UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM 6-K
_________________________
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2020
Commission file number 1- 33198
 
_________________________
ALTERA INFRASTRUCTURE L.P.
(Exact name of Registrant as specified in its charter)
_________________________
4th Floor, Belvedere Building, 69 Pitts Bay Road, Pembroke, HM 08, Bermuda
(Address of principal executive office)
_________________________
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F  ý            Form 40- F  ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1). Yes  ¨            No  ý
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7). Yes  ¨            No  ý













ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
REPORT ON FORM 6-K FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2020
INDEX






ITEM 1 - FINANCIAL STATEMENTS
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF LOSS
(in thousands of U.S. Dollars, except unit and per unit data)
Three Months Ended
March 31,
2020 2019
$ $
Revenues (notes 5 and 8)
312,401    336,637   
Voyage expenses (38,770)   (34,066)  
Vessel operating expenses (note 8)
(105,332)   (101,219)  
Time-charter hire expenses (12,475)   (12,453)  
Depreciation and amortization (78,501)   (89,466)  
General and administrative (notes 8 and 13)
(19,798)   (16,992)  
Write-down and loss on sale of vessels (notes 3 and 15)
(156,292)   —   
Goodwill impairment (note 17)
(2,032)   —   
Restructuring charge (900)   —   
Operating (loss) income (101,699)   82,441   
Interest expense (notes 6, 8 and 9)
(48,469)   (52,414)  
Interest income 667    1,070   
Realized and unrealized loss on derivative instruments (note 9)
(90,923)   (31,390)  
Equity (loss) income (5,144)   886   
Foreign currency exchange loss (note 9)
(3,555)   (568)  
Other expense - net (328)   (354)  
Loss before income tax expense (249,451)   (329)  
Income tax expense (note 10)
(4,365)   (2,269)  
Net loss (253,816)   (2,598)  
Non-controlling interests in net loss (11,025)   285   
Preferred unitholders' interest in net loss (note 12)
8,038    8,038   
General Partner’s interest in net loss (1,903)   (83)  
Limited partners' interest in net loss (248,926)   (10,838)  
Limited partners' interest in net loss per common unit
'- basic (note 12)
(0.61)   (0.03)  
'- diluted (note 12)
(0.61)   (0.03)  
Weighted-average number of common units outstanding
- basic 411,148,991    410,342,692   
- diluted 411,148,991    410,342,692   
Related party transactions (note 8)
The accompanying notes are an integral part of the unaudited consolidated financial statements.
Page 1 of 40



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands of U.S. Dollars)

Three Months Ended
March 31,
2020 2019
$ $
Net loss (253,816)   (2,598)  
Other comprehensive loss
Amounts reclassified from accumulated other comprehensive loss
To interest expense:
Realized gain on qualifying cash flow hedging instruments (note 9)
(208)   (133)  
To equity income:
Realized gain on qualifying cash flow hedging instruments (255)   (41)  
Other comprehensive loss (463)   (174)  
Comprehensive loss (254,279)   (2,772)  
Non-controlling interests in comprehensive loss (11,025)   285   
Preferred unitholders' interest in comprehensive loss 8,038    8,038   
General and limited partners' interest in comprehensive loss (251,292)   (11,095)  
The accompanying notes are an integral part of the unaudited consolidated financial statements.

Page 2 of 40



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. Dollars)
As at
March 31,
As at
December 31,
2020 2019
$ $
ASSETS
Current
Cash and cash equivalents 203,725    199,388   
Restricted cash (note 16)
23,053    17,798   
Accounts receivable, including non-trade of $43,223 (December 31, 2019 - $34,468) 214,169    204,020   
Vessels held for sale (notes 3 and 15)
5,100    15,374   
Prepaid expenses 31,455    29,887   
Other current assets (notes 3b, 5 and 9)
11,897    7,467   
Total current assets 489,399    473,934   
Restricted cash - long-term (note 16)
—    89,070   
Vessels and equipment
   At cost, less accumulated depreciation of $1,270,437 (December 31, 2019 - $1,666,582) 3,526,920    3,511,758   
Advances on newbuilding contracts (note 11c)
170,419    257,017   
Investment in equity accounted joint ventures (note 14)
214,198    234,627   
Deferred tax asset 4,230    7,000   
Other assets (notes 3b, 5, 7 and 9)
237,408    220,716   
Goodwill 127,113    129,145   
Total assets 4,769,687    4,923,267   
LIABILITIES AND EQUITY
Current
Accounts payable (note 11)
71,894    56,699   
Accrued liabilities (notes 9 and 13)
134,418    140,976   
Deferred revenues (note 5)
70,709    53,728   
Due to related parties (notes 8c and 8d)
50,000    20,000   
Current portion of derivative instruments (note 9)
206,232    18,956   
Current portion of long-term debt (note 6)
384,220    353,238   
Other current liabilities (note 7)
13,082    14,793   
Total current liabilities 930,555    658,390   
Long-term debt (note 6)
2,796,117    2,825,712   
Derivative instruments (note 9)
38,805    143,222   
Other long-term liabilities (notes 3, 5, 7 and 11)
199,620    223,877   
Total liabilities 3,965,097    3,851,201   
Commitments and contingencies (notes 6, 9 and 11)
Equity
Limited partners - common units (nil and 411.1 million units issued and outstanding at March 31, 2020 and December 31, 2019, respectively) (notes 12 and 13) —    505,394   
Limited partners - Class A common units (5.2 million and nil units issued and outstanding at March 31, 2020 and December 31, 2019, respectively) (notes 12 and 13)
4,914    —   
Limited partners - Class B common units (405.9 million and nil units issued and outstanding at March 31, 2020 and December 31, 2019) (notes 12 and 13)
382,367    —   
Limited partners - preferred units (15.8 million units issued and outstanding at March 31, 2020 and December 31, 2019) 384,274    384,274   
General Partner 11,264    12,164   
Warrants (note 12)
—    132,225   
Accumulated other comprehensive income 3,947    4,410   
Non-controlling interests 17,824    33,599   
Total equity 804,590    1,072,066   
Total liabilities and total equity 4,769,687    4,923,267   
The accompanying notes are an integral part of the unaudited consolidated financial statements.
Page 3 of 40



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. Dollars)
 
Three Months Ended March 31,
2020 2019
$ $
Cash, cash equivalents and restricted cash provided by (used for)
OPERATING ACTIVITIES
Net loss (253,816)   (2,598)  
Adjustments to reconcile net loss to net operating cash flow:
Unrealized loss on derivative instruments (note 9)
83,849    27,243   
Equity loss (income), net of dividends received of $15,495 (2019 - nil) 20,639    (886)  
Depreciation and amortization 78,501    89,466   
Write-down and loss on sale of vessels (note 15)
156,292    —   
Goodwill impairment (note 17)
2,032    —   
Deferred income tax expense (note 10)
2,229    570   
Amortization of in-process revenue contract —    (15,062)  
Expenditures for dry docking (2,773)   (3,184)  
Other 1,644    (3,369)  
Change in non-cash working capital items related to operating activities (18,740)   6,382   
Net operating cash flow 69,857    98,562   
FINANCING ACTIVITIES
Proceeds from long-term debt (note 6)
72,015    40,356   
Scheduled repayments of long-term debt and settlement of related swaps (notes 6 and 9)
(74,217)   (104,441)  
Financing issuance costs (512)   —   
Proceeds from financing related to sales and leaseback of vessels (note 11c)
11,900    —   
Proceeds from credit facility due to related parties (note 8d)
30,000    —   
Cash distributions paid by the Partnership (8,038)   (8,038)  
Cash distributions paid by subsidiaries to non-controlling interests (4,750)   (2,251)  
Other —    (614)  
Net financing cash flow 26,398    (74,988)  
INVESTING ACTIVITIES
Net payments for vessels and equipment, including advances on newbuilding contracts (196,758)   (68,014)  
Proceeds from sale of vessels and equipment 15,060    —   
Investment in equity accounted joint ventures (465)   —   
Acquisition of company (net of cash acquired of $6.4 million) 6,430    —   
Net investing cash flow (175,733)   (68,014)  
Decrease in cash, cash equivalents and restricted cash (79,478)   (44,440)  
Cash, cash equivalents and restricted cash, beginning of the period 306,256    233,580   
Cash, cash equivalents and restricted cash, end of the period 226,778    189,140   
Supplemental cash flow information (note 16)
The accompanying notes are an integral part of the unaudited consolidated financial statements.
Page 4 of 40



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY
(in thousands of U.S. Dollars and units)

PARTNERS’ EQUITY
Limited Partners
Class A Common Units
#
Class A Common Units and Additional Paid-in Capital
$
Class B Common Units
#
Class B Common Units and Additional Paid-in Capital
$
Common
Units
#
Common
Units and
Additional
Paid-in Capital
$
Preferred
Units
#
Preferred
Units
$
Warrants
$
General
Partner
$
Accumulated Other Comprehensive Income
$
Non- controlling Interests
$
Total
Equity
$
Balance as at December 31, 2019 —    —    —    —    411,149    505,394    15,800    384,274    132,225    12,164    4,410    33,599    1,072,066   
Exchange of equity instruments (note 13)
5,217    6,413    405,932    498,981    (411,149)   (505,394)   —    —    —    —    —    —    —   
Net loss —    (3,158)   —    (245,768)   —    —    —    8,038    —    (1,903)   —    (11,025)   (253,816)  
Other comprehensive loss (note 9)
—    —    —    —    —    —    —    —    —    —    (463)   —    (463)  
Distributions declared:
Preferred units - Series A ($0.4531 per unit) —    —    —    —    —    —    —    (2,719)   —    —    —    —    (2,719)  
Preferred units - Series B ($0.5313 per unit) —    —    —    —    —    —    —    (2,657)   —    —    —    —    (2,657)  
Preferred units - Series E ($0.5547 per unit) —    —    —    —    —    —    —    (2,662)   —    —    —    —    (2,662)  
Other distributions —    —    —    —    —    —    —    —    —    —    —    (4,750)   (4,750)  
Equity based compensation and other (note 13)
—    (6)   —    (403)   —    —    —    —    —    —    —    —    (409)  
Termination of warrants (note 13)
—    1,665    —    129,557    —    —    —    —    (132,225)   1,003    —    —    —   
Balance as at March 31, 2020 5,217    4,914    405,932    382,367    —    —    15,800    384,274    —    11,264    3,947    17,824    804,590   



  PARTNERS’ EQUITY    
  Limited Partners      
  Common
Units
#
Common
Units and
Additional
Paid-in Capital
$
Preferred
Units
#
Preferred
Units
$

Warrants
$
General
Partner
$
Accumulated Other Comprehensive Income
$
Non- controlling Interests
$
Total
Equity
$
Balance as at December 31, 2018 410,315    883,090    15,800    384,274    132,225    15,055    7,361    37,119    1,459,124   
Net loss —    (10,838)   —    8,038    —    (83)   —    285    (2,598)  
Other comprehensive loss (note 9)
—    —    —    —    —    —    (174)   —    (174)  
Distributions declared:
   Preferred units - Series A ($0.4531 per unit) —    —    —    (2,719)   —    —    —    —    (2,719)  
   Preferred units - Series B ($0.5313 per unit) —    —    —    (2,657)   —    —    —    —    (2,657)  
   Preferred units - Series E ($0.5547 per unit) —    —    —    (2,662)   —    —    —    —    (2,662)  
   Other distributions —    —    —    —    —    —    —    (2,251)   (2,251)  
Equity based compensation and other (note 13)
86    874    —    —    —    (3)   —    —    871   
Balance as at March 31, 2019 410,401    873,126    15,800    384,274    132,225    14,969    7,187    35,153    1,446,934   
The accompanying notes are an integral part of the unaudited consolidated financial statements.
Page 5 of 40


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)

1.Basis of Presentation

Effective March 24, 2020, Teekay Offshore Partners L.P. legally changed its name to Altera Infrastructure L.P.

The unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (or GAAP). These financial statements include the accounts of Altera Infrastructure L.P., which is a limited partnership organized under the laws of the Republic of the Marshall Islands, and its wholly-owned or controlled subsidiaries (collectively, the Partnership). Unless the context otherwise requires, the terms "we," "us," or "our," as used herein, refer to the Partnership.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with the Partnership’s audited consolidated financial statements for the year ended December 31, 2019, which are included in the Partnership’s Annual Report on Form 20-F, filed with the U.S. Securities and Exchange Commission (or SEC) on February 28, 2020. In the opinion of management of the Partnership’s general partner, Altera Infrastructure GP L.L.C. (or the general partner), these unaudited consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary to present fairly, in all material respects, the Partnership’s consolidated financial position, results of operations, changes in total equity and cash flows for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of those for a full fiscal year. Historically, the utilization of shuttle tankers in the North Sea is higher in the winter months as favorable weather conditions in the summer months provide opportunities for repairs and maintenance to the Partnership’s vessels and to offshore oil platforms. Downtime for repairs and maintenance generally reduces oil production and, thus, transportation requirements. Intercompany balances and transactions have been eliminated upon consolidation.

2. Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (or ASU 2016-13). ASU 2016-13 replaced the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 became effective for the Partnership January 1, 2020, with a modified-retrospective approach. The adoption of ASU 2016-13 did not have a material impact on the Partnership's consolidated financial statements. The Partnership will continue to monitor the impact of ASU 2016-13.

In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (or ASU 2019-12), as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences, among other changes. The guidance becomes effective for annual reporting periods beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. The Partnership is currently evaluating the effect of adopting this new guidance.

In March 2020, the FASB issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (or ASU 2020-104), which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of a reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. The Partnership is currently evaluating the effect of adopting this new guidance.

3. Fair Value Measurements and Financial Instruments

a)Fair Value Measurements

For a description of how the Partnership estimates fair value and for a description of the fair value hierarchy levels, see Item 18 - Financial Statements: Note 3 in the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year ended December 31, 2019. The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis, as well as the estimated fair value of the Partnership’s financial instruments that are not accounted for at fair value on a recurring basis.
Page 6 of 40


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
    March 31, 2020 December 31, 2019
  Fair Value
Hierarchy
Level
Carrying
Amount
Asset
 (Liability)
$
Fair Value
Asset 
(Liability)
$
Carrying
Amount
Asset 
(Liability)
$
Fair Value
Asset 
(Liability)
$
Recurring:
Cash and cash equivalents and restricted cash Level 1 226,778    226,778    306,256    306,256   
Derivative instruments (note 9)
Interest rate swap agreements Level 2 (240,672)   (240,672)   (163,972)   (163,972)  
Foreign currency forward contracts Level 2 (7,833)   (7,833)   575    575   
Non-Recurring:
Vessels held for sale (note 15)
Level 2 5,100    5,100    15,374    15,374   
Vessel and equipment (note 15)
Level 2 243,741    243,741    176,577    176,577   
Other:
Long-term debt - public (note 6)
Level 1 (1,068,510)   (933,565)   (1,067,740)   (1,069,204)  
Long-term debt - non-public (note 6)
Level 2 (2,111,827)   (2,140,218)   (2,111,210)   (2,136,315)  
Due to related parties - current (note 8e)
Level 2 (50,000)   (49,627)   (20,000)   (19,781)  
Obligations related to finance leases (note 11c)
Level 2 (33,353)   (35,700)   (21,453)   (23,800)  

Vessels held for sale – In March 2020, the carrying value of the Navion Bergen shuttle tanker was written down to its estimated fair value, using appraised value, as a result of the expected sale of the vessel (see note 15).

Vessels and equipment – In March 2020, as a result of changes in market conditions and future opportunities for certain vessels, the Partnership determined that certain of these vessels were impaired and wrote down the carrying values of the vessels to their estimated fair values based on a discounted cash flow approach (see note 15).

The Partnership determined the discounted cash flows for the Petrojarl I FPSO unit using the current contract's time-charter rates, including observable inputs using the Brent crude oil forward curve, operating costs, projected future use on the existing field, projected future redeployment opportunities, and estimated residual value, discounted at an estimated market participant rate of 10%. The projected future uses take into consideration the Partnership’s projected time-charter rates that it estimates could be contracted in future periods. In establishing these estimates, the Partnership considered the specific attributes of this FPSO unit, current discussions with existing and potential customers, available field expansions and historical experience redeploying the FPSO unit.

The Partnership determined the discounted cash flows for the Petrojarl Varg FPSO unit using the current lay-up costs, projected future redeployment opportunities, and estimated sales price, discounted at an estimated market participant rate of 10%. The projected future uses take into consideration the Partnership’s projected time-charter rates that it estimates could be contracted in future periods. In establishing these estimates, the Partnership considered the specific attributes of this FPSO unit, current discussions with existing and potential customers, and historical experience redeploying the FPSO unit.

The Partnership determined the discounted cash flows for the ALP Winger and ALP Forward towage vessels using projected utilization rates and projected towage rates, discounted at an estimated market participant rate of 11%. The projected future utilization rates take into consideration the Partnership’s projected towage rates that it estimates could be contracted in future periods. In establishing these estimates, the Partnership considered the specific attributes of these towage vessels, current discussions with existing and potential customers, and historical experience in the towage market.

The Partnership determined the discounted cash flow for the Navion Gothenburg shuttle tanker using the current contract's bareboat rates and operating costs, projected future redeployment opportunities, and estimated residual value, discounted at an estimated market participant rate of 8%. The projected future uses take into consideration the Partnership’s projected conventional rates that it estimates could be contracted in future periods. In establishing these estimates, the Partnership considered the specific attributes of this shuttle tanker, and historical experience redeploying shuttle tankers.









Page 7 of 40


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
b)Financing Receivables

The following table contains a summary of the Partnership’s financing receivables by type of borrower and the method by which the Partnership monitors the credit quality and the grade of its financing receivables on a quarterly basis:
Credit Quality
Indicator
Grade March 31, 2020 December 31, 2019
  $ $
Direct financing and sales-type leases Payment activity Performing 35,567    3,875   

4. Segment Reporting

For the three months ended March 31, 2020, the Partnership had five (three months ended March 31, 2019 - six) reportable segments: FPSO, shuttle tanker, floating storage and off-take (or FSO), Unit for Maintenance and Safety (or UMS) and towage and offshore installation (or towage). During 2019, the Partnership redelivered its two in-chartered conventional tankers to their owners and ceased operations in the conventional tanker segment.

Adjusted EBITDA is the primary measure used by the Partnership's chief decision-maker and management for evaluating segment performance. Adjusted EBITDA is defined as net loss before interest expense (net), income tax expense, and depreciation and amortization adjusted to exclude certain items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance. Such adjustments include vessel write-downs, gains or losses on the sale of vessels, unrealized gains or losses on derivative instruments, foreign exchange gains or losses, losses on debt repurchases, and certain other income or expenses. Adjusted EBITDA also excludes: realized gains or losses on interest rate swaps as management, in assessing the Partnership's performance, views these gains or losses as an element of interest expense; realized gains or losses on derivative instruments resulting from amendments or terminations of the underlying instruments; and equity income. Adjusted EBITDA also includes the Partnership's proportionate share of Adjusted EBITDA from its equity-accounted joint ventures and excludes the non-controlling interests' proportionate share of Adjusted EBITDA from the Partnership's consolidated joint ventures. The Partnership does not have control over the operations of, nor does it have any legal claim to the revenue and expenses of its investments in, its equity-accounted for joint ventures. Consequently, the cash flow generated by the Partnership’s investments in equity accounted joint ventures may not be available for use by the Partnership in the period that such cash flows are generated.

Adjusted EBITDA is also used by external users of the Partnership's unaudited consolidated financial statements, such as investors and the Partnership’s controlling unitholder.

The following tables include results for the Partnership’s reportable segments for the periods presented in these unaudited consolidated financial statements.
Three Months Ended March 31, 2020 FPSO Segment Shuttle Tanker Segment FSO
Segment
UMS Segment Towage
Segment
Corporate/Eliminations Total
Revenues 116,204    150,003    34,897    447    10,850    —    312,401   
Voyage expenses —    (33,426)   (187)   (17)   (5,140)   —    (38,770)  
Vessel operating expenses
(53,188)   (32,526)   (9,994)   (986)   (8,638)   —    (105,332)  
Time-charter hire expenses
—    (12,475)   —    —    —    —    (12,475)  
General and administrative(1)
(10,237)   (5,731)   (704)   (2,051)   (1,075)   —    (19,798)  
Restructuring charge (900)   —    —    —    —    —    (900)  
Realized loss on foreign currency forward contracts
—    —    —    —    —    (1,303)   (1,303)  
Adjusted EBITDA from equity-accounted vessels(2)
23,764    —    —    —    —    —    23,764   
Adjusted EBITDA attributable to non-controlling interests
—    (3,671)   (121)   —    —    —    (3,792)  
Adjusted EBITDA
75,643    62,174    23,891    (2,607)   (4,003)   (1,303)   153,795   

Page 8 of 40


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
Three Months Ended March 31, 2019 FPSO Segment Shuttle Tanker Segment FSO
Segment
UMS Segment Towage
Segment
Conventional Tanker Segment Corporate/Eliminations Total
Revenues 136,560    137,337    34,654    1,622    21,986    4,478    —    336,637   
Voyage expenses —    (21,305)   (205)   (15)   (10,613)   (1,928)   —    (34,066)  
Vessel operating (expenses) recoveries
(53,926)   (32,007)   (10,131)   1,003    (6,158)   —    —    (101,219)  
Time-charter hire expenses
—    (8,790)   —    —    —    (3,663)   —    (12,453)  
General and administrative(1)
(9,010)   (4,644)   (859)   (1,294)   (1,095)   (90)   —    (16,992)  
Realized loss on foreign currency forward contracts
—    —    —    —    —    —    (1,175)   (1,175)  
Adjusted EBITDA from equity-accounted vessels(2)
20,796    —    —    —    —    —    —    20,796   
Adjusted EBITDA attributable to non-controlling interests
—    (3,254)   (124)   —    —    —    —    (3,378)  
Adjusted EBITDA
94,420    67,337    23,335    1,316    4,120    (1,203)   (1,175)   188,150   
(1)Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources).
(2)Adjusted EBITDA from equity-accounted vessels represents the Partnership's proportionate share of Adjusted EBITDA (as defined above) from its equity-accounted joint ventures.
The following table includes reconciliations of Adjusted EBITDA to net loss for the periods presented in these unaudited consolidated financial statements:
Three Months Ended March 31,
2020 2019
$ $
Adjusted EBITDA 153,795    188,150   
Depreciation and amortization(1)
(78,501)   (89,466)  
Write-down and loss on sale of vessels(2)
(156,292)   —   
Goodwill impairment(3)
(2,032)   —   
Interest expense (48,469)   (52,414)  
Interest income 667    1,070   
Realized and unrealized loss on derivative instruments(4)
(89,620)   (30,215)  
Foreign currency exchange loss (3,555)   (568)  
Other expense - net (328)   (354)  
Expenses and losses relating to equity accounted investments(5)
(28,908)   (19,910)  
Adjusted EBITDA attributable to non-controlling interests 3,792    3,378   
Loss before income tax expense (249,451)   (329)  
Income tax expense (4,365)   (2,269)  
Net loss (253,816)   (2,598)  
(1)Depreciation and amortization by segment for the three months ended March 31, 2020 is as follows: FPSO $32.8 million, Shuttle Tanker $28.9 million, FSO $10.5 million, UMS $1.0 million and Towage $5.3 million (three months ended March 31, 2019 - FPSO $36.8 million, Shuttle Tanker $35.5 million, FSO $10.3 million, UMS $1.7 million and Towage $5.2 million).
(2)Write-down and loss on sale of vessels by segment for the three months ended March 31, 2020 is as follows: FPSO $99.8 million, Shuttle Tanker $27.7 million and Towage $28.8 million (see note 15).
(3)Goodwill impairment for the three months ended March 31, 2020 relates to the Towage segment (see note 17).
(4)Excludes the realized loss on foreign currency forward contracts.
(5)Includes depreciation and amortization, interest expense, interest income, realized and unrealized loss on derivative instruments, foreign currency exchange loss and income tax expense relating to equity accounted investments. The sum of (a) Adjusted EBITDA from equity-accounted vessels as presented in the tables above as part of the results for the Partnership’s reportable segments and (b) expenses and gains (losses) relating to equity accounted investments from this table equals the amount of equity (loss) income included on the Partnership's unaudited consolidated statements of loss.

Page 9 of 40


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
A reconciliation of total segment assets to total assets presented in the accompanying consolidated balance sheets is as follows:
March 31, 2020 December 31, 2019
$ $
FPSO segment 1,770,065    1,913,420   
Shuttle tanker segment 1,894,845    1,778,073   
FSO segment 414,852    425,694   
UMS segment 100,535    101,009   
Towage segment 354,976    390,895   
Unallocated:
Cash and cash equivalents and restricted cash 226,778    306,256   
Other assets 7,636    7,920   
Consolidated total assets 4,769,687    4,923,267   

5. Revenues

The Partnership’s primary source of revenues is chartering its vessels and offshore units to its customers. The Partnership utilizes five primary forms of contracts, consisting of FPSO contracts, contracts of affreightment (or CoAs), time-charter contracts, bareboat charter contracts and voyage charter contracts. During the three months ended March 31, 2020, the Partnership also generated revenues from the operation of volatile organic compounds (or VOC) systems on six of the Partnership’s shuttle tankers, and from the management of three FPSO units and one FSO unit (three months ended March 31, 2019 - VOC systems on eight of the Partnership’s shuttle tankers, and the management of three FPSO units, one FSO unit and two shuttle tankers) on behalf of the disponent owners or charterers of these assets. For a description of these contracts, see Item 18 - Financial Statements: Note 5 in the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year ended December 31, 2019.

The following tables contain the Partnership’s revenue for the three months ended March 31, 2020 and 2019, by contract type and by segment:
Three Months Ended March 31, 2020 FPSO Segment Shuttle Tanker Segment FSO Segment UMS Segment Towage Segment Total
FPSO contracts 100,932    —    —    —    —    100,932   
CoAs —    57,573    —    —    —    57,573   
Time charters —    68,768    30,428    —    —    99,196   
Bareboat charters —    8,267    3,665    —    —    11,932   
Voyage charters —    13,523    —    —    10,850    24,373   
Management fees and other 15,272    1,872    804    447    —    18,395   
116,204    150,003    34,897    447    10,850    312,401   

Three Months Ended March 31, 2019 FPSO Segment Shuttle Tanker Segment FSO Segment UMS Segment Towage Segment Conventional Tanker Segment Total
FPSO contracts 122,639    —    —    —    —    —    122,639   
CoAs —    47,785    —    —    —    —    47,785   
Time charters —    72,866    30,024    —    —    —    102,890   
Bareboat charters —    8,843    3,915    —    —    —    12,758   
Voyage charters —    6,230    —    —    21,986    4,478    32,694   
Management fees and other 13,921    1,613    715    1,622    —    —    17,871   
136,560    137,337    34,654    1,622    21,986    4,478    336,637   


Page 10 of 40


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
The following table contains the Partnership’s revenue by lease and non-lease contracts for the three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
2020 2019
$ $
Lease revenue
Lease revenue from lease payments of direct financing and sales type leases 730    122   
Lease revenue from lease payments of operating leases 275,209    292,010   
Variable lease payments - cost reimbursements(1)
3,629    2,618   
Variable lease payments(2)
3,588    2,030   
283,156    296,780   
Non-lease revenue
Voyage charters - towage 10,850    21,986   
Management fees and other 18,395    17,871   
29,245    39,857   
Total 312,401    336,637   
(1)Reimbursements for vessel operating expenditures received from the Partnership’s customers relating to costs incurred by the Partnership to operate the vessel for the customer.
(2)Compensation from production tariffs, which are based on the volume of oil produced, the price of oil, as well as other monthly or annual operational performance measures.
Contract Assets and Liabilities

Certain customer contracts that the Partnership enters into will result in situations where the customer will pay consideration for performance to be provided in the following month or months. These receipts are a contract liability and are presented as deferred revenue until performance is provided. In other cases, the Partnership will provide performance in the month or months prior to it being entitled to invoice for such performance. This results in such receipts being reflected as a contract asset that is presented within other current assets. In addition to these short-term timing differences between the timing of revenue recognition and when the entity’s right to consideration in exchange for goods or services is unconditional, the Partnership has long-term charter arrangements whereby it has received payments that are larger in the early periods of the arrangements and long-term charter arrangements whereby it will receive payments that are larger in the latter periods of the arrangements. The following table presents the contract assets and contract liabilities on the Partnership's consolidated balance sheets associated with these long-term charter arrangements from contracts with customers:
March 31, 2020 December 31, 2019
$ $
Contract assets
Current 4,789    3,816   
Non-current 70,498    74,830   
75,287    78,646   
Contract liabilities
Current 70,709    53,728   
Non-current 52,476    84,077   
123,185    137,805