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
September 30, 2021
Commission file number 1- 33198
_________________________
ALTERA INFRASTRUCTURE L.P.
(Exact name of Registrant as specified in its charter)
_________________________
Altera House, Unit 3, Prospect Park, Arnhall Business Park,
Westhill, Aberdeenshire, AB32 6FJ, United Kingdom
(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 SEPTEMBER 30,
2021
INDEX
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 |
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
|
|
|
2021 |
|
2020
Restated(1)
|
|
|
|
|
|
Notes |
|
$ |
|
$ |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
194,570 |
|
235,734 |
|
|
|
|
Financial assets |
4 |
|
36,300 |
|
103,514 |
|
|
|
|
Accounts and other receivable, net |
|
|
177,527 |
|
222,629 |
|
|
|
|
Vessels and equipment classified as held for sale |
5 |
|
9,900 |
|
7,500 |
|
|
|
|
Inventory |
|
|
20,077 |
|
16,308 |
|
|
|
|
Due from related parties |
12 |
|
685 |
|
9,980 |
|
|
|
|
Other assets |
|
|
32,141 |
|
37,326 |
|
|
|
|
Total current assets |
|
|
471,200 |
|
632,991 |
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
Financial assets |
4 |
|
45,738 |
|
36,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels and equipment |
7 |
|
3,059,822 |
|
3,029,415 |
|
|
|
|
Advances on newbuilding contracts |
8 |
|
39,595 |
|
127,335 |
|
|
|
|
Equity-accounted investments |
|
|
257,206 |
|
241,731 |
|
|
|
|
Deferred tax assets |
|
|
5,030 |
|
5,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
146,351 |
|
185,521 |
|
|
|
|
Goodwill |
|
|
127,113 |
|
127,113 |
|
|
|
|
Total non-current assets |
|
|
3,680,855 |
|
3,752,640 |
|
|
|
|
Total assets |
|
|
4,152,055 |
|
4,385,631 |
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable and other |
9 |
|
271,692 |
|
286,295 |
|
|
|
|
Other financial liabilities |
10 |
|
41,854 |
|
198,985 |
|
|
|
|
Borrowings |
11 |
|
565,930 |
|
362,079 |
|
|
|
|
Due to related parties |
12 |
|
69,615 |
|
16,126 |
|
|
|
|
Total current liabilities |
|
|
949,091 |
|
863,485 |
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable and other |
9 |
|
107,056 |
|
128,671 |
|
|
|
|
Other financial liabilities |
10 |
|
191,644 |
|
144,350 |
|
|
|
|
Borrowings |
11,12 |
|
2,007,639 |
|
2,397,638 |
|
|
|
|
Due to related parties |
12 |
|
706,713 |
|
605,888 |
|
|
|
|
Deferred tax liabilities |
|
|
700 |
|
700 |
|
|
|
|
Total non-current liabilities |
|
|
3,013,752 |
|
3,277,247 |
|
|
|
|
Total liabilities |
|
|
3,962,843 |
|
4,140,732 |
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited partners - Class A common units |
|
|
(3,350) |
|
(2,505) |
|
|
|
|
Limited partners - Class B common units |
|
|
(221,675) |
|
(157,897) |
|
|
|
|
Limited partners - preferred units |
|
|
384,368 |
|
376,512 |
|
|
|
|
General partner |
|
|
6,319 |
|
6,828 |
|
|
|
|
Accumulated other comprehensive income |
|
|
2,919 |
|
4,071 |
|
|
|
|
Non-controlling interests in subsidiaries |
|
|
20,631 |
|
17,890 |
|
|
|
|
Total equity |
|
|
189,212 |
|
244,899 |
|
|
|
|
Total liabilities and equity |
|
|
4,152,055 |
|
4,385,631 |
|
|
|
|
The accompanying notes are an integral part of the unaudited
interim condensed consolidated financial statements.
(1)See
Note 2c iv) for further details.
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
September 30, |
|
Nine Months Ended
September 30, |
|
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
Notes |
|
$ |
|
$ |
|
$ |
|
$ |
|
Revenues |
12,13 |
|
295,837 |
|
|
286,590 |
|
|
835,526 |
|
|
903,453 |
|
|
Direct operating costs |
14 |
|
(154,826) |
|
|
(164,425) |
|
|
(486,604) |
|
|
(483,896) |
|
|
General and administrative expenses |
15 |
|
(6,163) |
|
|
(3,035) |
|
|
(27,782) |
|
|
(20,143) |
|
|
Depreciation and amortization |
15 |
|
(80,576) |
|
|
(79,049) |
|
|
(239,385) |
|
|
(235,189) |
|
|
Interest expense |
11,12 |
|
(53,961) |
|
|
(48,036) |
|
|
(151,120) |
|
|
(142,212) |
|
|
Interest income |
|
|
10 |
|
|
190 |
|
|
59 |
|
|
900 |
|
|
Equity-accounted income (loss) |
|
|
10,985 |
|
|
11,890 |
|
|
40,598 |
|
|
16,263 |
|
|
Impairment expense, net |
7 |
|
— |
|
|
(4,720) |
|
|
— |
|
|
(184,997) |
|
|
Gain (loss) on dispositions, net |
6 |
|
1,397 |
|
|
(19) |
|
|
10,504 |
|
|
(1,969) |
|
|
Realized and unrealized gain (loss) on derivative
instruments |
10 |
|
(403) |
|
|
2,427 |
|
|
11,944 |
|
|
(103,689) |
|
|
Foreign currency exchange gain (loss) |
|
|
(671) |
|
|
(2,958) |
|
|
(648) |
|
|
(7,347) |
|
|
Other income (expenses), net |
12,17 |
|
(35,910) |
|
|
(4,262) |
|
|
(37,767) |
|
|
(9,628) |
|
|
Income (loss) before income tax (expense) benefit |
|
|
(24,281) |
|
|
(5,407) |
|
|
(44,675) |
|
|
(268,454) |
|
|
Income tax (expense) benefit |
|
|
|
|
|
|
|
|
|
|
Current |
|
|
(1,703) |
|
|
(1,639) |
|
|
(3,896) |
|
|
(5,240) |
|
|
Deferred |
|
|
— |
|
|
1,091 |
|
|
— |
|
|
560 |
|
|
Net income (loss) |
|
|
(25,984) |
|
|
(5,955) |
|
|
(48,571) |
|
|
(273,134) |
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
Limited partners - common units |
|
|
(32,282) |
|
|
(14,129) |
|
|
(66,551) |
|
|
(288,221) |
|
|
General partner |
|
|
(247) |
|
|
(106) |
|
|
(509) |
|
|
(2,156) |
|
|
Limited partners - preferred units |
|
|
7,880 |
|
|
8,038 |
|
|
23,640 |
|
|
24,114 |
|
|
Non-controlling interests in subsidiaries |
|
|
(1,335) |
|
|
242 |
|
|
(5,151) |
|
|
(6,871) |
|
|
|
|
|
(25,984) |
|
|
(5,955) |
|
|
(48,571) |
|
|
(273,134) |
|
|
Basic and diluted earnings (loss) per limited partner common
unit |
|
|
(0.08) |
|
|
(0.03) |
|
|
(0.16) |
|
|
(0.70) |
|
|
The accompanying notes are an integral part of the unaudited
interim condensed consolidated financial statements.
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
(in thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
Notes |
|
$ |
|
$ |
|
$ |
|
$ |
|
Net income (loss) |
|
|
(25,984) |
|
|
(5,955) |
|
|
(48,571) |
|
|
(273,134) |
|
|
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 |
|
(182) |
|
|
(206) |
|
|
(568) |
|
|
(622) |
|
|
To equity income: |
|
|
|
|
|
|
|
|
|
|
Realized gain on qualifying cash flow hedging
instruments |
|
|
(177) |
|
|
(251) |
|
|
(584) |
|
|
(765) |
|
|
Total other comprehensive income (loss) |
|
|
(359) |
|
|
(457) |
|
|
(1,152) |
|
|
(1,387) |
|
|
Comprehensive income (loss) |
|
|
(26,343) |
|
|
(6,412) |
|
|
(49,723) |
|
|
(274,521) |
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
Limited partners - common units |
|
|
(32,638) |
|
|
(14,583) |
|
|
(67,694) |
|
|
(289,597) |
|
|
General partner |
|
|
(250) |
|
|
(109) |
|
|
(518) |
|
|
(2,167) |
|
|
Limited partners - preferred units |
|
|
7,880 |
|
|
8,038 |
|
|
23,640 |
|
|
24,114 |
|
|
Non-controlling interests in subsidiaries |
|
|
(1,335) |
|
|
242 |
|
|
(5,151) |
|
|
(6,871) |
|
|
|
|
|
(26,343) |
|
|
(6,412) |
|
|
(49,723) |
|
|
(274,521) |
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the unaudited
interim condensed consolidated financial statements.
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) |
— |
|
|
(845) |
|
|
— |
|
|
(65,706) |
|
|
— |
|
|
23,640 |
|
|
|
|
(509) |
|
|
— |
|
|
(5,151) |
|
|
(48,571) |
|
Other comprehensive income (loss) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
(1,152) |
|
|
— |
|
|
(1,152) |
|
Distributions declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred units - Series A ($0.4531 per unit) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,326) |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
(5,326) |
|
Preferred units - Series B ($0.5313 per unit) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,216) |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
(5,216) |
|
Preferred units - Series E ($0.5547 per unit) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,218) |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
(5,218) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other distributions |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
(2,058) |
|
|
(2,058) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution of Capital from Brookfield |
— |
|
|
— |
|
|
— |
|
|
1,928 |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
1,928 |
|
Distribution to non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
(8,000) |
|
|
(8,000) |
|
Contribution from non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
17,950 |
|
|
17,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of preferred units |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1) |
|
|
(24) |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
(24) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at September 30, 2021 |
5,217 |
|
|
(3,350) |
|
|
405,932 |
|
|
(221,675) |
|
|
15,488 |
|
|
384,368 |
|
|
|
|
6,319 |
|
|
2,919 |
|
|
20,631 |
|
|
189,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
— |
|
|
(3,657) |
|
|
— |
|
|
(284,564) |
|
|
— |
|
|
— |
|
|
— |
|
|
24,114 |
|
|
|
|
(2,156) |
|
|
— |
|
|
(6,871) |
|
|
(273,134) |
|
|
|
|
|
|
|
Other comprehensive income (loss) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
(1,387) |
|
|
— |
|
|
(1,387) |
|
|
|
|
|
|
|
Distributions declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred units - Series A ($0.4531 per unit) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(8,157) |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
(8,157) |
|
|
|
|
|
|
|
Preferred units - Series B ($0.5313 per unit) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(7,971) |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
(7,971) |
|
|
|
|
|
|
|
Preferred units - Series E ($0.5547 per unit) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(7,986) |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
(7,986) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other distributions |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
(4,750) |
|
|
(4,750) |
|
|
|
|
|
|
|
Contribution of Capital from Brookfield |
— |
|
|
— |
|
|
— |
|
|
33,046 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
33,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity based compensation and other |
— |
|
|
(5) |
|
|
— |
|
|
(402) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
(407) |
|
|
|
|
|
|
|
Balance as at September 30, 2020 |
5,217 |
|
|
(1,508) |
|
|
405,932 |
|
|
(84,337) |
|
|
— |
|
|
— |
|
|
15,800 |
|
|
384,274 |
|
|
|
|
7,431 |
|
|
3,023 |
|
|
18,173 |
|
|
327,056 |
|
|
|
|
|
|
|
The accompanying notes are an integral part of the unaudited
interim condensed consolidated financial statements.
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, |
|
|
|
2021 |
|
2020 |
|
Notes |
|
$ |
|
$ |
|
|
|
|
|
|
Operating Activities |
|
|
|
|
|
Net income (loss) |
|
|
(48,571) |
|
|
(273,134) |
|
Adjusted for the following items: |
|
|
|
|
|
Depreciation and amortization |
7 |
|
239,385 |
|
|
235,189 |
|
Equity-accounted (income) loss, net of distributions
received |
|
|
(12,348) |
|
|
8,919 |
|
Impairment expense, net |
7 |
|
— |
|
|
184,997 |
|
(Gain) loss on dispositions, net |
6 |
|
(10,504) |
|
|
1,969 |
|
Unrealized (gain) loss on derivative instruments |
10 |
|
(165,989) |
|
|
55,363 |
|
Deferred income tax expense (benefit) |
|
|
— |
|
|
(560) |
|
Provisions and other items |
9 |
|
(293) |
|
|
(3,503) |
|
Other non-cash items |
|
|
65,654 |
|
|
19,086 |
|
Changes in non-cash working capital, net |
|
|
51,263 |
|
|
82 |
|
Net operating cash flow |
|
|
118,597 |
|
|
228,408 |
|
Financing Activities |
|
|
|
|
|
Proceeds from borrowings |
11 |
|
85,560 |
|
|
291,030 |
|
Repayments of borrowings and settlement of related derivative
instruments |
10,11 |
|
(282,891) |
|
|
(239,910) |
|
Financing costs related to borrowings |
|
|
(7,720) |
|
|
(6,162) |
|
Proceeds from borrowings related to sale and leaseback of
vessels |
8 |
|
71,400 |
|
|
47,673 |
|
Repayments of borrowings related to sale and leaseback of
vessels |
8 |
|
(8,518) |
|
|
— |
|
Financing costs related to borrowings from sale and leaseback of
vessels |
8 |
|
(584) |
|
|
(65) |
|
Proceeds from borrowings from related parties |
12 |
|
147,000 |
|
|
155,000 |
|
Prepayment of borrowings from related parties |
12 |
|
(30,000) |
|
|
— |
|
Lease liability repayments |
|
|
(10,861) |
|
|
(17,115) |
|
Capital contribution by non-controlling interests |
|
|
17,950 |
|
|
— |
|
|
|
|
|
|
|
Distributions to limited partners and preferred
unitholders |
16 |
|
(15,760) |
|
|
(24,114) |
|
Distributions to non-controlling interests |
|
|
(10,058) |
|
|
(4,750) |
|
|
|
|
|
|
|
Repurchase of preferred units |
|
|
(24) |
|
|
— |
|
Net financing cash flow |
|
|
(44,506) |
|
|
201,587 |
|
Investing Activities |
|
|
|
|
|
Additions |
|
|
|
|
|
Vessels and equipment |
7,8 |
|
(198,459) |
|
|
(449,916) |
|
Equity-accounted investments |
|
|
(3,711) |
|
|
(2,812) |
|
Dispositions |
|
|
|
|
|
Vessels and equipment |
6 |
|
34,979 |
|
|
18,437 |
|
Restricted cash |
4 |
|
51,885 |
|
|
39,227 |
|
Acquisition of company (net of cash acquired of $6.4
million) |
|
|
— |
|
|
6,430 |
|
Net investing cash flow |
|
|
(115,306) |
|
|
(388,634) |
|
Cash and cash equivalents |
|
|
|
|
|
Change during the period |
|
|
(41,215) |
|
|
41,361 |
|
Impact of foreign exchange on cash |
|
|
51 |
|
|
(3,838) |
|
Balance, beginning of the period |
|
|
235,734 |
|
|
199,388 |
|
Balance, end of the period |
|
|
194,570 |
|
|
236,911 |
|
The accompanying notes are an integral part of the unaudited
interim condensed consolidated financial statements.
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 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
November 5, 2021.
b.Going
concern
As at September 30, 2021, the Partnership had a working capital
deficit of $477.9 million primarily relating to scheduled
maturities and repayments of $565.9 million of outstanding
borrowings during the 12 months ending September 30, 2022, which
amounts were classified as current as at September 30,
2021.
The working capital deficit of $477.9 million as at September 30,
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 $67.2 million mainly relating to
amounts held in escrow for a shuttle tanker newbuilding yard
installment payment as at December 31, 2020, a decrease in accounts
receivable and other of $45.1 million, an increase of debt
repayments of $203.9 million mainly due to the maturity of the
Partnership's $250 million senior unsecured bonds due in the third
quarter of 2022 and and increase in related party borrowings $53.5
million, partially offset by a decrease in other financial
liabilities of $157.1 million primarily due to the termination or
amendment of certain interest rate swaps during the nine months
ended September 30, 2021 and accounts payable and other of $14.6
million.
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.
During the three months ended September 30, 2021, the Partnership
completed various measures to improve its debt maturity profile and
enhance its liquidity and financial flexibility. See Notes 12a and
16 for additional information. Other potential sources of financing
that the Partnership is actively pursuing, or may consider
pursuing, during the one-year period to September 30, 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 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 increase its liquidity
that it
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
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
September 30, 2022.
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 the amendments did not have an impact on the
Partnership's unaudited interim condensed consolidated financial
statements as at and for the three and nine months ended September
30, 2021. The Partnership's risk management strategy has not
changed as a result of these matters.
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, an administrator of regulated benchmarks, 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 September 30, 2021, the Partnership had $1.7 billion of
outstanding LIBOR-referenced borrowings summarized as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal |
|
Weighted-average term |
|
Transition Progress |
|
$ |
|
(years) |
|
|
Revolving Credit Facilities |
361,411 |
|
|
2.39 |
|
Expected to amend fallback clauses prior to cessation of
publication of LIBOR. |
Term Loans |
1,122,197 |
|
|
4.10 |
|
Public Bonds |
200,000 |
|
|
3.05 |
|
Total |
1,683,608 |
|
|
3.61 |
|
|
Interest rate benchmark transition for derivatives
As at September 30, 2021, the Partnership had an outstanding
notional balance of $0.6 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. Such adherence
would result in all legacy trade under the derivatives following,
on the cessation of LIBOR, the fallback clause provided in the
protocol.
ii.Segments
As at January 1, 2021, the Partnership modified the cost
allocations between its operating segments. 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 operating
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 and the modifications have been
deemed to not be material for all operating segments and all
periods presented.
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
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,
including whether any additional indicators of impairment were
present for the three and nine months ended September 30, 2021. The
Partnership will continue to monitor the COVID-19 situation and
review its critical estimates and judgements as circumstances
evolve.
iv.Related
Party Borrowings Reclassification
The accounting policy elected historically by the Partnership has
reflected its long-term debt within two line items, Borrowings and
Due to related parties. Borrowings has included publicly listed
debt held by third parties and by Brookfield. The related party
component of publicly listed Borrowings has been historically
disclosed in the notes to the financial statements.
On August 27, 2021, the Partnership completed a refinancing with
Brookfield (or
the Brookfield Exchanges)
(see Note 12a for additional information) and voluntarily revised
the Partnerships accounting policy to classify all debt held by
Brookfield, regardless of the nature of the instrument as Due to
related parties. The Partnership believes it is preferable to have
a consistent practice in showing all related party debt on the same
financial statement line items.
The Partnership has reflected this change retrospectively by
restating its comparative consolidated statement of financial
position. Following the change, debt will continue to be included
in two line items, Borrowings, which will include only debt held by
third-party counterparties and Due to related parties, which will
include all debt where Brookfield or other affiliates are the
ultimate counterparty, regardless of whether a debt instrument is
publicly listed. Additionally, all accrued interest on related
party debt will be reflected within the Due to related parties line
item rather than within Accounts payable and other, as previously
reported.
The following table provides a reconciliation of the resulting
reclassifications directly related to the change in accounting
policy discussed above to the Partnerships
consolidated statements of financial position:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
|
As at |
|
December 31, 2020 |
|
|
|
December 31, 2020 |
|
As Previously Reported |
|
Reclassifications |
|
Restated(1)
|
|
$ |
|
$ |
|
$ |
Accounts payable and other |
302,414 |
|
(16,119) |
|
286,295 |
Due to related parties |
7 |
|
16,119 |
|
16,126 |
Total current liabilities |
302,421 |
|
— |
|
302,421 |
Borrowings |
2,808,898 |
|
(411,260) |
|
2,397,638 |
Due to related parties |
194,628 |
|
411,260 |
|
605,888 |
Total non-current liabilities |
3,003,526 |
|
— |
|
3,003,526 |
Total liabilities |
3,305,947 |
|
— |
|
3,305,947 |
(1)The
Partnership has elected to restate its December 31, 2020
consolidated statement of financial position to retrospectively
show the change in accounting policy adopted during the three
months ended September 30, 2021. The impact of the accounting
policy change as at December 31, 2020 is a reclassification of the
Partnerships $411.3 million outstanding senior unsecured bonds held
by Brookfield from Borrowings (non-current) to Due to related
parties (non-current) and $16.1 million in accrued interest on said
bonds from Accounts payable and other (current) to Due to related
parties (current).
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
3.Fair
Value of Financial Instruments
The following tables provide the details of the Partnership's
financial instruments and their associated classifications as at
September 30, 2021 and December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020
Restated(6)
|
Measurement Basis |
|
FVTPL(5)
$
|
|
Amortized cost
$ |
|
Total
$ |
|
FVTPL(5)
$
|
|
Amortized cost
$ |
|
Total
$ |
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
— |
|
|
194,570 |
|
|
194,570 |
|
|
— |
|
|
235,734 |
|
|
235,734 |
|
Financial assets (current and non-current) |
|
534 |
|
|
81,504 |
|
|
82,038 |
|
|
6,497 |
|
|
133,389 |
|
|
139,886 |
|
Accounts and other receivable, net (current and
non-current)
(1)
|
|
— |
|
|
168,845 |
|
|
168,845 |
|
|
— |
|
|
212,316 |
|
|
212,316 |
|
Due from related parties (current and non-current) |
|
— |
|
|
685 |
|
|
685 |
|
|
— |
|
|
9,980 |
|
|
9,980 |
|
Other assets (current and non-current)
(2)
|
|
— |
|
|
55,335 |
|
|
55,335 |
|
|
— |
|
|
59,905 |
|
|
59,905 |
|
Total |
|
534 |
|
|
500,939 |
|
501,473 |
|
6,497 |
|
651,324 |
|
657,821 |
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and other
(3)
|
|
— |
|
|
90,334 |
|
|
90,334 |
|
|
— |
|
|
81,850 |
|
|
81,850 |
|
Other financial liabilities (current and non-
current)
(4)
|
|
31,645 |
|
|
201,853 |
|
|
233,498 |
|
|
203,597 |
|
|
139,738 |
|
|
343,335 |
|
Due to related parties (current and non-current) |
|
— |
|
|
776,328 |
|
|
776,328 |
|
|
— |
|
|
622,014 |
|
|
622,014 |
|
Borrowings (current and non-current) |
|
— |
|
|
2,573,569 |
|
|
2,573,569 |
|
|
— |
|
|
2,759,717 |
|
|
2,759,717 |
|
Total |
|
31,645 |
|
|
3,642,084 |
|
3,673,729 |
|
203,597 |
|
3,603,319 |
|
3,806,916 |
(1)Excludes
sales tax receivable of $8.7 million as at September 30, 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.
(5)Fair
value through profit or loss (or
FVTPL).
(6)See
Note 2c iv) for additional information.
The fair value of all financial assets and liabilities as at
September 30, 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
$2,534 million (December 31, 2020 Restated: $2,753 million)
compared to a carrying value of $2,574 million (December 31, 2020
Restated: $2,760 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.
In addition, within the December 31, 2020 Restated Due to related
parties (current and non-current) shown above, $411.3 million of
the outstanding senior unsecured bonds held by Brookfield were fair
valued using Level 1 and Level 2 inputs and resulted in a fair
value of $351.4 million.
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 and nine months ended September 30, 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 and
nine months ended September 30, 2021. The following table provides
the fair value measurement hierarchy of the Partnership's financial
assets and
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
liabilities measured at fair value through profit or loss on a
recurring basis as at September 30, 2021 and December 31,
2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
Financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments |
|
— |
|
|
534 |
|
|
— |
|
|
— |
|
|
6,497 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
— |
|
|
534 |
|
|
— |
|
|
— |
|
|
6,497 |
|
|
— |
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments |
|
— |
|
|
31,645 |
|
|
— |
|
|
— |
|
|
203,597 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
— |
|
|
31,645 |
|
|
— |
|
|
— |
|
|
203,597 |
|
|
— |
|
4.Financial
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
|
|
$ |
|
$ |
|
Current |
|
|
|
|
Restricted cash
(1)
|
35,766 |
|
|
97,017 |
|
|
Derivative instruments
(2)
|
534 |
|
|
6,497 |
|
|
Total current |
36,300 |
|
|
103,514 |
|
|
Non-current |
|
|
|
|
Restricted cash
(1)
|
45,738 |
|
|
36,372 |
|
|
|
|
|
|
|
Total non-current |
45,738 |
|
|
36,372 |
|
|
(1)Restricted
cash as at September 30, 2021 includes 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
Vessel |
|
Segment |
|
$ |
|
$ |
Navion Anglia |
|
Shuttle Tanker Segment |
|
— |
|
|
4,400 |
|
Navion Oslo |
|
Shuttle Tanker Segment |
|
— |
|
|
3,100 |
|
Navion Stavanger |
|
Shuttle Tanker Segment |
|
9,900 |
|
|
— |
|
|
|
|
|
9,900 |
|
|
7,500 |
|
The fair value of vessels and equipment classified as held for sale
measured on a non-recurring basis was $9.9 million and $7.5 million
as at September 30, 2021 and December 31, 2020,
respectively.
6.Gain
(Loss) on Dispositions, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period |
|
Vessel |
|
Segment |
|
Net Proceeds ($) |
|
Gain (Loss) on Dispositions, Net ($) |
Q3-21 |
|
Navion Anglia |
|
Shuttle Tanker Segment |
|
6,144 |
|
|
1,397 |
|
Gain (loss) on dispositions, net for the three months ended
September 30, 2021
|
|
1,397 |
|
|
|
|
|
|
|
|
|
|
Q2-21 |
|
Dampier Spirit |
|
FSO Segment |
|
3,970 |
|
|
3,970 |
|
Q2-21 |
|
Navion Oceania |
|
Shuttle Tanker Segment |
|
10,618 |
|
|
2,576 |
|
Q2-21 |
|
Navion Oslo |
|
Shuttle Tanker Segment |
|
3,160 |
|
|
(29) |
|
Q2-21 |
|
Stena Natalita |
|
Shuttle Tanker Segment |
|
8,198 |
|
|
(299) |
|
Q2-21(1)
|
|
Apollo Spirit |
|
FSO Segment |
|
2,889 |
|
|
2,889 |
|
|
|
|
|
|
|
|
|
|
Gain (loss) on dispositions, net for the nine months ended
September 30, 2021
|
|
10,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3-20 |
|
Navion Bergen |
|
Shuttle Tanker Segment |
|
3,385 |
|
|
(19) |
|
Gain (loss) on dispositions, net for the three months ended
September 30, 2020
|
|
(19) |
|
|
|
|
|
|
|
|
|
|
Q2-20 |
|
HiLoad
DP unit
|
|
Shuttle Tanker Segment |
|
— |
|
|
(1,388) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 nine months ended
September 30, 2020
|
|
(1,969) |
|
(1)The
Apollo Spirit
FSO was sold in December 2020 and a gain on sale of $5.4 million
was recorded as at December 31, 2020. An additional gain of $2.9
million was recorded in June 2021 after the official recycling of
the vessel was completed based on a recycling rate agreed upon with
the buyer per the terms of the contract.
7.Vessels
and Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
|
|
$ |
|
$ |
|
Gross carrying amount: |
|
|
|
|
Opening balance at beginning of year |
4,025,498 |
|
|
3,531,827 |
|
|
Additions |
28,897 |
|
|
41,346 |
|
|
Dispositions
(1)
|
(48,914) |
|
|
(29,242) |
|
|
Transferred from advances on newbuilding contracts |
253,301 |
|
|
543,131 |
|
|
Vessels and equipment reclassified as held for sale
(2)
|
(36,500) |
|
|
(61,564) |
|
|
Closing balance at end of period |
4,222,282 |
|
|
4,025,498 |
|
|
Accumulated Depreciation and Impairment: |
|
|
|
|
Opening balance at beginning of year |
(996,083) |
|
|
(506,111) |
|
|
Depreciation and amortization
(3)
|
(226,893) |
|
|
(295,610) |
|
|
Impairment expense, net
(4)
|
— |
|
|
(245,396) |
|
|
Dispositions
(1)
|
33,916 |
|
|
15,050 |
|
|
Vessels and equipment reclassified as held for sale
(2)
|
26,600 |
|
|
35,984 |
|
|
Closing balance at end of period |
(1,162,460) |
|
|
(996,083) |
|
|
Net book value |
3,059,822 |
|
|
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 nine
months ended September 30, 2021 and year ended December 31,
2020.
Impairment expense, net
The Partnership incurred no impairment expense for the three and
nine months ended September 30, 2021.
The table below indicates impairment expense, net for the three and
nine months ended September 30, 2020.
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period |
|
Vessel |
|
Segment |
|
Event |
|
Fair Value Hierarchical Level |
|
Valuation Techniques and Key Inputs |
|
Impairment Expense
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2020(1)
|
|
Apollo Spirit |
|
FSO |
|
Expected sale of the vessel |
|
Level 2 |
|
Fair value less cost to sell using an appraised
valuation |
|
1,620 |
|
Q3 2020(1)
|
|
Navion Anglia |
|
Shuttle Tanker |
|
Expected sale of the vessel |
|
Level 2 |
|
Fair value less cost to sell using an appraised
valuation |
|
3,100 |
|
Impairment expense, net for the three months ended September 30,
2020 |
|
4,720 |
|
Q2 2020(1)
|
|
Dampier Spirit |
|
FSO |
|
Expected sale of the vessel |
|
Level 2 |
|
Fair value less cost to sell using an appraised
valuation |
|
6,685 |
|
Q2 2020 |
|
Navion Bergen |
|
Shuttle Tanker |
|
Expected sale of the vessel |
|
Level 2 |
|
Fair value less cost to sell using an appraised
valuation |
|
1,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment expense, net for the nine months ended September 30,
2020 |
|
184,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Vessels
and equipment were classified as held for sale as at September 30,
2020.
The fair value of vessels and equipment measured on a non-recurring
basis was $nil and $140.5 million as at September 30, 2021 and
December 31, 2020, respectively.
8.Advances
on Newbuilding Contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
|
$ |
|
$ |
Opening balance at beginning of year |
127,335 |
|
|
297,100 |
|
Additions |
164,807 |
|
|
368,588 |
|
Capitalized borrowing costs |
754 |
|
|
4,778 |
|
Transferred to vessels and equipment |
(253,301) |
|
|
(543,131) |
|
Closing balance at end of period |
39,595 |
|
|
127,335 |
|
As at September 30, 2021, the Partnership has commitments relating
to shipbuilding contracts for one shuttle tanker newbuilding, which
is expected to be delivered in 2022. As at September 30, 2021,
gross payments made towards this vessel was $39.6 million. The
Partnership secured $105.6 million of borrowings relating to this
shuttle tanker newbuilding, which as at September 30, 2021 had an
undrawn balance of $73.9 million (see Note 11 for additional
information).
As at September 30, 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 |
|
86.3 |
|
|
86.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
9.Accounts
Payable and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 Restated(3)
|
|
|
|
$ |
|
$ |
|
|
Current |
|
|
|
|
|
Accounts payable |
64,416 |
|
|
46,022 |
|
|
|
Accrued liabilities |
113,954 |
|
|
127,541 |
|
|
|
Provisions
(1)
|
1,299 |
|
|
7,522 |
|
|
|
Deferred revenues |
77,970 |
|
|
91,392 |
|
|
|
Lease liabilities |
14,053 |
|
|
13,818 |
|
|
|
|
|
|
|
|
|
Total current |
271,692 |
|
|
286,295 |
|
|
|
Non-current |
|
|
|
|
|
Deferred revenues |
483 |
|
|
11,616 |
|
|
|
Lease liabilities |
11,865 |
|
|
22,010 |
|
|
|
Provisions
(1)
|
60,220 |
|
|
60,179 |
|
|
|
Decommissioning liability
(2)
|
33,495 |
|
|
33,901 |
|
|
|
Other |
993 |
|
|
965 |
|
|
|
Total non-current |
107,056 |
|
|
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 September 30, 2021.
(3)See
Note 2c iv) for additional information.
Provisions
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
|
$ |
|
$ |
Opening balance at beginning of year |
67,701 |
|
|
67,906 |
|
Additional provisions recognized |
153 |
|
|
12,033 |
|
Reduction arising from payments / derecognition |
(6,335) |
|
|
(12,238) |
|
Closing balance at end of period |
61,519 |
|
|
67,701 |
|
10.Other
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
|
$ |
|
$ |
Current |
|
|
|
Derivative instruments |
30,867 |
|
|
189,647 |
|
Obligations relating to finance leases |
10,987 |
|
|
8,839 |
|
Other |
— |
|
|
499 |
|
Total current |
41,854 |
|
|
198,985 |
|
Non-current |
|
|
|
Derivative instruments |
778 |
|
|
13,950 |
|
Obligations relating to finance leases |
190,866 |
|
|
130,400 |
|
Total non-current |
191,644 |
|
|
144,350 |
|
As at September 30, 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 |
|
204.5 |
|
|
11.3 |
|
|
11.3 |
|
|
11.3 |
|
|
11.3 |
|
|
11.3 |
|
|
148.0 |
|
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
The liability for the finance leases accrues interest at a variable
rate of LIBOR plus a margin of 2.85%. As at September 30, 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021 |
|
December 31, 2020 |
|
Financial Asset |
|
Financial Liability |
|
Financial Asset |
|
Financial Liability |
|
$ |
|
$ |
|
$ |
|
$ |
Interest rate swaps |
— |
|
|
31,070 |
|
|
— |
|
|
203,597 |
|
Foreign currency forward contracts |
534 |
|
|
575 |
|
|
6,497 |
|
|
— |
|
|
|
|
|
|
|
|
|
Total |
534 |
|
|
31,645 |
|
|
6,497 |
|
|
203,597 |
|
Total current |
534 |
|
|
30,867 |
|
|
6,497 |
|
|
189,647 |
|
Total non-current |
— |
|
|
778 |
|
|
— |
|
|
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
was reduced to $132.0 million in April 2021. These agreements
include mandatory termination provisions which terminate these
interest rate swaps February 2022.
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 September 30, 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 |
|
152,903 |
|
|
(8,392) |
|
|
0.80 |
|
|
2.6 |
% |
U.S. Dollar-denominated interest rate swaps
(4)
|
LIBOR |
|
424,100 |
|
|
(22,678) |
|
|
0.98 |
|
|
2.5 |
% |
|
|
|
577,003 |
|
|
(31,070) |
|
|
|
|
|
(1)Excludes
accrued interest of $3.5 million.
(2)Excludes
the margins the Partnership pays on its variable-rate debt, which
as at September 30, 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 and nine months ended
September 30, 2021 and 2020 as follows:
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
$ |
|
$ |
|
$ |
|
$ |
Realized gain (loss) on derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps |
(3,528) |
|
|
(14,244) |
|
|
(160,398) |
|
|
(45,887) |
|
Foreign currency forward contracts |
343 |
|
|
675 |
|
|
6,353 |
|
|
(2,439) |
|
|
(3,185) |
|
|
(13,569) |
|
|
(154,045) |
|
|
(48,326) |
|
Unrealized gain (loss) on derivative instruments |
|
|
|
|
|
|
|
Interest rate swaps |
3,651 |
|
|
14,174 |
|
|
172,527 |
|
|
(56,667) |
|
Foreign currency forward contracts |
(869) |
|
|
1,822 |
|
|
(6,538) |
|
|
1,304 |
|
|
2,782 |
|
|
15,996 |
|
|
165,989 |
|
|
(55,363) |
|
Total realized and unrealized gain (loss) on derivative
instruments |
(403) |
|
|
2,427 |
|
|
11,944 |
|
|
(103,689) |
|
The following table presents the notional amounts underlying the
Partnership's derivative financial instruments by term to maturity
as at September 30, 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 |
|
577.0 |
|
|
554.9 |
|
|
3.8 |
|
|
3.8 |
|
|
3.8 |
|
|
3.8 |
|
|
6.9 |
|
Foreign currency forward contracts |
|
49.0 |
|
|
49.0 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total |
|
626.0 |
|
|
603.9 |
|
|
3.8 |
|
|
3.8 |
|
|
3.8 |
|
|
3.8 |
|
|
6.9 |
|
11.Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average term |
|
Weighted average rate |
|
September 30, 2021 |
|
December 31, 2020 Restated(1)
|
|
|
|
September 30, 2021 |
|
December 31, 2020 Restated(1)
|
|
|
|
September 30, 2021 |
|
December 31, 2020 Restated(1)
|
|
|
|
$ |
|
$ |
|
|
|
(years) |
|
(years) |
|
|
|
(%) |
|
(%) |
|
|
Revolving Credit Facilities |
361,411 |
|
|
439,600 |
|
|
|
|
2.39 |
|
3.07 |
|
|
|
2.73 |
|
|
2.81 |
|
|
|
Term Loans |
1,326,490 |
|
|
1,426,370 |
|
|
|
|
4.93 |
|
5.51 |
|
|
|
2.65 |
|
|
2.69 |
|
|
|
Public Bonds
(1)
|
727,480 |
|
|
726,826 |
|
|
|
|
1.82 |
|
2.57 |
|
|
|
7.51 |
|
|
7.53 |
|
|
|
Non-Public Bonds |
187,823 |
|
|
206,870 |
|
|
|
|
4.29 |
|
5.04 |
|
|
|
6.13 |
|
|
6.13 |
|
|
|
Total |
2,603,204 |
|
|
2,799,666 |
|
|
|
|
3.66 |
|
4.33 |
|
|
|
4.27 |
|
|
4.22 |
|
|
|
Less: deferred financing costs and other |
(29,635) |
|
|
(39,949) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total borrowings |
2,573,569 |
|
|
2,759,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less current portion |
(565,930) |
|
|
(362,079) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term portion |
2,007,639 |
|
|
2,397,638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)See
Note 2c iv) for additional information.
Revolving Credit Facilities
As at September 30, 2021, the Partnership had two revolving credit
facilities (December 31, 2020 - two), which, as at such date,
provided for total borrowings of up to $361.4 million (December 31,
2020 - $439.6 million), and were fully drawn (December 31, 2020 -
fully drawn).
Term Loans
As at September 30, 2021, the Partnership had term loans which
totaled $1.3 billion (December 31, 2020 - $1.4 billion).
The term loans reduce over time with monthly, quarterly or
semi-annual payments and have varying maturities through 2034. As
at September 30, 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.
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
Public and Non-Public Bonds
As at September 30, 2021, the Partnership had public bonds
outstanding which totaled $727.5 million (December 31, 2020
Restated - $726.8 million) and non-public bonds outstanding which
totaled $187.8 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.
In August 2021, a subsidiary of the Partnership entered into an
agreement with Brookfield, which involved the exchange of $411.3
million in aggregate principal amount of the 8.50% Senior Notes due
2023 for newly issued 11.50% Senior Secured PIK Notes due August
2026 (or the
New PIK Notes)
in an equal aggregate principal amount. See Note 12a for a detailed
description of the Brookfield Exchanges.
As at September 30, 2021, the contractual maturities of the
Partnership 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 |
|
1,132.7 |
|
|
273.9 |
|
|
243.6 |
|
|
190.2 |
|
|
125.8 |
|
|
115.2 |
|
|
184.0 |
|
Secured debt - repayments on maturity |
|
743.0 |
|
|
41.8 |
|
|
266.1 |
|
|
237.5 |
|
|
— |
|
|
197.6 |
|
|
— |
|
Public bond repayments |
|
727.5 |
|
|
251.8 |
|
|
275.7 |
|
|
— |
|
|
200.0 |
|
|
— |
|
|
— |
|
Total borrowings |
|
2,603.2 |
|
|
567.5 |
|
|
785.4 |
|
|
427.7 |
|
|
325.8 |
|
|
312.8 |
|
|
184.0 |
|
Unsecured revolving credit facilities - due
to related parties
(1)
|
|
769.3 |
|
|
70.0 |
|
|
— |
|
|
— |
|
|
— |
|
|
699.3 |
|
|
— |
|
(1)See
Note 12 for additional information.
As at September 30, 2021, the Partnership was in compliance with
all financial covenants under its borrowings.
Interest paid on the Partnership's borrowings during the three and
nine months ended September 30, 2021 was $61.4 million and $141.6
million, respectively (three and nine months ended September 30,
2020 - $56.7 million and $152.2 million,
respectively).
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 and nine months ended September 30, 2021, total
compensation expenses of these three key management personnel of
the Partnership were $0.4 million and $2.1 million, respectively
(three and nine months ended September 30, 2020 - $0.3 million and
$1.9 million, respectively).
The Partnership is a party to the following transactions with
related parties:
a)On
August 27, 2021, a wholly owned subsidiary of the Partnership,
Altera Infrastructure Holdings L.L.C., as issuer, and the
Partnership, as parent guarantor, entered into an agreement to
exchange an aggregate of $699.3 million of indebtedness in the
Partnership with interest rates ranging from 5.00% to 11.50% and
with maturities ranging from 2022 to 2024, including $415.2 million
in aggregate principal amount of the 8.50% Senior Notes due 2023,
$236.9 million in aggregate principal amount of loans relating to
an unsecured revolving credit facility provided by Brookfield,
which was due to mature in October 2024, $30.0 million in aggregate
principal amount of loans relating to an unsecured revolving credit
facility provided by Brookfield, which was due to mature in
February 2022, and $17.2 million in aggregate principal amount of
loans relating to an unsecured revolving credit facility provided
by Brookfield, which was due to mature in July 2022, in each case
for newly issued 11.50% Senior Secured PIK Notes due August 2026 in
an equal aggregate principal amount. As at September 30, 2021, the
Partnership has accrued a total of $7.4 million of PIK interest,
increasing the principal amount of the New PIK Notes in an amount
equal to the interest. Any outstanding principal balances are due
on the maturity date.
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 the
date of the Brookfield Exchanges, August 27, 2021, Brookfield held
$411.3 million of these bonds (December 31, 2020 - $411.3 million).
As part of the Brookfield Exchanges, an additional aggregate
principal amount in New PIK Notes equal to the accrued and unpaid
interest with respect to the foregoing exchanged indebtedness
amounted to $4.0 million. In line with the Partnership’s new
accounting policy election these notes have been retrospectively
reclassified from Borrowings (non-current) to Due to related
parties (non-current) on the Partnership's unaudited interim
condensed consolidated statements of financial position. Please
refer to Note 2c iv) for additional information.
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
As at the date of the Brookfield Exchanges, August 27, 2021, the
Partnership had an undrawn balance of $nil (December 31, 2020 -
$nil) relating to an unsecured revolving credit facility provided
by Brookfield, which had previously provided for borrowings of up
to $225.0 million and matured on October 31, 2024. The interest
payments on the facility were based on LIBOR plus a margin of
5.00%. The agreement provided the Partnership the option to defer
interest payments of up to $25.0 million until maturity. As at
August 27, 2021, the Partnership had deferred a total of $11.9
million of interest payments were exchanged for an additional
aggregate principal amount in New PIK Notes per the terms of the
Brookfield Exchanges per the terms of the Brookfield Exchanges. Any
outstanding principal balances were 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 a
result of the Brookfield Exchanges, the Partnership determined that
the New PIK Notes were issued at fair value and therefore the
remaining unamortized discount of $28.0 million was recorded as a
loss through Other income (expense), net on the Partnership’s
unaudited interim condensed consolidated statements of income
(loss) during the three and nine months ended September 30,
2021.
Prior to the Brookfield Exchanges, during the nine months ended
September 30, 2021, the Partnership entered into an unsecured
revolving credit facility provided by Brookfield, which had
previously provided for borrowings of up to $30.0 million and as at
the date of the Brookfield Exchanges, August 27, 2021, was fully
drawn. The interest payments on the facility were based on LIBOR
plus a margin of 5.00% and the facility matured in February 2022.
Any outstanding principal balances were due on the maturity date.
During the nine months ended September 30, 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 nine months ended September 30, 2021. As a result of the
Brookfield Exchanges, the Partnership determined that the New PIK
Notes were issued at fair value and therefore the remaining
unamortized discount of $0.5 million was recorded as a loss through
Other income (expense), net on the Partnership’s unaudited interim
condensed consolidated statements of income (loss) during the three
and nine months ended September 30, 2021.
Prior to the Brookfield Exchanges, during the three and nine months
ended September 30, 2021, a subsidiary of the Partnership entered
into an unsecured revolving credit facility provided by Brookfield,
which had previously provided for borrowings of up to $17.0 million
and as at the date of the Brookfield Exchanges, August 27, 2021,
was fully drawn. The PIK Term Loan bore interest solely in kind at
a rate of 11.5% per annum. The PIK Term Loan had a maturity date of
July 2022. Any outstanding principal balances were due on the
maturity date. As part of the Brookfield Exchanges, an additional
aggregate principal amount in New PIK Notes equal to the accrued
and unpaid interest with respect to the foregoing exchanged
indebtedness amounted to $0.2 million.
b)During
the nine months ended September 30, 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 September 30, 2021, was fully drawn. 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 nine
months ended September 30, 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 nine months ended September 30, 2021. As at September
30, 2021, the Partnership was in compliance with the covenant
requirements of this revolving credit facility.
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 September 30, |
|
Nine Months Ended September 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
$ |
|
$ |
|
$ |
|
$ |
Revenues
(1)
|
2,184 |
|
|
1,941 |
|
|
7,127 |
|
|
5,967 |
|
|
|
|
|
|
|
|
|
General and administrative expenses
(2)
|
(306) |
|
|
(107) |
|
|
(828) |
|
|
(363) |
|
Depreciation and amortization |
(55) |
|
|
(50) |
|
|
(158) |
|
|
(160) |
|
Interest expense
(3)(4)(5)
|
(18,707) |
|
|
(12,016) |
|
|
(47,830) |
|
|
(30,576) |
|
Other income (expense), net
(6)
|
(28,517) |
|
|
— |
|
|
(28,517) |
|
|
— |
|
|
|
|
|
|
|
|
|
(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.
(3)Includes
interest expense of $5.4 million and $22.8 million for the three
and nine months ended September 30, 2021 (three and nine months
ended September 30, 2020 - $8.7 million and $26.2 million),
incurred on a portion of five-year senior unsecured bonds held by
Brookfield (see Note 12a for additional information).
(4)Includes
interest expense of $3.3 million and $10.3 million for the three
and nine months ended September 30, 2021 (three and nine months
ended September 30, 2020 - $2.4 million and $4.7 million), and an
accretion expense of $2.6 million and $7.4 million for the three
and nine months ended September 30, 2021 (three and nine months
ended September 30, 2020 - accretion expense of $1.0 million and
$1.0 million, accretion income of $nil million and $1.3 million)
incurred on the unsecured revolving credit facilities provided by
Brookfield (see Notes 12a and 12b for additional
information).
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
(5)Includes
interest expense of $7.4 million and $7.4 million for the three and
nine months ended September 30, 2021 (three and nine months ended
September 30, 2020 - $nil and $nil), incurred on the New PIK Notes
(see Note 12a for additional information).
(6)Includes
the write off of unamortized discounts of $28.5 million and $28.5
million for the three and nine months ended September 30, 2021
(three and nine months ended September 30, 2020 - $nil and $nil),
incurred on the unsecured revolving credit facilities provided by
Brookfield (see Note 12a additional information).
As at
September 30, 2021,
the carrying value of amounts due from related parties totaled $0.7
million (December
31, 2020
- $10.0 million).
As at
September 30, 2021, the carrying value of amounts due to
related
parties totaled $776.3 million (December 31, 2020 Restated - $622.0
million) and consisted only of 11.50% New PIK Notes and
unsecured
revolving credit facilities provided by Brookfield (see Note 12a
and 12b).
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 and
nine months ended September 30, 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 and nine months ended September 30, 2021 and 2020, by
contract type and by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
FPSO Segment |
|
Shuttle Tanker Segment |
|
FSO Segment |
|
UMS Segment |
|
Towage Segment |
|
Corporate/Eliminations(1)
|
|
Total |
Revenues from contracts with customers |
|
|
|
|
|
|
|
|
|
|
|
|
|
FPSO contracts |
36,287 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
36,287 |
|
CoAs |
— |
|
|
19,187 |
|
|
— |
|
|
— |
|
|
— |
|
|
(487) |
|
|
18,700 |
|
Time charters |
— |
|
|
23,399 |
|
|
8,805 |
|
|
— |
|
|
— |
|
|
— |
|
|
32,204 |
|
Bareboat charters |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Voyage charters |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
24,249 |
|
|
(2,163) |
|
|
22,086 |
|
Management fees and other |
37,855 |
|
|
1,979 |
|
|
1,250 |
|
|
227 |
|
|
43 |
|
|
— |
|
|
41,354 |
|
|
74,142 |
|
|
44,565 |
|
|
10,055 |
|
|
227 |
|
|
24,292 |
|
|
(2,650) |
|
|
150,631 |
|
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
FPSO contracts |
60,886 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
60,886 |
|
CoAs |
— |
|
|
25,718 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
25,718 |
|
Time charters |
— |
|
|
40,336 |
|
|
10,135 |
|
|
— |
|
|
— |
|
|
— |
|
|
50,471 |
|
Bareboat charters |
— |
|
|
1,748 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,748 |
|
Voyage charters |
— |
|
|
6,383 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,886 |
|
|
74,185 |
|
|
10,135 |
|
|
— |
|
|
— |
|
|
— |
|
|
145,206 |
|
Total revenues |
135,028 |
|
|
118,750 |
|
|
20,190 |
|
|
227 |
|
|
24,292 |
|
|
(2,650) |
|
|
295,837 |
|
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
As at September 30, 2021 and December 31, 2020 and for the three
and nine months ended September 30, 2021 and 2020
(all tabular amounts stated in thousands of U.S. Dollars, except
unit and per unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2020 |
FPSO Segment |
|
Shuttle Tanker Segment |
|
FSO Segment |
|
UMS Segment |
|
Towage Segment |
|
Corporate/Eliminations(1)
|
|
Total |
Revenues from contracts with customers |
|
|
|
|
|
|
|
|
|
|
|
|
|
FPSO contracts |
39,163 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
39,163 |
|
CoAs |
— |
|
|
18,838 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
18,838 |
|
Time charters |
— |
|
|
22,449 |
|
|
9,403 |
|
|
— |
|
|
— |
|
|
— |
|
|
31,852 |
|
Bareboat charters |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Voyage charters |
— |
|
|
1,119 |
|
|
— |
|
|
— |
|
|
16,929 |
|
|
— |
|
|
18,048 |
|
Management fees and other |
36,343 |
|
|
847 |
|
|
370 |
|
|
462 |
|
|
— |
|
|
— |
|
|
38,022 |
|
|
75,506 |
|
|
43,253 |
|
|
9,773 |
|
|
462 |
|
|
16,929 |
|
|
— |
|
|
145,923 |
|
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
FPSO contracts |
41,939 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
41,939 |
|
CoAs |
— |
|
|
31,037 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
31,037 |
|
Time charters |
— |
|
|
35,642 |
|
|
18,077 |
|
|
— |
|
|
— |
|
|
— |
|
|
53,719 |
|
Bareboat charters |
— |
|
|
4,326 |
|
|
3,735 |
|
|
— |
|
|
— |
|
|
— |
|
|
8,061 |
|
Voyage charters |
— |
|
|
5,911 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5,911 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,939 |
|
|
76,916 |
|
|
21,812 |
|
|
— |
|
|
— |
|
|
— |
|
|
140,667 |
|
Total revenues |
117,445 |
|
|
120,169 |
|
|
31,585 |
|
|
462 |
|
|
16,929 |
|
|
— |
|
|
286,590 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2021 |
FPSO Segment |
|
Shuttle Tanker Segment |
|
FSO Segment |
|
UMS Segment |
|
Towage Segment |
|
Corporate/Eliminations(1)
|
|
Total |
Revenues from contracts with customers |
|
|
|
|
|
|
|
|
|
|
|
|
|
FPSO contracts |
94,772 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
94,772 |
|
CoAs |
— |
|
|
64,658 |
|
|
— |
|
|
— |
|
|
— |
|
|
(487) |
|
|
64,171 |
|
Time charters |
— |
|
|
69,332 |
|
|
24,820 |
|
|
— |
|
|
— |
|
|
— |
|
|
94,152 |
|
Bareboat charters |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Voyage charters |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
49,665 |
|
|
(8,821) |
|
|
40,844 |
|
Management fees and other |
117,382 |
|
|
11,943 |
|
|
2,530 |
|
|
666 |
|
|
178 |
|
|
— |
|
|
132,699 |
|
|
212,154 |
|
|
145,933 |
|
|
27,350 |
|
|
666 |
|
|
49,843 |
|
|
(9,308) |
|
|
426,638 |
|
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
FPSO contracts |
141,599 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
141,599 |
|
CoAs |
— |
|
|
92,478 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
92,478 |
|
Time charters |
— |
|
|
119,321 |
|
|
29,356 |
|
|
— |
|
|
— |
|
|
— |
|
|
148,677 |
|
Bareboat charters |
— |
|
|
6,394 |
|
|
1,273 |
|
|
— |
|
|
— |
|
|
— |
|
|
7,667 |
|
|