CALGARY, March 14, 2019 /CNW/ - Tidewater Midstream and
Infrastructure Ltd. ("Tidewater" or the
"Corporation") (TSX: TWM) is pleased to announce that it has
filed its annual consolidated financial statements and Management's
Discussion and Analysis ("MD&A") for the
year ended December 31, 2018.
FOURTH-QUARTER AND FULL-YEAR 2018 FINANCIAL
PERFORMANCE
Despite a challenging industry environment, 2018 was a record
year for Tidewater both operationally and financially as
volumes and earnings increased as compared to 2017. During the
year, the Corporation commenced construction of approximately
$400 million (gross) of new capital
growth projects, experienced NGL and natural gas volume growth
across its operations and executed crude oil infrastructure
agreements to deliver crude oil to end markets. Tidewater delivered
another record year of net income attributable to shareholders and
Adjusted EBITDA growth.
Highlights
- Net income attributable to shareholders was $13.3 million or $0.04 per share for the fourth quarter of 2018
compared to $0.5 million or
$0.00 per share for the fourth
quarter of 2017.
- Tidewater delivered a record quarter of Adjusted EBITDA growth
to $20.9 million or $0.06 per share compared to $17.0 million or $0.05 per share for the same period in 2017.
- Net cash provided by operating activities totalled $26.7 million for the fourth quarter of 2018 with
distributable cash flow of $17.3
million, yielding a conservative payout ratio of 19% for the
quarter (23% year-to-date).
- Tidewater's 100 MMcf/day sour deep-cut gas processing complex
("Pipestone Gas Plant") is now fully contracted and Tidewater has
executed a gas processing contract with a second investment grade
counterparty at Pipestone,
reflecting the strategic value of the Pipestone Gas Plant.
Tidewater has significant support for future gas processing and
liquids handling expansions at Pipestone. The Pipestone project remains on time and on
budget.
- Tidewater continues to progress construction of the Pipestone
Gas Plant. In December 2018,
Tidewater successfully drilled an acid gas injection well, with a
salt water disposal well completed in January 2019. The wells provide the capacity
necessary to accommodate higher volumes of sour gas production
received at the plant.
- On October 30, 2018 Tidewater
received approval from the Alberta Energy Regulator ("AER") to
construct and operate a 120 km natural gas pipeline connecting
Tidewater's Brazeau River Complex ("BRC") to TransAlta
Corporation's generating units at Sundance and Keephills.
- On December 17, 2018, TransAlta
Corporation, through its subsidiary TransAlta Generation
Partnership ("TransAlta") exercised its option to acquire a 50%
ownership interest in the gas pipeline ("Pioneer Pipeline"). The
project is supported by a 15 year take or pay commitment from
TransAlta. Construction of the 120km pipeline commenced in
November 2018 and is expected to be
fully operational in the second half of 2019. Construction of the
Pioneer Pipeline remains on schedule and on budget as previously
disclosed.
- The Brazeau River Fractionation facility, part of the BRC, is
fully contracted for the first time in Tidewater's history and
Tidewater signed agreements with two new investment-grade customers
at the BRC to provide fractionation services. When Tidewater first
acquired the BRC in 2014 Tidewater had one customer that accounted
for the majority of Adjusted EBITDA at the BRC. Tidewater
transformed the BRC into a fractionation facility, with two new
investment-grade counterparties in 2019, a gas storage facility
with multiple investment-grade counterparties with long term
contracts, and a new egress option with a 15 year take or pay
contract with TransAlta.
- Tidewater continues to grow its crude oil and refined products
infrastructure business and is focused on strengthening customers
and contracts. Tidewater will have delivered crude oil to
approximately 10 markets by the end of the first quarter of
2019.
- Tidewater remains confident in its ability to execute its
previously disclosed strategic plan where net income and Adjusted
EBITDA is expected to increase by greater than 50%, compared to
current levels, into the fourth quarter of 2019 and 2020 once the
Pipestone Gas Plant and Pioneer Pipeline are operational. Tidewater
continues to evaluate additional strategic projects that address
customer needs and the increasing demand for natural gas, NGLs and
crude oil in North America. 2018
was a year of growth and new project construction and 2019 will be
a year where Tidewater will rely on its ability to execute and
position its business for continued earnings growth into 2020.
Selected financial and operating information is outlined below
and should be read with Tidewater's consolidated financial
statements and related MD&A as at and for the year ended
December 31, 2018 which are available
at www.sedar.com and on our website at
www.tidewatermidstream.com.
Financial Overview
Consolidated Financial Highlights
(In thousands
of Canadian dollars, except per share
information)
|
|
|
Three months
ended
December 31,
|
Year
ended
December 31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue
|
$
|
90,740
|
$
|
63,707
|
$
|
324,290
|
$
|
221,389
|
Net income
attributable to shareholders
|
$
|
13,285
|
$
|
504
|
$
|
20,318
|
$
|
12,855
|
Basic and diluted net
income attributable to shareholders per share
|
$
|
0.04
|
$
|
0.00
|
$
|
0.06
|
$
|
0.04
|
Adjusted EBITDA
(1)
|
$
|
20,924
|
$
|
16,974
|
$
|
77,423
|
$
|
61,560
|
Adjusted EBITDA per
common share -
basic (1)
|
$
|
0.06
|
$
|
0.05
|
$
|
0.24
|
$
|
0.19
|
Net cash flow
provided by operating activities
|
$
|
26,672
|
$
|
51,051
|
$
|
25,655
|
$
|
82,402
|
Distributable cash
flow (2)
|
$
|
17,347
|
$
|
12,372
|
$
|
57,312
|
$
|
44,994
|
Distributable cash
flow per common share – basic (1)
|
$
|
0.05
|
$
|
0.04
|
$
|
0.17
|
$
|
0.14
|
Dividends
declared
|
$
|
3,308
|
$
|
3,290
|
$
|
13,184
|
$
|
13,157
|
Dividends declared
per common share
|
$
|
0.01
|
$
|
0.01
|
$
|
0.04
|
$
|
0.04
|
Total common shares
outstanding (000s)
|
|
330,797
|
|
328,973
|
|
330,797
|
|
328,973
|
Payout
ratio (3)
|
|
19%
|
|
27%
|
|
23%
|
|
29%
|
Total
assets
|
$
|
1,233,543
|
$
|
934,624
|
$
|
1,233,543
|
$
|
934,624
|
Net
debt (4)
|
$
|
392,660
|
$
|
151,906
|
$
|
392,660
|
$
|
151,906
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
1
|
Adjusted EBITDA is
calculated as net income before interest, taxes, depreciation,
share-based compensation, unrealized gains/losses, non-cash items,
transaction costs and items that are considered non-recurring in
nature. Adjusted EBITDA per common share is calculated as Adjusted
EBITDA divided by the weighted average number of common shares
outstanding for the three-month period and year ended December 31,
2018. Adjusted EBITDA and Adjusted EBITDA per common share are not
standard measures under GAAP. See "Non-GAAP Measures" in the
Corporation's MD&A for a reconciliation of Adjusted EBITDA and
Adjusted EBITDA per common share to their most closely related GAAP
measures.
|
2
|
Distributable cash
flow is calculated as net cash used in operating activities before
changes in non-cash working capital and after any expenditures that
use cash from operations. Distributable cash flow per common share
is calculated as distributable cash flow over the weighted average
number of common shares outstanding for the three-month period and
year ended December 31, 2018. Distributable cash flow and
distributable cash flow per common share are not standard measures
under GAAP. See "Non-GAAP Measures" in the Corporation's MD&A
for a reconciliation of distributable cash flow and distributable
cash flow per common share to their most closely related GAAP
measures.
|
3
|
Payout Ratio is
calculated by expressing dividends declared to shareholders for the
period as a percentage of distributable cash flow attributable to
shareholders. This measure, in combination with other measures, is
used by the investment community to assess the sustainability of
the current dividends. Payout Ratio is not a standard measure under
GAAP. See "Non-GAAP Financial Measures" in the Corporation's
MD&A for a reconciliation of Payout Ratio to its most closely
related GAAP measure.
|
4
|
Net debt is defined
as current liabilities, plus bank debt and notes payable, less
current assets. Net Debt is not a standard measure under GAAP. See
"Non-GAAP Measures" in the Corporation's MD&A for a
reconciliation of Net Debt to its most closely related GAAP
measure.
|
OUTLOOK AND CORPORATE UPDATE
Tidewater continues to position itself to provide producers with
additional egress solutions and improved pricing for their products
in a challenging commodity price environment by developing and
connecting its infrastructure in order to access additional end
markets.
During 2018, Tidewater achieved a number of operational
milestones with strong demand for its services; including blending,
crude oil infrastructure, and storage. In addition, the Corporation
is carrying out the largest capital program in its
history. Tidewater continues to execute successfully on its
strategy, expanding its integrated network of assets with
disciplined capital allocation.
Overall, while gas processing volumes remained under pressure
compared to the first quarter of 2018, Tidewater moved significant
NGL volumes and generated incremental fee for service revenue from
its gas storage assets during the fourth quarter. The Corporation
also began entering into new crude oil infrastructure contracts
where the benefits to Tidewater's earnings will be visible in 2019.
Tidewater is pleased with the progress on its two largest projects,
including regulatory approval for both the Pipestone Gas Plant and
Pioneer Pipeline. Both projects will provide producers with
much needed egress solutions for natural gas, NGLs and
condensate.
Crude Oil Infrastructure
Tidewater is aggressively growing its crude oil infrastructure
business and has received significant support from producers and
refiners. Tidewater is well positioned in the crude oil space with
three pipe connected oil batteries at Valhalla, Brazeau and Acheson, including a large rail facility at
Acheson. Tidewater expects it will
deliver Canadian crude to approximately ten end markets by the end
of the first quarter of 2019 while it continues to explore various
market access opportunities including storage, terminals and
pipelines. The majority of the agreements are for terms of less
than 12 months; however, Tidewater intends to grow this business
and negotiate longer term agreements with existing and new
customers. Contribution to net income for crude oil
infrastructure contracts in 2019 is expected to be approximately
$7 - $8
million based on an average contracted volumes of 200,000 –
400,000 bbls per month at market rate loading and transportation
fees to locations throughout North
America. Contribution to Adjusted EBITDA is expected to be
approximately $10 million after
adjusting for capitalized lease and finance costs over an average
of approximately 3 years.
Brazeau River Complex
Throughput at the BRC was in-line with the prior quarter where
Tidewater is working diligently with producers to improve netbacks
by fully utilizing the BRC's facilities including its three NGL
pipeline connections, truck loading and offloading facilities,
fractionation and natural gas storage facilities.
The Brazeau River Fractionation facility is fully contracted for
the first time in Tidewater's history, including two new
investment-grade customers signed during the first quarter of 2019.
When Tidewater first acquired the BRC in 2014, the Corporation had
one customer that accounted for the majority of Adjusted EBITDA at
the facility. Tidewater transformed the BRC into a fractionation
facility with the addition of two new investment-grade
counterparties in 2019, a gas storage facility with multiple
investment-grade counterparties with long term contracts and a new
egress option with a 15 year take or pay contract with TransAlta,
another investment grade counterparty. Tidewater has added
contracts with greater than five investment-grade counterparties at
the BRC which services include gas processing, gas storage,
fractionation and natural gas transportation.
Natural Gas Storage
Tidewater continued to inject customer gas under long-term
fee-for-service contracts at the Pipestone gas storage facility through the
quarter, growing the cushion gas at the facility and increasing the
injection and withdrawal capability of the storage reservoir.
Tidewater's gas storage projects remain well positioned to
benefit from the low commodity price environment while acting as a
natural hedge to Tidewater's core business thereby achieving its
goal of offering additional egress options and improved pricing to
producers.
CAPITAL PROGRAM
The Corporation's two large capital projects currently underway
mainly focus on establishing a strong position in the Montney and Deep Basin development areas. It
is expected the two capital programs will begin delivering
incremental cash flow during the third and fourth quarters of 2019,
launching the next phase in Tidewater's growth.
Pipestone Gas Plant
On October 18, 2018 Tidewater
received approval from the Alberta Energy Regulator to construct
and operate the Pipestone Gas Plant. The Pipestone Gas Plant is
designed to process approximately 100 MMcf/day of natural gas. The
total infrastructure project includes an acid gas injection well,
salt water disposal well and pipelines directly connected to the
Pipestone storage facility as well
as connections to both Alliance and TCPL. A second investment-grade
customer has executed an additional take or pay contract at the
Pipestone Gas Plant in the fourth quarter of 2018. The Pipestone
Gas Plant is currently fully contracted, and Tidewater has
significant support for future gas processing and liquids handling
expansions at the facility. The Pipestone project remains on time and on
budget.
As a result of significant producer support, Tidewater is
currently evaluating a condensate liquids hub at the Pipestone Gas
Plant.
Tidewater began construction on the Pipestone Gas Plant in late
October 2018 and expects
approximately $50 - $55 million of capital remaining to be spent in
2019 with commissioning expected to occur in the third quarter of
2019. Remaining capital excludes the 32 MW cogeneration units which
Tidewater expects to monetize in the first quarter of 2019.
Contribution to net income for the Pipestone Gas Plant is
expected to be approximately $25 -
$30 million based on plant throughput
of approximately 100 MMcf/day of contracted volume at market rates
over a 5 – 10 year period. Estimated annual operating costs are
based on plants of similar size with sour gas processing capability
and similar NGL handling capability. Adjusted EBITDA
contribution is expected to be approximately $30 - $35 million
after adding back depreciation and finance costs based on a 60-year
useful life.
Pioneer Pipeline
On October 30, 2018, Tidewater
received approval from the Alberta Energy Regulator to construct
and operate the 120 km natural gas pipeline connecting Tidewater's
BRC to TransAlta's generating units at Keephills, and subsequent approval for an 11km
lateral connecting to Sundance.
The Pioneer Pipeline will have initial capacity of 130 MMcf/day
supported by a 15 year take-or-pay commitment from TransAlta, which
may be expanded to approximately 440 MMcf/day. The Pipeline will
allow TransAlta to increase the amount of natural gas it co-fires
at its Sundance and Keephills coal-fired units, resulting in lower
carbon emissions and costs.
A reconciliation of capital costs and contributions at
December 31, 2018 is summarized
below:
(In thousands
of Canadian dollars)
|
|
Tidewater
|
|
TransAlta
|
|
Total
|
Partner share of
capital
|
$
|
90,000
|
$
|
90,000
|
$
|
180,000
|
Contributions
|
|
(65,000)
|
|
(15,000)
|
|
(80,000)
|
Remaining
|
$
|
25,000
|
$
|
75,000
|
$
|
100,000
|
The Pioneer Pipeline is currently ahead of the original schedule
contemplated at final investment decision. As a result, capital
expenditures for the project were accelerated in Q4 of 2018.
TransAlta exercised its 50% working interest option in the
Pioneer Pipeline in the fourth quarter of 2018 and is expected to
fund up to its 50% of incurred capital costs on the project in the
first quarter of 2019. During the year ended December 31, 2018, TransAlta made advanced
refundable payments of $15 million,
and $25 million in the first quarter
of 2019.
Contribution to Tidewater's net income for the Pioneer Pipeline
is expected to be approximately $8 -
$9 million based on throughput of
approximately 130 MMcf/day of contracted volume at market rate
tolls over a 15 year period. Estimated annual operating costs for
the pipeline are based on other pipelines within Tidewater's
currently owned infrastructure of similar size and flow rate
capability. Adjusted EBITDA contribution is expected to be
approximately $10 million after
adding back depreciation and finance costs based on a 60 year
useful life.
Tidewater remains fully funded with its existing credit facility
and net cash provided by operations to fund its capital program
through the end of 2019.
Fourth Quarter, 2018 Earnings Call
In conjunction with this earnings release, investors will have
the opportunity to listen to Tidewater senior management review its
fourth quarter and full year results of fiscal 2018 via conference
call on Thursday, March 14th at
11:00 am MDT.
To access the conference call by telephone, dial 647-427-7450
(local / international participant dial in) or 1-888-231-8191
(North American toll free participant dial in). A question and
answer session for analysts will follow management's
presentation.
A live audio webcast of the conference call will be available by
following this link:
https://event.on24.com/wcc/r/1945582/5D492C382E85A9F163B08521CED36678 and
will also be archived there for 90 days.
For those accessing the call via Cision's investor website, we
suggest logging in at least 15 minutes prior to the start of the
live event. For those dialing in, participants should ask to be
joined into the Tidewater Midstream and Infrastructure Ltd.
earnings call.
About Tidewater
Tidewater is traded on the TSX under the symbol "TWM".
Tidewater's business objective is to build a diversified midstream
and infrastructure company in the North American natural gas and
natural gas liquids ("NGL") space. Its strategy is to
profitably grow and create shareholder value through the
acquisition and development of oil and gas infrastructure.
Tidewater plans to achieve its business objective by providing
customers with a full service, vertically integrated value chain
through the acquisition and development of oil and gas
infrastructure including: gas plants, pipelines, railcars, trucks,
export terminals and storage facilities.
Additional information relating to Tidewater is available on
SEDAR at www.sedar.com and at www.tidewatermidstream.com.
Advisory Regarding Forward-Looking Statements
FORWARD-LOOKING INFORMATION
Certain statements contained in this press release constitute
forward-looking statements and forward-looking information
(collectively, "forward-looking statements"). Such forward-looking
statements relate to possible events, conditions or financial
performance of the Corporation based on future economic conditions
and courses of action. All statements other than statements of
historical fact are forward-looking statements. The use of any
words or phrases such as "seek", "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe", "will likely result", "are expected to", "will
continue", "is anticipated", "believes", "estimated", "intends",
"plans", "projection", "outlook" and similar expressions are
intended to identify forward-looking statements. These statements
involve known and unknown risks, assumptions, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. The Corporation believes there is a reasonable basis
for the expectations reflected in the forward-looking statements,
however no assurance can be given that these expectations will
prove to be correct and the forward-looking statements included in
this news release should not be unduly relied upon by
investors.
Specifically, this news release contains forward-looking
statements relating to but not limited to:
- planned commissioning of Tidewater's Pipestone Gas Plant and
timing thereof as well as projections with respect to contracting
capacity, net income to be derived therefrom, projected operating
costs and Adjusted EBITDA contribution estimates;
- plans for future gas processing and liquids handling expansions
at the Pipestone Gas Plant;
- planned commissioning of the Pioneer Pipeline and timing
thereof, projected capital and operating costs and timing for
Tidewater's incurrence of these costs, projected closing of
TransAlta's option to acquire an ownership interest in the Pioneer
Pipeline, projected contribution to net income and Adjusted
EBITDA;
- expectations regarding funding of capital projects;
- projections that Tidewater will meet its obligations and
financial commitments and will have sufficient funding for
anticipated capital expenditures and projections regarding sources
of such funding;
- projections regarding future delivery of crude oil to end
markets, impact of crude oil infrastructure business to net income
and Adjusted EBITDA in 2019, plans to explore various market access
opportunities including storage, terminals and pipelines;
- future growth of Tidewater's crude oil infrastructure business
and expectations regarding longer term agreements with existing and
new customers;
- projected plans and benefits of the Corporation's crude oil and
refined products infrastructure business including with respect to
future earnings and incremental Adjusted EBITDA;
- expectations regarding performance of NGL extraction and
natural gas storage operations; and
- expectations that Tidewater will execute on its strategic
plan;
Such forward-looking statements of information are based on a
number of assumptions which may prove to be incorrect. In
addition to other assumptions identified in this document,
assumptions have been made regarding, among other things:
- general economic and industry trends;
- oil and gas industry expectation and development activity
levels and the geographic region of such activity;
- the success of the Corporation's operations;
- anticipated timelines and budgets being met in respect of the
Corporation's projects and operations;
- future natural gas, crude oil and NGL prices;
- the Corporation's ability to obtain and retain qualified staff
and equipment in a timely and cost-effective manner;
- assumptions regarding amount of operating costs to be
incurred;
- that counterparties will comply with contracts in a timely
manner;
- that there are no unforeseen material costs relating to the
facilities which are not recoverable from customers;
- funds flow from operations and cash flow consistent with
expectations;
- the ability to obtain additional financing on satisfactory
terms;
- the availability of capital to fund future capital requirements
relating to existing assets and projects;
- the ability of Tidewater to successfully market its
products;
- the Corporation's future debt levels and the ability of the
Corporation to repay its debt when due;
- foreign currency, exchange and interest rates;
- that any third-party projects relating to the Corporation's
growth projects will be sanctioned and completed as expected;
- the amount of future liabilities relating to lawsuits and
environmental incidents and the availability of coverage under the
Corporation's insurance policies;
- the ability of the Corporation to obtain equipment, services,
supplies and personnel in a timely manner and at an acceptable cost
to carry out its evaluations and activities; and
- that all required regulatory and environmental approvals for
capital projects can be obtained on the necessary terms and in a
timely manner.
Actual results achieved will vary from the information provided
herein as a result of numerous known and unknown risks and
uncertainties and other factors including but not limited to:
- general economic, political, market and business conditions,
including fluctuations in interest rates, foreign exchange rates
and stock market volatility;
- activities of producers and customers and overall industry
activity levels;
- the regulatory environment and decisions and First Nations and
landowner consultation requirements;
- operational matters, including potential hazards inherent in
the Corporation's operations and the effectiveness of health,
safety, environmental and integrity programs;
- fluctuations in commodity prices, inventory levels and
supply/demand trends;
- actions by governmental authorities, including changes in
government regulation, tariffs and taxation;
- changes in operating and capital costs, including fluctuations
in input costs;
- changes in environmental and other regulations;
- activities of other facility owners, including access to third
party facilities;
- competition for, among other things, business, capital,
acquisition opportunities, requests for proposals, materials,
equipment, labour and skilled personnel;
- environmental risks and hazards, including risks inherent in
the transportation of NGLs which may create liabilities to the
Corporation in excess of the Corporation's insurance coverage, if
any;
- failure of third parties' reviews, reports and projections to
be accurate;
- non-performance or default by counterparties to agreements
which the Corporation or one or more of its subsidiaries has
entered into in respect of its business;
- actions by joint venture partners or other partners which hold
interests in certain of the Corporation's assets;
- construction and engineering variables associated with capital
projects, including the availability of contractors, engineering
and construction services, accuracy of estimates and schedules, and
the performance of contractors;
- the availability of capital on acceptable terms;
- changes in the credit-worthiness of counterparties;
- adverse claims made in respect of the Corporation's properties
or assets;
- changes in the political environment and public opinion;
- risks and liabilities associated with the transportation of
dangerous goods;
- risks and liabilities resulting from derailments;
- competitive action by other companies;
- effects of weather conditions;
- reputational risks;
- reliance on key personnel;
- technology and security risks;
- potential losses which would stem from any disruptions in
production, including work stoppages or other labour difficulties,
or disruptions in the transportation network on which the
Corporation is reliant;
- technical and processing problems, including the availability
of equipment and access to properties;
- changes in gas composition; and
- failure to realize the anticipated benefits of recently
completed acquisitions.
The foregoing lists are not exhaustive. Additional
information on these and other factors which could affect the
Corporation's operations or financial results are included in the
Corporation's most recent Annual Information Form and in other
documents on file with the Canadian Securities regulatory
authorities.
The above summary of assumptions and risks related to
forward-looking statements in this press release is intended to
provide shareholders and potential investors with a more complete
perspective on Tidewater's current and future operations and such
information may not be appropriate for other purposes. There is no
representation by Tidewater that actual results achieved will be
the same in whole or in part as those referenced in the
forward-looking statements and Tidewater does not undertake any
obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable
securities law.
Future Oriented Financial Information
Any financial outlook or future-oriented financial information,
as defined by applicable securities legislation, has been approved
by management of Tidewater as of March 13,
2019. Financial outlook or future-oriented financial
information is provided for the purpose of providing information
about management's current expectations and goals relating to the
future of Tidewater. Readers are cautioned that reliance on such
information may not be appropriate for other purposes. The purpose
of the future oriented financial information contained herein
including but not limited to future periods, of net income and
Adjusted EBITDA is to assist investors, shareholders, and others in
understanding certain financial metrics relating to expected future
financial results for the purpose of evaluating the performance of
Tidewater's business for future periods. This information may not
be appropriate for other purposes. The results and conclusions of
these assessments, along with the known and unknown risks,
uncertainties and other factors referred to above, could impact
Tidewater's estimates and the information related to such future
periods contained herein and any such impact could be material.
Non-GAAP Measures
This news release refers to "Adjusted EBITDA" which do not have
any standardized meaning prescribed by generally accepted
accounting principles in Canada
("GAAP"). Adjusted EBITDA is calculated as income or loss
before interest, taxes, depreciation, share-based compensation,
unrealized gains/losses, non-cash items, transaction costs and
items that are considered non-recurring in nature.
Tidewater Management believes that Adjusted EBITDA provide
useful information to investors as they provide an indication of
results generated from the Corporation's operating activities prior
to financing, taxation and non-recurring/non-cash impairment
charges occurring outside the normal course of business.
Management utilizes Adjusted EBITDA to set objectives and as a key
performance indicator of the Corporation's success. In
addition to its use by Management, Tidewater also believes Adjusted
EBITDA is a measure widely used by security analysts, investors and
others to evaluate the financial performance of the Corporation and
other companies in the midstream industry. Investors should
be cautioned that Adjusted EBITDA should not be construed as
alternatives to earnings, cash flow from operating activities or
other measures of financial results determined in accordance with
GAAP as an indicator of the Corporation's performance and may not
be comparable to companies with similar calculations.
"Distributable cash flow" is a non-GAAP financial measure and is
calculated as net cash used in operating activities before changes
in non-cash working capital plus transaction costs, non-recurring
expenses and after any expenditures that use cash from operations.
Changes in non-cash working capital are excluded from the
determination of distributable cash flow because they are primarily
the result of seasonal fluctuations or other temporary changes and
are generally funded with short term debt or cash flows from
operating activities. Deducted from distributable cash flow are
maintenance capital expenditures, including turnarounds as they are
ongoing recurring expenditures. Transaction costs are added back as
they vary significantly quarter to quarter based on the
Corporation's acquisition and disposition activity. It also
excludes non-recurring transactions that do not reflect Tidewater's
ongoing operations.
Management of the Corporation believes distributable cash flow
is a useful metric for investors when assessing the amount of cash
flow generated from normal operations and to evaluate the adequacy
of internally generated cash flow to fund dividends.
For more information with respect to financial measures which
have not been defined by GAAP, including reconciliations to the
closest comparable GAAP measure, see the "Non-GAAP Measures"
section of Tidewater's most recent MD&A which is available on
SEDAR.
SOURCE Tidewater Midstream and Infrastructure Ltd.