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, 2021
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, 2021
INDEX

PAGE
2





ITEM 1 - FINANCIAL STATEMENTS
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of U.S. Dollars)
As at As at
March 31, December 31,
2021 2020
Notes $ $
ASSETS
Current assets
Cash and cash equivalents 197,078 235,734
Financial assets 4 48,621 103,514
Accounts and other receivable, net 217,392 222,629
Vessels and equipment classified as held for sale 5 7,500 7,500
Inventory 21,586 16,308
Due from related parties 12 2,723 9,980
Other assets 34,571 37,326
Total current assets 529,471 632,991
Non-current assets
Financial assets 4 45,753 36,372
Vessels and equipment 7 3,213,592 3,029,415
Advances on newbuilding contracts 8 26,094 127,335
Equity-accounted investments 243,698 241,731
Deferred tax assets 5,144 5,153
Other assets 169,887 185,521
Goodwill 127,113 127,113
Total non-current assets 3,831,281 3,752,640
Total assets 4,360,752 4,385,631
LIABILITIES
Current liabilities
Accounts payable and other 9 333,400 302,414
Other financial liabilities 10 40,307 198,985
Borrowings 11 349,890 362,079
Due to related parties 12 73,226 7
Total current liabilities 796,823 863,485
Non-current liabilities
Accounts payable and other 9 114,068 128,671
Other financial liabilities 10 207,425 144,350
Borrowings 11,12 2,799,400 2,808,898
Due to related parties 12 199,648 194,628
Deferred tax liabilities 700 700
Total non-current liabilities 3,321,241 3,277,247
Total liabilities 4,118,064 4,140,732
EQUITY
Limited partners - Class A common units (2,509) (2,505)
Limited partners - Class B common units (156,267) (157,897)
Limited partners - preferred units 376,488 376,512
General partner 6,826 6,828
Accumulated other comprehensive income 3,685 4,071
Non-controlling interests in subsidiaries 14,465 17,890
Total equity 242,688 244,899
Total liabilities and equity 4,360,752 4,385,631
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.






Page 1 of 34



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. Dollars, except per unit data)
Three Months Ended
March 31,
2021 2020
Notes $ $
Revenues 12,13 272,754  312,401 
Direct operating costs 14 (161,841) (153,819)
General and administrative expenses 15 (12,668) (14,802)
Depreciation and amortization 15 (77,249) (78,534)
Interest expense 11,12 (47,684) (48,269)
Interest income 28  667 
Equity-accounted income (loss) 19,384  (4,055)
Impairment expense, net 7 —  (172,002)
Gain (loss) on dispositions, net 6 —  (562)
Realized and unrealized gain (loss) on derivative instruments 10 13,860  (90,923)
Foreign currency exchange gain (loss) 325  (3,440)
Other income (expenses), net (26) (1,229)
Income (loss) before income tax (expense) recovery 6,883  (254,567)
Income tax (expense) recovery
Current (982) (2,136)
Deferred —  (2,229)
Net income (loss) 5,901  (258,932)
Attributable to:
Limited partners - common units (302) (258,141)
General partner (2) (1,907)
Limited partners - preferred units 7,880  8,038 
Non-controlling interests in subsidiaries (1,675) (6,922)
5,901  (258,932)
Basic and diluted earnings (loss) per limited partner common unit 0.00 (0.63)
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
Page 2 of 34



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

Three Months Ended
March 31,
2021 2020
Notes $ $
Net income (loss) 5,901  (258,932)
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit or loss:
To interest expense:
Realized gain on qualifying cash flow hedging instruments 10 (190) (208)
To equity income:
Realized gain on qualifying cash flow hedging instruments (196) (255)
Total other comprehensive income (loss) (386) (463)
Comprehensive income (loss) 5,515  (259,395)
Attributable to:
Limited partners - common units (685) (258,601)
General partner (5) (1,910)
Limited partners - preferred units 7,880  8,038 
Non-controlling interests in subsidiaries (1,675) (6,922)
5,515  (259,395)
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.

Page 3 of 34



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN 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
$
Preferred
Units
#
Preferred
Units
$
General
Partner
$
Accumulated Other Comprehensive Income
$
Non- controlling Interests
$
Total
Equity
$
Balance as at January 1, 2021 5,217  (2,505) 405,932  (157,897) 15,489  376,512  6,828  4,071  17,890  244,899 
Net income (loss) —  (4) —  (298) —  7,880  (2) —  (1,675) 5,901 
Other comprehensive income (loss) —  —  —  —  —  —  —  (386) —  (386)
Distributions declared:
Preferred units - Series A ($0.4531 per unit) —  —  —  —  —  (2,663) —  —  —  (2,663)
Preferred units - Series B ($0.5313 per unit) —  —  —  —  —  (2,608) —  —  —  (2,608)
Preferred units - Series E ($0.5547 per unit) —  —  —  —  —  (2,609) —  —  —  (2,609)
Other distributions —  —  —  —  —  —  —  —  (1,750) (1,750)
Contribution of Capital from Brookfield —  —  —  1,928  —  —  —  —  —  1,928 
Repurchase of preferred units —  —  —  —  (1) (24) —  —  —  (24)
Balance as at March 31, 2021 5,217  (2,509) 405,932  (156,267) 15,488  376,488  6,826  3,685  14,465  242,688 


  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
$
General
Partner
$
Accumulated Other Comprehensive Income
$
Non- controlling Interests
$
Total
Equity
$
Balance as at January 1, 2020 —  —  —  —  411,149  169,737  15,800  384,274  9,587  4,410  29,794  597,802 
Exchange of equity instruments 5,217  2,154  405,932  167,583  (411,149) (169,737) —  —  —  —  —  — 
Net income (loss) —  (3,276) —  (254,865) —  —  —  8,038  (1,907) —  (6,922) (258,932)
Other comprehensive income (loss) —  —  —  —  —  —  —  —  —  (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 —  (5) —  (402) —  —  —  —  —  —  —  (407)
Balance as at March 31, 2020 5,217  (1,127) 405,932  (87,684) —  —  15,800  384,274  7,680  3,947  18,122  325,212 
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
Page 4 of 34



ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. Dollars)
 
Three Months Ended
March 31,
2021 2020
Notes $ $
Operating Activities
Net income (loss) 5,901  (258,932)
Adjusted for the following items:
Depreciation and amortization 7 77,249  78,534 
Equity-accounted (income) loss, net of distributions received (990) 19,550 
Impairment expense, net 7 —  172,002 
(Gain) loss on dispositions, net 6 —  562 
Unrealized (gain) loss on derivative instruments 10 (162,257) 83,849 
Deferred income tax expense (recovery) —  2,229 
Provisions and other items 9 (193) (940)
Other non-cash items 12,086  6,246 
Changes in non-cash working capital, net 39,239  (17,964)
Net operating cash flow (28,965) 85,136 
Financing Activities
Proceeds from borrowings 11 75,000  72,015 
Repayments of borrowings and settlement of related derivative instruments 10,11 (99,367) (74,217)
Financing costs related to borrowings (750) (201)
Proceeds from borrowings related to sale and leaseback of vessels 8 71,400  11,900 
Repayments of borrowings related to sale and leaseback of vessels 8 (2,881) — 
Financing costs related to borrowings from sale and leaseback of vessels 8 —  (65)
Proceeds from borrowings from related parties 12 75,000  30,000 
Lease liability repayments (3,392) (5,753)
Distributions to limited partners and preferred unitholders 16 (7,880) (8,038)
Distributions to others who have interests in subsidiaries (1,750) (4,750)
Repurchase of preferred units (24) — 
Net financing cash flow 105,356  20,891 
Investing Activities
Additions
Vessels and equipment 7,8 (156,317) (201,707)
Equity-accounted investments (1,172) (465)
Dispositions
Vessels and equipment 6 —  15,060 
Restricted cash 4 42,202  83,815 
Acquisition of company (net of cash acquired of $6.4 million) —  6,430 
Net investing cash flow (115,287) (96,867)
Cash and cash equivalents
Change during the period (38,896) 9,160 
Impact of foreign exchange on cash 240  (4,822)
Balance, beginning of the period 235,734  199,388 
Balance, end of the period 197,078  203,726 
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
Page 5 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)

1.Nature and Description of the Partnership

Altera Infrastructure L.P. and its wholly-owned or controlled subsidiaries (collectively, the Partnership) is an international infrastructure services provider to the offshore oil and gas industry, focused on the ownership and operation of critical infrastructure assets in offshore oil regions of the North Sea, Brazil and the East Coast of Canada. The Partnership was formed as a limited partnership established under the laws of the Republic of the Marshall Islands in August 2006 and the Partnership's affairs are governed by the Marshall Islands Limited Partnership Act and its limited partnership agreement as amended. The Partnership is a subsidiary of Brookfield Business Partners L.P. (NYSE: BBU) (TSX: BBU.UN) (or with its affiliates, Brookfield).

The Partnership’s preferred equity units are listed on the New York Stock Exchange under the ticker symbols “ALIN PR A”, “ALIN PR B” and “ALIN PR E” respectively.

The registered head office of the Partnership is Altera House, Unit 3, Prospect Park, Arnhall Business Park, Westhill, Aberdeenshire, AB32 6FJ, United Kingdom.

2.Significant Accounting Policies

a.Basis of presentation

These unaudited interim condensed consolidated financial statements of the Partnership have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting (or IAS 34), as issued by the International Accounting Standards Board (or IASB). These interim condensed consolidated financial statements do not include all the information and disclosures required in annual financial statements, and should be read in conjunction with the Partnership’s annual consolidated financial statements as at and for the year ended December 31, 2020, which are included in the Partnership's Annual Report on Form 20-F for the year ended December 31, 2020. The unaudited interim condensed consolidated financial statements have been prepared under the assumption that the Partnership operates on a going concern basis and have been presented in U.S. dollars rounded to the nearest thousand unless otherwise indicated.

The accounting policies adopted in the preparation of these interim condensed consolidated financial statements are consistent with those followed in the preparation of the Partnership’s annual consolidated financial statements as at and for the year ended December 31, 2020, except for the adoption of new standards and changes in the Partnership's accounting policies effective as of 1 January 2021, as described below in Note 2c. There have been no significant changes to the method of determining significant estimates and judgments since December 31, 2020.

These unaudited interim condensed consolidated financial statements were approved by management and authorized for issue on May 3, 2021.

b.Going concern

As at March 31, 2021, the Partnership had a working capital deficit of $267.4 million primarily relating to scheduled maturities and repayments of $349.9 million of outstanding borrowings during the 12 months ending March 31, 2022, which amounts were classified as current as at March 31, 2021. The Partnership also anticipates making payments related to commitments to fund a vessel under construction during the remainder of 2021 through 2022 of $99.4 million; however, the Partnership has secured long-term financing related to this vessel.

The working capital deficit of $267.4 million as at March 31, 2021, has increased from $230.5 million as at December 31, 2020. The increase in the working capital deficit was primarily due to a decrease in financial assets of $54.9 million mainly relating to amounts held in escrow for a shuttle tanker newbuilding yard installment payment as at December 31, 2020 and a decrease in cash and cash equivalents of $38.7 million, partially offset by a decrease in total current liabilities primarily relating to the termination or amendment of certain interest rate swaps during the three months ended March 31, 2021.

Based on these factors, the Partnership will need to obtain additional sources of financing, in addition to amounts generated from operations, to meet its obligations and commitments and the minimum liquidity requirements under its financial covenants. Additional potential sources of financing that the Partnership is actively pursuing, or may consider pursuing, during the one-year period to March 31, 2022, include entering into new debt facilities, borrowing additional amounts under existing facilities, the refinancing or extension of certain borrowings, selling certain assets, seeking joint venture partners for the Partnership's business interests and/or capital raises. Additional potential sources of amounts generated from operations include the extensions and redeployment of existing assets.

The Partnership is actively pursuing the financing initiatives described above, which it considers probable of completion based on the Partnership’s history of being able to raise and refinance borrowings for similar types of vessels and based on the Partnership's assessment of current conditions and estimated future conditions. The Partnership is in various stages of progression on these matters.

Based on the Partnership’s liquidity at the date of these unaudited interim condensed consolidated financial statements, the liquidity it expects to generate from operations over the following year, and by incorporating the Partnership’s plans to raise additional liquidity that it considers probable of completion, the Partnership expects that it will have sufficient liquidity to enable the Partnership to continue as a going concern for at least the one-year period to March 31, 2022.
Page 6 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)

c.New standards, interpretations, amendments and policies adopted by the Partnership

The Partnership has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

i.Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

In August 2020, the International Accounting Standards Board published Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) (or Phase 2 Amendments), effective January 1, 2021. The Phase 2 Amendments provide additional guidance to address the issues that will arise during the transition of benchmark interest rates and primarily relate to the modification of financial assets, financial liabilities and lease liabilities where the basis for determining the contractual cash flow changes as a result of the replacement of an existing interest rate benchmark, allowing for prospective application of the new applicable benchmark interest rate, and to the application of hedge accounting, providing an exception such that changes in the designation of hedge accounting relationships that are needed to reflect the changes required by the benchmark interest rate reform do not result in the discontinuation of hedge accounting. The Partnership adopted the Phase 2 Amendments on January 1, 2021. The adoption of this amendment did not have an impact on the Partnership's unaudited interim condensed consolidated financial statements as at and for the three months ended March 31, 2021. The Partnership's risk management strategy has not changed as a result of this.

Progress towards implementation of alternative benchmark interest rates

The Partnership is exposed to the impact of interest rate changes, primarily through its floating-rate borrowings that require it to make interest payments based on LIBOR. The Partnership uses interest rate swaps to reduce its exposure to market risk from changes in interest rates.

The Partnership plans to transition the majority of its LIBOR-linked contracts to risk-free rates through amendments to fallback clauses in its floating-rate credit facilities and debt instruments which would change the basis for determining the interest rate cash flows from LIBOR to a risk-free rate at an agreed point in time. During March 2021, ICE Benchmark Administration announced that it has delayed the cessation of the publication of the overnight, one, three, six and 12 month USD LIBOR until June 30, 2023.

Interest rate benchmark transition for non-derivative financial liabilities

As at March 31, 2021, the Partnership had $1.8 billion of outstanding LIBOR-referenced borrowings summarized as follows:

Principal Weighted-average term Transition Progress
$ (years)
Revolving Credit Facilities 415,367  2.85 Expected to amend fallback clauses prior to cessation of publication of LIBOR.
Term Loans 1,219,674  4.41
Public Bonds 200,000  3.55
Total 1,835,041  3.96

Interest rate benchmark transition for derivatives

As at March 31, 2021, the Partnership had an outstanding notional balance of $0.8 billion of LIBOR-referenced interest rate swap agreements.

For all of the Partnership’s LIBOR-referenced derivatives, the International Swaps and Derivative Association’s fallback clauses were made available in late-2020 and the Partnership and its counterparties expect to adhere to this protocol. This ensures that all legacy trade will, on the cessation of LIBOR, follow the fallback clause provided in the protocol.

ii.Segments

As at January 1, 2021, the disclosure of the Partnership's corporate cost allocations to the segments was modified. The Partnership's components of the business for which discrete financial information is reviewed to assess performance and make decisions regarding resource allocation is still based upon five operating segments. However, the allocation of certain expenditures, relating to direct operating costs and general and administrative expenses, has been modified to show the impact of certain corporate direct operating costs in the corporate segment before reallocation to the segments. Additionally, certain expenditures that relate directly to corporate activities will be retained within the corporate segment. Previously all of these expenditures were allocated directly to the five operating segments based on an estimated use of corporate resources. The 2020 comparative information has been restated as a result of this change.

iii.Estimation uncertainty

COVID-19

The Partnership has not identified any new significant developments related to the COVID-19 pandemic which would impact key critical judgments, estimates and assumptions that affect the reported and contingent amount of assets, liabilities, revenues and expenses,
Page 7 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
including whether any additional indicators of impairment were present for the three months ended March 31, 2021. The Partnership will continued to monitor the COVID-19 situation and review its critical estimates and judgements as circumstances evolve.


3.Fair Value of Financial Instruments

The following tables provide the details of the Partnership's financial instruments and their associated classifications as at March 31, 2021 and December 31, 2020:
  March 31, 2021 December 31, 2020
Measurement Basis FVTPL
$
Amortized cost
$
Total
$
FVTPL
$
Amortized cost
$
Total
$
Financial assets
Cash and cash equivalents —  197,078  197,078  —  235,734  235,734 
Financial assets (current and non-current) 3,186  91,188  94,374  6,497  133,389  139,886 
Accounts and other receivable, net (current and
non-current) (1)
—  206,228  206,228  —  212,316  212,316 
Due from related parties (current and non-current) —  2,723  2,723  —  9,980  9,980 
Other assets (current and non-current) (2)
—  57,904  57,904  —  59,905  59,905 
Total 3,186 555,121 558,307 6,497 651,324 657,821
Financial liabilities
Accounts payable and other (3)
—  73,610  73,610  —  81,850  81,850 
Other financial liabilities (current and non-
current) (4)
38,029  209,703  247,732  203,597  139,738  343,335 
Due to related parties (current and non-current) —  272,874  272,874  —  194,635  194,635 
Borrowings (current and non-current) —  3,149,290  3,149,290  —  3,170,977  3,170,977 
Total 38,029 3,705,477 3,743,506 203,597 3,587,200 3,790,797

(1)Excludes tax receivable of $11.2 million as at March 31, 2021 (December 31, 2020 - $10.3 million).
(2)Includes investments in finance leases.
(3)Includes accounts payable and lease liabilities. Refer to Note 9 below.
(4)Includes derivative instruments, obligations relating to finance leases and other financial liabilities. Refer to Note 10 below.

The fair value of all financial assets and liabilities as at March 31, 2021 approximated their carrying values, with the exception of the borrowings, where fair value which was determined using Level 1 and Level 2 inputs and resulted in a fair value of $3,127 million (December 31, 2020: $3,104 million) compared to a carrying value of $3,149 million (December 31, 2020: $3,171 million). The fair value of the Partnership’s borrowings is either based on quoted market prices or estimated using discounted cash flow analysis based on rates currently available for debt with similar terms and remaining maturities and the current credit worthiness of the Partnership.

Fair value hierarchical levels - financial instruments

For assets and liabilities that are recognized at fair value on a recurring basis, the Partnership determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There were no transfers between levels during the three months ended March 31, 2021, nor during the year ended December 31, 2020. Additionally, there were no changes in the Partnership’s valuation processes, valuation techniques, and types of inputs used in the fair value measurements during the three months ended March 31, 2021. The following table provides the fair value measurement hierarchy of the Partnership's financial assets and liabilities measured at fair value through profit or loss on a recurring basis as at March 31, 2021 and December 31, 2020:
March 31, 2021 December 31, 2020
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
$ $ $ $ $ $
Financial assets
Derivative instruments —  3,186  —  —  6,497  — 
Total —  3,186  —  —  6,497  — 
Financial liabilities
Derivative instruments —  38,029  —  —  203,597  — 
Total —  38,029  —  —  203,597  — 



Page 8 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
4.Financial Assets
March 31, 2021 December 31, 2020
$ $
Current
Restricted cash (1)
45,435  97,017 
Derivative instruments (2)
3,186  6,497 
Total current 48,621  103,514 
Non-current
Restricted cash (1)
45,753  36,372 
Total non-current 45,753  36,372 
(1)Restricted cash as at March 31, 2021 includes amounts held in escrow related to the sale of certain vessels, funds for loan facility repayments, withholding taxes and office lease prepayments (December 31, 2020 - amounts held in escrow for a shuttle tanker newbuilding yard installment payment, a deposit related to the sale of a vessel, funds for loan facility repayments, withholding taxes and office lease prepayments).
(2)See Note 10 for additional information.


5.Vessels and Equipment Classified as Held for Sale

March 31, 2021 December 31, 2020
Vessel Segment $ $
Navion Anglia Shuttle Tanker Segment 4,400  4,400 
Navion Oslo Shuttle Tanker Segment 3,100  3,100 
7,500  7,500 

The fair value of vessels and equipment classified as held for sale measured on a non-recurring basis was $7.5 million and $7.5 million as at March 31, 2021 and December 31, 2020, respectively.


6. Gain (Loss) on Dispositions, Net

Period Vessel Segment Net Proceeds ($) Gain (Loss) on Dispositions, Net ($)
Q1-20 Petrojarl Cidade de Rio das Ostras FPSO Segment 2,282  (92)
Q1-20 Navion Hispania Shuttle Tanker Segment 6,715  (385)
Q1-20 Stena Sirita Shuttle Tanker Segment 6,055  (85)
Gain (loss) on dispositions, net for the three months ended March 31, 2020
(562)



Page 9 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
7.Vessels and Equipment

March 31, 2021 December 31, 2020
$ $
Gross carrying amount:
Opening balance at beginning of year 4,025,498  3,531,827 
Additions 4,085  41,346 
Dispositions (1)
—  (29,242)
Transferred from advances on newbuilding contracts 253,301  543,131 
Vessels and equipment reclassified as held for sale (2)
—  (61,564)
Closing balance at end of period 4,282,884  4,025,498 
Accumulated Depreciation and Impairment:
Opening balance at beginning of year (996,083) (506,111)
Depreciation and amortization (3)
(73,209) (295,610)
Impairment expense, net (4)
—  (245,396)
Dispositions (1)
—  15,050 
Vessels and equipment reclassified as held for sale (2)
—  35,984 
Closing balance at end of period (1,069,292) (996,083)
Net book value 3,213,592  3,029,415 
(1)Includes the sale of vessels and the disposal upon the replacement of certain components of vessels and equipment.
(2)See Note 5 for additional information.
(3)Excludes depreciation and amortization on the Partnership's right-of-use assets, office equipment and software.
(4)See below for additional information. Excludes impairment expense on vessels and equipment classified as held for sale during the three months ended March 31, 2021 and year ended December 31, 2020.

Impairment expense, net
Period Vessel Segment Event Fair Value Hierarchical Level Valuation Techniques and Key Inputs Impairment Expense
$
Q1 2020 ALP Forward Towage Change in the expected earnings of the vessels Level 3 Discounted cash flow valuation 8,361 
Q1 2020 ALP Winger Towage 12,479 
Q1 2020 ALP Ippon Towage 1,360 
Q1 2020 ALP Ace Towage 731 
Q1 2020 Petrojarl I FPSO Change in the expected earnings of the vessel Level 3 Discounted cash flow valuation 42,367 
Q1 2020 Petrojarl Varg FPSO Change in future redeployment assumptions Level 3 Discounted cash flow valuation 27,202 
Q1 2020 Petrojarl Knarr FPSO Change in expected earnings of the vessel Level 3 Discounted cash flow valuation 56,599 
Q1 2020 Navion Stavanger Shuttle Tanker Change in expected earnings of the vessel Level 3 Discounted cash flow valuation 3,606 
Q1 2020 Navion Gothenburg Shuttle Tanker Change in future redeployment assumptions Level 3 Discounted cash flow valuation 16,772 
Q1 2020 Navion Bergen Shuttle Tanker Expected sale of the vessel Level 2 Fair value less cost to sell using an appraised valuation 2,400 
Q1 2020 Other Shuttle Tanker 125 
Impairment expense, net for the three months ended March 31, 2020
172,002 

The fair value of vessels and equipment measured on a non-recurring basis was $nil and $140.5 million as at March 31, 2021 and December 31, 2020, respectively.



Page 10 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
8.Advances on Newbuilding Contracts

March 31, 2021 December 31, 2020
$ $
Opening balance at beginning of year 127,335  297,100 
Additions 151,757  368,588 
Capitalized borrowing costs 303  4,778 
Transferred to vessels and equipment (253,301) (543,131)
Closing balance at end of period 26,094  127,335 


As at March 31, 2021, the Partnership has commitments relating to shipbuilding contracts for one shuttle tanker newbuilding, which is expected to be delivered in 2022. As at March 31, 2021, gross payments made towards this vessel was $26.1 million. The Partnership secured $105.6 million of borrowings relating to this shuttle tanker newbuilding (see Note 11 for additional information).

As at March 31, 2021, the contractual maturities of the Partnership's obligations under its newbuilding contracts were as follows:
Total 1 Year 2 Years 3 Years 4 Years 5 Years Thereafter
(in millions of U.S. Dollars)
Newbuilding contracts 99.4  26.2  73.2  —  —  —  — 


9.Accounts Payable and Other

March 31, 2021 December 31, 2020
$ $
Current
Accounts payable 41,174  46,022 
Accrued liabilities 173,314  143,660 
Provisions (1)
7,662  7,522 
Deferred revenues 97,478  91,392 
Lease liabilities 13,772  13,818 
Total current 333,400  302,414 
Non-current
Deferred revenues 733  11,616 
Lease liabilities 18,664  22,010 
Provisions (1)
60,179  60,179 
Decommissioning liability (2)
33,538  33,901 
Other 954  965 
Total non-current 114,068  128,671 
(1)See below for additional information.
(2)Decommissioning liability relates to the Partnership’s requirement to remove the sub-sea mooring and riser system associated with the Randgrid FSO unit and restore the environment surrounding the facility. The liability represents the estimated cost to remove this equipment and restore the environment and takes into account the estimated timing of the cost to be incurred in future periods. There were no changes in the Partnership's valuation process, valuation techniques, and types of inputs used to determine the liability as at March 31, 2021.

Provisions
March 31, 2021 December 31, 2020
$ $
Opening balance at beginning of year 67,701  67,906 
Additional provisions recognized 140  12,033 
Reduction arising from payments / derecognition —  (12,238)
Closing balance at end of period 67,841  67,701 



Page 11 of 34



10.Other Financial Liabilities

March 31, 2021 December 31, 2020
$ $
Current
Derivative instruments 26,893  189,647 
Obligations relating to finance leases 11,029  8,839 
Other 2,385  499 
Total current 40,307  198,985 
Non-current
Derivative instruments 11,136  13,950 
Obligations relating to finance leases 196,289  130,400 
Total non-current 207,425  144,350 

As at March 31, 2021, the contractual maturities of the Partnership's obligations relating to the finance leases under the sale and leaseback transactions were as follows:
Total 1 Year 2 Years 3 Years 4 Years 5 Years Thereafter
(in millions of U.S. Dollars)
Obligations related to finance leases 210.1  11.3  11.3  11.3  11.3  11.3  153.6 

The liability for the financing leases accrues interest at a variable rate of LIBOR plus a margin of 2.85%. As at March 31, 2021, the Partnership was in compliance with all covenant requirements of its finance leases.

Derivative Financial Instruments

The Partnership’s activities expose it to a variety of financial risks, including liquidity risk, interest rate risk, foreign currency risk and credit risk. The Partnership selectively uses derivative financial instruments principally to manage certain of these risks.

The aggregate amount of the Partnership's derivative financial instrument positions is as follows:

March 31, 2021 December 31, 2020
Financial Asset Financial Liability Financial Asset Financial Liability
$ $ $ $
Interest rate swaps —  38,029  —  203,597 
Foreign currency forward contracts 3,186  —  6,497  — 
Total 3,186  38,029  6,497  203,597 
Total current 3,186  26,893  6,497  189,647 
Total non-current —  11,136  —  13,950 

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Partnership is exposed to the impact of interest rate changes, primarily through its floating-rate borrowings that require it to make interest payments based on LIBOR. Significant increases in interest rates could adversely affect operating margins, results of operations and the Partnership's ability to service its debt. The Partnership uses interest rate swaps to reduce its exposure to market risk from changes in interest rates. The principal objective of these contracts is to minimize the risks and costs associated with the Partnership's floating-rate debt.

The Partnership enters into interest rate swaps, which exchange a receipt of floating interest for a payment of fixed interest, to reduce the Partnership’s exposure to interest rate variability on its outstanding floating-rate debt. The Partnership has not designated, for accounting purposes, any of its interest rate swaps as hedges of variable rate debt. Certain of the Partnership's interest rate swaps are secured by vessels.

In February 2021, the Partnership terminated two and amended two of its interest rate swap agreements, which as at December 31, 2020, had a total notional amount of $600.3 million and a total fair value liability of $147.5 million. These interest rate swaps included early termination provisions, which if exercised, would have terminated these interest rate swaps in February 2021. Following the terminations and amendments, the total notional amount relating to the two remaining interest rate swap agreements will be reduced to $132.0 million in April 2021. These agreements include mandatory termination provisions which terminate these interest rate swaps February 2022.

Page 12 of 34



In March 2021, the Partnership terminated one of its interest rate swaps, which as at December 31, 2020, had a notional value of $90.4 million and a fair value liability of $37.1 million. This interest rate swap included an early termination provision, which was exercised in March 2021.

As at March 31, 2021, the Partnership and its consolidated subsidiaries were committed to the following interest rate swap agreements:
Interest
Rate
Index
Notional
Amount
$
Fair Value /
Carrying
Amount of
Asset (Liability)(1)
$
Weighted-
Average
Remaining
Term
(years)
Fixed
Interest
Rate
(%)(2)
U.S. Dollar-denominated interest rate swaps (3)
LIBOR 300,000  (9,727) 1.11  3.0  %
U.S. Dollar-denominated interest rate swaps (4)
LIBOR 524,076  (28,302) 1.41  2.9  %
824,076  (38,029)
(1)Excludes accrued interest of $5.5 million.
(2)Excludes the margins the Partnership pays on its variable-rate debt, which as at March 31, 2021, ranged between 1.10% and 6.50%.
(3)Notional amount remains constant over the term of the swap, unless the swap is partially terminated.
(4)Principal amount reduces quarterly or semi-annually.

Total realized and unrealized gain (loss) on the Partnership's derivative financial instruments that are not designated, for accounting purposes, as hedges are recognized in earnings and reported in realized and unrealized gain (loss) on derivative instruments in the unaudited interim condensed consolidated statements of income (loss) for the three months ended March 31, 2021 and 2020 as follows:
  Three Months Ended March 31,
  2021 2020
$ $
Realized gain (loss) on derivative instruments
Interest rate swaps (151,935) (5,771)
Foreign currency forward contracts 3,538  (1,303)
(148,397) (7,074)
Unrealized gain (loss) on derivative instruments
Interest rate swaps 165,568  (75,441)
Foreign currency forward contracts (3,311) (8,408)
162,257  (83,849)
Total realized and unrealized gain (loss) on derivative instruments 13,860  (90,923)

The following table presents the notional amounts underlying the Partnership's derivative financial instruments by term to maturity as at March 31, 2021:
Total 1 Year 2 Years 3 Years 4 Years 5 Years Thereafter
(in millions of U.S. Dollars)
Fair value through profit or loss
Interest rate swaps 824.1  414.8  389.1  3.8  3.8  3.8  8.8 
Foreign currency forward contracts 47.0  47.0  —  —  —  —  — 
Total 871.1  461.8  389.1  3.8  3.8  3.8  8.8 



Page 13 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
11.Borrowings
Weighted average term Weighted average rate
March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020
$ $ (years) (years) (%) (%)
Revolving Credit Facilities 415,367  439,600  2.85 3.07 2.76  2.81 
Term Loans 1,435,015  1,426,370  5.25 5.51 2.74  2.69 
Public Bonds 1,138,302  1,138,086  2.31 2.56 7.88  7.88 
Non-Public Bonds 198,090  206,870  4.72 5.04 6.08  6.13 
Total 3,186,774  3,210,926  3.85 4.10 4.79  4.77 
Less: deferred financing __costs and other
(37,484) (39,949)
Total borrowings 3,149,290  3,170,977 
Less current portion (349,890) (362,079)
Long-term portion 2,799,400  2,808,898 

Revolving Credit Facilities

As at March 31, 2021, the Partnership had two revolving credit facilities (December 31, 2020 - two), which, as at such date, provided for total borrowings of up to $415.4 million (December 31, 2020 - $439.6 million), and were fully drawn (December 31, 2020 - fully drawn).

Term Loans

As at March 31, 2021, the Partnership had term loans outstanding secured by 25 vessels, which totaled $1.4 billion (December 31, 2020 - secured by 25 vessels, which totaled $1.4 billion). The term loans reduce over time with monthly, quarterly or semi-annual payments and have varying maturities through 2034. As at March 31, 2021, the Partnership, a subsidiary of the Partnership or the other owner in the Partnership's 50%-owned subsidiaries had guaranteed all of these term loans.

In February 2021, the Partnership refinanced an existing term loan relating to the financing of the Petrojarl I FPSO unit. The new facility provides for borrowings of $75.0 million, which reduces over time with monthly payments and matures in February 2024. The interest payments on the new facility are based on LIBOR plus a margin of 3.50% per annum.

Public and Non-Public Bonds

As at March 31, 2021, the Partnership had public bonds outstanding which totaled $1.1 billion (December 31, 2020 - $1.1 billion) and non-public bonds outstanding which totaled $198.1 million (December 31, 2020 - $206.9 million). The public bonds have varying maturities through 2024 and the non-public bonds reduce over time with semi-annual payments and varying maturities through 2027.

As at March 31, 2021, the contractual maturities of the Partnership's borrowings were as follows:
Total 1 Year 2 Years 3 Years 4 Years 5 Years Thereafter
(in millions of U.S. Dollars)
Borrowings:
Secured debt - scheduled repayments 1,285.1  308.0  253.8  229.1  143.4  121.1  229.7 
Secured debt - repayments on maturity 763.4  42.9  247.7  93.1  182.0  98.9  98.8 
Public bond repayments 1,138.3  —  251.3  687.0  200.0  —  — 
Total borrowings 3,186.8  350.9  752.8  1,009.2  525.4  220.0  328.5 
Unsecured revolving credit facilities - due
  to related parties (1)
306.9  75.0  —  —  231.9  —  — 
(1)See Note 12 for additional information.

As at March 31, 2021, the Partnership was in compliance with all covenant requirements of its revolving credit facilities, term loans and bonds.

Interest paid during the three months ended March 31, 2021 was $58.3 million (three months ended March 31, 2020 - $62.7 million).


Page 14 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
12.Related Party Transactions

The key management personnel that are principally responsible for the operations of the Partnership are as follows:

Name Position
Ingvild Sæther President and Chief Executive Officer, Altera Infrastructure Group Ltd.
Jan Rune Steinsland Chief Financial Officer, Altera Infrastructure Group Ltd.
Duncan Donaldson General Counsel, Altera Infrastructure Group Ltd.

During the three months ended March 31, 2021, total compensation expenses of these three key management personnel of the Partnership was $1.2 million (three months ended March 31, 2020 - $1.2 million).

The Partnership is a party to the following transactions with related parties:

a)As at March 31, 2021, the Partnership had an undrawn balance of $nil (December 31, 2020 - $nil) relating to an unsecured revolving credit facility provided by Brookfield, which provides for borrowings of up to $225.0 million and matures on October 31, 2024. The agreement provides the Partnership the option to defer interest payments of up to $25.0 million until maturity. As at March 31, 2021, the Partnership has deferred a total of $6.9 million of interest payments. Any outstanding principal balances are due on the maturity date. The Partnership previously determined that as the interest rate under the facility was deemed to be at below market terms, Brookfield was acting in its capacity as an equity owner, and the Partnership recorded a $37.1 million decrease in the carrying value of the facility, which was classified as an equity contribution in the Partnership's unaudited interim condensed consolidated statements of changes in equity during the year ended December 31, 2020. As at March 31, 2021, the Partnership was in compliance with the covenant requirements of this revolving credit facility.

b)During the three months ended March 31, 2021, the Partnership entered into an unsecured revolving credit facility provided by Brookfield, which provides for borrowings of up to $30 million and as at March 31, 2021, had an undrawn balance of $nil. The interest payments on the facility are based on LIBOR plus a margin of 5.00% and the facility matures in February 2022. Any outstanding principal balances are due on the maturity date. During the three months ended March 31, 2021, the Partnership determined that the interest rate under the facility was deemed to be at below market terms and therefore, Brookfield was acting in its capacity as an equity owner. The Partnership recorded a $1.3 million decrease in the carrying value of the facility, which was classified as an equity contribution in the Partnership's unaudited interim condensed consolidated statements of changes in equity during the three months ended March 31, 2021. As at March 31, 2021, the Partnership was in compliance with the covenant requirements of this revolving credit facility.

c)During the three months ended March 31, 2021, a subsidiary of the Partnership entered into an unsecured revolving credit facility provided by Brookfield, which provides for borrowings of up to $70 million and as at March 31, 2021, had an undrawn balance of $25 million. The interest payments on the facility are based on LIBOR plus a margin of 5.00% and the facility matures in February 2022. Any outstanding principal balances are due on the maturity date. During the three months ended March 31, 2021, the Partnership determined that the interest rate under the facility was deemed to be at below market terms and therefore, Brookfield was acting in its capacity as an equity owner. The Partnership recorded a $0.6 million decrease in the carrying value of the facility, which was classified as an equity contribution in the Partnership's unaudited interim condensed consolidated statements of changes in equity during the three months ended March 31, 2021. As at March 31, 2021, the Partnership was in compliance with the covenant requirements of this revolving credit facility.

d)On July 2, 2018, the Partnership issued, in a U.S. private placement, a total of $700.0 million of five-year senior unsecured bonds that mature in July 2023. The interest payments on the bonds are fixed at a rate 8.50% (see Note 11 for additional information). Brookfield purchased $500.0 million of these bonds and as at March 31, 2021, Brookfield held $411.3 million of these bonds (December 31, 2020 - $411.3 million), which is included in the non-current portion of borrowings on the Partnership's unaudited interim condensed consolidated statements of financial position.

The Partnership also reimburses its general partner for expenses incurred by the general partner that are necessary or appropriate for the conduct of the Partnership’s business. The Partnership's related party transactions recognized in the unaudited interim condensed consolidated statements of income (loss) were as follows for the periods indicated:

  Three Months Ended March 31,
  2021 2020
$ $
Revenues (1)
2,475  — 
Direct operating costs (1)
—  1,979 
General and administrative expenses (2)
(269) (151)
Depreciation and amortization (50) (60)
Interest expense (3)(4)
(14,157) (9,347)
(1)Includes revenue from services provided to the Partnership's equity-accounted investments.
(2)Includes reimbursements to the general partner for costs incurred on the Partnership’s behalf.
Page 15 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
(3)Includes interest expense of $8.7 million for the three months ended March 31, 2021 (three months ended March 31, 2020 - $8.9 million), incurred on a portion of five-year senior unsecured bonds held by Brookfield (see Note 12d for additional information).
(4)Includes interest expense of $3.2 million for the three months ended March 31, 2021 (three months ended March 31, 2020 - $1.1 million), and an accretion expense of $2.3 million for the three months ended March 31, 2021 (three months ended March 31, 2020 - accretion income of $0.7 million) incurred on the unsecured revolving credit facilities provided by Brookfield (see Notes 12a, 12b and 12c for additional information).

As at March 31, 2021, the carrying value of amounts due from related parties totaled $2.7 million (December 31, 2019 - $10.0 million). As at March 31, 2021, the carrying value of amounts due to related parties totaled $272.9 million (December 31, 2020 - $194.6 million) and consisted only of the unsecured revolving credit facilities provided by Brookfield (see Note 12a, 12b and 12c).


13.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, contract of affreightment (CoAs), time-charter contracts, bareboat charter contracts and voyage charter contracts. All of the Partnership's revenues relate to services transferred over a period of time. During the three months ended March 31, 2021, the Partnership also generated revenues from the operation of volatile organic compound (VOC) systems on certain of the Partnership’s shuttle tankers, and from the management of certain vessels on behalf of the disponent owners or charterers of those vessels.

The following tables contain the Partnership’s revenues for the three months ended March 31, 2021 and 2020, by contract type and by segment:
Three Months Ended March 31, 2021 FPSO Segment Shuttle Tanker Segment FSO Segment UMS Segment Towage Segment
Corporate/Eliminations(1)
Total
Revenues from contracts with customers
FPSO contracts 30,322  —  —  —  —  —  30,322 
CoAs —  23,499  —  —  —  —  23,499 
Time charters —  23,239  8,437  —  —  —  31,676 
Bareboat charters —  —  —  —  —  —  — 
Voyage charters —  —  —  —  12,291  (4,974) 7,317 
Management fees and other 39,619  8,476  249  217  92  —  48,653 
69,941  55,214  8,686  217  12,383  (4,974) 141,467 
Other revenues
FPSO contracts 38,169  —  —  —  —  —  38,169 
CoAs —  35,341  —  —  —  —  35,341 
Time charters —  39,997  8,708  —  —  —  48,705 
Bareboat charters —  2,917  1,273  —  —  —  4,190 
Voyage charters —  4,882  —  —  —  —  4,882 
38,169  83,137  9,981  —  —  —  131,287 
Total revenues 108,110  138,351  18,667  217  12,383  (4,974) 272,754 

Page 16 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
Three Months Ended March 31, 2020 FPSO Segment Shuttle Tanker Segment FSO Segment UMS Segment Towage Segment
Corporate/Eliminations(1)
Total
Revenues from contracts with customers
FPSO contracts 44,644  —  —  —  —  —  44,644 
CoAs —  26,662  —  —  —  —  26,662 
Time charters —  26,889  9,680  —  —  —  36,569 
Bareboat charters —  —  —  —  —  —  — 
Voyage charters —  126  —  —  10,841  —  10,967 
Management fees and other 15,272  1,872  804  447  —  18,404 
59,916  55,549  10,484  447  10,850  —  137,246 
Other revenues
FPSO contracts 56,288  —  —  —  —  56,288 
CoAs —  30,911  —  —  —  —  30,911 
Time charters —  41,878  20,748  —  —  —  62,626 
Bareboat charters —  8,267  3,665  —  —  —  11,932 
Voyage charters —  13,398  —  —  —  —  13,398 
56,288  94,454  24,413  —  —  —  175,155 
Total revenues 116,204  150,003  34,897  447  10,850  —  312,401 

(1)Includes revenues earned between segments of the Partnership of $5.0 million and $nil, respectively, for the three months ended March 31, 2021 and 2020.


14.Direct Operating Costs

Direct operating costs include all attributable expenses except interest, depreciation and amortization, impairment expense, other expenses, and taxes and primarily relate to cost of revenues. The following table lists direct operating costs for the three months ended March 31, 2021 and 2020 by nature:

Three months ended March 31,
2021 2020
$ $
Voyage expenses (1)
28,168  38,770 
Operating expenses 71,046  56,042 
Charter hire 2,643  7,387 
Compensation 59,984  51,620 
Total 161,841  153,819 
(1)Expenses unique to a particular voyage, including any bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions.


15.Segment Information

For the three months ended March 31, 2021 and 2020, the Partnership's operations were organized into five operating segments: FPSO, shuttle tanker, FSO, UMS and towage.

These operating segments are regularly reviewed by the Partnership's Chief Operating Decision Maker (or CODM) for the purpose of allocating resources to the segment and to assess its performance. The key measure used by the CODM in assessing performance and in making resource allocation decisions is Adjusted EBITDA, which is calculated as net income (loss) before interest expense, interest income, 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 impairment expenses, gain (loss) on dispositions, net, unrealized gain (loss) on derivative instruments, foreign currency exchange gain (loss) and certain other income or expenses. Adjusted EBITDA also excludes: realized gain or loss on interest rate swaps, as management, in assessing the Partnership's performance, views these gains or losses as an element of interest expense; realized gain or loss on derivative instruments resulting from amendments or terminations of the underlying instruments; realized gain or loss on foreign currency forward contracts; and equity-accounted income (loss). Adjusted EBITDA also includes the Partnership's proportionate share of Adjusted EBITDA from its equity-accounted investments and excludes the non-controlling interests' proportionate share of Adjusted EBITDA. The Partnership does not have control over the operations of, nor does it have any legal claim to the revenues and expenses of its equity-accounted investments. Consequently, the cash flow generated by the Partnership’s equity-accounted investments may not be available for use by the Partnership in the period that such cash flows are generated.
Page 17 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)

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

The following tables include the results for the Partnership’s reportable segments for the periods presented in these unaudited consolidated financial statements:
Three Months Ended March 31, 2021 FPSO Segment Shuttle Tanker Segment FSO
Segment
UMS Segment Towage
Segment
Corporate/Eliminations (1)
Total
Revenues 108,110  138,351  18,667  217  12,383  (4,974) 272,754 
Adjusted EBITDA
52,768  67,194  7,405  (1,695) (2,350) (3,052) 120,270 

Three Months Ended March 31, 2020 FPSO Segment Shuttle Tanker Segment FSO
Segment
UMS Segment Towage
Segment
Corporate/Eliminations (1)
Total
Revenues 116,204  150,003  34,897  447  10,850  —  312,401 
Adjusted EBITDA
79,593  64,867  23,892  (2,606) (2,003) (195) 163,548 
(1)Includes revenues earned and direct operating costs incurred between segments of the Partnership of $5.0 million and $5.0 million, respectively, for the three months ended March 31, 2021 ($nil and $nil, respectively, for the three months ended March 31, 2020).

The following table includes reconciliations of Adjusted EBITDA to net income (loss) for the periods presented in these unaudited interim condensed consolidated financial statements:
Three Months Ended March 31,
2021 2020
$ $
Adjusted EBITDA 120,270  163,548 
Depreciation and amortization (1)
(77,249) (78,534)
Interest expense (47,684) (48,269)
Interest income 28  667 
Expenses and gains (losses) relating to equity-accounted investments (2)
(4,869) (28,908)
Impairment expense, net (3)
—  (172,002)
Gain (loss) on dispositions, net (4)
—  (562)
Realized and unrealized gain (loss) on derivative instruments (5)
13,860  (89,620)
Foreign currency exchange gain (loss) 325  (3,440)
Other income (expenses), net (26) (1,229)
Adjusted EBITDA attributable to non-controlling interests 2,228  3,782 
Income (loss) before income tax (expense) recovery 6,883  (254,567)
Income tax (expense) recovery
Current (982) (2,136)
Deferred —  (2,229)
Net loss 5,901  (258,932)
(1)Depreciation and amortization by segment for the three months ended March 31, 2021 is as follows: FPSO $20.6 million, Shuttle Tanker $43.4 million, FSO $7.7 million, UMS $0.6 million, Towage $4.3 million and Corporate $0.6 million (three months ended March 31, 2020 - FPSO $24.8 million, Shuttle Tanker $37.8 million, FSO $10.4 million, UMS $0.6 million, Towage $4.7 million and Corporate $0.3 million).
(2)Includes depreciation and amortization, interest expense, interest income, realized and unrealized gain (loss) on derivative instruments, foreign currency exchange gain (loss) and income tax (expense) recovery relating to equity-accounted investments. The sum of (a) Adjusted EBITDA from equity-accounted investments and (b) expenses and gains (losses) relating to equity-accounted investments from this table equals the amount of equity-accounted income (loss) included on the Partnership's unaudited interim condensed consolidated statements of income (loss).
(3)Impairment expense, net by segment for the three months ended March 31, 2020 was FPSO $126.2 million, Shuttle Tanker $22.9 million and Towage $22.9 million. (see Note 7 for additional information).
(4)Gain (loss) on dispositions, net by segment for the three months ended March 31, 2020 was FPSO $(0.1) million and Shuttle Tanker $(0.5) million. (see Note 6 for additional information).
(5)Excludes the realized loss on foreign currency forward contracts for the three months ended March 31, 2020.

Segment Assets

For the purpose of monitoring segment performance and allocating resources between segments, the CODM monitors the assets, including equity-accounted investments, attributable to each segment.

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ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
A reconciliation of the Partnership's assets by reportable operating segment as at March 31, 2021 and December 31, 2019 are as follows:
March 31, 2021 December 31, 2020
$ $
FPSO segment 1,202,949  1,221,316 
Shuttle tanker segment 2,227,673  2,114,215 
FSO segment 238,901  244,507 
UMS segment 77,936  100,254 
Towage segment 301,779  303,302 
Corporate/Other
Cash and cash equivalents and restricted cash 288,265  369,123 
Other assets 23,249  32,914 
Total assets 4,360,752  4,385,631 

Revenues from External Customers

The table below summarize the Partnership's segment revenue by geography, based on the operating location of the Partnership's assets, for the three months ended March 31, 2021 and 2020:

Three Months Ended March 31, 2021 FPSO Segment Shuttle Tanker Segment FSO
Segment
UMS Segment Towage
Segment
Corporate/Eliminations (2)
Total
Revenues from contracts with customers
Norway (1)
29,243  28,382  5,653  217  —  —  63,495 
Brazil (1)
8,830  13,783  —  —  —  —  22,613 
Netherlands —  —  —  —  12,383  (4,974) 7,409 
Canada —  11,438  —  —  —  —  11,438 
United Kingdom (1)
31,868  —  —  —  —  —  31,868 
Australia —  —  —  —  —  —  — 
Other —  1,611  3,033  —  —  —  4,644 
Total revenues from contracts with customers 69,941  55,214  8,686  217  12,383  (4,974) 141,467 
Other revenues
Norway (1)
33,286  44,420  6,759  —  —  —  84,465 
Brazil (1)
4,045  16,929  —  —  —  —  20,974 
Netherlands —  —  —  —  —  —  — 
Canada —  14,558  —  —  —  —  14,558 
United Kingdom (1)
838  —  —  —  —  —  838 
Australia —  —  —  —  —  —  — 
Other —  7,230  3,222  —  —  —  10,452 
Total other revenues 38,169  83,137  9,981  —  —  —  131,287 
Total revenues 108,110  138,351  18,667  217  12,383  (4,974) 272,754 

Page 19 of 34


ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As at March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data)
Three Months Ended March 31, 2020 FPSO Segment Shuttle Tanker Segment FSO
Segment
UMS Segment Towage
Segment
Corporate/Eliminations (2)
Total
Revenues from contracts with customers
Norway (1)
32,472  32,763  4,345  447  —  —  70,027 
Brazil (1)
15,800  6,907  —  —  —  —  22,707 
Netherlands —  —  —  —  10,850  —