SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| ALTERA INFRASTRUCTURE L.P. |
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| By: | ALTERA INFRASTRUCTURE GP L.L.C., its general partner |
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| Date: August 4, 2022 | By: | | /s/ Mark Mitchell |
| | | Mark Mitchell
Company Secretary |
Press Release ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
Altera Infrastructure Reports Second Quarter 2022 Results
Aberdeen, United Kingdom, August 4, 2022 - Altera Infrastructure GP LLC (Altera GP), the general partner of Altera Infrastructure L.P. (Altera or the Partnership), today reported the Partnership’s results for the quarter ended June 30, 2022.
•Revenues of $296.2 million and net loss of $40.0 million, or $(0.11) per common unit, in the second quarter of 2022.
•Adjusted EBITDA(1) of $129.1 million in the second quarter of 2022.
The following table presents the Partnership's Consolidated Financial Summary:
| | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | |
| | June 30, | | March 31, | | June 30, | | |
| | | | 2022 | | | | |
| 2022 | | Restated(2) | | 2021 | | |
| In thousands of U.S. Dollars, unaudited | $ | | $ | | $ | | |
| IFRS FINANCIAL RESULTS | | | | | | | |
| Revenues | 296,234 | | 323,655 | | 266,935 | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Net Income (loss) | (39,989) | | 52,908 | | (28,488) | | |
Limited partners' interest in net income (loss) per common unit - basic | (0.11) | | 0.11 | | (0.08) | | |
| | | | | | | | |
| | | | | | | |
| NON-IFRS FINANCIAL MEASURE: | | | | | | | |
| | | | | | | |
Adjusted EBITDA (1) | 129,146 | | 179,528 | | 109,595 | | |
| | | | | | | | |
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(1)Please refer to "Non-IFRS Measures" for the definition of this term and reconciliation of this non-IFRS measure as used in this release to the most directly comparable measure under IFRS.
(2)See the unaudited interim condensed consolidated statements of income (loss) below for additional information.
The Partnership generated net loss of $40 million for the three months ended June 30, 2022, compared to net loss of $28 million for the three months ended June 30, 2021. The decrease of $12 million was primarily due to vessel impairments in the current period, absence of contribution from the Knarr FPSO going off contract May 1, 2022 and higher interest expenses in the second quarter of 2022, partially offset by higher Petrojarl I oil price tariff revenue, higher shuttle tanker utilization and lower depreciation expenses following impairments in the fourth quarter, compared to the same period during the prior year.
Adjusted EBITDA was $129 million for the three months ended June 30, 2022, compared to $110 million for the same period during the prior year. The increase of $19 million was primarily driven by higher Petrojarl I oil price tariff revenue and higher shuttle tanker utilization, partially offset by the absence of contribution from the Knarr FPSO going off contract May 1, 2022.
Altera Infrastructure L.P. 1
Operating Results
The commentary below compares certain results of the Partnership's operating segments on the basis of the non-IFRS measure of Adjusted EBITDA for the three months ended June 30, 2022 to the same period of the prior year.
The following table presents the Partnership's Adjusted EBITDA by segment (1):
| | | | | | | | | | | | | | | | | |
| | | | | |
| Three Months Ended |
| June 30, | | March 31, | | June 30, |
| | | 2022 | | |
| 2022 | | Restated(2) | | 2021 |
| In thousands of U.S. Dollars, unaudited | $ | | $ | | $ |
| FPSO | 53,424 | | 99,533 | | 45,364 |
| Shuttle Tanker | 69,494 | | 63,590 | | 57,662 |
| FSO | 10,565 | | 10,659 | | 9,587 |
| UMS | (3,940) | | (1,760) | | (1,627) |
| Towage | 3,649 | | 8,990 | | (1,357) |
| New Ventures | (678) | | (129) | | — |
| Corporate/Eliminations | (3,368) | | (1,355) | | (34) |
| Partnership's Adjusted EBITDA | 129,146 | | 179,528 | | 109,595 |
(1)These operating segments are regularly reviewed by the Partnership's chief operating decision maker (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 defined in this release under the heading “Non-IFRS Measures." Adjusted EBITDA is also used by external users of the Partnership's consolidated financial statements, such as investors and the Partnership’s controlling unitholder.
(2)See the unaudited interim condensed consolidated statements of income (loss) below for additional information.
Second Quarter 2022 Compared with Second Quarter 2021
The Partnership's FPSO segment generated Adjusted EBITDA of $53 million for the three months ended June 30, 2022, compared to $45 million for the three months ended June 30, 2021. The increase of $8 million was primarily due to Petrojarl I higher uptime and oil price tariff revenues, partially offset by an absence of contribution from the Knarr FPSO going off contract May 1, 2022.
The Partnership's Shuttle Tanker segment generated Adjusted EBITDA of $69 million for the three months ended June 30, 2022, compared to $58 million for the three months ended June 30, 2021. The increase of $11 million was primarily due to higher shuttle tanker utilization.
The Partnership's FSO segment generated Adjusted EBITDA of $11 million for the three months ended June 30, 2022, compared to $10 million for the three months ended June 30, 2021.
The Partnership's UMS segment generated an Adjusted EBITDA loss of $4 million for the three months ended June 30, 2022, compared to $2 million for the three months ended June 30, 2021. The $2 million increased loss was primarily due to mobilization costs for the Arendal Spirit UMS for its current contract as compared to being in lay-up in the prior year.
The Partnership's Towage segment generated Adjusted EBITDA of $4 million for the three months ended June 30, 2022, compared to an Adjusted EBITDA loss of $1 million for the three months ended June 30, 2021. The improvement of $5 million was primarily due to higher average day rates and utilization.
Altera Infrastructure L.P. 2
Strategic Updates
Liquidity Update
As at June 30, 2022, the Partnership had total liquidity of $186 million, compared to $241 million as at June 30, 2021, representing a decrease of $55 million.(1)
Financings
The Partnership has engaged with certain of its asset level secured lenders within its FPSO, FSO, Towage, and UMS segments to better align the terms of such debt with expected cash-flows from the applicable segment and with Brookfield Business Partners L.P. and its affiliates (or Brookfield) as secured lender to address its secured debt. The Partnership also anticipates engaging with its unsecured corporate level lenders to address its unsecured debt. As part of these efforts, the Partnership entered into extension agreements with certain of its lenders on June 16, 2022 to defer certain required payments until August 12, 2022. Furthermore, in July 2022, the Partnership opted not to make the interest payment due on July 15, 2022 for its 8.50% senior unsecured bonds with a principal amount outstanding of $276 million that mature in July 2023, and has elected to enter into a 30-day grace period for this interest payment.
Contract Updates
In July 2022, Energean Isreal Ltd. exercised an option to continue to deploy the Arendal Spirit UMS for 32 additional days.
In June 2022, Equinor ASA exercised a one-year extension option for the Randgrid FSO. The extended firm contract is effective until October 2023.
In May 2022, the Knarr FPSO ceased production on the Knarr field in the North Sea, after which decommissioning activities related to the field commenced.
Shuttle Tanker Newbuildings
In May 2022, the Partnership's final newbuilding in a series of seven, the shuttle tanker Altera Thule, commenced operations off the East Coast of Canada.
Vessel Sales
In July 2022, the Partnership sold the ALP Ace and ALP Ippon towage vessels for continued use in a non-competing industry for a total of $14 million.
In July 2022, the Partnership entered into an agreement to sell its 50% owned vessel, the Navion Gothenburg shuttle tanker for continued use for approximately $25 million (100%). Delivery is expected in August 2022.
In July 2022, the Partnership entered into an agreement to sell the Petronordic shuttle tanker for recycling for approximately $7 million. Delivery is expected in September 2022.
In May 2022, the Partnership completed the sale of the Petrojarl Varg FPSO unit for $22 million to an energy company for re-use as a production facility as part of a new field development opportunity.
In May 2022, the Partnership entered into an agreement to sell the Falcon Spirit FSO for recycling for $10 million; the vessel is expected to be delivered to the buyer in the third quarter of 2022.
(1)Total liquidity is defined as Cash and cash equivalents (excluding Cash deposits with third-party restrictions).
Altera Infrastructure L.P. 3
Forward Looking Statements
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including, among others: the completion of anticipated vessel sales; the expected delivery dates of vessels subject to sales agreements; and the Partnership's engagement with its lenders relating to rescheduling outstanding debt obligations. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: the length and outcome of the Partnership's ongoing engagement with its lenders relating to its outstanding debt obligations; the duration and scope of the COVID-19 pandemic and the severity of COVID variants; the duration and effects of Russia's invasion of Ukraine; and other factors discussed in the Partnership’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2021. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
About Altera Infrastructure L.P.
Altera Infrastructure L.P. is a leading global energy infrastructure services partnership primarily focused on the ownership and operation of critical infrastructure assets in the offshore oil regions of the North Sea, Brazil and the East Coast of Canada. Altera has consolidated assets of approximately $3.8 billion comprised of 44 vessels, including floating production, storage and offloading (FPSO) units, shuttle tankers, floating storage and offtake (FSO) units, long-distance towing and offshore installation vessels and a unit for maintenance and safety (UMS). The majority of Altera’s fleet is employed on medium-term, stable contracts.
Altera's preferred units trade on the New York Stock Exchange under the symbols "ALIN PR A", "ALIN PR B" and "ALIN PR E", respectively.
For Investor Relations inquiries contact:
Jan Rune Steinsland, Chief Financial Officer
Email: investor.relations@alterainfra.com
Tel: +47 97 05 25 33
Website: www.alterainfra.com
Altera Infrastructure L.P. 4
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands of U.S. Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, | | March 31, | | June 30, | | June 30, | | June 30, |
| | | 2022 | | | | | | |
| 2022 | | Restated(1) | | 2021 | | 2022 | | 2021 |
| $ | | $ | | $ | | $ | | $ |
| Revenues | 296,234 | | | 323,655 | | | 266,935 | | | 619,889 | | | 539,689 | |
| Direct operating costs | (171,082) | | | (159,206) | | | (169,937) | | | (330,288) | | | (331,778) | |
| General and administrative expenses | (12,135) | | | (6,703) | | | (8,951) | | | (18,838) | | | (21,619) | |
| Depreciation and amortization | (70,150) | | | (71,882) | | | (81,560) | | | (142,032) | | | (158,809) | |
| Interest expense | (59,490) | | | (56,208) | | | (49,475) | | | (115,698) | | | (97,159) | |
| Interest income | 355 | | | 58 | | | 21 | | | 413 | | | 49 | |
| Equity-accounted income (loss) | 9,826 | | | 22,262 | | | 10,229 | | | 32,088 | | | 29,613 | |
| Impairment expense, net | (38,040) | | | — | | | — | | | (38,040) | | | — | |
| Gain (loss) on dispositions, net | 15,700 | | | — | | | 9,107 | | | 15,700 | | | 9,107 | |
| Realized and unrealized gain (loss) on derivative instruments | (3,108) | | | 10,231 | | | (1,513) | | | 7,123 | | | 12,347 | |
| Foreign currency exchange gain (loss) | 630 | | | 1,024 | | | (302) | | | 1,654 | | | 23 | |
| | | | | | | | | |
| Other income (expenses), net | (8,795) | | | (10,834) | | | (1,831) | | | (19,629) | | | (1,857) | |
| Income (loss) before income tax (expense) benefit | (40,055) | | | 52,397 | | | (27,277) | | | 12,342 | | | (20,394) | |
| Income tax (expense) benefit | | | | | | | | | |
| Current | 66 | | | 511 | | | (1,211) | | | 577 | | | (2,193) | |
| | | | | | | | | |
| Net income (loss) | (39,989) | | | 52,908 | | | (28,488) | | | 12,919 | | | (22,587) | |
| Attributable to: | | | | | | | | | |
| Limited partners - common units | (46,277) | | | 45,410 | | | (33,967) | | | (867) | | | (34,269) | |
| General partner | (354) | | | 347 | | | (260) | | | (7) | | | (262) | |
| Limited partners - preferred units | 7,880 | | | 7,880 | | | 7,880 | | | 15,760 | | | 15,760 | |
| Non-controlling interests in subsidiaries | (1,238) | | | (729) | | | (2,141) | | | (1,967) | | | (3,816) | |
| (39,989) | | | 52,908 | | | (28,488) | | | 12,919 | | | (22,587) | |
| Basic and diluted earnings (loss) per limited partner common unit | (0.11) | | | 0.11 | | (0.08) | | | 0.00 | | (0.08) | |
(1)The Partnership has restated its March 31, 2022 unaudited interim condensed consolidated statement of income (loss) to retrospectively show costs within Other income (expense), net that are not indicative of ongoing operations. The impact of the change as at March 31, 2022 is a reclassification of $9.8 million of General and administrative expenses to Other income (expenses), net. For additional information, please refer to Part I, Item 1. – Financial Statements: Note 2c iii) – Significant Accounting Policies in the Partnership's Report on Form 6-K for the period ended June 30, 2022.
Altera Infrastructure L.P. 5
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands of U.S. Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, | | March 31, | | June 30, | | June 30, | | June 30, |
| 2022 | | 2022 | | 2021 | | 2022 | | 2021 |
| $ | | $ | | $ | | $ | | $ |
| Net income (loss) | (39,989) | | | 52,908 | | | (28,488) | | | 12,919 | | | (22,587) | |
| Other comprehensive income (loss) | | | | | | | | | |
| Items that will not be reclassified subsequently to net income (loss): | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| To interest expense: | | | | | | | | | |
| Realized gain on qualifying cash flow hedging instruments | (182) | | | (179) | | | (196) | | | (361) | | | (386) | |
| To equity-accounted income (loss): | | | | | | | | | |
| Realized gain on qualifying cash flow hedging instruments | (158) | | | (159) | | | (211) | | | (317) | | | (407) | |
| Total other comprehensive income (loss) | (340) | | | (338) | | | (407) | | | (678) | | | (793) | |
| Comprehensive income (loss) | (40,329) | | | 52,570 | | | (28,895) | | | 12,241 | | | (23,380) | |
| Attributable to: | | | | | | | | | |
| Limited partners - common units | (46,614) | | | 45,075 | | | (34,371) | | | (1,540) | | | (35,056) | |
| General partner | (357) | | | 344 | | | (263) | | | (12) | | | (268) | |
| Limited partners - preferred units | 7,880 | | | 7,880 | | | 7,880 | | | 15,760 | | | 15,760 | |
| Non-controlling interests in subsidiaries | (1,238) | | | (729) | | | (2,141) | | | (1,967) | | | (3,816) | |
| (40,329) | | | 52,570 | | | (28,895) | | | 12,241 | | | (23,380) | |
Altera Infrastructure L.P. 6
ALTERA INFRASTRUCTURE L.P. AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands of U.S. Dollars)
| | | | | | | | | | | | | | | | | | | | | |
| | As at | | As at | | As at | |
| | June 30, | | March 31, | | December 31, | |
| | | | 2022 | | 2021 | |
| | 2022 | | Restated(1) | | Restated(1) | |
| | $ | | $ | | $ | |
| ASSETS | | | | | | | |
| Current assets | | | | | | | |
| Cash and cash equivalents | | 185,561 | | 171,305 | | 190,942 | |
| Cash deposits with third-party restrictions | | 98,205 | | 78,912 | | 58,566 | |
| Financial assets | | 9,520 | | 6,933 | | 5,856 | |
| Accounts and other receivable, net | | 127,305 | | 147,049 | | 127,453 | |
| Vessels and equipment classified as held for sale | | 52,530 | | 5,800 | | 5,800 | |
| Inventory | | 42,472 | | 31,775 | | 26,601 | |
| Due from related parties | | 773 | | 830 | | 978 | |
| Other assets | | 30,504 | | 30,706 | | 43,668 | |
| Total current assets | | 546,870 | | 473,310 | | 459,864 | |
| Non-current assets | | | | | | | |
| Financial assets | | 1,049 | | 969 | | 718 | |
| | | | | | | |
| Vessels and equipment | | 2,786,196 | | 2,928,453 | | 2,869,395 | |
| Advances on newbuilding contracts | | — | | — | | 51,918 | |
| Equity-accounted investments | | 246,628 | | 243,904 | | 237,469 | |
| | | | | | | |
| | | | | | | |
| Other assets | | 122,137 | | 128,082 | | 138,247 | |
| Goodwill | | 127,113 | | 127,113 | | 127,113 | |
| Total non-current assets | | 3,283,123 | | 3,428,521 | | 3,424,860 | |
| Total assets | | 3,829,993 | | 3,901,831 | | 3,884,724 | |
| LIABILITIES | | | | | | | |
| Current liabilities | | | | | | | |
| Accounts payable and other | | 194,793 | | 190,249 | | 249,297 | |
| Other financial liabilities | | 16,136 | | 14,029 | | 34,679 | |
| Borrowings | | 900,574 | | 572,842 | | 407,274 | |
| Due to related parties | | 10,424 | | 32,485 | | — | |
| Total current liabilities | | 1,121,927 | | 809,605 | | 691,250 | |
| Non-current liabilities | | | | | | | |
| Accounts payable and other | | 45,323 | | 47,501 | | 49,253 | |
| Other financial liabilities | | 182,596 | | 185,363 | | 188,658 | |
| Borrowings | | 1,519,966 | | 1,882,204 | | 2,056,753 | |
| Due to related parties | | 843,562 | | 820,210 | | 797,432 | |
| Deferred tax liabilities | | 700 | | 700 | | 700 | |
| Total non-current liabilities | | 2,592,147 | | 2,935,978 | | 3,092,796 | |
| Total liabilities | | 3,714,074 | | 3,745,583 | | 3,784,046 | |
| EQUITY | | | | | | | |
| Limited partners - Class A common units | | (4,550) | | (3,963) | | (4,539) | |
| Limited partners - Class B common units | | (315,009) | | (269,319) | | (314,153) | |
| Limited partners - preferred units | | 408,008 | | 400,128 | | 392,248 | |
| General partner | | 5,596 | | 5,950 | | 5,603 | |
| Accumulated other comprehensive income | | 2,133 | | 2,473 | | 2,811 | |
| Non-controlling interests in subsidiaries | | 19,741 | | 20,979 | | 18,708 | |
| Total equity | | 115,919 | | 156,248 | | 100,678 | |
| Total liabilities and equity | | 3,829,993 | | 3,901,831 | | 3,884,724 | |
(1)The Partnership has restated its March 31, 2022 and December 31, 2021 unaudited interim condensed consolidated statement of financial position to retrospectively show the change in accounting policy adopted during the three months ended June 30, 2022. The impact of the change as at March 31, 2022 and December 31, 2021 is a reclassification of $33.9 million and $13.5 million, respectively, of restricted cash from Financial assets (current) to Cash deposits with third-party restrictions and $45.0 million and $45.0 million, respectively, of restricted cash from Financial assets (non-current) to Cash deposits with third-party restrictions. For additional information, please refer to Part I, Item 1. – Financial Statements: Note 2c ii) – Significant Accounting Policies in the Partnership's Report on Form 6-K for the period ended June 30, 2022.
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, | | Six Months Ended
June 30, |
| 2022 | | 2021 | | | | 2021 |
| Restated(2) | | Restated(2) | | 2022 | | Restated(2) |
| $ | | $ | | $ | | $ |
| | | | | | | |
| Operating Activities | | | | | | | |
| Net income (loss) | 52,908 | | | 5,901 | | | 12,919 | | | (22,587) | |
| Adjusted for the following items: | | | | | | | |
| Depreciation and amortization | 71,882 | | | 77,249 | | | 142,032 | | | 158,809 | |
| Equity-accounted (income) loss, net of distributions received of $24.9 million (2021 - $24.0 million) | (5,441) | | | (990) | | | (7,171) | | | (5,639) | |
| Impairment expense, net | — | | | — | | | 38,040 | | | — | |
| (Gain) loss on dispositions, net | — | | | — | | | (15,700) | | | (9,107) | |
| Unrealized (gain) loss on derivative instruments | (25,373) | | | (162,257) | | | (21,375) | | | (163,207) | |
| | | | | | | |
| Provisions and other items | (645) | | | (193) | | | (3,786) | | | 188 | |
| Other non-cash items | 15,821 | | | 12,086 | | | 34,173 | | | 22,985 | |
| Changes in non-cash working capital, net | (50,324) | | | 39,239 | | | (20,923) | | | 79,464 | |
| Net operating cash flow | 58,828 | | | (28,965) | | | 158,209 | | | 60,906 | |
| Financing Activities | | | | | | | |
| Proceeds from borrowings | 63,195 | | | 75,000 | | | 63,195 | | | 75,000 | |
| Repayments of borrowings | (75,140) | | | (99,367) | | | (112,595) | | | (195,767) | |
| Financing costs related to borrowings | — | | | (750) | | | — | | | (884) | |
| Proceeds from borrowings related to sale and leaseback of vessels | — | | | 71,400 | | | — | | | 71,400 | |
| Repayments of borrowings related to sale and leaseback of vessels | (2,818) | | | (2,881) | | | (5,636) | | | (5,700) | |
| Financing costs related to borrowings from sale and leaseback of vessels | — | | | — | | | — | | | (584) | |
| Proceeds from borrowings from related parties | 32,000 | | | 75,000 | | | 32,000 | | | 130,000 | |
| Prepayment of borrowings from related parties | — | | | — | | | (22,000) | | | (30,000) | |
| Lease liability repayments | (3,341) | | | (3,392) | | | (9,108) | | | (6,961) | |
| Capital contribution by non-controlling interests | 3,000 | | | — | | | 3,000 | | | — | |
| | | | | | | |
| Distributions to limited partners and preferred unitholders | — | | | (7,880) | | | — | | | (15,760) | |
| Distributions to non-controlling interests | — | | | (1,750) | | | — | | | (1,750) | |
| | | | | | | |
| Repurchase of preferred units | — | | | (24) | | | — | | | (24) | |
| Net financing cash flow | 16,896 | | | 105,356 | | | (51,144) | | | 18,970 | |
| Investing Activities | | | | | | | |
| Additions | | | | | | | |
| Vessels and equipment | (75,387) | | | (156,317) | | | (87,046) | | | (168,979) | |
| Equity-accounted investments | (1,153) | | | (1,172) | | | (2,305) | | | (2,336) | |
| Dispositions | | | | | | | |
| Vessels and equipment | — | | | — | | | 21,500 | | | 28,835 | |
| Changes in restricted cash | 697 | | | 71,826 | | | (3,813) | | | 77,445 | |
| | | | | | | |
| Net investing cash flow | (75,843) | | | (85,663) | | | (71,664) | | | (65,035) | |
Total Cash and cash equivalents (1) | | | | | | | |
| Change during the period | (119) | | | (9,272) | | | 35,401 | | | 14,841 | |
| Impact of foreign exchange on cash | 828 | | | 240 | | | (1,143) | | | 369 | |
| Balance, beginning of the period | 249,508 | | | 284,486 | | | 249,508 | | | 284,486 | |
| Balance, end of the period | 250,217 | | | 275,454 | | | 283,766 | | | 299,696 | |
(1) Total Cash and cash equivalents includes Cash and cash equivalents and Cash deposits with third-party restrictions.
(2) The Partnership has restated its three months ended March 31, 2022 and March 31, 2021 and its six months ended June 30, 2021 unaudited interim condensed consolidated statements of cash flows to retrospectively show the change in accounting policy adopted during the three months ended June 30, 2022. For additional information, please refer to Part I, Item 1. – Financial Statements: Note 2c ii) – Significant Accounting Policies in the Partnership's Report on Form 6-K for the period ended June 30, 2022.
Non-IFRS Measures
To supplement the unaudited interim condensed consolidated financial statements, the Partnership uses Adjusted EBITDA, which is a non-IFRS financial measure, as a measure of the Partnership's performance. Adjusted EBITDA represents net income (loss) before interest expense, interest income, income tax (expense) benefit, and depreciation and amortization and is 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 the Partnership in assessing its 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; equity-accounted income (loss) and other income (expense), net. 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.
Adjusted EBITDA is intended to provide additional information and should not be considered as the sole measure of the Partnership's performance or as a substitute for net income (loss) or other measures of performance prepared in accordance with IFRS. In addition, this measure does not have a standardized meaning and may not be comparable to similar measures presented by other companies. This non-IFRS measure is used by the Partnership's management, and the Partnership believes that this supplementary metric assists investors and other users of its financial reports in comparing its financial and operating performance across reporting periods and with other companies.
Non-IFRS Financial Measures
The following table includes reconciliations of Adjusted EBITDA to net income (loss) for the periods presented in the Partnership's Consolidated Financial Summary.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, | | March 31, | | June 30, | | June 30, | | June 30, |
| | | 2022 | | | | | | |
| 2022 | | Restated(1) | | 2021 | | 2022 | | 2021 |
| (in thousands of U.S. Dollars, unaudited) | $ | | $ | | $ | | $ | | $ |
| Adjusted EBITDA | 129,146 | | | 179,528 | | | 109,595 | | | 308,674 | | | 229,865 | |
| Depreciation and amortization | (70,150) | | | (71,882) | | | (81,560) | | | (142,032) | | | (158,809) | |
| Interest expense | (59,490) | | | (56,208) | | | (49,475) | | | (115,698) | | | (97,159) | |
| Interest income | 355 | | | 58 | | | 21 | | | 413 | | | 49 | |
| Expenses and gains (losses) relating to equity-accounted investments | (5,932) | | | 526 | | | (10,606) | | | (5,406) | | | (15,475) | |
| Impairment expense, net | (38,040) | | | — | | | — | | | (38,040) | | | — | |
| Gain (loss) on dispositions, net | 15,700 | | | — | | | 9,107 | | | 15,700 | | | 9,107 | |
| Realized and unrealized gain (loss) on derivative instruments | (3,108) | | | 10,231 | | | (1,513) | | | 7,123 | | | 12,347 | |
| Foreign currency exchange gain (loss) | 630 | | | 1,024 | | | (302) | | | 1,654 | | | 23 | |
| Other income (expenses), net | (8,795) | | | (10,834) | | | (1,831) | | | (19,629) | | | (1,857) | |
| Adjusted EBITDA attributable to non-controlling interests | (371) | | | (46) | | | (713) | | | (417) | | | 1,515 | |
| | | | | | | | | |
| | | | | | | | | |
| Income (loss) before income tax (expense) benefit | (40,055) | | | 52,397 | | | (27,277) | | | 12,342 | | | (20,394) | |
| Income tax (expense) benefit | | | | | | | | | |
| Current | 66 | | | 511 | | | (1,211) | | | 577 | | | (2,193) | |
| | | | | | | | | |
| Net income (loss) | (39,989) | | | 52,908 | | | (28,488) | | | 12,919 | | | (22,587) | |
| | | | | | | | | |
| | | | | | | | | |
(1)See the unaudited interim condensed consolidated statements of income (loss) above for additional information.
Adjusted EBITDA from equity-accounted investments, which is a non-IFRS financial measure and should not be considered as an alternative to equity accounted income (loss) or any other measure of financial performance presented in accordance with IFRS, represents our proportionate share of Adjusted EBITDA (as defined above) from equity-accounted investments. This measure does not have a standardized meaning, and may not be comparable to similar measures presented by other companies. Adjusted EBITDA from equity-accounted investments is summarized in the table below:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, | | June 30, | | June 30, | | June 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
| (in thousands of U.S. Dollars, unaudited) | $ | | $ | | $ | | $ |
| Equity-accounted income (loss) | 9,826 | | | 10,229 | | | 32,088 | | | 29,613 | |
| Less: | | | | | | | |
| Depreciation and amortization | (6,823) | | | (7,551) | | | (13,951) | | | (15,116) | |
| Interest expense, net | (1,481) | | | (1,932) | | | (2,594) | | | (4,000) | |
| Income tax (expense) benefit | | | | | | | |
| Current | — | | | 21 | | | (36) | | | (26) | |
| | | | | | | |
| 18,130 | | | 19,691 | | | 48,669 | | | 48,755 | |
| Less: | | | | | | | |
| Realized and unrealized gain (loss) on derivative instruments | 2,939 | | | (2,005) | | | 11,052 | | | 3,522 | |
| Foreign currency exchange gain (loss) | (567) | | | 861 | | | 123 | | | 145 | |
| | | | | | | |
| Adjusted EBITDA from equity-accounted investments | 15,758 | | | 20,835 | | | 37,494 | | | 45,088 | |