CALGARY, May 14, 2019 /CNW/ - Tidewater Midstream and
Infrastructure Ltd. ("Tidewater" or the
"Corporation") (TSX: TWM) is pleased to announce that it has
filed its condensed interim consolidated financial statements and
Management's Discussion and Analysis
("MD&A") for the three-month period ended
March 31, 2019.
FIRST-QUARTER 2019 FINANCIAL PERFORMANCE
Recent Highlights
- Net loss attributable to shareholders was $7.1 million or $0.02 per share for the first quarter of 2019,
compared to net income attributable to shareholders of $4.8 million or $0.01 per share for the first quarter of 2018.
The loss during the first quarter of 2019 was mainly attributable
to the unrealized loss on derivative contracts, a non-cash offset
from the unrealized gain on derivative contracts recognized in the
fourth quarter of 2018.
- Adjusted EBITDA was $22.4 million
or $0.07 per share, compared to
$20.0 million or $0.06 per share for the first quarter of
2018.
- Net cash used in operating activities totalled $3.3 million for the first quarter of 2019, with
distributable cash flow of $16.3
million, yielding a conservative payout ratio of 20% for the
quarter.
- Tidewater's 100 MMcf/day sour deep-cut gas processing complex
(the "Pipestone Gas Plant") is fully contracted. Tidewater has
received significant support for future gas processing and liquids
handling expansions at Pipestone
and is currently evaluating an expansion at the facility. The
project remains on-time and on-budget.
- Tidewater expects to complete construction of the Pioneer
Pipeline, a 120km natural gas pipeline connecting Tidewater's
Brazeau River Complex ("BRC") to TransAlta Corporation's generating
units at Sundance and Keephills in the second quarter of 2019,
approximately four months ahead of schedule. Capital costs on the
project have increased by approximately 10% as a result of schedule
acceleration and evaluation of future expansion opportunities.
- On December 17, 2018, TransAlta
Corporation, through its subsidiary TransAlta Generation
Partnership ("TransAlta"), exercised its option to acquire a 50%
ownership interest in the Pioneer Pipeline. The transaction is
expected to close in the second quarter of 2019.
- During the first quarter of 2019, Tidewater expanded its gas
storage operations at Pipestone
(the "Pipestone Gas Storage Facility") and completed a 24km,
30-inch natural gas pipeline connecting the facility to both
Alliance and TCPL. The pipeline allows for significant future
optionality and egress at the Pipestone Gas Storage Facility and
Pipestone Gas Plant. The Pipestone Storage Facility is now fully
contracted with investment-grade counterparties over an average
six-year contract term. Continued capital improvements to the
facility during 2019, along with the completed 30-inch pipeline,
will significantly increase future contracting capacity at the
storage facility. The Pipestone Gas Storage Facility will be moved
into a Limited Partnership with the pipeline and facility expansion
financed primarily through a capital contribution from a
joint-venture equity partner as well as a non-recourse project
finance credit facility.
- The Brazeau River Fractionation facility, part of the BRC, is
fully contracted for the first time in Tidewater's history,
including signed agreements with two new investment-grade customers
at the BRC to provide fractionation services. When Tidewater first
acquired the BRC in 2014, it had one customer that accounted for
the majority of Adjusted EBITDA at the facility. Tidewater
transformed the BRC into a fractionation facility, with two new
investment-grade counterparties in 2019, a gas storage facility
with long-term contracts from multiple investment-grade
counterparties and a new egress option with a 15-year take-or-pay
contract with TransAlta.
- The Corporation divested of its 32MW cogeneration units at its
Pipestone Gas Plant for cash proceeds of $85
million. In conjunction with the divestiture, the
Corporation entered into a long-term energy services agreement
whereby the purchaser will supply power to Tidewater's Pipestone
Gas Plant once construction is complete in exchange for fixed
energy fee payments.
- The Corporation increased its availability under its credit
facility from $325 million to
$350 million by accessing its
accordion feature and amended its financial covenants.
- Tidewater remains confident in its ability to execute its
previously disclosed strategic plan where fourth quarter 2019
and fiscal year 2020 net income and Adjusted EBITDA are expected to
increase by greater than 50%, compared to the fourth quarter and
fiscal year 2018, respectively, 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. The Corporation continues to look forward to seeing
the completion of its two major projects as well as to execute and
position its business for continued earnings growth during the
second half of 2019 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 three-month
period ended March 31, 2019 which are
available at www.sedar.com and on our website at
www.tidewatermidstream.com.
Financial Overview
Consolidated Financial Highlights
|
|
|
|
|
Three months
ended
March 31,
|
(in thousands of
Canadian dollars except per share information)
|
|
2019
|
|
2018
|
Revenue
|
$
|
123,665
|
$
|
84,214
|
Net income (loss)
attributable to shareholders
|
$
|
(7,135)
|
$
|
4,797
|
Basic and diluted net
income (loss) attributable to shareholders per share
|
$
|
(0.02)
|
$
|
0.01
|
Adjusted EBITDA
(1)
|
$
|
22,404
|
$
|
20,001
|
Adjusted EBITDA per
common share - basic (1)
|
$
|
0.07
|
$
|
0.06
|
Net cash used in
operating activities
|
$
|
(3,310)
|
$
|
(20,921)
|
Distributable cash
flow (2)
|
$
|
16,310
|
$
|
16,814
|
Distributable cash
flow per common share – basic (2)
|
$
|
0.05
|
$
|
0.05
|
Dividends
declared
|
$
|
3,309
|
$
|
3,291
|
Dividends declared
per common share
|
$
|
0.01
|
$
|
0.01
|
Total common shares
outstanding (000s)
|
|
330,930
|
|
329,091
|
Payout
ratio (3)
|
|
20%
|
|
20%
|
Total
assets
|
$
|
1,518,769
|
$
|
960,058
|
Net
debt (4)
|
$
|
353,363
|
$
|
187,425
|
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 March 31, 2019. 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
ended March 31, 2019. 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 bank debt plus notes payable, less cash. 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 its products
in a challenging commodity price environment by developing and
connecting its infrastructure in order to access additional end
markets.
During the first quarter of 2019, Tidewater achieved a number of
milestones including the most capital-intensive period in its
history with peak construction on the Pioneer Pipeline, Pipestone
Gas Plant and Pipestone Gas Storage Facility and pipeline.
Tidewater continues to execute successfully on its strategy by
expanding its integrated network of assets with disciplined capital
allocation.
Overall, while gas processing volumes remained under pressure,
consistent with the fourth quarter of 2018, Tidewater moved
significant NGL and crude oil volumes and continued to generate
incremental fee-for-service revenue from its gas storage assets.
Tidewater is also nearing completion of its largest ever capital
program, with commissioning of its projects expected to occur in
the second and third quarters of 2019, and has begun evaluating the
next phase of growth to further complement its asset
base. Tidewater remains confident in its ability to execute
its previously disclosed strategic plan where fourth quarter
2019 and fiscal year 2020 net income and Adjusted EBITDA are
expected to increase by greater than 50%, compared to the fourth
quarter and fiscal year 2018, respectively, once the Pipestone Gas
Plant and Pioneer Pipeline are operational.
Crude Oil Infrastructure
Tidewater continues to grow its crude oil infrastructure and
refined products business and has delivered Canadian crude to
approximately ten end markets at the end of the first quarter of
2019. Tidewater is well positioned in the crude oil space with
three pipeline connected oil batteries at Valhalla, Brazeau and Acheson, including a large rail facility at
Acheson. Tidewater 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 from the crude oil
infrastructure remains in-line with Tidewater's previously
disclosed forecasts.
Brazeau River Complex
Throughput at the BRC was in-line with the fourth quarter of
2018 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.
Tidewater began accepting new volumes at the fractionation facility
in April 2019.
The Brazeau River Complex remains a flagship asset for
Tidewater, offering a full suite of services to producers,
including C3, C4 and C5 pipeline connections, NGL fractionation
capacity, sweet and sour deep-cut gas processing capability, and
two gas egress solutions in TCPL and the Pioneer
Pipeline.
Natural Gas Storage
Tidewater continued to inject customer gas under long-term
fee-for-service contracts at the Pipestone Gas Storage Facility
throughout the quarter, growing the cushion gas at the facility and
increasing the injection and withdrawal capability of the storage
reservoir.
Tidewater also commenced and completed construction of a 21km,
30-inch pipeline from its Pipestone Gas Storage Facility with both
Alliance and TCPL, providing significant future egress and
contracting optionality for the Pipestone Gas Plant and Pipestone
Storage Facility. The project is more fully described below under
Capital Program: Pipestone Gas Storage Facility.
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 three large capital projects currently
underway mainly focus on establishing a strong position in the
Montney and Deep Basin development
areas. It is expected the three capital programs will begin
delivering incremental net cash provided by operating activities
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 (the "AER") 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 Gas Storage Facility, as well as
connections to both Alliance and TCPL. 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.
In the first quarter of 2019, Tidewater divested the Pipestone
Gas Plant's 32MW cogeneration units for cash proceeds of
$85 million. In conjunction with the
divestiture, the Corporation entered into a long-term energy
services agreement whereby the purchaser, Kineticor Resource Corp.
("Kineticor"), will supply power to Tidewater's Pipestone Gas Plant
once construction is complete in exchange for fixed energy fee
payments. The Corporation also entered into an operating agreement,
whereby Tidewater will manage the final construction of the
cogeneration units and the day-to-day operations once in service.
This will ensure that the cogeneration units, which will be highly
integrated with the Pipestone Gas Plant, will be managed safely and
efficiently for both Kineticor and Tidewater.
Tidewater expects approximately $50 - $55 million
of capital remaining to be spent on the first phase of the
Pipestone Gas Plant in 2019, with commissioning expected to occur
in the third quarter of 2019. Total capital costs for the project,
once complete, are expected to be approximately $210 million after disposition of the
cogeneration units.
As a result of significant producer support, Tidewater is
currently evaluating a condensate liquids hub at the Pipestone Gas
Plant as well as an expansion to the processing capacity at the
plant. Tidewater expects capital expenditures related to scoping an
expansion as well as a liquids hub, including pre-spend on Phase II
connections, to be approximately $15
- 30 million over the next 12 months.
Contribution to net income from the Pipestone Gas Plant is
expected to be approximately $25 -
$30 million per year 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
per year after adding back depreciation, based on a 60-year useful
life, finance costs and taxes.
Pioneer Pipeline
On October 30, 2018, Tidewater
received approval from the AER to construct and operate the 120km
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.
TransAlta exercised its 50% working interest option in the
Pioneer Pipeline in the fourth quarter of 2018 and has made
advanced refundable payments of approximately $65 million to March
31, 2019 and a further $10.8
million subsequent to March 31,
2019.
Construction is near completion on the Pioneer Pipeline, which
is approximately four months ahead of schedule. Capital costs on
the project have increased by approximately 10% as a result of
schedule acceleration and evaluation of future expansion
opportunities.
Tidewater expects to flow gas on the Pioneer Pipeline in the
second quarter of 2019. Contribution to Tidewater's net income from
the Pioneer Pipeline is expected to be approximately $8 - $9 million per
year 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 per year after adding back
depreciation, based on a 60-year useful life, finance costs and
taxes.
Pipestone Gas Storage Facility
During 2017, Tidewater received regulatory approval to expand
its existing Pipestone Gas Storage Facility as well as to construct
and operate a 24km, 30-inch natural gas pipeline with connections
to both Alliance and TCPL.
During the first quarter of 2019, Tidewater commenced and
completed construction of the 24km, 30-inch natural gas pipeline to
Alliance and TCPL as well as several pipeline connections to the
Pipestone Gas Plant. Tidewater plans to complete the remaining
facility expansion work, consisting of additional compression and
injection/withdrawal wells, in the second and third quarters of
2019.
Total project costs are expected to be approximately
$70 - $75
million, of which $55 million
will be funded by way of $25 million
preferred equity contribution from a joint venture partner, as well
as a $30 million non-recourse project
finance credit facility. As part of the financing arrangement,
Tidewater will contribute its existing Pipestone Gas Storage Assets
into a limited partnership whereby Tidewater will retain 85% of the
cashflows after interest and preferred share payments while
retaining operatorship. The transaction is expected to close in the
second quarter of 2019.
The Pipestone Gas Storage Facility is now fully contracted on a
six-year take-or-pay basis with all investment-grade
counterparties. The project is a significant step forward in
Tidewater's fee-for-service gas storage business and offers
producers at the Pipestone Gas Plant significant optionality where
the plant now has three egress solutions in TCPL, Alliance and gas
storage.
Tidewater expects $20 -
$25 million in capital remaining to
be spent on the project by the end of 2019, mostly related to the
facility. At March 31, 2019,
Tidewater has funded all capital costs and expects to receive
capital contributions from its joint venture partner and the
non-recourse credit facility upon closing of the transaction in the
second quarter of 2019.
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.
FIRST QUARTER, 2019 EARNINGS CALL
In conjunction with this earnings release, investors will have
the opportunity to listen to Tidewater senior management review its
first quarter results of fiscal 2019 via conference call on
Tuesday, May 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/1994662/EA84F748A4953F6CFD2F1FE4D2272F6A 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 news 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 planned Pipestone Gas
Plant and timing thereof as well as projections with respect to
contracting capacity, net income to be derived therefrom, projected
capital and operating costs and Adjusted EBITDA contribution
estimates;
- future supply of power to the Pipestone Gas Plant;
- 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, future expansion opportunities and timing thereof,
projected contribution to net income and Adjusted EBITDA;
- future optionality, egress and contracting capacity at the
Pipestone Storage Facility and projected capital costs of such
project;
- plans to move the Pipestone Gas Storage Facility into a limited
partnership and financing plans for such project;
- expectations regarding funding of capital projects and that
Tidewater's three major capital programs will begin delivering
incremental cash flow during Q3 and Q4, 2019;
- projected net income and Adjusted EBITDA into the fourth
quarter of 2019 and 2020;
- 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; and
- 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.
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 proposed transactions will close as expected;
- 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 May 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.