental presentation, and a transcript will be available on our website at atco.com and can be found in the Investors section under the heading Events and Presentations. I'd like to remind you all that our remarks today will include forward-looking statements that are subject to important risks and uncertainties.

The city of Calgary is also home to the May two nation of Alberta region three.

We honor and respect the diverse history languages ceremonies and culture of the indigenous peoples, who call these areas home.

The call today will begin with some opening comments from Katie on recent company developments and financial results followed by an update from Adam on our global structures business.

After these prepared remarks, we will take questions from the investment community.

Please note that a replay of the conference call.

Short supplemental presentation, and a transcript will be available on our website at <unk> dot com and.

And can be found in the investors section under the heading events and presentations.

To remind you all that our remarks today will include forward looking statements that are subject to important risks and uncertainties for more information on these risks and uncertainties. Please see the reports filed by <unk> with the Canadian Securities regulators.

Colin R. Jackson: For more information on these risks and uncertainties, please see the reports filed by ATCO with the Canadian Securities Regulators. And finally, I'd also like to point out that during this presentation, we may refer to certain non-GAAP or other financial measures, such as total of segment measures, adjusted earnings, adjusted earnings per share, and capital investment. These measures do not have any standardized meaning under IFRS, and as a result, they may not be comparable to similar measures presented by other entities.

And finally.

I'd also like to point out that during this presentation, we may refer to certain non-GAAP or other financial measures such as total segment measures adjusted earnings adjusted earnings per share and capital investment. These measures do not have any standardized meaning under ifr S and ASUR.

Result, they may not be comparable to similar measures presented in other entities.

Katie Patrick: And now I'll turn the call over to Katie for her opening remarks. Thanks, Colin. And good morning, everyone.

And now I'll turn the call over to Katie for her opening remarks.

Thanks, Colin and good morning, everyone. Thank you all very much for joining us today for our fourth quarter 2023 conference call.

Katie Patrick: Thank you all very much for joining us today for our fourth quarter 2023 conference. Before we move into a more detailed discussion of our results, I wanted to touch on a few significant achievements we have had this year. In 2023, our business delivered adjusted earnings growth of approximately two percent. This highlights the strength of our diversified portfolio as we more than offset the impact of rebasing and Australian inflation in our largest investment, Canadian utilities. Structures had an absolutely incredible year.

Before we move into a more detailed discussion on our results I wanted to touch on a few significant achievements we had this year.

In 2023 of our business delivered adjusted earnings growth of approximately 2%. This highlights the strength of our diversified portfolio as we more than offset the impact of Rebating and the Australian inflation.

Our largest investment Canadian utilities.

Structures had an absolutely incredible year.

Katie Patrick: They impeccably executed on the strategy we have reinforced consistently to aggressively grow the base repeatable business model. Frontex continued to backfill the project pipeline, and, as always, we're exemplars of our corporate values through their operation of two fire relief accommodation villages in BC and Alberta during the challenging 2023 wildfire season, and Natume Ports increased ownership in a number of existing ports and entered into a JV with Nautilus known as the Vancouver Bulk Terminal. These are truly exceptional achievements and a testament to the operational and management expertise that we have across our portfolio. Moving to our overall financial performance, ATCO achieved adjusted earnings of $432 million, or $3.82 per share, for 2020-21.

The impeccably executed on this strategy, we have reinforced consistently to aggressively grow the base repeatable business.

<unk> continued to backfill the project pipeline and as always were exemplary of our corporate values and your operation is to fire relief accommodations villages in BC and Alberta during the challenging 2023 wildfire season.

And now to make ports increased ownership and a number of existing art and entered into a JV with non list known as the Vancouver bulk terminal.

These are truly expect exceptional achievement and a testament to the operational and management expertise that we have across our portfolio.

Moving to our overall financial performance after which these adjusted earnings of $432 million or $3 82 per share for 2023.

Katie Patrick: As I alluded to earlier, the diversity of our portfolio really showed its worth this year, with our non-utility investments more than offsetting the earnings pressure experienced at our Canadian Utilities Investments business. I won't go into too much detail on Canadian utilities as the team just spoke about these points on this morning's call, but I do want to reiterate that we entered into the year knowing that rebasing would create significant cyclicality for CU in 2022. So while the business did see earnings reset downward from 20 to 22 levels, CU delivered great performance and was well in line with our expectations for the. Looking ahead to 2024, Alberta Distribution Utilities, with an RTCU investment, will move into their third PBR performance-based regulation cycle.

As I alluded to earlier the diversity of our portfolio really showed its worth this year with our non utility investments more than offsetting the earnings pressure experienced in our Canadian utilities investments.

Hello go into too much detail on Canadian utilities as the team just spoke about these points on this morning's call.

But I do want to reiterate that we have.

It entered the year, knowing that re basing would create significant cyclicality foresee you in 2023.

So while the business did see earnings reset downward from 2022 levels.

When you deliver great performance and was well in line with our expectations for the year.

Looking ahead to 2024.

The Alberta distribution utilities within our CV investment move into their third P. D are performance based regulation cycle.

Katie Patrick: Consistent with the strategy utilized in the business's first two PBR cycles, the focus is on unlocking efficiencies that drive both premium returns and long-term customer savings. 2024 will also be supported by the recent generic cost of capital decision that increased our approved ROE to 9.28% versus the previous rate of 8.5% for all of the Alberta-based utilities within the portfolio.

Consistent with this strategy utilizing the businesses first to PDR cycles.

Focus is on unlocking efficiencies that drive both premium returns and long term customer savings.

'twenty 'twenty four will also be supported by the recent generic cost of capital decision that increased our approved ROE to $9 two 8% versus the previous rate of eight 5% for all of the Alberta based utilities within the portfolio.

Katie Patrick: TU continues to provide ATCO with a stream of stable and reliable earnings and cash flows, and these regulatory decisions reaffirm our view of the prospective and constructive nature of the regulatory system in Alberta. Moving to our other investments, ATCO's structures had an unprecedented, Structures delivered adjusted earnings of $89 million in 2023, $35 million higher than 2022. This growth was driven by a number of things, including the continued expansion of our base business and the successful integration of Triplum Housing.

Do you continue to provide that to sustain a stable and reliable earnings and cash flows and these regulatory decisions reaffirm our view of the perspective of constructive nature of the regulatory system in Alberta.

Moving to our other investments at cost structures had an unprecedented year Chuck.

Sectors delivered adjusted earnings of $89 million in 2023 $35 million higher than 2022.

This growth was driven by a number of items, including the continued expansion of our base business.

The successful integration of Triple housing.

Katie Patrick: Further optimization of our fleet and the successful execution of a number of key projects. I'll speak to some of these successes as we provide an update on the structure's business. Now, Katie, and good morning, everyone.

Further optimization of our fleet and the successful execution of a number of key projects.

Just speak to some of these successes and provide an update on the structures business.

Turn the call over to Ed.

Thank you Katie and good morning, everyone as Kathy alluded to our structures business continued to build year over year momentum and in 2023 realize significant earnings growth at the center of this growth was the continued realization of our Spice and global base business expansion we grew.

Adam M. Beattie: As Katie alluded to, Structures Business continued to build year over year momentum and, in 2023, realized significant earnings growth. At the center of this growth was the continued realization of our space, our global business expansion. We grew our global space rental business significantly in 2023 while also increasing our branch network by six additional locations. This contributed to an increase in our fleet size, number of units on rent, and a growth of 15% in our average rental rates.

ROE at global Spice rentals business.

Significantly in 2023, while also increasing our branch network by six additional locations. This contributed to an increased net fleet size number of units on rent and growth of 15% and the average rental rates Spice rentals remains the cornerstone of that base business and as a foundation for delivering.

Adam M. Beattie: Space Rentals remains the cornerstone of our base business and is the foundation for delivering not only sustained performance in this sector but also as a retail and operational medium to expand our offerings in workforce housing, manufacturing, residential housing, permanent modular construction, site construction activities, and operations and maintenance activities. Growth in this base business is especially meaningful to our overall results, as it contributes between two-thirds to three-quarters of our total earnings in a given period, providing earnings stability. Structures from this basis have been able to service the markets in which they operate with our other diversified products, services, and capabilities. This geographical diversification and unique core competency mix sets us apart in the markets where we operate. 2023 also marked our first full year of operations in the residential housing sector following the successful acquisition and integration of Triple M Housing, the largest modular residential housing provider within Canada.

Not only sustained.

Performance in this sector, but also as a retirement operational medium to expand that offering is in workforce housing manufacturing residential housing permanent modular construction site construction activities and operations and maintenance activities.

In this base business is especially meaningful to our overall results as it contributes between two thirds to three quarters of that title earnings in a given period, providing earnings stability structures phone. The spices has been able to service the markets in which it operates without other diversified products services.

And capabilities this geographical diversification and unique core competency mix sets us apart in the markets, where we operate.

2023 also marked our first full year of operations in the residential housing sector.

Following the successful acquisition and integration of Triple M housing the largest modular residential housing provide up within Canada. It is well known that attainable housing supply has a current and long term shortage and high demand has resulted in a significant housing process in Canada and elsewhere in the world.

Adam M. Beattie: It is well known that attainable housing supply has a current and long-term shortage, and high demand has resulted in a significant housing crisis in Canada and elsewhere in the world. We continue to believe that modular housing is a necessary part of the solution to bridge the supply and demand imbalance. Modular housing provides the speed, quality, and affordability that the traditional housing sector has been unable to accommodate in response to this demand.

We continue to believe that modular housing as a necessary part of the solution to bridge the supply and demand imbalance modular housing provides the speed quality and affordability that the traditional housing sector has been unable to accommodate in response to this demand.

Adam M. Beattie: This business has made meaningful contributions since being acquired, and its success in integrating and growing this segment displays our ability and commitment to excel in new business lines as we execute on our strategic growth ambition. In addition to the success we saw in our base business and new market entry during the year, we continue to focus on securing and executing meaningful major projects. This includes the successful execution of the Bechtel Pluto 2 project, a 2,200 person accommodation village and supplemental parallel modular facilities in Australia. ATCO Structures continues to be a market leader in major workforce housing accommodation projects and other scalable accommodation needs such as disaster response facilities and affordable multifamily facilities. In 2023, we delivered a 375-person accommodation village to support the critical recovery of a northern Alberta First Nation community that was devastated by wildfires.

This business has made meaningful contributions since being acquired and its success in integrating and growing this segment displays our ability and commitment to excel in new business lines as we execute on our strategic growth ambitions.

In addition to the success, we saw in our base business and new market entry during the year, we continue to focus on securing and executing meaningful major projects. This includes the successful execution of the Bechtel pollute, our two project a 2200 person accommodation village and supplemental.

In parallel modular facilities in Australia.

Construction continues to be a market later in major workforce housing accommodation projects and other scalable accommodation needs such as disaster response facilities and affordable multifamily facilities in.

In 2023, we delivered a 375 person accommodation village to support the critical recovery of Northern Alberta first nicely community that was devastated by wildfires.

Adam M. Beattie: As we look to the future, there continues to be a solid pipeline of real projects in Australia, Canada, Latin America, and the United States that we believe will drive additional opportunities and support growth. Our recent focus on both the United States and Eastern Canadian markets continues to deliver growth for us this year, with signs of continuing demand to both secure new work and competitively position us to disrupt existing supplies in these markets. We continue to complement our ongoing organic growth with opportunities for inorganic plays, including those similar to the triple M housing acquisition, which allowed us to accelerate our position in a growing and complementary business line and added additional capabilities to further enhance our competitive offering to the market. ATCO Structures is potentially the only multifaceted modular provider in the market able to leverage its diverse capabilities globally.

As we look to the future that continues to be a solid pipeline of real projects in Australia, Canada, Latin America, and the United States that we believe will drive additional opportunities and support growth at recent focus on both the United States and Eastern Canadian markets continued to deliver.

Growth for us in the year.

With signs of continuing demand to buy secure new work and compare competitively positioned us to disrupt existing supplies in these markets.

We continue to complement our organic ongoing organic growth with opportunities for inorganic plays including dollars similar to Triple M housing.

Acquisition, which allowed us to accelerate our position in a growing and complementary business line and added additional capabilities to further enhance our competitive offering to the market.

<unk> structures is potentially the only multifaceted modular provider in the market I able to leverage its diverse capabilities globally. This affords us the ability to walk for its new offer numerous products beyond slate to our global customer base.

Adam M. Beattie: This affords us the ability to offer numerous products beyond fleet to a global customer base. Our Structures business delivered fantastic results in 2023, featuring sustainable growth and the opening up of new markets via acquisition with the successful integration of triple M housing into our business. We continue to distinguish ourselves from peers throughout our segment, diversity, geographical footprint, and expertise in a variety of modular capabilities, including manufacturing, which we complete, which completes us across our eight global production facilities. This manufacturing prowess is complemented by expertise in fleet management, project management, and the custom design and engineering of modular products.

Our structures business delivered fantastic results in 2023, featuring sustainable growth and the opening up of new markets via acquisition with the successful integration of Triple M housing into our business. We continue to distinguish ourselves from peers throughout our segment diversity geographical.

Footprint and expertise in a variety of modular capabilities, including manufacturing, which we complete.

Which completes us across our global production facilities.

This manufacturing prowess is complemented by expertise and fleet management project management, and the custom design and engineering of modular products collectively these skills helped differentiate us from peers and create the foundation for growth moving forward and we look forward to sharing further accomplishments.

Adam M. Beattie: Collectively, these skills help differentiate us from peers and create the foundation for growth moving forward, and we look forward to sharing further accomplishments throughout the 2024 year. I'll now pass the call back to Katie.

The 2024 year.

I'll now pass the call back to Katie.

Katie Patrick: Thank you, Adam. An exceptional year for structures and definitely something to be proud of. Congratulations, and a special thank you.

Thank you, Adam and exceptional year infrastructures and definitely something to be proud of.

Congratulations and a special thank you.

Yeah.

Katie Patrick: To you, Adam, and the Structures team for showing us just how strong our ATCO businesses can be. Overall, ATCO had an exceptional 2023 that saw us deliver year-over-year earnings growth despite meaningful cyclicality in our utilities investments. Our targeted capital allocation to non-utility investments and exceptional operating results truly help mitigate this cyclicality through growth in other portions of our portfolio. As we head into 2024, Our Canadian Utilities investment has the key regulatory decisions needed for prospectivity. Combined with numerous exciting strategic developments across our greater portfolio, I'm excited for 2024 and look forward to sharing our achievements as the year develops. Before wrapping up, I do want to give my sincere appreciation to Brian at CU. I truly enjoyed working with you and wish you all the best on the beach. I have fake shoes to fill.

To you Adam and the such as team for showing US just how strong our agco businesses can be.

Overall I feel had an exceptional 2023 saw us deliver year over year earnings growth, despite meaningful cyclicality in our utilities investment.

Our targeted capital allocation to non utility investments and exceptional operating results truly helped mitigate the cyclicality by growth in other portions of our portfolio.

As we head into 2024.

Our Canadian utilities investment has the key regulatory decisions needed for prospectively combine with numerous exciting strategic developments across a greater portfolio I'm excited for 2024 and look forward to sharing our achievements as the year develops.

Before wrapping up I do want to give my sincere appreciation to Brian at seal.

Truly enjoyed working with you and wish you all the best on the Beach.

I have big shoes to fill.

Colin R. Jackson: That concludes my prepared remarks. I will now turn the call back to Colin. Thank you, Katie.

That concludes my prepared remarks, I will now turn the call back to Colin.

Thank you Katie.

Operator: In the interest of time, we ask that you limit yourself to two questions. If you have additional questions, you are welcome to rejoin the queue. I will now turn it back to the conference coordinator for questions. Thank you. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any key.

In the interest of time, we ask that you limit yourself to two questions. If you have additional questions you're welcome to rejoin the queue.

I'll now turn it back to the conference coordinator for questions.

Yeah.

Thank you to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any keys.

Italia question. Please press Star then two.

Maurice Choy: [inaudible] The first question comes from Maurice Choy with RBC Capital Markets. Please go ahead. Good morning, everyone.

The first question comes from Maurice Choy with RBC capital markets. Please go ahead.

Thanks, and good morning, everyone. Katie I noted this morning see you called it wasn't mentioned that the company needing additional that could eat to support its rate based growth.

Katie Patrick: Katie, on this morning's CU call, there was a mention of the company needing additional equity to support its rate-based growth. Given that ATCO, to you. How should we think about your commitment to keep this ownership interest level? And if there is that commitment, how do you see yourself funding that? Yeah, thanks, Maurice. Great question.

Given that I'd go owns about 53% up to you how should we think about your commitment to keep this ownership interest level and if there is that commitment how do you see yourself on that.

Yeah. Thanks for a great question.

I see you is absolutely a cornerstone investment for <unk> and will always be a meaningful.

Katie Patrick: CU is absolutely a cornerstone investment for ATCO and will always be a meaningful participant in CU. To be blunt, we're not exactly wedded to the 53% ownership stake that we have, and as equity needs arise for CU, we will weigh those against the other investment opportunities we have in front of us at the time. Class II, No. I don't think we have a specific minimum holding.

Participant in C U.

To be blunt, we're not we're not exactly wedded to the 53% ownership stake that we have in and as our equity needs arise for C. U we will weigh those against the other.

The opportunities we have in front of us at the time.

And then maybe just a follow up to that.

They don't let it to 52%, but there are minimum level, let's call, it 25, or 40% or whatever the number is.

That you are more comfortable speaking your minimum holding.

Katie Patrick: As I said, we will always be a very significant part of the ownership structure of Canadian Utilities. So, you know, it will not be I don't see ourselves becoming a minority investment minority participant in. Thanks for the clarification. And just to switch over to Adam, I think you mentioned that an acquisition at Triple M helped improve your market position or add a capability to your competitive offering. As you look at the S&L business today, and obviously that's running pretty well, what areas do you think will warrant taking another action to improve your market offering or even add a capability? Thanks, Maurice. Well, I guess we can probably look at it from a couple of different angles. Number one, geographic dispersion.

No I don't think we have a specific minimum holding as I said, we will always be a very significant.

Part of the ownership structure of Canadian utilities.

So it will it will not be.

I don't see ourselves, becoming a minority invest minority participant and see it.

Understood. Thanks for the clarity.

And just to switch over to Adam I think you mentioned that are in that because they should make triple M helped improve your market position or add a capability to a competitive offering.

If you look at the ethanol business today, and obviously, that's running pretty well what areas do you think are warranted, taking another action to.

To improve your market offering or even out of capability.

Okay.

Thanks Bryce.

Well I guess, we can probably look at it in a couple of angles.

Number one geographic dispersion, we've got a very good position geographically, where we operate in Latin America, Australia, USA and Canada. So, we're obviously going to look at continuing to grow and be competitive in the markets, where we exist to operate and we always look at project opportunities.

Adam M. Beattie: We've got a very good position geographically where we operate in Latin America, Australia, the USA, and Canada. So we're obviously going to look at continuing to grow and be competitive in the markets where we exist to operate. And we always look at project opportunities and new geographic positions as they come about. Secondly, probably more on the M&A side, which I think you're alluding to, look, we will always look at strategic acquisitions in markets where we see an acceleration potential to enter or a new opportunity where we can add value to our existing products and services. So I guess the market is fairly open in terms of where we'll look, but we'll primarily look in the places we have existing operations already. And just before I take that a little bit further, is there a specific business line that you would have always wanted to get into that, you know, current market valuation would help justify?

Geographic positions as they come about.

Secondly, on probably more on the M. A nice side, where I think you're.

Alluding to them.

Look we will always look at strategic acquisitions in the markets, where we see an acceleration potential to enter or a new opportunity, where we can value into our existing products and services. So I guess the market is fairly open.

In terms of where we'll look but we'll primarily looking at the places we have existing operations already.

Yeah.

Understood and thanks.

So I take that little bit further because their specific business line, but you would have always wanted to get into that kind of bucket elevations.

Justify that.

Adam M. Beattie: I think we really like the existing business lines that we have. We see manufacturing as obviously the primary function of what we do, be that manufacturing, fleet, workforce, housing. Residential housing is obviously a new market for us. It's a very attractive market for us. We like it.

I think we were where we really lock the existing business lines that we have Wei modulus, obviously the prime in primary function of what we do believe that manufacturing slate workforce housing residential housing is obviously, a new market for us it's a very attractive.

<unk> market for us.

Adam M. Beattie: We've successfully integrated the recent acquisition, so we have organic potential to expand that. And then we'll always look at alternatives to modular, whether that be componentized forms of building products, alternative building products. We manufacture in timber, steel, containerized products, and flat pack around the world.

We like it we have successfully integrated the recent acquisition so.

So we have organic potential to expand that and then we'll always look at alternatives to modular whether that be.

<unk> formed a building products alternative building products, we manufacturing timber steel containerized products flat pack around the world. So anything that has a solution in that product line or services associated with it I think is always attractive to us.

Adam M. Beattie: So anything that has a solution in that product line or services associated with it is always attractive to us. We wouldn't move too far from that field, I wouldn't think, as we think we do those activities quite well.

We wouldn't move too far from that field I Wouldnt think as we think we do those activities quite well.

That makes sense Katie congratulations on the additional responsibility section.

Katie Patrick: And Katie, congratulations on your additional responsibilities next year, and I look forward to working with you. Thanks, Brian. The next question comes from Linda Ezergailis with TD Cohen. Please go ahead.

So what gives you.

Thanks, Brian.

The next question comes from Linda is all goodness, but TD Cowen. Please go ahead.

Linda Ezergailis: Thank you. I just wanted to expand on Maurice's question about the minimum level of ownership, recognizing that at this point, the expectation is that ATCO will remain a majority owner of CU. Beyond the financing demands that CU has, might there be some risk of energy transition opportunities potentially crowding out the resources beyond just capital needs and other non-energy ATCO business platforms? Or do you see the synergies between your energy platform in the form of CU and other platforms just getting more compelling as you transition to a lower carbon future? You know, Linda, I mean, to start, it would be a great problem to have if we had so much growth that we were thinking about how we allocate our capital and we're looking forward to it. And that's absolutely what we are expecting.

Thank you I just wanted to expand on Maurice's question about minimum level of ownership recognizing that at this point the expectation is that at Ko will remain a majority owner of Cu beyond the financing demands that you have.

Might there be some risk of energy transition opportunities potentially crowding out the resources are beyond just capital needs and other non energy at co business platforms or do you see are the synergies and.

Between your energy platform are in apartment Cu and other platforms just are getting a more compelling as you transition.

To a lower carbon future.

I think Linda I mean to start it would be it's a great problem to have is we have so much growth.

That we're thinking about how we allocate our capital.

And we're looking forward to it and that's absolutely what we are expecting that we have we have capital allocation decisions.

Katie Patrick: We have capital allocation decisions to make amongst the various businesses that we have. But, you know, to be clear that ATCO wants all of our businesses to grow, and we will set up and structure and consider alternatives for how they finance their growth, to make sure that there are no constraints on this growth.

To make amongst the various businesses that we have but to be clear that also.

Once all of our businesses to grow and we will set up a structure and consider alternatives for how they finance their graph.

To make sure that there is no constraints on this growth.

Katie Patrick: So that's, that's really what we're focused on and, Obviously, at the end of the day, there will be, from the ATCO perspective, decisions to be made about where we allocate our capital, but we will not constrain the growth of our portfolio investments to continue to access other forms of debt and equity to grow. I hope that answers that question. Yeah, but beyond just the financing considerations, like what about other synergies in terms of cross-selling to various customers or, you know, stakeholder relationships in various geographies? Do you see maybe synergies becoming more compelling across your platforms between CU and ATCO over time, or maybe diluting a bit? Can you comment on that as well? Yeah, no; we've always had a one ATCO approach in terms of really trying to meet all of our customer needs.

So that's that's really what we're focused on and.

Obviously at the end of the day, there will be it will be from the Alco perspective decisions to be made about where we allocate our capital.

But we will not constrain the growth of our portfolio investments to continue to ask.

Access other forms of debt and equity to grow.

I hope that answers the question.

Yeah, but beyond just the financing considerations like what about other synergies in terms of cross selling to various customers or a.

Stakeholder relationships in various geographies, you see maybe synergies becoming more compelling across your platforms are between you and atco over time or maybe a diluting a bit can you comment on that as well.

Yeah, No. We've always had a <unk> approach in terms of really trying to meet all of our customer needs and I think we continue to see those opportunities across all of our business lines.

Katie Patrick: And I think we continue to see those opportunities across all of our business lines. You know, there's numerous examples where, you know, Frontech, for example, will go in, and they were early in Puerto Rico, just as an example, and that created, helped create the LUMO opportunities. So I think there are many areas where we can work collectively as businesses and share opportunities. And I think those examples

Numerous examples where a frantic.

Contact for example will go in in and they were early in Puerto Rico, just as an example on that created helped to create a little more opportunity. So I think there's many areas, where we can work collectively as businesses and share opportunities.

And I think those.

Katie Patrick: We see those now, and those should continue to be there as we move forward. Thank you. And just as a follow-up, maybe a little bit more of a pedestrian question, at your Nultumi ports, one of your terminals in Uruguay had its concession extended to 2042. Are there any other concessions that might be expiring in the next few years and at risk of not being extended?

We see those now and those should continue to be there as you move forward.

Okay. Thank you and just as a follow up maybe a little bit more of a pedestrian question in your note to me parts. Your one of your terminals in Uruguay had its concession extended 2042 are there any other concessions that might be expiring in the next few years and at risk of not being.

Katie Patrick: Or how do we think about the tenor of your franchises on the Nultumi side? Yeah, we have a number of different extensions and expiry of contracts that come up over time. And we continue to work. That's a big focus of what they're working on in terms of getting those extensions or creating new opportunities. So there's nothing that I would bring to note as an important change coming forward in the near term. Part of the business model of having to continuously look at the concessions that we have and continue to get the extension of.

And it or how do we think about the the tenor of your franchises Hum on the <unk> side and the parts.

Yeah, we haven't we have a number of different.

Extensions and <unk>.

Expiry of contracts that come up over time.

And we continue to work and that's a big focus of what they're working on and in terms of getting those extensions or creating new opportunities.

Theres nothing that I would bring to notice.

An important change coming forward in the next in the near term.

But certainly that is part of the business model of having to continuously look at those the concessions that we have and continue to get the extensions.

Great. Thank you Katie and congratulations on your expanded role.

Katie Patrick: Thank you, Katie, and congratulations on your expanded role. Thanks, Linda. The next question comes from Mark Jarvi with CIBC Capital Markets. Please go ahead.

Thanks Linda.

The next question comes from Mark Jarvi CIBC capital market. Please go ahead.

Mark Thomas Jarvi: Yeah, thanks. Good morning everyone. So given the strength of the instructional logistics business this year, good results. Just curious how you think that translates and moves forward into 2024. Can you keep that business flat?

Yeah. Thanks, good morning, everyone. So just given the strength in construction logistics business. This year. Good results. Just curious how you think that translates English word in 2024 can you keep that business flat or do you expect some contraction after a big year and just given where you think the backlog and in our book of businesses today.

Mark Thomas Jarvi: Or do you expect some contraction after a big year and just given where you think the backlog and the book of business are today? Thanks, Mark. I'll let Adam handle this, but I think, you know, we're very optimistic about its ability to continue to grow, and we're very excited about the results in 2023, and we don't see those starting to contract in 2024, but I'll let Adam expand a little more. Yeah, thanks, Mark. Good morning.

Thanks, Mark I'll, let Adam handle this but I think we're very optimistic about its ability to continue to grow.

Yeah.

We're very excited about the results in 2023, and we don't see those starting to contract in 2020, before but I'll, let Adam expand a little more.

Yeah, Thanks, Mark good morning.

Look I think with done a very good job from 2022 to 23 of back filling our project business with some reliable sustainable learning some of that through organic growth and also through the addition of triple aim.

Adam M. Beattie: Look, I think we've done a very good job from 2022 to 2023 of backfilling our project business with some reliable, sustainable learning, some of that through organic growth and also through the addition of triple M. So I think our strategy warrants our ability to sustain and possibly expand on our growth prospects, and we feel that the market is quite opportunistic at the moment to continue on a solid and reasonable growth platform. Okay, and then we talked earlier in this call about the equity needs that the C.U. level has.

S strategy warrants, our ability to sustain and possibly expand on our growth.

Prospects and we feel that the market is quite opportunistic at the moment to continue on a solid and reasonable growth platform.

Okay, and then you talked earlier in the call about the equity needs that they.

TCU level, how would you say the balance sheet is right now what I call. When you think about doing tuck in deals or expanding on the port business.

Katie Patrick: How would you say the balance sheet is right now at ATCO when you think about doing tuck-in deals or expanding on the port business? How would you frame the position of the balance sheet today, the ability to fund everything internally, and whether or not there would be a funding gap over the next couple of years, depending on whether or not you do some M&A in the next couple of years? Yeah, I think we have a very strong balance sheet, and we have the ability to finance the growth that's in front of us. I know from our experience in tapping the public markets for the hybrid for Neltume, we do feel that there is good support for various forms of debt financing or hybrid type instruments.

How would you frame the position of the balance sheet today ability to fund everything internally and whether or not there'll be a funding gap over the next couple of years, depending if you did some some M&A in the next couple of years.

Yeah, No I think we have a we have a very strong balance sheet and we have the ability to finance the growth that's in front of us.

From our experience and tapping the public markets for the hybrid for now to May we do feel that there is.

There is good.

Support for various forms of.

So debt financing or hybrid type instruments.

Katie Patrick: And as needed, if we have growth opportunities in the ATCO specific businesses, we would look to access those to fund that. Just on your base funding plan today, do you see a need for hybrids or anything else like that in the next year or two? It would be really dependent on non-organic growth, to be honest. If we are able to secure some inorganic growth opportunities, then we may need to access the public markets, but obviously, those are not necessarily predictable at the moment.

And as needed if we have growth opportunities and the agco specific businesses, we would look.

To access those to fund that.

Just on your base funding plan today do you see a need for hybrids or anything else like that in the next year or two.

It would be really dependent on nonorganic growth to be honest, if we are able to secure some inorganic growth opportunities.

And could we may need to access the public markets, but obviously those are not necessarily predictable at the moment.

Katie Patrick: Understood. Okay, thanks everyone. Congratulations, Katie, on the added roles.

Understood. Okay. Thanks, everyone, Congrats Kenny to added rules.

Mark Thomas Jarvi: Thank you. This concludes the question and answer session. I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks. Thank you, and thank you all for your participation today. We appreciate your interest in ATCO and we look forward to speaking with you again soon. This concludes today's conference call. You may disconnect your lines.

Okay.

This concludes the question and answer session I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks.

Thank you and thank you all for your participation today. We appreciate your interest in Agco and we look forward to speaking with you again soon.

Yeah.

This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Colin R. Jackson: Thank you for participating and have a pleasant day. Thank you for watching. If you enjoyed this video, please subscribe. Also, I would appreciate it if you could leave a like and a comment. Subs by www.zeoranger.co.uk

Okay.

[music].

Yeah.

Yes.

Yeah.